This premartial law editorial cartoon suggests the theme for today’s entry, which is: as a possible constitutional plebiscite or national election looms, the government, at a time of economic recesson, is going to be hard-put to find the cash it needs to put out to curry favor with the electorate and its allies.
I. The Economy and Jobs
New stories today range from 11-mo trade gap widens to $6.9B to Manufacturing output down 6.6% (for November, 2008, where Imports were down 31.5%). The Department of Labor calculates 23,485 job losses traced to crisis since October last year. Overseas, Bloody Monday: Over 71,400 jobs lost (200,000 lost since 2009 began; 2.5 million lost in 2008).
A few days ago, Jon Limjap wrote in Filipino Voices on IT and electronics industries in a binary of fuzzy fate:
The silver lining in this landscape of layoff despair is that the local IT (the internet and software part of it, not the hardware part) as well as the BPO industries are faring well, with some experts believing that the jobless can be absorbed by these industries altogether…
Not all is bright and dandy in those industries either, however…
And if you think the call center industry is safe, think again: late last year, Dell has started moving call centers back to the United States after constant customer complaints of having difficulty talking with Filipino and Indian call center agents. While the service has a higher price than Dell’s regular customer support services, it underscores the not-so-obvious fragility of the call center industry…
Meawhile, the government’s various activities (see the interesting discussion, in the comments section, in Marking out, on the NTC’s proposed order concerning telecoms content providers) is leading to a lot of hand-wringing concerning blogger ethics (see an excellent piece in It’s True! It’s True!), but also, apprehensions about whether e-commerce is going to start being intensively taxed. See Cocoy’s New Stuff on NTC’s Proposed Measure to License Online Content.
The other day a colleague told me of a briefing Citibank held for some prominent businessmen, in which they were told “this year can be one of two things for you: bad, or disastrous.” If the bankers say that, and the businessmen say that, you know both will be telling the politicians, “so sorry, no money” going into 2010. And so, the need to find alternative sources of political funding. All the scandals being touted by the government can therefore be seen, from the perspective of needing to shake down enemies, identify vulnerable patsies, and rake in the money.
II. World Bank Report
Even as Ebdane: 700 firms on DPWH 2007 blacklist: 300 more to be added, Senate told, the Senate’s also been told, by Ebdane, 3 banned firms still have gov’t projects. Senator Miriam Defensor Santiago elicited chuckles from the public over her hare-brained tantrums in the Senate, but it might be interesting to see if all the entertaining heat is producing very little light.
Of course the President’s husband has been dragged into the fray, with a to-be-expected pooh-pooing of his critics courtesy of the Palace.
What I find even more remarkable, though, is that no one outside the Executive Department seems to have gotten hold of the World Bank report; nor has the WB been forthcoming in releasing the report either to the public or to the legislature.
Think of the implications of this. Today I updated my previous entry on the government knowing of the World Bank report months before it became news. Now if the Executive Department is on a cozy enough basis to know what the World Bank report says, exactly (and exactly who’s implicated in the report), but neither the Executive Department nor the Ombudsman are willing to share both what they know and the report itself with the legislature -think of how this handicaps the ability of the legislature to actually get to the bottom of things.
The administration, if its friends are involved -and if the President’s husband is somehow involved- knows exactly what holes to plug, what leaks to watch out for, and what testimony to suppress.
III. Rural Banks
The Monetary Board, according to the Central Bank, has to decide whether to approve a loan to the Philippine Deposit Insurance Corporation, to cover payments to depositors in failed rural banks. See PDIC seeks P14-B loan from BSP:
According to PDIC president Jose Nograles, the insurer has started negotiations with BSP Governor Amando Tetangco Jr. for another loan worth P14 billion to boost its deposit-insurance fund.
The fund would cover claims of depositors of failed banks. By law, up to P250,000 worth of deposit per account is insured with the PDIC. Pending before Congress are bills that would double the deposit insurance to P500,000, a development Nograles and Tetangco support.
Nograles said the PDIC is now deep in debt, having incurred up to P72.5 billion in loans by the end of 2008.
The state-owned deposit insurer, however, has a deposit-insurance fund of only P60.5 billion. Thus the need to borrow from the BSP, Nograles said.
“We are borrowing P14 billion from the BSP to fund our deposit-insurance claims this year,” he said. The loan will be structured as a 10-year obligation of the PDIC.
