Grace Poe and the MRT

Earlier today, Senator Grace Poe took the MRT without fuss, without bodyguards, just like an ordinary citizen would. The lines were long, as they typically were. The senator, whether it was a calculated political move, or not, did what others could not. Perhaps, it was easier for her to brave the lines, to ride the carriage of the masses. Perhaps, it was a fact-finding mission to better frame herself ahead of a hearing on the MRT at the Senate. So she get praised for rubbing elbows with mere mortals. She gets praised for sympathizing with pain.

President Aquino did the same when he first took office. He banned the wang wang, and chose to stop at all intersections. He took to eat at sidewalk vendors while visiting the United States— in stark contrast to the opulent dinners by the previous regime. Along the way, people forget this side of the President. People forget this side of the story.

Jesse Robredo too is fondly remembered as being a simple man. He rode public transport home. He took no airs, and was a humble man. What a nation would ours be with a man like Robredo at the helm?

The lesson of the Aquino presidency is lost to many. The simple lesson it brings is that what kind of man we elect on top sets the tone, and sets the direction. The policies come less so. They, much to many’s dismay come into second place to the quality of the leader’s moral fiber. It is what it is, for now, at least until the nation is more cosmopolitan than provincial.

Many critics will disagree, of course, with Aquino’s style of reform. Corruption of course is far from eradicated. We have many weaknesses that are only now coming to light. Many of the changes are in the form of layers, but many expect the reform agenda to be loud, and big. My expectation of Aquino’s agenda has been grounded, and well formed from the beginning. So I understand where he and his men come from. With Mr. Aquino, I knew from the get go— by intuition— this was the guy who would drive us forward, however imperfect, into the next tier.

I sympathize with many of Aquino’s critics because I find myself in the position that they are in now, at least, when considering a hypothetical Ms. Poe as president. Without doubt, Senator Poe is doing all the right things I have come to expect of a President of the Philippines. She is perhaps the kind of leader I’d like to see on top of the food chain. Better than the Binays’ who have shown such fervent desire for being the top dog, but none of the humility.

Grace Poe seems to make populist choices from the get go. She seems to do what Mr. Estrada should have done. I liked her championing the Freedom of Information bill. Didn’t really like that she didn’t add much substance to the bill. It seemed to me something that needs more beef (but I have settled on the idea that that is but a pipe dream). Her taking up the MRT route is another that suggest she has taken a populist stance, certainly, but the difference is, Ms. Poe seems have a tad more substance than Mr. Estrada does. (If anyone needs a reminder of the Estrada Presidency he needs to look no farther than what’s happening in Manila now).

So this is where my intuition kicks in. It kicks in to push hard on the breaks. I have never been a fan of populist positions. Well, populist in the sense that the policy panders to people, and that’s it. [Mr. Aquino’s policy also seems to favor people first, but very little pandering.]

The MRT is a broken system, of course. It is obvious. What isn’t is the systematic understanding of the problem. Many of its problems stem from its conception, and exasperated by pandering to the people needlessly such as a subsidy driven by political choices. Many of the problems of the MRT originate from the fact that this ought to have been a locally executed project— by the governments of Metro Manila, and in a sane, and rational world the Senate of the Philippines shouldn’t be operating on solving. This is a local matter that should have been initiated, and as problems arose, repaired locally.

Metro Manila is not the Philippines.

Such concept eludes many, and unlikely to change anytime soon.

While it is admirable that Ms. Poe rode the MRT, with certainly good, and great intentions to help solve a problem, I hope it would lead to the untying of a problem of epic proportion without pandering to the public.

When Good Governance Isn’t “Good Enough”

MRTaccident

Four years under an honest, sincere leader like President Noynoy Aquino (PNoy), and the mood of the nation has palpably shifted, from one of hope and optimism that greeted his election in 2010, to one of fear and loathing at the prospects in 2016 when he is supposed to step down (talks of lifting his term limit notwithstanding).

Four years is a sufficiently long time to take stock of how far down the path of good governance (daang matuwid) PNoy has taken the nation. The opinion polls suggest that while an absolute majority still are satisfied with his performance, fewer and fewer people think he is succeeding or doing a good job. If this trend continues, the people who rate him poorly may become the majority.

In his last State of the Nation Address, PNoy acknowledged that the task of reforming institutions in the country will not be completed by the end of his term. By the government’s own scorecard, the administration is failing in all but one of the Worldwide Governance Indicators of the World Bank, the global benchmark for good governance, nor is it expecting to achieve its governance goals by the end of PNoy’s term in office.

When it comes to achieving inclusive growth and development, regarded by many as the holy grail of good governance, for which it is just a means (kung walang corrupt, walang mahirap), slow progress indicates the intransigence of the situation. Poverty incidence and unemployment rates remain stubbornly high, despite the uptick of our GDP growth figures for over a decade now.

In this context, where does blame lie? Were the actions taken by the administration towards implementing good governance the right ones? To answer these questions, we will need to retrace its steps. But before that, let us first lay the foundation for the analysis.

The role of any government is always two-fold: to expand the productive sectors of its economy, and to invest in human capital while providing social and environmental safety nets for those who slip between the cracks.

A government cannot raise enough revenue to perform the latter, unless it performs the former really well. Inclusive development is premised on rapid, robust, and sustained growth taking place. The benefits of growth are often distributed unevenly though, so governments often need to step in to spread them more equitably across society.

Some minimum standards of competence and probity need to exist for a government to perform these functions well. In developing and emerging economies, these tasks are made more complicated due to the limited nature of available resources, weak organizational capacity and poor institutional integrity. But as demonstrated by East Asia in the last century and now by Sub-Saharan Africa in the early part of this century, governments need not be whiter than the falling snow to perform these functions well enough.

Retracing steps

Early in his administration, the president was concerned about changing the atmospherics to promote good governance, which was what he rightly perceived as his mandate from the Filipino people. He sought to achieve this by:

–          Replacing Mrs. Arroyo’s appointees and going after his predecessor through the courts. This was achieved with a series of executive orders, impeachment complaints and charges being filed. When the PDAF and DAP controversies broke, this extended to filing cases against incumbent legislators, such as senators Juan Ponce Enrile, Jinggoy Estrada and Ramon ‘Bong’ Revilla.

–          Improving the integrity, efficiency and effectiveness of the government’s expenditure program through reforms in the Department of Public Works and Highways and Department of Budget and Management. Corollary to this was making the budget process, the bidding and awarding of contracts, more transparent and accountable.

–          Improving the collection efficiency of revenue agencies such as the Bureau of Internal Revenue, Bureau of Customs, and government owned and controlled corporations by going after tax cheats and smugglers, reforming the governance of corporate boards and initiating a performance based bonus system.

In all this, the administration has actually been quite successful in getting what it wanted. Mrs. Arroyo is under hospital arrest; the Chief Justice appointed by her was impeached and convicted; her Ombudsman resigned; and, the three senators mentioned have been suspended and are in detention. New budget and procurement procedures are now in place. Collections and dividends from revenue generating agencies and corporations are up, meaning to say their performance is improving.

So what has the administration done wrong? Why are its approval ratings going down now despite its many accomplishments in the area of good governance? I would like to go beyond just the immediate causes to offer three fundamental problems. Three things, which I believe the administration is guilty of—they are:

  1. Focusing too much on reforming the government’s budget and expenditure processes and not enough on a whole-of-economy policy agenda.
  2. Focusing too much on the process of good governance and not enough on the ultimate, end-goals or outcomes of good governance.
  3. Not being bold, or forward-looking enough in its plans and vision for the country.

Let us tackle these one-by-one.

On the first point, the administration, by focusing on the efficiency of the government’s expenditures, limited itself to influencing a mere 20% of GDP that the annual budget represents. Economic policies, which affect 100% of the economy, on the other hand, have been neglected, to say the least. Just consider the following:

–          We are facing an imminent energy shortage, despite paying some of the highest electricity rates in the region. Some parts of the country are already experiencing regular, rotating blackouts.

–          We are facing a logistics and ports crisis, with freight landing but remaining inside Manila’s container port due to regulatory bottlenecks at the national level, which have led to unlicensed trucks being apprehended by the city of Manila. This crisis in Manila is going on despite the excess capacity that exists in Batangas and Subic Bay ports.

–          Our urban roads are congested limiting the flow of people and goods around the city, impacting on our productivity and the cost of delivering basic goods and services.

–          The metropolis suffers from a lack of urban planning, co-ordination and integration with surrounding regions.

–          We are paying some of the highest rates for internet and telecommunications services, and suffering from one of the slowest internet bandwidth speeds and poor connectivity in the region.

–          The NAIA, our most important gateway to the world, is considered one of the worst airports. Even the opening of an extra runway in Sangley Point a few years from now will simply ease congestion slightly.

