Population races with food prices

Population races with food prices

FILIPINOS numbered 88.57 million as of August 2007, according to a proclamation issued by President Arroyo.The proclamation was based on a national census conducted from August to September last year. This could be an undercount and the actual total could be higher. We know many friends and associates who were not visited by the National Statistics Office field men last year. Census takers, who are supposed to visit every home or place of business, are not perfect.

A population of close to 89 million is big for a country where the government could not efficiently deliver most basic services and where natural resources are finite. Currently, rice lines have begun to form in the cities and big towns besieged by poor rice distribution. Observers have suggested that growing population has hurt rice production because urbanization and “people pollution” have eroded farmlands and converted them to housing and recreation. An opposing school of thought says the size of the population is the last to blame for the loss of agricultural land to new housing subdivisions, roads and highways.

The annual growth rate of 2.04 percent in the past seven years, from 2000 to 2007, was higher than the government’s target of 1.95 percent annually up to 2010, according to Augusto Santos, acting director-general of the National Economic and Development Authority.

The debate on population growth

The NSO findings will again stoke the debate on the pluses and minuses of population growth and questions about the national population policy. The pessimists see sustained population increases as a drag to development and a great contributor to poverty. They claim that given the growing scarcities in land, food, water and natural resources, the government, the private sector and the economy cannot accommodate unchecked population increments without suffering a breakdown in public services and supplies of basic human needs.

Each child added to a family and the community is a great asset, the optimists claim. A huge population is a strategic tool for development under correct state policies with a growing economy. The more-body advocates cite the examples of China and India, each with a population of more than a billion that had defied conventional wisdom and had transformed their societies with the help of human and economic capital.

Current conditions strengthen the case against uncontrolled population increase. Poverty victimizes more than a third of Filipinos. Unemployment and underemployment are high, housing needs are unmet and water is becoming a scarce resource. The employment line to foreign jobs lengthens. The blessing of free universal education eludes millions of children. We continue to import rice for many reasons, including the loss of farmlands to development.

What it takes to become a developed nation

The promises of prosperity are unrealized despite 37 quarters of economic growth. We need, according to the wise men of the World Bank and the Asian Development Bank, 10 years of sustained growth, at an average annual rate of 8 percent to 10 percent. Failing this, we cannot hope to build the economy that is capable of producing well-paying jobs in the cities and the hinterland for every Filipino man and woman who needs one.

The President has informed us that the Philippines is poised for a takeoff, that in 15 to 20 years we shall become a “developed” country with a first-world economy. It is interesting that China and India, despite their tremendous growth, are still classified as developing states.

Economists, development experts and social scientists tell us a country may enjoy a breakneck 10-percent growth rate consistently, earn huge surpluses of foreign exchange, but until the quality of life of its people improves, it cannot move up the scale of civilization. How close or far are we from the wealthy nations that have spawned a new generation of millionaires but violate human rights, suppress the free flow of information, and deny their people the right to vote or to vote freely?

Our story on Thursday reported that despite the increasing number of Filipinos, the government has no plans to change its population policy.

Wise population policy as Arroyo’s legacy

Under this policy, President Arroyo has resisted the use of contraceptives and other forms of family planning other than natural methods, “a move applauded by the Roman Catholic Church but criticized by those who blame overpopulation for rampant poverty in the Philippines.”

There lies the crux of the problem. A policy that does not encourage married people to plan the size of their families or to space childbirth, give heads of families or unmarried adults information about or access to contraceptives, or offer the public choices on family planning, will help push population growth, create families bigger than planned or necessary or fail to check unwanted pregnancies.

Going into the last two years of her presidency, President Arroyo should think really hard about the legacy she wishes to leave the country and the Filipino people. One that she should work on is an informed, independent and courageous population policy that promotes responsible parenthood, compatible with development, justice and social equity, that looks to the future and the well-being of the nation.

The people’s president

The people’s president

CORY AQUINO has faced many challenges in her life and she has always faced them head on. She’s had bad times before. Her presidency was plagued by both man-made and natural disasters (those debilitating coups, the great 1990 earthquake, Mt. Pinatubo’s eruption), but through it all she remained a person of courage and unwavering faith. It is one of the many personal traits that make her unlike any politician I know, and perhaps in the end, she was really never much of a politician, but more of a humanitarian. Looking at her life, in and out of politics, it is clear that she does not merely pay lip service to good values and to moral action. She lived these values. She represented the best of what we hoped for in our leaders.

