Paywalls

Badtrip. Manila Times has paywalled its opinion pages, upon publication, without delay. The first local news website to do so (correct me if i’m wrong). Nakaka-offend, at a time when fake news and disinformation rule, biglang may bayad ang opinions at info ng mga tulad ni B.Kritz at ni S.CuUnjieng na masugid ko pa namang sinusubaybayan. Hindi ba puwedeng i-share freely as usual with the reading public in aid of nation-building?

This reminds me of the time I first encountered a local paywall back in 2007. I was doing online research on Edsa Dos, and Google provided links to the archives of the print magazine Newsbreak of Erap and Gloria times. The magazine was “notable as a watchdog, having published investigative reports on social ills and corruption. Newsbreak’s writers have consistently been nominated for the Jaime V. Ongpin awards since its inception‘.

I was willing to pay for access to the archives and, as instructed, registered at Newsbreak Online Beta. I received a couple of e-mails, machine-generated it would seem. When I asked how much and how to pay, I never got a reply. Currently Newsbreak is the investigative and research arm of Rappler but still no archives of those Erap-Gloria years.  Hmm. Maybe it’s behind some academic paywall, as in, for scholars only?  What a waste of good historical data and prime examples of journalistic excellence circa 2001-2006.

Thank goodness the PCIJ archive is free for all.

Alab ng Puso

A short history of Filipino nationalism from the Cavite Mutiny 1872 to the Declarations of Independence from Spain 1898 and America 1946.  Mapagpalayang Araw ng Kasarinlan!

By AMELIA H.C. YLAGAN  

The first stanzas of the Philippine National Anthem speak of the fervor and passion, “Alab ng Puso,” in the heart of the country to protect and hold its independence from invaders and aggressors: “Sa manlulupig, di ka pasisiil.”

Today, June 12, 2023, is Independence Day, one century and a quarter (125 years) after the self-proclaimed Philippine Independence from Spain by the fragmented Filipino revolutionists led by Emilio Aguinaldo of the Magdalo faction of the Katipunan revolutionary movement founded by Andres Bonifacio.

The Cavite Mutiny of Jan. 20, 1872 is believed by historians to have been the beginning of Filipino nationalism that would eventually lead to the Philippine Revolution of 1896 (Chandler, David P. In search of Southeast Asia: a modern history. University of Hawaii Press). Some 200 Filipino military personnel of the Fort San Felipe arsenal in Cavite were angered by the withdrawal of their special tax-free status on wages and exemption from forced-labor duty at various camps. Eleven Spanish officers were killed by the mutineers.

Three Filipino secular Catholic priests — Mariano Gomez, Jose Burgos and Jacinto Zamora (collectively called “Gomburza”) — were implicated by Francisco Zaldua, a traitor-mutineer, who testified that the priests urged Filipino parishioners to raise nationalist protests. The three priests were executed by garrote (strangulation by torniquet) at the Luneta field, also known in Tagalog as Bagumbayan, on Feb. 17, 1872. Zaldua, the traitor-false witness was executed with them. The military court also sentenced 41 mutineers to death and the rest to life imprisonment or to exile to the Marianas (now Guam). Finally, a decree was made stating there were to be no further ordinations/appointments of Filipinos as Roman Catholic parish priests.

Jose Rizal’s brother Paciano was a close friend of Fr. Burgos. When in March 1882, Rizal, then 21 years old, left the Philippines to continue his medical studies in Spain at the Universidad Central de Madrid, he was afire with the passionate determination to hoist his country, Bayang Magiliw, from the injustice and unfairness of the colonial hold. He poured out his angst in his first novel, Noli Me Tangere (“Touch Me Not”), published in 1884. It quickly caught the attention and following of the expat Filipino intelligentsia and even the locals in Europe — social and political rights were the focus in Europe at that time, and with floundering of the monarchic systems came the clamor for participative and democratic governments.

