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Trapo Alert! Detecting political pandering, part 8

Panderometer

 

Featuring Nancy Binay, Tingting Cojuangco, Jamby Madrigal, Mitos Magsaysay and Cynthia Villar.

This is the eighth part in a series on the candidates for the senate in 2013. Just a recap: I am attempting through this series to have a serious discussion of the aspirants and their political platforms (or lack thereof). These are put through what I call the pander-o-meter to determine whether the policy detail they have released so far places them in either the reformist or populist columns. The following table details the range of possible scores a candidate can get and the equivalent meaning of each reading:

Introducing: the ‘Pander-o-meter’ or Trapo Scale

A reading of… …is equivalent to…

1-2

Low levels of pandering detected, generally reformist in nature

3

A mixed bag of proposals aimed at both pandering and reforming

4

Trapo alert! Approaching dangerous levels of pandering

5

Could be likened to a vote buying trapo

In part 1, I covered Juan Edgardo Angara, JrBenigno Aquino IV and Alan Peter Cayetano. In part 2, I covered Francis Escudero, Risa Hontiveros and Loren Legarda. In part 3, I covered Aquilino Pimentel IIIJoseph Victor Ejercito and Juan Ponce Enrile, Jr. In part 4, I covered Gregorio HonasanErnesto Maceda and Juan Miguel Zubiri. In part 5, I covered Teodoro Casiño, the candidates of Ang Kapatiran Party (John Carlos delos Reyes, Lito David and Mars Llasos), and the candidates of the Democratic Party of the Philippines (Bal Falcone, Christian Señeres and Greco Belgica). In part 6, I covered Grace Poe LlamanzaresEddie Villanueva and Richard Gordon. In part 7, I covered Jun Magsaysay, Edward Hagedorn, Antonio Trillanes, Samson Alcantara, Ramon Montaño and Ricardo Penson.

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Nancy Binay (PDP-Laban-UNA)

The erstwhile assistant of the vice president is gaining the spotlight as she runs for public office for the first time. Having served on the board of her parent’s foundations, Ms Binay is planning to push for health and education services in the senate. Her television ads contain three pledges, which include:

  1. Providing better prenatal and post natal services
  2. Free medicine and nutritional supplements
  3. Education to employment services

It is not clear how her proposals would work. She has not released a detailed policy statement. Her web presence is fairly limited. Her Facebook page contains mostly photos of her and a guy I presume is her partner on the campaign trail. What knowledge we have of her policy prescriptions come from ads and news items.

Ms Binay is banking on the franchise of her family name to assure voters that her promises are backed up with years of assisting her parents in their charities and public service work. Much has been made of her unwillingness to debate Risa Hontiveros on health issues.

While Risa talks in the abstract of making healthcare “more universal” through a systemic reform of the health system, Nancy is using very specific and perhaps targeted health programs that “make it real” to voters. That and the very tangible example of what the Binays have done in Makati is why she seems to be appealing to voters despite the fact that this is her first time to claim the public spotlight.

Unfortunately, we do not know how her programs would be funded and how costly they might turn out to be. It is feasible to do these things in the City of Makati with its rich taxpayers footing the bill for their programs, but doing the same throughout the country will be a major challenge, something that the traditional media has not confronted her with. Indeed, the mainstream media have in a way given Ms Binay a free pass.

I am not saying that her programs cannot be done. All I am saying is that someone will have to foot the bill for them. And without sufficient information regarding how big these programs are intended to be and how they will be funded, we have to take her proposals with a grain of salt.

Pander-o-meter: 4 out of 5

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Margarita “Tingting” Cojuangco (UNA)

This former governor, a history and national security buff, is running to create a peaceful end to the conflict in Mindanao and the settlement of the Sabah issue, her long-time passions. After listening to over forty minutes of her being interviewed on cable news regarding her plans, however, it is still not clear to me as to what her roadmap is for bringing this about.

It is such a shame, given her knowledge gained from scholastic and personal pursuits and involvement in the decades’ old peace process, that she is unable or unwilling to articulate a coherent roadmap for a long-term settlement of the conflict in the south. Pity as even her inclination as expressed in the interview tends to veer away from the current course taken by the administration in revamping the Autonomous Region of Muslim Mindanao. Does that mean the present set up is fine? If so, then why is it that there still is no real peace in the south? What is her alternative plan?

These are serious questions that remain unanswered. She sort of excuses herself for not enunciating a response by saying that ordinary Filipinos are simply not interested in hearing it. That is simply condescending. If one is going to treat voters like children, so that instead of sharing the harsh realities and stark choices, one offers ear candy or things which they presumably want to hear as self-interested individuals, then one shouldn’t be surprised if they return the favour with an equal amount of disdain.