A lot of other leaders can learn from her. Unlike the current president whose political legitimacy remains elusive because of alleged electoral fraud, Cory’s legitimacy was never in doubt. She survived those persistent coup rumors and actual military coup attempts, particularly the worst of them in August 1987 and December 1989, because people believed in her presidency. Yes, even when she disappointed not a few of the citizens, those who wanted the Edsa revolution to be indeed more revolutionary, they still stood by her. Cory was their hero, the only one who could have rallied and unified the people against the dictator.

One of the real lessons in Cory’s presidential term is that democracy offers the best means of overcoming extremism. Restore faith in the elections commission and strengthen other political institutions, have a vibrant civil society, restore constitutional rights and free­doms, and you’ve got a chance of quelling military adventurism, communist and secessionist rebellion and what have you. At the heart of it all, democracy’s survival lies in the people’s conviction that their president and her administration is legiti­mate; that the power of the presi­dent comes from the people, not a case of the president of wielding the vast powers of her office to rule over a her people, which is what many accuse GMA of.

Ninoy Aquino, whose death woke the Filipino people from their apathetic stupor, used to say that Marcos would leave the country with so many problems, his successor would be lucky to last six months. Of course, how could he have known Cory his wife would be the one to succeed the dictator. Maybe, knowing his wife, he would have given her better chances.

Never underestimate a woman with resolve and a just cause. She has an enormous capacity to inspire, as she did and continues to inspire Filipino people, and the world.

Cory was Time Magazine’s Woman of the Year in 1987, among Time’s 20 Most Influential Asians of the 20th Century in its August 1999 issue, one of Time’s 65 Great Asian Heroes (along with Mahatma Gandhi, Lee Kuan Yew, Aung San Suu Kyi and King Bhumibol Adulyadej) in its November 2006 issue. She was once nominated to receive the Nobel Peace Price. She was the 2nd woman to give a keynote address to the US Congress (the first was Madame Chiang Kai-shek). There are so many other honors given to her by the international community that when she is criticized here by fellow Filipinos, it is somewhat like a prophet not being accepted in her own land. She was adored and still is by the world.

Perhaps the Filipino people just expected too much of Cory. She was after all mythical—the devout housewife of a fallen hero who took up the cudgels and ousted the dictator without a drop of blood. How could what happened next (the real nitty-gritty of governance with all the confusing noisy politics and all the problems) top that? Edsa was a miracle. Perhaps we forgot that people worked hard to make that miracle happen. It is not just God’s and it is not just one woman’s inspiration alone. And if we expected true-blue socio economic emancipation after Edsa, well, that’s a miracle we had to work hard on as well. Who knows, maybe if there weren’t as many coup attempts during her term, maybe. If all those people who sought to bring her down, could have worked with her instead, who knows what could have happened?

Cory lasted more than six months. She did finish her term She was, after all, the people’s president. And as a testament of the woman’s character, despite having a chance to run again—and she would have won by a landslide—she walked away from it all, well actually, drove away, from Malaca­ñang, in a simple privately owned Toyota sedan.

They say that power corrupts, but Cory Aquino’s personal probity was beyond reproach. Even her critics swore by it. She never personally profited from her stay in office. And when her tenure as president was up, she never thought of staying a day more, despite having the chance to. Which is a lot more than you can say from a president who would do anything and everything to stay in power.

Good luck and godspeed to you, President Cory. We are all praying for you and believing that you will get well.

Territorial baselines: Be quick but careful

Territorial baselines: Be quick but careful

God must really be keeping close watch over the Philippines and the Filipinos. Territorial baselines bills are pending in Congress—consolidated and passed in the House on second reading last December. But, as revealed by Rep. Antonio Cuenco, head of the House foreign relation committee, action on the bill has been stopped because the Department of Foreign Affairs had told Congress of China’s objections to the proposed law. He also recounted that a Chinese embassy official had informed him passage of the bill would be considered an unfriendly act by the People’s Republic of China.

If the law had been enacted and not frozen for fear that China would take offense, we would have given up “an almost colossal” part of our territory. This is according to Sen. Miriam Defensor Santiago, who takes pride in being an expert in, among other things, international law, and is the Senate foreign relations committee chairwoman.

