Elections 2013

Philippine conservatism

On the problem of “jobless growth” and how to fix it

The last time the Philippines experienced an economic contraction was way back in 1998 in the aftermath of the Asian financial crisis. Since then, the country has posted 57 consecutive quarters of positive growth averaging 4.7 per cent in real terms year-on-year.

That may not be as fast as the Chinas or Indias of this world, but it is still pretty respectable considering the events both domestic and foreign that have occurred during this time (which include the impeachment trial of President Joseph Estrada, EDSA Dos and Tres, September 11, the dot.com crash and Enron scandal, the Oakwood mutiny, the global financial crisis, the Great Recession, and the current EU debt crisis, to name a few).

What do we mean by jobless growth?

Over the last seven years, 5.42 million net new jobs were created or an average of about 773,000 annually. This again is no mean feat. The only problem is that the labour force has also grown by about 5.49 million averaging an increase of around 785,000 new entrants per year 76,000 more than the jobs created since 2005.

If the growth of our workforce had been half as much, then the amount of jobs created would have been sufficient for the 2.8 million unemployed workers in 2012. If not for demographics, our unemployment rate would be much lower. Jobless growth in our context can best be described as a situation where economic growth fails to produce enough jobs to reduce the absolute number of unemployed workers in a sustained manner.

In the past, the economy’s inability to bring the number of the unemployed down was assigned to the growth rate not being fast enough. Instead of growing at an average rate of around 5 per cent, we needed to be growing at 7 per cent, or more.

Over the past three quarters, that is precisely the speed at which our economy has been expanding–above 7 per cent–which makes the employment figures for the April 2013 quarter all the more disappointing. Over the year, the number of those employed actually fell!

While we should not read too much into one quarter’s report (it is best to average four quarters’ worth of jobs data for the year to get a more realistic picture), it is still worth pondering how the economy could have expanded so much and yet not have made a dent in employment terms.

Examining “jobless growth”

Perhaps, much of the growth occurred as people moved from temporary and daily wage earnings into full-time, salaried employment as the labour force survey suggests. Increased income per worker rather than an increased number of workers might be a plausible explanation.

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The other could be the increasing “financialisation” of the economy as the banking and finance sector posted one of the highest growth rates among all sectors. This means that growth came more in the form of profits, bonuses and commissions paid to the business elite and their shareholders. Financialisation has been blamed for jobless growth in the West, more recently.

Then there is technological progress. The construction industry, for instance, may have grown the fastest, but the use of new methods and materials might have made it less labour-intensive than before.

The same applies to manufacturing. Our country once specialised in garments and toy-making which were conducive to sweatshops, but we have since switched to electronics and semi-conductor production which makes use of automated processes. The rapid growth in durable equipment that occurred in the first quarter could have allowed businesses to substitute capital for labour.

How Philippine conservatism is to blame

This would all be fine if those who profited from growth gave back a proportionate amount of their earnings in the form of taxes. Unfortunately, the collection of taxes went down as a proportion of GDP in the first quarter of the year. Despite the best efforts and reassurances of the current administration to lift the tax collection effort, their ability to generate tax receipts in a manner that would keep pace with the growth of the economy, remains very much in doubt.

The unemployment situation would be even worse if not for the mobile and adaptable workers that we have. Over the past seven years, the country has on average deployed 1.3 million Filipinos each year to work abroad. If we had not done so, we would have had double digit unemployment rates during this time. There would have been greater poverty, crime and social unrest, not to mention less consumption, savings and investment.

The residential and commercial property sector as well as financial markets would not be experiencing the boom we are currently witnessing. The credit upgrades that our political elite boast of would not be possible either.

Yet, despite the extra impetus provided by ordinary Filipinos who are forced to earn their living from abroad, often under difficult conditions, separated from their loved ones, the conservative forces in our society have successfully marshalled resources to maintain the status quo or keep it from changing rapidly instead of opening up our socio-economic life to the dynamism that it requires.

First of all, the demographic burden that we have discussed above has been caused by conservative forces hindering the development of reproductive health policies for decades. As a result, the Philippines will only see its population peak sometime in the latter half of this century based on current estimates. This has created a situation where the country’s current growth rate is unable to provide a sufficient number of jobs for those entering the workforce.

Secondly, the low tax-to-GDP level in the country has been set by the oligarchic business community in complicity with dynastic political families who have been unwilling to contribute their fair share to improve our country’s physical, social and economic infrastructure, the very thing needed to boost investment. Of course that doesn’t bother them because as the big fishes in a small pond, they are able to keep their stranglehold on the nation’s resources.

As the government relies on the private sector to fund major infrastructure projects, large domestic conglomerates have successfully cornered these contracts. The tepid pace at which Public-Private Partnerships have been approved is due to the fact that interest from the global investment community has waned. This isn’t the sort of public private partnership we need. The correct form of partnership is for the business community to pay the right amount of tax for the government to do the investing, not the other way around.

Thirdly, other countries with more progressive leaders have created sovereign wealth funds from their balance of payments surpluses to invest in their nation’s development; but, the inherent conservatism among our policy elite restrains them from tapping the massive stock of foreign reserves generated primarily not through exports, nor by foreign direct investments, but by foreign remittances, to fund the infrastructure needs of the country.

This innate conservatism was on display during the last election. I did a thorough evaluation of the senatorial candidates—their policies and legislative proposals—and two of the most topical were the ones to increase “skills matching” activities and loans to micro, small and medium-size enterprises (MSMEs).

Now I have nothing against skills matching, but we know that there are skills shortages that if plugged would only solve a tiny fraction of the unemployment problem, and yet so many senatorial candidates ignored the elephant in the room, the massive, long-term unemployed in favour of the small target.

Similarly I have nothing against MSMEs, but we also know that MSMEs do not generate as much new employment, at least the kind that matters, i.e. the full-time, salaried kind. And yet they take up an inordinate amount of attention in our political discourse. The new ventures with high innovation content, the kind that generates higher incomes and greater employment were not even talked about, save for one candidate who took on board the sovereign wealth fund idea to fund them, but failed to get elected.

How do we rectify the problem

The notion of the state performing the role of investor of last resort, the source of funds for projects that are deemed too risky by private capital markets but could have massive potential, is seldom talked about. This is because our history is littered with incidents where our business elite have exploited their connections within government to fund their own pet projects. Rather than being the lender of last resort, the government has been the financier of first instance, or the source of “booty capital”.

Of course, given our innate conservatism, marked by a high tolerance for social inequality and low tolerance for risk, there is nothing that prevents us from focusing on the small target, the low hanging fruit, the necessary, but insufficient conditions for mass employment generation. We can continue focusing on providing the right “eco-system” for innovation and investment, lowering the cost of doing business and the like.

But what should happen if our overseas workers start being turned back in droves? What if that seemingly limitless source of jobs for our swelling labour force starts to run dry, whether this be due to economic nationalism (as in the case of Saudi Arabia with its policy favouring locals), border disputes (as in the case of Taiwan following the shooting by our coast guard of their fishermen), or some other unknown factor? What then?

Without this safety valve, will our conservative leaders still manage to keep an ironclad lid on our social cauldron? Even before it comes to a boil, they need to re-examine the basic framework for growth and development that has embodied their consensus for thirty odd years. In the past they have been good at socialising the cost of their projects and privatising the (super-) profits. It is time that we gear up the state to be able to fund development and innovative risk-takers and to capture a fair share of their rents for our people’s benefit.

The Philippine Growth Spurt: will it last?

Image credit: NSCB.gov.ph

The latest release of GDP growth figures showed an upward growth spurt for the country. From a growth of 6.8 per cent for 2012 (revised up from initial estimates) to an unexpected year-on-year growth of 7.8 per cent in the first quarter of 2013, the numbers seem to provide both a strong signal to the world that the country now is back in business and a platform for the government to claim that its policy of pursuing clean, honest governance is paying off.