Pander-o-meter: 4 out of 5

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Jamby Madrigal (Liberal-Team PNoy)

Up to now Ms Madrigal’s website has a non-functioning tab for her “Platform”. In other words, she has not even bothered to inform us what her legislative agenda would be if she were to be given another chance to serve in the august chamber of the senate. What are we to make of this?

The only bit of information that exists is her stand on a number of issues from reproductive health to the promotion of eco-tourism. But that really is not nearly enough for us to know what exactly her plan is. Like I have said countless times in this space—it is not acceptable to merely mouth slogans or buzzwords in this campaign. For members of the voting public to support you, you have to provide very concrete measures to address important public policy issues. We know from the bills she has previously authored that Jamby stands for protecting the rights of women and children as well as the environment, so she should lay down an agenda to further those causes over the next six years.

It is not proper to merely use celebrities or gimmicks through social media to gain traction in a bid for a senate seat. There has to be substance. Unfortunately, despite taking some principled stances on certain issues, Ms Madrigal has failed to provide direction to her campaign by laying down a platform. It does not help that her party, the LP and Team PNoy has not come out with a unified stand on issues and a coherent agenda to implement over the course of the next congress. That has left a vacuum for each candidate to fill, which unfortunately Ms Madrigal to this day has failed to attend to.

Pander-o-meter: 3.5 out of 5

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Mitos Magsaysay (PMP-UNA)

This feisty representative from Zambales prides herself with being a “fiscalising” critic of the administration in Congress and vows to do the same if she reaches the upper house. In her bid to attract attention to herself, she runs the risk of being identified as a demagogue with no policy substance whatsoever.

But in fact, if you look at her record in Congress, you will find she has authored a number of significant bills that were passed by the lower house. One of these is an act creating a national student loan board to benefit poor students. If you study this bill closely, you will find that it has some very interesting features. The planned student loan system would be funded by a wage-based levy similar to Philhealth and SSS of anywhere from ½% to 4% of salaries based on a progressive scale (the higher the income, the larger the contribution which sounds complicated to administer). Student loans would be charged 5% annually and have a loan term of 5 years to pay.

I wonder which country Mrs Magsaysay had patterned her proposal after. If she had studied the Higher Education Contributions Scheme or HECS in Australia, she would have learned that five years is too short for student loans accumulated over four years of studies to be paid back. The cost of human capital should be amortised over the working life of an individual, which is at least 20 years.

Another thing is the interest rate. HECS does not charge any interest, or at least commercial rates of interest. It does however index the balance of the loan by about 2.5 per cent every year to keep up with inflation. In addition, a discount is offered for up-front payment of student fees.

The Australian model does not finance student loans with contributions from the working population, but from general appropriations and from repayments of students previously enrolled in the system. Repayments are conditioned on subsequent incomes being commensurate to what is expected of a university graduate. Payments are collected through the tax office in the form of mandatory deductions to one’s personal income. If the person earns less than the threshold, then no repayments are required.

(The recently concluded conference sponsored by the ASEAN and Australia was a forum where Philippine policy makers could have gained a better handle on these issues. Unfortunately, we did not participate in it.)

For this program to work, adequate funding has to be pumped into the coffers of the loan administration equal to the annual student fees collected by state universities and colleges for a number of years. This is until loan repayments from previous cohorts are sufficient to finance the loans of subsequent cohorts. Then the system could potentially be expanded to cover courses offered by private higher educational institutions. When years 11 and 12 are introduced in 2015 and 2016, and there are no incoming freshmen to SUCs, it would be an ideal time to bank some funds in preparation for the launch of the student loan board. I have detailed all this in a previous post.

Mrs Magsaysay has drawn much attention to herself as a firebrand, criticising the administration’s priorities at every turn. She criticises the president’s emphasis on Pantawid Pamilya which encourages primary school enrolment, while she says not enough money is spent boosting tertiary education. The two need not be in conflict, and she should realise this.

Pander-o-meter: 3 out of 5

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Cynthia Villar (Nacionalista-UNA)

Mrs Villar’s record in the lower house shows that she espouses the cause of the vulnerable in society, including seniors, children and women. She has also worked on updating the charters of UP and modernising the Philippine Normal University. When asked about the congressional investigation into nursing education in which she took the side of poorly performing providers rather than the needs of hapless graduates who could not meet the minimum requirements of the profession, she stumbled by denigrating the aspirations of those students, for which she later apologised.

Her platform consists of promoting livelihood programs for women and tree planting activities for environmental conservation purposes. She points to the work that she and her husband Senator Manuel Villar have started in their city in which she served as mayor as evidence that such programs work. It is not clear though exactly how these programs would work at the national level. Does she intend to mandate all local governments to imitate her own pet projects in Las Piñas? Or does she intend for a national agency like the DSWD to manage it? If so, where would the money to finance these programs come from?

