Category: OFWs

pinoy education: from bad to worse, k-12 and all

read conrado de quiros’s Making the grade, part of which dwells on the allocation for debt payments being 3 times larger than that for education:

… our schools are getting worse. Only the University of the Philippines remained among the top 100 of 300 schools in Asia. Ateneo de Manila University, De La Salle University and the University of Santo Tomas, though still in the middle ranges, slipped during the past year. Specifically, UP improved from 68th to 67th while Ateneo fell from 86th to 109th, La Salle from 142th to 151th, and UST from 140th to 150th.

Rep. Luz Ilagan, a former university professor, says this is due to schools preferring quantity to quality. Many universities are really just diploma mills offering popular courses based on public demand. Poor-quality elementary and high school education lead to poor-quality students entering college. Some of them have barely passable comprehension and writing skills.

Rep. Antonio Tinio says it’s funds, or the sore lack of them. “In Asia, public universities rule. In order for our higher education sector to become competitive, the government must drastically step up its funding and other support for our state universities and colleges. Unfortunately, government higher education policy over the last two decades has gone in the other direction, towards budget cuts, contractualization of faculty and commercialization.”

Ric Reyes of the Freedom from Debt Coalition puts the case of lack of funds for public education more forcefully. Last year, the budget for debt payments was P739 billion, three times more than the budget for education, which was only P224.9 billion. The latter was only 2.2 percent of GNP, well below the world benchmark of 6 percent. Unesco notes that the Philippines has the lowest expenditure for education in proportion to total budget. Since 1955, education has dropped from 30.78 percent of the budget to 15 percent post Edsa. This year’s education budget at 14.97 percent is lower than the post Edsa average of 15 percent.

I share their sense of apprehension, if not alarm, at the state, and future, of our education. With some caveats.

Certainly, I agree that we need to revise the budget and give education the utmost, ultimate, first-and-last priority it deserves. Which, not quite incidentally, the Constitution decrees. Debt payments are not the national priority, education is. Which, not quite incidentally as well, shows the continuing horror of martial law: To this day we are still paying for the Marcoses’ debt. Next time Imelda throws a party, know that you and your children are paying for it.

I don’t care if government makes all sorts of excuses to defer payment (“Sorry, but we have mouths to feed and minds to open”), or more conciliatorily negotiates to restructure payments again and again, but education should be three times more than debt payments. Hell, education should have half the budget, if we are going to have half the chance to curb, if not eradicate, poverty….

and read ben kritz’s Expanded program getting off on the wrong foot, mostly about k12 and how it’s meant, not to improve the quality of education, but to prepare students for overseas foreign work.

Rep. Luz Ilagan of Gabriela party-list criticized the government for “only adding quantity, not quality” with the implementation of the K-12 program, in reaction to a recent ranking that placed only five (down from 14 a year ago) Philippine universities among the top 300 universities in Asia. Ilagan’s contention is that the quality of Philippine higher has declined because of the poor preparation of incoming freshmen students and a fixation “on getting many students to graduate from popular courses that markets demand”; not nearly enough attention has been paid to improving the quality of the primary and secondary curriculum, in Ilagan’s view, therefore the K-12 program as it has been presented will have no real positive effect in improving the Philippines’ al reputation.

Ordinarily I regard the viewpoints of acknowledged leftists with a high degree of skepticism, particularly those expressed by the Migrante group, which has the seemingly incompatible objectives of promoting the interests of overseas workers while working towards eventually ending the labor export phenomenon. Over the weekend, however, I attended the annual parents’ orientation meeting at the private school where my three children are enrolled, and I was surprised, to say the least, at the “official” point of view towards the K-12 program. The academic director of our school—which already had a robust academic and extra-curricular program, as well as a good reputation for producing college entrants—in addressing the K-12 program offered the opinion that it “would better prepare students to find work overseas because of its focus on vocational training, and the fact that the students will be 18 [years old] [and thus legally employable] when they graduate high school.”

