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Dec 12

Opening salvo, not the barrage before the last charge

My column yesterday was Christmas tragedies. Read Tony Abaya’s column Consuelo’s Stimulus where he says the real economic hammer blow’s going to be on the electronics exports sector, and he calls for scrutiny of public spending. See also Lito Banayo’s column, Gloom. For the global situation, see 8 really, really scary predictions in Fortune. And the administration, besides embarking on borrowing money at a time when people aren’t inclined to lend (for its stimulus package, and here the ongoing investigation of the Fertilizer Scam is extremely relevant), is frittering away its remaining political capital on Charter Change.

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Let my put forward two concepts I’d like to return to, in the near future: “Honest Graft” vs. “Booty Capitalism”. The American Tammany Hall politician George Washington Plunkitt called it Honest Graft: to my mind, this was the model for Filipino politicians during the American era. What followed, the innovation under Ferdinand Marcos two generations later, was what has come to be called Booty Capitalism. A column by Clarence Henderson back in 2001 put it all in the context of Philippine business. This topic comes to mind as the President’s poised to go off to Qatar, as part of her (and every president’s need to conduct economic diplomacy) but piqued my interest because there’s also news of the plans of San Miguel Corporation to aggressively expand in the power and energy sectors and telecoms, too (tie this in with Transco’s privatization, and the ability of power lines to carry data, as well as provisions existing in infrastructure such as the MRT to carry data through the power lines) and how this can all be aided or hindered depending on the attitude of the administration to such potential investments and expansions. It seems the two groups poised to establish a strong presence in the power industry are the Aboitz and San Miguel groups, squeezing out the Lopezes (and here, an interesting alliance is in the making between Roberto Ongpin and Eduardo Cojuangco’s interests).

The President’s husband, for his part, is in hot water in the United States, according to the scuttlebutt, fueling even greater speculation on the various firms in which they’re alleged to have pecuniary interests (an “A List” that includes everything it seems from Chevron to Ashmore. See Why was there no Mike in Manny’s fight? and Diarrhea in the Air and FG’s costly bout with diarrhea . And then tie this in with Charter Change, where there was also talk that the President’s sons have been courting first term congressmen to hop onto the Charter Change bandwagon.

 

Meanwhile, as the President’s preparing to go overseas, in Makati City, the protest rally versus the House’s moves to propose amendments is set to take place today. While being portrayed as the showdown, or, as Doronila puts it, a test of the remaining viability of People Power, it may be more realistic, as Ellen Tordesillas points out, to view the Makati protest today as the “opening salvo” in what may have to be a sustained confrontation. The timeline for forcing through Constitutional amendments stretches into the first quarter of next year, at a minimum.

You cannot find a more eloquent explanation of why it matters to go to Makati City today, than what caffeinesparks has written in her blog.

The Secretary of the Interior (and a key player in the President’s political team, and who has been maneuvering the revival of Charter Change since 2006) for his part says the push is on, and it comes at the heels of the posturing of one of the nabobs in the President’s pet party, Kampi, going on a media offensive. Rep. Villafuerte, also of the President’s pet party, has been cruisin’ for a bruisin’ with the leadership of Lakas-CMD in the House. But Puno says there’s no real rift between the two main factions of the ruling coalition, but the differences do seem to be there, as the Sun Star reports:

Cebu Representative Antonio Cuenco, however, said it would be best for the House to sit down with senators to discuss convening a Constitutional Convention (Con-con) because the upper House has declared its openness to it. “We’re banging our heads to the wall,” he told the committee on constitutional amendments. “If we have our own way, our own separate way, we’ll get nowhere.” The committee, chaired by La Union Representative Victor Ortega, has already decided to suspend deliberations on Speaker Prospero Nograles’s House Resolution 737, which seeks to allow foreigners and foreign corporations and associations to own land. “Next week, we’ll vote on what committee thinks and whether to have amendments or not,” Ortega said after the panel wrangled on which mode should be adopted in proposing the amendments.

Or then again Ortega could simply be tipping the ruling coalition’s strategy, and thus, Puno might just be telling the truth. Veteran newsman Ding Gagelonia in fact thinks the Palace is poised to push forward a Convention -but before 2010, and possibly appointive in composition, as trial ballooned by the President’s personal lawyer and possible Supreme Court nominee, Romulo Macalintal- and indeed, according to the Star (December 6), the President’s pet party has it all planned out:

Kampi spokesman Jose Solis told The STAR in an interview the other day that the installation of the chief justice would be done once they succeed in amending the Charter through a Constituent Assembly, which he said is just 14 votes short of the needed approval to convene Congress into a Constituent Assembly. “If the people will approve the shift of the parliamentary system during the 2010 elections, the chief justice may act as the head of state because by that time the term of President Arroyo will already expire,” he said. He said the Chief Justice may sit as the head of the head and may call for a general election for the new members of Parliament. “Within three months the chief justice may call the election for the members of Parliament and once convened they can elect the Prime Minister,” Solis said. He said however that the installation of the Chief Justice is only among the options they will tackle once they convene into a constituent assembly to amend the Constitution. Solis said as of Friday they have already gathered 173 signatures but their political game plan may be derailed after Speaker Prospero Nograles announced his full support to Constitutional Convention as the mode to amend the Constitution.