Having outpaced the growth of countries like China (7.7 per cent), Indonesia (6 per cent), Thailand (5.3 per cent) and Vietnam (4.9 per cent), and having done so on the back of an expansion of manufacturing and construction, has led some commentators to claim that the country has turned a corner or reached a “tipping point” from where it would now be on solid footing on a higher growth path.

There are only three things to point out here.

The first is the blindingly obvious: one quarter’s performance does not make up a trend. We cannot make any projections regarding future prospects based on this single observation. I would argue, not even the performance of the last 18 months proves anything. Remember 1997 when we thought we were about to take off? For those who were old enough to recall, remember what happened next? The same thing can be said of today’s situation.

Second is for us not to downplay the effect of the recently concluded elections. Malacañang has stated that this was an unusual GDP growth result for a non-presidential election year. You would expect them to say that, but the problem with their argument is the automation of elections, which makes campaigns more expensive by all accounts as cheating can no longer be achieved centrally at the provincial or municipal levels, as was the case prior to automation, but has to be done at the retail, grass roots level through vote buying.

We cannot discount the fact, particularly in this election which was dominated by entrenched political families, that money might have flowed massively unlike previous midterm elections. This would have meant that provincial and municipal incumbents hit the pork barrel pretty hard in the opening months of the year in a bid to prove to constituents that they were hard at work.

Government spending and construction growth were consistent with this view, along with financial intermediation, which again could have been linked to this. That does not necessarily mean that all this spending went to waste. It just means that a large component of the first quarter growth was seasonal in nature: determined as it was by the political-business cycle.

The third and final point I would make is that the Philippines becoming the fastest growing economy in the region is more about China decelerating than it catching up to China. The two are interlinked though. Let me explain.

During the last decade, China was the workshop of the world. It basically drained the swamp for ASEAN sucking in much of the foreign direct investments in manufacturing. During this time, the Philippines suffered a hollowing out of its industrial base, what little of it that it had.


At some point in this period, China’s income per capita overtook the Philippines’. Demographically, China also started to face the consequences of their one child policy as labour started becoming scarce as investments in China’s interior slowed the migration of workers out to the prosperous coastal regions.

The newly installed Chinese president has also indicated that the government would not sacrifice the environment in pursuing economic growth. Much social unrest now stems from pollution. They are seeking to transition the country away from its dependence on exports and investment. China has basically lost its cost competitiveness and will now have to grapple with the challenges of being a middle income economy.

Early this year, it was reported that inward foreign investments into ASEAN have for the first time equalled that of China. A structural realignment is now taking place. Bangladesh, Vietnam, Myanmar and Cambodia are now the new Chinas. The Philippines could perhaps be benefiting from this trend as well. It probably has less to do with what the government is doing, and more to do with external factors, as I have just mentioned.

All this now puts the onus on government, however, not to “muck things up”. Recall how it inadvertently pulled down growth back in 2011 when it pursued a de facto austerity policy? Let me take the opposing view now and say that this could be the start of a trend, a structural break in economic parlance. In that scenario the one thing that could potentially derail it is the “noise” that we create. Happily for the administration, it won a rare majority in the Senate and kept control of the house (assuming its alliances hold).

The mystery now is what it plans to do with that majority. The ball is in its court. If this sudden growth spurt is to be maintained, then for the next three years, the Aquino government will have to work hard to unclog the investment pipeline in infrastructure, skills and energy that are needed to power its economy through.

Will things like charter change, the proposed Bangsamoro autonomous region, territorial disputes with our neighbours or some completely unexpected Black Swan event throw us off course? That I suppose is the burning question of the day.

Winner’s curse: How the opposition intimidated Team PNoy to take the low road to win in 2013 while leaving daang matuwid with no clear agenda or heir-apparent


In the Japanese martial art of Jujitsu one gains victory not by superior strength, but by using the force of one’s opponent against him. This is what the leader of the “friendly” opposition Vice President Jojo Binay did to the administration in the 2013 senatorial elections.

Having defeated President Aquino’s heir apparent Secretary Mar Roxas in the 2010 vice presidential derby, Binay’s unrivalled popularity while in office and his links to two of the most revered names in Philippine politics (Senate President Juan Ponce Enrile and ex-president Joseph Estrada) made “winnability” foremost in Team PNoy’s mind in considering candidates for its 2013 senate slate.

Having experienced the “tyranny of numbers” in the lead up to the impeachment trial of Supreme Court Chief Justice Renato Corona and in the subsequent push to have a number of its reform measures passed, the administration was not going to risk losing a majority of senate seats this time around. This caused the administration to take a “win at all costs” approach.

Its first move was to mend fences with its former rivals in the 2010 election. The entry of the Nacionalista Party’s standard bearers into the tent of Team PNoy spelled an about face for both parties. Senator Alan Peter Cayetano had started the TOPAK meme which maligned the president’s mental capacities. Senator Loren Legarda had called on him to undergo a psychiatric evaluation during the campaign. All that was swept under the rug as far as the administration was concerned.

After framing the contest between Messrs Aquino and Villar back in 2010 as one of “light v darkness”, the Villar’s were all of a sudden admitted among the “chosen ones” who would travel down the “Righteous Path” alongside the president. Not to worry, the administration said, since such a coalition was based on platforms, not personalities. Except that they avoided at every turn to define what that platform was.

When asked to identify the top 5 legislative proposals Team PNoy would push for if elected, its spokesman, Rep Miro Quimbo could only identify 4. “Let me get back to you on that” was his candid response. Unfortunately even the priorities he outlined didn’t figure in any formal policy document or in most of the endorsed candidates’ platforms.

When asked why there was no shared policy platform across Team PNoy, the undersecretary for strategy and communications, Manolo Quezon replied that midterms weren’t about policies but a referendum on the president. You either believe in him and his “chosen ones” or you don’t. So there you have it. The election was framed as a clash of personalities and their proxies, not as a contest of ideas, policies and visions for the country. Here’s what he said…

Consequently, the voters simply did what they have always done when faced with no real alternatives but the same old dynasties and incumbents: they went with those that connected with them on a deep emotional level, those with whom they felt a sense of shared destiny.

Due to the economic make-up of our electorate, that meant electing Nancy Binay even if she had no prior experience working in an official capacity in government. It also meant catapulting Grace Poe to pole position based on the memory of her deceased father and the playful use of her surname as an expression of respect.

Both these candidates scored high on our “trapo scale” dubbed the “pander-o-meter” based on an analysis of their personal platforms. Of course their policies were never scrutinised by the media. Neither did the intelligentsia perform its role in critically assessing the promises of each candidate (the absence of party-wide platforms made this task a lot more difficult than it should have been).

Health care reform, a key plank in Ms Binay’s platform was not given the kind of treatment it needed. She was never challenged on the feasibility of her proposals to provide free nutrition and medicine particularly to nursing mothers. In the case of Grace Poe, nobody noticed that her campaign was anchored on a coulda shoulda woulda basis committing her to nothing specific and nothing firm.

The candidates were allowed to promise the sun, moon and stars all the while pandering to the emotional pleasure zones of the electorate without the voice of reason being given an honest hearing. Social media was co-opted to suit the candidates’ purposes. There was no one calling them out on the false hopes and expectations that they were building.

Finally, in assessing the aftermath of Election 2013, what we will find is that although Team PNoy garnered a clear majority of seats that were up for grabs, it comes out the weaker party.

Sure, it now can boast of having a majority in both chambers of congress, but the political calculus facing its adherents will be daunting. Will they really pursue the tough and unpopular reforms that are needed to bring the country forward, especially now that the electoral bankability of the BInay dynasty remains utterly unassailable?

Secondly, the president does not have a clear, viable heir-apparent to challenge the Jojo Binay-Jinggoy Estrada machinery and name recall in 2016. Secretary Mar Roxas has not accepted his party’s draft to run perhaps due to his failure to define a narrative for his candidacy.

Only one of the Liberal Party’s three senatorial candidates is likely to win in this election, in large part due to the fact that he shares the same name as the president. Bam Aquino will be too young to contest the presidential elections in 2016 being a year shy of the minimum age requirement, repeating the fate of his late-uncle.

