As chronicled by John Markoff in one essay in “The Rise and Fall of the French Revolution (Studies in European History from the Journal of Modern History)” (University of Chicago Press Journals) “ the Great Fear was paranoia in the rural areas, as a political crisis engulfed France in 1789. Rumors began to spread that the King, bandits, merchants, what have you, were going to swoop down on farmers to take their grain. The farmers formed militias; urban residents panicked. The government panicked.
We are experiencing our version of the Great Fear. A vicious cycle involving dramatic moves by the government, magnified by a media out of any really big stories (NBN-ZTE, Spratleys, etc. all fizzled out by Holy Week) and the combination of the two brought out panic combined with opportunism on the part of the public. Its early glimmerings were reported by Bong Austero in his March 24 column, Averting the impending rice shortage.
Yesterday, the Inquirer editorial, Hoarding, pointed to the Great Fear among local governments (For background, see: Davao will hoard rice, and Bumper rice harvest expected in Mindanao and Govs of provinces in Panay say rice enough for Visayas and Panay has enough rice to feed entire Visayas and
My Arab News column for the week is Fixing the Rice Problem Leaving Others Unattended. Since the modern presidency began, presidents have obsessed about rice: and cultivating rice, literally, has been an image eagerly cultivated by our presidents. See The Presidency as Image, in the PCIJ.
In my Arab News column, I pointed to inflation as one of the unattended problems, and to get a better view of that problem, and other related ones, see this analysis in Global Property Guide: Gloomy days ahead for Asia’s housing markets. Two charts from that analysis are particularly relevant:
The in-house economist of Global Property Guide, Prince Christian Cruz, was the guest on my show and he had some interesting things to say. The rising price of oil last year already put pressure on income, but was offset by the appreciation of the Peso. However, with the rise in rice prices, Filipino families have been subjected to a double whammy and thus, rising inflation. See also Gov’t to cut growth target for 2008 Rising food prices to curb GDP expansion.
Government data says the top three expenses of Filipinos are food, transport, and rent (more or less in that order, but food always being at the top, and ranging from 40% to more than 50% of income expenses), so a rise in oil and rice prices bloats the three, and from his perspective (focused on the property market) this will mean families have to consider moving to cheaper accommodations or defaulting on their housing loans; and that’s only from the point of view of the domestic economy. Add to this a downturn, economically, overseas, and the problems increase, as Filipinos overseas have to set aside purchasing homes (which fuels the construction industry) as their families at home have to spend more for food, transport, and rent…
The other week, I asked a worker how prices had been affected since Holy Week. A serving of vegetable viand went from Php15 to Php25, for meat dishes, Php30 to Php40, a cup of rice from Php7 to Php14.
People have had to adjust their grocery budgets, which up to now had been fairly stable for a few years. See Opinionated Banana:
If UN has an emergency food summit, well our Household also had our own emergency food summit. My mother, who’s in charge of the hardcore accounting and shopping shared that before a sack of sinandomeng rice would just cost at around 1,400-1500 pesos, but as soon as the crisis hit the fan, she ended up paying for 2,000++ pesos for a sack. With just a couple of male species and one diabetic in our household, we’re really not dependent on rice. But still, it calls for attention. We would experiment now on mixing food viands with mashed or baked potatoes, which I’m looking forward to, or develop our skills with cooking pasta. Yes, we’d still cook rice, but in smaller quantities now. It may result to healthy and positive effects, just as long as rice is still an option and not a form of deprivation. We’re all willing to adjust.
This leaves less money for the various service-oriented businesses that rely on people having disposable income. So the immediate problem, for now, is it’s not that there’s no rice to be had, but that purchasing rice is more expensive and won’t be going down in costs significantly in the long term. And we aren’t creating the kinds of stable jobs we need.
A backgrounder on where we were, prior to the Rice Problem hogging the headlines.
From Cielito Habito, PDI Talk.ppt and Michael Alba, economic briefing.ppt (see also philippine economic growth revised.pdf” I’ve snipped some slides. The white ones are from Alba, the colored ones, from Habito.
In 2006-2007, both were looking at the growth taking place in the country (being proclaimed as a new Golden Age by the administration, if you remember) and pointed to where it was really taking place, and where it wasn’t:
Alba had been pointing out that productive land was being lost to the booming property market, and what was worse was government wasn’t even properly keeping track of the development. Both he and Habito were also pointing to the dangers of lopsided growth, since the sectors growing weren’t labor-intensive (Habito pointed to the collapse in manufacturing-related jobs) and a fall in domestic investments, which would be magnified by a fall in foreign investments.
See also The Grand Deception by Perry Diaz. He calls the Palace to task for trumpeting its economic record, and how it brushed aside questions concerning the statistics and where the growth was taking place. He also zeroes in on smuggling as one issue that has hounded the administration -and which, I think, explains why public skepticism has hounded its every move in attending to the Rice Problem. In Thads Bentulan’s PPT, there’s a footnote (see the notation with the asterisk, below) where he raises the question of smuggling, because there’s a gap in the official statistics:
This actually came up during the Senate hearings before Holy Week, but the vacation prevented people from focusing on it. The discrepancy was between what the Philippines claimed was the value of its trade with China, and the values China itself declared. The Philippines claimed something like 8 billion dollars in trade while China said the value was 30 billion dollars. Immediately, during the hearing, some senators began asking if the discrepancy wasn’t a sign of smuggling. Although one senator later explained the discrepancy could be a case of arguing apples and oranges: the Philippine figure may be trade with the People’s Republic of China only, while the China figure may be “Greater China” including the PRC, Hong Kong, and Taiwan (and even the Binondo traders) but also revelatory of “technical smuggling.”
