Yolanda's effects in the Philippine economy being felt right now

Government just released the first quarter economic figures and tells us that the economy only grew by about 5%. This is 2 or 2.5% lower than what government predicted a year ago.

Neda figures show that the economy was really affected by the devastation by Typhoon Yolanda (Haiyan) which took about 26 billion pesos out of our economy last year.

The agricultural sector grew less than 1%, while the services sector grew by nearly 7% and the industrial just by 5.5%. This figure is dismal and disappointing especially to many who hope that this country would sustain its record of being the region's fastest growing economy.

The Philippines now lags Malaysia and China. China remains the fastest growing followed by Malaysia.

5 Reasons Why It's Best to Stay in the Philippines

I had numerous offers mainly from companies abroad. I rejected them all. After working for years in Singapore, I decided that, it is best that I stay here and apply all the knowledge I got from there, to here. My decision has so far been proven correct.

Why is it best to stay in the Philippines, work here, earn and save a little and go the entrepreneurial route?

First, if you are in Manila or in any other urban center in the country, just take a look around you. Small and medium size businesses are sprouting all over. New buildings are being built in every nook and cranny of Metro Manila and surrounding environs. Filipinos are building their own businesses, at breakneck speed.

Credit that with low interest rates, a robust financial system and a healthy consumer market. Population is definitely not our problem and it is wrong still to say that it leads to poverty. Big population means big markets and big markets mean wider opportunities.

What am I saying? This is the time of opportunities for the brave!

Second, there are numerous properties being offered for those who have savings. This is the time to buy real estate because interest rates are just 5.5 to 6%. It is best to buy land, and develop it either for agriculture or commercial purposes. Instead of, say, buy a house and lot, best to buy land because you can definitely haggle with the price per square meter. Pieces of real estate are positive assets which do not diminish in value. Of course, you need land where eventually you can use for purposes other than building a house in it.

Third, multinational companies are setting shop in the Philippines. Years ago, there was a dearth of positions available in the professional class. This time, jobs are highly available for professionals especially for marketing and special services. Gone are the days when marketing professionals go abroad because pay here is simply not as competitive as what foreign firms pay. Yet, right now, there are numerous job posts with salary grades commensurate with those of the same posts abroad.

Fourth, the infrastructure in the Philippines is slowly being built. Infrastructure is the most important component in any growing economy. Local government units are trying their best identifying areas where roads are still needed and where other infrastructure are to be built.

Lastly, loan facilities is being made available for entrepreneurial pursuits. For small and medium size enterprises, there are banks and financial institutions that allow entrepreneurs to get their additional capital requirements although I must propose to government to ease the requirements of banks and these institutions for first time lenders. That two year requirement for loaners is really not that encouraging. Why not establish a funding source for new and innovative entrepreneurs? That will encourage many people to enter into business.

Threats against Philippine economic recovery and growth

There are three threats to Philippine economic recovery and growth. First, the immaturity and backwardness of the Philippine political system. There is no continuity in terms of State policies. The implementation of policies depends on the whims and caprices of the sitting Power. This explains why, when a Policy opposed by a majority of the People is implemented, the next available option is an action leading to destabilization. Some sectors hold the idea that change can only happen if the present administration is abolished and replaced by one more sympathetic to their Cause.

Presently, there is no institution of governance in the Philippine State that has a stable policy platform. Every institution is built like a fiefdom, where the whims of the appointed or elected Head is the ultimate policy. Even in the Supreme Court, the legal decisions which define the laws of the land and jurisprudence, are now blurred and are threatened by newer views and opinions which were previously expressed, but now, attaining ascendancy due largely by political influence, not by Law.

Translate that to several other agencies of government below the Executive Office, and you will find that every agency has its own interpretation of the Law, due again, largely by the dictates of the appointed Power. There is no symmetry, no clear and dominant View, only opinions based either on political or business interests. Hence, transactions with these agencies remain personal, not professional. Those who are socially up there in the strata enjoy more privileges than those below. Credit that to the weak leadership being exercised by the Chief Power.

This holds true in Congress where we see transactional politics at its worst form. Instead of the dominant view that Legislators are accountable to their constituencies to work hard and dispense laws that benefit all, the more ascendant view is that legislators work for their own interests and for their stay in power. Hence, there is no clear continuity in terms of policies, no clear direction as to where the country is headed and no validation of majority views if these conform with existing needs or not.

The second threat to the Philippines is the continuing corruption in several government agencies, something which should have been addressed by this administration, but because of the involvement of close associates of the President, being largely ignored and glossed over. Smuggling is still a big issue. Red Tape has lessened but continues to affect investor and business perception.

The last threat to the Philippines is the continuing dissolution of the Opposition. The continued fragmentation of civil society is dangerous. What follows after fragmentation is the strengthening of the State and eventual exercise of its Powers to further violate civil liberties. This is most evident with the passage of the Cybercrime  law and the State's continuing opposition to the passage of the Freedom of Information bill.

In sum, yes, the Philippine State is slowly liberalizing itself economically, and continues to reap excellent results. However, the lack of improvement in the political sphere and the continuing fragmentation of a credible Oppositive force threatens the very growth of this country into Asia's powerhouse.

Yes, the goal is to transform the Philippines into an Open Democratic society. What we have achieved so far is the liberalization of the economy, not the institution of measures which would further democratize our institutions. The expectation is while the economy opens itself up, other institutions or levers of power also benefits from this by modernizing which is not being seen.

The contrary is being achieved---while we attain economic maturity, our other institutions within the State superstructure continue to lag behind and worse, either decaying or being killed by efforts of the State to further widen its Powers and further strengthen its hold over the citizenry.