Knowing how diligently our school’s administration coordinates its management with Department of (DepEd) policy, it would now appear as though the complaints of Migrante’s Martinez and Ilagan have considerable substance. And if, in fact, the enhancement of the Philippines’ human export resource is a priority of the K-12 program, then the fears of many that the extended curriculum was implemented for all the wrong reasons are completely valid.

back in july 2010, then ateneo president fr. bienvenido nebres criticized the aquino admin’s k-12 plans, recommending instead that extra years be added to “select college courses”.  fr. ben was ignored, of course, as the agenda, it would seem, has always been to perpetuate the pretense of “sound economic fundamentals” via OFW remittances.

 

Recklessly noynoying a fatally strong peso

By Dean de la Paz

Citing 2013 as the Year of the Eagle and ejaculating as if the stars, the Zodiac and the Chinese calendar had really anything to do with economic governance, some stockbrokers, with their head in the sand, will probably deny a currency crisis exists, celebrating as they do the crossing of the six thousandth mark in the stock exchange index and cheering the economy on as if the capital markets was its best indicator.

Stock market analysts, and below this breed, the stock broker, are among the most mystical, dubious at times and ambiguous at most, and that is understandable as they are hardly predictive and more responsive, finding causes and rationale after the fact if only to justify the market’s movements.

The stock market is indeed an indicator but for the serious investor, it is probably the least indicative of economic governance or investment climate. For one, the index fails to capture the cost of doing business. It does not account for infrastructure development, the level of wages, or the cost of utilities on a sustained basis.

It also does not reflect the quality of economic governance, again on a sustained basis. Industry and agriculture may be experiencing slumps but the index will fail to reflect those on a long term basis. If at all, the spikes in the index will attract margin traders and margin players and thus bloat the index monetarily, but that will hardly be indicative as traders in the exchanges will make money either way the economy develops, or does not develop.

It is in the nature of the market and the concept of investment for those who play it. There is a reason that the so-called investments are labeled “Hot Money”. On a sustained basis, nothing can be more volatile and colloquially “iffy” and uncertain. Likewise, those who advise investing through such cannot be far behind both “iffy” and uncertain.

The real investors, as opposed to margin traders, who are earnestly looking at their long term options and willing to gamble not simply portfolio investments but real capital to build factories and long term businesses are seriously worried. These are not those who gamble. These are also not those who will, in one minute, purchase stock from the exchanges, and in the next minute, divest. These are not the financial browsers and investment tourists. More important, these are not those who give any sort of credence to a stockbroker’s sound bite advice, knowing full well that a broker earns his commission from both a purchase and a divestment, thus covering both eventualities and is characteristically risk free.

The dearth of serious foreign takers of the government’s Public Private Partnership (PPP) program is an eloquent example. Never mind the declarations of interest. Those might be plentiful but when compared to actualities and those who have seriously invested foreign capital, the number is embarrassingly low in contrast to the hype and hullaballoo. Three years into Benigno Aquino III’s incumbency, and the PPP, the original brainchild of former vice presidential candidate Manuel A. Roxas, remains as much a failure as was his unfortunate bid for the two highest elective and executive positions in government.

Failure spawns failure and two-time losers do not necessarily create winners. The arithmetic is as simple as that.

Let us however dig deeper. What is keeping foreign capital from seriously coming in and taking up residency as foreign direct investments (FDI) in the Philippines despite the declarations of a resplendent economy and the hyperbole of stock market brokers?

Let us examine one apparent hurdle.

In the recent weeks prior to the end of 2012, the monetary authorities were seriously intervening in the currency markets through what is called “open Market operations” or the buying and selling of currency to control the value of the peso as against another currency. In the case of the intervention towards the end of 2012, the peso arrayed against the dollar was a matter of serious concern, and in some instances, panic.

Threatening to impose some form of capital controls, either on the inflow of dollars, or the exit of the same, the monetary authorities constantly warned against an undesirable speculation on the peso. The imposition of capital controls, first through threats and then trough the imposition of trading limits of derivative instruments that reflect the peso’s long-term exchange volatility indicate speculators may already be attacking an overvalued peso.

Ironically, the peso is vulnerable to speculative attacks, as luck would have it, because of its apparent strength and the little that government is doing to return it to its rationale levels. Early-warning bellwether indicators have not only been ignored, but by their continued prevalence, a currency crisis might well impact on the profitability of gross domestic productivity (GDP) drivers such as the business process outsourcing sector and the one-off value of overseas Filipino worker’s (OFW) remittances.

