Category: hard times

that rating upgrade

… is good news only for the minority rich, not for the majority poor.

check out cielito habito’s An early Easter gift

So what’s in the credit rating upgrade for the ordinary Filipino? It’s actually a mix of good news and bad news. The positive side is that more investments—both of the job creating (FDI) and the “hot money” kind—should be drawn into the country by this new vote of confidence; let’s hope there will be much more of the former. Government and firms could borrow funds more easily and more cheaply. Lower interest rates would mean lower costs for government debt, freeing up more funds for health, education, infrastructure and other public investments to uplift people’s lives.

But the negative side is that a major segment of our population faces the very real prospect of lower incomes. Families relying on remittances from abroad, or from earnings in import-substituting or export-oriented industries (including tourism) will be hurt by a rising peso induced by the surge in foreign inflows. Pensioners, retirees and other savers relying on interest earnings from fixed-income placements will also see their incomes drop further. A retiree recently wrote me complaining that his interest income had dropped 40 percent in the past year alone because of falling interest rates, and laments that he now faces a serious problem with making ends meet.

and ben kritz’s Curb the ratings upgrade euphoria

President Aquino’s statement described the positive outcomes of the ratings upgrade as lower interest costs on government debt, making Philippine securities more attractive to investors, and “fiscal space” from the savings on debt costs, savings that can be used “to sustain and further improve on social protection, defense, and economic stimulus, among others.” The only part of that statement that is completely accurate is the first part. The specific meaning of the rating is a judgment of the country’s ability to pay foreign-denominated debt on time and in full, and because the Philippines is now judged to be at lower risk of default by one agency, the government will not have to pay so much to incur debt; interest on direct loans will be a bit lower, as will yields on government bonds.

As for the “savings” that can be applied to other activities, that presumes the government will incur new foreign debt, which most would consider a rather novel conception of “savings.” Furthermore, in a memo released on March 17, Treasurer Rosalia de Leon informed bond dealers that the Treasury will be increasing its monthly auction of 3-, 5- and seven-year bonds and treasury bills from P120 billion to P150 billion through the second quarter, as part of an effort by the government to source all its debt locally for 2013. In other words, the government has no plans for now to access the foreign credit market where the impact of the ratings upgrade would be felt the most.

and gary olivar’s Early Easter gifts

Perhaps the most important thing to remember about this credit rating upgrade is this: At the end of the day, it really matters only to professional portfolio managers who may be restricted from putting their money in non-investment-grade credits. Even with its shiny new investment grade, the Philippines will still have to compete with its new peer group for portfolio attention. And direct foreign investors—the ones who really bring in the jobs—will be totally unimpressed since they’re concerned with an entirely different set of issues altogether.

The new rating—like any other credit rating—speaks only to the country’s ability to repay its foreign-denominated debt, nothing more. It says less about whether or not equity investors can expect to earn the right returns on bricks and mortar on a level playing field. And it says nothing about whether we are investing properly for future growth, or creating more jobs through the right kind of growth, or improving our productivity as the only way to sustain long-term growth.

Unfortunately, like most early gifts, the packaging may be nice and glitzy—as the Palace will try to hype it up—but what’s inside is not what we really need.

read, too, atty. dodo dulay’s What PNoy isn’t saying about PH’s rating upgrade

demolition blues

says fr. joaquin g. bernas in inquirer:

Relocation of informal settlers. You might say that the constitutional command is clear enough: “Urban or rural poor dwellers shall not be evicted nor their dwellings demolished, except in accordance with law and in a just and humane manner. No resettlement of urban or rural dwellers shall be undertaken without adequate consultation with them and the communities where they are to be relocated.”

Does this mean that the validity or legality of the demolition or eviction hinges on the existence of a resettlement area designated or earmarked by the government? That would be the ideal; but jurisprudence has answered that question in the negative. What is required is that “the person to be evicted be accorded due process or an opportunity to controvert the allegation that his or her occupation or possession of the property involved is unlawful or against the will of the landowner; that should the illegal or unlawful occupation be proven, the occupant be sufficiently notified before actual eviction or demolition is done; and there be no loss of lives, physical injuries or unnecessary loss of or damage to properties.”