Note: the above includes scenarios and a situation that most definitely goes beyond merely amending the existing Constitutional provisions on land ownership and foreign participation in businesses. Another factor to consider is the wrangling within the ruling coalition might also include jockeying for advantages for particular leaders. Rep. Villafuerte, for one, is widely seen to want the Speakership very badly, and that there is a corresponding move to offer the current Speaker, Nograles, a seat in the Supreme Court as a face saving way out of office. For those interested in the legal niceties of the whole issue, the report in the Sun Star puts forward the constitutional interpretation of the President’s pet party:

Camarines Sur Representative Luis Villafuerte bared this recently, anchoring his arguments on his interpretation of the intent of Article 17, Section 1 of the Constitution, which provides that “any amendment to, or revision of, this Constitution may be proposed by Congress upon a vote of three-fourths of all its members.” He believed that so long as the constitutional requirement of three-fourths vote is met, it is enough to start the process of proposing amendments because the Constitution does not mention the words “House” and “Senate” and merely states “Congress.” “It is not the institutional representation that they make. It is as members of Congress, because in proposing amendments or revisions, the Senate and the House, as an institution, cannot act as members of Congress in that context,” Villafuerte, proponent of the resolution calling for Congress to convene into a Constituent Assembly (Con-ass) to propose changes in the Charter, said. He also admitted that his interpretation would be enough to force the Supreme Court (SC) to finally rule on the issue of whether Congress should vote jointly or separately in proposing amendments. According to him, the Constitution clearly delineates Congress’ legislative ordinary function from its power to amend or revise the Constitution and therefore, there is no need to seek the Senate’s concurrence if it does not want to participate. Villafuerte, however, told Parañaque Representative Roilo Golez, who engaged him in a plenary debate Monday night that “it will require the participation of the Senate, if they are so willing to participate.” “But what if they (senators) do not (agree to Con-ass)?” Golez asked to which Villafuerte replied, “We should not impel the concept of three-fourths of all the members of Congress.” He added that when it comes to amending or revising the Constitution, there is no institutional participation. “It is the participation of congressmen and senators acting as members of Congress for the purpose of exercising not a legislative power as in the bicameral system but in exercising a constituent power for proposes of amending the Constitution.” Villafuerte said the framers of the 1987 Constitution adopted a procedure, which “conforms to a unicameral system but adopted in a bicameral system.” Golez, who is also the spokesman for the House minority, said by forcing his issue, Villafuerte was offering a “very creative interpretation of the Constitution.” “That to me is quite shocking,” he said. “Because when we speak of constitutional change by Congress, we are talking of institutional intervention, not individual intervention.” “This is very misleading,” Golez said to which Villafuerte replied, “The word whole is equivalent to the word all just to distinguish from voting separately and as a whole.” Cebu Representative Antonio Cuenco, however, said it would be best for the House to sit down with senators to discuss convening a Constitutional Convention (Con-con) because the upper House has declared its openness to it.

Countering this is Dean Jorge Bocobo’s entry, Vivisecting Villafuerte and There Is Nothing For SCORP To Decide. And see SC must look to the Senate’s lead, by Abe Margallo. Some links for reference, on the grisly Sucat shooting: Sucat Shoot-out: 17 Dead as Robbery gang and Cops battle in Metro Manila suburbs and Sucat Shootout update: Police arrest 7 gunmen as Investigation continues into deadly firefight in Parananque, both in Mike in Manila. Snapshots in On Izzy’s Mind. Iloilo Views points to similar situations in the provinces. For the personal reactions of people, see Gossip Gehl and public_class_kc, and At Midfield.

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  1. hvrds

    First a lot of people have pointed to the governments failure to save Lehman as the trigger that changed the psyche of investors in the financial markets.

    Markets took a steep dive after that happened.

    Now the U.S. Senate has failed to come up with the loan package for GM and Chrysler.

    This time the psyche of both business and workers will be severely tested.

    The next few weeks will prove interesting. The knock on effects on a large part manufacturing base of the U.S. will feel a serious tremor.