As it is, the rise in rice prices has led to demands for salaries to be raised, see Hefty wage hikes to spell economic troubles for RP–bank. Even the Inquirer editorial warned of the consequences of government allowing itself to be stampeded into raising wages: see Immediate need.
Which brings us to my column for today, which is Rice per minute. It discusses Thads Bentulan’s provocative An Analysis of Rice Prices in Three Countries: Hong Kong, Singapore, and the Philippines (as of April 20, 2008) . You can also download his Hyperwage Theory book.
People in business immediately dismissed Bentulan’s proposal: if it were adopted, one person texted me, “jobs will simply disappear.”
Bentulan says the minimum wage for a domestic helper in Hong Kong comes out to 18,637 Pesos per month. Ask yourself what work or position would pay a similar salary in the Philippines. Many people I encounter who are business owners complain that there are lots of jobs available -only, there are no Filipinos qualified to fill those jobs- but you have to wonder, the jobs remaining unfilled (mid-level managers, bookkeepers, etc.) are at salaries that makes it a competitive choice for a qualified person to seek employment overseas.
Moving on to the politics of it.
There is a novel by Carmen Guerrero Nakpil, which appeared in 1990 but has a strangely contemporary ring to its title: “The rice conspiracy: A novel”. What is interesting to me is how students from the UP School of Economics on my show last Tuesday asked if we really had a rice crisis or if it was a politically-manufactured scenario. They are not alone in being suspicious, see The Multiplication Table of The Jester-in-Exile from April 10:
My suspicion is this: the “rice crisis” is a fabrication, a scare tactic to draw attention away from the assaults on the squatter in Malacanang. With the public focused on this apparent rice crisis, the media will spend very little airtime on the motion for reconsideration that the Senate has filed with regard to Neri vs. Senate, on Jun Lozada and his plummetting visibility, on Atty. Harry Roque and the Quedancor issue, and the Magdalo officers’ conviction for coup d’etat, among other things.
Heck, I’m fairly certain that this rice crisis issue will be milked for what it’s worth, and then the public gets blindsided by yet another impeachment complaint decide to shield GMA.
This was tackled by Mon Casiple in Rice politics and governance:
Of course, it has been a policy of the government for sometime to import rice directly as the sole importer. In theory, it is supposed to sell the imported rice to small retailers directly. In practice, it is the cartels — with connivance from corrupt government officials — who divert these into their own control. A variation on this tactic is to substitute imported high-quality rice with local inferior rice.
The connivance — if not the direct hand — of government officials in rice smuggling from NFA warehouses is underscored by the dearth of direct rice smuggling from abroad. Somebody or somebody’s group is making a killing on the supposed “rice crisis” and the expected panic which drives prices still higher.
In the medium- and long-term, there really will be a rice crisis, as well as a general food crisis globally. At the same time, global rice prices will continue to rise as rice-producing countries increasingly curtail and secure the need of their own population. A lot of factors also contribute to this, such as high population growth, slow scientific breakthroughs, climate change, and higher per capita consumption.
However, in the Philippine case, a major factor is the short-sighted government policy definition of food security as consumer-oriented securing “food on the table. This policy contradicts the common-sense notion of securing your staple food through sustainable production. The illogical policy of tolerating population growth when it outstrips resources complements this disastrous rice trader-friendly policy. Failure to complete the land reform program and prevent land conversion schemes of prime agricultural lands also contributed their share to the government’s failure in achieving real food security.
P43 billion is a drop in the bucket and a palliative when seen against the backdrop of governance failure by successive administrations in the rice and food sector. The GMA administration shares some eight years of it.
Rice, rice everywhere — but not enough to eat, says a news article. Ricky Carandang, in Why Rice is So Expensive, says an overlooked factor is manipulation of the Futures Market in foodstuffs:
As all this hot money goes out of the US, fund managers are looking for other places to put their money. And they’re going into commodities. They’ve seen how oil and precious metals have gone up and continue to go up. But with oil and gold hitting record highs, there’s a sense that the upside may be limited so they’ve focused on commodities that they believe could have a greater short term upside. And that means corn, wheat, soy, and rice.
Yes, there are real supply and demand factors driving up rice prices, but one must concede that a big chunk of the increases in the prices of oil, gold, and rice, are due to speculation on the international commodities markets.
As it is, in Cebu, at least, Rice prices start dropping. The decrease in prices being due to decisions by the traders, it seems, and not because of government’s intervention!
Frisco Malabanan, director of the Ginintuang Masaganang Ani (Golden Bountiful Harvest) Rice program, said that as of Tuesday, farm gate prices of wet palay in Nueva Ecija have been monitored at around P14 to P14.50 a kilo.
He said that commercially, this farmgate price should translate o about P30 a kilo of milled rice, lower than the current prices, which have been hovering around P32 to P34 a kilo.
Malabanan attributed the low farmgate prices of palay to the decision of traders to stop buying in the meantime.
“This may be a strategy for them to bring down prices of palay,” he said.
Some things on the chart above taken from The Rice Problem site: the wide disparity between the farmers’ price (light green) and what the wholesalers’ sell it for (orange); and the relatively small margins of the retailers (light blue).
The wholesalers, though, also need that wide margin because it represents the inefficient costs of distribution in our infrastructure-challenged country. But it also shows the opportunities for maximizing profits, for example, when NFA Rice is then mixed with commercial rice or repackaged entirely by wholesalers and retailers.