As can readily be seen, legal pronouncements on the subject will not be enough to prevent the confusion and damage to persons such as those which happened in recent evictions in Metro Manila.

says bantay pilipinas’ jerry esguerra on facebook:

THE PEOPLE VERSUS WALL STREET POWERHOUSE

The driving force behind the P3 billion Quezon City Central Business District (QCCBD) project is none other than World Bank itself. From its early inception WB has sold the idea of QCCBD as the mecca of new and forward looking economic development within Metro Manila area and outlying regions.

Generally dubbed as a mixed-use commercial/residential/recreational district – the 250 hectare Triangle Park project will displace 16,000 poor families. Ironically the 37 hectare property where San Roque is nestled belongs to the National Housing Authority of the Philippines and is leased to Robinsons Land Corporation – one of the biggest mall and residential developer in the Philippines.

Past World Bank projects were designed to expand capitalist activities in its host country hence greatly enhancing the profitability of American Companies. The Triangle Park development project which is closely modeled after the Makati Business and Commercial District will surely benefit Citigroup, American Express, Starbucks, KFC, Coca Cola, Nike, Gap, Hollywood film and music companies, etc.

San Roque is where the “rubber meets the road” in the realm of the antagonism between the capitalists and the poor.

says mon ramirez on facebook:

1. Does Quezon City really need another mall and… commercial area? I don’t think there is need for more when we have so much square feet of them in various parts of the city already.

2. The area in question is 37 hectares and is owned by government.

Why can’t the city government allot 4 hectares to build low-cost housing for these settlers? One hectare is equivalent to 10,000 square meters. A five to six-story housing in a hectare of land can contain 50-60,000 square meters, enough to house 2,000 families if given a 30 sqm unit each (in Montalban, the NHA is offering them a living space of 20 sqm each).

Three or four of such buildings can accommodate these families, leaving enough space for the business development plans of the city government.

And perhaps the settlers will be willing to pay more than the P200-300 they are asked to pay in Montalban, maybe P500 or more, for the ‘premium’ of staying near their jobs or close to job opportunities.

3. These settlers can be trained and/or enskilled (there are so many NGOs, which are supposed to be helping and can help, apart from government agencies like TESDA) to take on the construction and other jobs once actual construction begins. So they need not be dependent on government and will have the income to pay for their needs, including the mortgage for their housing units.

One problem with conventional ‘master planning’ and ‘city planning’ is planners only see the likes ofthe Ayalas and other developers as creators of value, not the mass of the lower income classes on whose muscle and sweat the high-rise and fancy malls and other real estate projects get built, not the security guard or driver or plumber or gardener who perform various odd jobs and services so that our homes and lawns and toilets and cars and offices run smoothly, and so that we don’t have do and/or learn the job ourselves.

They conjure their ‘development visions’ of the city as if these spaces were ’empty’ or can be ’emptied’ of these lives, who have as much right to the city as the Juan or Juana already paying the mortgage for their homes in private subdivisions.

‘Development’ gets spatialised, with the poor, literally and figuratively, pushed to the margins. It is as if we put them 23 kilometers away or far away where we can’t see them the poverty they experience will go away. The problem just gets transferred temporarily. It does not contribute to solving poverty in the city, and in the country in general. And perhaps makes it even worse as these people lose their jobs and their meager sources of income in the city.

When the city planners developed their master plan in 2007, they should have included these settlers as part of the planning team; in development jargon, as among the ‘stakeholders’, whose stakes are as equal, if not more, since it is their homes/shelters and livelihood that are at risk. What is 4 hectares out of 37? What is the social value that can be created when these people are given better chances to fight poverty rather than pushed further into the social and spatial edges, where their chances are less or diminished?

It would be refreshing to have a city executive, whose jurisdiction encompasses the largest number of informal settlers in the metropolis, whose ‘development vision’ of the city is truly ‘social’ (not just paying lip service and ‘politicking’), and approaches city development from the perspective of human rights, not just of the rich and middle class, but of the poor as well, and their right to have a place in the city as well as contribute to its development and planning.

says james cordova in asian correspondent:

It’s not as if these squatters have a choice. It’s not as if these communities are little Edens. For many of these people, being in a slum area is about survival, about life and death. You move them to another province without viable livelihood and you kill them.