As Manuel Buencamino pointed out in a column on September 3, 2008, the rural banking sector’s been shaky for some time now. Back in September, the House of Representatives wanted to relax rules covering rural banks’ capital requirements; the Rural Bankers Association objected to the measure; so did the Central Bank. As Buencamino pointed out, the House was trying to bail out the rural banks:
It seems undercapitalized rural banks lending money taken from depositors and creditors lured by outrageous interest rates are the intended beneficiaries of House Bill 3827. The bill will legalize “behaviors posing moral hazard.”
The BSP tried to place a number of undercapitalized but munificent rural banks under receivership, but the rural banks, acting in concert, were able to stymie the BSP with a temporary restraining order (TRO) from a Manila Regional Trial Court and a Court of Appeals division taking its sweet time on the BSP’s urgent appeal for a reversal of the TRO.
“Those rural banks, already enjoying the protection of the courts, might also get their meal ticket from the Batasan,” observed an apprehensive depositor.
An article in today’s Inquirer (the first of a four-part series) reports on Legacy banks’ double-money scheme: Former PDIC chief was alerted 3 yrs ago.
Ricardo Tan recalled that he was alerted by former Prime Minister Cesar Virata – who was then president of the Bankers Association of the Philippines – to the growing proliferation of “double-your-money” schemes that were being used to attract investors into putting their money in little-known financial institutions and rural banks.
“Virata called me up and told me that there were people soliciting deposits all over the country, offering double-your-money [schemes] and cars as incentives,” said Tan, who was at that time the president and CEO of PDIC, the government agency tasked mainly with insuring the people’s deposits in failed banks.
A probe of the banks that offered these schemes led to one name: Celso de los Angeles Jr., an Ateneo de Manila University and Asian Institute of Management graduate who already had previous entanglements with regulators in the 1980s…
“We invited him (De los Angeles) to our office to learn more about his business, and to my surprise, he showed up with a battery of lawyers,” Tan said.
The Philippine Daily Inquirer tried repeatedly to contact De los Angeles – who is now mayor of Santo Domingo, Albay – through his legal counsel, publicists, political allies, and at his offices to get his side, to no avail.
What followed and preceded this meeting was a chain of events that was directly linked to the BSP decision to close 13 small rural banks across the country just a few days before the long holiday break of December 2008, according to the former PDIC chief…
“What we found were fictitious deposits, [rotating] collateral from one bank to the other, unsafe and unsound [banking practices] and improper documentation.”
However, a weak regulatory and legal system – and the alleged involvement of high-profile politicians – also meant that PDIC would shell out 250 percent more to cover the banks – insured deposits three years later.
“When I left PDIC in April 2006, our exposure to De los Angeles – 12 banks in terms of insured deposits was P4 billion,” Tan said in an interview with the Inquirer. “Since then, PDIC’s exposure has risen to P14 billion.”…
..These banks linked to the Legacy Group are Rural Bank of Paranaque, Rural Bank of San Jose (Batangas), Rural Bank of Carmen (Cebu), Pilipino Rural Bank, Philippine Countryside Rural Bank, Rural Bank of Calatagan (Batangas) [now Dynamic Rural Bank], Rural Bank of DARBCI, Rural Bank of Kananga (Leyte) [now First Interstate Rural Bank], Rural Bank of Bisayas Minglanilla [now Bank of East Asia], San Pablo City Development Bank, Bicol Development Bank, Nation Bank and Rural Bank of Bais.
These banks closed voluntarily in late 2008 and were taken over by PDIC early this month.
Well, the slow burn finally led to a full-blown capitalization conflagration.
Meanwhile, House to start probe on Legacy fiasco:
Representative Teodoro Locsin of Makati City has described the failed banks saga as the “Celso de los Angeles Legacy scam.”
“He milked it, thinking it was a cow,” Locsin said of De los Angeles and the Legacy Group.
He added that “the mafia” in Philippine Deposit Insurance Corp. “took a dive for Celso de los Angeles.”
House Speaker Prospero Nograles is also calling for an investigation of the Legacy Group’s shuttered pre-need firms.
But what does the House intend to accomplish? Considering it had lobbied to keep the banks afloat and seems inclined to keep other troubled rural banks afloat, it therefore has to investigate itself -which is doubtful- even as it tries to apply pressure on the PDIC and the Banko Sentral.
