Fidel Ramos

Just give it to the Ombudsman

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

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

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

Article XI Sec. 13 of the Constitution:

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

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

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

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

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

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

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

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

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

Trust me on this one, Mr. President.

The 800-Pound Gorilla

What are the blind-spots that the administration is ignoring?

image from be-the-bear.blogspot.com

Those who chide us for telling the President not to lose sight of the economy in the hunt for Mrs Arroyo might remember the experiment conducted by Daniel Simon and Christopher Chabris.

In this famous study looking into visual perception and selective attention, participants were told to view a short video clip depicting two groups passing balls around, one group wearing black shirts and the other wearing white. They were told to count the number of times a ball was passed between those in white. Here is the video for those unfamiliar with it.

At the end, most participants were able to provide the correct number of passes made between white shirted people. But then, when asked if they had noticed the gorilla in the room, about half said they did not. As it turns out, the act of focusing too much attention on the ball prevented many from even noticing something as glaringly out of place as a person in a gorilla suit walking right into the middle of the set and thumping his chest, even when it was staring them in the face!

To those supportive of the president’s actions against his predecessor, Mrs Gloria Arroyo, she represents the eight hundred pound gorilla in the room. Any other concern such as the economy even during a deteriorating global economic crisis is a mere distraction to the task of bringing her to justice. They would rather have the president focus his energy and attention on the task of ending her ‘monkey business’ than worry about sustaining the growth of the Philippines and along with that the job security of present and future workers.

Of course in an ideal world, the president and his cabinet would be able to do more than one thing at a time, but that is not what the evidence suggests. Witness the latest downgrade by the ADB of the Philippines’ growth prospects. It demonstrates how the government has not kept its ‘eye on the ball’, so to speak by failing to prime the economy with public capital expenditures.

Ok, some would say. So, perhaps aside from keeping track of the ball, the president could also monitor the gorilla, but then as this next study shows, something else could be happening. When respondents were told about the gorilla after viewing the first clip, they were then asked to view a second one, which is shown below.

This time around, everyone noticed the movement of the gorilla, since they had by this time been primed for it. However, not everyone noticed the color of the curtain changing or that one of the players in a black shirt exited the frame. This again should be of concern to those who feel confident of the government’s cognitive abilities.

Even if say next year, P-Noy’s team were to start putting a greater emphasis on ensuring that his government did its job to prop up demand in the economy by spending its budget for public construction (a task it performed miserably this year), while prosecuting the Arroyos, what other crisis could catch it off guard? A power crisis for instance is already looming on the horizon. Presumably a temporary downturn will reduce demand for power, but decisions with regard to its future supply have to be taken years in advance. Remember how the Cory government failed to address this issue?

It was former president Fidel Ramos who likened the presidency to a juggling act which is performed by someone on a unicycle on a high tension wire several hundred feet off the ground wearing a blind-fold with one hand tied behind the back and no safety net. A simple distraction or loss of concentration could spell disaster. It appears that the president is already too emotionally involved not only with Mrs Arroyo’s case but with delegitimizing the Chief Justice as well. The rage he expressed recently could blind him and his administration from pursuing important reforms.

Already several balls seemed to have fallen to the ground (or slipped off the radar) such as the RH bill and revising the EPIRA law (only 3.25 of the 33 priority measures have been passed so far, which at that rate will take ten years for all of them to succeed), such as appointing competent ambassadors (yes, I am referring to that confirmation hearing of Domingo Lee which was lampooned here), and the like.

Personally, my take on this is that the ball represents the president’s poll numbers. His handlers are so keen on tracking them and on focusing on what would drive them up or down (prosecuting the Arroyos for instance and railing against the Chief Justice) that they have perhaps lost sight of their own short-comings and failings which they dare not speak to the president about lest he get upset with them for ‘distracting’ him.

Witness the justice department’s conduct in investigating the former president, now congresswoman Arroyo which did not square with the norms and institutions of the judicial system making it appear more like a witch hunt than a proper legal proceeding. The president’s transference of blame to the Chief Justice and the Supreme Court does not excuse the shameless way he went about seeking to detain Mrs Arroyo which was reminiscent of her own extra-constitutional and extra-legal antics. This dangerous precedent of the executive undermining the judiciary is something more hazardous to the survival of our fragile democracy than just this case alone can pose.

But the president seems dead-set on playing the biggest trump card up his sleeve, his massive popularity, in order to impose his will on the high court. These ‘animal spirits’ once unleashed could lead to disastrous consequences. The country now sits on the precipice of further decay. Waiting for just a slight nudge from the president which could plunge it into a downward spiral of political instability and risk uncertainty in the coming years which will dissipate any investor confidence that had been returning.

Many will balk at this characterization of the situation saying that what is going on is nothing out of the ordinary for the Philippines. But that is exactly my point–the country was well-poised to become a more mature, more stable democracy. Apparently not now by the looks of it. Was it too much to ask for the elite to rise above their familial squabbling? They seem so focused on who gets the ball and how it changes hands, keeping track and keeping score of each player that they ignore the wider context and how their actions affect the country’s progress. Ignoring in the process, the 800 lb gorilla in the room.

Back to the Future with Aquinomics 101

Perhaps PNoy should trade his Porsche for a Delorean.

In his self-appointed role as guru of the new Aquinomics, Prof Cielito Habito of the Ateneo Graduate School of Business alluded to the Reaganomics of the 1980s which preached that less government and lower taxes would promote growth through private investments.

Habito builds the case for an “economics of business confidence” where he points to the revival of private domestic investment which more than offset the drop in public and foreign direct investments during the first three quarters of the PNoy presidency. The hidden messaeg in all this is that when government gets out of the way, private investment soars.

He defends the underspending by the government in its first year by calling it the “economics of fiscal responsibility”. Here is how he explains it:

Some observers now fault the new administration for “underspending,” for indeed, not only has it spent less than it did last year, it has also spent even farther less than what had been programmed to be spent by this time. But before casting this government as inept and lacking absorptive capacity, one must remember that this year’s budget was still drawn up by the previous administration [emphasis added-ES]. And if the current government has been more prudent about spending the money, it could well be because they have found that they don’t have to spend as much as the former government would have, to accomplish as much.

