June 21, 2013

A quitter never wins

The impasse in the peace negotiations between the Government of the Republic of the Philippines (GPH) and the National Democratic Front of the Philippines (NDFP) brings to mind a popular tagline coined by the late Manuel Uy, a highly successful wholesaler of sweepstakes tickets from the late fifties onwards, to wit, "Ang nagwawagi ay di umaayaw; ang umaayaw ay di nagwawagi."  (A winner never quits; a quitter never wins.)

Odd and facetious as it may sound, this is the dilemma that the GPH under the administration of President Benigno Aquino III  now faces.  The GPH wants to quit the peace talks but it doesn’t want to appear to be losing in this arena of battle with the revolutionary movement.  At the same time, it loathes to concede that the NDFP is scoring political points at the peace table that is why the latter persists in negotiations despite seemingly insurmountable differences with the GPH.

The GPH has announced that it has had it with the NDFP: that the peace talks are going nowhere (whether the regular track referring to the formal peace negotiations or the “special track” initiated by the NDFP meaning the negotiations for arriving at an immediate truce and alliance between the two warring parties); that the NDFP’s adamant refusal to enter into a long-term if not permanent ceasefire bespeaks of its lack of sincerity since the peace talks are primarily about stilling the guns of war; in the meanwhile the NPA, although much reduced in strength, continues to ambush and kill soldiers, police and civilians in a protracted armed struggle (in many instances,  just as the AFP declared the area as "cleared" or "insurgency-free") that the CPP/NPA/NDFP matches with protracted peace talks aimed only at attaining belligerency status and the release of its detained leaders; and that the GPH is "talking to the wrong people" since the NDFP negotiating panel appears not to have control over its ground forces.

The GPH’s abovementioned pronouncements were widely interpreted to be a unilateral termination of the peace negotiations and reported dutifully as such by Philippine mass media.  But the GPH has had to backtrack and has instead said that it remains open to peace talks.  It appears that the GPH is still hard pressed to justify why it is pulling out of the peace negotiations and continues to buy time so as to convince the public that it indeed has a found a “new approach” to peace. 

Objectively, however, the GPH has placed itself in a no-win position. For the GPH to be the first to quit or pull out of the talks would be tantamount to conceding that it lacks the political will and acumen to face - and trump - the revolutionaries at the negotiating table.  The Aquino regime now appears to be defeatist and to have fallen prey to the mindset that sees the military solution as the only solution to an armed conflict rooted in social injustice.

Which is why OPAPP Secretary Deles, officials of the Armed Forces of the Philippines and the Presidential spokespersons have been busy trying to sell the GPH line that it is the NDFP that is the cause of the impasse and impending collapse of the talks and that there is a way to achieve a peaceful resolution to the armed conflict without engaging in peace negotiations with the revolutionary movement.

The GPH continues to poison the air by its lies, undermining and destroying confidence and goodwill - a clear indication of its desire and intent to end the GPH-NDFP peace negotiations even as it has yet to formally terminate them. 

The GPH lies when it says the NDFP has hostaged the resumption of formal talks on the precondition of the release of its consultants despite failure of verification of their documents of identification (DIs) as per the Joint Agreement on Safety and Immunity Guarantees.  They conveniently omit the fact that the  NDFP office and houses of its officials and staff in the Netherlands were raided by the Dutch police in 2003 and computers, flash and compact disks alike as well as documents were hauled away among which contained the encryption keys to the files that held the DIs. These keys had become corrupted while in the custody of the Netherlands authorities and failed to open the cyphered files containing the DIs.

GPH negotiating panel head Alex Padilla always cites the Oslo Joint Statement Feb 2012 that release is "subject to verification" while omitting the rest of the sentence which says "or for other humanitarian or practical reasons".  In fact only two detained NDFP consultants need to be released for substantial compliance by the GPH with its earlier commitments to pave the way to the resumption of formal talks.