Filipino expatriates in Spain, among them Jose Rizal, Marcelo del Pilar, Antonio Luna, and Mariano Ponce, established the organization La Solidaridad in December 1888, not really to push for Philippine independence, but to foster closer relationships between Spain and the Philippines. Through a newspaper of the same name, reforms and improvements were suggested, including the representation by direct participation of Filipinos in the new Spanish congress. Rizal might have become impatient for reactions to their cause, and so he wrote a more hard-hitting sequel to his Noli, El Filibusterismo (a.k.a. “Social Cancer” and “The Reign of Greed”) which chastised and parodied the abuses, corruption and manipulations of the establishment, juxtaposing the elitism and pretentions of some social-climbing nouveau-riche Filipinos who subserviently fed the colonial greed.

Rizal returned to his beloved country, “Lupang Hinirang,” in June 1892 and immediately established the reformist society, La Liga Filipina. Barely a month after his arrival, Spanish authorities arrested Rizal for subversion and inciting to rebellion, and exiled him to Dapitan where he languished for four years.

Revolutionary documents from Archivo General Militar de Madrid rediscovered in the 21st century suggest that the secret revolutionary society, Kataastaasang, Kagalanggalangang Katipunan ng mga Anak ng Bayan (KKK or Katipunan), had been organized by Andres Bonfacio et al. as early as January 1892 but may not have become active until July 7 of the same year; that was the date Jose Rizal was to be banished to Dapitan (Tempo. Feb. 5, 2015). Rizal set the revolutionary fires ablaze.

When Cuba revolted against Spain in February 1895, dictatorial control tightened even more over the colonized Philippines. Movements and activities were closely monitored, focusing on the Katipunan. Perhaps to keep Rizal even more apart from the growing revolutionary fever, he was required by the Governor-General to serve as a physician for the Spanish army in Cuba. But just as Rizal returned to Manila to go to Cuba, the Katipunan, which was secretly stirring protests in the provinces, was discovered when whistle-blower Teodoro Patiño revealed it to Fr. Mariano Gil, an Augustinian priest.

The revolutionaries tore their cedulas (residence or tribute tax certificate) as a symbol of their determination and defiance at the Cry of Pugad Lawin on Aug. 23, 1886. Andres Bonifacio, Supremo of the Katipunan, issued a manifesto urging the Filipinos to take up arms against the Spaniards. Governor-General Blanco proclaimed a state of war in eight rebel provinces, placing the provinces of Manila, Laguna, Cavite, Batangas, Pampanga, Bulacan, Tarlac, and Nueva Ecija under martial law (reference: Official Gazette of the Republic of the Philippines).

On Dec. 30, 1896, Rizal was executed by firing squad in Bagumbayan, Luneta, on the same field where the three Gomburza priests were executed by the garrote 24 years before.

“Lupang hinirang, duyan ka ng magiting!” (Land dear and holy, cradle of noble heroes.) Perhaps panicking from the loss of the figurative leader of the revolution, the competing and often disagreeing factions of the Magdalo group, led by Emilio Aguinaldo, and the Magdiwang group, led by Andres Bonifacio, met the day after Rizal’s execution to resolve disputes over leadership.

At the Tejeros Convention on March 22, 1897, Aguinaldo and Mariano Trias were elected as President and Vice-President of the revolutionary government. Bonifacio could not believe he lost to Aguinaldo and was not even given a Cabinet post. He declared the popular election null and void and insisted on continuing with his own independent operations under his re-organized Katipunan. Aguinaldo ordered Bonifacio arrested and charged with treason and sedition. He was tried and convicted by his enemies and executed on May 10, 1897 (from the Library of Congress, loc.gov/rr/hspanic/1898/Bonifacio).

Thousands of suspected revolutionists were executed, imprisoned, or exiled. On Dec. 15, 1897, the Pact of Biak-na-bato was signed between Spanish colonial Governor-General Fernando Primo de Rivera and the revolutionary leader Emilio Aguinaldo to end the Philippine Revolution. Aguinaldo and his fellow revolutionaries were given amnesty and indemnity of 800,000 Mexican dollars in return for self-exile to Hong Kong (Mabini, A., 1969, The Philippine Revolution, Republic of the Philippines Department of Education, National Historical Commission).

