Category: economy

environment 3: forests gone

FORESTS GONE
(In Defense of Kaingineros)

Junie Kalaw

In 1863, after three hundred years of free access to forests for all, natives and Spaniards alike, the Inspeccion General de Montes was created by royal decree to keep track of, and control access to, the forests that blanketed the archipelago.  It was charged with all matters that had to do with the cutting of timber, the opening up of virgin forests, and the selling of forest land.  The discernible goals of forest policy were to (1) provide for Spanish civil and naval needs for timber, (2) contribute to government revenue, and (3) perpetuate forest resources. These goals were not met. Revenues from commercial timber exploitation and forest use were low. Timber could be used freely under a permit but few bothered; illegal cutting of trees and clearing of forest lands for cultivation increased among the natives.  In 1874 kaingin farming was banned and commercial cutting a crime.

Fortunately the population was small and forest loss negligible.   In fact, when Spain ceded the Philippines to the United States in 1898, the islands were still covered with forests, plains and mountains alike.   According to a report of the U.S.-appointed director of the Forestry Bureau, the forests of Mindanao, Palawan, Samar, and Luzon were intact, “waiting to be explored.”

The forest industry flourished under American rule, thanks to America’s huge demand for Philippine hardwood.  Soon enough the forests started to suffer from both destructive logging and kaingin farming.  By 1934 only about 17 million hectares or 57% of the country’s 30 million-hectare forest remained. By World War II the lumber industry ranked second in employment and fourth in value of production among Philippine export industries, with annual government revenues from forest charges averaging Php 2.5 million.

During the occupation, the Japanese took every opportunity to exploit Philippine forests.  Forest stations in occupied territories were made to continue operations, resulting in severe destruction of forests and the devastation of the industry, with 141 out of 163 sawmills completely destroyed.

Upon independence, the state’s ownership of all forest land was affirmed.  Projecting a bias for social justice and equity and envisioning democratic participation, the Philippine Constitution mandated that natural resources belong to the state.  In practice, the “state” has meant politicians and their business partners, and the doctrine has been “what is good for business is good for the general welfare.”

The forestry industry was rehabilitated and mechanized with American help and the exploitation of timber institutionalized through the concession system used by most governments of the tropical world.  Set up for the private management of commercial forests and to allow public authorities to collect revenue, the state controls exploitation through (1) a system of licensing that limits the area and duration of concession to 50 years, including renewals; (2) the collection of fees based on the volume cut; and (3) the enforcement of a maximum allowable cut derived from estimates of sustainable productivity.  Firms capable of setting up or linking with a complementary sawmill or wood–processing operation are more likely to be granted licenses.

In response to U.S. market demands, and to raise revenues for industrialization, the country resumed exporting forest products, with exports valuing Php 3.3 million in 1949.  Early in the next decade Japan stepped up its imports of Philippine hardwood, lauan in particular; from half a million cubic meters by 1952 to 4 million cubic meters by the end of the decade.  Forests were then clear-cut, large-scale, without concern for the future, until 1954 when government imposed the selective logging system on commercial loggers.   Designed as a “sustainable yield management scheme,” it requires the logger to refrain from cutting a certain proportion of trees in the concession, as designated by the Bureau of Forest Development, the residual stand to be managed by the logger, who arranges a second cycle of cutting after a specific growing period.

In the 1960s the Japanese government decided to develop its own wood-processing export industry, treating the forest resources of the Philippines and other South Seas countries as a singe resource base.  Hardwood imports, mainly logs, were processed into plywood in Japan and the best-quality production exported to the U.S.   This trade enjoyed special government privileges since it helped obtain precious currency for the Japanese economy and fueled the development of its plywood manufacturing industry.