Drowned out by the pom-pom cheerleading and girly chorusing of stock brokers who’ve broken out the bubbly over the recent rise in the stock exchange index, few are listening but officials representing the business outsourcing sectors are now complaining of our growing uncompetitiveness.

BPO revenues are not only slowing down but are thinning out as margins are depleted by the detrimental rise in the peso’s values. Note that a recent analyst from one of our creditor banks had forecasted an even stronger peso breaching all time parameters and heading straight into the uncompetitive Php 30’s levels.

When compared to other economies that offer the same BPO service and have in fact better telecommunications infrastructures, more reliable power platforms and a better-educated constituency that might service the technical BPO market, cracks in the local BPO sector are starting to form. While admittedly, we will remain a key player in the global market, our preeminent position is not only threatened but it may not remain for long should the noynoying continue. To validate such concerns, the local associations representing the BPO sector are gradually increasing their criticism of the monetary policies being pursued where the peso is kept inordinately strong.

Echoing those concerns are the associations that represent OFWs, relevant and critical especially in this period when OFW remittances flow into the economy in substantial volumes as compared to any other time of the year.

A major OFW group has begged the government to act aggressively and pro-actively to maintain the value of remittances. One way they suggest is to suspend the 0.05% documentary stamp tax slapped on every US$ 200 worth of remittances. The Aquino government simply replied with its classic callousness and has turned a deaf ear. Its highest official has instead chosen to noynoy and ride a pony while taking the holidays off. Either through a serious lack of discernment and economic comprehension it appears he has not understood the impact of their plight, or he doesn’t care. Heaven forbid that it is both.

The criticality cannot be ignored however, now or in earlier periods. The strong peso has diminished the value of the remittances and when domestic families convert the remittances the actual peso amounts are far lower than expectations.

In the last year the peso versus the dollar exchange discrepancy had slashed the remittance values by as much as 10% thus reducing consumer purchasing power from this one vital source of cash flows for a public whose earning capacities in the local currency is severely limited and worsening under a dispensation unperturbed by worsening unemployment. Add the devaluation of 10% to a historic 30% in the previous years to 2012 and the situation shows why, despite anachronistic partying by stock market brokers and Aquino’s sycophants over GDP growth, OFW families seriously worry.

This is unfortunate on several counts. The remittances are the basis for increased consumer spending which is typically a vital economic driver that feeds into GDP growth. When the effects of the remittances are depleted, then so follow consumer spending and its impact of real GDP. This belies the veracity of Aquino’s 7.0% year-over-year GDP growth statistics. If indeed the economy grew then that statistic does not reflect the realities felt by the OFW families much less by those unemployed and continue to be unemployed.

If Aquino’s continued noynoying and his economic policies are wreaking havoc on the unemployed and the OFW families, then perhaps these are benefiting those with work in the dollar-earning exporting. Look again. Unfortunately, only the suck-ups are toasting and sipping champagne. Let’s look at the realities instead of listening to self-promoting stock market analysts who know little of the sector other than its short-term impact on the capital markets. Let us listen to the actual echoes from the export industry itself.

The Philippine Exporters Confederation is pleading for the Aquino government to stabilize the exchange rate at Php 42.50 to the dollar, determining that level to be the viability threshold to save the export sector. Too late. The prognosis on the exchange rate is far below Php 42.50 for 2013. So much for the Year of the Eagle. The better analogy is a cooked goose.

Against all these, an uneducated media, a number of paid columnists and the army of suck-ups continue to hark on the peso as the region’s best currency performer against the dollar. They should have OFW families. Or they should be a worker in the export sector, be one of the jobless, be a BPO operator or simply be Filipino. Then they would realize how empty and irrelevant such boasts of currency can be.

Let us analyze the heresy behind the hype. Government’s press releases proudly claim the peso as the region’s best performer against a weak dollar by comparing our peso’s upticks to those of the New Zealand dollar, the Turkish Lira, the Taiwanese Dollar and the Singaporean Dollar.

As if these were the economies we competed against. Taiwan perhaps, but as for the rest? It’s a question of coconuts and oranges.