Their existence betrays the government’s incompetence and troubles: it lacks the livelihood to keep people in their provinces and it lacks the same thing when the squatters are forced to move to urban areas. At least in the urban areas, their options for livelihood are far greater.

What adds insult to injury in this case is that the land in question is not something that is owned by a private person or group. It is owned by the government. For some reason, the National Housing Authority, whose mission is to provide housing for the poor, has struck a deal with Ayala Land that deprived the squatters of their houses.

To be fair to the squatters, they’re not saying they don’t want to give up their homes. All they want is a relocation site that is near their places of work and the schools of their children. But no, the NHA decided to relocate them 20 kilometers away, to the town of Montalban, Rizal, where it takes more than an hour to commute…

The lives of these 6,000 families have been disrupted by the shortsightedness of the government. But I’m probably being kind. More to the point, the government treats these people as trash. Montalban, after all, is where Metro Manila throws its garbage, both the literal and human kind.

the irresponsible filipino elite

i’ve been fretting over, and collecting columns about, the yawning gap between the few filipino rich and the manymanymany filipino poor for some time now, wondering why other southeast asian countries are able to bridge lessen / shrink the gap, but not the philippines.   here are three online essays that explain why, the latest by business world‘s jemy gatdula, which he writes in relation to the 2010 elections.   the two others are by editorial consultant juan c. gatbonton and political economist calixto v. chikiamco, both of the manila times.

TAMA NA, SOBRA NA, PALITAN NA
Jemy Gatdula

… the statistic that around 10% of the population owns around 80% of the nation’s wealth remains roughly true. What is even more disturbing, save for the huge immigration influx that was done during the Marcos years (particularly in the 1970s), the families that make up that wealthy 10% have not changed through the years. This accounts for a profoundly stagnant social mobility, thus making it more bizarre for our voting population to actually be giving somebody, who has nothing to credit him but his parents’ names, an indecent shot at the presidency. By adding to this the fact that somewhere around 30-40% of the country’s 80 million citizens are under the poverty line, then one can see how obscene a 10% wealthy figure is. Indeed, the attitude of the elite seems to be: it’s all right to help the poor so long as they know their place — and stay there.

Joe Studwell, in his Asian Godfathers, made an analysis on the Philippines that is particularly relevant:

“The old political elite, restored by godfather progeny Corazon Aquino after Marcos’ departure in 1986, appears as entrenched as ever. The current president, Gloria Macapagal-Arroyo — herself the daughter of a former president — spends much of her time fending off congressional attempts to impeach her because of the possibly unconstitutional manner in which she ousted her predecessor, Joseph Estrada, 2001, and allegations of vote-rigging in her own election victory in 2004. x x x Faith in the political process is falling, communist insurgency is present in most provinces, and the local elite remains the most selfish and self-serving in the region. The Philippines’ best known living author, Francisco Sionil Jose, lamented in the Far Eastern Economic Review in December 2004: ’We are poor because our elites have no sense of nation. They collaborate with whoever rules — the Spaniards, the Japanese, the Americans and, in recent times, Marcos. Our elites imbibed the values of the colonizer.’ The Philippines, in short, has never moved on from the colonial era and the patterns of amoral elite dominance that it created.” (Asian Godfathers, 2007, pp.180-181)

A reading of Sandra Burton’s Impossible Dream shows how those in power are so related or linked to each other that our history is seemingly like one long sequence political rigodon. If Burton’s account is accurate: it was a Laurel who acquitted Ferdinand Marcos of murder, a Roxas who liberated him from a US army brig, a Quezon who urged him to be in public life, a Macapagal who awarded him half of his war medals, and a Magsaysay who served as godfather to his wedding. Marcos had Ninoy Aquino as a fraternity brother. And before Aquino married Cory, he was actually dating, guess who? Imelda Romualdez.