The GPH lies when it says that the NDFP killed the “special track” by presenting three new drafts and imposing impossible preconditions such as the abolition of government programs such as the Conditional Cash Transfer, PAMANA and Oplan Bayanihan.  In fact, it was the NDFP that proposed the “special track” to open the way to an extraordinary “truce and alliance” between the GPH and the NDFP that would be anchored on a declaration of unity to put in place several major and urgent reforms upon which an immediate truce could then be forged.  The GPH shot this down by insisting a priori on a ceasefire and its version of the draft declaration. When the NDFP countered with its own comprehensive draft that it was willing to subject to negotiations with the GPH, the GPH representatives simply refused, saying they did not have the mandate to discuss the NDFP draft as well as other prejudicial issues.

OPAPP Secretary Deles lies when she says that the GPH and RNG third party facilitator have "mutually agreed that the special track has been killed by the NDFP ...(and) we do not want to return to the regular track".  The RNG official involved has not affirmed this statement; on the contrary he has denied this to the NDFP and has declared that the RNG is continuing in its role as third party facilitator although the RNG, for its own reasons,  has refrained from making any public pronouncement to this effect.

The GPH is again lying and resorting to intrigue when it says that the NDFP peace panel based in Utrecht, the Netherlands are not the “right persons to talk to” claiming a supposed “disconnect” between these NDFP officials and their people “on the ground”.  There is no iota of evidence that the revolutionary movement has withdrawn the sole authority to conduct peace negotiations with the GPH from the current NDFP peace panel.  The GPH is merely laying the ground for localized peace talks that the NDFP has already denounced as bogus.  It would not be surprising if the GPH later trots out rebel surrenderees in make-believe localized peace talks.

To top it all, the GPH is lying through its teeth when it says that formal peace negotiations have not achieved anything and is leading nowhere.  The Comprehensive Agreement on Respect for Human Rights and International Humanitarian Law or CARHRIHL is a landmark agreement on the first of the four substantive agenda of the GPH-NDFP peace negotiations that speaks for itself.  On the basis of CARHRIHL, a mechanism is now in place by which complaints of either side, or anyone else for that matter, with regard to violations by either party of human rights and international humanitarian law in the course of the armed conflict can be filed, investigated and justice rendered.  That it is not able to fulfill this function effectively is the result of the inexplicable refusal of the GPH to convene the Joint Monitoring Committee mandated by CARHRIHL and not because the agreement is worthless.

In fact the regular track was poised to tackle the second substantive agenda, socio-economic reforms, and if the agreed upon timetable of 18 months was to have been pursued, the rest of the agenda, political and constitutional reforms and cessation of hostilities/disposition of forces would have followed.

On the other hand, the GPH is floating its "new approach" piecemeal yet is unable to clearly define a new viable framework more than a month and a half after rejecting the regular track and announcing that the GPH is "considering a new approach" to the peace process and peace negotiations.

Meanwhile Secretary Deles’ insistence on "reducing violence on the ground" departs from, undermines, and is not contextualized in achieving "a just and lasting peace by addressing the roots of the armed conflict" but in fact imposes ceasefire as a precondition to talks.  Moreover, the GPH is avoiding at all costs the continuation of the regular as well as the special track of the peace talks wherein both address urgent and systemic reforms that can result in a genuine and viable peace.

This time the GPH under Mr. Aquino has grossly miscalculated its gamble and, if it is effectively exposed and opposed, is bound to lose the political and moral high ground. #

Published in Business World
21-22 June 2013

June 13, 2013

PPP – profits before people

The privatization mantra is being incessantly hummed by the Aquino III administration.  Privatization is being promoted to the public as the solution to deteriorated, broken-down and inadequate public utilities and social services.  The argument is not new: government just doesn’t have the resources to provide for these public goods.  Coupled with this line is the conventional wisdom that governments are prone to mismanagement and corruption so much so that only private capital investment and management could solve the problem.

Thus the so-called public-private partnership or PPP has become the centerpiece economic program of Mr. Aquino.  He however is merely taking a leaf from his mother, former President Corazon Aquino, who implemented the first build-operate-transfer (BOT) scheme for the power sector in the country in 1987 when the Philippine economy was subject to the conditionalities of the structural adjustment programs laid down by the International Monetary Fund.  PPP projects are basically BOTs with a new, fancier title.