In 1969, the peak year of the “logging boom,” the Philippines exported 8.3 million cubic meters of logs to Japan.  Two co-existing systems facilitated the process.  The first consisted of local concerns (Chinese timber merchants who generally managed the logging for the well-connected Filipino concessionaires) borrowing large capital from Japanese trading houses for the purchase of logging equipment; loans were repaid with log shipments.  The second system consisted of joint ventures between local capital and Japanese trading houses, with the Japanese supplying as much as 30% of the capital investment through the back door.

In the early 1970s log exports started to decline.  Despite the selective logging policy, Mindanao had been largely deforested, its high-density dipterocarp stands in accessible areas exhausted.  Logging continued but mostly in Luzon.   In principle, a ban on exports and a ban on logging in seven provinces, later reduced to six, were introduced in 1976.  However, government repeatedly delayed their implementation for “economic recovery” reasons.

Deforestation took place most rapidly under the authoritarian regime of Ferdinand Marcos.  The Japanese system of processing imported Philippine hardwood and then exporting the best products to the U.S. not only earned the Japanese government scarce currencies but also permitted the excesses of Marcos cronies.  When the Aquino administration came into power in 1986, several large concessions, some of them directly connected with Japanese interests, were canceled and a number of people, including government officials, were charged with corruption.

President Corazon Aquino, on whom the hopes of the 1986 revolution were pinned, did not fare much better, unfortunately.  By 1988, according to the latest nationwide inventory survey, Philippine forests had shrunk to 6.3 million hectares or 21% of their original area, with as much as 80% of these remaining forests partly logged over.  The most severely affected type is the naturally-grown dipterocarp forest.   Once dominating the country’s silvicultural pattern, it now stands marginally in (only) 4 out of 12 regions. From 1934 to 1988, the size and proportion of this type of forest declined between 11.1 and 13.6 million hectares to about 1.04 hectares.   In other words, almost 90% of the natural dipterocarp forest existing in the mid-’30s had been either cleared or transformed into residual forest areas, unproductive mossy fields, and open cogon lands by the 1980s.

The problem is essentially an institutional one, having to do with rules of access and control.  The red tape and complicated requirements involved in acquiring a Timber Licensing Agreement (TLA) or forest concession effectively squeeze out small-time operators or community interests in favor of big and influential concerns.   Besides, the prices assigned to standing timber are so low relative to their true market values that logging concessionaires make a killing in “rents,” which is the “surplus” profit available to a logging company once labor, equipment, and marketing costs are accounted for.   Since they incur no costs in producing the timber, loggers’ profits are often far higher than normal capital remuneration, which has led to the overexploitation of the resource.

This would also explain why the selective logging system has not worked for Philippine forests.   It has been shown that while the first cutting cycle is profitable for the private logger, the timber-stand improvement phase is not, due to the long period of time involved in waiting for the second cut.  Thus loggers tend to maximize revenues from the first cut, and then forego the second.   Invariably, when the loggers move on, “informal” forest users follow in their wake to clear logged-over areas for kaingin farming. These are mostly migrant farmers from lowland communities, numbering some 14 million Filipinos.

It is important to recognize the critical nature of this population pressure on the forest areas, which are now mostly in the uplands.   Unlike indigenous tribes that have long adapted to the environment, migrant farmers tend to overexploit the land quickly, using technology suited only for lowland agriculture.  It is therefore not surprising that government has singled out these kaingineros as the major culprit in 75% of forest destruction.

But if there is anything that the ecological crisis teaches us, it is to have a systems view of life, from which perspective everything is interconnected and interdependent.  We need to ask why we have 14 million kaingineros in our uplands and why they were forced to migrate in order to survive.  And we need to ask why only a few well-connected people are benefiting from forest resources.

From 1979 to 1982, loggers made a profit of US$ 820 million (roughly Php 16.4 billion) and the government earned approximately US$140 million (Php2.8 billion) in taxes.  Clearly now, this centralization of access to and benefits from forest resources has directly contributed to the poverty and environmental degradation in the countryside.  At a national level, benefits from forest resources have been used to finance political power through the dispensing of patronage to an impoverished electorate and the buying of military protection.   This has produced a basic anomaly in our democratic system.  Authentic democratic elections are not possible when the voters are poor and depend upon the patronage of a powerful few for their survival.  Ecological consciousness points to the necessity of acknowledging that the right to a life-support system from our natural resources is an inherent human right that must be given to people before the rights of the state and political leaderships can be voted on.

