September 2012

Still Awaiting Lift-off

The UN Conference on Trade and Development’s annual World Investment Report released back in July this year revealed yet again that the Philippines, a country that ranks on the second tier of potential destinations for foreign direct investments has languished at the bottom of actual investment flows in 2011.

This is a familiar tale, one that both natives and foreign observers alike have come to recognize: the country since its independence has always been touted as a land rich with potential, but it rarely ever lives up to it. Here is what the report says

A group of developing countries with emerging market status and with growing investment potential nevertheless is currently receiving FDI flows below expectations, including the Philippines…

The following chart taken from the report shows where the Philippines lies in relation to other emerging economies:

The UNCTAD is saying that based on our current policy settings and economic fundamentals, the country ought to be attracting more investments than it has actually drawn.

Another exceptional piece of work by Harvard Kennedy School’s Ricardo Hausmann shows that based on a concept called economic complexity the country ranks among the top twelve nations in terms of expected growth of incomes. According to the analysis, our current growth of income per capita is less than what is expected given our level of education and technical sophistication as demonstrated by the things we are able to produce and export.

From 1999-2009, the growth in the average income per person (computed by deducting the population growth rate from the growth rate of the economy) was a mere 2.6%, but based on the country’s underlying economic structure, Hausmann predicts it should grow at 3.5% over the next decade to 2020. That is given the present state of our revealed abilities, the country’s average level of income ought to be rising much more rapidly.

At 2.6% growth per year, the nation’s per capita income doubles every 27 years. At 3.5% it takes only 20 years. Here is a table from Hausmann’s book, the Atlas of Economic Complexity which shows the Philippines ranked 11th among 128 countries in terms of potential income growth per head of population.

Scholars and commentators alike can’t seem to pin the reason for our underperformance down to any logical explanation. Those who take a dispassionate view of our fundamentals are perplexed at our inability to see our economy take off. Perhaps like in the movie Moneyball (see video below), investors are biased, relying on their subjective “gut feeling”, overlooking a potential “star” on the field. Could these biases be causing them to put their money on other high profile picks (the Chinas and Indias) to the detriment of others that represent better returns?

In other words, is the Philippines being undervalued because of these perception biases?

In the past, for instance, it was said that our overprotected industries were the reason for our stagnation. Yet, even when we acceded to the WTO and became an open trading economy in 1995, a rush of investments did not flood in the way it did in China and Vietnam following their accessions in 2001 and 2006.

Then experts turned to our peace and order problem and corruption as the culprits for our underachievement. But then all they had to do was turn their attention to our southern neighbour Indonesia which had worse bombings by terrorists and corruption in high places but has now joined Singapore and Malaysia (according to the latest UNCTAD report) as a highly attractive destination for foreign investments.

Perhaps as the experts say, it is the weak rule of law and lack of democratic accountability that have dampened investor sentiment. Well then, that doesn’t explain why China which has no rule of law or accountability to speak of continues to be the top destination in the world for FDIs. One just has to look at the way the state has kept the whereabouts of its president in waiting Xi Jinping over the past fortnight as an example of its lack of accountability.

All of the above counter arguments make 2012 a critical “breakout” year for the country. As FDIs to China have slowed down as a result of the crisis in Europe, so much so that outward investments or OFDIs have outstripped inward bound FDIs for the first time, as India’s attractiveness also falters due to a stalling reform program, the Philippines has a chance to shine by contrast.

Some are beginning to think that this time around, things might be different for the country. Two years into his six year term and no major scandal has erupted involving the president or any in his cabinet as has been the pattern with his predecessors. Major infrastructure projects have been approved and are now in the pipeline. The nation averted another constitutional crisis during the impeachment trial. Commercial and residential projects dot the landscape.

The naysayers will run the argument that the recent growth experienced in the first half of the year is merely some fluke, the result of good fortune and the flow of remittances from overseas workers. Some will recall the time of the first Aquino presidency which promised economic deliverance based on a return to democracy. The nation held its breath for six long years.

Much like the Obama presidency now in its bid for re-election, the mantra then was that the Marcos dictatorship had left the country in such a deep hole, that it required more than one term to climb our way out of it. Here we are, twenty years since the first Aquino president left office, and we are still waiting for economic lift off.