As indicated by the Speaker’s interest in the pre-need activities of failed Legacy Bank, other regulatory problems are slowly simmering, too. See Gov’t mulls bailout for preneed sector even as 35 insurers warned on capital deficiency. You can expect insurance claims to increase as times get tougher and some businessmen turn to filing false claims (on the basis of arson, etc.) or when the coffers of insurance companies hard-hit by no new policies being sold, have to face unexpected big claims.
IV. Drug Menace
Related to the above, today’s Business Mirror editorial points to a statement by “four former presidents of the Philippine Deposit Insurance Corp. (PDIC), three of the most recent finance secretaries and two of the most senior former central-bank officials, among others”, warning of “the increased boldness and arrogance by rogue bankers and their political padrino.”
According to the editorial, the Central Bank governor is, at least, getting moral support. But what about whistleblowers? The editorial then goes on to say -and this is what makes it relevant to this sub-section of today’s entry- that other whistleblowers don’t have it so good:
But for many other bureaucrats, especially in regulatory bodies, who are waging lonely battles against wrongdoers in and out of government, the story is quite different. In fact, some of the names in the FSGO roster have themselves once suffered the kind of shabby treatment that this administration has come to be known for, when it comes to dealing with its executives. We all remember stories of Cabinet and sub-Cabinet officers, directors or heads of regulatory agencies – many of whom got on the wrong side of the administration by stepping on the toes of cronies – who were rudely told to quit, or learned about their “resignation” in the most embarrassing situations, often through the media. One ambassador learned he had been replaced just before undergoing surgery; another learned it from reporters while they were airborne. Perhaps the latest casualty is the chief of the National Printing Office (NPO), Enrique Agana, who was abruptly replaced last week, after a most curious string of events: Right after he firmly blocked a cabal of contractors linked to alleged anomalies in the past, he suddenly found himself facing the most unpalatable of charges – child molestation – and Mr. Agana is crying frame-up. This is not to conclude that Mr. Agana is innocent; it is simply a plea for the due process that was denied him. Child molestation is a serious charge; but equally deserving of attention, nay, a thorough investigation, is the man’s claim that the usual “syndicates” that had the run of the place for years are aggressively lobbying for more share of the pie. That Mr. Agana – man with a clean work record as far as we can ascertain – is to be replaced by a controversial general embroiled in the “Hello, Garci” case only makes this latest Executive firing uglier. The Palace cannot accuse the opposition this time of beating a dead horse; the decision to name former Admiral Tirso Danga is an invitation to dredge up anew this issue against the President, considering the NPO prints sensitive election forms. Meanwhile, the people are losing another good public servant; and getting the signal that working in the bureaucracy here is much too hazardous for reformers.
The willingness of the current gangsters in government to go after its enemies by any means (and to keep probing the defenses of the public by trying to put in all sorts of characters into politically-useful positions -in place of Agana, the President tried to appointretired Admiral Tirso Danga, is something we ought to consider as the same government revs up its “War on Drugs.” The Palace hastily backtracked on Danga’s appointment when NAMFREL raised a hue and cry because of Danga’s having been implicated in the Hello Garci scandal.
Which is why the point raised by John Nery in his column Drugged (or, PDA for PDEA) , yesterday, needs to be more widely discussed:
Lost in all the noise is the enormous power of the beast that is coiled inside the law creating the PDEA.
Tito Sotto, chairman of the Dangerous Drugs Board (DDB) as reconstituted by Republic Act 9165, hinted at the stirrings of the beast, with his appeal for a return of the death penalty. PDEA Director-General Dionisio Santiago, once one of President Gloria Macapagal-Arroyo’s favorite generals and for five months Armed Forces chief of staff, let the ghostly cat out of the bag when he admitted that PDEA agents sometimes planted evidence. “We sometimes do this although this is against the rule of law. Definitely we only apply this matter to some cases, like a subject who is publicly known to be peddling drugs but always escapes arrest. This is when we enter the picture.”
Now, the President’s impending appointment of Palparan, the so-called “Butcher” at whose whetting stone the Melo Commission laid the blame for some extrajudicial killings, to the DDB is the virtual pronouncement of the Arroyo administration’s new strategy, its own version of “narcopolitics.”
Call it paranoia, but perhaps we should brace for a future where critics, whistleblowers, just plain annoying people can be removed from (political or media) circulation with a timely dose of planted evidence.