After the authoritarian Marcos regime, any other administration would have had to cope with the problem of poverty and democratic access, including Marcos himself, had he won the snap election as he claimed, and come to terms with the assault unleashed by an outraged civil society.  The history of primary-resource exploitation in the Philippines is replete with the names and interlocked fortunes of politicians and foreign interests, as left-wing ideologues have not tired of repeating.  These ideologues, however, seek to impose a political solution to what is at the core a problem of ecological relationship.  Until this is understood, poverty, as well as the aggravations created by insurgency, will continue to bedevil us.

A HARIBON READER ON THE PHILIPPINE FOREST, September 1989
Philippine Daily Inquirer 26 July 1988

showdown 2010

grabe.   sa halip na mapaghandaan natin nang maayos ang 2010 elections, lalo tayong nagaaway-away over issues that could have been put off naman, sa totoo lang, until after we would have elected na a new president with a clear mandate.    manolo quezon is right, gma is Outflanking her enemies.

… we are seeing a dizzying number of possibilities raised, knocked down, revived, shelved, or what have you; the essentials, however, have been identified -primarily, an election in 2010- while everyone is still kept guessing, so that the resources of the enemy are dissipated while that of the administration is more cohesive; the military and police have been kept fat and well-groomed, the hierarchy remains divided, and everything is geared for resolution in the Supreme Court.

I know many people, both among her admirers and her critics, strongly believe the President’s bottom line is simple: she does not want to be disgraced by going to jail, and she wants to complete her term. I do believe that her stay in office has also convinced her that God put her in power to kick the country into shape. Therefore to be convinced of failure when it comes to the former, will only inspire her to pursue staying in power, as her self-preservation, to her mind, becomes a case of national survival, too.

So all options must remain on the table for the duration, if only to keep everyone guessing. It helps distract her leading opponents, but also, helps keep her supporters tractable.

and even if, in the end, gma gives  it up, and by some stroke of luck the opposition unites behind one presidential candidate, things can still go wrong in 2010.

JPE warns of chaos in 2010
Next president to find govt coffers empty
By Rhaydz B. Barcia, Manila Times Correspondent

LEGAZPI CITY, Albay: Failure of the computerized elections in 2010 would cause “chaos” but, if the polls succeeded, the winner would find the government coffers “empty,” Senate President Juan Ponce Enrile said over the weekend.

“I would like to urge the people through the [people of Legazpi City] to be very, very careful in this coming election of the leaders who will handle the Philippines in 2010 and beyond,” he said.

“I would like to tell you that we’re facing a critical period in our history. The elections in 2010 are very critical because, for the first time in our political history, we are going to change the manner of [conducting the] elections,” Enrile added, referring to the fully automated polls next year. He spoke during a program here marking the 50th anniversary of the city.

Enrile expressed fears that the electronic voting could go haywire.

“We’re going to use machines to record and count the votes, [when in the past] we were using human beings or teachers,” he said. “What will happen if the machines break down? What do you think will happen to our country? This country will be in a total chaos, there will be no government or leaders, no soldiers, no policemen, no Supreme Court. What will happen to our country? It will be the rule of the strongest among us. I hope that will not happen.”

Empty coffers

Enrile added that the successor of President Gloria Arroyo would discover that the government was broke.