    The production capacities of major car companies in the U.S. is for 17M to 18M cars a year. They expect sales to drop to 10M… That is a lot of capacities that will send destruction up and down the entire supply chain….

    Kenneth Rogoff said it best it best, when you are facing the plague you do not use measure to fight the measles.

    Fighting inflation is easy compared to lifting an economy from deflation… Free money ain’t gonna cut it when people have the fear of losing their jobs. They will save instead of spend…..

  2. Geo

    mlq3,

    You wrote: “The President’s husband, for his part, is in hot water in the United States, according to the scuttlebutt, fueling even greater speculation…”

    Sigh. Scuttlebutt indeed. From the butt. Why do you participate in such, such…diarrhea?

    Tony Abaya’s article is gossip at best, moronic in fact. His source? He wrote: “Columnist Banayo quotes an unnamed “friend” who asked: “Was it a case of the presidential party being alerted by phone that someone among them was going to be picked up by authorities upon landing at Los Angeles airport for money-laundering activities?”

    A “friend” of a friend who came up with some question? Wow. Hard-hitting.

    And Tony’s own contribution of (ahem) concrete evidence is that the plane was much closer to Hawaii than Japan. Ummm….maybe he should have talked to a pilot or someone with any knowleadge in this field. I think he has no idea about the typical trans-atlantic, northern hemisphere airline route.

    He should have taken the time to check. That is his responsibility.

    That plane was very likely to be closer to Alaska than Hawaii. And it was even closer to Japan than anywhere decent (and then closer to Manila afterwards).

    The only question should be why Osaka and not Tokyo? And I bet the answer has to do with which inbound flights (commercial, presumably) the FG’s docs would come in on…..

    This stuff is just stupid and taints the better work that you guys have produced.

    This stuff is what drives me anti-anti!!! If you guys could stick to the arguments (viable enough) and get rid of the venomous tirades, childish name-calling and (ahem again) “scuttlebutt” reporting of facts, then maybe more of us would listen to you.

    Sheesh.

  3. mlq3

    Geo, that’s how the dots started being connected for the Marcoses and Estrada. Ask your friends who may be knowledgeable about Chevron, and ask the diplomats you know. For businessmen and diplomats whole stock in trade is scuttlebutt.

    As for your disliking my column, that’s your opinion. It wasn’t written for you, I guess. It was written for the people who are gagged. and for those who deserve to know they’re not alone in freaking out over news that can’t become news because of these legal obstacles -obstacles, on a larger scale, that keeps us from knowing what everyone knows about the looting and meaneuvering going on upstairs.

    http://esotericpiaosi.blog.friendster.com/2008/12/a-so-true-story/

    Whatever the big picture may be to someone like you, the least someone should be able to do is not be gagged by a non disclosure agreement when he or she is fired shortly before the holidays, under circumstances that by any measure are simply heartless.

  4. BrianB

    Of Christmas Tragedies:

    I don’t hear this anywhere online. This should’ve spread, media or not, on the Internet already.

  5. supremo

    The termination agreement was probably not explained very well to the former employees. I don’t think there is a non disclosure clause. It was probably an arbitration clause which means the employee cannot go to the courts or the Department of Labor for complaints without talking to the employer first or going through arbitration.

  6. mlq3

    you do know, geo, the president’s husband was fetched by a private jet from the san miguel fleet?

  7. hvrds

    “No, mlq3, I think you want us to think that the economy really isn’t that good (the gov’s success is a mirage), that the foreign jobs that are supposed to save the country will not and that opening up to these Scrooge foreign firms will make Tiny Tims of everyone,” Big Picture Lunatic Fringe punditry

    If the economy is really that good, can one man’s column actually change that reality?

    Facts as gleaned from official sources. The nominal share to GDP of the sub-sector that is called the BPO is between 2-3 percent.. Using a comparative analogy with India that has an almost $1 trillion economy. The share is between 4-5 % of GDP. However the total size of the BPO in India is about 1/3rd of the entire Philippine economy. $140B. It’s size relative to the total of the global economy is 1/3rd of 1 percent.. Global economy – $50 T (nominal dollars)

    I am sure there have been cutbacks overall but also expansion. The net figure is hard to come by.

    Formal figures of GDP from more advanced economies are more formal than the figures from the developing economies whose informal sector comprises a guesstimate of official figures.

    Over the past few months there has been cutbacks in India in this sub-sector. So much so that marriage brokers have now stricken off their choices for arranged marriages men who work in the sub-sector.

    The proof if the pudding will come out in the first quarter of next year when the government will release which sectors of the economy have slowed their growth or have contracted.