So that leaves the administration with a mere three years to cement its legacy before handing over the reins to its successor who is likely to come from the opposition. For failing to define its agenda and properly vet its allies prior to the elections, the administration now suffers the problem of having no clear mandate to implement whatever reforms it outlines afterwards.

The same thing happened following the 1986 people power uprising. Rather than develop a new breed of politicos based on principles and a common reform agenda, the revolutionary government of Cory Aquino accommodated and resuscitated the clans who ruled the country in the pre-Martial Law era allowing the children of its revolution to die in the ditches defending their cause.

Joseph Estrada once said that her government’s biggest mistake was letting guys like him back in (clever guy he truly is!). Only those like Jejomar Binay who were willing to “play by the rules” of the jungle survived.

Instead of taking the hard, difficult path of building a constituency for reform through principled, policy-driven politics and developing a new breed of politicians from inside its base, the second Aquino administration opted to go down the quick and easy path to success, just like the first.

For those that thought 2010 marked the beginning of an era of new politics, think again. The years 2010-16 might simply be an interlude, a case of trapo interrupted, where the country enjoyed a momentary respite from the worst forms of populist, predatory politics at the top, before old habits kicked in once again.

Image: courtesy of Rappler.com

Trapo alert! 2013 Election summary

I have attempted through this series to have a serious discussion of the 2013 senatorial aspirants and their political platforms (or lack thereof). These were put through what I called the pander-o-meter to determine whether the policy detail they had released placed them in either the reformist or populist columns. The following table details the range of possible scores a candidate was able to get and their equivalent meanings:

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

Follow the links below if you want to review the detailed notes regarding each candidate’s score (found in parenthesis):

Part 1: Juan Edgardo Angara (3), JrBenigno Aquino IV (1.5) and Alan Peter Cayetano (6).

Part 2: Francis Escudero (2.5), Risa Hontiveros (2) and Loren Legarda (4).

Part 3: Aquilino Pimentel III (3)Joseph Victor Ejercito (4) and Juan Ponce Enrile, Jr (1.5).

Part 4: Gregorio Honasan (1.5)Ernesto Maceda (5) and Juan Miguel Zubiri (6).

Part 5: Teodoro Casiño (4), the Democratic Party of the Philippines’ Bal FalconeChristian Señeres and Greco Belgica (3), and the Ang Kapatiran Party’s JC delos Reyes, Lito David and Mars Llasos (4).

Part 6: Grace Poe Llamanzares (4)Eddie Villanueva (3) and Richard Gordon (5).

Part 7: Jun Magsaysay (1)Edward Hagedorn (2)Antonio Trillanes (3)Samson Alcantara (4)Ramon Montaño (3.5) and Ricardo Penson (2.75).

Part 8: Nancy Binay (4), Ting Cojuangco (4), Jamby Madrigal (3.5), Mitos Magsaysay (3), and Cynthia Villar (4).

In studying the platforms of various candidates, more weight was given to the legislative program they articulated through campaign documents and news releases. Platitudes and expensive programs with no costings or identified sources of funding were reasons for marking down the candidate. Those that offered buzzwords with no policy detail were likewise downgraded. I then took account of their stand on certain critical issues. Some revision was done to account for this.

It should be noted that assessing candidates can be a highly qualitative exercise. We are all subject to our individual biases. I tried to ground my analysis on the policy prescriptions of each candidate rather than on issues concerning their private lives or rumours of misconduct. The following interactive charts show the Trapo scale reading for each candidate and the average for each ticket, beginning with Team PNoy, followed by the UNA Coalition and the independents.

Golden opportunity gone to waste?

The average score for Team PNoy is 3.13. It is a mixed bag of reformers and populists. The administration missed a golden opportunity in this election to define a legislative agenda for the remaining three years of its life and require those on its ticket to commit themselves to this program of government.

Having the wind in its back with investment grade status being granted Philippine sovereign debt by credit rating agencies, Team PNoy could have crafted a set of reform programs that would have consolidated these gains and teased out the president’s social and economic agenda through legislative proposals. Instead it was left up to each member of the team to set priorities in an uncoordinated and often self-contradicting fashion. Rather than follow the president down the righteous path, their policy prescriptions seemed to be scattered to the four winds.

Team PNoy would have us squander the gains of his administration. In direct violation of its stated policy of shrinking the fiscal deficit down to 1 per cent of GDP per annum in a year or two before it leaves office, some of the “chosen ones” want to go the other way. One intends to exempt petrol from VAT and another wants to lift the tax free threshold to the minimum wage level with no offsetting savings or revenues. At the same time they want to expand social entitlements massively. That would lead us back down the same road to ruin we were on early in the last decade.

No viable alternative

The average score for the UNA Coalition is 3.8. It is reaching dangerous levels of traditional politicking, akin to vote buying almost. While the administration has not assembled a team with a coherent and cohesive agenda, the opposition is not offering anything better. They are in fact trying to outdo Team PNoy in promising populist measures. It is the role of a responsible opposition party to present a viable alternative program of government. Unfortunately, the UNA coalition is not performing that role very well (or at all) with the way most of its candidates pander to the electorate.

The average score for the Independents is 3.35. They are a mixed bag, which is what you would expect. There is one or two reform minded players in the mix. If I was thinking of cherry picking candidates from various parties instead of voting for a straight ticket, then I would select from one of these options.

Of tramps and trapos

The pander-o-meter was crafted so that we as voters could have a way of cutting through the sweet nothings politicians often whisper in our ears. These often consist of what the late Nobel prize winning economist Milton Friedman called “free lunches”. The thing with free lunches as Friedman famously pointed out is that they simply do not exist. Someone will eventually have to foot the bill. Lavish entitlement programs are hard enough for rich countries to maintain, let alone impoverished ones.

When a government can muster no more than 20 per cent of its economy from taxes and other forms of revenue to pay for its expenses, then whatever spending it does has to be efficient, well-targeted and productivity enhancing. What we have seen from most of the candidates of Team PNoy and UNA is a spraying of social entitlement programs every which way without regard at all for our budget bottom-line. Nothing and no one seem to rein in their capacity to promise the sun, moon and stars. They seem to be operating on an assumption of limitless resources, instead of the shallow pockets that we have.

You might of course assess the candidates differently with your own scoring system. In the end, all I hoped to achieve was to concentrate the discussion on what really counts: policies and programs, costings and budgets, rather than on celebrity and platitudes. If we compare the pander-o-meter reading with the polls for instance, it is clear that several candidates on the verge of being elected to the senate do not deserve to be there. I hope that this series has been helpful in elevating our political discourse to some extent by bringing to light certain substantive issues that normally do not gain much attention in the course of our electoral cycle.

Trapo Alert! Detecting political pandering, part 4

Panderometer

Featuring Gringo Honasan, Ernesto Maceda and Migz Zubiri.

This is the fourth 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 this instalment, I will be covering Gregorio Honasan II, Ernesto Maceda and Juan Miguel Zubiri.

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Gregorio “Gringo” Honasan (Ind-UNA): has been principally involved in crafting a number of landmark pieces of legislation on the environment (Clean Air, Clean Water and Solid Waste Management Acts), national security and public safety (National Security policy and Disaster and Risk Reduction Management Act) and social reform (Comprehensive Agrarian Reform Program Extension with Reforms Law).

His manifesto says that he is currently shepherding the passage of a number of bills through the Senate. These are listed as:

  1. Freedom of Information (what he calls POGI or the People’s Ownership of Government Information) act
  2. National Mapping and Resource Authority Law and Land Use Act
  3. Mini-Marshal Plan for Mindanao.

My critique:

It is clear from the senator’s platform and track record that he takes a strategic view with regards to public policy issues. The pieces of legislation that he tends to get involved with are often framework documents in areas that are often neglected and require the state to set the scene. They don’t make for catchy political jingles or slogans but they are essential nonetheless.

The Clean Air Act has been criticised due to implementation failures owing to corruption, but at its core are the fundamental principles of using a market-based mechanism for pollution abatement and of making polluters pay for their emissions. These create incentives for motorists and businesses to change their behaviour in the long-run.