Obviously, every country has an elite. Nevertheless, developed countries’ healthy economy and social conditions would indicate a more fluid social mobility rate than that being demonstrated by the Philippines. A cursory look at our history would show the same families, the same surnames, continuously lording it over Philippine affairs. History would also show, however, that they consistently failed the country. In the end, while a country indeed gets the leaders it deserves, it must also be considered that in our case the electorate has had a history of poor quality to choose from. This, then, in sum is our nation’s problem: the monopolization of political and economic power by a narrow minded and incompetent oligarchy.

Interestingly, most of the political class (which, it must be remembered, also constitutes the wealthy end of our social spectrum) would point to corruption as the problem. No, it’s not. It’s the elite who are the problem. Commentators from apparently different ends of the globalization debate converge on this point: from Walden Bello (in his The Anti-development State) to Federico Macaranas and Scott Thompson (in their great Democracy and Discipline), to other books by different authors (The Rulemakers, Booty Capitalism, Sugar and the Origins of Modern Philippine Society, Malolos: The Crisis of the Republic, and Anarchy of Families).

Let us encourage the Filipino voter to not vote for anybody coming from the old political families, no matter how good their branding or packaging may be. They’re all part of the group that created the problems of our country. They’ve had their chance. And they sucked big time.

Tama na, sobra na, palitan na iyang mga lumang pamilya.

WHO ARE THE ELITE
They get the most of what there is to get
Juan T. Gatbonton

Our elite of power and wealth are extremely diverse. Their members range from the genteel remnants of the colonial hacendero families to the grossest political-warlord clans such as the Ampatuans of Maguindanao, who are accused of slaughtering 57 people in just one morning.

In between are the political kingmakers who “bet” on a likely candidate and then collect on their investment in business favors once the candidate wins an influential office. Their paragon is the Chinese-Filipino entrepreneur Lucio Tan, who apparently put up 70 percent of presidential candidate Joseph Estrada’s campaign funds in 1998.

The only thing our elite families have in common is that they still get the most of what there is to get. The Ampatuan godfather is reputed to have kept a nest egg of P400 million in an industrial-strength vault in one of his mansions.

Noblesse oblige

The time is long gone when the rich and powerful took fatherly care of their serfs and tenants, in return for their submission and respect. And the decay of this traditional consensus has made the lives of our poorest families less and less secure.

The social contract that had morally obliged the rich to protect the poor’s right to subsistence has been repealed. Whenever this right to live was threatened, as in Central Luzon beginning in the 1930s, the peasants took up arms, but “less often to destroy elites than to compel them to meet their moral obligations.”

Such unrest has widened, as the spread of the cash economy compelled patrons to turn their backs on their customary rights and duties. Besides, people no longer believe inequality to be divinely ordained, or that power is put to the service of society and its values.

Even the usual markers of elite status have been erased, among them the inferred responsibility of privileged people to act with generosity and nobility toward those less privileged.

Landowning, or “not having to buy the rice you eat,” no longer brings social prestige. In Central Luzon, two successive insurgencies have driven away the sugar and rice hacenderos.

Meanwhile, many of the landowning families who have switched to manufacturing have lost out to Filipino-Chinese arrivistes. Having lost their power to monopolize markets, they proved too greedy, too nepotistic, too authoritarian, to survive global competition.

Rich and poor are separating, as in Disraeli’s England in the 1850s, into “two nations, between whom there is no intercourse and no sympathy . . . ”

The Jesuit sociologist John J. Carroll believes that coercion has become the “operating theory” of our social relationships. Naked power has become the main mediator between rich and poor and power is used heedlessly to accumulate wealth and prestige for the power holders.

Gross inequality

One result is that income inequality has been rising, and at the expense of the lower-income groups. The historian Carlos Quirino estimated that in the 1970s, the country was “in the grip of about 50 leading families.” Even now, family ownership of the Philippine corporate sector is the most highly concentrated in East Asia.

The economist Arsenio Balisacan, whose field is poverty studies, notes that things have got really worse in the last six to seven years.

Academics from the University of the Philippines estimate that 35 percent of Filipinos live below the official poverty line. Our middle class has been shrinking. In 2006, the National Statistics Office placed it at 19.1 percent of all our people, down from 22.7 percent in 2000.

Gross inequality seems to be distorting even the conventional economic outcomes. In East Asia, because of egalitarian public policies, a percentage increase in GDP growth typically reduces poverty incidence by 2 percent. (Globally, a percentage increase in GDP reduces poverty by 1.6 percent.) GDP is the total value of goods and services produced in a country in a year.

