October 2011

New Beacons of Hope: 9th Ten Accomplished Youth Organizations

I’ve been a part of the search for Ten Accomplished Youth Organizations for three years already because of the nature of my job. No, I am not one of the finalists, let’s just say our office is pretty much involved in this annual search for youth organizations who have created huge impacts in their communities.

Being a staff in the Office of Senator Kiko Pangilinan, an institutional partner of the search, I’ve been involved in this annual search in various ways, but the 9th search for Ten Accomplished Youth Organizations is probably one of the most memorable TAYO searches I have experienced. Not only because I was chosen as one of the national judges for NCR but also because of the once in a lifetime opportunity to have a seat down chat with some of the TAYO 9 finalists, who, too much of my delight, emerged as part of the Top Ten Accomplished Youth Organizations this year. (5 finalists in our table won)

L-R Joeby Barrientos (Aklan Catholic College Junior Philippine Institute of Accountants); Rox Murillo (Industrial Engineering Council of the Cebu Institute of Technology-University); Cyril Sayre (Association of Locally Empowered Youth in Northern Mindanao); Lesly Anne Bangoy (MACO Youth for Peace); Rob Basco (Youth Solidarity for Peace); and Lea Asuncion (Indak Kabataan Youth Organization)

Indak Kabataan, a youth organization in a depressed area in Alabang, Muntinlupa, who’s main program “Organisadong Binyagan,” focuses on kids ages 3 and above in their community to receive the Sacrament of Baptism. The group raise money to fund the project by joining dance contests, cleaning canals in nearby communities, and through support from some City officials. Unknown to many, due to poverty in slum areas, some parents can’t even afford to have their babies baptized. And this is where Indak Kabataan Youth Organization (IKYO) comes in. All the nitty-gritty is covered by the group, the church, priest, clothes and a simple gathering after the christening.

NYC Chairman Leon Flores III explains all about NYC and its projects and advocacies during the NYC Bloggers Night
NYC Chairman Leon Flores III explains all about NYC and its projects and advocacies during the NYC Bloggers Night

Personally, I must admit that This youth organization struck me the most because of how it helps rehabilitate juvenile delinquents, whom, they admitted, were mostly “drug addicts” when the group was formed on 2006. As I have mentioned, I was one of the judges during the NCR Area finals and I was moved by the story of Lea Asuncion, the group’s President and representative for TAYO 9. I thought to myself that the group has a lot of potential if only given the proper guidance and support. And in my personal opinion, helping CICL (Children in conflict with the law) prove that there’s always a room for change and growth really gives a direct impact, not only in their community, via their projects, but also in the lives of their volunteers. Congrats to Indak Kabataan Youth Organization for being one of this year’s winners. This group is a concrete example that everyone can change, especially the youth, if they are given proper guidance and care. Thus, as how they put it, the once “perwisyo sa komunidad” is now the “pag-asa ng bayan.”

On the other hand, another youth organization from Mindanao, called Association of Locally Empowered Youth in Northern Mindanao (ALEY NM) sparked my interest upon reading their group’s entry this year. Yes, ALEY NM was also a TAYO finalists last year but they weren’t able to make it to the Top Ten so I was happy that this year, they were able to make it.

Their project entry “Improving Food Security among Rural Youths and their Families” rings a bell, especially nowadays that food security is an issue that the Philippines should really focus on.

Cyril Sayre, one of the volunteers and this year’s representative of ALEY NM was very passionate as he was explaining to me their project entry this year. I find their project an out of the box way addressing food security in the rural areas of Misamis Oriental, which is also one reason why others may find it a bit odd. But hey, they won’t bag the the Lenovo Most Innovative Project special award for nothing. ^_^

But really, the technology or system that they use to produce vermi-composted organic matter as fertilizer mixed with human waste (feces and urine) is really brilliant. Not to mention they are also helping poor families to have their very own concrete toilets (yes, believe it or not, most rural families in their area still don’t have toilets) aside from teaching them the value and importance of backyard farming, by providing their beneficiaries with seedlings and teaching them how to grow it even if they don’t have their own backyards. (Most of their beneficiaries live in coastal areas)

Aside from vegetables, tree seedlings are also sold to be able to raise fund for their projects. These tree seedlings are commonly used for tree planting activities. “Food always in the home” is ALEY’s vision.

Me with Cyril Sayre of the Association of Locally Empowered Youth in Northern Mindanao

Another entry from Mindanao, specifically in Zamboanga City, is the Youth Solidarity for Peace – Peace Advocates. Like the two previous groups and projects I just mentioned, what could be even more timely, especially in Mindanao, but the issue of peace.

And like ALEY, YSP was also a TAYO 8 finalists but wasn’t able to make it to the Top 10 so I’m happy for the group that they were able to enter the Ten Accomplished Youth Organizations this year.

Robert Bacso, YSP volunteer and the group’s representative for this year’s search was overflowing with energy as he was explaining to us during the NYC Bloggers Night their project and how helpful their summer camps are, especially to the Mindanao youth.

Their project entry this year is “Peace Education through Summer Peace

NCR Commissioner Georg Nava explains all about the TAYO Search

Camps.” It is an initiative that aims to “build a peace constituency among children and youth through the culture of peace and framework. This summer camp is being held annually and is composed of youth leaders from different institutions, out-of-school youths, young professionals, as well as young people with special needs regardless if they are Muslims, Catholics, or are a part of the indigenous tribes. Good thing about this summer camp is that it’s TOTALLY FREE! YSP believes that conducting peace camps will help instill the culture of peace in the minds of the young people, which will eventually eliminate signs of apathy and violence. Very interesting indeed! He even told us that we can join in one of their summer camps if we wish. ^_^

By the way, after the awarding ceremonies in Malacanang last October 27, we congratulated Rob (Robert’s nickname) and he handed us (Liz Reyes and I) a sort of kit, which I really find very cute and creative by the way, and a book entitled “The Thread that Binds.” And based on the book’s introduction, “the book is not only a narration of what had happened in the project areas [jn Mindanao] over a period of four years, rather, they are an expression of what it means to be liberated from the grinding chains of poverty and disposession, to finally have something to hold on to, and to know once more what it means to be a human being.” Haven’t read the whole book yet, just scanned through the pages but it seems a nice read.