Similarly with a National Land Use Act, the development of a 30-year plan would come into play which would guide the setting of city and municipal zoning ordinances and ensure the proper use and development of natural resources based on a mapping of regions done at the national level. One of the important benefits of this would be to prevent settlements in ecologically sensitive or disaster prone places. Again, behaviour would be changed because a national framework would be in place.

Overall comments:

Senator Honasan demonstrates through his legislative work a kind of far-sighted, long-range vision and planning that is needed in solving many vexed public policy problems. The kind of structural reforms he pursues are the sort that don’t make the headlines or score him brownie points with the public, but they will be noted historically as landmark pieces of legislation for their long-lasting impact.

Pander-o-meter: 1.5 out of 5

(Update: I have had to revise Gringo’s score from 1 to 1.5 due to his stand on the reproductive health bill.)

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Ernesto Maceda (NPC-UNA): the former senate president has a thirteen point agenda which are organised under five major themes:

  1. Senior citizens: the creation of a conditional cash transfer type allowance for seniors and the increase of senior citizen’s discounts from 20% to 30%.
  2. Job creation: creating 3 million new jobs over the next 4 years through infrastructure works, agricultural programs and by offering credit to 1 million small businesses.
  3. Education: tripling the budget for state universities and colleges (SUC), increasing scholarships offered to poor students at SUCs from 10% to 50% and reviving the study now, pay later scheme.
  4. Local government unit (LGU) fund allocation: increasing the internal revenue allotments of LGUs to 50% from the current 40%.
  5. Clean and safe drinking water: providing safe and potable drinking water to every household.

My critique:

Including seniors in the Pantawid Pamilya or 4P’s program would essentially turn it into a pension scheme (see also my comments under JV Ejercito who has made a similar proposal). Perhaps what the senator intends to do is provide a wider safety net to seniors than what currently exists. To do that he would have to address their healthcare costs which rise as they get older.

There are about 1.51 million Filipinos aged 65 and older according to the Department of Labor and Employment, out of which about 1.49 million are employed and 22,000 are unemployed. This sounds strange as you would expect most seniors to be retired (perhaps most of them are engaged in part-time work). Assuming they are provided with a Php 500 per month allowance or Php 6,000 a year, that would cost the taxpayers an additional Php 9 billion annually*. The question here is how should the government shoulder this expense?

The target of creating 3 million jobs in 4 years has already been achieved in recent years (on average) even without any new policies or programs being enacted. Perhaps the target needs to be a bit more ambitious (which is the 1 million jobs per year which the government has but doesn’t meet consistently). What is needed is not a new goal but a new way of achieving it. The usual tired old idea of using infrastructure projects and livelihood programs which Mr Maceda espouses is already at play.

Tripling the current SUC budget would require an extra Php 60 billion given last year’s budget. Again, the question here is how the government should support such an expansion and whether it is appropriate to do so given the quality issues prevailing in the system. Those who follow this space know that I have offered a comprehensive reform package here, which would address questions of affordability, effectiveness and quality at minimum cost to taxpayers.

As for expanding the IRA to 50%, again the problem lies in the fact that many LGUs are simply not adopting best practice because they are so accustomed to deriving a large portion of their budgets from the national treasury automatically. Improving their revenue raising capacity through other measures would allow them to gain true fiscal autonomy (see also my comments under Koko Pimentel who is pushing for the same measure as Mr Maceda).

Clean and safe drinking water is of course an ongoing program of the government. The UN MDG report has shown us being on track towards achieving the relevant targets of providing safe drinking water and sanitation by 2015. Of course meeting the MDG targets wouldn’t get us to universal access, but in the case of drinking water, we would be coming really close.

Overall comments:

Mr Maceda seems to be operating on the basis of limitless resources as far as the budget is concerned. Perhaps if the Philippine government had revenues equivalent to 33% of GDP like other nations with a BBB- credit rating instead of the measly 18% that it currently collects (as Fitch Ratings recently noted), we could afford to undertake the costly measures he proposes. Unfortunately, we don’t. So that means, we need to prioritise and rationalise our level of spending, or we need to raise additional taxes. That choice hasn’t been posed by Mr Maceda’s program of government.

As for the targets he sets for job creation and safe drinking water, the government is currently on track to achieve them.

Pander-o-meter: 5 out of 5

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Juan Miguel “Migz” Zubiri (PMP-UNA): the Bukidnon based first term senator who resigned due to allegations of cheating at the 2007 elections is campaigning on a platform comprised of five key planks. I would like to focus on just the two primary ones covering health and education due to space limitations.

1. Health:

  • Description: making healthcare “totally free including hospitalisation in government hospitals and health facilities” and providing free medicine at public hospitals among others
  • Cost: upwards of Php150 billion (see explanation below)
  • Source of funding: not specified

My critique:

The latest Philippine National Health Accounts show total health expenditures in the Philippines was Php379 billion back in 2010 up from Php269 billion in 2007. Of this about Php100 billion came from public sources (national and local governments), another Php34 billion from social insurance (medicare and employer contributions), Php 6.4 billion from donors and grants, and finally about Php240 billion from private sources. Of the private sources, about Php200 billion were out-of-pocket expenses, which has been growing at an annual rate of 10.6 per cent.

Assuming out-of-pocket expenses continue to rise at the same rate, it would total Php299 billion by 2014. Now suppose that about half of these out-of-pocket expenses were to be shouldered under Mr Zubiri’s policy proposal. That would require additional funding to the tune of about Php150 billion by 2014.

Either we raise additional revenues (including insurance premiums) to cover this or the budget deficit would have to blow out to 3-4% of GDP per year from the current 2-3%. That level of spending would be unsustainable. We would definitely lose our coveted investment grade status immediately. The alternative would be to cut spending elsewhere to the tune of Php150 billion to fund his policy. Which programs would he cut? Mr Zubiri has to offer a way to square this circle.

Providing free medical services and medicine at government hospitals and health facilities would cause a shift in behaviour, as people who formerly sought treatment at private facilities substitute private for public healthcare providers. This would put a greater strain on public hospitals to deal with this influx of patients. Mr Zubiri has to specify how the government would handle not only the full subsidy to health patients, but also the growing number of people who seek treatment from it.

2. Education:

  • Description: providing free breakfast and lunch at public schools, increasing entry level salaries for public school teachers and offering special education centres in the public system among others,
  • Cost: not specified
  • Source of funding: not specified

My critique:

The food for school program (FSP) was introduced by the Arroyo government during a period of rising rice imports and food price inflation. Program evaluations have indicated certain inefficiencies associated with managing the logistics of it. The 4P’s was seen as a more effective way to achieve the same results without the administrative cost and wastage. That is why the Aquino government ramped it up, while addressing some of the weaknesses of the FSP. Expanding the 4P’s rather than FSP is the better, more cost-effective option based on the evidence.

Increasing salaries for entry level teachers is clearly a vote getter, and it is a continuation of past measures to improve salaries of frontline service providers. Rather than imposing such an across the board adjustment, which would create budget pressure on the already strained DepEd budget, a more realistic option would be to provide extra salary loading to teachers who are assigned to remote regions, thereby encouraging the movement of qualified staff to those locations.

Providing additional salary loading to teachers with training to handle children with special needs would also help address the problem of learning difficulties in school. Special diagnostic tests would be the first step. We need to first measure the magnitude of the problem existing among our school children before embarking on a policy solution.

Overall comments:

Mr Zubiri is indeed trying to revive his political fortunes using vote-getting politics. He has flagged health policy as his number one priority. The problem is that funding his proposals would cause the government to go broke. Without offering a way to fund this additional level of spending, we are entitled to consider these promises as mere pie-in-the-sky. The more likely outcome if his proposals are adopted is for government hospitals to be overwhelmed with the influx of patients who then get turned away or for their service to suffer even further.