Meantime, the Spanish-American War over Cuba in April-August 1898 led the US to attack Spain’s Pacific fleet in Manila Bay. Defeated, Spain had surrendered to the US in Cuba, and on Dec. 10, 1898, Spain and the US signed the Treaty of Paris wherein Spain renounced its claim to Cuba, ceded Puerto Rico and Guam to the United States, and gave the United States sovereignty over the Philippines in exchange for $20 million.

Philippine revolutionaries revived the cry for independence. The Philippine-American War raged from 1899-1901, until Aguinaldo was captured by US forces led by General Frederick Funston. American rule over the Philippines started, and in 1916, the US Congress passed the Jones Law, which served as the new organic act, or constitution, for the Philippines. Its preamble stated that the eventual independence of the Philippines would be American policy, subject to the establishment of a stable government. In 1934, Congress passed the Tydings-McDuffie Act to establish the process for the Philippines to become an independent country after a 10-year transition period (Zaide, Philippine History, 1994).

On July 4, 1946, representatives of the United States of America and of the Republic of the Philippines signed the Treaty of General Relations between the two governments. The treaty provided for the recognition of the independence of the Republic of the Philippines as of July 4, 1946, and the relinquishment of American sovereignty over the Philippine Islands.

It actually took 74 years from the awakening of the 1872 Cavite Mutiny for true independence to be benevolently given by a foreign dominator in 1946. But the ardor of our heroes — “Alab ng Puso” — to fight for elusive freedom must not be diminished or less appreciated for the painful tests of fate and circumstance that delayed independence.

Love of country can be best be shown by true concern for the integrity and honor of the country and its people — speaking up in fraternal correction against abuses and wrongdoing of leaders and followers, improving ways and rectifying wrongs within capabilities and reinforcing values for peace and justice by good example to inspire others.

Alab ng puso, sa dibdib mo’y buhay!

Maharlika — everything, everywhere, all at once

Pasting this in full before it gets paywalled.

By Stephen CuUnjieng

SIGNED, sealed, delivered — it’s yours. Now what do we have with Maharlika and what will they do with it? I have previously said I am supportive of a national development fund. Preferably one like Indonesia’s, but at least the Senate improved on the House version. Still, would it be the way I would do it? No, but I am not the president or a senator, so what should the managers and board do with what we have?

It is clear as can be seen from the rushed document that there are even sloppy typographical errors that could have been cured with a little proofreading. In the section on the Bangko Sentral ng Pilipinas (BSP), the bill mentions “the monetary board” when it clearly should be “the Monetary Board.” Was that so hard to miss, and correct? What else might be there?

More important, there are contradictions or at least ambiguities, which should have been worked out, unless they were intentional. If the latter, then I would be worried. Sec. 2 on the “Declaration of Policy” seems to imply without being explicit that this is a national development fund from what the aims are. Yet there is no provision delineating this or limiting the breadth of what the Fund can invest in or where. Then in Section 14 on what the Fund can invest in, it reads to me like “Everything, Everywhere, All at Once.” Literally any type of equity, debt, or hybrid debt or equity plus joint ventures anywhere is allowed. That was carried over from the bill passed by the House. This does not seem in line with the “Declaration of Policy” in Sec. 2. If I was charitable, I could argue that this is where to park the money, starting with the initial P75 billion until they make the long-term investments but that is something the board and management may choose to follow, impose or ignore. If the latter, then it is no longer a national development fund but a regular fund with unlimited scope.