–          The MRT and LRT systems are hampered frequently with accidents and breakdowns.

–          Our public transport system is not safe for the riding public or motorists.

–          Pollution is choking the city, leading to health risks and higher health bills.

–          Our higher educational institutions continue to slide down global league tables and a lower proportion of their graduates succeed in passing their professional licensure exams.

–          The sleeper issue is water. Will there be enough of it with all the growth happening in our urban centers?

Now energy, ports, communications, transport, roads, clean air and water, education and skills all affect the efficiency and productive capacity of our economy. If regulatory and line agencies lack the capability to independently plan, manage, monitor and guide the players that operate in these sectors in line with national development goals, then the future growth of the economy will be significantly constricted.

‘Plan rational’ missing

If a government cannot develop what the late-Chalmers Johnson called a “plan rational” for growing productive sectors in the economy and use its economic agencies to effectively line up the players in their respective spheres of influence to attain the targets of this plan, then it won’t achieve the kind of growth that results in massive improvements in its people’s quality of life.

The administration has identified the business process outsourcing, electronics, semiconductor, logistics, tourism, manufacturing and agro-industrial sectors for growth, and yet if you look at the basic infrastructure needed to power them forward, which includes human capital and skills, the policy frameworks are not providing a conducive environment for this to be a sustainable future.

Over-processed, under-performing

On the second point, the administration has focused too much on the process of good governance, not enough on the outcome. PNoy has focused on cleaning up the bureaucracy of corruption, institutionalizing right procedures of governance, and improving transparency and accountability.

Those are noble things, worth pursuing no doubt. However, in seeking to improve the processes by which the state governs society and the economy, it should not neglect to forge effective tools with which to improve the outcomes of processes without having to clean up the system, entirely.

As the only entity in society with the right to grant licenses, franchises, monopolies and provide public goods, the government actually has some clout to shape the economic landscape if it wanted to. It can direct state resources, finances and act as guarantor to projects that it sees as strategic in nature.

During East Asia’s rapid rise to prosperity, bureaucrats would grant loans at concessionary rates and issue licenses to operate in strategic sectors of the economy to favored companies. In return, they or their political masters would often receive commissions for facilitating these transactions that would go to their political machineries. They were, in this respect, no different from our own bureaucrats.

The only distinction lies in the fact that the recipients of such cheap loans and coveted licenses were obligated to produce results in line with national development targets. If they failed to achieve these performance standards, bureaucrats would wield the stick to rein them in, i.e. loans would be retracted or they would be forced to consolidate or be threatened with the entry of new players. The economic agencies had the tools and acted cohesively to do this.

In the Philippines, we have neglected to develop such tools and organizational cohesiveness. If we had a national policy to increase the average speed of our internet service, for instance, and the current providers were not meeting this target, then our regulators should have the power and authority to slap hefty fines and penalties on them, threaten to suspend their licenses or bring in new players from abroad. The targets should be easy to measure and verify, clearly defined and pre-agreed.

The same should apply elsewhere. Of course, the constitution might stand in the way of some policy tools, such as liberalizing foreign ownership in certain sectors. The problem with full liberalization for its own sake though is that if you continue to have weak agencies without the tools to shape the behavior of players in the market, we could simply end up with foreign players behaving just as badly as local ones. Having said that, all options must be on the table.

The government through its budget process has started to initiate performance based budgeting, which is focused not just on how much gets spent or what outputs are produced, but the outcomes it achieves. This is a positive step. The next logical one would be to empower agencies with the right policy tools to achieve the desired outcomes.

Bolder vision, action-oriented focus needed

On the third and final point, if the government is not bold or forward-looking enough in its plans and vision for the country, then it follows that the agencies which develop policies and regulations for the economy will not be ambitious or strategic enough in wielding the tools for shaping its future. Without a national agenda, agencies will be more susceptible to being ‘captured’ by narrow, vested interests.

Of course the government has developed targets in the Philippine Development Plan. The question here is whether these are the right targets needed to develop a grand vision and narrative for where the country should be heading. Are they bold and forward-looking enough? Are they outcomes-based as opposed to being outputs- or even process-based?

In my view, many of the targets in the Plan remain output-oriented. What matters to the broader public is not how many passengers go through Ninoy Aquino International Airport, for instance, but how comfortable and easy it is for them to do so. There ought to be measures that monitor and track this. There could be 40 million passengers going through NAIA by 2016 as per the plan’s target, but they could all be unsatisfied and disgruntled with the service.

A more visionary target would have been to open a new airport by 2016 to service the expected inflow of passengers into Metro Manila. If the government had come into office with this as a bold target, then agencies and investors would have known what to do and where to invest their resources. The same could have occurred in power.

If the government came in and said we needed to produce X additional megawatts by 2016 and to lower the average cost by Y per cent, while reducing greenhouse gases by Z tons, and empowered responsible agencies with the mandate, resources and tools to get it done, we could have avoided the current situation. I believe dissatisfaction among many citizens stems from the impression, rightly or wrongly, that government just does not have a plan to solve their everyday problems.

When President John F. Kennedy in 1961 set a bold, long-range vision and asked for extra appropriations from the US Congress to put a man on the moon by the end of the decade, no one at that point knew how it could be achieved. There were no feasibility studies. The technology was not even available. NASA had to learn by doing, taking action that brought them closer to that vision through experimentation and adapting their plans and organization accordingly.

The many challenges facing our country are adaptive in nature. Intergenerational poverty, climate change and conflict ridden communities: the solutions to these problems are not known in advance. Even experts are confounded when they apply their current state of the art tools. But that should not deter our leaders from framing a bold and inspiring vision for the future, and to set the scene for government, clients and stakeholders to collaborate in finding a unique way forward.

Good (or “good enough”) governance?

As PNoy enters the final third of his time in office, the clock seems to be ticking much faster. People have 2016 on their minds. What he needs to do now is race to the finish line. As he contemplates the legacy that his government will leave behind, he may need to re-think his agenda thoroughly.

While pursuing anti-corruption and good governance is a laudable goal, admittedly it takes several presidential terms, decades even, before this can be fully accomplished. His government has taken many positive steps down this path, and should be commended for it, but as he himself acknowledged in his penultimate state of the nation address, the journey will not end when he steps down.

Given that good governance in its strictest sense will not be achieved during the life-time of his administration, what steps can he take now to achieve better outcomes in many policy areas that directly impact the lives of residents and ratepayers, and will affect the future growth potential of the country?

These steps, when taken, would constitute “good enough” governance, because the process for achieving outcomes may not be perfect, but at least they will allow the government to perform its primary role of expanding the economic base, and with it the capacity to address social disadvantage and environmental damage.

Once the economy has expanded sufficiently, government will be able to raise more revenue, and shall have more resources, which will allow it to continue down the road of good governance and inclusive development.

If the government fails to lift the standard of our economic infrastructure, then growth could stall, and many of the positive steps this government has taken so far might falter as well. When that happens disillusionment might set in, and many of the reforms initiated by PNoy might be wound back.

Finally, the citizenry, for its part, cannot wait decades (or even another term for that matter) before the promise of good governance is achieved, nor should they be made to wait. Four years under PNoy may have already taught them that the path of good governance is just too long and arduous. Their growing dissatisfaction with the results is a sure and telling sign that, as far as they are concerned, good governance simply isn’t good enough.

What Mar Roxas, et al can learn from Jojo Binay

He must get under their skin. A lot. By them I mean the good governance (GG) club comprised of Mar Roxas, the Liberal Party (LP) headed by Senate President Frank Drilon and Budget Secretary Butch Abad, civil society and Big Business. As to why, after four years under an honest leader like President Noynoy Aquino (PNoy), who has been pushing for institutional reforms in the bureaucracy with some modest gains, the Filipinos seem set to throw their lot with someone in 2016 who does not come from their flock?

By ‘someone’ I mean Vice President Jejomar Binay, whom they regard as an apostate to their gospel of GG. He has the highest approval rating of any public official in the land including that of PNoy. The latest nationwide poll conducted by the reputable Pulse Asia shows him way ahead of rival contenders for the presidency. Even if you grouped together the support for Grace Poe, Mar Roxas, Allan Peter Cayetano, et al, Binay would still come out on top.

And nothing seems to be able to slow him down from claiming the presidency in two years’ time. Not the revival of old corruption charges against his wife, the former mayor Dr. Elenita Binay, nor allegations of misuse of PDAF by his daughter who is in Congress, not even allegations of overspending on a public car park by his son, the current mayor of Makati, seem to break his stride. To top it all off, the three siblings of PNoy have all but come out in support of Binay’s candidacy.