As how Rob would put it, they want people to see Mindanao in a different light. And one of their projects is actually to keep Mindanao away from the shadow of war, thus they have this vision of “terrorism to tourism.”

The creative YSP Summer Camp Kit and book given by Rob

I would love to get to know more the other groups as well because based on their introductions and project descriptions, their entries are very much interesting, but due to lack of time and for fear that this piece might go on forever, I would just like to extend my heartfelt congratulations to all the Top 20 finalists for being an agent of change at a young age. Truly, they are inspirations worth emulating. They give hope to our nation that there are still people who, despite their lack of resources and support from the government, still try to help their fellowmen the best way they can.




The Ten Accomplished Youth Organizations for 2011 (TAYO 9). Awarding was held at Heroes Hall, Malacanang Palace with President Benigno Simeon Aquino III as Keynote Speaker

Please visit www.tayoawards.net for more information about the TAYO search. Check the LIST of TAYO 9 Winners HERE.


PostScript: A representative from La Salle Worlds Debate presented their project and the upcoming worlds debate this year and early next year. Mind you, it’s very interesting!!! I’m not a debater but I would definitely love to watch brilliant minds debate. Hope I can watch it. ^_^ Here’s DLSU Worlds website for more information. TAKE ME TO MANILA!!!


Worlds Debate


***Thanks to the National Youth Commission (NYC) for the invite***



Wisner and Chen on Spratlys and South China Sea

In this second of a three-part series of PH.CN’s re-echoing of what was discussed in the Carlos P. Romulo Foundation and Institute of Southeast Asian Studies’ Forum on the South China Sea, I would like to share to you the presentations made by former Ambassador Frank Wisner and former Ambassador Chen Shi Qiu.

The United States and the South China Sea by F. Wisner

I come to you as an American with a keen interest in this region.  I spent  many of my early years as a diplomat in my country’s fateful engagement  in Viet Nam and I had the honor of representing  the United States in Manila as Ambassador. But I do not speak to you today as a representative of the United States government.  I speak for myself.  In my remarks, I will attempt to reflect my government’s point of view as I understand it.

It seems hardly necessary to  explain the interests of the United States in Asia, including in South East Asia and in the South China Sea.  The United States is a Pacific power; our destiny is linked to this region. America’s security and economic well being depend heavily on Asia and this fact will grow in importance in the years ahead.  During my lifetime, my country has fought three wars in Asia.  Today we are intimately involved in two of Asia’s important questions  – the  future and security of the  Korean Peninsula and the question of the People’s Republic of China and Taiwan.

We also have interests in the South China Sea.  I  need not  remind you  of the importance of the South China Sea. A full half of the world’s merchant fleets pass through your area each year; in the transport of oil alone, the South China Sea carries six times the freight of the Suez Canal.  80% of China’s oil is shipped through the sea lanes of the South China Sea and similarly large percentage of the energy supplies required in  Japan,  Korea, China and Taiwan make a similar  voyage; the amount of traffic through your area will double by 2030.

The South China Sea is also an area of great complexity, containing as it does thousands of miles of oceans and 231 islands and reefs.  Claimants to the area are many and in recent years each has shown itself more determined than ever to assert  its rights.  Many are increasing their military capabilities.   In the view of the United States, these claims, however they are justified, do not diminish  from  the fact  that the South China Sea is  a part the global commons. Put differently, the right of free passage and freedom of navigation  and the orderly and  consensual exploitation of the resources of the South China Sea  are matters of huge importance to all nations.

In addition to history and economics, the United States has long standing defense and security ties to nations in this area.  At our initiative, SEATO, was born.  We enjoy treaty ties with the Philippines and Thailand and we are involved in military assistance and military exercises with the Philippines, Thailand, Malaysia, Indonesia, Singapore. We are beginning to include Vietnam and Cambodia in these efforts.

Our security responsibilities  in this region  have become part of our domestic political  dialogue as well as  enjoying a place in our  official policies. The Congress has addressed the subject of the South China Sea.  In our present campaign for the Presidency, Governor Romney expressed his views on the subject in a speech he gave week before last in support of his candidacy.   As I read his remarks, he pledged the constancy of  the American presence in this region and he  committed his presidency, if he achieves it, to maintaining naval forces adequate to defending our interests.

The Administration, the Governor and the overwhelming majority of Americans, who think about our international obligations, believe that our relationship with the People’s Republic of China is among the most important questions we face as a nation.  Americans seek strong and positive ties with China in all fields, including over the question of the South China Sea.   Indeed I reflect the views of many, many of my fellow countrymen.  We welcome China’s emergence on the world stage, as a great, indeed growing power and one with which the United States looks forward to pursing a respectful, productive and peaceful relationship.

Given our stake in Asia’s security and economy and our ties to the nations of the continent, it follows that the United States pays close attention to developments in  the South China Sea.  We have watched with growing concern the increasing  tensions  in your neighborhood  — from the first outbreak of hostilities in 1974, when China and Viet Nam clashed over the Paracel Islands.  We were similarly concerned by the 1998 incident in the Johnson South Reef.    The United States took note of China’s National People’s Congress assertion of sovereignty in the area in 1992; we have also paid close attention to China’s much debated 9-line.  In 1995 we made it clear that with regard to the Spratley Islands, “the freedom of passage was a fundamental US interest”.  We have been similarly troubled by construction activities on Mischief Reef and the flare ups over oil and gas exploration in 2007 and afterwards.

Throughout this period, the United States has sought to make it clear that unilateral actions which result in rising tensions in the region are a matter of concern and importance to us.  As troubled as we have reason to be, the United States has also been impressed by this region’s ability to act politically to address its differences and preserve the peace.  South East Asia, often with the participation of the People’s Republic of China, has shown an ability to come together in the region’s interests.  Your 1976 Treaty of Amity and  Cooperation and your 1995 declaration on the freedom of this area  from  nuclear weapons are outstanding examples. The same is true of the 1992 ASEAN Declaration on the South China Sea.  Any responsible observer should take heart from the ASEAN-China declaration on the conduct of parties in the South China Sea; that document remains a seminal statement of the intentions of all states in the area and a point of reference for the future.  Its assertion that parties will seek a peaceful resolution to their differences and cooperate in developing the resources of the area are significant principles which point the way to future management of disagreements.