Will the second Aquino president finally deliver the goods? Is there a compelling reason to be hopeful this time around, that for once the nation will live up to its top billing? I sure hope so, simply for the sake of not having to write the same sort of article again around this time next year. But perhaps we should stop listening to the naysayers.

Perhaps we should channel FDR and think that the only thing to fear is fear itself. Maybe we ought to change the nature of the game and put more faith in the bean counters rather than the old boy’s network. Perhaps it is time to give the Philippines a second chance. A chance to step up to the plate and hit a homer. And then just maybe, we might begin to see the nation take off and fly.

Just give it to the Ombudsman

My unsolicited advice to a couple of friends – one who works in the Palace and another who writes a popular column – was for them to recommend to the President to turn over the whole Puno event to the Ombudsman. That way the President will not be accused of a whitewash if an internal investigation finds groundless the allegations against former DILG undersecretary Rico Puno. Anyway, they think I’m nuts to begin with so they dismissed my suggestion outright. Hopefully, you won’t.

In the US, a Special Prosecutor is named whenever there is an issue that requires independent investigation. That was done in Nixon’s Watergate and several other gates. Neat, right? Except that in the US, the appointment of a special prosecutor is a highly politicized weapon used by both political parties against each other. Normally, it is the party out of the White House that calls for special prosecutors to investigate allegations against members of the Executive. It is rare when there is a bi-partisan call for one.

We don’t have that problem in this country. The framers of our constitution were wise enough to create an independent constitutional office, the Office of the Ombudsman, with the following powers, functions, and duties:

Article XI Sec. 13 of the Constitution:

The Office of the Ombudsman shall have the following powers, functions, and duties:

1. Investigate on its own, or on complaint by any person, any act or omission of any public official, employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient.
2. Direct, upon complaint or at its own instance, any public official or employee of the Government, or any subdivision, agency or instrumentality thereof, as well as of any government-owned or controlled corporation with original charter, to perform and expedite any act or duty required by law, or to stop, prevent, and correct any abuse or impropriety in the performance of duties.
3. Direct the officer concerned to take appropriate action against a public official or employee at fault, and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith.
4. Direct the officer concerned, in any appropriate case, and subject to such limitations as may be provided by law, to furnish it with copies of documents relating to contracts or transactions entered into by his office involving the disbursement or use of public funds or properties, and report any irregularity to the Commission on Audit for appropriate action.
5. Request any government agency for assistance and information necessary in the discharge of its responsibilities, and to examine, if necessary, pertinent records and documents.
6. Publicize matters covered by its investigation when circumstances so warrant and with due prudence.
7. Determine the causes of inefficiency, red tape, mismanagement, fraud, and corruption in the Government and make recommendations for their elimination and the observance of high standards of ethics and efficiency.
8. Promulgate its rules of procedure and exercise such other powers or perform such functions or duties as may be provided by law.
If we have a credible Ombudsman, like the one we have now, then the sort of congressional probe that Sen. Miriam Santiago held last Friday will be seen for what it is: nothing more than epal, the slang for self-promotion by politicians at taxpayer’s expense.

Here’s Miriam doing some self-promotion in a Tweet several days before her hearing:

“There will be a lot of sound and fury. There will be a lot of sound from Mr. Puno and maybe a lot of fury from me.” (http://t.co/HDgSSQFe) Was she promoting the Bourne Legacy? Dispensing viagra to our sensationalist media?

Here is more of her teasing in a press interview: “Maybe the president is not defending Mr. Puno, but is just trying to assuage or protect the backers of Usec. Puno.” Asked to name the backers, she replied, “Now, I can’t because I may be accused of unfair allegations without any evidence.” More viagra for reporters and politicians who are always looking for someone to screw.

Previous presidents, Fidel Ramos and Gloria Arroyo, appointed controversial ombudsmen. Their appointees were seen as their personal bodyguards against prosecution. Consequently, the public did not give any credibility to their work.

But that’s not the case with Ombudsman Conchita Carpio-Morales. She proved her independence as an associate justice of the Supreme Court. Her legal acumen plus her independence are beyond reproach. She is nobody’s protector. She ain’t nobody’s fool. That’s why on July 11, 2011 the Daan Matuwid president appointed her to serve as Ombudsman. She will serve until 2018, two years after he steps down from office, enough time for her to go after him if he commits any crime during his incumbency. That proves the president had no self-interest in mind when he appointed her.