This has been a recurring theme in this series. Candidates for the most part are not forthright about the intended size and scale of their proposals. My feeling is that we would need a fiscal sustainability law to force them to cost these and determine the source of funds for them. This would discipline candidates and parties when crafting their policies to provide full transparency and accountability. Without such information, the policies and programs that candidates present are simply pandering to the interests of targeted voters without any care given to their fiscal impact or sustainability.

Pander-o-meter: 4 out of 5

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The final instalment of this series will come in the form of a summary. Stay tuned!

Whither the Philippines in 2020?

As America “pivots” towards Asia where the future economic centre of gravity of the world will be, how big or small a role will the Philippines play in this the Pacific Century?

Source of image: taiwandocuments.org

Jim O’Neill the man from Goldman Sachs responsible for the acronym BRICs (which stands for Brazil, Russia, India and China) in a forthcoming book feels all the more convinced as ever of the accuracy of his predictions ten years ago when he first coined it to describe the growth potential of emerging markets. His sense of vindication for what he now characterises as his “conservative” estimates comes from the fact that in his words,

The world economy has doubled in size since 2001, and a third of that growth has come from the BRICs. Their combined GDP increase was more than twice that of the United States and it was equivalent to the creation of another new Japan plus one Germany, or five United Kingdoms, in the space of a single decade.

At this rate, China will be on track to surpass the United States as the world’s biggest economy by 2027, according to O’Neill, beating the earlier estimate of 2035. Predicting when this will happen has become an interesting past-time of analysts of late, which is why The Economist whose own projections for a 2019 year of reckoning made available the following interactive chart where you can play around with the assumptions and do-it-yourself  by entering them in the assigned fields (see below).

As Secretary Clinton has put it

The Asia-Pacific has become a key driver of global politics. Stretching from the Indian subcontinent to the western shores of the Americas, the region spans two oceans — the Pacific and the Indian — that are increasingly linked by shipping and strategy. It boasts almost half the world’s population. It includes many of the key engines of the global economy, as well as the largest emitters of greenhouse gases. It is home to several of our key allies and important emerging powers like China, India, and Indonesia.

In his address to the Australian parliament, President Obama welcomed the rise of a peaceful China stating that

Together, I believe we can address shared challenges, such as (nuclear) proliferation and maritime security, including cooperation in the South China Sea.
Meanwhile, the United States will continue our effort to build a cooperative relationship with China.
…We will do this, even as we continue to speak candidly to Beijing about the importance of upholding international norms and respecting the universal human rights of the Chinese people.
A secure and peaceful Asia is the foundation for the second area in which America is leading again – and that’s advancing our shared prosperity.

A constant theme in that speech which effectively marked the “pivot point” to the East was America’s adherence to the rule of law to govern international relations in security and economic terms, as well as its championing of open democracies and free markets in the region. In both cases, Obama was at his professorial best when he promoted the concept of rules based trading in commerce and politics.

His speech writers could be said to channel F.A. Hayek the founder of contemporary libertarianism who said that, “Only the existence of common rules makes the peaceful existence of individuals in society possible.

This is consistent with America’s constitutional belief in universal principles. Prof Obama was also acting like Dr King, in that he was delivering a sermon. He may have seemed in Australia to be “preaching to the choir” but his real intended audience was not in Canberra, but Beijing. In Bali, he got to exchange a few constructive words with his Chinese counterpart. Much to the Philippine delegation’s dismay, the US defence posture in the region is not meant to intimidate the rising power of China into submission over the South China Sea issue.

Back home, President Aquino had another axe of sorts to grind with the placing of his predecessor Gloria Arroyo under hospital detention following her indictment for election fraud. This followed a week of controversy involving her attempted departure from the country to seek medical treatment following a Supreme Court decision to temporarily lift the Department of Justice’s hold departure order on her, a decision that was not accepted by the said department.

All of this puts into context, the question of where will the Philippines be in 2020? Will the Philippines be a prosperous democratic country governed by the rule of law? Or will it still be struggling to achieve this ideal that the US president spoke of so eloquently?

Today, the hot topic in Manila among political commentators is whether the action taken by the Aquino government to prevent Mrs Arroyo from leaving was in accordance with the rule of law. On the side of those who say yes is Randy David who believes what we have now is a “rule of justices” not a bona fide rule of law thanks to the lady at the centre of the controversy. On the side of naysayers is Solita Monsod who believes the speed with which the investigation was conducted points once again to the politicisation of the process. Both make reasoned arguments in support of their views.

The president convinced of the justness of his actions and mindful of his constituents exhorted his countrymen to “not waver.” He said that

We are all working for a new Philippines, one where there is equality, where whoever does wrong, whatever his status in life may be, is punished, a country where justice rules.