Talks of a merger between the LP and Binay’s party UNA as well as possibly extending PNoy’s term are all aimed at one thing: ensuring the survival of the Liberal Party as a fighting force into the next presidential cycle. But these demonstrate just how desperate the GG crowd is at the moment with elections in 2016 on the horizon.

It’s one big conundrum that bedevils them. If PNoy has proven that the GG works, why do/es his heir/s apparent appear/s to be languishing at the bottom of the presidential derby? And corollary to that, why is Mar Roxas, his partner in arms, not able to gain the support of more people?

It is no secret that Big Business supports the candidacy of ABB (Anyone But Binay). They are represented by Bill Luz, the former executive director of the Makati Business Club, who now heads the National Competitiveness Council, which is geared to lift the country’s competitiveness in the World Bank league tables, by reducing redtape as measured in the Doing Business Survey.

It is Big Business, also going by the moniker “civil society” that have been trying to oust the Binays from their perch as rulers of the Central Business District of Makati since the people power revolution ensconced them in city hall back in 1986. It is no secret that it is this group that Secretary Mar Roxas associates with, given his own family’s commercial background as owners of the Araneta Centre in Cubao.

Ironically, the way the Binays have fought off the pressure from the business community has been through an inclusive growth and development agenda in the city, something that the GG club have yet to implement elsewhere. The Binays have made sure that the business community paid their fair dues in the form of city and real property taxes to ensure that the lower income classes benefited from the growth of the city.

The problem for the GG crowd is that the Binays, despite being considered ‘stationary bandits’, have proven to be benign autocrats of Makati, fostering an effective program of human development among the poorest in the city that has become the envy of the rest of the nation, without sacrificing the growth and competitiveness of the city.

Indeed, in Bill Luz’s most recent competitiveness rankings for cities and municipalities in the country, Makati has come out on top. Now how can a city which is supposedly run by a corrupt, dynastic, autocratic family remain on top of competitiveness surveys and produce human development indicators that are the ‘best in class’?

The answer is not good governance, but ‘good enough’ governance.

Wait. Hold-on, you might say. The economic vibrancy of Makati comes from its business community. They are the ones who make Makati great. You would only be half right in thinking that. What makes a city competitive is the regime of taxes and regulations, as well as the quality of services offered to residents and businesses. The economic vibrancy of a city can be attributed to the business sector, and for that Makati only comes in second in Luz’s study.

At the national level, we have seen the limits of GG in formulating what Chalmers Johnson called a “plan rational” for the country to govern and expand the economic spheres of activity through robust, coherent policy and regulation.

If you look at the national economic agencies of government, they are in total disarray. The country is heading for, or perhaps already is in, an energy crisis, with rotating brownouts now a reality in several parts of the country (coming to your neighborhood soon, unless PNoy invokes emergency powers, says Energy Secretary Petilla). Power rates are the highest in the region and yet regular power outages may be in the offing in Metro Manila next year. This will severely impact the country’s competitiveness.

Then there is the so-called “ports crisis” as the logistics industry is up in arms with cargo unable to leave Manila’s ports due to no integrated master plan for Manila and the surrounding regions. The LTFRB has been in conflict with the MMDA, unable to process applications for truckers on time, which has led to the prevalence of unlicensed operators. Provincial buses are another cause of paralysis.

We turn to rail policy and here, it was not too long ago the manager in charge of maintaining the Metro Rail Transit came under fire for favoring bidders with close relations to his family. Frequent breakdowns and accidents have resulted causing the riding public to suffer delays and lower productivity due to inefficient public transport.

The PPPs that came into effect this year were improperly co-ordinated causing great aggravation to the motoring public as roads and elevated skyway projects have simultaneous commenced, almost in a mad rush to leave a physical legacy after PNoy steps down from office.

The airports have notoriously been a source of shame for the country being labelled the worst in the world. With the NAIA-3 becoming fully operational, some of the congestion will be eased, but only slightly. To cope up with increased demand, another runway at Sangley Point needs to be rushed. It took a decade to get NAIA-3 finally running, how long will it take for Sangley to come on stream?

Shifting to telecommunications and internet policy, we have one of the slowest, if not the slowest internet speeds in the region. Congestion experienced by networks has been the subject of much investigation in the senate as complaints of bad service permeate. It seems that the regulatory body in charge has failed to set the proper framework to ensure that services offered by private providers was adequate to meet the needs of an increasingly technology-connected population. The high cost and poor quality of service again affects our global competitiveness.

Transportation, information technology, communications, and energy policies all play a significant part in expanding the economic activity of a nation and are a major input to the cost of basic goods. Without robust regulatory agencies staffed with people who have not worked for the big players or are in cahoots with them, supported by a good attraction and retention policy, the result is what we see.

Secretary Mar Roxas was in charge of the Department of Transport and Communication for a good period of time. The policy frameworks in the areas of air, port, rail, logistics, information and communication were within the scope of his portfolio. The current secretary was apparently hand-picked by him. The GG agenda seems to have stalled if not utterly failed to set the right framework for future growth. Electricity, transport and communications policies are all in shambles.

Yet, PNoy’s presidency has almost solely been devoted to improving the expenditure side of government through reforms in the Department of Budget and Management. For an administration to be so focused on the efficiency of government expenditure means it concerns itself with only one fifth of our economy (which is what the national budget represents). The economic regulations, however, affect the whole economy because of their impact on both the public and private sectors.

The reason why PNoy was so focused on reforming the budget process? He wanted to prove that his GG mantra works. And yet, all that happened was a slowdown of expenditure in the first two years of his presidency, leading to a halving of economic growth. His budget department tried to fix this with the Disbursement Acceleration Program, which has now gone down in flames.

The LP through Sec Abad is now pushing for bottom-up or participatory budgeting through local government units with Mar Roxas, now secretary for the interior and local government in charge of handing out grants to them. Can the GG club redeem itself, following the DAP debacle in the lead up to the elections?

The problem with this scheme is that expenditure is only one side of local government success. You need a proper taxation regime in place. When Jejomar Binay spoke before the influential Centre for Strategic and International Studies in Washington, D. C., he narrated the challenge he faced when he first became mayor of Makati. The city’s finances were in disarray, experiencing chronic deficits. He needed to fix it through proper revenue measures to improve the quality and availability of services.

PNoy entered Malacanang Palace with a “no new taxes” pledge, which has resulted in no new revenue measures being passed except for the sin tax law, which Frank Drilon championed in the senate. Unfortunately, this pledge has limited his ability to fulfill his social contract with the Filipino people.

Meanwhile his acolytes in the senate keep proposing measures to erode the tax base by increasing exemptions, or reducing tax rates. They also want to increase the salaries and benefits of government employees, en masse, thereby putting upward pressure on spending. These senators, who have not had a day of executive experience in their political lives, would not know how to balance a budget if they were to succeed PNoy in 2016. And yet each of them would vie for the mantle of GG.

The social contract came with the age of enlightenment in Europe. The covenant entered into by the state and industry was one whereby taxes would be imposed on businesses; and in return, the state would provide basic public education and sanitation to provide a healthy, literate workforce for the factories being built during the Industrial Revolution. Here we are in the 21st Century and the proponents of our social contract do not understand the essential bargain required to educate masses with the skills needed for the Information/Digital Age.

The GG club’s approach to higher education is to shut down erring schools. PNoy said he charged CHED Chair Licuanan with closing the nursing schools who were producing graduates that did not pass the nursing board exams. She then proceeded to form “commandos” to do just that. Three years later, and according to the government’s own statistical report card, the proportion of board passers has actually declined, not risen. What happened here? Did they really go after erring schools, or just the ones that posed a threat to the big universities?

Meanwhile there is still not an adequate level of financing for higher education in place that would make tertiary education an entitlement, and lift the quality of the sector. Our universities continue to slide down the global league tables.

In each of these policy spheres, the responsible agencies have been susceptible, if not downright captured by large industry players whom they were meant to regulate. Policies are not being developed by independent agencies. As a result, the needs of clients and the nation at large have not been looked after. There is no long-term view to policy. In addition, the technical and leadership capacities of people running these agencies is severely hampered by a lack of proper resourcing.

For the economy to expand rapidly, it requires rational players in economic agencies who come from the best and brightest. These individuals need to be selected on the basis of merit. They need to have the resources to be able to fulfill their mandate. Our competitiveness and future economic vibrancy depend on that happening.

Coming back to Jojo Binay. If you look at the performance of his own housing portfolio through the government’s own statistical scorecard, his agencies look like they are hitting their targets. This is again another feather in his cap—unlike the GG scorecard, which shows PNoy’s government failing in all but one indicator of the World Governance Indicators, the one for political stability, which has come about through his popularity and taking care of the military and police through the budget.