Consequently, Ombudsman Carpio-Morales is the right person to look into the allegations against Puno, any member of the Cabinet, and anyone else perceived to have close personal ties to the president, not only because that’s her constitutional mandate but more importantly because she has the credibility to do it.

The President could have saved himself a lot of flak from politicians and media if he had simply announced, “I’ve turned the papers over to the Ombudsman. I await her findings and will respect whatever action she may decide to take. If you have any questions, go see her. Now let me get back to work.”

Trust me on this one, Mr. President.

Childish and inutile

Nine associate justices snubbed the oath-taking of Chief Justice Sereno. Seven were not around for her first flag ceremony. Presumably, those justices wanted to demonstrate their disappointment and disapproval over the president’s disregard for the principle of seniority and Sereno’s willingness to abide by it. But, as demonstrations go, it was childish and inutile.

Sereno will remain chief justice for the next 18 years unless she resigns or is impeached, becomes incapacitated or dies. So unless the protesting justices can force her to quit or convince Congress to impeach her or if somehow they can incapacitate or kill her without getting caught, they will just have to live with the fact that she will remain their chief and none of them will ever head the Court.

For those associate justices who can’t live with Sereno and the “trashing” of the principle of seniority, former senator Rene Saguisag offered a suggestion, “To dramatize a passion for the principle of seniority, resign! As was done by Supreme Court Justice Florentino Torres in 1920 and my Evidence teacher, Court of Appeals Justice Pompeyo Diaz in 1954.” That’s the way mature and principled people behave.

Justices claim they hold dearly the practice of appointing the most senior justice to succeed an outgoing chief but evidence proves that they do not hold it as dearly as Justices Torres and Diaz.

Justice Reynato Puno did not resign when Gloria Arroyo skipped him for Justice Artemio Panganiban. He thought about it, he said, but he didn’t do it. Maybe the promise that he would succeed Panganiban after a year’s wait was good enough for him. Justice Antonio Carpio did not resign when Gloria Arroyo appointed Justice Renato Corona who was his junior. Now if Carpio could live with Corona then surely he can live with Sereno. Or is it a case of “Not once but twice!”

So what are these infantile associate justices going to do other than undermine their chief? Are they going to show their true colors and confirm once and for all the reason why out of all the thousands of lawyers qualified to serve as justices of the Supreme Court Gloria Arroyo handpicked them? Think about it. all things being equal, why were they chosen by Gloria? Read their decisions for the definitive answer.

Those justices should resign if only to demonstrate their respect for tradition. And the institution. They are not irreplacable. They are not the last bulwark against undemocratic tendencies if in fact there are any. They are not the finest examples of justice. In fact, as Arroyo appointees, they proved themselves champions of executive orders that not only gagged witnesses from testifying about anomalies but also as facilitators of Gloria Arroyo’s attempt to escape justice.

If those brats in robes are unhappy and unwilling to work then they should leave and make way for those who are willing to work their asses off to reform the judiciary and undo all the damage they have wrought. That’s the honorable thing to do, Your Honors. Rest assured none of you will be missed.

Goodbye and don’t let the door hit your asses on the way out.

Michelle Obama hits a home-run

Transcript of Michelle Obama’s address to the delegates of the Democratic Party convention is here.

Michelle Obama did not concede any ground on the Republican party’s claim to the values of “real” Americans. And she succeeded in making the case that Barack, herself, and the Democrats represent values held by the “real” America.

    “Like so many American families, our families weren’t asking for much.

    They didn’t begrudge anyone else’s success or care that others had much more than they did…in fact, they admired it.

    They simply believed in that fundamental American promise that, even if you don’t start out with much, if you work hard and do what you’re supposed to do, then you should be able to build a decent life for yourself and an even better life for your kids and grandkids.

    That’s how they raised us…that’s what we learned from their example.

    We learned about dignity and decency – that how hard you work matters more than how much you make…that helping others means more than just getting ahead yourself.”

    We learned about honesty and integrity – that the truth matters…that you don’t take shortcuts or play by your own set of rules…and success doesn’t count unless you earn it fair and square.