Whatever the position either camp holds in this debate, all will agree that prosecuting the Arroyos has been quite a messy undertaking, much like the way President Joseph Estrada was deposed from office. The legality of it will be questioned and the merits of it will be argued for years to come in the court of public opinion.

Incidentally, 2011 is also the tenth year since Estrada’s ouster. Back in 2001, Mr Estrada will argue, the country’s elites conspired to bring a sitting and democratically elected president down by extra-constitutional means. Today, it has been argued that one faction of the elite has manipulated the legal system to jail the head of another.

In all this time, has the country progressed towards becoming a stable more prosperous country? To the analysts, the country’s growth rate over the last ten years has proven their rosy forecasts right. They will say that we are on track both demographically and economically to be a force to reckon with by 2020 and beyond.

To the “insiders” the same old problems of social inequity still prevails. One set of rules still seems to apply to one class of people, and another applies to the rest. To the administration and its followers, the Arroyos have become totemic of this system. To them successfully prosecuting and sending her swiftly to jail would prove once and for all that only one system of justice prevails in the country.

To the realists, the application of justice over the course of the next ten years will largely depend on who sits in power. By 2020, a certain boxer-legislator who happened to be one of GMA’s strongest endorsers believes he will be a strong contender for the Palace in 2022. By then he would have tucked a few billion pesos under his belt and followed a path set before by the populist Erap Estrada.

Should the reforms espoused by the current seat warmers of Malacañang not take route in the next five years the political pendulum could swing the other way and a revival of patronage-based populism with a new face could rise to replace the torch-bearers of our current elite democracy.

Similarly, China could match the US pound-for-pound in their rivalry for regional dominance. The Beijing Consensus might by then trump the Washington version. A different model for prosperity might be in play making the need for establishing common rules seem rather (how shall we put it?…) academic.

Shall We Dance (Cha-cha-cha)?

As foreign ownership of land is talked up in the Philippines, other countries like Brazil and Australia are looking to limit it.

Brazil began last year when it decided to treat farmland as a strategic asset on par with oil when the government invoked an old law from 1971 limiting the amount of rural land that foreigners are able to buy. It is estimated that as a result of this about $15 billion of planned agriculture investments will be dropped.

Australia followed suit early this year when its Parliament passed a resolution that would see for the first time their bureau of statistics (the ABS) collate a list of direct foreign ownership of agricultural land, water rights and businesses. This is seen as a first step towards taking any necessary action to safeguard the food security of the nation.

What spooked the federal governments in both cases were growing reports of sovereign wealth funds and state owned or state-backed enterprises buying up vast tracts of prime agricultural land. With the world population set to rise from 7 billion to about 9 billion by mid-century, the quest for food security is forcing countries like Qatar, China and Singapore to look overseas for their food supply.

Unlike the Philippines which has a constitutional restriction against foreign ownership of any kind of land, Brazil and Australia are not seeking to resrtrict foreign ownership, but merely monitor and manage it, to ensure that it doesn’t pose a national security risk or lead to speculative bubbles.

I think these considerations should give our legislators reason to pause and consider their plans for liberalizing participation of foreigners in certain sectors like communications, education, professional services and land. Liberalizing services may be necessary for the Philippines to join the Trans-Pacific Partnership and gain market access to signatory countries in the Asia-Pacific. Opening up real property is another matter.

Opening up land to foreign acquisition would require us to have a few necessary safeguards in place. How would the country maintain food security for instance? Should there be a requirement to seek government approval once the scale of land purchase breeches a certain amount? If so, what should that amount be?

The case involving the lease of one million hectares to Chinese interests for grains and bio-fuel crops which was halted by a petition to the Supreme Court due to its constitutionality will almost certainly become mute once constitutional restrictions are removed.

If stronger states such as Australia and Brazil start to place increasing scrutiny towards the use and sale of their land to foreigners, will the affected foreign firms turn to weaker states like the Philippines in order to pursue their agenda? Once these assets are sold, it will be very hard to retrieve them.

It makes the question of lifting constitutional restrictions all the more poignant. While it is true that it might stimulate much needed investments and exports, what will happen to us as a nation once our ability to feed our people is traded away?

Budget 2012: How it all stacks up

Among the nations in the developed world that follow in the Westminster parliamentary tradition, the most eagerly anticipated policy speech by the government is not the state of the nation address but the budget speech.

The budget tackles not only the spending side, you see, but the tax side as well. On budget night, citizens find out if they are to get some form of tax relief. They also look for any additional spending on things they directly benefit from, like schools, hospitals or infrastructure.