They also cite the strategic devaluation of the Indonesian Rupiah, the Japanese Yen and the Indian Rupee. They seem to have forgotten their macroeconomics or perhaps they never learned it. A devalued Rupiah steals away FDI from the Philippines, a weakened Yen slows down Japanese investments into our economy and a devalued Rupee makes our BPO sector uncompetitive against India’s thus making that economy more viable.

For those sycophants who’ve made it a practice to cheer on the type of governance that has ignored these realities, we suggest they soon finish the bottle of champagne they’ve broken out to celebrate an index that can just as easily fizz out comprised as it is by bubbles and little else. Worse, bubbly like that can quickly turn to vinegar.

Dean dela Paz is an investment banker. He is a consultant in the fields of finance and banking and has packaged some of the most prolific public offerings in the Exchanges. He is a member of the Executive Committee and sits in the Board of one of the oldest financial institutions in the country. He is likewise an energy consultant having served on the Boards of several foreign-owned independent power producers and as CEO of a local energy provider.

He is currently the Program Director for Finance in a UK-based educational institution where he also teaches Finance, Business Policy and Strategic Management. A business columnist for the last fifteen years, he first wrote for BusinessWorld under the late-Raul Locsin and then as a regular columnist for the Business Mirror and GMANews TV. He also co-authored a book and policy paper on energy toolkits for a Washington- based non-government organization. He likewise co-authored and edited a book on management.

 

RH “mocks” Filipino culture?

james imbong, son of lawyer jo imbong who is reportedly the legal counsel of the catholic bishops conference of the philippines (CBCP), has asked the supreme court to nullify the reproductive health (RH) law.

Filing on behalf of their minor children, James and Lovely Imbong said the law “mocks the nation’s Filipino culture — noble and lofty in its values and holdings on life, motherhood and family life — now the fragile lifeblood of a treasured culture that today stands solitary but proud in contrast to other nations.”

ano daw?  bad writing aside, ano ba yang “filipino culture” na yan that the imbongs so sophomorically extol?  what’s so “noble and lofty” ba about filipino culture?  once upon a time there was jose rizal, but who else since, and what else, really, in this dysfunctional undeveloped disaster of a catholic country, where some 70 percent, maybe 80, are poor and hungry by default, thanks to an uncaring elitist leadership, administration after administration, ever long on promises but short on delivery, greedily thriving on systemic corruption and patronage politics.  and what is that “treasured culture” really but some fantasy movie in the imbongs’ and bishops’ pompous minds where families are whole and happy, rather than broken, riven, mother father wife husband forced away by economic necessity to keep family, and country incidentally, afloat.  i think it’s the imbongs who mock us, insult our intelligence, with their holier-than-thou platitudes.

and what about this from CBCP vp archbishop socrates villegas:

“The poor can rise from their misery through more accessible education, better hospitals and lesser government corruption. Money for contraceptives can be better used for education and authentic health care,” Villegas said.

as if.  what if, instead of fighting the RH bill law, the imbongs and the bishops fight, condemn, agitate against, the systemic corruption and patronage politics that plague the nation, for a change?  but first, maybe, the church should start paying taxes voluntarily, so that it’s not forever beholden to government for the exemption; then bishops can truthfully embrace honest-to-goodness pro-poor advocacies, sabay threaten elitist government officials with hellfire and brimstone until they stop enriching themselves in office and finally deliver on election promises of a better life for the masses, yes, accessible education, better hospitals, and lesser corruption, now na.

OFWs, unite!

patindi nang patindi ang daing ng ating mga OFW sa tuloytuloy na pag-appreciate ng halaga ng piso.  wala na daw silang naiipon dahil kailangang dagdagan maya’t maya ang ipinapadala nila sa mga pamilya nila dito.  bakit parang binabalewala ng administrasyong aquino ang mga bayaning ito, e kung hindi sa kanila, matagal nang bumagsak ang ekonomiya?  sino lang ba talaga ang nakikinabang sa pag-taas ng halaga ng piso?  OFWs should unite and demand depreciation.