While we, or some sectors claim to have achieved tremendous economic gains, the State is slowly building its strength and is slowly making measures for its preservation by culling civil liberties.

2013 Predictions and Expectations

Last year seemed to be very good for the Philippine economy. Many companies survived the ongoing financial debacle which swept Europe and the United States. The domestic economy far exceeded expectations by analysts and government officials. True to the Filipino spirit, entrepreneurs are sprouting everywhere, far and wide, to strengthen the SME sector. The growing SME sector is actually the real reason why the economy is still very much alive. The domestic economy is doing very well.

What we lack right now is foreign investment. That 7 plus growth in the domestic economy should have been higher had government been able to attract more foreign investments. I guest investors are still pretty cautious since they know that the Philippine economy is traditionally linked with the US economy, which is right now, teetering towards what many say, a financial cliff. The US is suffering from a trillion dollar debt, and the possibility of it falling off that cliff to wherever, is the serious worry of many.

I can safely say that even if the US do fall off that financial cliff, the Philippine economy will be resilient. Efforts made by Filipino entrepreneurs and exporters to find markets other than the United States is paying off. Asia is a big market, bigger than the US and North America. In this alone, Filipino entrepreneurs are seriously looking at entering their products into these markets.

China is a big market, which Filipino entrepreneurs are seriously going into. SM, for example, has just opened their third big shopping mall in China. SMB and Concepcion products are all over Asia, even in Australia. There is a big market for Filipino products. Instead of looking at puncturing the US and European markets, it is time for Filipinos to rethink their strategies and instead, dominate the nearest big markets first and then shift towards bigger ones in the stable future.

Of course, government is saying that the BPO sector is the biggest earner of foreign currency for the Philippines. This continues to be good but, on a strategic or long-term, the BPO is not. BPO earnings are still dependent on the condition of the US and European economies.

What I see is the possibility of government assisting domestic food corporations in punctuating other markets. There is a big market for Filipino food products. Government can help by assisting these corporations into entering other Asian economies.

Liwayway Marketing Corporation, for example, is one sterling case study of a Filipino company doing quite well in the regional scene. Do you know that your Oishi and other Liwayway products are some of the best loved snack brands in Asia? Liwayway has manufacturing plants in China, Vietnam, and Indonesia.

I can cite other Philippine products which have successfully established their brands in other Asian countries. Filipino entrepreneurs must look outward and must consider possibilities of puncturing external markets instead of just focusing on the domestic market. This strategy will bring further growth and development in the Philippines---bring those dollars here. Offer Philippine products abroad to generate dollars that would be infused into the domestic market to widen it and create more job opportunities.

Filipinos should think like internationalists. Entrepreneurs should not box themselves out. Entrepreneurs should expand their horizons.

Likewise, I see a very bright opportunity in the IT and tourism sectors. Many Filipinos are now being used by foreign content providers as their graphic design artists and content developers. As platforms develop and as the IT industry expands, this will further emphasize the need for people who are experts in creating apps and designs. We have a market for this, and Filipino firms should be able to exploit this to our advantage.

The expected opening of the Pagcor entertainment city will bring tremendous stimulus to the domestic economy. Positioning Manila as the newest and the grandest gaming or entertainment hub in Asia will definitely spur economic growth in the entire Philippines. DOT has reported a 4 million visitor count as of December 2012. If DOT can reach double by this year, think about the huge money these will generate for the country and the economy.

So, to emphasize, three strategies should be undertaken by the government and the private sector to sustain economic growth and development for 2013.

1. Think outside the local economy. Filipino entrepreneurs should start thinking of how to puncture other Asian markets and establish their brands.

2. The Philippines should be a hub for IT content developers and providers. The trend is not about developing platforms, which, needs a mature manufacturing sector to be able to viable. Make the Philippines as the content provider, the software creator of the world.

3. Make the Philippines as the biggest entertainment hub this year. This will attract more attention from foreign investors who will probably appreciate the beauty of this country and invest in the tourism sector. The tourism sector is still very young and underdeveloped.

Pnoy does a good job in Tourism and Investor Relations

Let's see--what are the areas that President Aquino's administration fared well? In the SWS survey, tourism and investor relations are two of at least seven areas of concern that Pnoy did quite well. There is one which the pollsters probably forgot---the silent unification of reform groups under his leadership.


For some groups allied with the President, two years are not enough to gauge the overall performance of this administration. I agree. With the monumental problems left behind by the Arroyo administration, de-structuring the bureaucracy is one big problem which continues to challenge this administration. This administration took great pains in reviewing the onerous contracts entered into by its predecessor.It takes great leadership and time to do that.


This is the reason why groups are still hopeful that, in the end of the term of this President, there will be at least some problems which either will be terminated or delimited in scope. One of the bright spots I see is the resolution of the Bangsamoro Question. Another one, is the raging Communist insurgency.


Aside from these, I think the economy will remain resilient inspite of the impending threat of global recession. Citibank already said that the Philippine banking system is totally impervious over the financial malady that has caused great pains in many parts of the world. The banking system is protected because it is now awash with cash.


Tourism will bring in more revenues and jobs for the country in the future. The opening of the Entertainment City is being anticipated by several top companies already. I am definitely sure that tourism will bring in the goods. 


Investors are also bullish about the way things are being handled administratively and in politics. However, more efforts should be put into levelling the business playing field. This may take some time, but the future is brighter than before. 

Is February 25 an Official Holiday or a "working" holiday?

February 25, in previous years, was an official holiday. People thought that this February 25 is another holiday, which, to my mind, is but fitting to be declared as such given the high significance of this date as the twenty fifth year of the EDSA phenomenon.