Back in April 9, Philippines Without Borders warned that since government, by its nature, is slow to act, by the time its policies actually start having an effect, it could screw up what should at least be a bonanza for our farmers:
Now, based on Business Mirror reports, its seems Malacanang is simply telling the private sector to import what is allowed under the minimum access volume (MAV)…. Crazy!
The fact is that the MAVs have been there all along and no one dared importing much lately simply because tariff is high (50%). Who would be encouraged to import rice that are already expensive in the world market and pay 50% on top of it, thus making the landed ones so expensive? If I’m the importer, I’ll wait for local prices to really move up the heavens before I even thought about availing of the MAVs. That’s what is happening now.
So the supposed policy pronouncement about “allowing the private sector to import rice” was a bogus one – a deception. Or probably it was real, only that government, as usual, simply backtracked, nay backslided. My goodness! Now, the private sector is saying they will only import rice at zero tariff, and given the government’s very slow decision making process, we might end up having those imported rice landing our shores when the farmers are already harvesting their palay. Some of them has actually started harvesting now. That will be tragedy.
Another matter.
We shouldn’t discount, too, as the effects of people being able to game the system, as smoke points out in Malthus got this one right:
You see, some well-off families have been gaming the system. When you reach a certain income bracket, people eat more often at restaurants than at home. For these people, the rice they buy is mostly for the house-help and the pets. Ironically, in the circles I know, these are also the largest purchasers of cheap rice. With most of these upper-income families employing at least two – up to six – house-help, they are able to buy more at those street side selling points.
First thing they do is they go quite a distance from where they actually live. When they find a selling point, the helpers line up with everyone else, only they are spaced about two-three people apart. Most of the time, they’re not noticed as strangers. But when they are, they just say they’re from so-and-so depressed community and that that place ran out of rice. They then give the sob story about having had to walk or travel far just to find rice. It’s clever, really. This story reinforces the notion that there is a shortage, and sets people a-twitter. In short order, they forget that their are strangers among them.
Once they get their quota of cheap rice, these helpers walk walk walk. Eventually, they all meet up, get in the re-conditioned van they use for going to the market and drive on home.
People would go to localities where NFA rice was being sold, even if they’re not from the area and not necessarily the target market of rice relief -the idea being a habit as old as the Japanese Occupation, which is to hoard when things are cheap and simply pull one over the authorities.
Roving rice-buyers aren’t just agents of the well-off. This is where having many family members -and idle ones- comes in handy: you can line up, anywhere, even far from home; and when supplies are limited per person, multiply the number of persons and you multiply the family’s total share. And the strategy is validated by events: even mentioning that the NFA may be forced to raise prices increases the determination of people to hoard now.
Politically, whether manufactured or not, the Rice Problem affords as many opportunities as it presents risks. See Manila’s Arroyo treads risky path with rice campaign. Amando Doronila takes a dim view, saying that Low credibility bodes ill for Arroyo riding out crisis. I’m not convinced the public mood will sour the way he thinks it will, or could. Definitely, as Mon Casiple says, in Malacañang 2010 hopes, the Palace will be sniffing around for opportunities -or trying to create them, as RG Cruz amplifies in an entry. Or, simply try to move fast to take advantage of any that may arise; more so, if it can claim credit for heading of an emergency. House to call Yap on P250-B plan setting the stage?
The Warrior Lawyer has a trilogy of entries, starting with The Politics of Rice then Rice Crisis Relegates the ZTE Broadband Scandal to the Background and On Corporate Rice Farming and Other Notes on the Rice Crisis . Which brings us to issues raised and some readings.
I. Government agricultural policy
Rice: a policy blind spot says Randy David. On the National Food Authority, see Soaring World Food Prices Exacerbate Challenges Across Asia… Especially in the Philippines in the Asia Foundation blog. See also The Bottom Seed: Notes on the Philippine Rice Crisis by Martin Perez.
See Bohol rice farmers ‘forced to eat camote’:
Catarata said that in planting rice, farmers need to spend for one hectare at least P18,745: P900 for the rice seeds, P6,000 for 14-14-14 fertilizer, P4,900 for urea, P30 for the transport of fertilizer and P500 for chemicals against pests, and P6,415 for labor.
Catarata said that if the P1,080 for thresher and blower and P1,800 for irrigation fee is added, the total rice production cost of P21,625 will be shouldered by the farmer, who is able to harvest only 60 sacks of palay worth P28,800.
Because the farmer has to share one-fourth of his harvest, equivalent to P7,200, to the landlord, he stands to get only P21,600 as gross income. After deducting the production cost, she said, farmers end up with a loss of P25.
But this situation can only be compounded by what Ellen Tordesillas says is a Looming fertilizer shortage.
See also P5M full subsidy for rice farmers and Herrera proposes full subsidy of rice seeds.
II. The World food situation
Earlier, Food crisis grows by Paul Krugman and then from Time.com: No Grain, Big Pain. From the Asia Sentinel, recently, Will Rice Depart from Asia’s Tables? The region’s most important food staple may be going into permanent decline.
See RP may not be able to secure more rice from East Asia.
See Wal-Mart’s Sam’s Club limits rice purchases.
III. Biofuels
See Let Them Eat Bio-fuels by Tony Abaya, and Biofuel not to blame for loss of rice lands — senator. He’s right, I think -but there’s the question of corn (and inefficiencies: it’s cheaper for hog raisers in Luzon to import corn from Thailand than to ship it in from Mindanao), which is being allocated for biofuel production.