“If President Arroyo, an economist, a very intelligent woman and a very determined person [has been able to] run the government despite the opposition and the obstacles that have been placed before her [but still] could not manage the nation as we want it to be, how much more the next President [who] will be confronted with so many problems and [who will be expected to] unify a fragmented force? How could he or she do it when the country’s coffers are empty?” he said.

and he goes on:

“So, if we want clean governance, it should begin at the kitchen of Malacañang because one of the [problems] in the country is corruption and if you clean up your backyard, the rest [stamping out of the other problems] will follow,” Enrile added.

what does enrile mean?   that there is time to oust gma and her corrupt ways before 2010?   is he advocating extra-constitutional action a la EDSA?    is ping lacson’s call for civil disobedience, for a tax revolt, vs charter change a meaningless coincidence?   because in february ’86 it was cory’s civil disobedience campaign and economic boycott which coryistas took up that paved the way for EDSA.   is it possible that enrile and lacson are on the same page these days?   can honasan and lacson, former classmates, batchmates, pma ’71, finally be on the same page too?   nakakaintriga.

or is enrile just saying that we need to elect a president in 2010 who is without a taint of corruption?   but wait, here’s more from him, about drawing inspiration from the china experience.

According to him, China used to be the doormat of the world but later became an emerging superpower through the will of the government and the people.

Enrile said that the Chinese had told him that their determination and that of their leaders brought about a modern China free from domination of other countries. The same resolve, he added, could see China outshining the United States.

“I will tell you, in this decade [China] will overtake America. China will become the superpower of the world, because [it has] prepared [itself for that role],” Enrile said.

He allowed, though, that China’s ascendancy entailed economic and political costs. Still, Enrile said, the price the Chinese people paid went to “freedom.”

“True enough, [the Chinese] government is a little bit rigid compared to our government, and I’m not trying to say [that we] adapt the [Chinese] system but, nonetheless, we must work together as a people in order to bring progress and to make our country really free,” he added.

Enrile’s visit to Legazpi City coincided with celebrations there commemorating the 111th anniversary of the proclamation of independence.

He said that his wish for the occasion was to see the country attain economic freedom and freedom from poverty.

hmm.   will of the government and the people.   determination.   resolve.   progress.   freedom from poverty.   freedom from domination of other countries.   but with economic and political costs.   paying the price for “freedom” . . . . sounds like a political platform.   who’s the candidate kaya.   siya mismo?    sana hindi.

erap is right, there’s no hope of beating gma’s annointed in 2010 unless the opposition gets behind a single ticket.   maybe enrile can be a uniting force.    maybe the presidentiables will listen to him.   sana he can inspire them to rise above self-interests for the sake of the country.   sana together they can arrive at a consensus, agree on a platform and a ticket that would have a fighting chance against gma’s money and machinery.   then 2010 might be worth dying for.

con-ass economics

promise ni nograles, reported by manila standard today june 8, charter change will be limited to economic provisions:

LAWMAKERS who will convene as a constituent assembly will be limited to easing the economic provisions of the Constitution to provide investors with the stability they need for their investment and allow them to own land, House Speaker Prospero Nograles said yesterday.

Under the recently-approved House Resolution 1109, the assembly “will tackle only the two economic provisions of the Constitution on foreign land ownership,” Nograles said.

…By focusing on economic provisions, the assembly would assure foreign investors that they could stay here for the long term since they could own the land where their factories and buildings were located, Nograles said.

…Nograles also criticized National Economic Development Authority director general Ralph Recto for warning that Charter change would cause more shocks to the economy.

“If Neda thinks that this could cause more shocks to the economy, it is also therefore correct that the reason why our economy has been suffering from shocks, since most of us can remember, is because of this Cha-cha issue,” he said.

on the same day, former neda director-general cielito habito, in his business column in the inquirer, blasted the house of representatives for sinking so low:

Lame excuse for Con-ass
By Cielito Habito

THE BRAZENNESS with which the majority in the Lower House rammed the now-infamous House Resolution No. 1109 through is yet another instance of naked exercise of political brute force that properly earns them that monicker many of them despise–claiming “larger” to be more apt than “lower.”

… Indeed, many believe that this current Lower House has sunk the Philippine legislature to its lowest point ever in our nation’s political history.

