Category: money

cheap meds – gma vs. mar

ano ba talaga?   kahapon ito ang balita:  Arroyo to sign cheap meds EO

MANILA, Philippines-President Gloria Macapagal-Arroyo will finally sign next week the executive order placing a price ceiling on 22 essential drugs sold in the country.

Malacañang made the announcement Tuesday amid allegations that Pfizer Phil. had tried to bribe the President with some P100 million worth of discount cards for distribution to indigent patients around the country.

pero today iba na:  Palace backtracks on issuing cheap meds EO!

Malacañang on Wednesday said President Gloria Macapagal-Arroyo would first take into account keeping foreign investors and ensuring public access to cheaper drugs before ordering a price ceiling for essential medicines.

“Theimplications for economic health go beyond just the issue of cheaper medicines at hand,” Gary Olivar, deputy presidential spokesperson, told reporters Wednesday.

The Palace was apparently backtracking on its tough position on Tuesday that Ms Arroyo was set to sign the executive order imposing maximum retail prices (MRP) by next week.

ano ba ‘yan?   what implications for “economic health”???    it won’t be healthy for the economy if the president signs the e.o. because it might drive away foreign investors, such as multinational drug companies who are making a killing, selling us meds at three times the price in other countries???    come on!   does she really think these drug companies will stop selling us their drugs if she signs the e.o.?    in the end, they will settle for a small cut in profits dahil hefty pa rin surely, than no profits at all.

so why really is gloria making urong-sulong when signing the e.o. would be very good if not for the books then for her public image and approval rating, lalo na’t swak ang timing for the SONA?   aha.   kung si ellen tordesillas ang tatanungin, it’s pure and simple inggit.   inggit si gloria kay senator mar roxas because roxas, who steered the law through congress, will get the credit for it and might even get elected president in 2010 because of it.

Ang ugat ng kontrobersya sa executive order na magpapatupad ng Maximum Retail Price (MRP) na nakasaad sa 2008 Cheaper Medicines Act ay inggit. Inggit ni Gloria Arroyo na makalamang si Senador Mar Roxas sa isyung ito.

Sabi ng isang source namin sa Malacañang inis raw si Arroyo na ang pipirmahan niyang executive order ay magagamit ni Roxas sa kanyang kampanya para presidente sa 2010. Kaya pinulong niya ang mga hepe ng pharmaceuticals nuong Hulyo 8 at sinabing ibaba nila ang presyon ng 50 na gamot para siya ang sikat at masasabi niya na mas magaling siya kasi 22 lang ang gamot na nasa listahan ng MRP.

Ang kapalit siyempre ng kooperasyon ng mga pharmaceutical firms ay hindi pipirmahan ang MRP.

hm, naisip ko rin yan, but not in terms of inggit, rather of just not doing the presidentiable senator any favors. i’m still hoping that gma would could be big enough to allow credit where credit is due, never mind the politics of it.   after all cheaper meds would mean more money to spend, more money going around, for other essential goods and services, which would be very good for the economy’s ever failing health di ba?

as for the criticism laid at mar roxas’ door that the power to implement the cheaper meds law should have been given not to the president but to a price regulatory board, hmm, i tend to agree with mar:

(mar) said it is difficult to pinpoint responsibility in a board that he predicted to be the dumping ground of “election losers and relatives of powerful politicians…”

sa totoo lang, i like it that the cheaper meds law puts the president on a spot.   it’s time she showed some real statesmanship.   something we can remember her fondly for, unlike the “hello garci” tapes, and the infamous if unfortunate boob job (ang dagdag ang dagdag)!

defending celso

i’m not going to pretend i understand what’s really going on with celso de los angeles and the banking establishment.  my kneejerk response when i read that his rural banks had a ponzi-like scheme going, promising high returns to depositors, higher than that offered by the big banks, i was disgusted, lalo na’t it seemed that he was counting on the pdic to bail out his depositors just in case…

and then i read manila times columnist dan mariano‘s vilification of celso de los angeles, and it made me think again. in the wake of the u.s. economy’s crash thanks to innovative financial schemes, it’s hard to think positive of celso’s own innovations, especially because he has been painted as an incorrigible scoundrel by the mass media.