As we come to the final third of PNoy’s presidency, it does not look like the GG goals are going to be met, nor do we find a rational set of policies being laid down to govern the economy’s expansion. For investments and jobs to be created, we need to have a high performing economic bureaucracy taking charge of all these policy areas. Unfortunately, so far we have not built that capacity and the results speak for themselves.

What Mar Roxas, et al from the GG club can learn from Jojo Binay is the following:

  1. Governance is in the doing, not the talking.
  2. Governance is about developing rational, long range policy, independent of vested interests, i.e. the major players in industry.
  3. Governance needs to be felt on the ground for it to be sustainable.

The Binays represent a formula of benign, “good enough” governance that has worked at the local level for over two decades. For Mar and the rest to offer a viable alternative to him, they will need to provide us with concrete evidence that their formula for GG has done what Binay and Makati has been able to achieve. Sans that documentary proof, they might as well throw in the towel.

Our experience with PNoy has exposed the limits of GG. The thesis that kung walap corrupt, walang mahirap. Binay on the other hand has proven the success of “good enough” governance. It has proven to be more appropriate given our stage in development to be content with setting the framework for business to thrive and expand, while ensuring that they pay their fair share to make this growth inclusive.

It doesn’t matter that he has acted like a “stationary bandit” preying on the rich to give to the poor, while ensuring that the rich still get to keep their wealth and build their empires. It doesn’t matter that the Binays have amassed wealth in the process and have turned into a formidable political dynasty. This has allowed them to take a long-term view of development and govern the city without being beholden to the big end of town.

If the GG club want leaders who are honest, yet able to win elections without becoming beholden to vested interests, they need to initiate campaign finance reform and provide state funding for political parties. The only other option is what the Binays are doing in Makati.

Economic agencies are a rich source of campaign finance through the licenses, franchises and policies they craft that can easily be made to favor the big players. The reason they are weak in a developing and emerging country context is precisely to allow political bosses to use them as a source of campaign donations. You see the system is not dysfunctional. It is purposefully built to serve their needs. The only way to fix corruption and incompetence in these agencies is to finance political parties so that they do not have to depend on them as a source of funding. Then invest in their capacity and upkeep.

If we don’t fix this, then we should not complain that our choices come election time are so limited.

Good (or Good Enough?) Governance

Chastised, toned down, hurt, and exhausted:

These are all words used to describe the mood and sentiments expressed by President Aquino (PNoy) during his fifth State of the Nation Address to Congress. Reeling from the effects of impeachment complaints filed against him on the back of the Supreme Court ruling declaring certain aspects of his controversial Disbursement Acceleration Program (DAP) as unconstitutional, the president nearly broke down as he recounted the sacrifices his parents made to restore democracy.

Suggestions that he was acting like a dictator in usurping Congress’s power over the purse and in initially defying the Supreme Court must have cut him deep. The only intention he had in pursuing the DAP was to hasten the progress of his reforms aimed at addressing the needs of the country, PNoy opined.

Despite this momentary setback, PNoy indicated his willingness to keep fighting for the nation and also suggested that even without him these reforms would continue through the people’s (whom he referred to as his boss’) initiative. This in effect was an acknowledgement that the work of repairing the nation’s institutions and implementing good governance would not be completed by the time he steps down in 2016.

He admonished the nation to look for someone who would continue the effort. He continued to affirm that the path he has chosen (Daang Matuwid) was the right path, and that despite the support of the people to move his agenda forward, there continued to be forces at work to undermine him.

At a forum hosted by the ABS-CBN News Channel (ANC) in cooperation with the National Economic Development Agency, the man at the center of the DAP controversy, Sec Butch Abad cited the glowing words issued by the World Bank president in his recent visit on the progress made by PNoy’s government in pursuing an anti-corruption and good governance agenda.

And yet, by the governments own scorecard (which by the way is based on the World Governance Indicators produced by the World Bank), the government is failing in all but one measure of good governance.

An alternative SONA

As one analyst from the IBON Foundation pointed out, four years is a sufficiently long-time to assess whether PNoy’s time in office so far has been spent well. Based on the evidence, it seems poverty continues to remain high. Despite the lowering of the poverty incidence by some percentage points, it was pointed out that the poverty line was simply based on 54 pesos a day or about US$1.25. Perhaps the more accurate thing to say about that is that the severity of poverty has been eased, but poverty overall still remains high (at about a quarter of the population of 100 million).

Another crucial statistic is that the unemployment and underemployment rates remain the highest in the region. This is what accounts for the high poverty incidence. As pointed out by Sec Almendras and NEDA Director General Balisacan at the PHDevt Forum on ANC, this is mostly due to the low productivity of the agrarian sector of the economy, which is due to poor infrastructure, and low human capital investments, which the administration has been trying fix.

Despite forging a social contract with the Filipino people at the 2010 elections, the ruling Liberal Party spent the first two years of the Aquino presidency going after its predecessor, Gloria Arroyo and her appointees in key positions of government, including Ombudsman Gutierrez and the Chief Justice Corona. Though it was successful in jailing Mrs Arroyo, getting Gutierrez to step down and removing Corona from office, this came at a cost.

The slow rate of its expenditures on infrastructure put a drag on GDP growth, and other items in the social contract were derailed by PNoy’s earlier commitment not to raise taxes and to re-examine every item in the budget to exorcise any vestige of corruption allegedly left behind by the previous administration.

When the economy slowed down the next two years were spent trying to recover through the DAP. The economy did rebound, but then the PDAF and DAP controversies blew up in their face. In its last two years, PNoy’s government will seek to pursue its social contract for accelerating inclusive development while working within the bounds set by the constitution. DAP was an aberration that could have been avoided if it had simply prioritized the social contract to begin with.

Evading the traps

The challenge of any government is always two-fold: to expand the spheres of productive activity in the economy, while increasing the social safety nets of those who slip between the cracks. What separates the “convergence club” of nations that are catching up with the rich nations with the “divergence club” that are falling behind, is the integrity and continuity of economic governance. This is “good enough” governance as opposed to good governance as espoused by the World Bank.

When using good governance as the benchmark, both converging and diverging economies fare poorly. There is no significant difference between the average governance scores of converging countries from their poorer counterparts. What is different is their ability to pursue economic reforms, which expand investments and produce jobs.

In a developing country where wealth is concentrated within a few powerful groups, this task is not easy, especially as the ability of government to generate resources to maintain its autonomy from such vested interests towards crafting independent, coherent, and strategic economic policy is very limited.

When the tax to GDP ratio of a country is 10-20% (ours is hovering between 17-19%), the revenues just aren’t sufficient to enforce contracts, property rights and maintain transparent, accountable government (i.e. good governance). An estimate of how much it costs in the West to enforce a rules based system range from 40 to 60 per cent of the economy. In a developing or even emerging country context, that simply is not feasible given the low tax to GDP ratio.

Added to that are the costs associated with patronage to “payoff” vested interests to give way to reforms or to maintain political stability and security (think of business groups, rebels and the military), and you have a situation where the government’s ability to maneuver is significantly diminished.

When the whole purpose of running for political office is to capture the “off-budget” items such as franchises, licenses and monopolies the congress issues or creates, or to protect business interests by controlling appointments into regulatory agencies or by influencing key policies through legislation crafted in congress, it is hard for a government to pursue reform without sufficient “sweeteners”.

In an emerging country like the Philippines where the productive sectors of the economy are expanding and governments are able to raise more money for social safety nets, the challenge is in maintaining the momentum, while seeking a sustainable path to development (given the environmental and social costs associated with development).

More importantly, escaping the “poverty trap” of low or underemployment, intergenerational poverty in an atmosphere of expanding opportunity for some may lead to a “middle income” trap where development takes place within a narrow segment of the economy and fails to “trickle down” to the base of the social pyramid. It is within this context that PNoy finds himself with severely diminished political capital, in the last two years of his presidency.

Foreign chambers will challenge him to lift restrictions to expand investment opportunities in the economy, encourage greater competition and improve infrastructure. The marginalized sectors of society will press him to complete social reforms and expand the system of safety nets.

SONAw what?

PNoy will have to pick his battles from now on. Will he continue to pursue his ambitious good governance agenda, or will he be content with achieving “good enough” governance, the definition of which is to eliminate the worst forms of corruption (i.e. the most extractive) that do not facilitate the expansion of productive sectors and lock people into a path of dependency while maintaining the integrity of economic policy making and governance?

Coherent economic policy does not necessarily equate to liberalization. The power sector is a good example. For a long time we were told that the key to lower energy bills was to “leave it to the market”. This was accomplished through the EPIRA. Now we are seeing that this regulatory framework will not prevent a power shortage and higher energy bills. Calls for emergency powers to allow government intervention to correct a ‘market failure’ are getting louder.