But in the Philippines, a 1-percent increase in economic growth may in fact be accompanied by a 0.3-percent increase in the number of the poor. This is because economic growth is so highly concentrated: 65 percent of GDP is generated in Metro Manila and its satellite regions, Central Luzon and Southern Tagalog.

Power to the excluded

Inequality is notable not only in people’s incomes and status. What is worse, inequality is built into social and political structures that, in Father Carroll’s view, enable “certain groups or classes of people systematically [to] enjoy more than others the benefits which society can provide.”

Unequal institutions and legal systems affect the entire structure of national society and the way it apportions wealth and power. Systematic inequality pervades public policy, starting from a tax structure that falls on the poor more heavily than on the rich; to regulatory agencies unable to protect people against monopolies and cartels; through the steady decline in the budget share of social services; and public investments that favor the rich regions against the poor ones.

In the end, these elitist social structures can be moved only by some exertion of power from those excluded from them. Hence, the easing of inequality must await the time the Filipino poor are able to develop forms of autonomous organizations that will give them some leverage in dealing with people in authority.

OUR IRRESPONSIBLE ELITE
Calixto V. Chikiamco

I think it was Gen. (ret) Jose Almonte, former national security chief during the presidency of former President Fidel Ramos, who said that the Philippines had the most irresponsible elite in Asia.

Indeed, “Jo-al” has not been the first and only one who has made this observation. American political scientist Paul Hutchcroft calls the Philippine elite as “booty capitalists” who prey on the weak state for its rent-extraction.

The sorry history of the Philippines since independence is a reflection of the record of our irresponsible political and economic elite.

Compared to its neighbors, the Philippines is still mired in a
“development bog” and unable to reduce its widespread poverty. The Philippines has earned the moniker of “sick man of Asia”-thanks to its irresponsible elite.

And it’s not the Marcos dictatorship alone that’s to blame. Nearly 20 years after Marcos fell, the elite cannot show substantial progress:the country’s institutions are weak, if not weaker; the foreign debt is ballooning and the country is falling into another debt trap;unemployment and poverty rates remain high; and the country is still racked with rebellion with one of the world’s longest-running communist insurgencies.

Why is the Philippine elite so irresponsible?

Well, compared to its Asian neighbors, the Philippine elite never felt really threatened by communism. South Korea, Taiwan, Japan, Malaysia, Singapore, Thailand and Indonesia at one time or another faced “life and death” crisis fostered by the communist threat.

South Korea, which started out more backward than the industrialized North Korea, had no choice. Its military essentially told the business elite to behave, or else all of them would be overrun by the North Korean communists.

Fleeing the communists, the Kuomintang-led Chinese government settled in Taiwan. As outsiders to the island, the Kuomintang-led government could institute land reform and the ever-present threat of a Communist invasion forced its elite to become responsible.

Singapore was a tiny island with few resources and which faced a communist insurgency. Lee Kwan Yew and Singapore’s political elite battled back by building a strong bureaucracy and adopting many socialist elements (state ownership of key enterprises, socialized housing, etc.) while embracing foreign investments and free markets.

The same story was replicated in other countries like Malaysia,
Thailand and Indonesia. Their respective elites rose to the occasion and led their respective countries to wipe out poverty, strengthen public institutions and develop economically.

On the other hand, the Philippine elite became an anomaly and seemed to follow the Latin American model, unable and unwilling to lift the country out of its quagmire. Rather than acting as leaders, the Philippine elite, true to the rules of booty capitalism, acts more like pirates, preying on the state and the people.

One reason for this is that the Philippine elite felt secure under the protective umbrella of the United States. With the US bases, the Philippine elite could always count on the US military, or so it thought, to rescue it from the communist marauders.

The Laurel-Langley Agreement, which allowed US citizens to operate businesses in the Philippines as a foreign monopoly under high tariff walls, further cemented the symbiotic relationship between the US business elite and the local rent-seeking elite. The US and the Philippines became joined at the hip in weakening the state and promoting “booty capitalism.”