but if it’s true that big banks could actually match the interest rates he offered on savers’ deposits but big banks just won’t because it would eat into their huge profits, then talaga, it’s possible that celso is the victim of a vilification campaign that was meant to panic his depositors, thus to protect the interests of big banks rather than the interests of the banking public.

makes me wonder about the senate and house investigations.  sino ba talagang pinoprotektahan nila?  makes me wonder too about vice-president noli de castro’s deafening silence.  anyway here’s dan mariano’s column in full:

Vilification of Celso de los Angeles

If you are convinced that Celso de los Angeles is as guilty as sin, read no further.

Off the bat, let me say he is a former classmate of mine. I still regard him as a friend even if these past couple of weeks he has not replied to my calls, text messages and e-mail. Given the pressure he is under, I don’t fault him at all.

As Celso’s friend, I am ready to give him, if not sympathy, then certainly the benefit of the doubt. I am still so prepared-even in the current lynch-mob atmosphere created by certain central bank officials and other quarters.

Not too long ago, Celsotold some of his friends he was anxious about a plot to shut down his businesses. The rural banks he set up, for instance, were offering depositors interest rates on their savings that the big banks could not-or simply refused to-match lest it cut into their profit margins.

As a result, the number of depositors in Celso’s banks, which were spread out across the archipelago, grew at such a rate that the big banks began to feel genuinely threatened.

Serves the big banks right, I thought. Their interest rates were so tiny they did not even allow their depositors’ savings to keep pace with inflation. Keeping your money in one of those big banks was only a bit better than stuffing cash into your mattress, but it still was a losing proposition for the average depositors. I had thought that the aggressive marketing tack taken by Celso’s banks would ultimately stir the big banks into giving their customers a similar or an even better deal. I had hoped the big banks would finally wake up and realize that they now face a serious competitor.

Boy, was I wrong.

Instead of stimulating the big banks’ competitive instincts, Celso’s rural banks-along with his “preneed” ventures, which formed an integrated business-became the object of what amounts to corporate murder. The big banks decided to deal with the competition the only way they knew how-elimination at all costs.

For months, articles and columns were caused to be printed in newspapers and aired on radio and TV questioning the “unsound practices” of the rural banks identified with De los Angeles. Predictably, politicians saw a chance to draw free publicity to themselves and grabbed it.

In what seemed like the blink of any eye Celso had become one of the most vilified men in the Philippines.

Even before the hatchet job was completed, enough of the rural banks’ customers had been so unnerved that they understandably withdrew their money.

Result: A bank run triggered, not by the lack of assets or fraudulent business practices, but by negative publicity and intimidation by officials-far too many of whom look forward to a cushy sinecure in conglomerates that own big banks after retirement.

But was there anything intrinsically illegal in how Celso’s banks and preneed companies operated?

For an answer let me quote excerpts from a column written by Dean de la Paz in the Busi-nessMirror. Last Friday, de la Paz wrote in part:

“Despite the absence of an elementary preneed code, regulators and Monday-morning quarterbacking politicians cry illegality. Because there are no laws, to declare criminality requires some amount of creativity for the charges to stick if fraud and malice are to complement illegality.

“Let us examine a hypothetical preneed offering and see whether those are present.

“Matching revenues against costs is critical in the preneed industry. Where revenue sources and fund providers are one, through a virtual holdout feature, risks of defaults are mitigated, collections more efficient and the matching of revenues to costs closer. Note that here we have a preneed subscriber as clients of either a credit-card company or borrowers in affiliated banks.

“By enhancing this financial model, either through a compounding mechanism on the invested fund where interest earned is compounded monthly, quarterly or even semiannually, a doubling of earnings can be achieved.

“For instance, a credit-card holder paying an effective annual interest of 36 percent, or 3 percent monthly, quickly covers a holdout on the same individual whose funds provided costs a nominal 12 percent annually. By tying an investment that earns 12 percent annually to a debt, or a revenue source that earns 36 percent within the same period, a financial institution can earn 300 percent over the same base. Depending on the compounding schedule-doubling can occur in less than five years.