This problem is not just confined to the power sector. In transportation, education, telecommunications, and internet policy, the independence of regulatory bodies and their capacity in formulating policy is hampered either by an incestuous relationship with the very industries they are meant to regulate or corruption.

Deregulation may simply lead to a glut of operators (as in the case with buses in the metro) or having global monopolistic capital capturing regulation as opposed to local monopolists, leading to the same market failures. What is required is a significant improvement in the integrity and capacity of regulatory bodies overseeing strategic sectors of the economy to help expand economic activity.

Success won’t be measured by how liberalized the sectors are but by how efficiently they operate, how low the prices they charge, how available and reliable are the services they offer. To monitor and track all that and wield the carrot and stick effectively to produce desired outcomes requires strong, well-resourced government agencies.

You might have guessed by now that the priorities of a “good enough” governance agenda are very different and more direct to the point than the good governance agenda, per se.

The next item in the agenda would have to be increasing the tax collection effort. Despite his claims that the sin tax indexation reforms did not constitute a new tax, the net effect is that it imposed a higher tax on tobacco and alcohol producers. The template for achieving this reform is just as we outlined above. Affected farmers were compensated with the revenues generated by the tax. The improvements in tax collection were earmarked to improve social safety nets through health expenditure.

This is a template the administration can use to expand the tax base. Forming a social contract requires sacrifice from some taxpayers, in exchange for greater investments in social and human capital. That lies at the core. One proposal would be to have a one percent property tax that would be invested in public and social housing to eliminate the problem of informal settlers.

A minerals and resource rent tax imposed in exchange for liberalizing the mining sector, with proceeds invested in a future fund to provide loans and scholarships to tertiary students would be another example. Whether this administration likes it or not, tax policy is an important lever for achieving its social contract. But to legislate and enforce a minerals and resource rent tax requires a beefing up of the economic bureaucracy. Again, “good enough” governance will get you there.

Ticking clock

As the PNoy administration tries to beat the clock in the remaining year and ten months that it has in office, priorities matter. Will it continue to pursue its good governance agenda, or will it focus on “good enough” governance? As shown here, the priorities are very different based on which agenda he uses. If he wants to pursue inclusive growth and development and fulfill his social contract with the Filipino people, he needs to follow “good enough” governance by improving the capacity of economic agencies within the bureaucracy.

This will make the strategic sectors of our economy perform more effectively and efficiently. It will allow him to generate additional resources, beyond just what the present tax code affords him, even with an intensive collection drive. He will need to look at generating additional sources of revenue by following the sin tax indexation template his government has developed.

Two years may not be enough to complete the good governance agenda, but it is sufficient to achieve “good enough” governance, which is more achievable and will be more direct in following the elusive quest for inclusive development. If he chooses the latter, he will be able to step down in 2016 having a more lasting legacy.

Of white knights and dark horses

Its timing could not have been more poignant. Exactly two years or 730 days before the next president of the Philippines assumes office (and the current one steps down), the Supreme Court decided to hand down its verdict on the (il)legitimacy of the Disbursement Acceleration Program (DAP).

The intent behind DAP was noble enough–to be transparent so that the public could scrutinize what legislators did with their pork barrel allocations. But just as with the ill-fated PDAF (Priority Development Assistance Fund) which was struck down by the high court for being unconstitutional, giving such spending visibility and formality allowed members of the community to challenge it in court. It also forced the administration to justify a practice that had been so pervasive that its illegitimacy now taints nearly every member of Congress that has dipped its fingers in it.

For a president who touted his expertise in scrutinizing the budget as his single greatest achievement in the senate that qualified him to run for the top post, the judgement of the Supreme Court is truly an indictment on his capacity to govern righteously.

So now, with its reputation sullied and its moral ascendancy in tatters, the Aquino administration will have to re-invent its narrative as the president reports to Congress during the State of the Nation Address later this month. For many nothing he does or says will matter. As one cab driver told me when the question of the pork barrel arose, magnanakaw naman sila lahat. Pati si PNoy nagnakaw din ‘yan (They’re all thieves. Even President Aquino himself has stolen).

This could be the political fallout of this entire saga. Faced with a cynical public, the challenge the president now faces is to craft an agenda for the remainder of his term, as he approaches lame duck status next year when the political season comes into full swing. This agenda will have to be inspiring enough to cut through the political noise as hecklers and protesters crowd the airwaves with their own agenda of discrediting or bringing him down.

In truth, nothing much has changed. During the early days of Mrs Arroyo’s presidency, her opponents sought to derail her agenda of building a strong republic (matatag na republica) by questioning her legitimacy and taking advantage of each corruption scandal that arose involving people in her cabinet or first family. Given the circumstances that surrounded her rise to power (the ousting of a popular president through extra-constitutional means), the only way for her to stay the course was with the use of congressional pork barrel to stave off any impeachment complaint.

Now under the current president, pork barreling as practiced before is no longer an option. What assures his survival is the threat of mutually assured destruction. Since both congress and the executive have been mired in controversy with the PDAF and DAP anomalies, both branches feel vulnerable. A third option is also open: the use of BUB or bottom up budgeting, another discretionary fund, under the control of Secretary Mar Roxas of the Department of the Interior and Local Government, to get provincial governors and city mayors on its side.

At the SONA, expect the president to present his legacy in a good light, basking in the glow of the recently concluded World Economic Forum on East Asia where his reform credentials were touted as the source of the country’s newly established reputation as the darling of the international investor community.

To be sure, the contrast between the president’s international and local reputation could not be starker. Abroad, he has been hailed as a leader who has brought political stability and credibility through good governance as evidenced by the signing of a permanent peace accord with Muslim secessionists, but to people on the ground, his political rhetoric concerning the Straight Path (Daang Matuwid) is just that, mere rhetoric.

By their own admission, the holy grail of inclusive growth and development has eluded this administration so far. Any claim that their mantra of good governance means good economics (kung walang kurap, walang mahirap) still rings hollow for majority of Filipinos who have yet to feel the effects of rapid economic growth trickle down to them.

Here again nothing much has changed. There is a long laundry list of unfinished business. From the distribution of land titles under the Comprehensive Agrarian Reform Program, which the president promised would be completed before he steps down, to the closing of the school building backlog, to the lifting of infrastructure spending to 5% of GDP to increase the flow of private investments, to the financing of tertiary education to provide skills that investors seek, to the achievement of universal health care.

Any significant progress on these fronts would help blunt the attacks directed at him and give people cause to keep the faith. The fact of the matter is the Filipino people are a forgiving lot. If you show them that you are working for their benefit, they may forget the ugly proceedings that have occurred in the realm of politics.

This leads me to the question of succession in 2016. The president in his public addresses has been ramping up rhetoric surrounding the choice facing us, as one of continuing down the straight and narrow path that he has followed or going back to how things were prior to his presidency. The problem now is that the president’s straight and narrow path looks a lot like the old path following revelations of corruption in the use of the DAP and PDAF which he approved.

For me the problem really lies in our quest for a white knight to rescue us from our present troubles. The reform constituency in 2016 won’t opt for the president’s nominee apparent, Secretary Mar Roxas because they already see him and the ruling Liberal Party as being part of the problem. They will seek a new face. Someone like Senator Grace Poe. The 40%+ that elected PNoy in 2010 (whom we might consider to be the reform constituency) will be split between them.

This will allow Vice President Binay, the dark horse of 201o to have a straight path (no pun intended) to the presidency. To many Filipinos, the election of Binay won’t be such a bad thing. This is because most Filipinos are pragmatic. They are not enamored by slogans of hope and change. Like the cab driver I rode with, they recognize that no one who reaches high political office does so without compromising their integrity.

The goal for them is not necessarily doing the right things or doing things right, so much as simply getting things done so that their lives improve. That is all that matters to them in the final analysis. Between a leader who promises reform, but is unable to deliver results that matter to their lives, and one who has demonstrated that capacity in a smaller scale, who do you think voters will select?

In a way, Noynoy the white knight is paving the way for Binay the dark horse because people have come to see that it takes more than pure idealism to produce real results on the ground. It takes more than just a smattering of patronage here and there to address social ills. What it takes is systemic reforms to deal with structural problems, not just cosmetic changes or token arrests. A leader who understands this and is able to do more than reshuffle deck chairs on the Titanic will come up a winner in 2016.

Why Militant Left needs to explain their PDAF use

There seem to be this misconception about PDAF— pork in general. Having pork is not the same as being evil. Using pork for evil— getting kickbacks from it is evil. Can you see the difference between it? The existence of pork is not per se proof of nefariousness. Again: the mere fact a legislator has pork, and used it, does not imply wrong doing.