Similarly  the ASEAN and Chinese agreement which was reached  on July 21 of this year constitutes welcome if limited steps forward.  Its eight guidelines treat important non-traditional security issues; at the same time, the agreement  falls short of defining a path to the  management  of increasingly  volatile territorial issues.  Nor do the guidelines address the nettlesome question of naval incidents.

In a word,  all of us must be  concerned that the  states bordering on the South China Sea have not yet agreed on guidelines for the implementationof a Code of Conduct, a fact that leaves room for misunderstandings and the possibility of increased tensions.  The United States supports such Code of Conduct.

Diplomacy is essential but diplomacy to be effective must be  flexible and inclusive. There is a role for multilateral as well as bilateral processes and fora in addressing differences and conflicting claims.  No party has the right to say it will exclude from the dialogue any other party with significant interests.  Similarly, international tribunals, like the International Court of Justice, may be able to play a role in the future and the UN Convention on the Law of Seas certainly provides a framework.

But let me emphasize that events of the past several years are  troubling.  The  absence of progress toward a Code of Conduct is a particular reason for concern.   Rising tensions and an increase in incidents is another source for concern.  There are many  causes  for  increased friction; they certainly include the assertion of territorial claims by nations in the area and by  the exploration for hydrocarbons.

The United States has particular sympathy for the  concerns of Viet Nam which has been the object of the greatest number of incidents.  We are similarly  sensitive to the needs of our friends in the Philippines.   And to repeat myself for emphasis  it is a matter of regret that the region’s diplomacy has not moved vigorously and achieved a Code of Conduct.  Foreign Secretary Albert del Rosario of the Philippines recently noted that this area needs to set a “collective goal for rule based actions by all parties concerned”.  He spoke wisely and well.

I am sure Secretary del Rosario’s appeal is directed to all parties.  I would add an extra word to my friends from the People’s Republic of China.  The United States does not take a position on competing territorial claims in the South China Sea.  That said, no American can dismiss China’s interests in the area.  But China is a great nation which enjoys special advantages in an orderly world – one in which peace and freedom of commerce prevail.  To larger states, extra responsibilities fall since they benefit disproportionately from a cooperative environment.   It is with this point in mind that I welcome recent efforts of the Chinese government, including in recent days with Viet Nam, to send a signal of cooperation to its Asian neighbors.

The visit of China’s Prime Minister to the region and the actions and statements of China’s Foreign Minister point to China seeking diplomatic engagement and cooperative solutions to the issues of the South China Sea.  There must be no gap  however  between  the  statements and the actions  of any party, China included.

The United States’ attitude on the South China Sea deserves an additional word of elaboration.   The United States position was articulated by Secretary of State, Hillary Clinton in Hanoi at the 2010 ASEAN  Regional Forum.  There she declared the United States, like every nation, has a national interest in the freedom of navigation, open access to Asia’s maritime commons and a respect for international law in the South China Sea.    While she refused to take sides in any territorial claim, she stated American opposition to the use of or the threat of the use of force in resolving differences and called for a peaceful resolution of differences. She went on to state that the United States shares “these interests not only with ASEAN members, ASEAN Regional Forum participants but with  other maritime nations and the broader international community”.  In other words, the Secretary reminded us the US national interest is  broadly and internationally shared.

Secretary Clinton’s statement was amplified at the 2010 Shangri-la Conference in Singapore where Secretary of Defense Gates referred to the South China Sea as “an area of growing concern to America”.  A year later, at the same conference, Secretary Gates further noted “without rules there will be clashes”.  In addition to these statements of principle, the United States has also noted that “claims in the South China Sea should be derived from legitimate claims from land features”.

To repeat my opening contention, the United States has long standing interests in the South China Sea and in the resolution of differences between the littoral states.  It does not seek advantage for itself nor does it threaten any other nation.  It welcomes the possibility of coordinating its positions and actions and discussing its interests with all parties, including with the People’s Republic of China, which shares responsibility with other neighboring countries for stability in the area.

The United States looks to the nations of this area to find diplomatic solutions to differences.  It is willing to do its part when that is appropriate and I believe it is when I reflect on the need to develop rules to manage incidents at sea.  In addition, the US is committed to maintaining a robust military presence in Asia and will support its  allies.  It  will maintain capabilities sufficient to deter conflict.  As Secretary Gates made clear in his waning days in office, the United States can be counted on in the near future to conduct naval port calls, training and exercises and help its friends address regional challenges.  We have already begun to act on these commitments, conducting exercises with Malaysia and the Philippines and responding to President Aquino’s plans to rebuild the military capability of the Philippines.

In November, President Obama will participate in the East Asia Summit, the first American president to do so.  He will also take part in the USASEAN Summit and will host APEC in Honolulu.  The President’s presence in each of these fora point to the resolve of the United States in protecting its interests and standing by its friends, pursuing at the same time, peaceful solutions and cooperation.

Of course, there are differences between nations over the South China Sea but these differences need not become disputes nor worse yet, causes for conflict even if we admit, as we should, that the likelihood of agreement on issues of sovereignty will not occur any time soon.    Isn’t the time right to shelve disputes and develop the region jointly.   The time is certainly right for tempers to cool and diplomatic engagement to take over.  A Code of Conduct is needed and it must be a full one.    The interests of all will be served by it.  And it must be based on principles all of us accept – freedom of navigation,   peaceful resolution of differences, the sharing of resources and the avoidance of the use of force or the threat of its use.


China and the South China Sea by Chen S.Q.

I would like to share  with you some of  my own perspectives in my personal capacity.

First, The core of the South China Sea Issue. Sovereignty disputes over the Nansha Islands is the core part of the South China  Sea Issue. Other matters, such as disputes over maritime areas and resources, all directly depend upon how to properly handle the sovereignty disputes over the Islands. To put it bluntly, the fundamental issue is who has sovereignty over the Nansha Islands. Maybe it is necessary now for us to take a look at the evolving process concerning the sovereignty disputes over the Nansha Islands.