  8. Bert

    just a thought, no offense meant.

    why is it that everytime somebody wrote anything negative about GMA and husband Geo bristles then started manifesting outrage against the anti.

    just coincidence maybe?

    he said he’s not pro-gloria but just ‘for the rule of law’.

    coincident nga siguro.

  9. hvrds

    The Villafuerte/Nograles Gambit on Con Ass.

    Nograles wants to get the House to pass a resolution to call for a con ass to remove citizenship restrictions on the purchase of land etc.

    He wants to convince the Senate to do the same along the same lines.

    All that is needed is a simple majority vote.

    Then once a Con Ass is called that is an entirely new temporary legal animal created simply to amend the constitution.

    That is when the issue of voting separately or jointly will come into play when the legal animal is in session.

    GMA to the Senate and to those opposing the Cha Cha now, “Let us talk about it.”

    The problem with that statement today is the fact that GMA’s words have lost their currency.

    Even the case of an attack of diarrhea becomes a big issue for speculation.

    To many it appears she has already sold her soul to remain in power for power’s sake. That fear has taken hold in a large enough cross section of Philippine society.

    I cannot think of any confidence building measure on her part with the exception of a resignation for the country’s sake to enable the country to move along non-partisan lines to prepare for this once in a century economic crisis.

  10. justice league

    Manolo,

    I know you are pro federal.

    But why hasn’t Makati city put Congress and the President to task for their support for Federalism?

    I think it would have been better if Makati city unfurled a banner proclaiming “Payag pala ang Presidente at Kongreso sa Federalismo. Kaya dapat itaas ang IRA sa 80%. NOW NA!” or words to that effect.

    I believe Makati city has a lot to gain with an increased IRA.

  11. mindanaoan

    justice league, “I believe Makati city has a lot to gain with an increased IRA.”

    i don’t think makati’s IRA is significant relative to its income

  12. Philip Manila

    I believe its a bit too late the hero to be amending the charter in order to attract foreign investors in the face of looming global recession, or even depression.

    What significant foreign investments do you foresee in the short to middle-term considering the big fall in the demand for manufactured parts that will eventually be used by final assemblers China, Korea, etc.

    Exports- dependent countries like the Philippines are especially vulnerable. Consider that RP’s top exports: 1. semiconductors..3. computer parts…5.automotive parts…7. electrical apparatus, etc.

    A domestic stimulus package looks good. But no fertilizer distribution scheme please!!!

  13. cvj

    The ‘scary’ predictions in Fortune are not all that scary compared to the worst that can actually happen. In particular, Nouriel Roubini’s prediction of a maximum 10% unemployment rate in the US by 2010 is somehow reassuring.

  14. justice league

    Mindanaoan,

    i don’t think makati’s IRA is significant relative to its income

    I said I believe Makati city has a lot to gain. And I believe 400 million Pesos is a lot to gain.

  15. Carl

    “…two groups poised to establish a strong presence in the power industry are the Aboitz and San Miguel groups, squeezing out the Lopezes (and here, an interesting alliance is in the making between Roberto Ongpin and Eduardo Cojuangco’s interests).” – mlqIII

    Nothing new there. It’s the old musical chairs game among the booty capitalist elite. Ordinary folk don’t give a damn who’s in and who’s out. They’re always out anyway.

  16. mindanaoan

    justice league, if you have a revenue of 10 billion, that doesn’t seem a lot

  17. istambay_sakalye

    “All tyranny needs to gain a foothold is for people of good conscience to remain silent.”
    Thomas Jefferson

  18. rego

    Geo, that¡¯s how the dots started being connected for the Marcoses and Estrada.” M LQ3

    This is the reason why I hate history sometimes.Never mind if my beloved father is a history teacher himself …

  19. justice league

    Mindanaoan,

    Several years ago, PGMA (who professess to be for Federalism) wanted to reduce the IRA for the LGUs.

    One of the LGUs vehemently against the idea was Makati city.

    Their total income then was P7.4 Billion and their IRA was about P300-400 Million.

    But even with already an income of 7.4 Billion Pesos; “Makati’s IRA budget goes to improvements on infrastructures, for government employees’ salaries and for local economic projects.”

    I believe 400 million Pesos is a lot to gain.

    //www.mb.com.ph/issues/2004/08/27/MTNN2004082717195.html

    And don’t bother to cite to the last paragraph.

  20. Carl

    “A domestic stimulus package looks good. But no fertilizer distribution scheme please!!!” – Philip Manila

    Philippine-style stimulus package? Contracts will be cornered by a chosen few and only a handful will feel the “stimulus”. Isn’t that the way government and business have always operated in the Philippines?

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