The privatization of the Metropolitan Waterworks and Sewerage Service (MWSS) in 1997 is considered to be the country’s showcase for such schemes.  It was the largest water privatization project in the world at the time costing close to $8 billion.  The Ramos government touted the project as the answer to the water crisis in Metro Manila and adjoining areas promising lower rates, better quality water, universal coverage and a more efficient use of scarce water resources. Filipino firms owned by the Ayalas and Lopezes  (and later, the Consunjis and MV Pangilinan group of companies when the Lopezes divested)) partnered with foreign investors from the US, France, UK, the Netherlands, Japan and China/Hong Kong to successfully bid for these contracts.

The move was immediately met with opposition, spearheaded by the MWSS Employees’ Union who unjustly stood to be displaced by privatization, supported by consumers who anticipated higher water rates once this vital public service is subjected to the bottom line of big business – profit.

In two years’ time water rates began their steady and steep climb, especially so with rate rebasing that took place every five years.  By the 1st quarter of 2013, water rates were 7 – 12 times higher than pre-privatization rates.  This year the rate increase is already under negotiation between MWSS, the government regulatory body, and the two concessionaires: Manila Water is asking for an increase of the basic charge by P5.38 per cubic meter (m3); Maynilad, by P10.30.  Together with other charges such as 12% VAT, environment charge and foreign currency differential adjustment, this adds up to a hefty increase of P7.81/m3. for Manila Water and P13.71/m3 for Maynilad.

What does this mean for consumers? According to the national democratic alliance, BAYAN, one way to look at it is to compute the increase in monthly water bills for a low monthly consumption of 10 cubic meters and a “high” of 30.  This rate hike will range from P78.10 to P234.30 for Manila Water and P137.10 to P411.30 for Maynilad per month.  But the real impact is revealed by comparing such increases with family incomes, especially of the more economically disadvantaged. 

To illustrate, assuming the daily minimum wage in the National Capital Region (NCR) is at P419-456, the water bill to be charged by Maynilad for 10 cubic meters monthly consumption would be 3-4% of an ordinary worker’s earnings while it would be 2-3 % for Manila Water.  At 30 cubic meters consumption, the figures are 10-11% for the former, 7-8 % for the latter.

Such calculations were confirmed to even be underestimated in a study conducted by the policy research outfit IBON in four urban poor communities in NCR.  Water connections cost anywhere between P1,300 to P10,000 and effective water rates are P20-75/m3 (for submetered connections) and P63-P333/m3 (for water bought in containers).  The community is populated by “kasambahay” or household workers, pedicab/tricycle/jeepney drivers, construction workers, vendors, security guards and janitors with daily earnings of P100-400 or P3,000-12,000 monthly.  The portion of their earnings that goes to paying for water is anywhere between 7-22% (at an income P100-150/day) and 3-15% (income P300-350/day).

Quite starkly, the wealthy households in Ayala Heights, Quezon City pay roughly the same rates as those in the slum area nearby who are fortunately connected to the water main.  Those poorer households that make do with submeters pay several pesos more per cubic meter consumption while those who pay for water by the “balde” containers pay three to five times more.  Thus the poor have to pay for their water at astoundingly higher rates than the rich do because the water reaches them through middle men.

Which brings us to ask what ever happened to the private concessionaires’ claims that they had achieved close to a hundred percent coverage of their franchise areas?  According to IBON, the most recent representative survey data for access to safe water in the entire country including NCR is from the 2008 Annual Poverty Indicators Survey which makes it difficult to cross check the water concessionaires’ claims. (It is also an unflattering indication of how assiduous is the government in compiling data relevant and necessary to its regulatory function.)

Nonetheless, the official data shows that upon privatization (1997), the percentage of families without access to safe water was 12.2%.  Post privatization (2008), it stood at 8.4%.  On the other hand, the rising absolute numbers of households without access to safe water, from 201,117 to 204,036, is cause for alarm.