For  a very long period of time of more than a thousand years before 1970s, there had been no such a problem as the so-called Sovereignty disputes over the Nansha Islands. There had not been any doubt about the fact that the Nansha Islands, along with Xisha Islands, Dongsha Islands, Zhongsha Islands belong to China.  No country surrounding the South China Sea had challenged China’s exercise of sovereignty over the Nansha Islands and their adjacent waters. Only beginning from the 1970s, when oil and gas reserves were discovered in the South China Sea, some countries began to occupy part of the islands and reefs of the Nansha Islands and laid claim to sovereignty over them, thus turned the China-owned Nansha Islands into disputes.

Second, Viewing the Issue from International law. A  Disputes in the South China Sea should be  analysed in accordance with  universally accepted principles of international law. Since the core part of the South China Sea  Issue is the Sovereignty disputes over the Nansha Islands. We have to study the issue with applicable international law as  well as the historical facts of the situation in question.  Among all international law principles, the most pertinent one is the intertemporal law principle. There are many exemplary cases in the world such as the Palmas Island case, the Clippton Island case, the East Greenland Island case and the Minquis and Ecrohos Islands case, to mention just a few.

Historically. Discovery is the oldest way to claim land territory, Classical international law developed doctrines by which States could make a valid claim of sovereignty over territory. The doctrines included discovery. Discovery can produce complete sovereignty. New territories and islands were subject to claim of sovereignty by discovery. A host of historical facts have proved that before  16th-17th century, it was China who first discovered, occupied and developed the Nansha Islands; the Nansha Islands have become an inalienable part of Chinese territory since then.

Occupation and Effectivity. Occupation applies to territory that is terra nullius, that is, territory which is not under the sovereignty of any State  by that time  and is subject to acquisition by any State.  Occupation requires proof of two elements: (1) the intention or will to act as the sovereign;  and (2) the continuous and peaceful display of sovereignty. In the case of islands in the South China Sea,  activities of China, though modest in number but diverse in character, covering a considerable period of time and revealing an intention to exercising State functions, show its effectivity.

After discovering the islands in the South China Sea, the Chinese Government marked the Nansha Islands on the authoritative maps and exercised administrative jurisdiction over these islands. Chinese people started to develop the Nansha Islands and engage in fishing on the islands. Up till the beginning of 20th century, the Chinese Government had exercised peaceful jurisdiction over the Nansha Islands without any disputes.

After the founding of the People’s Republic of China, the Nansha Islands were incorporated into Guangdong Province and Hainan Province successively and the Chinese Government has all along maintained China’s sovereignty over the Nansha Islands and taken effective actions for that. All in all, according to international law, China was the first to discover, name, occupy and develop the Nansha Islands and exercise sovereignty over them

Estoppel. “Estoppel” is a generally accepted principle of international law in international relations. This principle has particular relevance to territorial sovereignty issues. In accordance with this principle the recent claimants should be still subject to their original recognition or Default.

Prescription. Prescription applies to territory that was claimed by another State.  It is described as the acquisition of territory through a continuous and undisturbed exercise of sovereignty during such a period as to usurp another State’s sovereignty by its implied consent or acquiescence. As for the Nansha Islands issue, the Chinese Government has indisputable sovereignty over it since ancient times. And the Chinese  Government has all along maintained China’s sovereignty over the Nansha Islands and taken effective actions for that. The very recent time claimants can’t resort to the doctrine of “occupation” or “prescription” to gain sovereignty over them.

Geographic Contiguity. Some countries argue that small islands and other features of Nansha Islands are close to their main territory, within their EEZ or on their continental shelf, should belong to them. Under customary international law, contiguity is not an independent basis for the acquisition of territory. There are many historical cases which denied similar claims.

UNCLOS. Some countries have claimed sovereignty of Nansha Islands on the ground that these islands are within their continental shelves or exclusive economic zones. According to international law and the UN Convention on the Law of the Sea, it is a basic principle that land dominates the sea. Maritime rights and interests should be based on territorial sovereignty. No country should be allowed to extend its maritime jurisdiction to the territories of other countries, still less should it be allowed to invade and occupy other’s territory on the ground of exclusive economic zones or the continental shelves. The 1982 Convention on the Law of the Sea (UNCLOS)  has no provisions on sovereignty, nor does it regulate sovereignty over islands of their original status. UNCLOS only prescribes the regime of maritime zones. UNCLOS assumes that it has been determined which State has sovereignty over a continental land mass or an off-shore island. It then sets out what maritime zones can be claimed by States. All in all, UNCLOS can in no way serve as a basis for a country’s territorial claim, nor can it change China’s indisputable legal status as having sovereignty over the Nansha Islands.

The scenarios for the solution of the South China Sea Issue in the foreseeable future resolution of the sovereignty claims and agreement on maritime boundaries in the South China Sea seem unlikely in the foreseeable future.

One scenario is resolution by threat or use  of force. Disputes used to be solved by force, but times have changed. Now, disputes should be dealt with by peaceful means. Threat or use of force is contrary to the purposes and principles of the Charter of the United Nations and in violation of the basic norms of international relations. Threat or use of force in the South China Sea only cause more conflicts. No country, whether the countries surrounding the South China Sea, or countries outside the area, can benefit from this kind of scenario.

One scenario is “let it to be”.  The countries concerned engage in “war of words” or unilateral  actions on the basis of their own unilateral claims. In this scenario, the risk of conflicts or armed clashes is very high because unilateral actions by one country and counter-actions by another country may escalate or complicate the disputes, could only aggravate tension in the South China Sea which will benefit no one.

One scenario is resolution through direct dialogue and consultation by peaceful means. The countries directly concerned properly handle differences and sensitive issues based on the principle of equality and mutual  respect; make great efforts to resolve disputes through bilateral consultations and negotiations. The countries directly concerned need to show political sincerity and flexibility in order to find a final solution acceptable to both sides. The situation in the South China Sea will be peaceful and stable. Good-neighborly relationship of cooperation can be developed among the countries surrounding the South China Sea. It is a win-win way. Though it may take some time, it is worth doing.