“In the preneed industry, a hypothetical educational plan can be offered featuring a front-end 20-percent rebate. With warrants that allow repurchases where credit-card companies buy the plan via postdated checks [PDCs], a double-your-money instrument can be offered.

“Should the plan holder liquidate prior to maturity, the 20-percent front-end rebate and the PDC repayments that double the plan’s initial value count as the cost of the investment. Matched against the credit-card company’s 36-percent-per-annum revenue, the cost of the assignable preneed plan can adequately be covered under normal circumstances.

“When offered as a contiguous package, is this patently illegal? Was fraud the intent? Are these designed to steal from plan holders? Or were they meant to offer yields matched against specific revenues?”

Some commentators bewail the fact that the deposit insurance cover for the customers of Celso de los Angeles’s rural banks will cost taxpayers some P14 billion.

Yet some of the same pundits remain mum on, say, the billions of pesos in kickbacks from World Bank projects that were reportedly cornered by a close relative of a high-ranking government official.

Now, why is that?

economic experts urge: fix rate @ 55php to 1$

now that we know for sure, thanks to the world bank and senator miriam defensor santiago, that corruption is alive and doing very well under gloria macapagal arroyo, lalong nakakatakot at nakakailang all the talk about stimulus funds, a whopping php330 billion, to be spent on infrastructure in aid of generating jobs, raising consumption, and weathering the global recession.  u.p. economics professor, once budget secretary, benjamin diokno is right:

“Big projects take time to implement and a big chunk of the funds are usually lost to corruption,” he told reporters at the sidelines of the Export Development Council forum on Thursday at the Hotel Sofitel.

What the country needs during these difficult times, he said, are easily implementable and quickly felt initiatives.

more than ever, professor diokno’s recommendation that the exchange rate be fixed at 55php to 1$ seems infinitely more sound, if the idea is truly to pump-prime the economy before things get worse.  writes filomeno s. sta. ana of action for economic reforms:

Benjamin Diokno’s proposal to peg the exchange rate at PhP 55 to a US dollar is gaining a broader constituency.The exchange-rate debate is no longer an esoteric one, confined to finance executives, exporters, and academic economists.

Those engaged in the manufacture of import substitutes now recognize that a competitive exchange rate can be a better alternative to tariffs to protect domestic industry and jobs. The tourism industry also sees the importance of the exchange rate, aside from its freedom-to-fly advocacy, for the country to draw in bigger numbers of inbound tourists.The BPO (business processing and outsourcing) industry has seen how a rapidly appreciating peso (in 2007) can sharply cut profit margins. Note that some of the Philippine corporate giants—the Henry Sy family and the Ayalas, for example—have stakes in the tourism or BPO industry.


The largest constituency that has added its voice for a competitive exchange rate is made up of the overseas Filipino workers (OFWs).They are highly organized and politically articulate.… Specifically, undervaluing the peso by fixing the exchange rate at PhP 55.00 to US$ 1.00 from the current PhP 47.00 to US$ 1.00 is a pump-priming tool to boost consumption.Thus, for every US dollar that an overseas Pinoy sends home to her family, the latter obtains an additional PhP8.00.In a manner, that’s a windfall gain of 17 percent based on the present exchange rate.In the aggregate, assuming that the US$15 billion in OFW remittances in 2008 will hold, we can expect an additional PhP 120 billion in the pockets of OFW families in 2009.

meanwhile, instead of spending the 330 billion bucks on the usual infrastructure projects in urban areas most of that stimulus fund could be spent on farm-to-market roads and irrigation systems that would pump-prime the agricultural sector so we can produce our own rice, among other crops, instead of relying on imports.

but of course we’re going to hear objections from the globalists, not least of them the gma camp.  says men sta. ana:

A criticism that the Diokno proposal cannot evade is that a currency undervaluation is improper at a time of a global economic crisis.The deep recession that has hit the advanced economies requires global collective action.Beggar-thy-neighbor practices such as devaluing the currency will undermine the recovery of hard-hit countries that suffer from current account deficits and overvalued currencies.

but really it’s about time we started thinking of ourselves first, what’s best for us, which is what other nations are doing, worrying about themselves first.  sabi nga ni senador manny villar:

“We have to think on our own and come out with an economic model that is suited to the Philippines,” he said.