Note that Section 11 of RA 9165 provides that mere possession of “any dangerous drug” (the provision specifies the quantities) can result in “life imprisonment to death and a fine ranging from five hundred thousand pesos (P500,000.00) to ten million pesos (P10,000,000.00).”
…We should hold the PDEA’s feet to the same fire we have started for the DoJ. Far from a simple black-and-white fable, we are dealing with the human narrative in all its messy glory: flawed human beings, doing sometimes contradictory things, for not necessarily simple reasons.
For instance, my instinctive reaction to the House hearings (a different matter from the newspaper reports) was formed largely by an aversion to the PDEA chief legal counsel, Alvaro Bernabe Lazaro. I did not know him from Adam (or Adan), but the way he comported himself during the first televised hearing triggered internal alarm bells. In particular, his attempt to raise the stakes by bringing in something Resado said about Chief State Prosecutor Jovencito Zunio in a phone conversation was shameless.
After much hyping of the phone call, Lazaro then recalled Resado saying, “Pare, delikado, ‘wag tayo sa telepono mag-usap. Eh kasi si Chief Zunio pumirma, eh.” [Buddy, this is risky. Let’s not talk on the phone. It was Chief Zunio who signed it.] After insinuating proof of wrongdoing, he then said (I am recalling from memory): But I am not insinuating anything.
Santiago is another flawed character. In 2005, he was charged before the Ombudsman with a graft case, based on a military probe alleging that after he had retired as AFP chief of staff he “defrauded the government” by depositing an P8-million check in his personal account. I do not know what happened to the case, which his successor Gen. Efren Abu had announced. I can find no further reference to it.
What about Marcelino? He remains unsullied by all the back and forth, a good man trying to do his best in a sordid though necessary job. But he strikes me as Ruben Guinolbay redux: The Scout Ranger captain emerged a hero from the Lamitan siege, but his personal bravery could not mask the reality that, in Lamitan, the Armed Forces suffered one of the worst debacles in its history.
I’d pointed out the disquieting statements of Santiago in my June 15, 2008 column, The Rule of Glo .
I’d like to raise some additional points, here, that I originally raised in the discussion going on Smoke’s blog entry, Militarization is it?.
If you’ve noticed, reports on the illegal drugs trade, specifically on the manufacture and sale of Shabu (a danger posing a real National Emergency, in my opinion), always point out there are several factors at play.
The first is that foreign drug syndicates won’t engage in “technology transfer,” so chemists come and go, to cook up batches of the stuff.
Have we heard of a concerted plan to increase the scrutiny of foreign arrivals, in cooperation with the drug agencies of foreign countries?
The second, is that ephedrine is a necessary raw material. Tons of the stuff is imported under false pretexts.
Have we heard from officialdom, first of all, how much ephedrine is required for legitimate purposes? Next, have we heard of any sort of scheme to beef up customs inspections, and fortify the system of permits and documentation?Have we heard of a doable plan to secure our coastlines, scrutinize private ports and docks, keep tabs on interisland shipping? Keep track of cargo manifests outside Metro Manila, in a country where Marina officials keep track of these things by scribbling data on yellow legal pad, which indicates the absence of a timely and reliable national database on interisland and international commerce?
The third is, if you recall the saturation drives conducted by the armed forces in Luzon during the time of Palparan, and similar efforts undertaken in urban poor areas last year, one benefit people did point out, was that public disorder and things like the drug trade were dramatically affected by the saturation drives. And yet, we have not heard of any plan to integrate the police and armed forces in simply maintaining the high visibility of law enforcement agents, in a manner that inspires confidence and not unease, in the public. This is particularly true in far-flung provincial areas where the drug trade seems to be taking root as things get hot for the syndicates in the metropolis.
The absence of a holistic picture, informed by facts which could be gleaned from a government that is looking at the big picture -interdiction, patrols, scrutiny, as wel as the more dramatic rounding up of petty pushers- is why we ought to consider whether this is really a serious effort to fight the Drug Menace or a great to-do in aid of extortion and growing the administration’s campaign kitty. As the economy takes a downturn, the government will be hard-pressed to raise taxes, to pay for patronage, and to build up a war chest for whatever comes next -and so, needs to farm out favors, in the tradition of tax farming.