One scenario is “put aside dispute for joint development”. Pending the final settlement, all countries concerned should exercise self-restraint and refrain from taking any action that may escalate or complicate the disputes. The countries concerned make great effort to enter into provisional or transitional arrangements, including “shelving disputes and carrying out joint development” in disputed areas. Joint development will not only bring benefits to all parties concerned, but also create favorable environment and atmosphere for settling disputes in a long run. It should be the most practical, feasible and win-win way for the countries concerned under the present circumstances.

Fourth, the way forward on the SCS Issue. The countries surrounding the South China Sea have a common interest in ensuring peace and stability in the SCS. To this end, they must handle their differences in an appropriate way. All the parties concerned should adopt a restrained, calm, responsible, constructive attitude toward the issue. Refrain from further actions that may undermine peace, stability, trust and confidence in the region. Handle differences and relevant disputes with the countries concerned through direct consultation or diplomatic channels and by peaceful means. Solve the disputes properly through bilateral negotiation and consultation in accordance with universally recognized international laws including modern maritime laws and the United Nations Convention on the Law of the Sea , fully respect legal principles, take history and other relevant circumstances into consideration and accommodate each other’s concerns in a fair and constructive manner.

Pending the final solution of the disputes, the countries concerned shelve the disputes for the time being and go in for joint development in the disputed areas. Abide by the Declaration on the Conduct of Parties in the South China Sea(DOC) and actively  explore or undertake cooperative activities in such areas as marine environmental protection, marine scientific research, safety of navigation and communication at sea, search and rescue operation and combating transnational crimes. To maintain the safety, unimpededness and freedom of navigation of foreign vessels and aircraft enjoyed in accordance with international law.

No involvement by any external forces in the South China Sea disputes. “Internationalizing” the South China Sea Issue is undesirable, as that will only further complicate the situation. Make joint efforts to transform the South China Sea into an area  of peace, stability, cooperation and development.

It’s alright Ma (I’m only dying)

“You get more with a smile and a gun than with a smile alone.” – Al Capone

What you want to do when savages massacre 19 of your valiant soldiers is to allow the AFP Chief or the Secretary of National Defense to have the first word. Strength is what you need to project at a time like this. Furthermore, you want the military’s narrative and not the enemy’s to become the frame for different reactions to the encounter. What you don’t want to do is send out a castrato to sing “Kumbayah” even before the bodies of some of the slain heroes have been recovered. But this administration runs on good intentions and not much else.

And so before a proper heroes’ burial could be accorded the martyred soldiers and an investigation into the massacre could begin, it sent out its boyish-looking soprano-voiced peace negotiator to declare, “We are certain that this is an isolated incident. This armed confrontation was not intended by both government and MILF. We’re looking at the larger picture. We need peace in Mindanao. In the meantime, the government panel in talks with the MILF is preparing for a meeting with its counterparts next month.” With that, he demoralized soldiers in the field; pleased the sub-humans protected by ceasefire zones; and made a public already howling for blood even more bloodthirsty.

The Commander in Chief’s initial statements did not help sort out right from wrong, good guys from bad guys, either. He castigated the military, relieved officers, ordered a stand down, and threw a rotten egg at those who expected him to be on the right side. His response to calls for an all-out war against the MILF was “If there is one rotten egg must we assume the whole basket is rotten?”

Excuse me poh, Señorito, but yes you might as well assume that they are all rotten because you won’t know if an egg is rotten if you don’t crack it first. The trope you want is an apple because you don’t have to cut it open to tell if it’s rotten.

If you had used an apple as your metaphor, you could have sent the message that you will pick and choose your apples, meaning you will selectively suspend the ceasefire and hunt down savages in the areas where they roam freely and that if the MILF will not domesticate them then the you will do it, whether the MILF likes it or not. That would have placed the MILF on notice that you will not be pushed around, reassured the public that you know right from wrong, and boosted your soldiers’ morale, knowing you will be with them through thick and thin. Anyway, that’s what we expected from our president, the commander in chief of our armed forces.

The problem is this administration is treating the MILF in the same way that previous administrations did. When the same gang of sub-humans beheaded 10 Marines four years ago, then Executive Secretary Eduardo Ermita dismissed it as an ‘unhappy development’ and reiterated his government’s policy of appeasement, “We are in a very good footing because it’s (peace talks) being moderated by Malaysia and I feel the MILF will not allow this peace process to collapse just because of the action there in Basilan.”

And you wonder why those friends of the MILF go on with their merry ways looting, burning, bombing, raping, eating human flesh, beheading, and whatever else sub-humans do? It’s because they know they can always count on castrati to do nothing but hold hands and sing “Kumbayah”.

Señorito, I am not asking for total war. All I’d like is for you to consider the wise words at the top of the page, “You get more with a smile and a gun than with a smile alone.”

*** As I was finishing this article, the Commander in Chief went on television with a smile, a gun, and a pledge to take down the savages who massacred our soldiers. Better late than never, I guess. The next step is to resettle Metro Manila squatters to Al Barka, Basilan and Payao, Zamboanga-Sibugay and give them money to raise hogs there.

Kenneth Cobonpue reimagines NAIA terminal 1

On Kenneth Cobonpue’s Facebook page, he published a video on how NAIA terminal one could be made over. The proposal is pro bono from Budji Layug, Royal Pineda and Kenneth Cobonpue in cooperation with the National Competitiveness Council of the Philippines.

Cobonpue writes, “Its time someone did something about the worst airport in the world. So we made this design because we believe that no matter how beautiful our country is, our airports give the first and last impressions. This plan is relatively inexpensive and simple to adapt. The plan also involves renovating the interiors to allow faster flow of travelers between security, immigration and departure”. The first step has been done. Lets hope our government moves on this proposal quickly.”

The Tyrrany of Cousins

Altruism towards other people of the same blood-line is widely practiced and literally embedded in our DNA. The Hamilton Rule named after the British evolutionary biologist William Hamilton states that we are pre-disposed to behave altruistically to those with with whom we share a greater proportion of genes. This biological imperative to pass on our genetic code to the next generation is quite powerful.

Hunter gatherer societies tended to exhibit a high degree of inter-locking marriages based on kinship. Alliances between tribes were sealed through bridal exchange allowing genes to be distributed across a wider area. This had implications for early rulers and states. As agricultural societies gew within a defined space, its rulers found it more and more difficult to govern independently sufferering what is called the “tyranny of cousins” which puts the needs of the tribe above the rest.