Come February 25, that date will remind us of two things: One, that revolutions are not two-week affairs. These are processes which take a long time to mature and for people to really see and feel its results. And second, genuine revolts are often lead by the people. Bogus ones are hijacked by the elite. 


February 25 is supposed to be our time of self-reflection. People should be given time to reflect what really went wrong--why is it that the same conditions that precipitated the first revolt remain and even worsened? What are the real gains that the People got from this revolt, other than the often repeated line of "we regained our freedoms" or " we are freer now than before."


Who really got freed that time? Was it the people?


The Filipino People are still enslaved by the twin evils of poverty and inhumanity. The number of poor people tripled from a mere 7 million to its present state of 27 million. Killings against journalists remain unabated. The state remains a tool of the elite groups in perpetuating a neo-liberal economic system that oppresses the poor, especially the workers. Workers right now are still being enslaved by capitalists. The ranks of the lumpen proletariat has risen to astronomical highs due to the inability of the system to effect a trickle down effects after every economic gain.

Investors see the Philippines as a “low cost, but higher risk” country. It means it is cheaper to do business in the Philippines compared with other Asian countries but the risk is definitely higher than others. Meta Group Incorporated defined that risk as political. The Philippines, says MetaGroup, is second largest IT outsourcing hub, but political instability is affecting competitiveness.[1] Since 2003, the global competitiveness of the Philippines has seen good and better days due to rampant graft and corruption, worsening peace and order situation and political instability.[2]

The World Economic Forum’s “The Global Competitiveness Report, 2008-2009” ranked the Philippines in 74^thplace, lower than its neighbor Indonesia (58^th) and Vietnam (73^rd). Compared to Malaysia (24^th place) and Singapore (8^th), our country lags behind in terms of competitiveness. [3]

The latest Global Competitiveness report shows a further decline in the ranking of the Philippines. Our country is now at 85^th place, even lower than Trinidad-Tobago. Vietnam is ranked well above us.

Global competitiveness is affected by poor governance. In the World Bank’s Governance Index, the Philippines performed poorly in governance, registering a negative 0.59% since 1998 to 2008, well below Indonesia’s (-0.14%). There is a high incidence of political violence (negative 1.41%, down to about negative 1.25% since 1998) compared with other countries in the region.

Governance has been largely affected by perceptions of rampant graft and corruption and crony practices.A survey of 1,400 business leaders carried out by Economic Risk Consultancy Ltd, a Hong Kong based company, found that the Philippines was considered the most corrupt of the 13 Asian economies, followed by Thailand, China, and Indonesia. The Philippines is separately ranked number 131 out of 179 countries by corruption watchdog Transparency International in its 2007 report, placing it on a par with Libya and Burundi.[4]

Global Integrity Report (2008) has this to say about the Philippines:

Despite some impressive world-class anti-corruption safeguards, such as formal "cooling-off" employment periods for senior officials leaving government, the Philippines remains challenged by the lack of a formal access to information regime and an election system that breeds cronyism and corruption in the political process. Improvements in the transparency surrounding government procurement remain promising, and civil society groups continue to play an important role in the debate around governance reforms. Restrictions on financial donations to candidates and parties from those with business before the government are an interesting and rare regulation internationally.[5]

In terms of peace and order, the Global Peace Index places the Philippines in 114^th place with a score of 2.357[6], suggesting a higher incidence of political and non-political violence outbreaks in the Philippines compared with its neighbors in Asia.

According to the World Economic Forum Executive Opinion survey, the top five issues which the Philippines needs to address are the following: corruption, inefficient bureaucracy, inadequate infrastructure, crime and theft and policy instability. Furthermore, the Philippines needs to address irregular payments in public contracts, prevalence of illegal political donations and the rising business costs of terrorism.

Quality of Life in the Philippines

Good governance is basically anchored on giving the best quality of life for its citizens. Political scientist Henry Poole described government’s importance as the people’s medium to achieve a higher quality of life. He wrote that the quality of life is strongly correlated with open governments. As government opens more avenues for the exercise of basic rights and freedoms, it leads to a higher the quality of life for its citizens.

“Open government answers injustice rather than causing it. Open government exposes, and so corrects, corruption. “[7]

Philippine democracy under a regime of turmoil. Steven Rogers of the Open Democracy Society described democracy in the Philippines as under a regime of turmoil. [8] Arroyo’s failure to provide opportunities for the direct exercise of civil liberties has led to a continuous debilitation of public institutions.

Philippine democracy under extreme decay. Friedrich Stiftung describes democracy and political freedom in the Philippines as under “extreme decay.” The Heritage Foundation meanwhile gave the Philippines a score of 56.9 in its 2008 Index of Economic Freedom. The US think tank described Philippine economic freedom as “moderately unFree” placing the country in 92^nd place out of 157 countries in the world.

Partially Free Philippines. The US think tank Freedom House downgraded the status of the Philippines from “free” to “partially free” The institute said that the negative status change was “based on credible allegations of massive electoral fraud, corruption, and the government’s intimidation of elements in the political opposition.”

In its overview of the Philippines in its 2009 Freedom in the World Country reports, the think-tank maintained the current status of the country as “partially free” with a score of 4 out of 10 in political freedom and 3 out of 10 in the civil liberties index due to:

High-level corruption scandals inhibited governance in 2008 and generated significant public opposition to the administration. The number of extrajudicial killings declined during the year, and a new army chief with a pledged commitment to human rights was appointed in June. However, a breakdown of peace negotiations between the government and Muslim insurgents plunged the southern provinces into the worst violence since 2003, with more than 600,000 people displaced from their homes by year’s end.[9]

Bertelsmann, a European think tank gave the Philippines 4.5 in terms of civil and political liberties, placing the country in the 46^th rank out of 132 countries.[10] The Institute for Democracy and Electoral Assistance (IDEA) in its November 2008 assessment report categorized the state of political freedom in the Philippines as “under constant seize”.