    We learned about gratitude and humility – that so many people had a hand in our success, from the teachers who inspired us to the janitors who kept our school clean…and we were taught to value everyone’s contribution and treat everyone with respect.

    Those are the values Barack and I – and so many of you – are trying to pass on to our own children.

    That’s who we are.

Here are other great lines on values and character from Michelle Obama:

    “after so many struggles and triumphs and moments that have tested my husband in ways I never could have imagined, I have seen firsthand that being president doesn’t change who you are – it reveals who you are.
    “at the end of the day, when it comes time to make that decision, as President, all you have to guide you are your values, and your vision, and the life experiences that make you who you are.
    “He didn’t care whether it was the easy thing to do politically – that’s not how he was raised – he cared that it was the right thing to do.

    He did it because he believes that here in America, our grandparents should be able to afford their medicine…our kids should be able to see a doctor when they’re sick…and no one in this country should ever go broke because of an accident or illness.

    And he believes that women are more than capable of making our own choices about our bodies and our health care…that’s what my husband stands for.”

On Obama as “the other” who does not understand what America is all about:

    “Barack knows the American Dream because he’s lived it”

Here’s a great zinger that draws a distinction between Obama and Romney and, at the same time, sharpens the perception that most Americans have about how the Republicans behave once they get up the ladder:

    “And he believes that when you’ve worked hard, and done well, and walked through that doorway of opportunity…you do not slam it shut behind you…you reach back, and you give other folks the same chances that helped you succeed.”

Another zinger against the Romney/GOP definition of success:

    “He’s (Barack) the same man who started his career by turning down high paying jobs and instead working in struggling neighborhoods where a steel plant had shut down, fighting to rebuild those communities and get folks back to work…because for Barack, success isn’t about how much money you make, it’s about the difference you make in people’s lives.”

She capped the obligatory “why America is great” part of her speech with the following:

    “in the end, more than anything else, that is the story of this country – the story of unwavering hope grounded in unyielding struggle.”

That’s my favorite line in her speech:

    the story of this country – the story of unwavering hope grounded in unyielding struggle.

Home run from Michelle. She reminded Democrats, and Americans, why they voted for Barack four years ago and she motivated them to give him four more years.

You have to watch her speak. (HERE) She is an extraordinary speaker.

Free Seminar on Video Production for Organizations

Free Seminar!!!

Video Production
for Organizations
September 13, 2012
2:00 pm to 5:00 pm

If pictures are worth a thousand words, imagine the value of a video.   Moving images with accompanying sounds designed to sway emotions and convey messages.

Videos can increase the effectively of your organization’s internal and public communications.  It can document events, show actual systems and processes, induce sales, detail instructions and highlight important statements.  Videos are more than a marketing tool.  Take advantage of the accessibility the internet offers, the increasing distribution avenues available, the advancement of technology and lowering cost.  The potential impact a video can have in relaying your institution’s messages are only limited by your application.

Who should attend
Corporations, NGOs and Government Agencies
• Marketing Department Heads and Personnel,
• Employees involved in the Service Procurement, Accreditations and Approval Process

What to cover
Video Production – Overview
Uses of Video in Organizations
Setting In-House Video Group
Key People & Responsibilities
Basic equipment
Skills and knowledge
Hiring Outside Services
Full Production Service (Agency, Production Houses)
Independent Service Suppliers
Guides for a Successful Video
Bid Specifications and  Evaluating Proposals
Speaker
Czarina Sheela Alcasid completed the Master of Entrepreneurship program from the Asian Institute of Management.  She has her own business but her fascination and passion for production keeps pulling her to work in the industry.  She started in 2007 as the program host for NBN 4’s  “Kapihan ng Bayan” and occasionally, as on-cam commercial talent after.  She had performed various capacities such as production manager, assistant director and line producer for music videos, AVPs, video viral and commercial.

To register, email the following to <[email protected]>

Name:
Company (if any):
Phone number:
Email address:

Or phone us at (2) 759-3087 / 892-5281

Seminar Venue: Philippine Center for Creative Imaging (PCCI)
2247 Don Chino Roces Avenue,
Makati City, Philippines

Register early, limited seats available!