Short-term, long-term

Let us even argue that this broader scope of permissible investments is just “short-term” until the long-term investments are made. What if they lose value in the meantime or are so illiquid that they can’t be liquefied to fund the long-term investments? Why do I worry that Sec. 14 was not meant for just short-term investments, i.e. for the money on hand until the long-term investments are made? If it was just short-term, why would that section allow joint ventures and unlisted securities which are not liquid, short-term, or easily sold? If for the long term as well, then why is there no limitation on where and what the Fund can invest in? Again, it seems to be the old provision from the bill passed by the House and just carried over without clarifying what it meant, unless they really plan for it to be open-ended. Unless that was the intent and the Declaration of Policy was just principle that the Fund’s board and managers could comply with in whatever way they want to. So, in reality, full discretion. If so, then it really is the old House bill version with some statements of principle but no implementing or limiting provisions, which is an all-encompassing fund and not a national development fund. If that happens, then I worry and I don’t think that is a very good use of proceeds or worth the trouble and use of funds from the various government sources as Sen. Imee Marcos pointed out. Frankly, the government through existing entities can do that already, so why create something new and use profits of the Bangko Sentral (BSP) which are better used building up its own balance sheet? More on that later, but as Senator Marcos pointed out this is not coming from a windfall. The funds are being allocated away from other potential uses of funds by the DBP, LandBank, BSP and the national government.

Open-ended

On June 3, Sen. Mark Villar, the principal author of the bill which has become law, basically said it is both a general fund that can invest in anything and a national development fund. That means it is open-ended and really can be anything, unless the board and management choose to limit the Fund’s scope voluntarily. The board and management have the discretion to allocate what percent to a general fund and to the development side. Should they decide, that scope can also be changed by subsequent boards and managements.

Then there is the way the Fund is being funded. Most mutual funds that invest in public debt and equity are fully funded from the start and fully invest their funds in a short period of time. Unless they are open-end funds and raise new capital, they sell some of their holdings to buy other stocks or bonds. Most private equity firms that invest in unlisted securities (as at least what should be the national development fund side is targeted to do), usually get commitments but only call the funds when needed. What does that mean? Let us for example say XYZ Fund raises $1 billion in commitments from 100 investors who for simplicity commit $10 million each. At that start, there is no money in the fund, except perhaps an initial call of 5 percent or less for organizational purposes. So, in this case all that is put is $50 million. Then they decide to make a $100 million investment in a company or project, the Fund will receive 10 percent, or $100 billion, from the investors who will each send $1 million, or 10 percent of their commitment. This continues until the Fund is fully invested or the Fund reaches the end of its investment period. That way there is no worry about what to do with the money until the Fund makes the investments.

Here we are starting with zero targeted investments but P75 billion in funds. What will the Fund do with this pending use of proceeds? It also reads that this Fund will continue to be funded until it gets to P500 billion regardless of whether the Fund is making the envisioned long-term investments or not. Or is it profitable or not. Not the normal way it is done. For example, GIC manages the reserves of Singapore. Their private equity fund and investments in global private equity funds don’t send the money ahead except for calls for management fees and the like. They usually send the funds when investments are made. It is different if you are a windfall fund like Norway where revenues from their sale of oil is managed but this is not the case here. While sovereign funds are not limited to those with windfalls it is unusual when there is no windfall or revenue stream to fund ahead of commitments. Even more odd if what is envisioned is a national development fund and not a sovereign wealth fund, then as I put it, why can Maharlika invest in everything, everywhere, all at once? I suppose because it is a two-in-one fund, but those two are at cross-purposes.

Most problematic

Then there is the matter of using the profits of the BSP. Central banks, especially if you are not fortunate to be from a reserve currency like the US or European Community, are never big enough. Most prudent governments want to build the asset base of their central banks as fast and as much as they can to have the wherewithal to act in a financial crisis whether homegrown (like we had in 1983-1985) or regional (1997) or global (2008 and Covid and this year after the Ukraine invasion), which happen with regularity and more so recently. Under the BSP law, 100 percent of the profits of the BSP are returned as additional capital. Well, not anymore. The Senate version adds that “the monetary board (sic) can recommend to the president” that the investment of their profits to Maharlika be deferred if needed. Note, it is the president who decides, not the independent central bank and Monetary Board. Also, the nature of emergencies and crises is they are usually unforeseen, hence the need to prepare for their possibility ahead of time and not post its occurrence. When it happens, the central bank will have to use what resources it has and not be able to recall prior profits given to Maharlika or wait for the forthcoming profits and defer sending that if the president agrees. Frankly, this is the most problematic provision of Maharlika for me.