The problem, says Cornell University professor Carl A. Trocki of the Southeast Asia program is that Philippine democracy continues to exhibit “cacique-type” behavior.[11] Likewise, political analysts also think that Philippine democracy is “weak” and “infantile”.

In a paper presented to the Conference Democracy and Civil Society in Asia, Joel Rocamora succinctly described the situation as:

The Philippines has the most persistently undemocratic democracy in Asia. Except for the period of dictatorship under Ferdinand Marcos between 1972 and 1986, the Philippines has had a functioning democracy since independence from the United States in 1946. At the same time, a small group of powerful families has dominated politics and kept the economic benefits of power to themselves. Many analysts use the modifier "elite" when referring to Philippine democracy. (Bello and Gershman, 1990)

Effective participation by citizens outside of elections is limited. Unlike Malaysia and Singapore (much more obviously unlike the military dictatorship in Burma) with their Internal Security Acts, the Philippine state does not impose too many formal limits to the self-organization of disadvantaged groups. But a combination of bureaucratic rules and informal means including violence continues to make organizing difficult. Without effective popular pressure, government is generally not accountable.[12]

World Bank: Governance in Philippines, a failure

The World Bank ranks the Philippines as a failure in governance. Failure of governance has been attributed to graft and corruption, cronyism and inability in providing concrete policy directions.

A confidential Friedrich Stiftung report summarizes the Philippine situation insofar as combating the twin evils of graft and corruption:

“The Philippines faces a steep battle in combating and preventing corruption among elected and unelected office holders and in discouraging officials from utilizing public positions for family and business interests. There is effectively no political party system in the Philippines–no strong and operational political parties to speak of, no discipline among parties with switching commonplace among candidates, and no clear system of accountability within the party nor between parties and the public. Prominent is the tendency of public officeholders to exhibit loyalty to families, relatives, and friends even at the expense of compromising the larger public interest.”

Political Challenges

Freedom House described the political situation in the Philippines as worsening due to rampant graft and corruption, cronyism and influence peddling, leading to what German think tank Friedrich Stiftung described as a decaying democracy.

Corruption, cronyism, and influence peddling are rife in business and government. Despite recent economic reforms, a few dozen leading families continue to hold an outsized share of land, corporate wealth, and political power. Local “bosses” often control their respective areas, limiting accountability and encouraging abuses of power. [13]

The Heritage Foundation meanwhile gave the Philippines a score of 56.9 in its 2008 Index of Economic Freedom. The US think tank described Philippine economic freedom as “moderately unFree” placing the country in 92^nd place out of 157 countries in the world. Asia Barometer describes Philippine democracy as a “tired democracy”.[14]

Reporters without Borders meanwhile increased the ranking of the Philippines by 14 places (128 out of 169).

Two popular indices of civil and political rights are Freedom House’s Civil Liberty and Political Right Scores. In 2006, the Philippines scored 3 on both indices, putting it in the league of Cambodia and Thailand in the middle of the 13 East Asian countries and territories covered by the Asian Barometer. Taiwan tops these measures at 1 for both civil liberty and political rights, while China comes in last, scoring 6 and 7 respectively.

Another set of indicators that portray the state of “control of corruption”, “voice and accountability”, “government effectiveness”, and “rule of law” prevailing in a country or territory is provided by the World Bank. In 2006, the Philippines obtained a negative score on “control of corruption” (-0.69), “rule of law” (-.48), and “voice and accountability” (-0.18). It scored close to zero (-0.01) in “government effectiveness”. This puts it in the league of Cambodia, Vietnam, Indonesia, and China as far as having no positive score on each of these measures. The rest of the East Asian bloc – Japan, Hong Kong, Korea, and Taiwan – score positively on all three measures. Mongolia and Thailand have mixed scores.

Philippines Risk Assessment: Political social economic conditions

Gloria Arroyo was inaugurated as president at the end of June 2004, taking up her first electoral mandate since assuming the presidency in 2001 from Joseph Estrada, who was forced from office by massive street protests related to charges of corruption.

Arroyo's efforts to tackle corruption and to focus on economic reform have been undermined by a string of scandals. A year after being elected, her popularity rating had fallen to a record low amid opposition claims that she cheated in the elections. She apologized to the nation for talking to an election official about her hopes for victory in the run-up to the 2004 poll but denied any wrongdoing. Because of continuing allegations of corruption against her administration, Arroyo survived the political maelstrom.

Social and economic reforms introduced during her first term did little to ease poverty or the country's debt burden. She has taken a strong line on law and order and in 2006 lifted a moratorium on the death penalty. She also has allied herself closely with the U.S.-led war on terror.

Arroyo advocated constitutional reform. She proposed to swap the country's U.S.-style presidential system for a parliamentary government before the 2010 elections. The existing constitution was adopted to prevent the president from subverting democracy by stealth after the fall of the corrupt dictatorship of Ferdinand Marcos. However, any attempt to change the constitution rouses suspicion that it is the first step back toward dictatorship.

Because of budget deficits and widespread corruption, the Philippines recovered from the regional economic crisis of the late 1990s more slowly than other Asian countries. The budget deficit is forecast to widen in 2009, as revenue collection is hurt by lower economic growth and corporate tax cuts. Analysts believe Arroyo's aim to eliminate the budget deficit by 2010 is overly ambitious.