Cocoy, in his Filipino Voices entry All Your Drugs Belong to Me , had also pointed out that oodles of money’s to be made from drug testing, when a drug testing policy requires safeguards being put in place. Yesterday’s Cebu Daily News editorial, Drug tests can be abused, lays out the dangers of a blanket policy of drug testing for kids:
Still there are fears that, like in the Alabang Boys case, the police and the PDEA may manipulate drug test results, a convenient way to extort money from students.
There are grave concerns about how the drug tests will be conducted and its potential for abuse.
Urine samples can be switched. Test results can be manipulated.
Just observe the hole-in-the-wall health centers that abound near the Land Transportation Office where adult drivers have to pay for a certification that they were tested for drug use.
Users anticipating a test can also abstain from their vice or flush it out of their system in time for the exercise.
Then again, random drug testing is also known to produce false-positive results. A person can show misleading positive results after having taken over the counter medicine like Ibuprofen, a common pain reliever.
The whole system of managing the information that comes out of a surprise drug test is supposed to be conducted in strict confidence and under controlled terms for results to be reliable.
Imagine the damage to a youngster’s self confidence or reputation, when rumor spreads in school that he tested positive in the screening test? (A confirmation test would have to be made before one concludes that illegal drugs were found in one’s system.)
Another cause for concern is when school officials conduct drug tests with specific targets in mind, namely students they consider troublemakers. The test would be a convenient means to bar enrollment or defer graduation of an undesirable.
A lot of assurances will be have to be given that the right of students to privacy, to refuse the test and not to incriminate oneself without due process are guarded.
Again, this is a question of government going for the spectacular, and expensive, shotgun approach to the headline-hogging crisis of the day. Schools, for example, could have been encouraged, as a matter of policy, to undertake drug tests, but leaving the details to the schools themselves. Greater education and a kind of neighborhood watch could be encouraged, too; at the same time training in detection and the counseling of kids, has to take place among educators and school staff, the kids themselves, and parents.
V. LPG and Gasoline
In my on LPG entry the other day, I quoted industrialist Raul Concepcion as saying he expected oil prices to go down. But instead, Oil firms hike gasoline prices (including, interestingly, ethanol blend gasoline). The third time prices have gone up for gasoline this month (while the price of Diesel continues to fall):
According to data from the Department of Energy, the regional benchmark Dubai crude climbed to an average $46 a barrel as of January 26, from an average $41 a barrel last month.
The price of unleaded gasoline based on the Mean of Platts Singapore (MOPS) benchmark for refined petroleum products likewise increased to a $51-a-barrel average as of January 26, from its December average of $41 a barrel.
The reason for this is put forward by the International Energy Agency in its Oil Market Report:
Crude oil prices rose to nearly $50/bbl in early January, supported by cold weather, the Russian/Ukrainian gas crisis and fighting in Gaza. Subsequently, weak global refinery demand and an increasing crude overhang have pressured Brent futures to currently around $45/bbl, while WTI was at $35/bbl, distorted by record-high Cushing stocks.
Other news has OPEC and other producers slashing output to keep crude at the $50 a barrel range for this year. Maybe Concepcion didn’t take this into account in his ad.
A caption to a front page photo in the Inquirer says LPG prices are expected to go up 5 Pesos per kilo next month (with no answers, up to now, about the ongoing shortage in supply).
The Philippines is out of control and getting worse with no hope in sight……..
As I said in Rom’s blog,good points to ponder.
I erased a long comment, or I think one of my comment did not show up,but good thing it was not published I had more time to read the comment I was reacting to;all along what I was saying is already pointed out in your comment.
For our sea ports
The dotc handles marina,the coast guard and what else?
the customs is handled by the department of finance
ppa is another animal
we add pdea to the equation
we add the anti smuggling task force
our airports we also have their own alphabet soups
each with their own agenda.
the minimum requirement would be coordination,but rather than say easier said than done, I will just hope hat they will just do it.