Collective impotence and the peso
By Raul V. Fabella 

THE RESOLUTION submitted by the PCCI to Pres. Aquino at the closing of the just-concluded Philippine Business Conference is notable. It called for the arrest of the continuing appreciation of the Philippine peso to safeguard our dollar earning industries. I will not comment on the specific recommendations but only in the general direction — a more assertive attitude towards the value of the peso. When, in early 1994, a group of us (Noel de Dios, Benjamin Diokno, Cayetano Paderanga, Toti Chikiamko and myself together with PHILEXPORT which is celebrating its 20th anniversary on Nov. 30, 2012) called for the deliberate weakening of the peso — a cause carried in a speech by the then Senate President Edgardo Angara at the first plenary session of the 1994 National Economic Summit — we were treated worse than lepers. One mouthpiece of the then central bank governor labelled us the “jukebox economists”: singing any tune the moneybags call. The implied moneybags, IMF and the World Bank, did not even know they were calling our tune; they were, in fact, calling the CB’s tune. They had a catatonic fixation for floating the exchange rate which, at that point of considerable dollar inflow, pointed to appreciation. And PCCI? It was firmly on the CB governor’s side. But even labor unions whose jobs we were trying to save called for our heads. Note that this was after the People’s Republic of China devalued its currency 40% early 1994. The yuan then stayed at about 8.30 per US dollar for 10 years despite ever larger trade surplus and howls of protest from the West. One did not need atomic physics to glean that PRC’s move would devastate Philippine manufacturing and employment. This was a plea for economic survival!

The CB governor himself responded to the proposal with the defiant “Over my dead body!” To the business complaint of high domestic interest rate (to support the overvalued peso), the central bank’s response was: “Borrow in dollars.” It was a counsel for disaster. Borrow with vengeance they did, especially the banks. After all, with appreciation a one way bet, you get low interest rate and a sure appreciation gain! The ‘Over my dead body’ boast being a portfolio inflow come-on and the consequent massive private foreign borrowing forced the peso upwards to ₱24/$. And this omen of an impending debacle was hailed a success! In other words, the Philippine economy got poison disguised as medicine. Two years later, the Asian Financial Crisis, the bitter harvest of private over-borrowing and asset bubbles, wiped out the gains slowly built up the last five years. The CB’s strong peso policy had aborted the Ramos growth momentum!

This rebuff of economic common sense is a source of great sadness for me personally. Toti Chikiamco summed up our collective despondency at the Summit’s rejection: “We lost our balls!” Meaning, we as a people failed a massive collective action test: we let ignorance among our central bankers and among the business community short-change our future. Had we moved the exchange rate as proposed, there would not have been excessive private foreign borrowing and the Asian Crisis would have spared our shores. The banks would have remained whole and the Ramos growth inertia would have continued into the next decade. Instead, we experienced a decade of painful curettage to sweep away the poisonous residues (bank NPAs, etc.) of that abortion. Our romance with sado-masochism marched on.

Such is the power of the CB: it can shatter a budding future. In this case, the strong peso was the sledgehammer. And this was not the first time the CB officiated in the abortion of a potential breakout in the post-EDSA era. The sledgehammer in the first was the interest rate cure administered through the JOBO Bills that shrank the economy to fit the overvalued peso: it found common cause with misguided military elements to abort the momentum of the post-EDSA Philippines. But that deserves its own re-telling.

Fast forward to 2012. The air is once more pregnant with promise. The signs are all pointing in the right direction. As if on cue, however, that same abortive sledgehammer rears its head. Will we overcome the collective action challenge this time? Now that the players and the economic realities have changed. Now that there is a new and more open dispensation in the BSP. Now that even such sworn enemies as the PCCI has switched lanes. Now that OFW remittance is the country’s lifeblood. Now that BPO is the sunshine industry and the big conglomerates have dollar earning assets. Now that the old global monetary consensus has become tired and misguided. Now that the challenge – keep the exchange rate from dipping below ₱42/$1 — is much simpler than in earlier times.

I dare take heart. A new collective consensus seems a-building. We the people should now take the bull by the horns and not leave it to bureaucrats. Would that this time we will not lose our balls. Let not collective impotence again mock our hopes. Even if it should happen twenty years late!

Raul V. Fabella is the chairman of the Institute for Development and Econometric Analysis, a professor at the UP School of Economics, and a member of the National Academy of Science and Technology. For comments and inquiries, please email us atidea.introspective@gmail.com. To know more about IDEA, please visitwww.idea.org.ph.