China is credited with forming the first modern state to address this problem. The Qin and Han dynasties (221 BCE-220 CE) instituted a civil service staffed based on a rigorous examinations process. It was tasked with raising taxes used to secure the populace against enemy invasion or domestic exploitation as distinct from local lords who extracted rents from their serfs. China’s political history from then on can be told on the basis of how this tension arose between the state and elite families. Following a few “bad emperors” it eventually succumbed to repatrimonialization.

Medieval Islamic rulers sought to counteract tribal rivalry by erecting a warrior caste made up of slaves. The Mamluk slave warriors and their Ottoman Janissary counterparts were responsible for the administration and protection of Islamic civilization because they acted as a coherent ruling class looking after the broader interests of society and not any one particular tribe. Just as in China, however, the integrity of this institution began to erode over time.

Altruism based on reciprocal relationships rather than kinship played an active role in the modernization of East Asia. The Japanese keiretsus were organized on the basis of inter-locking boards led by former bureaucrats who were parachuted into senior executive positions. Korean chaebols had a reciprocal relationship with state finance and grew into large corporate family-owned entities with high debt-equity ratios. The management style of these conglomerates was based on consensus between parties. Life-time employment was the norm.

In communist China, investors partnered with local Township and Village Enterprises to gain access and participation in China’s economy. Going to bed with local governments protected assets from expropriation for as long as they continued to reciprocate with profitable performance. There was no formal recognition of property rights or an independent judiciary to enforce contracts, just a tacit agreement based on reciprocity and credible commitment based on mutual interest.

Guanxi a term denoting close networks has been behind informal credit markets supplying start-up capital to Chinese entrepreneurs the world over. Again, no formal agreements eforceable through the courts operates here. Trade and credit has been made possible through closely linked networks built on family and kin relations or reciprocal relationships based on one’s honor and reputation.

From trust to contracts

The West took a very different more protracted route. After the conversion of Germanic tribes to Christianity in the sixth century, the church promoted changes to interlocking marriages based on kinship. This tended to weaken in the long-run political and economic ties based on kin selection. They moved away from trust to contracts through the centuries.

In the twelfth century the English common law administered by the king’s court to which subjects could appeal the decisions of local lords established a system known as “the rule of law” to which eventually even the monarch was made subject by the nobles who feared expropriation by the state. Contracts became enforceable and property rights made more secure without the need for personal connections or networks.

Across the English Channel, the Dutch established the first stock exchange in the early seventeenth century. This made corporate management distinct from its owners and spread risk through tradable certificates lowering their average exposure and leading firms (such as the Dutch East India Company) to be less conservative in business expansion. Capital-raising went through an impersonal market rather than through personal networks.

Management in the West tended to be more individualistic than consensual motivated by incentives rather than trust. Short-term, risk-taking behavior leading to rich rewards and bonuses became more prevalent. Maintaining reputation continued to be important, but only in terms of improving one’s value in the impersonal labor market rather than protecting one’s “word of honor” within a tightly knit community.

Where to begin?

The Philippines is obviously stuck in transition. Many formal institutions have been transplanted from the West, but they remain weak and porous to the tyranny of cousins. It has been difficult for a strong central state to emerge where one’s loyalty to the country ends where one’s loyalty to one’s family begins. The thick network of kumpadres, kamag-anak, and kaibigan (now augmented by kaklase, kabarkada and kabarilan) makes it difficulty to determine where to even begin the reform process.

Getting to Denmark” is the problem to be grappled with: how to emulate Scandinavia which has the highest levels of human development and cleanest governments in the world. It almost sounds tautological. In order to gain the living standards of the West, we need to adopt their political and economic institutions including a strong state, rule of law and democratic accountability. If our society had the means to create and maintain such institutions, it wouldn’t be poor to begin with.

Earlier in a separate post, I commented on the preponderance of avowed bachelors or males with no offspring holding sensitive posts in the current government, the president being one of them. This harks back to the time of Mamluks, Jannisaries and Imperial Chinese eunuchs. This is purely coincidental and fleeting in the broad scheme of things.

Prescribing Western-style political institutions again might have its pitfalls. Public finance of parties does not necessarily weaken the influence of campaign donors even in the US where it is practiced. It might dampen but not eliminate it. And, at any rate, the need for donors features more at the national level. At the local level, political and economic dynasties are one and the same.

A majority of seats in Congress is dominated by dynasties including within the president’s Liberal Party (albeit by a smaller majority). Rather than decoupling the political from the economic classes or dismantling dynasties, shouldn’t we like Japan, Korea and Taiwan find a way to make this coupling work for our country by directing it to more productive ventures?

Yes, we can

The problem is not reform incapacity by our leaders. I would argue that under Mrs Aquino, the state exhibited a considerable degree of efficacy in achieving substantial economic reforms under difficult situations. From tax reform to foreign investments deregulation, flexible currency exchange to trade liberalization, wage decentralization to monetary independence, privatization to democratization, the list is quite impressive from a Western perspective.

The problem was that the agenda was perhaps too comprehensive instead of building one reform on the proven success of another. We shouldn’t blame Mrs Aquino for this. Her government was put in an institutional strait jacket by the IMF which today is imposing a heavy burden on some weak European countries. What EDSA-I demonstrated is that the country can achieve a consensus over a broad set of reforms and pursue it diligently.

The difficulty of governing in the shadow of one so revered as Mrs Aquino is much like the dilemma faced by the successor to Apple’s visionary CEO Steve Jobs. His mission now is not to “stuff up” the legacy. The overly cautious approach this breeds could prevent the sort of imaginative thinking that led to success in the first place.

East Asia didn’t buy into the comprehensive reform package that international donors, aid agencies and multilateral organizations were foisting on them. It opted to target areas that were more appropriate for its needs and developed its own recipe based on local ingredients. It caught up with Western living standards and then reformed some of its earlier idiosyncratic institutions which had by then become less useful.