The Arab News editorial, International Problem, says European farm subsidies have been very successful and advocates some sort of international body to manage subsidies for agriculture on a global scale:
Biofuels are not the root cause of the price hikes; they and the high price of oil are simply the straw that broke the camel’s back. The real villain is the phasing out of subsidies in so many parts of the world at the behest of the IMF and the World Bank. More land has been taken out of food production as a result than any shift to biofuels. It has hit poorer countries particularly hard because they are the ones that have most needed IMF and World Bank support. Without subsidies, farmers in countries such as Ghana or Gabon – West Africa has been particularly affected – could not compete against cheap imports from the big producers, and gave up. But no one realized a crisis was brewing because cheap food imports continued to arrive. It is only now, with prices rocketing, that poorer countries find they do not have enough local producers to fall back on.
Then again, we can focus on growing meat without having to grow animals -see Tastes Like Chicken in Slate.
IV. Population
See Juan Mercado’s look at population from a regional perspective in 2010 dividend. And Manuel Buencamino’s Earth Day blues. Blogger smoke is also in Malthusian mode in C-rice-is.
And finally, a brief survey of the blogosphere:
April 9: see: The Left Click, Arbet Loggins @ Multiply, Life As I Know It and The Unlawyer. A particularly interesting look back at previous rice problems in A Simple Life:
In the slums of Iloilo City, circa middle of 1970s, back when the NFA (National Food Authority) was still known as the NGA (National Grains Authority), “NGA” was synonymous to an inferior variety of rice — dark-grained, 50% broken, and had a chemical-like smell.
Therefore, I am surprised that unscrupulous traders nowadays can repack NFA rice, which retails at P18.25 per kilo, and pass it off as commercial rice, now selling at up to P34 per kilo as of posting time.
As a child, I remember Nanay occasionally taking home with her a brown paper bag containing a ganta (about two and a half kilos) of NGA rice. Those were hard times. Those were the times when Ferdinand Marcos rationed rice to just a few kilos per family.
A few months into the oil-rice crisis of the 1970s, the NGA resorted to rationing rice mixed with corn grits. Although the yellow corn grits-white rice grain mixture looked good, either cooked or uncooked, swallowing it is another matter. The discriminating Ilonggo palate just does not have the tolerance for corn as the staple. We may eat corn during snacks — on the cob, steamed or broiled, or as popcorn, but not when cooked as rice.
I did not remember exactly how long the corn-rice blend lasted in Iloilo, but I can still recall that the Ilonggos did not enthusiastically receive it. We survived and outlasted the rice crisis by subsisting on “binlod” (Tagalog: binlid) — 90 to 100% broken rice grains. Normally, binlod should be chicken feed, but undoubtedly, it fells better on the palate than corn-rice. Binlod is best eaten as “lugaw” or porridge. Sometimes, Nanay would be lucky to obtain some “laon”, which was only slightly better than NGA rice, and we would feel blessed.
Yes, we survived the rice crisis then and we can survive it now.
April 10: see Every man is guilty of the good he did not do…Voltaire, Poolah, Daily Musings, mackybaka! , www.CCLozano.com and Prospect Avenue:
My mom’s having a hard time ordering rice right now. She said the price of rice has risen twice over the week. She’s called all her friends and our relatives. One is selling a sack for 1,500 pesos, our aunt (who owns a stall in a public market) is selling hers for 1,800 pesos. Rumor says that a sack would cost 3,000 pesos in a few week’s time.
I don’t think there is a rice shortage at the moment. People are just getting greedy and hoarding the sacks out of greed and paranoia. It’s mass psychology at work. The rice crisis is a self-fulfilling prophecy that is slowly coming true.
Mom’s thinking of sending our workers out to buy NFA rice. It’s cheaper (18 pesos per kilo versus 35 pesos selling in the market). But you have to line up pretty early in the morning (around 5am) to buy the rice (shop closes at 10am). Each buyer can only buy up to two kilos of rice. There are cops (or soldiers) standing guard, making sure that everyone gets a fair share of the NFA rice.
April 11: see Splice and Dice:
That is the part where a morally bankrupt regime purports to be the moral buttress of the nation. That is the part where a Garcified leadership pretends to wrestle with the liars, cheaters and thieves in this nation when that leadership has nobody else to wrestle other than themselves. That, too, is the part where a gloriafied regime sees everything else as investments, owing largely for its economic eye, while failing to understand the basic difference between what is legal and what is just.
I’ve always believed that what is legal does not necessarily equate with what is just. While we may have laws, and we do have laws, there remains the sweeping thought and feeling that we lack justice. Invoking an executive privilege may be legal, but does it bequeath us any justice? Well beyond all that there is to be truly disappointed about, sanctifying that executive privilege, one which has truly become a privilege in the strictest sense of the word, by the prostitutes of the law corrodes the fists of justice. It’s a case where a distorted defense of a privilege which the constitution does not even explicitly provide tramples upon the written forces of truth and transparency, the gravity of which pins us back to a crisis worse than one plaguing our rice supplies.
O, tingnan ninyo….. maaring nga na lahat, maliban kay mang kiko, ay mas magaling kay GMA. Pero iba-iba pa rin ang patakbo depende kung sino sa mga blogger ang nasa poder. Iyong iba, uunahing arestohin ang mga mayayaman lalo na kung nag-aral sa Ateneo. Iyong iba, pa-kikinggan, ang Amerika, iyong iba naman, papakinggan ang Cuba o Venezuela, o ang United Nations. Iyong iba, gi-giyerahin ng husto ang MILF. Iyong iba, baka ibigay ang Mindanao sa MILF. Iyong iba, hindi lang ituturo ang sex education sa high school, do-doblehin o triplehin pa ang pera ng gobyerno na gastos sa condom. Iyong iba, ipag-babawal ang sex education dahil iyon ang sabi ni Pope Gregory. Iyong iba, ibabalik si Erap; iyong iba naman, baka ang ilagay sa poder, si Trillanes o si Doc Bautista. Iyong iba, ibaba kaagad ang presyo ng gasolina. Iyong iba, dodoblehin kaagad ang minimum wage.