Take for example reading the DBM website. In 2009, Rep. Binay spent 12 million on vermiculture (product or process of composting using various worms) for the 2nd district of Makati. She also spent 200,000 pesos for indigent patients for Rizal Medical Center, and another 1 million pesos for National Kidney Transplant Institute.

Binay PDAF

These in itself do not suggest wrong doing. It does not suggest she spent her PDAF on nefarious purposes. These are the questions you can ask:

  1. Why does the 2nd district of Makati need to train in composting, and how effective was it for backyard vegetable and herbs gardening?

  2. Did that training go to actual training, or ghost project?

  3. How did the 2nd district of Makati benefit from this sort of training?

  4. Did the NGO/Implementing Agency of the vermiculture project— real?

  5. Is it true that the recipient were indigent patients? Can show proof?

How about this? Bayan Muna spent 100,000 pesos in 2013 for monoblock chairs. They also spent 700,000 for “Financial assistance for the implementation of CIDSS Program (Livelihood Program-Training on Organic Farming & Demo Farm and Alternative Learning System)”

Bayan Muna - PDAF

Again, this in itself is not indicative of wrong doing. It does open up questions such as:

  1. Where those received by the targeted school (Am pretty sure if someone calls up that school they can answer yes or no, right?)

  2. Are these monoblock chairs being used?

  3. What is level of quality of those mono block chairs— and do they meet standards set by the Department of Education (or whomever sets standard for it).

  4. On Livelihood program: farmers learn? Did they get info needed? Is it kulang, or do they need more training?

Again— in on itself— this data from DBM is not indicative of wrong doing.

Then you get testimony from the whistleblowers. Is Revilla telling the truth? Is Mr. Estrada? Well, you can look at the DBM data and if they correlate to what the government, the whistleblowers have to say, maybe there is something there to demand an investigation or indictment, don’t you think?

In the case of Rep. Binay— Rep. Edgar Erice’s allegations do correlate with some of Rep. Binay’s PDAF disbursement. While that in itself doesn’t imply wrong doing— it does suggest someone should investigate if these allegation are indeed true, don’t you think?

This is the problem with how the militant left frames the question. Everyone is a crook because pork is evil. Well, they used pork too. If pork was used to buy chairs for kids, I think we can all agree that shouldn’t be an issue, yes? If pork was used to cheat the people, then that’s why we punish crooks. How hard can it be for the militant left to also publish their accounting of how they spent PDAF like what Raissa Robles is asking in her post?

So all this talk that the DBM data doesn’t provide color? Of course, it doesn’t. It only provides part of the puzzle. It does not generate more color than straight cold facts. It does however get you to ask questions, like what Raissa Robles is doing, and other journalists because if this data is out there, and we citizens can’t ask our elected officials how they spent their monies, then what good is it? Put it simply, the DBM data is a data point that leads you to ask questions.

Skin in the game

This week has been filled with about the same thing. Bong started his song, and gave us a yarn of amazing stories, which the Philippine Daily Inquirer called, “a mockery, and an insult“. Jinggoy took to the podium to proclaim his innocence, and to say sorry to his kids, to plead that they not pay the sins of their father, while dragging them in front of national television to cultivate a sense of mercy. Then there was Representative Abigail Binay in the halls of Congress saying her family is not corrupt, and to prove it, she points to Makati— their fiefdom— an example of what their family has done, and can do. They were not corrupt, because corrupt people leave the country impoverished. Well, that’s the Binay story.

There is a time and place for everything, Proverbs said. I don’t know what Ateneo de Naga has been teaching its students. In La Salle we were taught to be courteous. Em Mijares, a 4th year, 19 year old psychology student at Ateneo de Naga was arrested by the Presidential Security Group, and charged.

Em Mijares was protesting for “Edukasyon para sa Lahat” (Translation: Education for all). The irony, the Government under President Aquino has been focused on education for all, through the K-to-12 system. Its goal is strengthen early childhood education, among other things. It has been using CCT programs (Pangtawid Pamilyang Pilipino Program) to help impoverished family get a leg up. Both programs have their critics, and arguments for and against.

Much has been said about this young Atenean. Much has been said how “improper” the response was of this government. How heavy handed it was in having this young heckler arrested, and charged.

Perhaps, they are right. Perhaps, a slap on the wrist would be all right. Jego says the penalty is a minimum 200 pesos.

Perhaps, as Jester puts it— the problem was with the police, and the uneven enforcement of the law. Once, in the beginning, another hooligan disrupted an event the President was in. Correct me, if I am wrong— he was freed wasn’t he? And so you have these protesters thinking they can do whatever shenanigans that they want without fear. Maximum tolerance, remember?

I have been thinking about it, and my problem with this, it goes back to the theme— “Bakit kami lang? Bakit hindi sila?”

The President, and his men have exercised maximum tolerance. Protests are allowed on the street, no matter how inane what they are protesting about. Even when the President says, he shares their point of view, because that’s the nature of his administration. Because, you know, that’s democracy.

Protests are allowed online. Memes, and Facebook sites have pop’d and mushroomed publishing all sorts of material. Some historical revisionist, some in the spirit of protesting for protesting’s sake. Because, you know, that’s the nature of democracy.

People are allowed to say anything, no matter how idiotic, or moronic it maybe. Just as Bong, and Jinggoy have the right to privileged speech, members of the public have a right to exercise their grievance. And they have. Just this week, protests have been around calling for pork users to be jailed.

When does the right to protest disrupt a celebration of the day of independence?

The long standing problem— one that many in the public share is a single blindness to uncivilly. Online, and offline, yes, you may disagree with Noynoy Aquino the man, but where does that disagreement end, and respect for the office begin? Where does the disagreement between a point of view end, and disagreement with a person begin? It is a common problem really. We take things too personally. Whether it is public officials, or people on twitter, or on Facebook or on blog comments.

There was a photo of Jinggoy Estrada, and DOJ secretary Leila de Lima shaking hands. Some may call it plastic, personally it was nice to see people excising some civility. Smile and shake hands when someone holds it out. You know, simple courtesy never hurt anyone.

Does Mijares warrant being charged with a crime? Art 153 is:

Art. 153. Tumults and other disturbance of public orders; Tumultuous disturbance or interruption liable to cause disturbance. — The penalty of arresto mayor in its medium period to prision correccional in its minimum period and a fine not exceeding 1,000 pesos shall be imposed upon any person who shall cause any serious disturbance in a public place, office, or establishment, or shall interrupt or disturb public performances, functions or gatherings, or peaceful meetings, if the act is not included in the provisions of Articles 131 and 132.

The penalty next higher in degree shall be imposed upon persons causing any disturbance or interruption of a tumultuous character.

The disturbance or interruption shall be deemed to be tumultuous if caused by more than three persons who are armed or provided with means of violence.

The penalty of arresto mayor shall be imposed upon any person who in any meeting, association, or public place, shall make any outcry tending to incite rebellion or sedition or in such place shall display placards or emblems which provoke a disturbance of the public order.

The penalty of arresto menor and a fine not to exceed P200 pesos shall be imposed upon these persons who in violation of the provisions contained in the last clause of Article 85, shall bury with pomp the body of a person who has been legally executed.

A hundred sixteen years ago, Filipinos bought freedom, and independence with blood, toil, sweat and tears. Many died. Some by the hand of our overlords. Men like Rizal. Some died by our own forefathers’ hand. Men like Bonifacio.

That freedom would be short-lived, but the flame of that dream lived on even as new masters would take Spain’s place. It would be decades, and only after fighting yet another foreign power for freedom— not just our own land, but be in the same corner as the Allied Forces in the fight for freedom across the world would we, as a people, gain a nation, again.

There is a phrase for it— skin in the game.

Do people really think that protesting— for whatever cause doesn’t have any consequence? That we can achieve something that we want without sweating it out? That if we break the law— no matter if in our mind it is for a good cause— wouldn’t hurt us at all? That there is no price to pay?

@ceso thinks there are parallels to Em Mijares and Carlos Celdran’s case. Jego says it is difficult to compare. Both are charged with different crimes. The latter was sued by the Church for hurting religious feelings. The difference between Mijares, and Celdran’s case— the former raised his flag to heckle, and the latter raised his flag for a far, far worthy cause, which was the reproductive health law. In Celdran’s case, I believe he also apologized.

If you’ve ever had to meet and talk to a member of the Presidential Security Group, they are pretty courteous. They also take security very seriously. They are professionals. If you’ve ever had a chance to meet and talk to a member of the Secret Service, they are even more courteous, and take security, very, very seriously.

Bakit cya lang? Bakit kami lang?

Em Mijares got caught.

Juan Ponce Enrile got caught.

Bong Revila got caught.

Jinggoy Estrada got caught.