Rather than applying the “second generation” reforms of the augmented Washington Consensus, following the “first generation” reforms tackled by Aquino I, the policymakers in advising Aquino II need to escape the poverty of ideas this represents. They should develop imaginative arrangements that will immediately unlock the productive capacity of our country. Only then can the son escape another sort of tyranny that seems to be afflicting us…the tyranny of low expectations.

Guanxi diagram courtesy of: China Australia consult

Why their lawyers are all over town (UPDATED)

One of Mike Arroyo’s lawyers accused the Comelec of compromising its independence by participating in a joint investigation panel looking into allegations that his client was involved in massive electoral fraud in the 2007 midterm elections.

Atty. Ferdinand Topacio said it is “legally impermissible” for an independent constitutional body like the Comelec to work together with the Justice Department because it would, for all intents and purposes, be acting as an agent of the president.

    “Chairman Brillantes (Comelec) should have opposed this latest assault on the integrity and independence of the Comelec, but being the former lawyer of the President, he meekly stood by and delivered the Comelec to the Executive branch like a lamb being led to slaughter. This is a less than brilliant stand on his part,” he said.

Is there something to what he said? Let’s break it down.

1. “Chairman Brillantes (Comelec) should have opposed this latest assault on the integrity and independence of the Comelec…”

ASSAULT? Was the Comelec coerced into forming a joint panel with the DOJ or was it exercising its integrity and independence when it decided to form a joint panel with the DOJ? Forming a joint panel to investigate the same charges is common sense, it will avoid redundancy and save time and money for everyone concerned. Topacio should welcome it.

LATEST ASSAULT? Topacio should ennumerate the previous assaults, if any.

2. “…but being the former lawyer of the President, he meekly stood by and delivered the Comelec to the Executive branch like a lamb being led to slaughter”

Can Topacio show proof other than innuendo by association? Maybe he can cite specific examples where Brillantes as Comelec chairman behaved in a manner similar to former chairman Abalos. That should not be difficult because Brillantes has been in office for a year and that’s enough time to leave footprints.

If sliming by association is okay then let’s cite Topacio’s other clients. There’s police superintendent Cesar Mancao of the Dacer-Corbito murder case whose testimony against Sen. Panfilo Lacson came at the height of Lacson’s exposes against his client Mike Arroyo; there’s former Palawan governor Joel Reyes who is accused of being the mastermind in the murder of Geraldo Ortega, a radio-journalist and environmentalist; there’s Euphemio Genuino, former PAGCOR chairman and friend of his client Mike Arroyo, who is facing multiple charges before the Ombudsman. He was also the election of the late Batangas governor Armand Sanchez, a rumored jueteng lord and ally of the Arroyos.

We can also play the innuendo game,

    “Atty. Topacio should have welcomed the joint DOJ-Comelec panel not as the latest assault on the integrity and independence of the Comelec but as cooperation between two independent agencies to ferret out the truth regarding the 2007 elections, but being the lawyer of Mike Arroyo who reportedly set-aside billions for his defense, Topacio protested and slimed Comelec chairman Brillantes. This is a less than brilliant stand on his part.”

Will innuendos bring us closer to resolving the issues related to the 2007 elections?

Business Mirror reported, “Topacio also assailed the panel for refusing to exonerate Mike Arroyo despite the findings of the joint fact-finding team of the DOJ-Comelec, which found insufficient evidence to place him under investigation.”

Topacio is being specious. The summons for his client is in connection with the election sabotage case filed by Sen. Koko Pimentel. It is an entirely different from the case he is citing.

The lawyers of the Arroyos are preparing the ground work for the application for political asylum of their clients. Newspaper clippings of their statements regarding trumped up charges and delays in granting travel permits to their clients, including the SC decision on the Truth Commission, will be presented as proofs of persecution against the Arroyos. You can be sure the Arroyos have been consulting lawyers abroad.

UPDATE In Malaya Comelec Chairman Brillantes responds to Topacio

    Brillantes said, “Kilala ko naman si Attorney Topacio. Napaka-galing na abugado. Ang problema lang sa kanya, hindi yata niya binabasa ang batas.”

    He said the Poll Automation Law would show that pursuing election-related crimes is no longer the sole jurisdiction of the Comelec.

    “If you read the RA 9369, concurrent ang jurisdiction ng Comelec and DOJ. It means the law itself allows that the Comelec and the DOJ should join,” said Brillantes.

    Section 43 of the law states: “The Commission shall, through its duly authorized legal officers, have the power, concurrent with the other prosecuting arms of the government, to conduct preliminary investigation of all election offenses punishable under this Code, and prosecute the same.”

So there.


Does public infrastructure represent the best use of private investment?

It seems that our corporate titans have nothing better to do with their excess cash than to pour it into the growing public utilities and infrastructure sector. Whether it is San Miguel the beverage giant which went heavily into power or the Metro Pacific group a major player in telecoms which operates the NLEX-SCTEX road networks, there does not seem to be anything which competes for their attention than this sector.

About one-and-a-half trillion pesos is sitting in Special Drawing Accounts with the BSP deposited by banks which are unable or unwilling to lend them out. With a country as underdeveloped as ours, one would think that such excess savings could be put to better use. Why for instance isn’t San Miguel investing to develop coco juice exports which it has the capital and expertise to do?

Since our lost decade in the 1980s when a banking crisis followed by a political upheaval reduced our economy to tatters, manufacturing has never really recovered from the heights it once achieved by the end of the 70s and early 80s (see chart). Meanwhile, our ASEAN neighbors Indonesia, Malaysia and Thailand overtook us in moving their economies towards industry. Our gross capital formation as a percentage of GDP is the weakest in the region as a result.

Vietnam, a relative latecomer in the game has seen its manufacturing sector grow by leaps and bounds, while Singapore cannot be held up as an example for us to follow since it is a city-state with a tiny population and workforce. It can afford to de-industrialize its economy, while we can’t. While some would argue the high value services sector is nothing to sneeze at, it still cannot be relied on to provide the kind of jobs that match the skills held by our bulging population. The answer lies with manufacturing.

The Philippine Development Plan identifies infrastructure as the “binding constraint” to speedier growth. The reason it claims Philippine goods remain uncompetitive is our inability to bring them to market efficiently. Apart from that there is the implicit “tax” that comes by way of corruption which increases the cost of doing business and the unfair competition from smuggled or pirated goods that discourages domestic manufactures, the result of weak rule of law.