Ignoring the evidence by espousing an expansion of a program that has serious flaws is a bit reckless, as well. Calling for across the board wage adjustments would not necessarily solve the problem of hiring qualified teachers which is more acutely felt in remote parts of the country. Proposing policies without estimating the magnitude of the problem and diagnosing it properly is the fault of many aspiring senators. Mr Zubiri has demonstrated his capacity for it in spades.

Pander-o-meter: 6 out of 5 (off the charts!)

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Next up: Teodoro Casiño and the small parties: DPP, Kapatiran and SJP.

*Update: Ernesto Reyes in this recently released ADB report arrives at a similar estimation by assuming that 20% of the 6.2 million elderly Filipinos aged 60 and above or 1.2 million are poor. It makes sense, because individuals who cannot afford to retire have to keep working beyond the retirement age (either that or they love their jobs extremely).

Trapo Alert! Detecting political pandering, part 2

Featuring Chiz Escudero, Risa Hontiveros and Loren Legarda.

This is the second 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). I have identified nineteen so far that have articulated some kind of policy agenda in running for a seat in the upper house. 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 analysed the platforms of Juan Edgardo Angara, Jr, Benigno Aquino IV and Alan Peter Cayetano.

In this instalment, I will be covering Francis Escudero, Risa Hontiveros and Loren Legarda.

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Francis “Chiz” Escudero (Ind.-Team PNoy) has spent his time in the senate over the last Congress submitting bills that delve mostly on justice and human rights having been the chair of the said committee. As such he has been responsible for shepherding a number of notable bills like the Human Rights Victims Reparation and Recognition Law of 2012 through the Senate. This should be counted as one of his greatest achievements to date.

The Senator has also filed a number of bills that aim to strengthen social justice and democratic accountability such as the bill seeking to strengthen the investigative and prosecutorial powers of the human rights commission and the freedom of information bill.

His platform for this senate race attempts to cover a broader agenda such as shelter, the environment, health, food security, education, entrepreneurship and employment, peace and order, protection of women and children. While the platform consists of very broad principles-some would call them motherhood statements-the following two senate bills he has filed are examples of concrete proposals he has put forth when it comes to social and economic policy.

1. Educational Trust Fund (ETF)

  • Description: a voluntary scheme in which GSIS and SSS members could contribute regular payments into a plan that would cover educational costs for their grantees. This would make the GSIS and SSS similar to the Central or Employees Provident Fund of Singapore and Malaysia, respectively, which are pension funds, but allow employees to withdraw part of their accumulated contributions for educational purposes.
  • Cost: to be determined
  • Source of funding: member’s voluntary payments

My critique:

If done correctly, this could solve the problems of insolvency that have been observed in a number of privately managed educational plans. The coverage of the ETF plans has to be defined by the actuaries of the two government institutions to avoid the problems related to tuition inflation. The fact that the scheme is voluntary means that individuals can still exercise their right to opt out of it. The creation of a public provider to compete with existing private pension plans will be an interesting new dynamic in the industry.

2. Magna Carta for Informal Sector Workers

  • Description: this bill seeks to create a number of entitlements for informal sector workers such as those working in the construction, farming, fisheries, retail and transport sectors. It seeks to grant formal rights to micro-enterprises through a business registration system administered at the local level in which business permits would be issued to street hawkers, sidewalk vendors, transport operators and the like. The annual dues start at Php100 and scale up to Php1.500 depending on the net worth of the individual. This net worth is to be verified using financial statements as proof. The money collected goes into an Informal Sector Development Fund, which uses the money to provide all the sorts of benefits: everything from housing, education, health (including reproductive health), and support for their industry.
  • Cost: to be determined
  • Source of funds: Ninety per cent of all revenues from business registration of informal sector workers and entrepreneurs and ninety per cent of fees and dues collected from PAGCOR and PCSO.

My critique:

This, in my view, demonstrates the limits to taking a “rights-based approach” to social and economic issues. By creating a whole set of rights for informal workers and business operators, there is no question that the intentions of the bill are noble. How realistic it is though is another matter. One can legislate these rights into being, but enforcing them is a bit hard for a government that is chronically underfunded. For one, not many informal sector workers would have financial statements of their net worth as the bill assumes they do. Second, many unintended consequences could occur such as continued harassment of those who do not come up with the fees to register themselves (and continued corruption from street level “enforcers”). The whole purpose of the bill could be subverted at the local level.

Overall Comments:

Senator Escudero has authored a number of sensible pieces of legislation that deal with justice and political rights. It is when he tries to legislate social and economic rights that things become a bit of a mixed bag. Perhaps in preparation for another stab at higher office in 2016, he seems to be pitching himself as a candidate with a broader agenda, more appropriate for a chief executive. The problem is, it is a bit of a hit and miss situation when it comes to that, so far.

Pander-o-meter: 2.5 out of 5

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Risa Hontiveros (Akbayan-Team PNoy) who was a proponent of the cheaper medicines law and reproductive health bill at the lower house when she was a party-list representative is staking her second run for a senate seat on health issues. To wit, she has issued a policy statement covering the health sector, which has five key planks towards “making health care more universal”. The five planks of her program include:

  1. Increased spending on healthcare through the budget
  2. Tighter regulation of private health facilities to address affordability of health-care
  3. Upholding patient’s rights and standards of healthcare treatment
  4. Disease prevention and promotion of healthier lifestyles
  5. Improving the quality of training and education of healthcare workers

My critique:

There are no costings to her proposals. She hasn’t really specified what this five-pronged strategy would mean to ordinary people on the ground in terms of what they should expect. She hasn’t really talked about how much the health spending ought to increase as a share of GDP. She hasn’t really said if there ought to be a patient’s bill of rights and the method for enforcing those rights.

One thing she has spoken about with regard to healthier lifestyles is that she supports banning the sale of sugary drinks in school cafeterias. As to how to improve the quality of healthcare professionals, again there is not enough detail regarding this. Should non-performing schools be closed, for instance, or should better disclosure and consumer information be relied upon to improve student choice as I have suggested here.

Since we do not know how much health spending needs to be, we don’t have a clue as to how much to raise to fund it. What about a “fat tax”, as I have advocated in this space? I have estimated it would raise a significant amount that could in fact fund health reform programs and interventions.

Overall comments:

There are so many blanks to be filled in Risa Hontiveros’s policy platform. I hope she gets around to filling some of them before the election season ends. Overall, I feel that if these policy prescriptions (sorry for the pun) were to be fleshed out, they would provide greater clarity to citizens about what she is fighting for and her distinctive appeal. She can literally dominate and “own” this policy space if she really wanted to. It’s a pity that she has been forced to deal with “Team Patay” distractions and hasn’t been able to scope out her place as a senate contender, yet.

Despite this lack of detail, however, the intent of her health policy statement is clearly headed in the right direction, for the most part. I still am not clear about how tighter regulation will lead to lower cost of delivering health service, since the jury is still out on whether the cheap medicines act has in fact done the same in the pharmacy industry. It is important for her to state what the intended outcome of these policy directions will be and the principles she would adhere to in designing either an expansion of existing health services and entitlements or the creation of new ones.

Pander-o-meter: 2 out of 5

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Loren Legarda (NP-Team PNoy) launched LOREN, an acronym that stands for Livelihood Opportunities to Raise Employment Nationwide, as her campaign platform for 2013. According to the senator, “LOREN sa Bawat Barangay will be a consultation with various sectors of society and concerned local government agencies on how to raise employment and entrepreneurship opportunities. This is a program I did during my first term in the Senate and we will have it in every region in the country.” The policy intent of LOREN is to implement four employment and business laws that she has been responsible for (see below), conduct job fairs and disaster risk and reduction programs. The four laws referred to are listed below:

Public Employment Service Office (PESO) Act RA 8759 of 1999. The law that set up PESO, which according to the Bureau of Local Employment website is “a non-fee charging multi-employment service facility or entity established or accredited”. These are meant to provide job fairs, livelihood and self-employment bazaars, workers hiring for infrastructure projects, credit and the like. The law requires these to be provided in “all capital towns of provinces, key cities, and other strategic areas”.