The need for the US to maintain its vital bases here during the Cold War made it also imperative that the Philippine elite be kept divided and unable to assert itself.

Why is it that years after the removal of the US bases and the end of the Cold War, the Philippine elite has retained its irresponsible ways? In fact, the Philippines seems to be replaying its history, with 2004 substituting for 1969. Like in 1969, right after the presidential election, the country is sitting on the edge of civil war, its public institutions are politicized, and its treasury nearly bankrupt.

One reason is what economists call the “economics of increasing returns.” Once a country is on a given path, positive feedback and increasing returns keep a country on the same path. If it’s necessary, for example, for an oligarch to bribe justices, it would be also necessary for the other oligarchs to engage in the same practice to compete, and a sort of an arms race to corrupt institutions develops.

As Hutchcroft puts it, “There has been little incentive for oligarchs themselves to press for a more predictable political order, because their major preoccupation is the need to gain or maintain favorable proximity to the political machinery. Even those oligarchs temporarily on the outs with of the regime exert far more effort in trying to get back into favor than in demanding profound structural change.”

Another reason why our elite is so irresponsible is that many of them shifted to regulated, service industries-banking, telecommunications, power, shipping, airline, etc.-in reaction to globalization. Thus, there was great incentive to the further weakening of the state and for “regulatory capture.”

The archipelagic nature of the country further insulates its elite and makes it oblivious of external threats. The communist threat from the North and competition with its old arch-rival, Japan, tempers the possible misbehavior and abuses of the South Korean elite. As for India, competition and rivalry with its neighbor Pakistan represents a motive force to develop the country.

No such rivalry or threat moderates the Philippine elite’s behavior.

Is there any hope then for the Philippines? Will the Philippine elite ever shape up?

bookbug blues

i could be more upset about the book tax.   i am a bookbug, after all.   i buy imported and local fiction and non-fiction regularly, mostly imported mostly english, and i read them all as a matter of pleasure, of study, sometimes of survival.   do i really not mind paying more?

i mind, of course.   times are hard, money is tight.   maybe it’s just mercury being retrograde, i’ve been through this before, the post office has been taxing our mail-order books for someyears now, and talaga i know i should could be angrier but i just can’t get beyond a hay-naku sabay buntong-hininga.

kumbaga sa “straw that broke the camel’s back” this is not it, this is far from it.    because a tax on imported books simply is too lightweight and too burgis an issue to get me as mad as i already am about the scandalizingly high cost of basic goods and services e.g. food, shelter, clothing, utilities, medicines, and schooling.    “non-educational”  books simply don’t belong in the same category.

nonetheless i wish robin hemley and manolo and jessica and teddyboy and the blogosphere success in the campaign to jolt the government back to its senses and back to full compliance with the florence agreement. until then, books getting more expensive just means i’ll be buying less.   maybe i’ll even stop going to bookstores, as a matter of protest, as 1read2 suggests:

… the government as represented by the Department of Finance and Customs Bureau has made its stand on the Book Tax and Duty.  “Sue us” seems to be the battle cry: A very arrogant one at that.

…Hopefully, someone does sue thembut in the meantime what to do?

Given that it seems that the bookstores and booksellers are somewhat hesitant to challenge this ruling. Perhaps it would be time to do something against this taxation.

Do not buy books that have duties imposed. Do not buy it. Book readers and book collectors are the customers of this industry. And they make it prosper and if the industry cannot defend itself from unjust and illegal taxes it might be the time to not buy.

Books can be downloaded from the Net . Read and even share the ebook with a friend or fellow book reader.

…Refuse to pay the taxman his unjust taxes

Books can be gained in several ways and not all of them involves buying. No I am not referring to stealing. Borrow from the library or share a book with a friend.

Establish book clubs with libraries…

meanwhile as reminds in his comment to mlq3 there’s the 2010 elections coming.   how about if we not vote for candidates who support the book tax.   or, to be positive.   how about if we campaign and vote for candidates who would rescind the book tax (other things being equal ;)

also meanwhile, there’s always booksale.   i don’t mind secondhand books.   i’m also willing to trade, but first i have to put together a list of books that i can bear to part with, fiction and non-, all of them educational.   promise.