And it seems they have. The Department of Public Works and Highways is one of the biggest “culprits” in the underspending. It turns out that the agency has made dramatic changes in the way public works projects are costed out, leading to substantial savings. For one thing, Public Works Secretary Rogelio Singson has significantly reduced allowable “indirect costs,” including contractors’ profit margins (and quite likely the so-called “bukol”), in public works projects. Coupled with a strict policy on transparent public bidding, the agency boasts of more than P2 billion in savings from 2,797 projects over the past year.

It seems quite astounding that Habito could claim that this year’s budget was drawn up by the previous administration. It beggars belief given that the president’s men spent the first six months engaged in a zero based budgeting process to weed out undesirable projects left behind by Mrs Arroyo.

While his explanation for the delays in DPWH disbursements remains plausible, it does not explain the delays in all the other departments. It would also appear dubious or incomplete when stacked against the DBM findings that delays in DPWH were due to re-alignments requested by regional offices.

But the more disturbing problem is that Habito conveniently disregards the evidence regarding spare capacity in the economy for capital spending. At a time when unemployment is rising, he has the audacity to suggest that it was a good thing for government to put its foot of the accelerator.

Habito like most of our economists seems to be taking his cue from the West where austerity measures seems to be taking hold as deficit hawks seem to gain ascendancy in the debate in both Europe and America.

Nobel Laureate Prof Paul Krugman who argued for a much larger stimulus under Obama back in 2009 and has been proven right by recent events with the stalling US recovery notes how the “Triumph of Bad Ideas” (referring to Reaganomics) has taken place. He is not alone in this, another Nobel winning economist Joe Stiglitz backs him up.

The same sort of triumph seems to be taking place in Aquinomics with the Palace announcing it has no plans to introduce any new tax measures in 2012 despite its intentions to increase spending to 1.8 trillion pesos from the current 1.6. The hubris of this plan is that they believe efforts to improve collection will work wonders in their second year when it clearly has not happened in the first.

Despite Prof Winnie Monsod’s calls for higher tobacco taxes and Prof Ben Diokno’s proposal for fiscal adjustment plan, Malacanang seems to be confident in its Aquino doctrine that “no new taxes” are needed. This makes the fulfillment of its 2012 expenditure program a pipe dream, just as the 2011 one led to “trickle down” economics with social expenditures actually dipping while military and police spending increased.

We need to recall that it was the result of tax reforms adopted under Cory Aquino for whom Monsod and Diokno are proxies that revenues from taxes as a share of the economy went up, and those under Fidel Ramos for whom Habito is a proxy that they gradually got eroded. The problem however is that in the battle of ideas, it seems the argument of Habito trumps that of Diokno and Monsod.

Is the Good Governance path a dead end?

Is the “markets plus good governance” formula indeed the enlightened way to economic Nirvana that its adherents say it is?

Warning: I am following Paul Krugman’s tradition of labeling some of my posts ‘a bit wonkish’. Some of the succeeding material might be a bit taxing, but for those who persevere, the results can be quite rewarding.

The Fork in the Road

During his first state of the nation address, President Noynoy Aquino or PNoy told us that the country faced a fork in the road. On the one hand was the destructive path of evil tread by the Inglorious Beast, on the other was the righteous path of good governance that he the Benign One would lead us down.

Nearly one year on and it seems the righteous path is headed nowhere with allegations of BFFism floating around, corruption and smuggling continuing unabated, and a government that cannot seem to spend its own lean budget in a timely manner.

Despite these setbacks, the Palace continues to put up a brave face. PNoy after all has become the new poster boy for Washington’s policy consensus having been endowed with a grant by the US Milennium Challenge Corporation to pursue its Milennium Development Goals to halve poverty.

This follows the Philippines belated exit from the IMF emergency loan program. The ADB for its part turned on the tap by partly financing the expansion of the Conditional Cash Transfers program, the government’s flagship project for ending poverty. Meanwhile private investments were being sought to fund the government’s public infrastructure program.

The present seems to echo the 1950s and 60s when the country was held in such high esteem by international donors during the last “big push” towards development. We can of course see what that era of donor dependency produced when it culiminated with Ferdinand Marcos’s debt driven boom and crash of the 1970s and 80s.

The Righteous Path

The 1990s saw the rise of economic fundamentalism among policy circles the world over. The precepts of this view bordered on religious zeal. The high priests and prophets of this pseudo-religion proclaimed that there was but one model, the Market.

All those on the path to the Promised Land had to be guided by the Invisible Hand of the Market. Thou shalt have no other models before me was the first commandment. The Philippines under the yolk of the IMF had to follow these strictures. We soon found that the Market could be very exacting and vengeful. Many of the vulnerable, “uncompetitive” and at risk sectors would fall by the way-side and suffer from its discipline.

Despite all the pain that followed from swallowing this bitter pill, the economy did not grow sufficiently fast enough to deliver our people from the clutches of poverty. Why our leaders cried, has the Market abandoned us? We found more and more of our countrymen being led into exile, into servitude abroad. Where have we fallen short? they asked.

Then from on high came the answer.

In the 2000’s, a new covenant was sealed. We were now told that we needed an intercessor to mediate on our behalf. That Intercessor was called Institutions. For the magic of the Market to come into our lives, we needed to repent of our evil ways and follow the path of Good Governance. To convince us, the apostles of the new covenant showed us this sign (click to zoom):

From the pages of the IMF’s journal Finance and Development, Kaufmann and Kraay sought to demonstrate that good governance is the path through which all nations need to pass to get to economic salvation. It shows by implication that countries which have adopted Western standards of governance flourish economically, and countries that have shunned them tend to have floundered.

Indeed though it sounds tautological the very simple and coherent nature of this message, a message that puts it all on our ability to be born again to a re-awakened sense of right and wrong, has enamored most of our elders in the political and business community. Even Mrs Arroyo claimed to tread on this path, but she had stumbled along the way. In 2010, Mr Aquino pledged to bring us back on it.

We would soon be joining the rich club with his slogans like Kung walang corrupt, walang mahirap (no corruption, no poverty) and Daang matuwid (the Righteous Path). PNoy was singing from the same hymn book of the new Washington Consensus (Markets + Institutions = Economic Nirvana).