With its low tax collection rate and chronic fiscal deficits, partly to do with an aggressive liberalization policy pursued since the 1990s, the government was more than willing to let the private sector fill the breach in public infrastructure.

Since private business seems so gung-ho about providing public goods, it seems the identification of infrastructural bottlenecks was the correct diagnosis of the problem of underdevelopment. One wonders, however, if these firms are moving into such projects because there is no attractive alternative in other sectors, or is it because of higher returns now currently on offer from public-private partnerships?

Also, if indeed there are “bottlenecks” causing the cost of doing business and cost of living to skyrocket, then one would expect the public would be willing to absorb the fees charged by private operators under existing PPP arrangements. That is not what has been observed though (think MRT and LRT). One would then have to conclude that either the private operators have negotiated prices above the market-clearing level or that the demand for such infrastructure was not sufficient to begin with.

Investing in public goods by their very nature would often produce a private return lower than the commercial rate of return. That is why it is often financed in capital scarce countries through “concessionary loans” from foreign governments and multilateral institutions. If private operators borrow at prevailing market rates, then they cannot possibly make a profit unless the government provides a subsidy to pay for the spread between the “risk free” government borrowing rate and the commercial lending rate.


The sudden flash of insight Sec Mar Roxas used to interject into the president’s faltering public-private partnerships roll-out was that it would be better for the government to borrow at the risk-free rate and contract out the construction phase of some projects in effect passing on the cheap cost of capital to contractors. It could then auction off the operations and maintenance contract separately minimizing the need to subsidize fees charged to customers.

The question then is can government afford to borrow more in order to finance its infrastructure roll-out? It could if it chooses take-up the BSP’s offer to borrow against the country’s excess international reserves that accumulate each year. The state would effectively be borrowing against itself. Given the total cost for the original projects of about one hundred billion pesos, the surplus of reserves flowing into the country each year of four to five billion dollars is enough to cover these projects twice over.

If the public sector is then able to deal with the cost of providing infrastructure, how can it stimulate complementary investments needed in the private sector? If the lack of domestic capital and skilled labor are not responsible for the observed underinvestment, neither are low rates of return (low taxes and labor market flexibility are found in special economic zones), then what else could it be?

There are a number of candidates. Government failures which include corruption or weak property rights and rule of law are one option. A second possible candidate is market failure due to inabilities to coordinate investments in complementary upstream and downstream sectors or to internalize the benefits of innovation and experimentation.

The first has been identified by the National Competitiveness Council and the government as an area of concern. The decline of the Philippines ranking in the latest Ease of Doing Business survey by the World Bank reflects the country’s inability to address government failure. On the other hand, if these are the causes for underinvestment, why is it that manufacturing has suffered a decline relative to services in terms of investment and output? Shouldn’t they all be suffering the same fate?

This leads me to identify the problem of market failures as well. The systematic break that occurred in the mid-80s when the country turned away from industry policy and underwent an aggressive reduction of tariffs unilaterally ahead of WTO commitments left our manufacturing sectors at a disadvantage vis-à-vis our ASEAN neighbors. This is perhaps the reason services have oustripped manufacturing since it represents non-tradables which can only be provided domestically. Think retail, housing, commercial property and yes, utilities. Mining is a similar story. How then could the government begin to stimulate activity within the tradable industries? The following five measures would represent the most important steps.

  1. Partially rollback tariffs to within acceptable levels still within WTO commitments targeting in particular greenfields. Sustainable technology is one example of greenfields. To partly offset the modest rise of inflation that would come with this, tax cuts and (conditional cash) transfers should be directed to low income families.
  2. Finalize the list of investment priorities to signal the areas that government wants growth to occur in. Government must consult with business groups in compiling this list, but it must also exert some independence and take the lead in some areas and not simply take a market follower approach.
  3. Rationalize fiscal incentives and gradually fine-tune the selectivity of sectors for promotion. This has already been initiated by the BOI, but follow through and institutional capacity building needs to occur, which leads to the next item.
  4. Strengthen the economic bureaucracy to solve investment coordination problems across related sectors. Improve the ability of state agencies like the BOI, PEZA, DTI and other government agencies to undertake a consultative and promotional role.
  5. Create a research and innovation fund jointly run by public and private enterprise to encourage commercialization of ideas. Given the excess foreign reserves cited earlier, the state can also afford to undertake this strategy in partnership with academe and the business community.

Compared to the strong-arm tactics being employed by Argentina and Brazil which like us bought into the liberal free trade argument in the 1990s and have like us seen their manufacturing sectors stagnate (see chart), these measures would be considered rather tame.

From 1949 to 1959, the Philippines used heavy handed trade and industry policies similar to what LatAm countries pursued from the 1930s to the 1980s. This led to the fastest growth ever sustained in our history (and theirs). Unfortunately, it did not last long enough for investments to expand beyond light industries as Paul D Hutchcroft notes. The direpute to which import-substitution subsequently fell was the result of the Filipino First policy instituted in 1958 towards the end of the decade of growth, an over-reach of the “elite” nationalists. The poor administration and outright corruption that the policy bred stymied it and led to the liberal policies of the 1960s supported by the landed agricultural exporters.

Pres Marcos tried to weaken the landed aristocracy and revive our nascent industry sector in the 1970s, but the lack of checks to the predatory nature of his regime led to its collapse. The Philippines has been following the liberalization paradigm ever since. The stagnancy of our manufacturing and overall weak economic performance is hard to explain given the structural reforms undertaken from the late-80s. The Philippines since the early 2000s has become a net saving country due to overseas remittances and is rapidly accumulating foreign reserves (it has more than enough to pay off all our external debts). With some tweaking, we can unlock this capital and put it to better use.

So far from encouraging private investors to get into public utilities, the government should actually follow Sec Roxas’s advice to break-up build, operate and transfer contracts to lower their cost to the public. Finally, the government must look to revive investments in the industry sector (which includes high value agricultural and services too) through pragmatic policies. It must create as much policy space within existing WTO arrangements to maximize the benefits of industrialization. Without this its vision for a rapid, sustained and inclusive pace of development might simply come to naught.