BAYAN says that not all households have individual connections; in urban poor communities, most rely on bulk meter connections that result in higher rates.  In many areas water pressure is low such that water flows only at specified, and even ungodly, hours.  In fact the physical infrastructure for water supply in many areas still appear to be antiquated resulting to the bursting of water mains that caused flash floods in thoroughfares and residential areas such as those at EDSA in 2010, Las Pi?as in 2012 and Mandaluyong in 2013.  It would be useful for a study to be made comparing the incidence of water-borne diseases in NCR pre- and post-privatization.

Most useful data culled by IBON is the robust profits garnered by Maynilad and Manila Water from 2008-2011, a 44% average annual increase for Maynilad and 15% for Manila Water.  In fact the two water companies have been able to expand: Manila Water owns Boracay Island Water, Clark Water, Laguna Water and Kehn Dong Water Supply at Ho Chi Minh City, Vietnam; Ayala & Pangilinan, for their part, have cornered the Cebu Bulk Water project.

To check whether the water firms’ profits are indeed quite healthy, perhaps even unconscionable from the point of view that the commodity they are profiting from is one so vital to life, health and wellbeing, IBON estimated their respective rates of return on equity (ROE) or how much the company is earning from funds invested by its stockholders:  Maynilad’s is 48%; Manila Water, 19%.  These figures are reportedly higher than those of companies in the telecommunications, power and mining industries.

At the end of the day, this only underscores that with privatization, water firms controlled by the biggest names in the local and foreign business community are raking in their profits and government gets its similarly gargantuan tax revenue, while the poorest and middle-income households are bled dry.

With the privatization of water services considered to be the model for the PPP program of the Aquino regime, the common tao is in for a lot more  hardship and misery, all for the glory of private profit.  Looming just around the corner is the privatization of government hospitals, starting with the National Orthopedic Hospital.

It is as if we are not suffering enough from the unending increases in electric power rates and oil and gasoline prices, the Aquino regime would want us to believe that the best this government can offer is more of the same. #

Published in Business World
14-15 June 2013

June 06, 2013

Challenges to Philippine independence

It is often said that Filipinos, as a general rule, have “short” or “poor” memories.  The allusion is not to some racial genetic predisposition to be forgetful.  What media commentators and the home-grown Pilosopong Tasyo among us refer to is the Filipinos’ seeming lack of a sense of history or of the ability to learn our lessons from past mistakes.   Consequently, we appear to lack a sense of purpose or direction in forging our path towards national unity, progress, and a better life for most, if not all, Filipinos. As the aphorism goes, those who do not learn the lessons of history are condemned to repeat them.

But insightful historians like the illustrious Renato Constantino identify the real problem as a lack of or an anemic nationalist consciousness, no doubt the product of a colonial past and a neocolonial present. 

The high officials of the land or those who would pass themselves off as our betters are quite recent examples of how insidious and damaging is this anti-nationalist mindset.

Let us take the seemingly innocuous declaration of President Benigno Aquino’s Spokesperson Edwin Lacierda that a main stumbling block in the peace negotiations between the Philippine government (GPH) and the revolutionary umbrella formation, the National Democratic Front of the Philippines (NDFP), is the latter’s supposed fixation with such outmoded or “passé” concepts as “national industrialization”. 

What was meant to be a derisive assessment of one of the pillars of the NDFP’s proposal for a bilateral agreement on socio-economic reforms turned into an unintended revelation of what in fact frames the government’s, and in particular, the Aquino regime’s economic policies and programs – no less than the mindset of economic subservience.

For how can this government, in fact any government that is truly intent on achieving the unassailable goal of economic sovereignty, belittle the goal of building domestic industries that will cater primarily for domestic needs.  To do so would doom the Philippines to be forever dependent on outside sources to supply what Filipinos need for daily living and for essential economic activities. This lack of basic industries and consequent dependence on imports is in fact the root of our economy's backward agrarian character and our century-old trade and capital deficits. 