That analogously, is also the issue with using DBP and LandBank as funders. It lessens what is available to lend and by about 10 times the amount they invest in Maharlika. Why 10 times? Regardless of how they find it, what the LBP and DBP invest in Maharlika is charged to their equity. In their respective cases, initially P50 billion and P25 billion. Now a bank needs about 10 percent Tier 1 capital. So P1 in capital supports about P10 in loans and other debt instruments. As the Maharlika investment is charged to their equity, that means up to P750 billion less lending for both. Can the Bankers Association of the Philippines and BSP confirm if I am correct? I hope I am wrong but if I am right this is something to carefully assess and suggest the administration consider.

Especially given the clashing goal of merging LBP and DBP to make them bigger so they can be more efficient and lend more. How is that accomplished by taking away P750 billion in lending capacity up front, even while Maharlika has yet to find investments, and this will continue if the capital investments continue for these two banks.

Let me put it analogously. If it was too imprudent to let the pension funds like SSS and GSIS invest in Maharlika and are permanently barred, wouldn’t the same logic apply to the BSP given their need to constantly build up their balance sheet and resources to defend the peso and stabilize the economy as needed? Same with DBP and LBP if they are to fund infrastructure, development and agriculture. Why take away equity which will result in 10 times reduction in lending capacity?

Let me leave discussion of management, organizational structure and funding to another column. If we had to have a government-funded investment fund, I wish it was a national development fund, similar to the one Indonesia is trying out. That is not what Maharlika is. It could be implemented as a national development fund, but what is provided by the law is open-ended. It seems to be some hybrid fund whose direction is open to the board and managers but whose funding is set.

In the week since its passage, I have been listening to all the arguments of the government officials on how this will help Philippine infrastructure and so on. I agree if the Fund dedicated its resources to be a national development fund, it could. If that was the intent, then why did they set up a Fund that could invest in everything, everywhere, all at once? And why is that part not being explained?

 

Maharlika moromoro

moromoro  Sp. n. stage play depicting struggle between Moros and Christians. Syn. komedya. [Panganiban 1972]

“Magmoro-moro na lang kayo,” President Marcos the Senior is said to have instructed the Tanodbayan and a Sandiganbayan justice, once upon a time. As in, just put on a show. His parting words: “Thank you for your cooperation. I know how to reciprocate.” [G.R. 72670]

Iyan mismo ang datíng sa akin ng final deliberations on, amendments to, and passage of the Senate version of the controversial Php 500 billion Maharlika Fund bill na madaliang naganap Monday and Tuesday sa Senado. Madalian din ang bicameral conference na naganap Wednesday kung saan agad-agad inaprub ng Lower House ang Upper House version “in principle — subject to style.”

Para bagang nagpalabas lang ang mga senador, a show of resistance, with pahabol “safeguards” that may or may not work, may or may not be applied, but at least they tried? What’s for certain is that the 19 didn’t have the heart to say no to the president’s “urgent” request, bahala na si Batman, ehe, si BBM. Super galing naman kasi ang timing ni presidente: he certified Maharlika as “urgent” May 25, giving the senators exactly a week to get it passed and bicammed before the senate adjourned June 2 for a 50-day break.

ANA MARIE PAMINTUAN: Do lawmakers know the exact nature of the Maharlika fund that they have approved with impressive speed?

Investors will want to know where their money will be placed. International investment banker Stephen CuUnjieng says the measure was so hastily passed that provisions allow Maharlika to function both as a national development fund and a sovereign fund that can be invested in “everything everywhere all at once.”