The real Fork in the Road

The development experts, who had once written us off, welcomed us back in the fold like a Prodigal Son. In his first year in office, PNoy relaxed on spending thinking that we had already been saved and that through the grace of the Market we would soon be rolling in the clouds along with our richer ASEAN neighbors who had already passed on to the other side.

Such a seductive world view, with everything tidily falling into place–that is until you consider the Inconvenient Truth from the real world. It turns out that things don’t necessarily follow according to the message. Take a look at this contradicting sign courtesy of Mushtaq Khan from the UNCTAD’s Discussion Papers (the UNCTAD being the IMF’s poorer cousin).

It draws on a similar data set that Kaufmann and Kraay used covering indicators of good governance and economic well-being from the 1990s predominantly. We find that countries can actually be grouped into three: the rich ones (circled in the upper right-hand corner), the poor ones (circled in the bottom left-hand corner), and the ‘convergence club’ countries (circled in the upper left-hand corner).

From the chart we can see that the members of the converging economies (on the upper left-hand corner) advanced economically first before improving institutionally. In fact the convergence club performed on average just as poorly on the corruption scale as the diverging economies (on the lower left-hand corner).

(Update: Although the regression line is upward sloping, indicating a positive correlation between anti-corruption and economic growth, an analysis of the three clusters of countries comprised of rich, poor and convergence club members reveals the direction of causality to flow from growth to control of corruption, not the other way around)

Indeed if we examine the economic histories of the convergence club members, we will find that they did not adhere strictly to the ‘righteous path’ of Markets plus Institutions. Japan, Korea and China developed not by relying on the Invisible Hand of the Market alone, but by wielding the Visible Boot of the State to coordinate, reward and punish industry players in accordance with their rational industrial policies.

Instead of relying on impersonal contracts under the Market framework, they used informal contracting under different guises, the keiretsus, chaebols and guanxi, to create secure property and contract rights to protect investors in strategic sectors within their economies. These institutions did not come from Western capitalism but were home grown. Indeed the alternative of implementing Western-style rule of law throughout the system would have been beyond their reach at the time they were emerging.

Chalmers Johnson who documented the rise of industrial policy in Japan by studying MITI the lead agency of its industrialization, wrote that

(a) part of the MITI perspective is impatience with the Anglo-American doctrine of economic competition. After the war MITI had to reconcile itself to the occupation-fostered market system in Japan, but it has always been hostile to American-style price competition and anti-trust legislation. Sahashi likes to quote Schumpeter to the effect that the competition that really counts in the capitalist system is not measured by profit margins but by the development of new commodities, new technologies, new sources of supply, and new types of organizations.

What this points to is the fact that rather than the fork in the road being a choice between the Righteous Path of good governance versus bad governance, the decision we are faced with is whether we continue down the same old road of the (new) Washington Consensus or change course and move more towards the BeST Consensus (Beijing, Seoul and Tokyo Consensus) bearing in mind that no other country has successfully traveled down the path of the former into the promised land.

A wake-up call

So is the good governance path a dead end? If we are to look at economic history, the answer seems to be a resounding YES. Unfortunately, the tribe of PNoy seems to have fallen head over heels for it. They will not accept any deviation from this course. The eunuchs and high priests surrounding him are all advising their leader to stick to their teachings.

Who can blame them? The gospel they have accepted is a truly seductive one. It does not require us doing our homework, building home grown institutions consistent with channeling resources into more producitive activities. It fits with our fatalistic, religious upbringing to rely on someone or something external to deliver us from evil.

The results of the alternative path trodden by the convergence club are evident for anyone to see. Singapore, Malaysia, Thailand and even Indonesia are heading down that road. The Philippines needs to wake-up to this reality. It needs to gain “a re-awakened sense” alright, not of right and wrong, but of self-empowerment and self-determination. That is the very essence of people power after all.

BFFs, NO! Developmental State, YES!

For all its talk of good governance and economic reform, PNoy’s government seems to be struggling at both. It needs a circuit breaker to change its current trajectory.

Last week, two surprise announcements were made. Well perhaps one was a surprise, the other was to be expected, but shocked a lot of people nonetheless. The first had to do with the resignation of Jose “Ping” De Jesus as secretary of the DOTC (Transport and Communications). The second was the less than stellar growth rate recorded in the first quarter of the year of 4.9%.

According to “Mareng Winnie” Monsod, Ping De Jesus her former colleague in Cory Aquino’s cabinet resigned due to his distaste for the shenanigans of his assistant secretary, Virgie Torres, a political appointee and shooting buddy of the Benign One himself. It appears that Mrs Torres who was already on the nose for two scandals involving her alleged abuse of authority was causing interference in the way Sec De Jesus wanted to run things at the department.

What’s more is that the DOJ Sec Leila De Lima, another highly esteemed member of PNoy’s cabinet had recommended suspension for Mrs Torres pending investigation of her latest infringement. What broke the proverbial camel’s back for Sec De Jesus, was PNoy’s decision to just ask Torres to go on leave for awhile, disregarding the DOJ’s recommendation.

A pattern emerges

This case mirrors the treatment of Sec Jesse Robredo, a highly decorated public official. In that instance another shooting buddy of PNoy in the person of Ricardo Puno was appointed undersecretary and was preventing Robredo from running the agency effectively. Despite the Luneta debacle involving Puno, who again was found liable by the DOJ secretary for mishandling the rescue of hostages, PNoy once again came to the aid of his BFF (best friends forever!).

At some point surmises Mareng Winnie, Robredo and De Lima might follow De Jesus and leave the PNoy administration.

It could not happen at a worse time as the economy seems to be slowing as a result of government underspending by a magnitude of 70 billion or three and a half conditional cash transfer programs in the first quarter alone. This according to the nation’s chief statistician NSCB Sec Gen Virola dragged the growth of the economy down from 5.1% supposedly to 4.9% effectively causing the NEDA to rethink its growth forecasts for the year.

Despite the approval given by Congress before the start of the year and the zero based budgeting approach instituted which presumably cleansed the roster of projects of wasteful anomalous spending, the current administration still found itself stumbling at the gate with a review of costings delaying its spend. Senator Ralph Recto a former NEDA director general says, “Use it, or lose it.”

Unfortunately, these two events are just symptomatic of a dysfunctional state and set of institutions that continue to hound the Philippines.