Fact: FPJ explicitly stated Food Security as his Number One priority.
Fact: FPJ was cheated by Gloria Arroyo and so did not have the opportunity to even start implementing such policy.
Fact: Gloria Arroyo rejected food security via agricultural self-sufficiency and instead, pursued a policy of (as hvrds mentioned above) ‘importing food that was cheaper from our more efficient and productive neighbors’.
The rest is speculation based on cherry-picking of ‘clues’ (or sour-graping).
Woulda . . . Coulda . . . Shoulda . . . It’s still going into the realm of speculation. Trying to beat a dead horse back to life . . . so pathetic it’s almost funny!
Fact: Erap Said wlang kama kamag-anak, kaikaibigan in his inagural speeh/
Fact: everybody knows what he actuatllu did when he is in malacanang.
Fact: FPJ run because Erap convinced him to run.
Fact: Filipinos do not vote on issues and platform
Fact: CVJ voted for Gloria not FPJ
Fact: CVJ did not know about the food security of FPJ issue during the election:
Fact: Now that we have the rice crisis only then he made his research about FPJ Food security program.
Fact: CVJ wanted to use that FPJ food security
to feed his and his ilks anger towards GMA.
Fact: FPJ is dead wasnt able to sit in malacanang as president. So whatever good platforms he had will not matter at all if e dicussed then over and over again . The only thing it can achive is to maintain teh anger of anti Gloria crowd :
Fact: CVJ motive and bringing this up FPJ food is evil and not to solve this rice problem at all.
Fact: CVJ is was educated in La Salle and he is Catholic:
this book, http://www.ipc-ateneo.org/publications/?id=28 makes for instructive reading.
you can read about it here:
http://www.pcij.org/stories/2004/poorvote.html
which is not to idealize this category of voters. when we went to campaign for Sabas Abang Mabulo in Bicol, during the motorcade people would go up to him or signal to him by rubbing their fingers together (money, money) and he would shake his head each and every time (few and far between were such people, but noticeable). contrast that with the lakas-cmd hq for dato arroyo where people were lining up for “logistics.” but even then in the end dato had to pull out all the stops to win.
This statement below by CVJ is very stupid (i’m attacking the statement, not the person)
I have scanned the book after downloading it. Basically it says
Today: Helper P2,000 per month. Laptop: P30,000
Accdg to CVJ if
tomorrow: Helper P20,000 per month… Laptop will be P300,000 each???? (by adding the zero??))
A P300,000 laptop?????? Where in the world? Even in the USA, that model will just lower than P30,000 (we have to import – duty and freight)
Some people really stop thinking when faced with new ideas..
I am saying Hyperwage is correct. But I cant say the CVJ is correct either..
A P300,000 laptop???…. ano yan.. gold?
—————–
cvj :
BTW, regarding ‘hyperwage theory’, raising everyone’s salaries by ten times is equivalent to adding another zero to our currency with the same effect. I prefer the previous suggestion of drawing horns on the 200 peso bill.
April 24th, 2008 at 7:06 pm
Homegirl, you are assuming that the exchange rate (versus foreign currencies) will remain the same. Using your example, a P300,000 laptop is possible if as a result of multiplying salaries ten times, the peso:dollar exchange rate also is multiplied by ten times e.g. 400 Pesos to 1 US Dollar (as opposed to today’s 40 pesos to 1 US Dollar), which would be the likely outcome. In the above, the dollar value of the laptop remains the same.
If hyperwage theory is correct, why stop at multiplying salaries by ten times? Why not multiply all salaries by one billion so all of us will become multi-billionaires?
I am not against increasing salaries (especially the minimum wage) as there are other reasonable basis for doing so i.e. to stimulate consumer demand. However, salaries and wages cannot get too much ahead of productivity as we would be shooting ourselves in the foot by discouraging investments that would augment our capacity to produce.
“Fact: CVJ is was educated in La Salle and he is Catholic:”
Speculation: he is outnumbered by ateneans in this blog.
Rego, those facts you introduce in the context of the present discussion are known as red herrings. What Erap said, who i am and what my previous choices were are not relevant to FPJ and GMA’s policy choices.
I was wrong in voting for Gloria, and the masa were correct. Anyway, Gloria won because of Hello Garci which makes my vote moot and academic. More importantly, I would not have and do not approve of cheating as the way to keep Office because as Randy David said, “Politics is society’s way of producing collectively binding decisions.” and the way of making collectively binding decisions when choosing leaders is through elections. We mess with that process at our peril.
The other logical fallacy you have committed (and have been committing since before) is also a form of red herring fallacy called ‘appeal to motive’.
hvrds, the jury is still out if the philippines adherence to free market principles was a mistake. most countries have become part of the world financial system. those who are not are pushing their governments to join. trade is now globalized and even non free trader countries are also feeling the pinch on what’s going on around them. vietnam who is a net exporter of rice seeing their staple retail prices soaring 85%. our country is too dependent on foreign capital to resist the pressure on not being part of this community. i wonder if we even have a choice looking though the general structure of our economy. although we are only in the third inning of this global financial meltdown, there are subtle signs that the bottom is near with xlf soaring this week. dont fight the fed, there is too much at stake here even if it has to print more fiat currency or open more thr fed spigot to backstop the crisis.
our country is definitely fortunate to have OFW’s. filipinos care too much for their families, they will increase their remittances to compensate for the rising prices thus saving the day for all of us once again. gma probably knows about this, hehehehe. who would want to bet against peso appreciation in the long term knowing the ofw’s will probably come to the rescue. hmmmmmmmm…. she is indeed one lucky biatch.