Once self-sufficient in rice, the country has lost nearly half its irrigated land to rapid urban development during the past 20 years. It is now the world's biggest importer of the crop. Recent falling global food and oil prices, together with sluggish domestic demand, are forecast to allow the rate of inflation to slow from 9.6% in 2008 to 4.5% in 2009. Owing to the deepening global financial crisis, growth in gross domestic product is expected to slow from 7.3% in 2007, its fastest rate of growth in 31 years, to 1.9% in 2009.

The New Administration

Just four months prior to his one year rule, President Benigno “Noynoy” Aquino III continues to face extreme challenges. There is no visible strong political opposition against Aquino so far, but rising prices of goods, gasoline and utility rates remain a very viable social and security threat against the administration.

Aquino inherited a dysfunctional society run by elite groups whose interests ran counter to the general interest. The dysfunctionalism is intentional. As the country grapples with more problems, the higher and weaker government becomes in solving the root cause of its problems.

Slowly, promises made by the Aquino administration concerning social reform remain unfulfilled. Several sectors are now slowly realizing their error when they supported Aquino during the May 10, 2010 elections. Promises of national reforms fell by the wayside, as Aquino gave way to the whims and caprices of his election funders, all members of the traditional elite groups. Aquino’s neo-liberal economic policies are giving rise to an undercurrent of social dissent. This wave of dissent will continue to fester for several years and probably will not be strong enough to topple this administration.

Comments, however, against Aquino’s governance style remain. Several groups, including the very influential Makati Business Club (MBC) had already issued statements commenting on the “easy going” work ethic of Aquino. Aquino’s failure to effect strong governance had already made a very strong misimpression among the people. The botched Manila Bus hostage crisis, the diplomatic row with Taiwan and rising criminality are signs of a growing problem, which this administration considers minor issues.

Rising poverty is slowly configuring the social structure, with more and more Filipinos falling into the lower middle classes. More than 26 million Filipino families consider themselves poor. Statistics from the National Statistical Coordination Board (NSCB) revealed that the ranks of the rich and middle income groups fell from 19,700 families to only about 18,000---lower by 1% from the previous figure. This happens despite previous government pronouncements of successes in the arena of encouraging foreign investments.

Analysts, however, remain bullish on the Philippine economy. Worries, however, are now being expressed by several businessmen, including Ramon Ang of San Miguel Corporation. Ang said that government should allow the free fall of the Philippine peso to avert a possible food crisis. Food prices are expected to further increase this year, and a strong peso could mitigate the effects of such a crisis. Ang expects the Philippine peso to reach 35:US$1 before the end of the year. It still remains however, what contingency plans the Aquino administration intends to implement given the slow deterioration of the political situation in the Middle East.

We face extreme challenges, which, to my mind, are man-made. We chose the bakla route for change, by promoting a "non-violent" revolution that further promoted violence within our own society.

We prevented a bloodbath in 1986, yet because of our "yellowish" predilection, we allowed the continued perpetuation of elite rule, to the detriment of the people. Yes, there was no life lost in that event in 1986. But, every single day, millions lose their lives and futures all because we tried to avoid the inevitable. 

---

[1] Stacy Collett, “The Philippines: Low cost, but higher risk:Costs are low and the English is flawless, but there are pockets of political instability.” Computerworld, 15 September 2003.

[2] Michael B. Mundo, “ Growth and Business Competitiveness among 80 economies: Philippine Rankings Rise and Fall, “ Makati Business Club confidential report, No. 52 - November 2003. This is based on the 2003-2004 Global Competitiveness Report released by the Switzerland-based World Economic Forum (WEF) last 30 October 2003.

[3] World Economic Forum, “ Global Competitiveness Report: 2008-2009”, Switzerland, 2009.

[4] http://www.reportbuyer.com/transport_travel/country_overviews_transport_travel/philippines_freight_transport_report_q3_2008.html

[5] http://report.globalintegrity.org/Philippines/2008

[6] http://www.visionofhumanity.org/gpi/results/rankings.php

[7] Henry Poole, CivicAction.com, 3 January 2007.

[8] http://www.opendemocracy.net/democracy-protest/philippines_2759.jsp

[9] http://freedomhouse.org/template.cfm?page=22&country=7684&year=2009

[10] http://www.nationmaster.com/graph/dem_civ_and_pol_lib-democracy-civil-and-political-liberties

[11] Trocki, Carl. Gangsters, democracy and the state in Southeast Asia. USA: Cornell University Press, 1998: 57

[12] Joel Rocamora, “Formal Democracy and its Alternatives in the Philippines: Parties, Elections and Social Movements”.Paper presented at the conference Democracy and Civil Society In Asia: The Emerging Opportunities and Challenges. Queens University, Kingston, Ontario, Canada, 19-21 August 2000

[13] Freedom House, “ 2009 Freedom in the World Report” released July 2009.

[14] Segundo Eclar Romero and Linda Luz Guerrero, “Philippine Democracy and Governance 2005:Insights from the Asian Barometer Survey” included in An Asian Barometer Conference on the State of Democratic Governance in Asia report. June 2008: 24.

The Hijacking of the Filipino Dream and the Underground Economy

Based on a study, the average Filipino dreams of finishing an education, marrying the lady of his dreams, securing a housing loan and gifting himself with a car. Simple. Achievable? Of course. 


Every year, more than 3 million Filipinos enter college. These are the survivors, those who had wiggled their way out of the public school system and the expensive private schools. 