Santiago has warned that if the Philippines declares itself an archipelagic state, as the pending House bill does, the declaration would contradict the Treaty of Paris which sets the boundaries of our country. The national territory defined in the 1898 Treaty of Paris, she said, is vaster than what would end up as our territory under the archipelagic definition allowed by the UN Convention on the Law of the Sea (UNCLOS).

Under the 1898 Treaty of Paris, Spain ceded the Philippines to the United States. The Philippine baseline law – in Republic Act 3046 and RA 5446 – is based on the boundaries defined under that treaty. Senator Santiago contends that “the Treaty of Paris sets out the International Treaty Baselines of the Philippine territorial sea.” But “the bills pending in Congress will eliminate such limits and thus, the Philippines would lose its boundaries.”

Declaring the Philippines as an “archipelagic state” would be a grave error because under the UNCLOS, the Philippines would end up being entitled to only 12 nautical miles of the territorial sea. This is “an almost colossal reduction from the wider boundaries of the International Treaty Limits under the Treaty of Paris.”

As an “archipelagic state,” Santiago warned, “our zone of sovereignty would collapse. Our internal waters would become archipelagic waters where the ships of all states will enjoy the right of innocent passage. In addition, foreign states would have the right of so-called archipelagic sea lane passage. Ships of all states would have the right of passage and their aircraft would have the right of overflight.”

The Philippines must submit its UNCLOS claims before the UN’s May 2009 deadline—otherwise we lose any claim we have on the Spratlys. But Senator Santiago warns that wrong wordings in any new law could also undermine the established claim of the Philippines on Sabah.

What should the Philippines do now?

The consolidated bill passed in the House in December 2007 would redefine the baselines of the Philippine territory to include the Freedom (Kalayaan) Group and the Scarborough Shoal off Zambales, and extend its exclusive economic zone by 240 kilometers.

Sen. Santiago also warned that a Philippines that is self-declared to be an archipelagic state would suffer environmental and marine pollution from ships freely entering its archipelagic waters.

The Philippines would then have less powers to discipline foreign vessels polluting our seas than we have now as a nonarchipelagic state dealing with ships in its territory.

The Kalayaan Island Group could actually wind up being defined as another archipelago different from the main Philippine islands. Santiago said that under international law the Spratlys could be termed “other islands” (not a separate archipelago) that falls under Philippine sovereignty. Under the UNCLOS, the Philippines as an “archipelagic state” would have to be defined as having two archipelagos—the Kalayaan Group and the main Philippine group of islands.

The bills now in Congress that would include the Scarborough Shoal in Philippine territory could pose problems because international law does not recognize the drawing of archipelagic baselines as a method of claiming territorial sovereignty.”

How should we prove our claim to Scarborough Shoal then?

Use the principle of “effective occupation under international law,” the senator recommends. The military exercises, the construction and use of a lighthouse, enforcement of laws against foreign vessels and nationals that have illegally entered the area, and many other political and administrative acts are proofs that the Republic of the Philippines has been effectively exercising sovereignty over Scarborough Shoal.

Hard times could begin next month

Hard times could begin next month

Everyone should pay attention to the warnings made by UP Economics Professor Ernesto Pernia, the former chief economist of the Asian Development Bank and its expert in human-development economics, that the looming US recession, which has begun to cause a slowdown throughout the world, will hit the Philippines hard. Harder than the 1997 Asian crisis did.

Some economists, however, still believe the situation is not as bad as Pernia paints it.

The most complete presentation of his forebodings came out in Newsbreak last Monday with Lala Rimando’s byline.

Hard times will begin to be felt next month, Pernia forecasts, up to the third quarter of the year—if the stimulus packages recently launched in the United States work to arrest the slowdown or recession there. If not, Filipinos will feel the pains throughout 2008 and maybe beyond.

“It’s going to be a hard year for us. Everyone will be affected. And the hurt will be deepest among the low-income families,” Prof. Pernia was quoted as saying.

Economic domino effect

Although the Philippines is no longer as dependent on the USA as our largest export market (we now sell only 17 percent of our exports to Americans, it was twice that volume just a decade ago), the looming recession there also impacts on the economies of our other major buyers.

We sell 27 percent of our exports to China (including Hong Kong) and 20 percent to Japan. US purchases from China will be as badly hit as ours. This means China/Hong Kong will have its own slowdown, so they will not be buying from us as much as they used to. The same goes for Japan—which, despite its hobbled economy for many years now, buys 20 percent of our exports—and these are not just our bananas and mangoes but the automotive parts and harnesses we make for that country’s carmakers.