The rich nations that make up the OECD (Organization of Economic Cooperation and Development) have varying levels of taxation. The Scandinavians typically tax more and provide a high degree of social insurance and welfare. The Anglo-American nations of the UK, US and Ireland tend to have lower taxes but provide a smaller safety net for their people.

Australia, the nation I am most familiar with seems to have the best of both worlds, with a tax take much lower compared to the Nordic countries but providing a level of social insurance and welfare comparable to them. That is because its tax and spend policies are some of the most progressive in the world.

Australia spends about 16 per cent of GDP on cash benefits (pensions, unemployment insurance, healthcare and community services) compared to an OECD average of just over 19 per cent. It is able to keep this expenditure down by means-testing benefits enabling it to target spending on those that most need it. Its tax take is about 27 per cent of GDP compared to an OECD average of close to 35 per cent. It is the sixth lowest-taxing country in that group.

Rich country, poor country

It is perhaps in this light that we need to focus on the Philippine tax and spend situation. Most poor countries are able to generate only as much as 20% of GDP from their tax systems. Yet the demand for public service is much higher than in advanced economies. The Philippines is no exception.

In 2012, the government projects it will generate about 1.5 trillion pesos worth of revenue out of a domestic economy that is expected to reach 11 trillion or about 13.6% of GDP. In the current year 2011, the government projects to earn 1.4 trillion out of an economy of 9.9 trillion or 14.2% of GDP. In 2010, the ratio was 13.3% (based on DBM papers).

In 2012, due to its low tax take and with a budget of 1.8 trillion, the government will incur a deficit of 286 Billion (up from the original 260 B) or 2.6% of GDP. That is compared to its projected deficit in 2011 of 300 Billion worth 3% of GDP and 314.5 Billion for 2010 or 3.5% of GDP.

Social services which include education, health, housing and land distribution are programmed to consume 556.2 billion pesos or 30% in 2012. That compares with 529 Billion in the current year equal to 31% of the budget in 2011 and 399.3 billion in 2010 worth 26.2% of that year’s total spend.

Among the social services, education takes the largest share. Next year it will amount to 309 billion or about 2.8% of GDP. This is up slightly from 2011 which was 272 Billion or 2.7% of GDP and from 2010 which was 225 billion or 2.5% of GDP. By contrast, Singapore and Thailand spend anywhere from 3.5-4% of GDP on education. Malaysia spends from 5-6%. If we were to match Thailand’s education to GDP ratio, we would need to spend an additional 70 billion on education.

As for health, next year’s budget includes 59 billion or 0.5% of GDP, up from 48 billion in the current year (0.48%) and 36 billion last year (0.39%). In contrast, Singapore spends about 0.9-1.5% of GDP, while Malaysia spends 1.8%, and Thailand 1.2-3%. If we were to match Singapore’s ratio, we would need to spend about 40 billion more on health.

Finally in housing, the 2012 budget contains 14.5 billion worth of spending or 0.13% of GDP compared to the current year’s 21 billion (0.2%) and 12 billion (0.13%) from 2010. Singapore by contrast spends about 1.8-2.5% on housing. Malaysia spends 0.3-0.6%, and Thailand spends 0.5-1%. If we were to simply match Malaysia, we would need to double our current spend by another 14 billion.

Living within our means

Judging from the magnitudes and ratios alone, we can plainly see that the country will continue to lag behind its neighbors in the region when it comes to providing basic social services for its citizens. As a result, it has much higher levels of poverty and inequality and lower levels of human development among the ASEAN-5.

If you take out the possibility of tax reform, “living within our means” confines the budget department to look for savings and improve the structure or mix of spending to improve the quality of the spend rather than the quantity. Past studies have shown that our education spending is already quite progressive, while that of our health sector tends to be regressive with its focus on the tertiary hospitals in urban centers rather than on primary healthcare in the community.

Certainly, there are opportunities to improve the progressivity of our spending program in health. One problem is that our health system follows the model in the US, Europe and Japan which relies of specific contributions. Those who earn more tend to receive higher reimbursements. While in Australia, health expenditures are financed from income taxes, but then are spent in a more egalitarian way by means-testing recipients so that those who earn more tend to pay more out of pockets than those who earn less.

Can afford more

The orthodoxy of constraining the budget because we have to live within our means can of course be challenged by simply asking the question, can society afford to pay more?

From his State of the Nation Address, the president hinted that we probably could afford to pay more when he cited to his own disbelief the close to two million self-employed entrepreneurs and professionals who declare incomes beneath the minimum wage. The BIR has said subsequently that it believes that the current 10 billion raised from these individuals should actually be about 100 billion.