Janet Lim Napoles got caught.

Bakit hindi lang sila?

Sometimes people get caught with their hand in the cookie jar, and those are the breaks. If you ever go to a protest, and not expect to be arrested, that’s kind of silly isn’t it?

Juliet S. Alipa pointed to this Badjao boy named Raymond Amil. He is now a licensed teacher. Good for him, isn’t it?

We can argue all we want about the righteousness or lack thereof, or how these cases could have been handled differently. The only thing left to do is for these people to hire lawyers, if they haven’t already, and get their day in court, because they are innocent until otherwise said. Fight.

No matter where you stand— for or against— what happened to Mr. Mijares; to Revilla, Estrada, Mrs. Napoles and so many others, there are consequences. For ever action, there is an equal reaction. Sometimes they are good consequences. Sometimes you get hit with the most idiotic consequences. Sometimes you do good, and you go to jail like Rizal did. Sometimes you do evil, and you earn penthouses at the Ritz, and you get to sleep with beautiful women. But everything catches up, one way or another.

To rave, and rage at the unfairness of it all, is human, but men and women of conviction stand by theirs. Our forefathers did. They bought skin in the game, and in so doing, they paid for democracy, freedom, and independence— even for hooligans who heckle. There are far, better ways to engage, and create opportunities, and for education for all. Whether it is in the highbrow of policy, or in the street level it is challenging for all.

Some men like Em Mijares, Bong Revilla, Jinggoy Estrada, and Mrs. Napoles you wish them the best of luck, and good lawyers, because that’s how civil people are, and how this democracy works: innocent until proven guilty. Some men like Rayond Amil should be celebrated for his contribution. He put his sweat and tears to be a licensed teacher. To make something of himself. To be better in his own way. That’s how you pay our forefathers for their skin in the game, an inspiration to us all by throwing in your own skin in the game.

A tale of two privilege speeches

There were two privilege speeches today. In the Senate there was Senator Jinggoy Estrada, indicted for plunder in his involvement with #PDAFscam and Mrs. Janet Lim Napoles. In the House, was Representative Abigail Binay, defending her family, again on allegation that she used her Priority Development Assistance Fund for evil.

Senator Estrada didn’t really have anything different to say. “I’m innocent,” lashing out against against due process, and as Nik put it, “whining about his inability to interfere in the Ombudsman’s investigation.” Filipinas adds, he offered insinuations and analysis from his great mind, and publicly humiliated himself again.

Rappler has a transcript of Senator Estrada’s speech.

Binay’s privilege speech

As Senator Estrada was surrounded by his family— in black for the occasion— Representative Abigail Binay at the other end of the capital gave her own privilege speech to defend herself and her family amidst allegations that she used her “pork barrel to pay for political rallies and bused-in crowds from 2007 to 2009, and that there were supposed irregularities in vermiculture projects from her PDAF from 2010 and 2011.”

A “white paper” that has been circling around has been called, “a demolition job within the majority” by Minority floor leader Ronaldo Zamora.

DZBB reporter Rowena Salvation quoted Representative Binay on twitter saying, “Malalim ang relation ng making ama at ni Pangulong Aquino. (Trans: My father and President Aquino have a deep relationship). It is a friendship beyond politics.” According to Salvation, Congresswoman Binay added, “Kung totoong may anomalya sa aking PDAF, hindi dapat natamo ng Makati ang kaularang tinatamasa nito.” (Trans: If it is true that there are anomalies with my PDAF, then why has Makati progressed so far?)

Former Miss International Aurora Pijuan reacted by saying simply, “Thank you Ayala“.

One accusation levied against Representative Binay was the use of her Priority Development Assistance Fund for the National Livelihood Development Corporation. This corporation is allegedly linked to the pork barrel scam according to the Philippine Daily Inquirer. In 2010, according to the Department of Budget and Management’s page on Priority Development Assistance Fund disbursements, Representative Abigail Binay provided 12 million pesos worth of financial assistance to National Livelihood Development Corp. for the implementation of livelihood projects in the 2nd District of Makati City.

The National Livelihood Development Corporation is described in the Department of Budget and Management website as to provide “vermiculture, composting training with backyard vegetables and herbs gardening in the 2nd District of Makati.” The Commission on Audit reported that implementing agencies described the National Livelihood Development Corporation as “fully reliant on the Office of the Legislators to supervise and ascertain project implementation.”

Congresswoman Abigail Binay was first elected to Congress in 2007.

COA’s question for Representative Binay

The Commission on Audit Report Special Audit report noted that between 2007 and 2009, Representative Binay allegedly gave the Non-Government Organization (NGO) Dr. Rodolfo A. Ignacio, Sr. Foundation, Inc. (DRAISFI) 8.1 million pesos. According to COA, DRAISFI NGO was not registered with SEC, but issued permits by the City Government of Quezon. COA in their report wrote that when they tried to confirm the validity of Ms. Binay’s signature for SARO (ROCS) 08-00189 (3.6 million), 07-07450 (4.500 million), her office, “did not reply to the team’s request for confirmation.”

Representative Binay was not the only one listed in the COA report as having sponsored DRAISFI. Senators Lapid (SAROS – D-08-03129, and 07-06623) and Enrile (SAROS 07-07221, and 08-03024), for example, were included in the report. Senator Enrile according to COA “Confirmed authenticity of signatures of his authorized representatives in all documents submitted by the NGO”. There were several others too in the list. Dr. Rodolfo A. Ignacio, Sr. Foundation, Inc. (DRAISFI) as per COA, confirmed receipt of P164.621 Million in livelihood projects provided for by various legislators.

COA also reported that Representative Binay had an excess of 47 million pesos priority allocation in 2008, but does not provide further color beyond that.

How Binay used her PDAF

The Department of Management website in 2009 listed “Financial assistance to Makati City for priority development programs and projects in the 2nd District of Makati City, pursuant to Special Provision No. 1, Priority Development Assistance Fund, RA 9524.” as the use of Representative Binay. It totaled 15 million pesos.

In 2011, Representative Binay’s PDAF grew to PHP70 million. She spent 11 million of that PDAF to “assist the City of Makati for the implementation of various Small and Medium Enterprises/Livelihood projects”. Another 10 million for the rehabilitation of Kalayaan Avenue. She also spent 13 million “for Scholarships w/ Asian Touch International Training Institute as recipient tech voc sch in the 2nd District of Makati City.”

In 2012, most of her PDAF were used toward schools in her district.

The DBM website does not provide further color.

Senator Estrada has been indicted on his alleged misuse of his Priority Development Assistance Fund. Beyond COA’s report, Representative Abigail Binay, as of this writing, is not the subject of any investigation by the Department of Justice.

Contrast

It is interesting to view the two speeches. One is embattled— Estrada— with public opinion mostly going against him. Estrada’s like Revilla’s was fired up with bravado. The Estrada speech, much like Revilla’s was aimed at his base, and family. And posterity.

Binay’s is much more energetic reactionary response. It was aimed at the media, and her colleagues in the House who may now be picking sides for 2016. Mostly the latter.

Everyone likes a winner. The Binays want to make sure they’re viewed as such. None of the Binays are subject to an investigation related to the PDAF scam. Their ‘problem’ isn’t quite as large Estrada’s.

While both the COA report, and the DBM-PDAF pages do not quite paint a damning picture, it does paint some very interesting questions. Did Abigail Binay really spend 157.000 million pesos of public funds from 2007 to 2009? Where did it go? How much impact did those projects deliver? Can she explain the connection between her office, and National Livelihood Development Corporation, as well as Dr. Rodolfo A. Ignacio, Sr. Foundation, Inc.?

The Binay line seem to be: “We are not corrupt. Just look at Makati. If we were corrupt, why is Makati, ‘a success?’ We can do the same for the Philippines.”

How powerful is that message?

How much of Makati’s success can be attributed to the Ayalas?

Bong Revilla turns Privileged Speech into Privileged Song

Embattled Senator Bong Revilla who is fighting for his political life, and freedom, took to the Senate podium to rally his supporters. Rappler sums it up in their headline: “Revilla privilege speech turns into a show“.

A privilege speech is a right of every legislator. They can step into the podium and say anything they want without fear of being sued, for example. There is a good reason for this. They can launch expose, after expose and not be held for libel, for example. They can talk about anything without being prevented to speak.

What gets into people’s nerves is that this privileged is being used in defense of Bong Revilla’s political survival. The senator is being accused of stealing the people’s money. And he is using the people’s money to shore up his defense. What irks people is that this is insensitive to public sentiment. A press conference would have sufficed, and not waste people’s money.

The people pay for a legislator’s privilege speech because it is the People’s dime being spent to operate all the cogs that go with it. What irks people is the inanity of it all. We expect our senators to be men and women of stature. To imagine them to be giants, with speeches of eloquence that make us proud to have voted for them.