From these 3 million, a million graduates from the skills education sector, while more than 2 million dropped out, unable to cope with the rising costs of education. After four years, only 450,000 on average, gets out of college and join the rising mass of the unemployed. 


This happens every single year, based on government data I read from the CHED, NSCB and the Census. 


Those of us whose desire for a better life is as intense as our hunger for the good things, prepare for the life of an Overseas Filipino Worker. We will bet even our lives or at least one of our internal organs, just to get that dream job somewhere, somehow. 


If stats from the Immigration are to be believed, more than 4,000 Filipinos go out of the country every, single day. That is actually equivalent to about 1.5 million for a year, or half of those who initially desired to finish a college education here (accurately, this is "more or less").


These millions will either get what they desired after a few years or join the rising victims of human trafficking or the modern day version of slavery. They are brought back into the system, now poorer than before. They will then try to get out of the country, employing every means possible, even sacrificing the futures of their own families, just to get that dream going. 


Those who simply can't afford going abroad, join the rising mass of small and medium-sized entrepreneurs. Others, well, join the increasing numbers of the underground economy, and unconsciously take part in the multi-billion peso underground economy.


In the underground economy, there are a few rules. Of course, there are those dominant players who act not just as the equivalent of public servants, but as Lords and Masters of the Damned.


This underground economy grows bigger every single minute. This economy absorbs every single victim of the system and provides even an alternative "green pasture" for those who are strong willed and dreams of surviving the harsh landscape.


Unknown to all, an economy cannot operate without a government, and in this case, there are several who operate this underground economy like Presidents, Vice President and Cabinet secretaries.


They are those who control the flow of goods and products, those who belong to the Cartels that control the distribution channels and those who protect the system from external pressures. Of course, the PNP provides the muscle to protect the economy from government intervention. 


Shocking? Oh no. This happens every where. When there is a capitalist system, and the system goes bunkers, expect something like this to morph out of the existing one. 

Epiphany

Senator Ping Lacson and Senator Aquilino Pimentel, the true voices of the real opposition, nailed it in the head. They criticized how the palace defended the alleged decision of Arroyo to extend Esperon's term. They say that we are now living in an imperial presidency, where the Chief Executive is being hostaged by a group of generals, both active and retired.

Frankly, these statements resonated in me. Why? Because my ideal of a government to be run in this country for a certain period of time postulates the same kind of arrangement to be undertaken prior to the institution of a more democratic model.

For a long time, I've been advocating for a civilian-military governance model, the kind where military generals rule the country in tandem with members of the academe, civil society and non-government organisations. I believe that this setup is the one we need to replace the present decrepit governance model that we have.

My observations jibe with Lacson's and Pimentel's in the sense that at present, we already have this model in place, albeit, unofficially. That's why the state, though perceived weak, is actually strong to repel external pressures and counter forces.

If this is the setup we have today, where Arroyo serves as just a ceremonial head, without exercising real powers of her own, then, it confirms that a silent revolution is now before us. We don't need a coup because forces have already neutralized Arroyo in the sense that she does not dispense decisions of her own. She dispenses them ceremoniously.

However, this imperial presidency, as Pimentel describes the present governance paradigm is, I think, the extreme interpretation of the New Philippine Revolution (NPR). Why? Because only the military sector wields true power. In my model, it envisions the unity and synthesis of three dominant forces in Philippine society: the civil society, military and the people's organisations.

I've explained this model in previous blogs. The only component that this present model lacks is the active participation of people's organisations in policy-making in all government agencies. Likewise, there is no latent council of senior advisers who contributes towards crafting policies based on their collective experience and skills sets.

This is the only thing lacking in this model. If these generals would eliminate the causes of disapproval, namely Esperon and Arroyo's group, then the people will accept this model and embrace it as their own without shedding blood. Only those in the ideological groups would balk at such a model because it does not conform with their beliefs. Since they are weakening, they don't matter.

Now, I know why FVR etal are silent. They are working for us to neutralize Arroyo, though, in a silent mode. They are building up the model not from ground up but from the present structure and its resources. This supports Ramos' statements saying that we don't need another EDSA because it's easy to neutralize Arroyo without her knowing that she already lost power.

And she already lost power since Day One. She's perceived to be strong yet, the true powers are those behind her.

Public acceptance remains a problem. However, there's a rationale why these true powers want her to continue being there at the helm. They want her to receive all the flak. For if they surface, they'll be exposed and receive direct attacks, leading to civil war.

Hence, going back to Esperon's term extension, this is the test whether Arroyo truly wields real power or not. Should she really announce her alleged decision to extend Esperon, then, this confirms what Ping and Pimentel are saying to us all along--we indeed have a besieged presidency.

The US recession and its Impact on US

Arroyo has just called an emergency energy summit. She needs to. The threat of high oil prices will impact greatly on the country's economy. One of the things which this summit achieved is lower the tariffs imposed on oil prices. It was a decision which sectors have been wanting for Arroyo to do since last year when oil players jacked up petrol prices.

But what Arroyo must actually do instead of calling for an energy summit is an economic summit. Why? There is a strong possibility that the slide of the US economy into recession will affect Philippine economic growth this year. The high 5% unemployment rate and the sluggish pace of the economy will surely affect the flow of net foreign portfolio and foreign direct investments. Investors, both local and foreign, have shown nervousness and apprehension, not because of political talks, as what "eminent" stock analyst Astro del Castillo said yesterday. The Philippine stock market will perform poorly in the next couple of weeks or even months until this US recession boils over.