“Politics is society’s way of producing collectively binding decisions.†– Randy David
The practical definition of politics is “struggle for power.”
Yes Jakcast, for many in the Upper and Middle Classes, despite their education, it still boils down to might makes right, which accounts for their shortsighted support for Arroyo.
“. . . not to idealize this category of voters . . . but even then in the end dato had to pull out all the stops to win.” – mlq3
But still Dato won, even if he “had to pull out all the stops”. What were the “stops”? Vote buying? Ward politics? Coercion?
While I don’t dispute the conclusions made by the article, the resulting vote can still be very fragile. If the voters were really more discerning, the situation of having a carpetbagger imposed on the electorate by local and national politicians would be intolerable. The carpetbagger would have been sent packing by an overwhelming majority. However, if the carpetbagger still managed to win, albeit “pulling out all the stops”, it still shows how vulnerable this “category of voters” is.
According to Song Seng Wun, regional economist at CIMB-GK Research, the Philippine president Gloria Arroyo panicked and ordered 1.5 million tons of rice. The Asian exporting countries were alarmed and responded by restricting exports based on national security point of view. This created the Asia’s fear of impending rice shortages.
The Philippine president who is hounded left and right by corruption is sensitive to civil unrest that might result from rice crises and increases in other food prices. So she made the order.
It becomes her self-inflicted wound depending on the reactions of the public.
“most countries have become part of the world financial system. those who are not are pushing their governments to join. trade is now globalized and even non free trader countries are also feeling the pinch on what’s going on around them. vietnam who is a net exporter of rice seeing their staple retail prices soaring 85%. our country is too dependent on foreign capital to resist the pressure on not being part of this community. I wonder if we even have a choice looking though the general structure of our economy.”
Last I looked the most successfull countries have not joined the worlds financial system dominated by the FED and are making moves to restrain the bad effects and preapring for the fall of the dollar as the reserve currency.
The idea behind the construction of the Eurozone, Englands refusal to join either the Eurozone’s common currency or the dollar zone, PRC’s strict capital controls, India’s capital controls, Japan and Taiwans strict control of their capital accounts and Latin America’s move to establish thir own monetary zone are all sure signs of the eventual breaking up of the dollar reserve system.
The ECB did not move their interest rates lower. They do not have to fight the Fed. They have maintained national control of their currencies.
The rush to convert dollars into any asset outside dollar denominated assets is fueling this inflationary tidal wave so where is the rush to embrace dollar based financial system coming from?
Why don’t the Americans care? Because you see they also own and control worldwide assets denominated in other currencies that are earning them profits.
Have your Coke Zero and enjoy it. It fuels more profits send home to Mama in the U.S.
Since the Eurozone is producing goods in Euros companies there are also trasnferring their plants to the U.S. to take advantage of cheaper costs than in their own country.
Oh yeah in Vietnam where 80% of the people still live in the countryside and live off their produce price inflation denominated in a foreign currency has a small effect on them.
Maybe you should suggest to your favorite President that it might be time to put together an expedition with Gen. Esperon and company and raid all those bulging warehouses in Vietnam that have all that tonnage of rice. They are actually hoarding it and will sell at the right price it seems.
She could get a legal opinion from Miriam and Raul Gonzales about the legality of invading Vietnam since they obviously are speculating on rice prices to gain a windfall from their surplus.
Oh yeah, since when was trade not globalized?
d0d0ng, do you have a link to that regional economist’s views?
While shortsighted anti-gma haters continue to lay the blame of rising prices on the government this is the explanation of the global crisis.
ito may link, yong iba wala. DUH
http://www.smh.com.au/news/businessinnovations/hunger-nibbles-protectionism/2008/04/17/1208025357614.html
Siyanga?
business protectionism has always been the name of the game even for world trade.
The normal reaction for staple products producers/exporters such as rice and wheat is to provide enough for the domestic consumption before they export. DIDn’T YOU KNOW THAT?
This “silent tsunami” has been hounding the asian countries long before the rice shortage and price inflation became the headlines of the world news.
The high tariff duties of importing countries to protect the agricultural industries have also something to do with this shortage.
with the supply less than the demand, the importing countries such as the Philippines has to consider lowering these trade barriers.
Tssk tssk, maraming nagmamarunong, ang mata naman hanggang Pilipinas lang.
opps, another ammunition.
dodong, did you know that last year the phils imported 1.8 million tons of rice? and maybe you missed reading this one below from pcij.
http://www.pcij.org/blog/?p=2256#more-2256
hay… paulit-ulit na lang tayo. pinipilit isisi sa politika ng bansa ang nangyayaring global crisis. parang langaw na nakatuntong sa kalabaw. bida pa rin ang pinoy.
what he failed to mention was that this comment emanated from the discussion of the export restrictions being made by countries even before the plan of importing 1.5 millio tons of rice.
This is a question of which comes first, the chicken or the egg.
This comes from what he quoted.
The rest are the his own opinion.
DUH.
@ cvj,
Point is, what politicians and practitioners of politics (e.g. lobbyists, public relations people, etc) understand is the practical definion. Even former priest, Fr. Among Ed Panlilio, knew this. He used the Catholic Church as his power base versus the power and money of the gambling lords.
Its not just the upper and middle classes (‘elitists’) who are grounded in the the power struggle concept. Karl Marx, Lenin, and others. Definitely, these people were not pre-modern leaders. Lately, Fidel Castro, Hugo Chavez, etc.