The BFF phenomenon

Ferdie had his cronies. Cory had her kamag-anaks (close relatives or Kamaganak Inc), Eddie had his fellow generals. Erap had his drinking kumpadres, Ate Glo had her husband’s classmates, and Noy has his shooting barkada (update: or Kaibigan Inc as the Inquirer has put it). It’s a BFF phenomenon replicating itself with each successive administration. Despite their rhetorical flourishes, they just can’t help but stick to the same playbook.

What’s the reason for this?

Well it goes to the heart of what institutions are about, which in economic theory is all about reducing transactions costs. Let me break it down for you…

In a nation like the Philippines, where business transactions are lubricated through personal relationships and kinships, using close friends and connections are one way to minimize costs associated with screening and monitoring business contracts, partnerships and joint ventures.

So it is in running a government, the sheer size of it makes it necessary for the one appointing to efficiently select appointees to help him share the burden. So often the shortest possible route to that is appointing BFFs.

The use of personal ties does not always lead to dysfunction. In post-war Japan where the top graduates from the premier law schools were often recruited into the economic bureaucracy, a member of an incoming “cohort” would often rely on school ties to forward his or her career. In fact, companies were wont to recruit graduates from the same universities mainly because of the close connections they had with public servants in these powerful agencies.

Todai Law School, University of Tokyo: has one of the most powerful of school cliques in Japan. Alumni are well-placed in the upper echelons of government, banking and industry.

The term they used for this was gakubatsu or school cliques which are ensconced in the upper echelons not only of government, but banking and industry. Within this batsu, is the Todaibatsu, or the “bastu of all batsus” which refers to alumni of the University of Tokyo Todai Law School, whose education features a heavy dose of public administration, more like political science, and economics.

This mixture of a merit based appointment and school/class based loyalty system enabled these bureaucrats to work cohesively and professionally, which in turn permitted policy to be developed independent of local as well as international pressure or influence, to strengthen economic policy and manage public-private cooperation.

The developmental state model

In his widely celebrated book on the powerful Ministry of Trade and Industry, MITI and the Japanese Miracle, the late Prof Chalmers Johnson outlined how the Japanese bureaucratic model worked

The first element of the model is the existence of a small, inexpensive, but elite bureaucracy staffed by the best managerial talent available in the system…they should be educated in law and economics, but it would be preferrable if they were not professional lawyers or economists, since as a general rule professionals make poor organization men…

The second element of the model is a political system in which the bureaucracy is given sufficient scope to take initiative and operate effectively. This means, concretely, that the legislative and judicial branches of government must be restricted to “safety valve” functions…to intervene in the work of the bureaucracy and to restrain it when it has gone too far…

The third element of the model is the perfection of market-conforming methods of state intervention in the economy. In implementing industrial policy, the state must take care to preserve competition to as high a degree as is compatible with its priorities. This is necessary to avoid the deadening hand of state control and the inevitable inefficiency, loss of incentives, corruption, and bureaucratism that it generates.

The fourth and final element of the model is a pilot organization like MITI. The problem here is to find the mix of powers needed by the pilot agency without either giving it control over so many sectors as to make it all-powerful or so few as to make it ineffective.

What Johnson was describing is basically the East Asian economic model based on the developmental state or the BeST Consensus (BeST stands for Beijing, Seoul and Tokyo). The Commission on Growth and Development in its findings covering the factors that gave rise to rapid and sustainable growth gave a tip of the hat to the fourth element. Its term for this is “reform teams”. According to the report

The business of “feeling for stones” in fast-growing economies was often carried out by highly qualified technocrats in small, dedicated “reform teams”. Singapore had its Economic Development Board, Korea its Economic Planning Board, and Japan its Ministry of Trade and Industry.

Reform teams were not burdened with adminstrative duties, but they were given direct access to the top of the government. Malaysia’s Economic Planning Unit reported directly to the prime minister. Taiwan, China’s…Council for Economic Planning and Development, reported directly to the president. Indeed, several future heads of government sprang from their ranks: the second chairman of the Council later became president of the country.

From this unique position…the reform teams helped coordinate the government’s efforts and overcome administrative opposition and inertia.

Although technocrats unchecked by political forces can fail to balance economic with political and social concerns, political forces unchecked by technocratic knowledge can be disruptive.

In the Philippines, the closest resemblance to a “reform team” is the NEDA which creates the revolving five year medium term plans and screens development projects. The latest roll-out is the Philippine Development Plan 2011-2016.

Unfortunately, while the director general of this agency does sit within cabinet, his stature is often relegated to a planning or “secretariat” function. We also witnessed in the case of Sec Romulo Neri how the clout of the NEDA chief could get superceded by political players and personalities outside of government.

The NEDA in its original design was meant to perform the function that the cabinet cluster under EO#43 sets out to do. Under this over-arching framework, the NEDA’s sole job is to act as secretariat for one of the clusters, on economic development leaving social development, climate change, governance and justice to be handled by other lead agencies.

The Philippine reform experience

If we look at our own track record at performing economic reform, the reform teams have traditionally been held by players close to the president, a Joe Almonte under Mr Ramos or a Joey Salceda under Mrs Arroyo.  Love them or loathe them, the reforming credentials earned by their presidents (whether you agree or disagree with the type of reform is immaterial) can be credited to them and the teams that worked with them.

Following in that tradition, I formed the view that the person best placed for this role would be Mar Roxas, the president’s failed vice presidential running mate. Although EO#43 has been branded a power play on the part of the opposing faction to “cluster out” the incoming chief of staff, I believe that it has the exact opposite effect. A reforming team requires a strategic “helicopter view” of the world.

Had the E.O. pigeonholed the chief of staff like it has the NEDA chief, the occupant would be unable to move out of this administrative strait jacket. Perhaps the strongest suit of Mar is his being a former DTI secretary, which puts him in good stead with the various industry groups and the economic bureaucracy. Given his skill sets, he should be able to drive a number of key reforms across all five cabinet clusters.

It is reported in today’s Inquirer that his rivals within the office of the Executive Secretary want Mar Roxas to take the DOTC secretaryship supposedly to keep him away from the Palace. Given the shambolic state that the administration currently is in, with its rookie student council style of governance, the presence of a veteran like Roxas might help steady the ship and keep it on course.