Aside from professionals and self-employed individuals, the corporate sector might also afford to pay more. That is according to a five year old study by Dr. Renato Reside. His work showed that a very low correlation between investments approved by the BOI and PEZA with actual capital formation in all regions except Regions 4 and 7. He concluded that since investments did not materialize companies were simply using their fiscal incentive privileges to engage in tax avoidance. The recipients of such incentives read like a who’s who of Philippine business elite according to Dr Ben Diokno.

Because companies under this scheme are also allowed to sell as much as 50% of the goods they produce to the domestic market, Dr Reside also believes that much revenue is lost. According to him, back in 2004, we were losing as much as 59 billion pesos from revenues on imported capital goods, 135 billion on imported raw materials, 10.5 billion on the use of domestic capital goods, and 44 billion on income tax holidays provided to these so called exporters. If even half of these were recoverd, it would be an additional 125 billion in revenues.

Another form of tax incentive is provided to sin products because of the non-indexation of taxes imposed on them. It is an incentive because every year the prices of these products go up, but the taxes imposed on them don’t. Government revenues are eroded over time. By gradually increasing the taxes along with the rise of prices in general, the additional revenues from sin products estimated to be as much as 70 billion annually could help beef up our infrastructure which in 2012 will be 270 billion a mere 2.5% of expected GDP.

Indeed, from the combined tax breaks given to entrepreneurs, professionals and corporations, our society could afford to bridge the gap in social as well as economic infrastructure. We could become a more inclusive society. With a combination of better policies and stricter enforcement in revenue and incentive granting agencies, by renovating our economic bureaucracy, we could produce a more progressive tax and spend system.

Imagining True Independence

What would a truly independent Philippines look like?

In the week that the nation was celebrating the 113th anniversarry of its original declaration of independence from Spain, it was fending off rumors of impending incursions into its territory in the Spratlys by China. Having an up and coming naval power in the region press the boundaries of our sovereignty made us call upon our former Commonwealth partner in the US to come to our rescue with assurances of support.

To some, the fact that we had to seek foreign assistance to protect our domestic resources means that we are not truly free. This leads me to imagine what a truly independent Philippines would look like. I use the word ‘imagine’ in the Andersonian sense. Benedict Anderson, author of Imagined Communities would say that all post-colonial societies are mere fiction, inventions of their former colonial masters.

According to one definition of it, “independence is a condition of a nation, country, or state in which its residents and population, or some portion thereof, exercise self-government, and usually sovereignty, over its territory.” The concept of a sovereign state usually incorporates two things: an effective and independent government on the one hand and a defined territory on the other. Nations or states which are unable to fulfill these two requirements are generally recognized as failed states.

Based on these definitions, can the Philippines be seen as truly independent?

Aside from acquiring formal independence in the political sense, what other indicators would signal our independence in a de facto sense. It sounds like a sophomore’s essay writing assignment, but the president himself during his Independence Day addresses was ruminating out loud as to what this would mean for us today. He seemed to be offering up a few suggestions, to wit:

  • One was freedom from corruption. It was present and running rampant in 1898. In Cacique Democracy, Anderson described how the abuses of local bosses prevented the revolutionary taxes from reaching the central government of Aguinaldo. In 2010 a hundred and thirteen years later, one of the decendants of the original revolutionary leaders in the person of PNoy declared that the Philippines had become graft free. Strange imaginings, perhaps, but corruption does prevent the state from governing in the interests of its people.
  • Another ingredient for true independence dreamt up by PNoy was freedom from hunger and unemployment. In his speeches during the week, he spoke of the freedom from privation when he said that the problem facing his countrymen was what type of food to put on the table, rather than having something to eat or not. He also mentioned that overseas workers now had an option to come home to the Philippines because the booming call center industry permitted them to earn decent wages. Again, strange imaginings, it would seem, but deprivation of economic freedom does weaken a nation’s sovereignty.
  • Related to the second ingredient is energy independence or freedom from the high cost of foreign oil. During the week, PNoy announced the fifty percent renewable energy by 2030 target. Indeed the high cost of transportation and electricity along with food are the main causes of misery among much of the populace, which is probably the reason for his declining popularity. However, in the same week that he made this announcement, the palace also released a statement regarding the postponement if not outright cancellation of some port and rail projects just as the previous administration cancelled an airport contract for much the same reason.

Indeed each administration would like to draw a line in the sand to mark the end of the old era and the start of a new one. But what each administration finds out, whether it be the Aquino administration and the mothballing of Marcos’s nuclear plant, or Erap and Ramos’s indepenent power producers, or GMA and Ramos’s NAIA-3, or PNoy and GMA’s pet projects, cancellation of old contracts come at a price. This price is eventually borne by the taxpayers.