Dr. Giovanni Tapang, chairperson of AGHAM or Advocates of Science and Technology for the People, summarizes the rational for pursuing national industrialization thus:  “Having a sound industrial policy that focuses on modernizing agriculture and shoring up our capability to locally produce capital goods is key to the establishment of a modern and diversified industrial economy. We need to build, among others, our own base metals industry, chemical industries, machinery manufacturing, pharmaceuticals, electronics, industries for food processing, textile, garment, mass housing and agricultural commodities.”

The desired outcome is not just food security and self-sufficiency in essential consumer goods and intermediate products for a dynamic manufacturing sector but secure and high-quality jobs for a burgeoning population including the pool of talented and highly-trained scientists and professionals who invariably end up working for multinationals at home or, more often, abroad.

Completely antithetical to the goal of national industrialization is the Aquino government’s policy and program thrusts and actual performance.  These can be summed up as follows: 1) dependence on foreign capital in the form of loans or investments; 2) geared towards meeting the demands of the foreign market; 3) lack of protection of and support for domestic producers including peasants, workers, and small to medium-scale entrepreneurs; 4) bias for local partners of foreign monopoly capitalists such as the big banks and financial houses, big trading companies and import-dependent, low-value-added semi-manufacturing enterprises; and 5) completely in sync with the neoliberal doctrine, policy prescriptions and programs peddled by the IMF, World Bank and Asian Development Bank, i.e. liberalization, deregulation, and privatization as well as denationalization of such vital economic factors as land and natural resources.

It is no wonder that despite record high foreign exchange reserves (thanks mainly to remittances of overseas Filipino workers); credit ratings upgrades from foreign agencies (who rate countries on the basis of their proven creditworthiness or ability to pay their debts); a robust first quarter GDP rate of 7.3 per cent (as a result of liberal election spending as well as accelerated government expenditure on public infrastructure); and healthy profit-taking by the top 500 corporations in the Philippines (such as the oil, telecommunications, financial and real estate companies) – the official yet grossly underestimated poverty and unemployment figures have remained dismal.

Embarrassed government officials promise “inclusive growth” remains a top priority. They make much ado about World Bank designed anti-poverty programs such as the multi-billion peso Conditional Cash Transfer program wherein for up to five years poor families get a maximum of P300/child subsidy.  Such programs may provide immediate alleviation for absolutely destitute families but after the program ends, with an economy still unable to generate good quality jobs, these families are back to square one.

Aquino defenders and allies also scramble to justify why most Filipinos do not feel the benefits of high growth rates by saying that the “trickle-down effect” does not happen automatically or overnight.  Yet Mr. Aquino has really nothing to show for his administration’s land distribution program (still the slowest since the Marcos Dictatorship years);  workers’ wages are fixed to the bottom while mandatory contributions including for social security and health insurance go up; the cost of basic goods and services  are constantly on the rise; social services such as education, health and housing are bereft of government funding, are deteriorating if not already substandard and are quickly being privatized through the Public-Private Partnership scheme so as to become even more inaccessible to families struggling to survive.

The truth is staring us in the face:  the real reason why economic “growth” is not felt by the vast majority of the Filipino people is simply because economic policies are geared to profits for foreign capital and local business partners and not to raising the living standards of the ordinary Filipino.

The continuing policies and reality of economic dependence to foreign monopoly capital is also the underlying reason behind the lack of political independence of the present Aquino regime and all its predecessors.

This is the more real and compelling factor for the Philippine government's almost knee-jerk support for or compliance with US foreign policy dictates, including aggression and military intervention. The excuse or rationale that the US and Philippines are traditionally close allies and should stand side by side on every issue has been proven false, not the least by the US' own statements that it is not bound to side with the Philippines on each and every security issue. 

Thus the awkward, if not embarrassing Malacanang pronouncements invoking US support for the Philippine position on the South China Sea territorial dispute, while the US disavows any formal, legal, political and military commitments or obligations to support the Philippine position.

The first step towards a meaningful celebration of Independence Day this June 12 is the forthright acknowledgement that national independence and sovereignty must be defended against continuing impositions -- economic, political and military -- by the Lone Superpower and the supine acquiescence of the current ruling regime.#

Published in Business World
7 – 8 June 2013