It clearly didn’t matter to lawmakers. Proving (again) that it’s not only the House of Representatives that is a Malacañang rubber stamp, the Senate dutifully passed the bill creating the Maharlika fund in record time. The House, no surprise there, immediately adopted the Senate version. Truly, the two chambers are as thick as thieves. [https://www.philstar.com/opinion/2023/06/02/2270795/everything-everywhere]

Salamat kay Senator Koko Pimentel for doing the research and taking the time to explain his objections in very practical terms sa turno en contra (indeed, the road to hell is paved with good intentions). His pointed questions, many left unanswered, in the interpellation of the bill’s sponsor, were also most enlightening. 

Salamat din kay Senator Chiz Escudero for the amicus curiae moment, warning his colleagues that certain requirements of the Constitution re the creation of a Government-Owned and Controlled Corporation (GOCC) such as the Maharlika Investment Fund were not fulfilled. For the public good nga ba?  Economiically viable and sustainable nga ba?

Salamat na rin kay Senator Risa Hontiveros for her lone categorical NO vote, even if largely symbolic.

As for Senate Prez Migs Zubiri, I would very much like to hear him defend the MIF in Plaza Miranda, warts and safeguards and all.

DIWA GUINIGUNDO:  [T]he MIF is many things. One, it is untimely; two, its method of sourcing funds could destabilize public finance and ultimately raise our national debt; three, the BSP could be compromised as an autonomous and independent monetary authority; and four, it could further worsen governance and patronage. In other words, there is a great likelihood of market failure. [https://mb.com.ph/2023/02/17/maharlika-fund-some-fundamental-issues/ ]

Under the one single fund concept, whatever public money is earmarked for the Maharlika Investment Fund and away from the national budget, the national government will have to compensate for that. And to be able to do that, the national government will have to borrow or to impose higher taxes or more taxes. There is no other way [https://www.cnnphilippines.com/news/2023/5/31/Guinigundo-diverting-public-funds-to-Maharlika.html]

ALEX MAGNO: Through all the debate, supporters of the MIF never arrived at a clear statement of purpose for setting this up. If it is to grow capital for future generations for Filipinos, then it should be primed with enough nimbleness to outwit and outmaneuver the giant institutional investors out there. It should be enabled to roam all the world’s markets scouring for the biggest returns. It must be super profitable to make it worthwhile. Then the money it accumulates from its smart operation as an institutional investor should be locked in for future generations to enjoy. In which case, it contributes nothing to our near-term development goals.

If the purpose is to serve as a source of project funding for development projects, then it must be able to offer cheaper loans than other alternatives such as official development assistance (ODA) granted by friendly entities. Remember that most ODA earn nothing but goodwill for the countries and multilateral institutions lending them out. To provide a better option for ODA borrowing, the MIF must earn nothing. [https://www.philstar.com/opinion/2023/06/01/2270657/useless]

MARENG WINNIE MONSOD.  What projects are this fund going to finance? If they want to finance what’s in the Philippine Development Plan, fine. … but this fund, what are they doing? They’re going to invest in blue chip stocks? What will that contribute to development? … What they’re trying to do, in investing in bluechip stocks, is supposedly to make a profit higher than government agencies can make…. I don’t understand it. Medyo confused sila eh. Martin Romualdez is confused, talking about the stock exchange etc.

Where are we going?  From one confused person to another confused person to a confused public. I mean, is that a way to pass a law? Why didn’t they make it transparent to everybody so that everybody could find out what is going on? You know. Now it’s such a well-guarded secret because they just want to pass it. Isn’t that terrible?  [“Winnie Monsod: Passage of MIF strictly a political move, not an economic move” https://www.youtube.com/watch?v=pzz68LDtT9Y]

And then, again, the 19 senators may know something the rest of us don’t know, maybe some inside info that’s particularly reassuring for their vested interests?  Maybe it was as much a moromoro as it was an exercise in realpoliitik, moved by practical rather than moral considerations — a matter of political survival in this heavily toxic times? eyes on 2025 and 2028?  Perhaps that’s why the whole affair smacked of suck-up politics. No doubt the prez would know to reciprocate.