A fiscal strategy missing

The deeper question has to do with why the nation has to depend on overseas development assistance or ODA’s in the first place. These projects which often require us to purchase equipment from the donor country are little more than industrial policy disguised as foreign assistance. Indeed with the WTO restricting member countries from exercising independent industrial, trade or monetary policies, public sector procurement provides one of the remaining avenues for a nation to foster domestic import replacing industries.

The model I would put up is that of Marikina City under Bayani Fernando. The city’s engineering department under Mayor BF did not contract out its public works projects but produced everything in house, including its quaint looking portalets, traffic signs and street lights. While the city was not one of the richest, it raised revenues through property taxes which were justified by the city’s improvement of roadworks and schools. Fiscal independence was integral to its development.

Unfortunately, calls for a fiscal adjustment plan that would lead to greater fiscal independence seem to be falling on deaf ears as the administration continues to believe in its ability to attract private investors to supply public infrastructure. The idea is that a user pays principle trumps the socializing of public investment. The problem with that is that along with user pays, PPP’s also introduce the notion of a fair market return for the private investor.

It would be possible, under an alternative situation, for the government to fund the construction of public infrastructure projects and recover its investment by charging users without resorting to a private operator model. Under such a set-up, users would not have to pay as much, as the government would not require a fair market rate of return.

The social contract

The modern imagining of the concept of sovereignty comes from reflections on the relationship between individuals and their government. This led to an “intellectual device” known as the social contract. According to one definition, the “(s)ocial contract arguments assert that individuals unite into political societies by a process of mutual consent, agreeing to abide by common rules and accept corresponding duties to protect themselves and one another from violence and other kinds of harm.”

For the nation to maintain its territorial integrity, and protect its off-shore assets in the South China Sea from invasion, it will have to increase its military budget. Australia has already announced that it will increase its deployment of defence assets off its northern and western shores to secure its oil and gas reserves. The move comes while it also contemplates increased US military presence on its own bases. This is in anticipation of the rising influence of resource hungry China in the region.

For the government to provide security and basic social services to the people in a way that enables them to be productive citizens, it will have to become more efficient and competent in acquiting its resources. One of the things hindering the present government from doing what it intends appears to be its fear, some would say paranoia, that a lot of its spending goes to line the pockets of corrupt officials.

This distrust has created bottlenecks in the expenditure program which has hampered development spending of late. If as PNoy stated the Philippines has become graft free, it would be partly because his government in its first year has withheld spending from most of its line agencies with only the military and police agencies being spared.

Finally, and perhaps as a parting shot, let me say that if the nation is to be more mature, one would imagine there to be no need for petty partisan politics during national celebrations such as June the 12th. The use of folksy street parlance to settle personal political gripes denigrates the solemnity of the occasion. For me, the day when we as a people can mark such important dates in our history without our leaders resorting to snide remarks and bickering of this sort will be the day that our nation truly becomes free.

Noy slams APEC allies over travel advisories

Noy slams APEC allies over travel advisories
By Aurea Calica
The Philippine Star

YOKOHAMA – President Aquino appeared in fighting form before other heads of state during the Asia-Pacific Economic Cooperation (APEC) Summit here, lashing out at his counterparts for recent adverse travel advisories on the Philippines.

Mr. Aquino was particularly irked by the travel advisories coming from countries that he said are supposed to be allies of the Philippines.

He said the advisories had been issued amid efforts of his government to encourage investors to come to the country.

Mr. Aquino, who attended the APEC CEO Summit here along with New Zealand Prime Minister John Key, was the one who got the most attention from businessmen, as several questions were thrown at him over how they could invest in the Philippines in the light of the adverse travel advisories.

Mr. Aquino and the New Zealand leader were joined by business and industry leaders led by Asian Development Bank (ADB) president Haruhiko Kuroda, DHL CEO Hermann Ude and All Nippon Airways Co. Ltd. chairman Yoji Ohashi, who is also vice chairman of Nippon Keidanren.

Mr. Aquino and Key were separated by a coffee table and delivered their speeches before the question and answer portion.

Mr. Aquino sternly answered the question on travel warnings against the Philippines, which elicited laughter from the crowd.

Key, for his part, seemed to have reddened  serious and blushed while Mr. Aquino voiced his displeasure over the advisories. New Zealand was among six countries that warned against travel to the Philippines, citing imminent terror attack.

Host nation Japan the other day joined the other nations that issued adverse travel advisory against the Philippines, but this time, warning against robbery and kidnappings.

Mr. Aquino lamented that other countries should be more considerate to their allies vis-à-vis their responsibility to warn and protect their own citizens.

Mr. Aquino though thanked the businessman during the forum for bringing up the issue of adverse travel warnings. He said the Philippines “unfortunately is not one of the tourism powerhouses yet.”

“We have three million visitors a year, some of our neighboring countries would have as high as 22 million visitors. Unfortunately, with the terror advisories recently we were singled out as a place to avoid,” Mr. Aquino told the forum.