Magna Carta for Micro, Small and Medium Enterprises (MSME) RA 9501 of 2008. This act amended earlier laws RA 6977 of 1991 covering MSMEs which now range from firms with capitalisation of under Php3 million for micro enterprises up  to Php100 million for medium-sized enterprises (the earlier law defined the range from less than Php50,000 to Php20 million. In its current form, this law seeks to intensify and expand existing programs that encourage entrepreneurship and skills acquisition, facilitate access to funds and government procurement contracts, reduce red-tape and stringent requirements, and to foster linkages with large companies and industry associations.

Barangay Kabuhayan Act RA 9509 of 2008 which establishes livelihood and skills training centres 4th, 5th and 6th class municipalities with satellite and mobile training centres. The purpose of this law is to extend the services of government with respect to livelihood and skills down to the grassroots level.

Agri-Agra Reform Credit Act RA 10000 of 2010. This law seeks to provide an agriculture and agrarian reform system of credit and financing through banking institutions. The law mandates banks to allocate a minimum of 25% of their loan portfolio to agricultural loans and a minimum of 10% for agrarian reform beneficiary loans.  They can do this by either lending directly to loan applicants or to other banks and institutions that specialise in offering credit to the primary sector.

My critique:

It is a bit strange that the senator is seeking re-election so that she can implement these laws which have been in place for up to fourteen years. Surely, what she ought to be doing is seek an evaluation of the policies and programs through an externally commissioned study. That is the very essence of evidence based policy analysis and advice. She should push for the inclusion of that in the assigned line agencies’ budgets.

Furthermore, it seems a bit strange that the senator is campaigning by offering job fairs and disaster risk and reduction programs. Regardless of how noble the purpose of these projects may be, they should really be done outside the election campaign period.  If a rich billionaire were to distribute relief goods to flood victims during the campaign season, wouldn’t that be regarded as a form of vote buying? Furthermore, this “consultation” as she terms it might be skewed due to the context in which it is being performed—during an election.

Overall comments:

The senator is clearly pivoting to hip pocket issues. Her means of doing this is by demonstrating her track record through the laws she has co-authored in the area. She has toned down her environmental and women’s rights advocacies for the moment. She probably recognises that for her to aspire for a higher office in the future, she needs to solidify her economic credentials with the masses.

That can only be established through the effectiveness of the programs she has sponsored as a legislator. That as I said should already have been done. It is rather disappointing that so many years since the enactment of these laws, no serious effort has been made to try and measure their impact, which is perhaps why she has nothing new to offer the electorate this time around in terms of new or updated legislation.

Pander-o-meter: 4 out of 5

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Next, I will cover Aquilono “Koko” Pimentel, III, Joseph Victor “JV” Ejercito and Juan “Jack” Ponce Enrile, Jr.

Trapo Alert! Detecting political pandering on the pander-o-meter

Panderometer

Featuring Sonny Angara, Bam Aquino and Alan Peter Cayetano.

The populist is in the details (or lack thereof).

As part of a series covering the senate race of 2013, I am casting a spotlight on the platforms and policy pronouncements of the candidates as the campaign season unfolds.

Previously, I found that only 11 candidates had bothered to present their legislative agenda for the senate. These were Bam Aquino, Chiz Escudero, Risa Hontiveros, Loren Legarda and Koko Pimentel of Team PNoy, JV Ejercito, Gringo Honasan, Ernesto Maceda and Migz Zubiri of UNA, Teddy Casiño of Makabayan, and Greco Belgica of the DPP. This list has recently been updated to include Sonny Angara, Jack Enrile and Peter Cayetano. There are also five more candidates that belong to parties that have released a party-wide platform. This includes the partymates of Greco Belgica in the DPP, namely Bal Falcone and Christrian Seneres, and Kapatiran’s candidates JC delos Reyes, Rizalito David and Marwil Llasos. So in total, there are 19 candidates with platforms.

I will in this series tackle their proposals and evaluate their content in terms of their reformist versus populist credentials. I will offer an overall rating for each candidate based on what I call a Pander-o-meter or Trapo (traditional politician) scale which will indicate the level of pandering that goes on. The various readings of this panderometer are based on the following scale:

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

Note that for those candidates who do not even present an agenda, their reading automatically goes to 5 by default. I will now proceed with the first three candidates on my list who all belong to Team PNoy: Sonny Angara, Bam Aquino and Peter Cayetano.

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Juan Edgardo “Sonny” Angara (LDP-Team PNoy) looks set to follow in his father’s footsteps in cornering the youth vote by branding himself the ‘education senator’ through proposals specifically targeted to this sector. The following three priority bills are illustrative of the type filed by him in the lower house. Do they reveal a reformist or populist bent? Read on and find out.

  1. National student loan program a.k.a. “study now, pay later”:
    • Description: creation of an education loan fund authority to oversee student loans to tertiary students (both vocational and higher education)
    • Cost: Php5 billion, Php10 million to set-up operations
    • Source of funding: not specified

My critique:

The sufficiency of the fund depends on the take-up rate of students. Currently with Php32.8 billion being spent by government to cover ~90% of the cost of a college place, the remaining ~10% or about Php3 billion in fees have to be shouldered by students. With a 100% take-up rate, the entire fund would be exhausted in less than two years, and that doesn’t take into account students of private colleges and universities availing of the program. Even if we were to assume only a 50% take-up rate, the fund would still be exhausted in three to four years assuming inflation in student fees and administrative cost of the fund. This needs further work to become realistic and self-sustaining. I provide a more comprehensive reform agenda here .

  1. School modernisation and innovation program:
    • Description: upgrade of computer/science labs, libraries and the promotion of distance-learning at public elementary and secondary schools
    • Cost: unspecified
    • Source of funding: earmarked from existing expenditures equivalent to 10 per cent of Department of Education budget

My critique:

DepEd already spends 56% of its budget on maintenance and other operating expenses, with a further 3% on capital outlays, which cover everything mentioned in the proposal including Alternative Learning Systems plus Sports, Health and Nutrition, National Education Test development and others. Without additional funding, this bill would simply bind the department to re-direct existing spending to the areas specified in the bill. This might be counter-productive and lead to unintended consequences due to the inflexibility built-in to budget by such a measure. It also fails to mention anything about promoting web connectivity of classes which would be the most innovative thing we could do. An NBN as proposed by my colleagues in this site should be re-investigated.

  1. Bill of rights for fresh graduates
    • Description: a package of incentives for fresh graduates incorporating: workplace rights (secure tenure, fair treatment, further training), exemption from contribution into workplace entitlement programs (social security, PhilHealth, Pag-ibig) for one year, fee waivers for job search costs (NBI clearance, birth certificate, passport application), access to small business loans of up to Php100,000, additional Php10,000 personal exemption on income tax on top of existing income tax threshold,  discounts to transportation fees for one year.
    • Cost: not specified
    • Source of funding: National Treasury

My critique:

This is potentially a very costly program for government. Last April alone there were just over 9 million Filipinos aged 15-24 who were in the labour force. Assuming that roughly a tenth of them were fresh vocational or university graduates, there would be 900,000 eligible beneficiaries annually. Multiply that by a conservative estimate of Php10,000 worth of benefits per person, that amounts to Php9 billion a year that needs to be funded. Even if we assume half that amount become eligible, you are still talking about serious sums being spent. If the aim of the plan is to encourage college completion, then there might be better, more cost-effective ways of doing that. As it is, this bill is really a stop-gap measure addressing low wages and lack of appropriate job opportunities for graduates in the domestic economy. Creating paid apprenticeships and training subsidies would be a better way to go as I have discussed here.

Overall comments:

The three proposals are specifically targeted to a large chunk of voters sensitive to education issues: the youth and parents of school and college students. The problem with the measures is that they are all potentially expensive and unfunded. They pander to the electorate by promising a whole slue of benefits, but without proper costing and funding, they may simply become ‘paper entitlements’.

Pander-o-meter: 3 out of 5

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Benigno “Bam” Aquino (LP-Team PNoy) has a three-point agenda which are aimed at the youth, job hunters, and micro-to-medium sized business owners.