“It is no longer automatic that what is good for others is good for us. We have the intellectual capacity to decide on the model that we should follow and not depend on other countries,” Villar said.

He said the country has a large pool of economists, both in the government and the private sector, who could be tapped to formulate an economic model for the Philippines.

Villar explained the economic models used by western governments and international organizations have turned out to be ineffective in preventing the housing credit problem in the United States from developing into a global crisis.

“The global financial crisis has crunched or destroyed some conventional economic thinking, particularly the Washington consensus. When we finally get out of this crisis we will find that things will never be the same again,” the senator said.

“First, we have been led to believe that big is good, so we encourage consolidations, mergers, combinations, like in the banking system,” he said. “However, the collapse or near-collapse of the world’s biggest banks – UBS, Citigroup, Bank of America and, of course, Lehman – has shattered this once-held gospel truth,” he pointed out. “Big is not necessarily good because being too big also means being unwieldy,” Villar added.

He also said the crisis has shattered belief that less government intervention is better.

“In reality, we know now that the damage wrought on the global economy would have been far greater if governments did not intervene,” he noted.

a new economic model, one appropriate to our strengths and cognizant of our weaknesses, is exactly what we need to turn things around, and not a copy-cat model based on whatever obama manages to work out with europe, russia, and china.

finally, wise words from a presidentiable.  of course he has yet to comment on diokno’s proposal of a 55-to-1 exchange rate.  if he says yes, he  just might get my vote.

do not delete (economic provisions)

verrrry interesting that it took that angry (complete with expletives) december 12 multisectoral anti-chacha rally to provoke former leftist now gma apologist-loyalist alex magno into revealing the real score behind the arroyo administration’s kulit campaign for charter change.   apparently, suko na siya (sila), sort of.

Yesterday’s march was an event of bigotry. It was undertaken in the spirit of rejecting even a mere discussion of proposals for Charter change. It is act trapped in the presumption of malice. It does not enrich our democratic culture.

I did say, in one televised interview, that I have lost hope constitutional reform will ever happen in my lifetime. A freshly-elected administration has no incentive to surrender its electoral victory to Charter change. A sunset administration, when it does initiate a constitutional reform process, will always be suspect.

We saw that in the case of Pirma at the end of the Ramos period. We see that today.”

so.   ang solusyon ni propesor magno?   kalimutan na ang change from presidential to parliamentary, kalimutan na ang ambisyon ni gma na maging prime minister, gayon din ang ambisyon ng mga representatante na maging members of a unicameral parliament.    pero, wow, huwag na huwag kakalimutan ang economic provisions na dapat daw i-delete na from the constitution.

In one recent public forum organized by civic groups sympathetic to constitutional reform, I suggested that if there is anything that is politically feasible it has to be narrowing down the debate to only the economic provisions in the 1987 Charter.

Forget about reforming our institutional arrangement. That will always be divisive because there will always be vested interests finding themselves on opposite sides of any political question. The Senate will always oppose any shift to a unicameral assembly. Oligarchic interests will always oppose a shift away from the presidential system because any other option will be a lot harder for them to control.

The only possible aspect of the constitutional reform agenda where some amount of consensus may be forged is that section that “constitutionalizes” our nation’s economic policy.

That section is anomalous to begin with. A constitution should never prescribe economic policy. Economic policy ought to be an evolving thing, shaped by the continuing process of legislation and policy-making.

In the scenario I propose, the House majority could simply pass a resolution deleting the provisions in the 1987 Constitution that preempt economic policy-making. With a limited scope, the Senate has to agree with the revision. No one, except the ideologically blinded, wants our economic policy to be fixed like religious dogma.

I call this the “Delete Option.”

Because the provisions to be removed will not be replaced, there is no need to debate wording. The debate on economic policy, henceforth, will occur where it must: in both chambers of Congress.