Economic provisions

Proponents of the resolution would have us believe that it has become so urgent to amend the 1987 Constitution that we now have to resort to the fast-track method available to effect Charter change (“Cha-cha”).

And this fast-track way is to convene the legislature into a constituent assembly (“Con-Ass”) to act on proposed amendments. The purported rationale–which as the last and relatively brief “whereas” clause in the resolution, comes across more as an afterthought–is that the economic provisions of the current charter need urgent revision.

To quote: “Whereas, there is a specific proposal that for the Philippines to be internationally competitive in attracting foreign investments and technology transfers that the economic provisions of the Constitution is proposed to be amended in an appropriate manner …”

The economic provisions being alluded to are those in Article XII on National Economy and Patrimony limiting foreign ownership in certain reserved economic activities to 40 percent.

Could easing up on these provisions really save our economy from recession at this time?

No urgency

There are two questions involved here: First, do we really need these amendments now? Second, do we even need these amendments at all?

The first is easier to set aside. The second is open to debate, and has indeed been debated for some time now.

Let’s tackle them one by one.

Are these legislators telling us that opening our economy even wider to foreign ownership cannot afford to wait until after the 2010 elections? Can foreign direct investments really lift our economy out of the current downturn?

Well, I have news for them (as if they didn’t know!). The UN Conference on Trade and Development (Unctad) reports that flows of foreign direct investments (FDI) fell globally by 21 percent in 2008, and will likely fall even deeper in 2009.

For developed countries, the source of the global downturn, the decline is even steeper at 33 percent. Note that much of what is reported as FDI are in the form of mergers and acquisitions, where existing enterprises merely change hands; thus, no newproduction and employment necessarily result.

Greenfield investments, or those that start new production activities, are projected to fall even more steeply.

Will an urgent Constitutional amendment to permit full foreign ownership in the very few remaining restricted economic activities be the key to rejuvenating our economy at this time, then? (I could almost hear someone say … “Hello?!”)

Wide enough

This brings us to the second, more debatable question. Is a constitutional amendment to eliminate all restrictions on foreign ownership even desirable or necessary at all?

Consider the following:

First, investment in this country had been opened substantially to foreign participation as far back as 18 years ago, with the Aquino administration’s Foreign Investments Act of 1991.

That law turned around our foreign investment policy from a “positive list” mode-where foreign participation was only allowed in a limited list of investment areas-to a “negative list” approach.

Here, all activities were opened to foreign investment except those in a short list of strategic enterprises limited to Filipinos by the Constitution (e.g., public utilities, exploitation of natural resources).

This opening up led to the surge in foreign investments that the country reaped in the 1990s.

Second, even within the few remaining restrictions in law, the government has found creative ways to open the way for foreign participation, such as through coproduction, joint venture, or production-sharing agreements, or in the case of mining, through the controversial Financial and Technical Assistance Agreement (FTAA) mechanism, which virtually opens mining to 100 percent foreign-owned companies.

Some may disagree, but the door for foreign investors is wide enough.

Other things are keeping them away.

But why even bother debating this now? We’ve known all along that the economic provisions are only being used by the Palace sycophants as a smokescreen.

Clearly, the real agenda is to shift to a parliamentary system (forget about the “covenant” in the “whereas” clauses promising no term extensions; this all becomes inapplicable if the whole structure changes), thereby paving the way for perpetuating those now in power.

You think the Lower House has brought the country low enough? Think again.

marck, edel, benignO

over @ the collective filipino voices, young blogger marck ronald rimorin laments:

When are people going to write for the poor, the downtrodden, the laid-off, the fired, the underpaid, the hungry, the sick, the ill… those people who are as sickened about everything as we are, yet don’t have the benefit of blogs or computers to do what they can of it, no matter how small?

radical u.p. intellectual edel garcellano, “sir” edel to many generations of comparative lit students, has this comment on bloggers post-bambi that might explain why it aint gonna happen, marck.