Conclusion

If the government of the Benign One ever hopes to dig itself out of the rabbit hole it has dug itself in, now is the time to do it. It will have to show its reformist credentials soon. The paternalistic state was one where BFFs thrived. It was compatible with the misplaced faith in “the Market” to deliver its citizens into the promised land of economic prosperity wherein the state played a diminished role.

As inconsistencies between the outcomes of this model and what it predicts has become apparent, perhaps our leaders will realize that the responsibility for charting our own path lies in our hands and not that of foreign aid donors and advisors. Perhaps this “re-awakened sense” of self-determination is the vision lacking in all our plans.

Lies, Damned Lies and Statistics: Or why De Quiros is a bit of a crank

In his two most recent op-ed pieces published successively in the Inquirer between Monday and Tuesday this week, Conrado De Quiros proves why his writing should be taken with a grain of salt.

Apologist

In Repetitions, Mr De Quiros talks of parallels between the two Aquino administrations and uses the argument that history may be repeating itself against those who despair at the current lackluster performance of PNoy in his freshman year. The implicit parallelism here is between the Marcos and Arroyo loyalists who claim that life deteriorated under their successors.

De Quiros uses a number of “lies, damned lies and statistics” in making his case. These fibs undermine his credibility. He states first of all that

(o)ne year after he came to power, the Gloria Macapagal Arroyo (GMA) loyalists are out saying how things have gotten worse from GMA’s time. Proof of it is that unemployment is rife, prices are higher and the hungry are getting hungrier. And they have the figures to show it.
What they forget to say is that Gloria borrowed more than Tabako (President Fidel V. Ramos) and Erap (President Joseph Estrada) combined in the course of her long, vicious and illegitimate rule from January 2001 to May 2010 which did not keep prices from soaring anyway, and which debt has added immeasurably to an already gigantic one the people are paying during P-Noy’s time and will continue to pay well past P-Noy’s time.

Ok, let us subject the first part of the argument to the Truth-o-meter. What was the level of external debt during the presidencies of Messrs Ramos and Estrada in contrast to Madame Arroyo? The chart below is taken from World Bank data which is hosted on Google Data Explorer.

It shows that the total external debt stock in 1991 prior to the election of Pres Ramos stood at 32.5 billion current US dollars. In 2000, the year before Mrs Arroyo succeeded Mr Estrada in office it rose to 58.3 billion dollars. That is a jump of about 25.8 billion. In 2009, the year before Mrs Arroyo handed power to Mr Aquino, the total external debt stock was 62.9 billion dollars or an increase of a mere 4.6 billion!

So on point one, Mr De Quiros’s claim that GMA had borrowed more than Messrs Ramos and Estrada combined is not only untrue, it misses the truth by a longshot. The growth of debt during the latter was 5.6 times more than under the former.

Let us examine the second part of the argument about price inflation under the Arroyo administration. The chart below shows inflation from the same data source. I am afraid that again in this case, the data conflicts with De Quiros’s claim. It shows that under GMA, inflation was tame. The country experienced some of the lowest price rises that it experienced since the 1970s, much of this is a result of the economic reforms instituted since the mid-80s of course.

So on point two, once again Mr De Quiros is caught fiddling with the truth.

Moving on to the rest of his argument, De Quiros states that

The economy Gloria left to P-Noy is not a rundown restaurant that has been sold to a new owner who with unlimited funds can renovate it and open with the sign, “Under new management.” It is a horse that has been starved and flogged to near-death and bequeathed to an impoverished nephew by a good-for-nothing aunt upon her death. You cannot make that horse spring back to life overnight, especially when it’s all you can do to keep body and soul together. It will take a great deal of nursing to make it so. Along with a great deal of cursing the departed.

You can’t blame everything that is wrong with the economy on Gloria. But you can, and ought to, blame her for a great deal. The people of this country did not start getting unemployed during P-Noy’s time, they started getting unemployed during Gloria’s time. Hell, they started getting hungry—yet another statistic a few months ago said people had gotten hungry of late—during Gloria’s time, as a result of abandoning the farmers completely and relying on importations of rice. And stealing billions of bukols along with the rice.
Gloria is the cause, this is the effect.

So, to verify these claims, let us look first of all at the level of income during Mrs Arroyo’s presidency. The chart here shows that per capita incomes grew quite rapidly and consistently for the most part during her term from $899 in 2001 to $1,752 in 2009, an increase of about 95%.

In a comparable period from 1991 to 2001, GDP per capita only rose from $710 to $899 or an increase of a mere 27%. Again, it seems that calling the economy a rundown hand-me-down does not seem appropriate.

Well, you might say, De Quiros is really talking about the hardships suffered by the most marginal sectors of society getting worse under Mrs Arroyo. So, let us examine the income share of the poorest quintile of the population in the following chart.

We find here that the lowest 20% of the population had a 6.5% share of total income in 1988 and this dropped down to 5.36% in 1997 and remained steady at 5.37% in 2000. From there it rose to 5.6% in 2006 where the time series stops. So it seems that for the greater part of GMA’s term, the decline was arrested. The time series unfortunately ends there, right before the surge of rice importation.

As a sidebar, it is worth noting that the economic liberalization instituted since the mid-80s as prodded by the Washington Consensus may have moderated inflation but failed to provide protection to the most vulnerable. Mrs Arroyo’s rice program was also aimed at limiting the effects of price rises, but may have impacted the farming sector adversely. In that case, it was simply extending the existing policies further.

Revisionist

In Visions and Revisions, the second thesis of De Quiros is a stab at economic revisionism. His very first line exposes him to this charge:

P-noy isn’t making things worse, economically or otherwise, but he’s missing a lot of chances to make things better.

Unfortunately, the first quarter results say otherwise. The latest 4.9% GDP growth figure reported by the National Statistical Coordination Board, while nothing to sneeze at, was at the lower end of the expected range that analysts had predicted of between 4.8% and 5.6%. It was almost half the 8.4% growth registered in the same period of the previous year under Mrs Arroyo and a far cry from the government’s own target of 7-8% for the year. Given the recent tweaking of the way GDP is computed, the growth rate of 4.9% is actually higher than it would have been under the previous method.