You have to be elected as the leader, before you can run your mission.
“This strike may well be ‘legal,’ but is it moral?”
This queation was raised by one reader to the Star regarding the issue of the Right to Strike by the Transit Workers, which left thousands (l and ½ millions take the transit daily) stranded Friday night when the Transit workers called a Surprise Strike after announcing a Tentative agreement Sunday, April 19 and some without alternative transport home were forced to walk..
In a very rare Sunday Emergency Session Premier Dalton McGuinty will table a “Back to Work†Legislation in time for Monday rush hour.
Now back to the Question..It maybe Legal, but is it Moral? It was a legal Strike. Maybe not very Long, because with the Anger of the Taxpayers who is the paying the bill, the Provincial Government is “musing†about Declaring the Mass Transit an Essential Services, which take away their right to strike, and walkout and slow down or get fired..
http://www.thestar.com/News/GTA/article/418906
http://www.thestar.com/News/GTA/article/418904
Someone made a comment last night :
“If you didn’t have ethanol, you would not have the prices we have today,” said Bruce Babcock, a professor of economics and the director of the Center for Agricultural and Rural Development at Iowa State University.
This year, at least a fifth and perhaps a quarter of the U.S. corn crop will be fed to ethanol plants. As food and fuel fuse, it has presented a boon to American farmers after years of stable prices. But it has also helped spark the broader food-price shock.
rego, additional facts for cvj:
FACT: his belief that GMA cheated FPJ is pure speculation.
FACT: cvj takes the cake for one-track mind persistence against all reasons.
just toying with a ridiculous idea for an equally ridiculous scenario:
great fear. part of the plan. must be. the government is in control: this is what they always say anyway. could be this is precisely how they planned it. like a double-bladed sword: for every problem there is a corresponding opportunity. to gain “opportunity”, create a problem… for what? isn’t it an insider already squealed: commissions (easy bucks from importation)… this way, di nga naman masyado halata ;).
poor me. must be really hÃœngry: imagination gone wild. or hallucination creeping in…
— double-edged, i.e., sorry.
Jakcast, to say that politics is a ‘struggle for power’ is similar to saying that business is a ‘struggle for profit’. In short, it is the usual confusion between means and ends that leads to such an impoverished definition.
Even without a political system, and even outside society, the ‘struggle for power’ is already there. Outside society [aka Hobbes ‘state of nature’], the struggle for power boils down to ‘might makes right‘. What is supposed to distinguish a political system within civilized society is the larger role played by communicative power (i.e. where reason takes the lead) in arriving at collectively binding decisions that are then supposed to be directed towards the common good. It should no longer be a matter of who is the strongest or the most cunning.
Now if the upper and middle classes see politics merely as a struggle for power and, as a result, disregard the rules or bend it to their advantage, then what they are doing is reproducing the state of nature within society, albeit with a superficial veneer of procedures to keep up appearances. This is dangerous and shortsighted because it weakens the reasons for having a political system in the first place. Perhaps for the Upper class, it is a calculated risk because they always have a way out. For the middle class, it is a more dangerous gamble.
Food for thought. The government of Argentina has implemented confiscatory taxes on farmers. “In the name of the greater good”? Or ‘because the government is incompetent’?
—–
A strike by Argentine farmers over rising taxes on major export goods has entered its third week, with little sign of resolution. Blockades by farmers have led to shortages in the shops and have also hit exports, with some companies saying they cannot fulfil their contracts.
The government says the tax increases are justified and it will use force if necessary to get food to the markets. Rival demonstrators rallied in Buenos Aires overnight amid some scuffles.
The latest crisis was sparked by the government’s decision to introduce a new sliding scale of export taxes, raising levies in some cases up to 45%.
Argentina, a leading exporter of beef, corn, soy oil and soybeans, has benefited from the recent global surge in commodity prices.
But farmers say the taxes are hitting them and their communities hard. “Our profit margins are getting smaller and smaller. What we pay to the state is not returned to us in the form, for example, of subsidies to buy fertilizers or to promote the social and educational development of our communities,” Marcelo Rasseto, a small farmer from Santa Fe province, told the BBC.
This might be what D0d0ng is referring to:
http://www.forbes.com/reuters/feeds/reuters/2008/04/26/2008-04-27T014953Z_01_MAN273918_RTRIDST_0_ASIA-ECONOMY-FOOD-ANALYSIS.html
cvj,
Fact: FPJ never said how he’d do it.
Fact: thats a usual election campaign rhetoric
Fact: FPJ also cheated.
Fact: Eddie Villanueva did not cheat.
Fact: you are completely unaware of the efforts of the Department of Agriculture towards agricultural self-sufficiency. Not enough, yes, but the direction is there
i wonder if the ‘food crisis’ is caused by gloria’s wrong policy choice. did you score gloria on that area even before the ‘food crisis’ started?
cvj: respect the rules and “follow the Constitution” is one of the messages by many from the middle-, the upper- and the poor to explain their lack of participation in surging the Malacanang gates. Now, if the anti-GMA can manage the rules so that impeachment processes push forward this year or next, those who have not surged the gates will listen intently to the proceedings.
I didn’t score Gloria because i was on the wrong side of the debate on that one (which is more or less her side).
http://www.quezon.ph/1500/rice-self-sufficiency/
Commenter Leo (who emphasized ‘Food Sovereignty’) got it right. So did Sparks and Justice League among others.
scalia, what makes you say fpj cheated?