Surely, those companies involved in the call center, export and those closely linked with retail or consumer goods will find it extremely hard to compete in the US due to this recession. There will be less demand for locally-based call centers because companies in the US will surely slash their customer service budget. When things turn worse, companies look at their books and erase those which they consider to be dispensable expenses.

What I fear is the fate of fellow Filipinos in the US. Surely, with unemployment high, the first sector to be affected by it would be the minorities. There will be less jobs available for them. When this happens, some or many of them would be unable to send dollars into the country or worst, entertain thoughts of going back. The exodus of incoming expats would surely strain our own economy.

This early, questions about the resiliency of our economy are animating every boardroom and every coffee shops. People are edgy. And when people are uncertain about things, they are bound to do the inevitable--strategic retreat. I, myself, am thinking of pulling out certain investments linked with the stock market, for fears that the value of my money will be diluted due to this impending recession. I am not encouraging others to do so. But, if they assess the situation, they would empathize with me when I say this: When the sky is littered with dark clouds, it's time to rush to the nearest shelter for rain.

Unveiling Arroyo's Hidden Plan

Now, it's all beginning to make sense. That trip to meet Europe's royalties exposed the hidden desires of the First Family to be the Philippine's number one royalty. While Filipinos' busy themselves making preparations for the holidays, Arroyo unleashed her lapdogs in Congress to file a resolution calling for a Constitutional Convention. Obviously, Arroyo wants to extend her term through constitutional change of governance. That only means that Arroyo wants to rule beyond 2010. This explains why Arroyo brought 40 or so legislators to Europe to show to them their futures if they support a constitutional monarchical setup under an Arroyo constitutional monarchy.

A Constitutional Monarchy?

Yes, a constitutional monarchy. A change in government shall allow Arroyo to run again in Pampanga. With Arroyo's Kampi and Lakas allies, there's a big possibility of Arroyo being elected as Prime Minister. IF JDV continues to hope for this, he's mistaken. Arroyo's lust for power remains boundless and insatiable. She wants to be the sovereign power until, maybe, her death.

No Elections in 2010?

That's what we know. Why would Adelmiro Amante and Vic Ortega initiate such moves without the expressed blessing of their principal, who is Arroyo? Surely, these stooges made this move

Will this happen?

Yes. Chacha is part of the grand strategic plan to ensure Arroyo's rule as sovereign. Damn Roxas, Damn Ramos, Damn Erap, Damn Aquino, Arroyo is the name to beat when it comes to political power!

And why will this happen? Because the AFP and the PNP (Esperon and Razon) remain Arroyo's stooges and lapdogs. They remain her knights in shining armor.

Too late a hero

However, more than this is the fact that the opposition remains fragmented due to their individual interests. Ramos already told this administration that chacha was the best option in 2005. His advice then was not heeded because Arroyo has'nt decimated the ranks of her enemies back then.

Now that her enemies' ranks have been fractured and debilitated, Arroyo and her loyal knights are now bold enough to force chacha down the throats of every Filipino.

Arroyo--No. 1 Most Corrupt Philippine Leader

A survey by a reputable firm shows that most Filipinos think or perceive Arroyo as the number one most corrupt Philippine leader this country has ever produced. Malacanan tried to divert the attention of the people by (1) defending Arroyo's corrupt actions by saying that she inherited problems from her predecessors (2) she is working to make the economy better and (3) different government agencies are trying very hard to prosecute grafters in her government.

Bull. What crap!

Arroyo has been in power since 2001, or six years already. Whatever problems she inherited from Estrada, Ramos or Aquino should have been solved already. If Malacanan says that these bad things happening are just "inherited" stuff, then, this shows how inefficient a leader Arroyo is.

Second, as I wrote here, the economy benefits from the growth of the regional economy. Three things contribute to the continued survival of the economy. One, the billions of OFW monies being infused every month. Two, the weakening state of the US dollar which redounds to the benefit of the peso. And third, the very nature of the economic markets in the Philippines itself.

However, how would the Arroyo administration explain the continuing decrease of foreign direct investments in the Philippines? How would they explain the worsening reputation of the Philippines as a viable investment site?

Lastly, Malacanan'g defense saying that government agencies are trying to prosecute grafters to the best of its abilities--its full of crap. Have they explained fully who's responsible for the ZTE mess? Have they prosecuted Abalos and FG? Did they prosecuted the ones responsible for the overpriced sale of coal to Napocor worth 500 million pesos? Did Arroyo ever lifted a finger arresting and booking grafters in the BIR, Customs and different government agencies? A million times no!

Measuring Economic Success

Gloria Arroyo just boasted before the European royals that "shes an excellent economist but the worst politician". She claimed that she's the one responsible for the strong economic showing of the Philippines.

Bull. And a lot of horse shit.

In a way, she IS responsible for the "phenomenal growth" of the economy. By really messing up here, making life intolerable and unbearable to millions of Filipinos, Arroyo prompted an exodus of workers and intelligent Filipinos. Their monies help stabilize the economy. It is no secret that the only thing that keeps this economy alive are billions of dollars worth of overseas remittances every month.

Also, she just happened to be president when the REGIONAL ECONOMY is having a blast. The emergence of China as an economic powerhouse, the excellent showing of other ASEAN countries and the influx of investments are natural occurrences of globalization. Investors have no choice but to go to the Philippines because it's one of the largest markets around--85 million people. Whether it's Arroyo or Erap or whoever, no investor will gloss the importance of the Philippines as a consumer market.

What then is the measure of economic success?