It is a simply, surgical operation that will not disturb the institutional arrangement. It will not endanger the political ambitions of those who now so vociferously oppose constitutional reform.

One might call it Constitutional Appendectomy.

The necessary reform of our economic architecture has been delayed because deleting the economic provisions has been tied up with the other messy political issues in the Charter change agenda. There is an immediate benefit in liberalizing the economic architecture the soonest to help us cope with the global recession.”

it’s a whole lot of crap, the assertion that deleting the economic provisions will help us cope with the global recession.   hindi totoo.   it will only open us up completely and absolutely to the free-market kind of speculative capitalism that brought down wall street and the american economy with it, and we are expected to lie back and enjoy it.

and who really stands to benefit from magno’s delete option?   why, the arroyos of course.   check out patricio mangubat’s “The fiefdom of A“:

Sources within the palace told me that the real reason behind the lifting of these economic provisions is not to really grow the economy. No. In fact, if we think about it, the reverse would happen. If we allow foreign ownership of land and property in the Philippines, the profit that they will be getting from using these lands would definitely be taken outside the country anyway. The local economy would not benefit from it. It would just be like what Mike Defensor did when his Chinese-owned mining company bagged that multi-billion contract to mine a mountain full of gold in Zambales.

The real story is the purpose of the establishment of a Hongkong-based holding company. Allegedly, this holding company which is named after a reputable historical figure “Ashmore” is owned by the First Golfer and his associates. Ashmore is an off-shore investment firm which was built solely to be the conduit between foreign companies wanting to own lands in the Philippines and a real estate firm called “Alphaland”, which, again, is owned by a hotelier associate of the First Golfer.

The insider said that what the First Golfer and his associates intend to do is, make profit selling Philippineproperty to these foreigners using Ashmore and that Alphaland will be the authorized seller of these properties. They intend to get billions out of this.

What the First Golfer and his associates intend to do is monopolize the selling of prime Philippine property (including agricultural lands) and make a quick buck from it. Bad? Not entirely except that this smucks of bad odor and immoral since most of those behind this scheme are living inside the palace.

And you know who is helping the First Golfer and his associates build a veritable fiefdom in the Philippines? Reportedly, that person is Roberto Ongpin. (Ongpin used to be an associate of the late Ferdinand Marcos. His brother, that Ongpin during Cory’s term, reportedly committed suicide because he’s ashamed of what his brother did).”

so please, utang na loob, kalimutan na for good yang pagbabago ng economic provisions ng saligang batas.   the restrictions have been there since quezon’s time at least.   even marcos did not have the heart to delete them, knowing that to do so would not bode well for the country.

besides, foreigners are already doing good business here.   they can lease land for 50 years, extendable for another 25.   but why are we still poor?   among other things, because foreigners are allowed to repatriate all profits home.   nothing is plowed back into the economy, which says a lot about our economic fundamentals.    i’ve said this before in a letter to the inquirer editor published back in july 2005 and i’m saying it again:

There’s nothing sound about our economic fundamentals.  Nothing sound about the endless borrowing.   OFW remittances are the only thing that’s been keeping the economy afloat for many many years now, at such cost to our families, marriages, the children.  That’s fundamentally sound?  What would be sound would be if the elite, the rich, who invest their millions in China, Vietnam, the U.S., start investing here at home.  What would be sound would be if the elite were to start plowing back business profits into the local economy instead of piling it up in foreign banks or behaving like foreign investors quick to pull out their money at the first sign of unrest.”

professor benjamin diokno agrees.    invest heavily here, he urges big business.

FILIPINO businessmen should invest heavily in the country in order to generate jobs and not wait for the government to shield the country against the ill effects of the global economic meltdown, economist Benjamin Diokno said over the weekend….

He said many Filipino businessmen have invested heavily in neighboring countries and even deposited their money in Switzerland and the Cayman Islands.

Instead of letting their money sleep in the banks, Diokno said they can use at least the interest of their money to put up business in the country and help fellow Filipinos to get a decent job as well as keep the economy working.”

only when the rich-who-say-they-love-their-country start putting their money where their mouths are will this country have a hope of making it through the global slump.