PNoy tried to remain upbeat and blame the less than targeted performance on economic headwinds coming from conflicts in the Middle East and North African region as well as natural disasters closer to home. He also sought to paint a favorable picture by comparing it to the milder growth experienced by our ASEAN neighbors.

What he conveniently failed to mention was that the growth could have been higher had his government not contracted spending by 17%. Today’s banner headline of the Businessworld says it all, Underspending Curbs Growth. What this means is that the higher unemployment, hunger and poverty reported during the period is partly the government’s doing.

None other than Budget Sec Buth Abad confirmed that the first quarter was “not regular” in that government spending slowed as a result of project costings being reviewed. While he claims they can play catch up during the remainder of the year, Prof Ben Diokno, a former budget secretary, and Gov Joey Salceda, a former analyst and political advisor to Mrs Arroyo think otherwise.

Unfortunately, not only is “PNoy missing a lot of chances to make things better”, he is also “making things worse, economically”. No amount of economic revisionism can change that fact.

In bolstering his claims, Mr De Quiros needs to steer away from using spurious statistics. He has failed the truth-o-meter on all counts. Such flagrant misrepresentations do not aid his cause one bit. They merely expose the hollowness of his arguments.

That Vision Thing part 2: Curing dysfunctionalism

Apart from discarding outdated mental models, the president needs to address personality-based factionalism that has led to organizational dysfunction within his team.

In part one of this series, we uncovered the problem of an inadequate framing of the strategic role of government. In this second part, we look at the organizational fault-lines that have skewed the president’s role as chief executive and let him down in his first year.

It was evident even before he assumed office. The president’s team was hampered unduly by factions vying for influence within his government. What is disheartening about these factions is not that they existed, but that they were drawn along the lines of personality and not based on philosophical tensions that could have led to more considered policymaking.

Having belatedly entered the 2010 derby, the president had to cobble together a coalition built on the political aspirations of candidates that had either withdrawn from the race or slid-down to accommodate him at the top spot of the ticket. The fault lines in his team ran along the lines of personalities that had to train their sites on succeeding him in 2016.

Overlaying this stratum of political maneuvering is the presence of the president’s own pals who do not belong to any of the factions. Their appointment was his way of building a power base independent of them. Unfortunately, these pals either became vulnerable to attacks or suffered from the Peter Principle of being promoted to roles they were incompetent to fill.

Baggage and rumors

Complicating matters was the baggage handed down by the Inglorious One who left behind a cabal of her supporters ensconced in corporate boards and constitutional bodies with fixed terms of office that almost run concurrent to that of the president. Exposing their abuses and missteps to shame them into resignation has been a time consuming process. The first year of the administration has almost been absorbed by it.

As the one year ban on appointing losing candidates from the field of 2010 approaches, talks of a reshuffle are inevitable. Rumors are rife that one cabinet official whose managerial style has not agreed with the president is on his way out. The man in question would have been eminently qualified to stay in his present role, had it not been for personality clashes with the benign one. His replacement is meant to be a legislator who came out of hiding as a fugitive from the law after being exonerated.

The current cabinet secretary saw his authority undermined by a presidential bossom buddy who was given exclusive direction over a huge chunk of his agency and given direct reportorial access to the president. Having been stripped of formal authority over half of his portfolio the estranged cabinet official was being made responsible and accountable for its poor performance.

Benign form of Erap?

This dysfunctional organizational style has hampered another president before. Erap Estrada’s cabinet was beset not only by personality-based factions vying for ascendancy but by a coterie of cronies that performed the informal role of a shadow cabinet. The present crop may be less malignant, more benign, than the previous kind they nevertheless have created more problems than solutions for the president.

Estrada showed a distaste for formal cabinet meetings to conduct policy development and took to the more informal ways of wheeling and dealing with associates over several bouts of drinking. The current president similarly sought to limit the frequency of meetings by his full cabinet but rather focused on dividing them to more manageable clusters. Although his particular style was more benign than the former leader’s, it showed if anything a penchant for involving himself in sub-committee discussions where specific detail rather than broad strategy get threshed out.

The role of chief executive

Honing a common vision and strategy means that differences over operational or implementational details can be finessed. The lack of a clear, crisp direction from the top leads to organizational incoherency. Good chief executives are able to stick to “that vision thing” while working with individuals with whom a strong personality clash exists. In fact good ones do not mind subordinates who are stylistically different from them, but who possess unique, critical skill sets for running their organization.

At this point, the president needs to demonstrate that capacity. No amount of cabinet reshuffling will work, unless he re-defines more clearly what his role is and that of his official family. Year two of his presidency needs to learn the lessons of year one where a steep learning curve had to be scaled.

They say that the window for creating change only exists during the first 18 months of the presidency. Beyond that, the wheels of official duty will simply overrun much of the president’s agenda. The benevolent one needs to assemble a team around a common vision and lay personality issues aside if it is to get itself across the line on a number of important issues.

A separate unit within the Office of the President needs to take charge of developing strategy, coordinating and monitoring its implementation. It needs to take on the role that former national security adviser Jose Almonte played under the Ramos administration or that governor Joey Salceda performed under Gloria Arroyo.

<<<go back to part 1: That Vision thing

>>> go to part 3: Credible Commitment

DPWH chief ‘appoints’ self to head MWSS

DPWH chief ‘appoints’ self to head MWSS
By Gil C. Cabacungan Jr., Kristine L. Alave
Philippine Daily Inquirer

MANILA, Philippines—It appears that Public Works Secretary Rogelio Singson could not wait for his boss to appoint him to head the body that regulates the private water concessionaire that he used to manage.

On his own, Singson, the former president and chief executive officer of Maynilad Water Services Inc., wrote a letter wherein he claimed that President Benigno Aquino III wanted him to head the Metropolitan Waterworks and Sewerage System (MWSS).

But the President seems unaware of Singson’s self-appointment. “Will check on that,” he said in a text message, responding to the question of whether he knew that Singson had appointed himself MWSS chair.

In a letter dated July 6 and addressed to MWSS Chair Gabriel Claudio, Singson said: “We wish to inform you that it is the desire of His Excellency, President Benigno C. Aquino III, that the secretary of public works and highways immediately assume the position as ex-officio chairman of the board of trustees of the [MWSS] pursuant to Section 4 of Republic Act No. 6234 as amended.”