Europe buys less than 10 percent of our exports. It will also experience a slowdown as a result of the US recession. So even our sales to Europe—and everywhere in the world that has to do some belt-tightening in response to economic doldrums in America—will decline.

Cebu’s world-class furniture industry is now already suffering from the strength of the peso. If customers in Singapore and other countries need to economize, they will hold off buying from their Cebu suppliers.

Less labor exports

It won’t just be the hits on our product exports that will make us suffer.

Let’s not forget that hardworking Filipinos are in fact our country’s biggest exports. Less money for service companies in the United States and for companies and families in the Arab world, Hong Kong, Macau, Singapore, Taiwan, Malaysia, Japan and Europe will mean POEA will be deploying less OFWs to those places. We pray all the Filipinos already holding jobs abroad are retained by their employers. Prof. Pernia, however, worries that some may have to be let go by the hardest-hit countries and business sectors.

This means there will be less US dollars in remittances from our OFWs to their families. These remittances have been a major driving force in our consumption-led economy. This decline will hurt our malls, restaurants, supermarkets, department stores and even the wet markets.

Bad news for OFWs

OFWs’ investments in family-owned small and medium family enterprises will also decline. Less OFWs will buy the condominiums now being built for them by property companies. We hope and pray not too many OFWs who signed their installment-plan contracts these past few years get pink slips—and end up being in default. Less OFW funds could abort the revival of the property market. And this will in turn mean less employment in construction and private-sector infrastructure building.

A poorer USA, Europe, Japan and China will mean less foreign direct investment here. And less foreign firms coming to the Philippines to open call-centers and other business process outsourcing offices (BPOs).

These forthcoming days of hardship for us Filipinos will be worse than the 1997 Asian crisis. That one was not so bad because at that time we were less pronouncedly involved in the global economy. APEC was just starting and the vision of Asean economic solidarity was only being fleshed out.

As usual the poorest segments of our society will be hardest hit. With such problems as a possible rice shortage and steep increases in the prices of food and fuel, the threat of inflation becomes real.

Beware of kleptocrats

The administration has announced various economic stimulus plans. Scores of billions will be spent for infrastructure. This will create jobs and inject money in the lower segments of society. Wonderful.

But massive government spending has a downside—success in meeting the goal of maintaining a budget surplus and liberation from the pressures of a deficit will have to be forgone. This means S&P’s, Moody’s and Fitch cannot soon raise our risk rating to investment grade.

The administration will also have to make doubly sure that all the billions allocated and released to pump prime the economy do not go to the pockets of the kleptocrats in the Palace and the Cabinet. Bureaucratic theft, in the perception of most of our fellow citizens as well as of the international country-assessment institutions, usually gobbles up at least 40 percent of government budgets.

Ping’s sting

Ping’s sting

HOW could that have happened to Sen. Panfilo “Ping” Lacson?

That was the question on everybody’s mind following the dud of a testimony given by Leo San Miguel before the Senate probe of the national broadband deal. For publicity’s sake, Lacson had built up San Miguel’s scheduled appearance before the blue-ribbon inquiry. Filipinos were made to expect that the new resource person would offer the same level of entertainment, which the now-famous Jun Lozada has provided the public.

As it turned out, however, San Miguel’s testimony became a source of major embarrassment to Lacson—for several reasons.

First, palpable is the public’s frustration over Lacson’s failure to satisfy their expectation that the new witness would be as exciting, if not as entertaining, as Lozada.

Second, San Miguel’s testimony tends to show that not everybody is afraid of the top cop-turned-lawmaker. For 12 hours Lacson tried to badger San Miguel into saying in the Senate hearing what the two of them allegedly discussed in private. But San Miguel dug in and stuck to his line—forcing Lacson to utter the scary words, “My patience has its limits.”

San Miguel did not flinch, however—apparently unintimidated by Lacson’s fearsome reputation.

Third, the San Miguel dud tends to show that Lacson is highly vulnerable to unreliable or deliberately misleading information. The senator’s press statements always carry the standard qualifier, “I have information that . . . ” It gave the impression that the former chief of the Philippine National Police has maintained an intelligence network, which possesses dossiers on just about anybody who matters in this country.

The San Miguel debacle loudly hinted that some of the senator’s intelligence sources might actually be peddling reports designed to mislead and embarrass him. Not a few observers now think that his much-vaunted machinery of spooks and stoolies has become what makes the senator vulnerable.