“Unfortunately for us, there seems to be standards when they issue these alerts. There are countries that have experienced terrorist attacks directed at tourists (and) that area placed in a category lower than the Philippines in terms of terrorist alerts,” he said.

Mr. Aquino said there are countries that have harbored terrorists who attacked other countries but they are not included in the list of travel alerts.

“We don’t understand why, on the basis of a report that actually talked about a threat that was very dissimilar to previous Islamic, fundamentalist, jihadist attacks, suddenly gains so much credence that’s enough to issue all of these alerts that unfortunately were played up by our media,” he explained.

Mr. Aquino was acerbic in his comments, eliciting laughter from the crowd, particularly when he questioned the “sincerity of our allies” in issuing the adverse advisories.

He said the travel warnings came even as the Philippines is preparing a tourism campaign on Nov. 15.

“One has to suspect the sincerity of some of our allies,” he said. “We have made our displeasure known to their ambassadors.”

Mr. Aquino told the forum that the Philippine government had implemented a new procedure that would validate any information on security threats.

“We have a new procedure put in place. You know the basis of the information given to our government came in the form of SMS (short messaging system) and it was more, in the best light it can be said, it was taken so that they will not be accused of not doing anything,” Mr. Aquino said.

“But in terms of validating the data, it seems there is no effort at all to validate and this negatively impacted on our country’s efforts and again one has to wonder why such a thing came from allies,” he added.

‘Is not unusual’

Malacañang, for its part, said the latest travel advisory issued by Japan against the Philippines “is not unusual and extraordinary.”

“These are just precautionary measures. We respect our Japanese friends on this,” Presidential Communications and Operations Office Secretary Herminio Coloma said.

Coloma stressed the responsibility of the Japanese government to ensure the safety of its citizens.

He said the Department of Foreign Affairs (DFA) is regularly holding dialogues with embassies for a “clearer understanding” of foreign governments.

“We want to know what their concerns are,” Coloma said.

What makes the Japanese travel advisory different, Coloma noted, was that text was written in Nippongo, which means only Japanese people can understand it.

“There is no English or international version,” Coloma said. “The travel advisory was written in Japanese.”

Coloma also noted the Japanese travel advisory did not mention any possibility of terror attack in the Philippines.

Japanese Ambassador Makoto Katsura explained the advisory was merely a reminder for their nationals visiting the country to take the usual precautions against criminal elements.

The travel advisory, Katsura said, is being issued by the embassy regularly, particularly in the last months of the year when a significant number of Japanese tourists travel to the Philippines.

“So we just ask them to take safety measures against any security concerns like robbery and kidnapping,” he said.

Katsura pointed out his government’s advisory was “completely different in nature” to those issued by the United States, Australia, New Zealand, United Kingdom, Canada and France.

The six nations came out with their respective advisories one after the other within a matter of days, all of which warned of an imminent terrorist attack.

Security forces confirmed they were aware of the report of a terrorist threat on the country but stressed the information should be validated.

Officials said this was the same information used by the six nations when they issued their advisories against the Philippines.

Matsura clarified the advisory did not discourage their citizens from traveling to the Philippines. What it did was only to remind Japanese citizens to “take safety measures against any security concerns like robbery and kidnapping.”

“Our advice is quite different from them. We just remind them of the possible security (risks). We advise them to take precautionary measures,” Matsura said.

Matsura said the Japanese embassy had no idea about the information used by the six nations to issue the travel warnings.

President Aquino lamented that foreign countries did not share information with the Philippines that eventually led to the spate of adverse travel advisories.

He said the six countries did not even bother to coordinate with their Philippine counterparts on intelligence matters to check if the reported terror threats were real and accurate.

The US embassy issued a statement explaining the latest travel advisory against the Philippines carried only “slight changes.”

The British government also clarified it did not issue any new advisory to its nationals but only a revised travel advisory.

The Australian and New Zealand embassies also responded in similar tones. With Delon Porcalla, Danny Dangcalan

UK, Australia issued travel advisories to Philippines (updated)

A “credible” threat of some sort has gotten the governments of the United Kingdom and Australia to issue a travel ban to the Philippines.

“There is a high threat from terrorism throughout the Philippines. Attacks could be indiscriminate, including in places frequented by expatriates and foreign travellers. Such places could include, but are not limited to, airports, shopping malls, places of worship etc,” the UK Foreign and Commonwealth Office said on its website.

The Australian Foreign Affairs and Trade Office echoed the warning. “We continue to receive credible reports indicating terrorists are planning attacks against a range of targets in a variety of locations, including places frequented by foreigners… such as large shopping malls and convention centres.”

(entry updated. title changed from ban to advisory. – @cocoy)

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