Singson, also a former director of Metro Pacific Investments Corp., took over Claudio’s post on July 7, when the MWSS had its first scheduled board meeting for the month.

But Singson Thursday said he “cleared” his move with Executive Secretary Paquito Ochoa before going to the MWSS.

“I cleared it with the ES in a letter. I wouldn’t have done it without their signal,” he said.

Conflict of interest?

Reached by phone, Claudio, a top political adviser of then President Gloria Macapagal-Arroyo, said that under the rules, the public works secretary served as chair of the MWSS unless the President appointed another person.

He refused to comment on the purported conflict of interest inherent in Singson’s takeover of the MWSS.

Maynilad was formed by the Lopez group 15 years ago to bid for Metro Manila’s huge concession area, which the administration of President Fidel Ramos had divided into two zones to engender competition and protect consumer interest.

Maynilad won the west zone, and Ayala-owned Manila Water Company Inc. won the east zone.

Because of Maynilad’s debt problems, the Lopez group’s allies—Metro Pacific Investment Corp. run by Manuel V. Pangilinan and construction and property giant DMCI Holdings—took over the water firm three years ago.

Singson, however, said there was no conflict of interest when he accepted the public works portfolio after working with Maynilad.

“What conflict of interest? We are both protecting the consumers,” he told the Inquirer over the phone.

He said that in order for this kind of talk to die down, he would sell his shares in the companies he used to head.

“I am selling my shares. I have 30 days to do that,” he said, adding in jest that he would be on the losing end. “Lugi pa nga ako.”

Ties to big business

The deep ties of Singson and other Cabinet officials to big business interests have elicited questions from lawmakers about the “disturbing pattern” of Mr. Aquino’s appointments.

Speculations have swirled about such appointments as Transportation and Communications Secretary Jose de Jesus (a former president of Manila Electric Co., which is jointly run by the Lopez group and Metro Pacific, and a former executive vice president of Philippine Long Distance Telephone Co.) and Energy Secretary Jose Rene Almendras (a former president of Manila Water and Cebu Holdings Inc., both owned by the Ayala group, and a former treasurer of the Aboitiz group).

In an interview, Bayan Muna party-list Rep. Teodoro Casiño said Congress would keep a close watch on appointees with known connections to utility firms and other powerful business interests, “to make sure that they do not unduly favor the monopoly interests of their patrons.”

Casiño said that during the confirmation and budget hearings, lawmakers would demand from these appointees their firm commitment to prioritize public interest over the interest of their former business associates.

“We are calling on the public to serve as a check to any potential conflict-of-interest situations brought about by such appointments. This is crucial given that oil, water, power and telecommunications firms are itching to raise their prices and profits,” he said.

’Nothing new’

But according to Singson, the MWSS charter states that its ex-officio chair is the public works chief.

“It’s always the DPWH secretary [who chairs the MWSS board]. There’s nothing new there,” he said.

Singson said his decision to chair the MWSS had raised eyebrows because “some people wanted to stay” in the agency.

He also said the Arroyo administration did not follow the charter and gave the posts to political appointees.

'Don't be surprised if frontrunner loses'

‘Don’t be surprised if frontrunner loses’
The Philippine Star

MANILA, Philippines – The race for the presidency is still wide open, Malacañang said yesterday.

Speaking to reporters, Press Undersecretary Rogelio Peyuan said Filipinos must not be surprised if the winner is not among the frontrunners in the surveys.

“Elections give us a lot of surprises,” he said.

Peyuan said figures from the Commission on Elections (Comelec) showed some 50 million registered voters nationwide, out of a population of about 92 to 94 million.

“It would be very safe for each and everyone to think and to always keep in mind that if there are about 50 million voters and 10 or 11 percent of them do not vote, as we experienced in the past, it would be hard for us to have faith in the surveys that have 900 respondents in Luzon, 600 in the Visayas and maybe another 600 in Mindanao. That would be very, very unfair to even presume and assume that that (surveys) is the sentiment of the people,” he said.

Peyuan cited the case of Lakas-Kampi-CMD standard-bearer Gilbert Teodoro Jr., who has not fared well in the surveys.

Nevertheless, he won the endorsement of Pastor Apollo Quiboloy of the Kingdom of Christ the Name Above Every Name, which has five to six million followers nationwide.

Peyuan said supporters have heavy turnouts during the campaign sorties of the other presidential candidates.

Other groups with substantial following may announce their preferred candidates before May 10, he added.

Enrile: Polls would be unpredictable

Senate President Juan Ponce Enrile said the elections would be unpredictable despite the high survey ratings of Liberal Party presidential candidate Sen. Benigno “Noynoy” Aquino III and his running mate, Sen. Manuel Roxas II.

“It can go either way,” he said. “Well, as of now, Noynoy is leading the surveys. But there are issues raised against one another, and this would affect the minds of our people.”

“In the last hour, they will make up their minds. Until that point is reached, it would be fair and square. You cannot be sure of the outcome of the election,” he said.

“You have an undecided number of about 10 percent at this point that can swing either way,” he added. “If the turnout of the election is 70 percent, then you have around 3.5 million undecided voters.”

Enrile, who is running for re-election under the Pwersa ng Masang Pilipino, said the Iglesia ni Cristo’s possible endorsement of Aquino would give the him a wider lead.

However, that will not change the position of their standard bearer, former President Joseph Estrada in relation to Nacionalista Party presidential candidate Sen. Manuel Villar Jr.

Enrile said the INC has a command vote of three to four million, which could help a candidate win an election, he added.

He was not aware as to how many voters Quiboloy could deliver, but that too could change, he added.

Based on experience, there could still be shifting of support in favor of one or the other presidential candidates, he said.

Enrile dismissed speculations of a failure of elections or the need for snap polls.

“I do not know why are they so preoccupied with the so-called failure of election,” he said.

“I have no fear that the election will fail. I don’t think it will.”

Santiago cautions Aquino vs people power

Sen. Miriam Defensor-Santiago cautioned Aquino yesterday against his statement that the Filipino people might resort to people power if the results of the elections will not be acceptable to them.