Given the embarrassment that San Miguel has caused him, Lacson should now take a second look at Dante Madriaga, author of the “Greedy Four Plus Plus” tale. It was Madriaga who created in Lacson’s mind the impression that San Miguel was a major player in the NBN-ZTE deal.

Madriaga’s “revelations” may have given the notion that San Miguel was in possession of a potential bombshell. Lacson may have unwittingly bought Mad­riaga’s pitch about the value of a San Miguel appearance at the blue-hearing inquiry.

As the saying goes, once burned twice shy. Lacson should now take a second look at everything that Madriaga has said at the inquiry—and elsewhere. The senator should now determine whether or not Madriaga’s so-called bombshells were merely meant to sell San Miguel to Lacson.

Observers suspect that Lacson has been had and that San Miguel was not alone in a conspiracy to embarrass him, deliberately or otherwise.

Evidently, it was Madriaga who inflated the value of San Miguel whom the former insisted was part of the Greedy Four. That description generated excitement for San Miguel, which was magnified through a second label, “surprise witness.”

Clearly, the biggest surprise was on Lacson. And the public is startled that despite his much-vaunted intelligence apparatus, Lacson could still be flabbergasted.

As far as many observers are concerned, the San Miguel dud further eroded what credibility Madriaga still has. It has now become harder and harder to accept what he has said—and what he would say in the future.

Was Lacson set up with a scheme that exposed his vulnerability to bum steers, which sounds even more humiliating in its Tagalog translation—kuryente.

Too bad, the confirmation that Madriaga has no credibility virtually dismisses his own allegation that former presidential chief of staff Mike Defensor was somehow involved in the NBN-ZTE scandal. Did Madriaga drag Defensor’s name into the controversy merely to spice up his tall tale?

Madriaga may be aware of it or not, but there is an ongoing smear campaign against Defensor, which knowledgeable sources say is being carried out by the “Thunderbird Gang.”

The clique’s moniker has nothing to do with the classic coupe that giant automaker Ford first rolled out in the 1950s. The gang takes its name from its members’ “I love my own” syndrome. The hatchet job on Defensor is, according to knowledgeable sources, all about local politics.

Lacson should not allow characters like Madriaga and San Miguel to highlight the chinks in the senator’s armor. He obviously has been had—and it will take some time for people to forget that he was publicly shamed by a nationally televised dud.

Lacson should also take a second look at his intelligence apparatus and clean it up before it is manipulated again by a San Miguel-type caper. The ex-PNP chief’s edge over his political rivals is his uncanny ability to get the “goods” on anyone he targets.

Another Leo San Miguel-type flop, and people might start to think that Ping has lost his sting.

So Insensitive

So Insensitive

THEY come in the wee hours of the morning, without ample warning, as we’re in our homes fast asleep after a long week at work. We’re not talking about thieves in the night, but they might as well be, considering how much they take away from our hard-earned incomes.

Since the Downstream Oil Industry Deregulation Act took effect more than a decade ago—and especially lately with the record crude prices worldwide—retailers have been raising prices at the pump when we are at our most vulnerable.

Their announcements—if we could call them that—hardly reach the public to be of any practical use. If at all, they would be aired during the late night TV news or barely 30 minutes before midnight, by which time most of us are already in bed and too beat up from a week’s work and the Friday traffic to have the energy to get up and drive to the nearest station to gas up.

For all the discomfort they’re causing commuters during transport strikes, we must hand it to public utility vehicle operators and drivers because they have the decency to announce their plans way ahead of time. At least people could plan their lives accordingly.

We can say the same about labor unions, which are required by law to file the necessary papers with the government before they embark on work stoppages. Not that we’re great fans of these two groups, but the antiquated restraints imposed on these factor markets betray the free-market ideologists’ bias for the powerful when it comes to sectors such as the downstream oil industry.

The underhandedness exhibited by oil companies is so insensitive coming at this time when very expensive oil products are causing inflation to shoot up again, raising fears that incomes may be slow in catching up to the erosion in people’s purchasing power.

What difference would it make for companies if they announce their price increases early in the evening, giving motorists enough time to pass by a station along the way home to gas up? Apparently it means a whole lot for their margins, as they would rather surprise most of us the following morning.

What we find so intriguing is that whereas multinational oil refiners had reported record profits last year, their local units and affiliates said their earnings barely rose from the previous year. And we hear this at a time when oil products are at their most expensive in history—and still rising, judging from the unabated increases in the futures markets.