  1. GoTrabaho Act
    • Description: Addressing education-employment mismatch through a national internship program supported by a database with incentives for business and educational institutions to properly match training with demand
    • Cost: not specified
    • Source of funding: not specified

My critique:

Although the funding issue is not tackled, this is a much more practical and manageable response to the problem of youth unemployment and skills mismatch than what Sonny Angara proposes above. I have previously tried to cost this program based on the level of demand from employers as per government released statistics. The cost of Php1.5 billion is not prohibitive and really well-targeted and cost-effective, as I discuss here. This makes this proposal realistic and actionable.

  1. GoNegosyo Act
    • Description: Supporting the creation of sustainable micro, small, and medium enterprises (MSMEs) through regulatory red-tape reduction, microfinance, market mapping, training and cluster road map development, as well as incentives to social enterprises
    • Cost: not specified
    • Source of funding: not specified

My critique:

This proposal need not necessarily require additional funding. The package of reforms brings together several programs already operating, including the National Competitiveness Council’s efforts to address the cost of doing business, the DTI’s and BMBE program that provides credit to MSME’s and TESDA’s and DepEd’s entrepreneurial programs. What is new is the boost to social enterprise signalled by the policy statement and the creation of a cluster within government to develop a roadmap for MSMEs.

It is important to include MSMEs, research councils and scientists and civic society in cluster development and to have multiple industry clusters to develop roadmaps so that government can get behind these naturally forming clusters and help them expand and agglomerate. At some future stage, when priorities are identified, there may be a need to fund industry- or cluster- specific infrastructure, but only after stakeholder consultation and engagement has indicated that there is a need for it.

  1. PPP4E
    • Description: supporting public-private partnerships for education
    • Cost: not specified
    • Source of funding: not specified

My critique:

PPP’s to close the classroom deficit have already been scheduled according to the responsible agency, DepEd. This proposal seeks “to arrive at the best form of partnership/s that will be beneficial and fair to all parties, while leapfrogging government’s resource constraints.” Perhaps what the proposal should do is seek to close other gaps such as those involving equipment and science labs. Connecting schools, colleges and universities with high speed broadband needs to be addressed either through PPPs or through a sovereign wealth fund model as per my suggestion here.

Overall comments:

Bam Aquino has not yet learned the bad habits of veteran legislators to enact broad sweeping entitlements with no costings or sources of funding. His more modest, measured proposals would require minimal or no cost as they involve better coordination and improvements to existing programs and policies. One cannot discount the impact that these will have on the broader economy, if done correctly.

Pander-o-meter: 1.5 out of 5

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Alan Peter Cayetano (NP-Team PNoy) has recently launched his PiTiK program (P-presyo, T-trabaho, K-kita) an acronym he has obviously borrowed from former socio-economic planning secretary Cielito Habito, but failed to acknowledge (could this be a case of plagiarism?). The following is a list of proposals the senator seeking re-election has made in conjunction with this framework. These he claims were the product of his listening tour of the country.

  1. Reconsidering VAT on gas
    • Description: reconsidering the application of VAT on petroleum products.
    • Cost: not specified
    • Source of funding: not specified

My critique:

The senator needs to propose revenue neutral ways for the government to recover the revenues lost from lowering or eliminating VAT on petroleum products. As it stands, this proposal could impact the gains which the government has already made in raising its revenues to close the budget gap. A more realistic proposal was offered by former budget secretary Ben Diokno wherein the VAT rate automatically adjusts to oil prices (the VAT rate goes down when prices are up, conversely the tax rate goes up when prices are down, although there is a ceiling which would limit the rate rise to the current 12%).

That proposal is meant to be revenue neutral, but what Cayetano does here is a classic case of pandering to the masses, because they would avoid the VAT but have to pay in the future through higher inflation if the government has to borrow more because it is unable to maintain its revenue base. Interestingly enough, Diokno’s recent pronouncements that VAT needs to be raised to 15% to deal with the infrastructure gap and chronic budget deficits might become necessary if Cayetano’s proposal is enacted into law.

  1. College scholarships to the top 10% of every graduating class from public schools
    • Description: exempting this cohort from student fees at state universities and colleges
    • Cost: not specified
    • Source of funding: not specified

My critique:

The proposal is representative of a number of pending bills in the senate. I have canvassed them here. Mandating SUCs to provide tuition free places to a cohort of students is in my view a band aid measure. One of the unintended consequences of this is that SUCs will have to fund these scholarships by raising the fees charged to the rest of their students. They either do that or lower the amount they spend upgrading their facilities and lecturers. At the rate at which legislators call for the creation of newer SUCs, government simply cannot keep up with the funding costs as there is much duplication of programs and administrative departments. It is in fact necessary to encourage SUCs to merge rather than to multiply to gain economies of scale.

Addressing the issues of equity, efficiency, appropriateness and effectiveness of higher education is the more important reform agenda that needs to be tackled.

One important question to consider in all this is: Why should Juan dela Cruz, the grade school drop out who works in the informal sector, for instance be paying with his taxes the studies of Isko the scholar who will become a skilled professional after graduation and earn a high salary? The returns to training of both private individuals and society at large must be studied and assistance offered to scholars to deal with the incidence of costs to training on that basis. Rather than create a universal right to free higher education, government should help private individuals by shifting the timing not the value of the costs associated with their studies. I have offered a comprehensive program on how to do that here.

  1. Providing cheaper loans through cooperatives
    • Description: building more and expanding existing cooperatives that can lend to their members using cheap interest rates.
    • Cost: not specified
    • Source of funding: not specified

 My critique:

The proposal is half-baked. What is the role of government in building and expanding voluntary organisations such as cooperatives? That is not defined. Studies have shown that it is the unavailability of credit rather than the cost of it that is the biggest roadblock the poor face in undertaking entrepreneurial endeavours. This proposal was framed in the context of public transport operators making less money as a result of high input costs but regulated prices in their industry. So if that is the case, offering them credit will not necessarily help them address that fundamental issue.

Overall comments:

The senator has used his so-called listening tour to launch his PiTiK campaign, which is really more of a loose organising principle for his policy pronouncements than a robust policy framework. As a result, his proposals seem to be shot from the hip and not well-thought out. The senator (currently sitting at no. 3 in the SWS and Pulse Asia polls) seems to be more focused on grabbing the headline than on governing responsibly. His proposals are laden with costly unintended consequences from a fiscal, economic and social standpoint and don’t really address the fundamental problems. They in fact misconstrue the very nature of these problems and as a result lead to false solutions. For violating the rule in public policy, which is “to do no harm,” Peter’s proposals are even worse than if he had done nothing.

Pander-o-meter: 6 out of 5 (off the scale!)

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The next batch will include Chiz Escudero, Risa Hontiveros and Loren Legarda.

 

 

The ruling parties’ (lack of) platforms

To guide voters in the upcoming 2013 elections of the upper house, I decided to study the campaign platforms of the major parties. This in a way is a follow-up to a previous post in which I detailed Five Ways to Elevate Political Discourse in the Philippines.

The first of the five points I made in that post was for the parties and/or their coalitions to publish their official platforms. I decided to do a web search to find out what these parties/coalitions have stated to voters as their policy directions once voted into office. Here is what I found.

Let’s start with the administration ticket. We have recently learned from the Comelec that Team PNoy was not officially registered as a formal coalition. It is to be treated as merely a “tagline”. So as far as having a formal platform on which to launch their candidates, I went to the Liberal Party website where the Team PNoy candidates are hosted.

Here I found very little regarding the legislative agenda the administration is presenting to the people. All that I found was the same old “platform” that the LP took to the electorate in 2010, which is really a kind of “party principles” or motherhood statements. There really isn’t any detailed policy agenda here.

Three years after taking charge of Malacañang Palace, I was expecting a bit more. If we as voters are being told to treat these elections as a referendum on PNoy’s presidency, there should at least be a list of his achievements and what he plans to carry forward towards the remainder of his term in office, with the team that bears his name.