“That is an extremely dangerous statement, because if that is the case that Mr. Aquino might be tempted to lead a people power demonstration if he does not win, then all other presidentiables who have reasonable chances of winning such as those who place no. 2 or no. 3 maybe up to no. 4 in the surveys might also be tempted to make the same threat so we will have a culture of resistance or disobedience to authorities,” she said.

Santiago said all presidential candidates must respect the results of the elections.

“There should always be caveat that the results of the elections should be accepted as regular because that is the presumption in the rules of court unless proven otherwise,” she said.

Santiago said that when she lost the presidency to retired Gen. Fidel Ramos in 1992, she filed an election protest.

“So in my case in 1992 I deliberately, voluntarily and spontaneously refrained from calling a people power,” she said.

“If you remember I was a very close number two. The president was not elected by a majority vote, and in fact he got only less than 30 percent of the vote and his margin over me was less than one million,” she said.

“But all the same I took the legal route. I filed an election protest with the Presidential Electoral Tribunal. I did not call on the young people who are my avid supporters at that time to spill out into the streets because I felt extremely responsible for their lives and their safety,” she added.

Santiago asked presidential candidates not to raise the specter of massive civil unrest.

“But if they are not lucky to be proclaimed as president notwithstanding their own beliefs on their invincibility in the election process then they should go to court like what I did,” she said. – Paolo Romero, Aurea Calica and Christina Mendez

Villar: Survey timing suspect; Legarda: It’s infiltrated, for trending

Villar: Survey timing suspect; Legarda: It’s infiltrated, for trending
By Michael Lim Ubac
Philippine Daily Inquirer

MALOLOS CITY, Philippines—Manuel Villar has questioned the timing of the latest Pulse Asia survey on presidential preferences showing him and Joseph Estrada tied for second place after Benigno Aquino III.

“Why did they [start the] field survey on April 23?” Villar told reporters after a rally and rock concert dubbed “Rockatropa” late on Thursday, marking the first time the Nacionalista Party (NP) standard-bearer raised questions on the accuracy of a preelection survey.

Villar noted that Pulse Asia began field work on the day it was reported that Estrada and senatorial candidate Juan Ponce Enrile were accusing him of bending bourse rules to allow the sale of shares of the family-owned Vista Land & Lifescapes Inc. in 2007.

(In answer to that accusation, Villar had said no law was violated, and that the government even earned more than P100 million in taxes from the public offering of shares of his real estate firm.)

Villar told reporters that a survey was just one “indication” of candidates’ chances at the polls.

“We have survey results that we accept and survey results we don’t,” he said, adding:

“It’s up to the people who want to make surveys… We are not stopping [survey] companies from doing it, and it’s up to the readers to believe the results.

“We will just continue with our [campaign activities]. In the end, we will be proven correct.”

‘Infiltrated’

If Villar was diplomatic in expressing his displeasure at the survey results, his running mate Loren Legarda did not pull her punches.

“They have mastered the art of black propaganda, lies and slander. What kind of leaders are they?” she said.

According to Legarda, Pulse Asia is “infiltrated” by Aquino’s Liberal Party (LP) because the latter’s cousin, Rapa Lopa, is its president.

“That [April 23-25] survey is inaccurate. It’s an impossibility. Let’s not base our victory or defeat on the surveys because it’s clear that the surveys have been infiltrated,” Legarda said.

She said the results were not in sync with the reality on the ground but were made public “so that there will be trending and mind-conditioning.”

Legarda said the NP “should not be affected by surveys because we are strong from the ground.”

‘Predetermined’

She said Fidel Ramos and Gloria Macapagal-Arroyo never led in preelection surveys, but ultimately became President.

She added: “I was No. 17 in the [preelection senatorial survey] in 1888, but became No. 1.”

Legarda said Pulse Asia officials had admitted that survey respondents were predetermined—meaning, she said, that they had a regular pool of respondents.

“Only the sampling [size] is changed,” Legarda said.

“If the owner of a survey company is the first cousin of a candidate… If your cousin is an owner—although he resigned or took a leave—it’s easy to know where the respondents are,” she said.

She challenged reporters: “All of you, ask around in your communities if a person has been surveyed. None. [After] three months that I campaigned around the Philippines—and this is my fourth national election—I know what I’m talking about. Not one person told me that he or she had been surveyed.”

Legarda has dropped to third place in the Pulse Asia survey of vice presidential candidates, having been dislodged from the No. 2 post by Estrada’s running mate Jejomar Binay.

Aquino’s running mate Manuel “Mar” Roxas is still leading the pack at 37 percent despite a drop of 6 percentage points.

But Legarda said: “Mar can take all the surveys; I’ll take the people’s votes.”

She said survey results reflected “the opinion of a small group of people at a particular point in time.”

“How can 3,000, mostly urban-based, people speak for 50 million Filipino voters? If you want to know the real pulse of the people, go out in the streets and to the provinces, and get to know the people,” she said.

‘Real gauge of victory’

Legarda said the real gauge of victory was the sentiment of the entire nation, as exemplified by the “very warm” reception she had been getting on the campaign trail.

“The true survey is out there,” she said. “Ask anyone who has been in my campaign sorties. People line the streets during motorcades. They flock to the markets when I visit; thousands converge on municipal gyms and stadiums when my running mate Manny Villar and I speak. How can all these people be wrong?”

Legarda said the people had inspired her to campaign harder.

She said the ratings game was a political tool that politicians commissioned to “brainwash people into believing that their candidate will win.”

Legarda said part of the reason survey firms were purportedly not treating her well was the fact that she had not commissioned any survey or subscribed to one.

“Unlike my rivals, I don’t commission surveys. I campaign on the ground. I try to reach out to as many people as possible on the ground level—in markets, city halls, and plazas. I bring my platform and humanitarian mission to them. And I also engage in dialogue with them through consultation meetings,” she said.

Popularity test

Legarda, whose claimed constituency is the D and E socioeconomic classes, issued a challenge to Roxas and Binay to go through a “grassroots popularity test.”

“I challenge my two opponents: Let’s all stand at a corner of Quiapo [in Manila] and see who will be mobbed by the people, even for 30 seconds,” she said.

Legarda said the campaign period was an opportunity to inform voters of the issues besetting the country, and to present concrete, doable platforms.

She said the warm reception she had been getting “really shows that a platform-based campaign reaches out to people, and that we are succeeding in running a campaign that educates voters.