Not like this. Privileged speeches have been turned as a poor excuse for entertainment. And it isn’t even good entertainment.

Perhaps, we have been spoiled by Game of Thrones. We expect entertainment to thrill, to surprise us. We half expected Bong Revilla to call for a Trial of Combat, but it was not to be. We expect honor amongst thiev— sorry— amongst leaders. And we are clearly disappointed that our taxes pay for inanity.

The likes of Bong Revilla clearly show the lack of impropriety. They think it is their privilege to rule, forgetting that being senator ought to mean service. That their job is to advance the interest of the public, and not their own self-interest. Then again, would a senator who believes in propriety, in the rule of law, in civility be held accused of stealing the people’s money?

Why Bong Revilla, Jinggoy Estrada, Juan Ponce Enrile, Janet Lim Napoles, and others? Because they’re the ones who got caught. They’re the ones with evidence that prosecutors believe could convict. Most certainly, it is foolish to think they’re the only ones, or that with those people punished, we can all sing Kumbaya. That wouldn’t be real either.

The speech trolled us all. And maybe that thrilled Revilla to stick it to the taxpayer once again. A dirty finger, a figurative belat to all sanity. It was after all, incredibly selfish.

Bong Revilla’s primary audience for his privileged song isn’t for the likes of you or me. It wasn’t meant for the taxpayer seeking the best bang for their buck. No. It was meant to shore up Revilla’s supporters; to lift his spirit up. The privileged speech was for Bong Revilla.

The sad truth is that there is no law or rule that prevents a senator from being creative in his speech. There is no rule or law that prevents a Senator from using the podium hopefully reserved for grave matters of state, and instead be used for mundane matters or even political survival. In the same respect there is no law on stupidity, or moronism. It doesn’t mean that you should aspire to stupidity, or moronism either.

Source: http://www.akamai.com/stateoftheinternet/soti-visualizations.html#stoi-map

Is overselling, and inadequate infrastructure to blame for slow Internet?

Source: http://www.akamai.com/stateoftheinternet/soti-visualizations.html#stoi-map
Source: http://www.akamai.com/stateoftheinternet/soti-visualizations.html#stoi-map

Much have been said lately about how Internet is slow in the Philippines. “Congestion, oversubscription,” ABS-CBN quotes a DOST engineer. The other telcos add layer to the problem like issues with Local Government Units— which in my experience— is real. Isn’t all this— symptoms of the underlying disease, rather than the cause?

When someone wants to build something— a house— for example, he goes, and draws up a plan. A design— a signal of— intention. Well, he doesn’t do it himself gets a contractor or architect to draw it up (unless he is a contractor or architect himself, I suppose). He tells them how many rooms, and baths, and how much he hopes to spend on it so the architect and contractor has an idea on how to design it. There should be room for the kids to play in! There should be a place for the dog, and the car!

Design it.

The same goes for cars, or spaceships, and space travel, or Computers. The same goes for building a business, or an artist writing, painting, or writing music, or anything that involves creation. There is an underlying plan. There is a thoughtfulness put into it. A design.

You hear Apple talk about how they craft perfectly beautiful products. You read about how much they care about the screws— how beautiful it looks in the inside, as much as it looks beautiful on the outside. Pride in the workmanship. In the craft.

Again, design.

Design is an indication of intention.

It is the same with nation building. It is the same whether or not we’re talking about how crappy the Internet is in the country, or why the power situation in the Philippines is as bad as it is. The lack of underlying design.

If design is a signal of intention, then policy direction is similar. The key to South Korean success— in so far as broadband space is concerned is a clear indication of policy. They developed national broadband plans. Several in fact, over the years, because plans are not static, they adjust overtime.

In the Philippines there is a Philippine Digital Strategy. The Government used it as basis, and seem to be making some success in developing, and executing an eGovernment Master Plan. This is good in concept, and looks like the Department of Science, and Technology is on the right path to build these eServices. Short of waiting for an evaluation— the direction the government is going for with regard to eServices is I would say, OK. As you can see, when there is a clear plan, and a clear vision, there is proper direction.

Creating policy does not mean that it kills the free market. In fact, Policy should be an initiative that spurs innovation, increases investment, grants further access to information as well as preventing unfair pricing, consumer exploitation, breaches of privacy, and on the business-side, protects investors from government that may make it impossible to do business. Cough, LGUs. In short, it is about setting up rules of Fair Play. It is about designing a vision of what we want to build.

The Magna Carta for Philippine Internet Freedom (#MCPIF) was designed as a foundation. It invokes the spirit of Angevin charter with a purpose. Just like the Constitution is the foundation of our laws, the MCPIF’s foundation on people sets the stage for what’s next.

The next step is to lay the foundation for a real National Broadband Plan. What are the elements I think that should be part of this plan?

First, it needs to be multistakeholder. The guys who need to make this should be multidisciplinary because the Internet has a profound impact on everything. So the guys who are designing, developing, establishing and executing a detailed strategy should be recognized leaders in national security, financial analysis, technology, telecommunications, information technology, healthcare, manufacturing, education, community development and energy; representatives from government agencies, non-governmental entities, the business community, chambers of commerce, and industry watchdogs.

No one person has the complete picture on how to go about this. So a multistakeholder approach is necessary. It would be nice if the model was rough consensus and running code, but that would be asking too much, isn’t it?

Second, a national broadband plan needs to advance a) consumer welfare; (2) civic participation; (3) public safety, and Security; (4) community development; (5) Healthcare delivery; (6) Energy Independence; (7) Efficiency in Education, employee training, private sector investment, entrepreneurial activity, job creation; (8) establish infrastructure, and network rollout; (9) Research; (10) Manufacturing promotion; (11) User awareness;
Digital literacy; (11) e-Government Master Plan for e-government services; (12) Economic growth and opportunity generation; and
of course, other national purposes.

[Just as a side note, a lot of this second point is in the MCPIF.]

Third, we need to be serious about investing in our nation’s future. Investing comes from the necessity of putting government funds into the infrastructure. Investing comes from the necessity of putting monies into digital literacy, in research. Investing comes in the ability to enact policy that gets other players into the field.

To show you my point. Please take a look at this. You won’t find this proposed bill in any government website because it is entirely fictional. It is a thought experiment to illustrate my points in this opinion piece.

We spend too much time allocating monies to bogus Non-Government Organizations, maybe it is time to allocate monies for our own use. What works for us, but with as much specificity, and feedback mechanism as possible, because you know, it isn’t a stupid idea to say we don’t know or can predict everything.

For example, government should be tasked to forming partnerships, making strategic development a priority, putting monies into research projects aimed at identifying, “Is this plan working?” Analytics are important to make informed decision. It doesn’t hurt that accelerating three digit intelligence in this country wouldn’t be a bad thing. That’s why it is in that thought experiment to include feedback from NEDA, and the academe. Plus, increasing research wouldn’t be a bad thing either, no?

Much have been said about the symptoms of the disease. We get it. There is slow is because of bad infrastructure. It is bad infrastructure because we let the telcos decide deluding ourselves that this is how a free market acts. It is like telling a contractor to build your house without you reviewing the plans or how much it costs.

Source: http://www.akamai.com/dl/akamai/akamai-soti-q413.pdf?WT.mc_id=soti_Q413
Source: http://www.akamai.com/dl/akamai/akamai-soti-q413.pdf?WT.mc_id=soti_Q413

Of course, the telcos are going to build it to make as much profit as possible. That’s what businesses do! I also have a business selling web servers, and I wouldn’t be in business if I didn’t make money off it. If I could get away selling servers for US$100, and having spent only US$1 for it, why wouldn’t I jump at the chance? What’s the point of being in business?

Going back to our house analogy, would you be pissed at a contractor if they put in the cheap PHP 10 peso tile in your bathroom over the Italian tile that you wanted, but never actually told your contractor, “dude, this is what I want”?

Blaming a business for making too much profit without the underlying regulation— the plan— around it is just barking at the wrong tree. It is like telling a dog not to scratch flees. A dog can’t help to scratch. A business can’t help to profit. It is in the nature of both. This is why there are consumer protection laws telling businesses how to act. This is why there is government. This is why there should be a national broadband plan. The underlying problem why Internet is slow in the Philippines can be summed up in this phrase: lack of clear policy.

I leave you with this article from the BBC, which was shared by Wilson Ng on Google+: “On paper, the Philippines has all the ingredients of an emerging tech tiger: a fast-growing middle class with money to spend; a 100-million strong, largely English-speaking, population addicted to social media; plus low labour and operating costs — except that it has slow and expensive internet…. “

Ideas Towards Transformative Action