I then did a web search of UNA (United Nationalist Alliance), the only officially registered coalition with the Comelec, an alliance comprised of the parties headed by the vice president, the senate president and a former president. Again I was disappointed, as all I found was a Facebook page with a brief mission and description of the coalition. It does not really provide any detailed platform or policies for the 2013 election.

So in terms of providing a detailed set of platforms, both major coalitions failed to even provide some kind of agenda for the Filipino people. That speaks volumes about our political system.

Next, I decided to go to the political parties that comprise these major coalitions. I already went to the Liberal Party’s website, as mentioned above. I then decided to visit the website of the Nacianalista Party (NP), the Nationalist People’s Coalition (NPC), the Laban ng Demokratikong Pilipino (LDP), the Partido ng Demokratikong Piliono-Laban (PDP-Laban) and the Partido ng Masang Pilino (PMP). It was a dead end as most of these sites were empty shells or sites for their party heads. The NP site had some information regarding their three nominees, but most of the content was on the spouse of its president (the spouse is running to join him in the senate) and the foundation which they run.

Makabayan, which is fielding one senatorial candidate (it has dissolved its alliance with the NP), probably has the most detailed policy platform of all the major parties competing in this election. Their 10-point platform is discussed in detail in a document that you can download from their site.

The Democratic Party of the Philippines website contains a 12-point agenda that its three candidates support. Very little detail however is provided on this platform.

Ang Kapatiran’s website provides voters with their stand on 5 major issues, reproductive health, gun control, pork barrel, political dynasties and freedom of information. It also provides detailed policy positions on each of these issues. It also has a 50-point plan for the nation. It is fielding three candidates.

I couldn’t find anything on the Social Justice Society, which is fielding one candidate.

As far as I can tell from this quick web search, it is the alternative political parties which are more serious about developing policy platforms from which to launch their candidates. It is perhaps a sad feature of our democracy that the parties that respect voters enough by providing them with detailed information about their platforms are the ones lagging behind in the polls.

Undeterred by this dismal outcome, I then decided to look at the individual candidates themselves and here I found a bit more information regarding their policy stances and platforms. Off hand, I found eleven (UPDATE: as of 14 March 2013, it is now fourteen) who have outlined some sort of platform. These are Bam Aquino, Chiz EscuderoRisa HontiverosLoren Legarda and Koko Pimentel of Team PNoy, JV Ejercito, Gringo HonasanErnesto Maceda and Migz Zubiri of UNA, Teddy Casiño of Makabayan, and Greco Belgica of the DPP. (UPDATE: to this list we can now add Sonny Angara, Jack Enrile and Peter Cayetano)

I am not saying the other candidates don’t have platforms. They might not have released them yet or published them online. A lot of candidates have policy positions or advocacies listed on their personal pages. Some incumbent or former legislators provide detailed information regarding their priority bills. So the implied message here is that we should re-elect them based on their previous performance. It is preferable that they tell us why we should re-elect them. What is the work that remains for them to complete?

The absence of consolidated party platforms puts the burden of selecting the candidates based on their individual platforms onto the voter. This is made even harder by the scant or incomplete information that can be found regarding their positions and personal legislative agenda.  The following is a run-down of what I found on the individual candidates.

Team PNoy

  1. Edgardo “Sonny” Angara, Jr – has a website that provides his profile and accomplishments as a legislator in the lower house. At the bottom of his home page, there is a video clip labelled, “Agenda ni Rep. Sonny Angara sa Senado” from a TV interview presumably, but it was not working at the time of this publication. (Update: he has been steadily updating his site with news from the trail which details his legislative agenda.)
  2. Benigno “Bam” Aquino IV – from his Facebook page you can read his policy prescriptions for encouraging entrepreneurship and skills matching. There are a few news releases which feature his statements and advocacies.
  3. Allan Peter Cayetano – has a Facebook page which shows him going out into the community but provides very little in terms of the sort of laws he has either sponsored as a senator or plans to push for if re-elected. (UPDATE: he has recently launched his platform here)
  4. Francis “Chiz”Escurdero – buried deep in his website is a 7-point agenda with no date.
  5. Risa Hontiveros – has Facebook page which provides some of her recent policy pronouncements particularly on making healthcare “more universal” and that of her Akbayan partylist members.
  6. Loren Legarda – has a website that lists her advocacies in the form of a useful acronym called L.O.R.E.N. From here you can read the sort of bills she has filed as senator some of which have been turned into law.
  7. Jamby Madrigal – has a website which details her policy stance on a number of issues and her past accomplishments as a senator. There is a non-functioning tab on her site for “Platform”.
  8. Ramon “Jun” Magsaysay, Jr. – does not have a web presence, but his profile in the senate website provides his bio and his legislative agenda while serving there.
  9. Aquilino “Koko”Pimentel III – has a Facebook page which provides some policy positions the senator has taken on infrastructure and governance.
  10. Grace Poe Llamanzares – has a Facebook page which does not really provide much in terms of a legislative agenda or her position on any relevant policy issues.
  11. Antonio “Sonny” Trillanes IV – has a website  which provides information on the bills and resolutions he filed in two sessions of congress and some policy, research material mostly on national security issues which date back to 2001 and 2002.
  12. Cynthia Villar – has a website which details her accomplishments as a congresswoman and as the head of the Villar Foundation. Very little in terms of policy detail on how she intends to pursue her tagline “Hanep Buhay”.

UNA

  1. Nancy Binay – as a colleague from this site has said, she does not have a web presence at all.
  2. Margarita “Tingting” Cojuangco – has a Facebook page which shows her two video advertisements. Unfortunately, apart from the endorsements of her three celebrity daughters and a few throw away lines about her advocacy, there is hardly any detail regarding what she plans to push for as senator.
  3. JV Ejercito – has a website which lists a 13-point agenda which the mayor of San Juan plans to pursue in the senate.
  4. Jack Enrile – has a Facebook page which contains a video of his campaign speech. He details the problem of hunger which he intends to focus on and nominates the bill he sponsored as congressman, which he claims will address it.
  5. Richard “Dick” Gordon – has a web Facebook page, but has very little information about why he is running.
  6. Gregoria “Gringo” Honasan – has a website which lists his platform as senator.
  7. Ernesto Maceda – has a website which lists a 13-point agenda which the former senate president intends to pursue if returned to the senate.
  8. Mitos Magsaysay – has an “official Facebook fanpage” which shows her touring as a candidate, but there does not seem to be any content devoted to policy detail.
  9. Miguel “Migz” Zubiri – has a website which details his platform around five themes.

Other parties/candidates

  1. Sammy Alcantara (Social Justice Society) – has a Facebook page, which contains a short video clip in which he answers a few shallow media questions, nothing with regards to policies.
  2. Greco Belgica  (Democratic Party of the Philippines) – has a four-point platform found in an image in his Facebook page.
  3. Teodoro “Teddy” Casiño (Makabayan) – has a website which contains a platform and policy positions on several issues.
  4. Lito Yap David (Kapatiran) – has a Facebook page but has nothing about his candidacy.
  5. Baldomero Falcone (Democratic Party of the Philippines) – has a Facebook page with hardly anything on it.
  6. Edward Hagedorn (Independent) – has a website but the vision and initiatives shown there deal with the city of Puerto Princesa where he is the mayor.
  7. Mars Llasos (Kapatiran) – has a blog  which seems to be regularly updated.
  8. Ricardo Penson (Independent) – has a Facebook page which shows his anti-political dynasty advocacy. It seems he is campaigning mainly on this issue.
  9. John Carlos “JC” delos Reyes (Kapatiran) – has a Facebook page with no platform or policy positions.
  10. Christian Señeres (DPP) – has a Facebook page which has a video which shows his profile as a former partylist lawmaker and some policy positions.
  11. Eduardo “Eddie” Villanueva (Bangon Pilipinas) – has a website but it does not contain a platform or policy positions of any kind.

I am happy to be proven wrong. So should any of the candidates or their representatives wish to make corrections to this, the Comments page is most welcome for them to do so.

 

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