Arroyo can only claim to be an economist if the standard of living has improved. If the average salaried employee can own a house or if the amount of savings put by at least a fraction of Filipinos have increased, we can say that, indeed Arroyo has succeeded. If her government manages to lower the price of oil despite its increasing price in the global marketplace. If she manages to lower inflation and keeps the GDP in its strongest levels, then, we can say that indeed, the Philippines has achieved economic stability. And oh, by the way, if majority of Filipinos can say for sure that they are eating at least three times a day, everyday for a month, and not just noodles and tuyo mind you, but quality, healthy, nutritious food, that'll be the time that I can truly say, with certainty, that Arroyo is a consummate economist.

For now, all I can say is that Arroyo is a dreamy economist. I remember one of her speeches when she told the people to build an "enchanted kingdom" Well, Arroyo probably has dreamt of being queen. Yes, we do have an "enhanted kingdom" right now, with her as queen and FG as king. The only problem is, it only exists in the minds of the First Couple.

The Right Solution

The Philippines has placed tenth in the Global Bribery survey. Transparency International said in its report that the poor are the most hit in the worsening graft crisis ever to hit the country. The World Bank meanwhile said that poverty incidence has increased in the Philippines despite what the Arroyo administration says as the best economic performance ever. What do all these mean?

It means that these economic gains generated by a revitalized economy are not spilling over the masses but are being dissipated by corrupt groups in government. Those who control the levers of power are the ones benefiting from this inequality. Wealth continues to be concentrated in the hands of a few lucky ones close to the center of power. The disparity, says the World Bank, between the rich and the poor has increased because the system does not have the right spillover mechanism to enable the poor to at least get a slice of the economic gains.

This explains why the Philippines rank a close second to India in terms of the number of pessimistic people. Despite having a “sunshine” economy, most Pinoys are not happy. If you study the surveys, many are desperate and feel depressed. Many feel that they have nowhere to turn to. Since 1986, the people have searched in vain for the right solution. Always, the people fail to find one.

Those who don’t suffer the brunt of high prices or are insulated from the ravages of extreme poverty, they are the ones who discourage the people to revolt. For these few, the solution is still Gandhian. When you’re being killed slowly, will you still say “peace brother”? And by entertaining these thoughts, can you then be classified as a “coup plotter”, “ a war freak” or a “peace wrecker”?

Eventually, I believe, people will look at the palace and blame it for their current poverty. In dire times, people need to point on something or look at one direction to place the blame at. I shudder at the thought of seeing one day when poor people kill the rich because of their wealth. It has happened before in other countries.

Saving this country from chaos necessitates a collective effort. It may not be a coup. It definitely cannot be a revolt. It should be a pronunciamento. This could be the solution everybody is lusting for.

Danger signals

Reports say that the Philippine gross international reserves (GIR) remained high at 32.4 billion US dollars at the end of October. Central Bank governor Amando Tetangco Jr. attributed this high GIR to the central bank’s dollar purchases amid strong inflows from OFW remittances. BSP expects about US$ 14.7 billion in OFW remittances by the end of 2007. The monies being sent by over 8 million OFWs is one of the contributory factors of the strong performance of the peso against the US dollar. Currently trading at 43.60 against the weak dollar, the peso is the second best performing Asian currency.

BSP intervention: keeping the peso at bay

The BSP’s intervention in the forex market is the second or third time the monetary authority intervened. For the 5th straight month, Philippine money supply flowed to 11.4 percent due to BSP dipping its hands into the cookie jar. Government hopes that a strong peso would slow down inflation. Reports indicate a reverse. Inflation remains high at 2.86 percent, higher than the 2.8 expected inflation rate.

Balance of Trade

Government figures place the balance at a negative US$ 867 million due to a slowdown in export earnings (US$ 4.10 billion) compared with the entry of imports (US$ 4.97b). Ths is the sixth or seventh straight time that trade imbalances nearly near a billion dollars.

Slowdown of FDI’s

Analysts are worried on the continuing drop of net foreign direct investment (FDI) dipped to US$77 million last August, down by 80 percent from a year ago and nearly 82 percent from July. Net FDI’s amounted to US$ 387 million in August and just US$ 419 million in July of this year. Aside from fears of a further slowdown of the US economy, investors are worried about the high power costs and decrepit infrastructure in the Philippines. The country lags behind Indonesia, China and Singapore in attracting foreign investments.

The slowdown of FDI has reflected in the performance of the stock market. Today, the stock market fell 0.3% over fears of continued US economic slowdown. This is not unusual considering that the regional markets reacted the same way.

Danger signals

The implications of a strong peso must not be glossed over. This early, government is concerned over the impact of the strong peso in the lives of OFW families. More on this later.

A New Ideology

Former Chief Justice Artemio Panganiban wrote extensively on JoAl's political theorem. Though JoAl's concept has been there since the 80's, it deserves a review for two reasons: one, it remains relevant and two, it justifies a reiteration.

Our present condition needs immediate solution. The solution is political, not economic. Our economy is stable. It cannot just be totally affected by any moves, whether political or terrorism. Therefore, any change in the present set of administrators will definitely not lead to an economic crash of Argentinian proportions.

JoAl believes in a revolution, led by Caudillos. There must be a change in the socio-political system, JoAl writes because this will correct the age-old problems besetting the nation. This revolution must be led by the soldier who suffers like the common tao. The change, though revolutionary, must not change the economic system. The economic system remains the proposed system. It is the political structure which needs immediate change.

I concur with JoAl's observation. And I fully support a revolution to be lead by our enlightened soldiers.

First stage---- neutralize the weak.
Second stage--create favorable scenarios
Third stage----wait for a dramatis causa
Fourth stage---launch the storm
Fifth stage-----neutralize anti-revolutionary forces
Sixth stage-----Establish councils
Seventh stage---Peace & Order