“this book, http://www.ipc-ateneo.org/publications/?id=28 makes for instructive reading.
you can read about it here:
http://www.pcij.org/stories/2004/poorvote.html”
Manolo,
I’ve been repeating a similar opinion, the poor is often logical, more logical than the elite because they’re concerns are sincere. Compare that to the upper middle class and the “pundits.” And I didn’t need to do a survey on this one, just my… ehem natural preponderance to make out my kababayans as a decent group of people.
“Yes it’s a global crisis but I’m curious to know what VIETNAM and THAILAND did correctly so as to have a surplus given that Filipinos have higher yields per hectare than the Thais and the Viets…”-nash
nash, we all know what Vietnam and Thailand did correctly. They chose leaders inclined to be self-sufficient in rice, and do something about it, instead of relying on massive rice imports.
Here, our leader do the opposite, and her apologists are singing hossanas to the global rice crisis just to defend their favorite president.
“i wonder if the ‘food crisis’ is caused by gloria’s wrong policy choice.”-anthony
anthony, if you think gloria has the right policy choice, and we have a crisis now, then, surely, gloria’s right policy choice is just a choice, nothing more.
Which means that her actual choice is to import massively, which caused all this hardship to the people.
In time of crisis, and before it gets any worse the Government has the responsibility to do everything in its power, legally, to stop it from getting out of control.
The transit strike, maybe looked at just a labour dispute, but the ramifications to the economy of the province, especially to the city which is the Economic Engine of the country is beyond anyone’s imagination plus the inconvenience and the cost it will cause the already suffering public getting hit by the raising prices in gasoline, the harm to environment with the use of cars and for those with no alternative means of transport a very expensive taxi ride or a long walk.
Without warning, the Union Leaders put the whole city hostage and perhaps the safety of its members which will bear the brunt of the riding public, I hope not. In a very rare move the government called for A Sunday Session and in a 30 minutes deliberation with support from all parties passed a Back to Work Legislation and was given an immediate royal assent.
The Union and the Management has 30 days to appoint an Arbitrator to settle whatever their differences bearing in mind the City capacity to pay the cost and if can not decide on the arbitrator, the labour minister will appoint one for them. Dispute resolved and tomorrow the wheels will be rolling again…or even tonight..
http://www.thestar.com/GTA/Transportation/article/418964
Vic: Strikes by transit workers with intent to paralyze a city is common tactic. Has happened recently in Paris; likewise in Metro-Manila with the jeepney driver strikes. And even in face of an existing law prohibiting them from striking, workers still strike in order to negotiate for higher salaries, e.g. New York City transit workers strike in 2005.
I noticed that according to the 2004 survey “The Poor Vote Is A Thinking Vote”, “Makadiyos” has almost 3 times the importance to the respondents versus “tumutupad sa pangako” and “mapapagkatiwalaan”. Seems to be a good description of the current crop of elected Filipino officials…. hears services every Sunday, but.
UP n,
But this walkout will have a negative impact on the Union. They already arrived at a negotiated settlement last week, but the union leaders were not able to deliver their membership and may had just provoked the public to urge the government to legislate the Transit an Essential Service, the same as Police, Fire and Medical Services where disputes will be brought to Binding Arbitration instead of Strike Actions or any Techniques to win concessions.
But today the Transit is back in operation and except for a two weekend days of inconvenience, the Union got nothing more, but maybe lose their right to strike for more serious and more beneficial issues in the Future..remain to be seen…
UP n, your snobbery is pathological.
BrianB, Should I conclude that you believe that the current crop of elected officials are “tumutupad sa kanilang pangako” to their constituency? Actually, the statistics are on your side — evidence : political dynasties.
actually, BrianB, I would rather you tell me how you match the survey — a portrait of how the Filipino poor have defined how they choose the candidate to vote for —to the people getting elected, e.g. the current crop in the Senate and in Congress.
back to our economic history. someone said that our current style of managing a country has always been that way. corruption is becoming a common practice.
my point: should we learn from the past and use it as a guide to come up with a better solution for the current situation? if it’s the case, have we not learned from the past? someone said, it’s always been that way.
when I was in school long time ago,i remember in my economic class, I was asked the three causes of the Asian economic crisis in 1997-98. i google search ” causes of asian economic crisis” lots of answers. it was an easy class.
My conclusion is that: we did have lots of debts from the previous administration. On the positive side using current GDP average,we experience growth. My question, is our GDP overstated to make it look good so that we can easily borrow if needed? Or as it is? If overstated, what are the consequences in addition to the Rice Crisis?
rego,
‘Hay naku supremo, yang nga conspiracy theories nyo huh , hindi na kapanipaniwala. Ano naman ang akala mo sa mga tao dito?????’
I don’t believe in conspiracy theories. I think you do because you said ‘nyo huh’. Please list the names of the ‘nyo’ so we can see how they are related.
@bert
siguro nga.
Gloria has had 6 years already. By this time, her grand plan should have been completed.
It’s disappointing to read the PCIJ report showing that GMA has hired incompetent and unqualified people for cabinet posts.
Look at Yap, he is just a mere lawyer and still he got the DA portfolio. And what about the DENR secretary? Why is that moron there?
biggest fact you of all: joc joc the agri scam poc poc diverted the funds intended for farmers to pad up the already lard laden hog who lives in the sty by the pasig river. that’s where the rice and corn fertilizer allocation had gone. as in gone.
nash, what’s wrong with being a lawyer? you think you are a better person and can do a better job? what can you say about yourself any way that gives you the nerve to call somebody a “moron”?
inodoro, and how did you arrive at that conclusion? by reading the inquirer, watching news “reports” at abs-cbn, or listening to harry roque? and you call it fact??
bencard,
by the rotarian 4-way test?