The sad part is that the downstream deregulation law took away whatever legal remedies past edicts provided consumers. The 1998 law even emasculated the government, which has been reduced to a bean counter, tallying price changes after the fact. The operative word, according to the law, is “price monitoring.”

True, the law banned a handful of anti-competitive offenses to prevent price collusion, but oil companies have found a way around these practices. The law also gave the Department of Energy certain powers it could exercise in such circumstances, but left it to the local courts to deliberate on the matter. As it is, the courts are already clogged up with other pressing cases, so ordinary consumers are left to their own devices. Once again, the free-market ideologists have betrayed the lot of their unsuspecting middle-class supporters.

Despite the limitations set by law, we’re still waiting for the incumbent energy secretary to make good on his bluster when he took office. Last year, he had warned oil companies to comply with a directive to inform the department of price adjustments. Moreover, he announced a government plan to audit oil companies, tapping the services of a third-party service provider.

We’re well into a new year, and we’ve yet to hear anything come out of those initiatives. So, Mr. Secretary, we’re still waiting.

Mayor Lim: Consistent crimefighter

Mayor Lim: Consistent crimefighter

The City of Manila’s Mayor Alfredo Lim made our day again. He has once more shown how consistent and admirable an enemy of crime he is.

The Filipino “Dirty Harry” vowed last Monday not to lift a finger to help his son, Manuel, who was arrested in a drug bust.

He said “Manuel should be man enough to face the music. I will not protect him. I will not lift a finger to help him. Whatever trouble he has got himself into he must bear by himself.”

Manuel is a 44-year-old man. He had been arrested with two other suspects for allegedly trying to sell methamphetamine—also known as shabu, which is the most popular illegal drug in the country. They did not know that their sale was a sting. Their buyer was an undercover agent of the Philippine Drug Enforcement Agency.

Police have filed charges against the young Lim and his companions. If convicted, Manuel could face a long prison term for selling shabu.

A model LGU official

We have always admired Mayor Lim for being a staunch anti-crime crusader. He cleaned Manila’s red-light districts of prostitutes and drug dealers in his previous (pre-Lito Atienza) terms as mayor of the Philippine capital. He is a model for other local government officials.

Not too many Filipinos liked his use of the spray-paint in one of his anti-drug campaigns. What he did was spray-paint warnings on the the houses of suspected drug pushers. This was criticized by activists as a violation of the house-owners human rights. Besides, they reasoned, some of the residents in the spray-painted houses—the wives and children and parents of the actual drug pusher—were most likely innocent. What if some crazed anti-drug crusader threw a grenade at the house?

Mayor Lim relented and stopped his unusual campaign. But it was effective. Many of Manila’s drug pushers moved to other places—especially Pasay and the Baclaran area.

We need more public officials with Mayor Lim’s honesty and consistency as a crime-fighter.

It must have been painful for him to make the decision to let the law take its course in the case of his flesh-and-blood Manuel.

Mayor Lim’s posture runs counter to the feudalistic and overly-personalistic mentality of the Filipinos. That mentality is often the source of corruption in this country.

A less strong-willed and honest powerholder than Mayor Lim would have surely sprung Manuel out. The mayor could have easily managed such an operation. He is after all a former chief of the national police and a former senator. But it would have sullied his integrity.

If President Arroyo had been as firm a crime and corruption fighter as Mayor Lim, she would not have to suffer for the alleged corruption of her underlings—and perhaps some close friends and political creditors—whose wrongdoings are being exposed in Senate investigations.

Many people of good will are not joining the anti-Arroyo forces holding rallies and trying to organize the public into forming a massive movement that will force her out of office.

Among these are the Catholic bishops and the impressive body of former senior government officials (FSGO). These two groups have made sharp assessments of government corruption. They see the President as—at least—negligent in curbing corruption that has cost this country scores of billions. The FSGO says she must be central in these alleged corrupt deals.

Yet they do not want to add their voices to the call for her resignation or ouster by people power.

They want her to continue being president until her term ends in 2010. But they do insist that she must zealously go after her administration’s monsters of corruption.

We hope the President heeds the CBCP and the FSGO. Doing so can’t possibly be as painful as Mayor Lim’s resolve not to lift a finger to help his son out of the mess he has put himself in.