The ANC journalists find blogging the most competitive for mainstream media. Now anyone can infiltrate the public sphere when once in the pre-cyber years only the favored & the ideologically acceptable icons could smugly perorate.

Bloggers of varied IQ & credentials can deliver their daily spiel in cyberspace. Let a hundred flowers bloom? There are, of course, the attendant risks of libel & other judicial threats in a feudal environment, but the current scenario simply exemplifies that the huge energy of counter-discourse is being tapped to mount an offensive against the canonical satraps of state apparati.

This is what the valley golf brawl has uncovered: the rise of cyber critics, who responsible or not, middling or talented, tilt the balance in favor of the unarticulated response, the publicly repressed, the individually marginalized. The personal-& the quotidian, the everyday-has assumed the political: & militarist mentors are hard put to clamp the irreverent folks in jail, much less stem the textual avalanche. In the techno-terrain, words transform, mutilate.

Of course, bloggers must necessarily be middle-class, professional. No informal settlers would figure in the equation, even if OFWs infest their fold. The discourse therefore is basically extension/amplification of capitalist production, some internal resistance that however falls within the ambit of reformist negotiation. The very idea therefore of a radical dialogue isfar-fetched.

It might even cultivate the impression that freedomflourishes in a fascist state. For which a Maoist revolution is old hat, impractical, naïve, discredited.

yes, the discourse is reformist rather than radical.  most if not all bloggers are middle-class and the middle-class is, at best, reformist — we want changes, an end to corruption (which we think will solve poverty) but nothing too drastic, nothing that would rock the boat or upset the status quo.  in contrast, “radical” is associated (and outlawed) with the communist left and means drastic deep-seated changes in the way wealth and resources are distributed and how we do business with each other as a people.  the kind of discourse that threatens and shakes the status quo, indeed the kind of discourse (in filipino) that can be found elsewhere in the blogosphere, but not in sosyal fv.

HOWEVER, fv is not entirely without substance.  i hate to disagree with practically everyone who has ever dissed and continues to diss marck’s co-blogger benignO.  i’ve just been to his blog getrealphilippines — i visited once long ago to check out his ebook but was turned off, i don’t remember why now, senior moment ;) — the book’s gone, in its place a brief analysis of and solutions to the poverty and backwardness of the filipino that is the best stuff i’ve read so far on the subject from a filipino (okay, filipino-australian), who is obviously influenced by third wave thinkers and informed by the filipino experience, and whose context of solutions is actually another way of redistributing the wealth and doing business with each other as a people.  his current post substance matters in an economic crisis is also worth cross-posting @fv.

Decades of dependence on foreign employment (and a lack of appreciation of its social costs), sustained prostitution of the economy at the altar of the gods of “foreign direct investment”, and a consumer market opened to a flood of non-durable imports has rendered Philippine society one that utterly lacks substance — one that could now be providing a safety net for workers once hailed as “heroes” of the Republic now returning to become its burden.

it’s a pity that rather than flesh out, test, develop further his ideas @  fv — the perfect venue, i’d say — mostly benigno heckles and baits and asks hard questions, the latest of which is:  what does “the filipino” stand for?

Even as we struggle with the low bar of defining an identity, the aim for a stand – the higher bar – I realise seems a virtual impossibility for a people such as ours based on what I’ve seen so far.

What does the “Filipino” stand for?

The question remains unanswered; not that it ever will be convincingly.

Then again isn’t conquest of perceived impossibility the very essence of achievement? Maybe not so if you are a Filipino. And that kind of regard for achievement is probably what defines us.

what does “the filipino” stand for?  right now “the filipino” (collective, as opposed to the individual) does not stand for anything, much like fv, which does not stand for any one thing that the group as a whole can agree on — if there is, it has yet to be articulated.  in the case of the nation, the possibility of standing for something, the capacity to stand for something, has yet to be grasped, thanks to mainstream media that continue to fail the people.