Lim as Malacañang anti-corruption czar

Here’s our inspired thought: Mayor Alfredo Lim—despite being an opposition party member and a close friend of former President Estrada who has of late been actively speaking against President Arroyo and asking her to resign—is one of those men of goodwill who want President Gloria Macapagal Arroyo to finish her term.

He has vowed to keep her safe from any force that will unconstitutionally push her out of the Palace.

Why not make Mayor Lim the Palace’s anti-corruption czar? He can be that while keeping his job as Manila mayor.

But, of course, if she takes our unsolicited suggestion, she has to give Mayor Lim the proper equipment and resources to collar the thieves and scoundrels in the corridors of power.

The fastest and biggest deal

The fastest and biggest deal

ON Dec. 13, 2006, the state-owned PNOC Energy Development Corp. (PNOC EDC) sold its shares for the public for the first time. EDC is the world’s largest geothermal company. It generated P19.2 billion from the initial public offering (IPO) at P3.20 per share for 20 percent of the world’s leading geothermal producer.

The P3.20 share price was grossly underpriced. On the first trading day, investors easily earned 42 percent as the shares closed at P4.60 per share, thanks to CLSA Exchange Capital, the financial advisor and global coordinator hired by PNOC EDC President Paul Aquino.

In July 2007, PNOC EDC made a follow-on offering, for 20 percent of the company. It raised P17 billion and PNOC EDC was no longer a government firm. The IPO price was higher this time, P5.70 per share.

In November 2007, the remaining 60 percent was auctioned—40 percent in common shares and 20 percent in preferred shares.

EDC was acquired by the Lopez family’s Red Vulcan Holdings Corp. for a whopping P58.5 billion. EDC had become 100 percent private from 100 percent government three years ago.

Why would the Lopezes, the family that invented large-scale power ownership and management in the Philippines, value a company three times it was worth after 11 months and eight days?

The first answer is that the P3.20 per share IPO price was, it now turns out, really an anomaly. PNOC EDC was wrongly priced in December 2006.

The second answer is that PNOC EDC is a good company. It is literally steaming with potential. The largest geothermal energy producer in the world, it supplies steam to 12 operating power plants with total generating capacity of 1,199 megawatts (MW). Future projects will add 300 MW more in capacity.

EDC has hot geothermal properties. It has good management, especially the engineering team (including 750 geothermalists with combined 11,000 man years of experience). An archipelago of volcanoes, the Philippines is the world’s second largest geothermal producer, with 1,978 MW of installed capacity. The US is first, with 2,544 MW.

The company’s worth has been highlighted with oil soaring past $111 per barrel and by the global focus on green fuel like geothermal.

Finally, the team that auctioned the controlling 60 percent of PNOC EDC last November did a really good job, packaging the equity, drawing up the ground rules, adopting complete transparency, and thus triggering unprecedented investor interest.

That team was composed of PNOC President Antonio Cailao, president and CEO of PNOC, PNOC EDC’s mother company; veteran treasury expert Reynaldo G. David, president and CEO of the state-owned Development Bank of the Philippines; Manuel Salak III, managing director of ING, and topnotch lawyer Perry Pe, a partner in the Romulo Law Offices.

David’s DBP committed to provide what he calls “staple financing” or half of the financing needed by the winning bidder. “Where can you find a bidding where the bidders are given the financial wherewithal, the financial lubrication, the ammo for their bids,” gushed PNOC CEO Cailao.

The staple financing, David explained, “is that it would come in just in case the foreign partners of the winning bidder opted out.”

Rey also secured, quickly, the required approvals from government to sweeten the offer. This included continuance of government guarantees on PNOC EDC’s sovereign loans, the Monetary Board exemption from the single borrower’s limit on loans extended by the financiers, and the Department of Justice and the Securities and Exchange Commission opinions that a 60 percent Filipino consortium could be considered 100 percent Filipino as far as the bidding was concerned.

At the time of the bidding, Pe noted, EDC was already about 30 percent foreign, leaving just 10 percent remaining to be owned by foreigners since utilities like energy must be at least 60 percent Filipino.

Salak packaged the deal to interested bidders. His ING has an enviable track record, having handled or played the leading role in the $98 million IPO of Meralco in 1992, the $400 million IPO of Petron in 1994, the sale of government’s 32.5 percent equity in PNB for $145 million in 2005, and the $336 million EDC IPO in 2006. It counts Aboitiz,Marubenim,Banpu of China, Siemens, and Mirant among its energy clients.

Lawyer Pe made sure that “the rules crafted were all transparent and of international standard.”

With the terms made appealing, the bidding naturally attracted what Cailao calls “the crème de la crème” of the energy business, 15 groups, later reduced to five, then four final bidders. The interested parties were amazed at the groundwork done by the privatization team. Two of them, Reykjavik Energy and Geysir, told the group: “You think like Bobby Fisher, 30 steps ahead.” Which means the team was a genius in their work.

Rey David’s heart sank when the first bid was opened, P33.2 billion by AP Renewables of the Aboitiz Group. PANASIA Energy of San Miguel quoted P39 billion. Then Andrew Gotianun submitted P48.5 billion. The privatization team’s hopes were buoyed. Then Red Vulcan’s bid was opened—P8.5 billion!

More than common economic indicators

More than common economic indicators

THE economy is performing better according to the standard measurements and the administration never fails to say so in every forum available.

The Philippine peso continues to strengthen after having the second highest appreciation among the currencies in Southeast Asia. Macroeconomic performance is strong and the 7.3% GDP output last year was the highest in three decades. Inflation is under control, the government is making headway in reducing the budget deficit, and unemployment is well below double digits.

The administration must be wondering why there’s hardly any kudos from its citizens. The economy is doing so well and yet there’s no applause and a great many Filipinos are not “feeling” GMA and her administration. Are they simply suffering from adjustment anxieties, from an economy that’s just picking up? Perhaps the so-called trickle-down effect has not trickled down yet? Or perhaps the economic indicators are painting a picture that is markedly different from what most Filipinos are actually experiencing?

The Philippines continues to have a high poverty incidence according to the Asian Development Bank report titled, “Philippines: Critical Development Constraints,” and this is because of poor revenue collections and rampant corruption. These are the “critical constraints” to sustainable growth, the ADB said. The pace of poverty reduction has been slow and income inequality remains stubbornly high because of corruption.

Even government statistics show that there are more Filipinos living below the poverty line today. The National Statistical Coordination Board said two weeks ago that 33 out of 100 Filipinos were considered poor in 2006 compared to only 30 out of 100 in 2000. Not a few, of course, suspect that poverty among the populace is higher than the 30% plus stats thus provided.

How “rampant” is this corruption that leads to poverty? The independent think tank Ibon Foundation Inc. said that in the past seven years, the figure could easily reach P7.3 billion, noting the allegedly highly anomalous projects and otherwise unresolved scandals like the P720-million fertilizer fund scam, the Northrail project, P400 million plus Jose Pidal bank accounts, the Impsa power-plant project, the Macapagal Boulevard project and the ZTE-NBN broadband project.

Yes, corruption is an economic problem too—perhaps the economic problem which the political arena seeks to address. So this administration cannot just resort to the usual “let’s-move-on-and-focus-on-the-economy” argument. Neither a strong peso nor a rising GDP will lead to sustainable growth and poverty reduction if the money circulating in the economy flows only among the political and economic elite, or if it just lines the pocket of corrupt officials in government

Economic growth has many dimensions. Ultimately, a country should gauge its economy on its ability to provide its citizens with what they need to live a decent life: enough food, adequate shelter and health services, a well-paying job, leisure and family time and a good education.

The United Nations Development Programme (UNDP) came up with a way to measure or calculate more real indicators to measure growth and progress, which it called the Human Development Index, which measures things like GDP per capita, the literacy rate, life expectancy rate, school enrollment, the purchasing power of the currency, and others.

In the 2007/2008 UNDP Human Development Report, the Philippines’ Human Development Index ranking dropped to 90th place, lower than a lot of our neighbors in East Asia and the Pacific region.

Obviously the mere quantity of economic activity, as measured by a common indicator like the GDP, taken alone, says virtually nothing about whether life for the common Filipino is getting better or worse. It ignores the distribution of income and makes no distinction between workers with top-paying jobs and those workers who can barely eke out a living. It ignores the fact, for instance, that the record remittances which makes economic figures so rosy have a heavy social toll in terms of broken families. The booming mining industry which the government touts? That has environmental costs too which should count for something when you’re calculating economic balance.

Economics must be a means to an end. It is not an end in itself. Real economic growth must benefit the people. And when the economic figures are out of sync with the everyday experience of most Filipinos, the government cannot simply shrug its shoulders and say the figures are right, their (Filipinos) experience is wrong.