“I recently met with the Millennium Challenge Corporation, a US agency that provides grants to countries based on governance. They have commended our gains, contributed P1 billion to our fight against graft, and declared us eligible for more grants. Thank you!”GMA 2008 State of The Nation address
“Even as Ebdane: 700 firms on DPWH 2007 blacklist: 300 more to be added, Senate told, the Senate’s also been told, by Ebdane, 3 banned firms still have gov’t projects.” – mlq3
Manolo, I submitted this comment over at Ellen’s I think we can use it here, too:
If Ebdane will not remove the three companies from the shortlist of qualified contractors, any of the Senators/Congressmen can. I hope Ruffy Biazon or Roy Golez or any of the reps of Miriam or Lacson or even Atty. Harry Roque is reading this, since they can petition the Phil. Contractors Accreditation Board (PCAB) to suspend or revoke the contractor’s license they have issued to the three on the grounds that their scandalous actions have tainted the whole Phil. Contracting Industry before the eyes of the world. This could also be filed and/or supported by the Phil. Contractors Association (PCA).
The Three, E.C. De Luna, Cavite Ideal Int’l, and C.M. Pancho, thereafter, will all be automatically disqualified from all public bidding since only PCAB-certified AAA contractors are allowed to participate in all PBAC (Pre-qualification, Bids and Awards Committee) competitive biddings in all gov’t construction projects especially those over a certain cost limit. Major private commercial and industrial projects also require an AAA license to be qualified. That will keep them out of business for the meantime.
Likewise, the Professional Regulatory Commission (PRC) may be petitioned so that the Engineers, Architects and Accountants under the employ of the three firms and had participated in one way or another, or had knowledge of, the rigging of the bids be stripped of their license or at least suspended, co-terminus with the period prescribed by the World Bank. I assume one or all of the three owners are civil engineers. All contractors require a minimum number of licensed professional engineers who sign on the construction plans.
So guys, better start emailing your favorite Senators and Congressmen. Who says dakdak lang tayo ng dakdak and don’t achieve anything?
moving on to the banned chinese firms.
Atty Roque has was the lawyer of the abaya vs ebdane case;
since ayaw nang mag file for motion for reconsideration ng mga petitioners maybe Roque can find some financial backers to file another case and plug the loopholes that caused the dismissal of the case.
it really is silly na walang implementing rules ang foreign funded projects. Kaya di daw binding ang WB sabi ni ebdane.
I heard chiz filed an amendment to the procurement law, my dad will be working with him.
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LPG, that shortage said to be caused by substitution to lpg by car owners taxi owners and households may have some sense to it,pero bakit nila binenta as alternative ang lpg tapos di nila macontrol ang supply, ngayon ang mga taxi drivers gusto ibalik ang ten peso add on .
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about unemployment.
here are some of the news thta happened.
there was a pinoy in the oZ fired for not using TP(he used tabo)(i winder if benigs heard of this,piesta na naman yon)
and there is this Pfizer laid off employee who massacred his family before committing suicide.
Pfizer and Wyatt merged.
Now layooffs due to mergers can happen even when both companies are doing good pano pa kaya kung hindi,aabot ito sa pinas,pero sana naman wag mawalan ng pag asa ang mga ma layoff.
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edit wyeth instead of wyatt
Nalito yata ako magkasunod ang news sa tv ng merger at ng murder suicide.
I checked the web Hospital worker pala ang pumaty sa pamilya tapos nagsuicide.
One of the authors I wish I could’ve met in person is dead:
http://www.newyorker.com/online/blogs/books/remembering-upd/
The other one–Saul Bellow–died four years ago.
I’ve always wanted to prove that John Updike was as smart in person as they say.
Here’s an interview, nice voice too.
http://www.youtube.com/watch?v=LlD6DmWBU4o
On your views on the economy, the money can be created. That is orthodox advice from Keynesians (we are all Keynesians when faced with a Great Recession). It is quiet proper for the central bank to print money, the only constraint being that it should not trigger runaway inflation.
A picture says a thousand words. But I must say something is wrong, or very, very misleading or at the very least, lacking in the picture/caricature, — it’s as if the villain here is the electorate/people. Say, who’s the original source of money here? Candidates, especially referring to those who are incumbents or those who have connections to the government get their money from the electorate, money which politicians distribute as if coming from their own pockets during election day – not the other way around. This is true with drug money, gambling revenues (e.g. lotto/jueteng), national coffers (sourced from taxes) and now pensions funds, the last which I want to discuss here.
To the government, SHOW US OUR MONEY. Our legislators should check out the stinking mess that is going in around the Social Security System (SSS), under the helm of the spineless Romulo Neri. Jesus Christ, guess where GMA and her cabal will get the money to finance their “pump-priming activities” to avert the fall-out from the job/economic crisis or to make another round of buying the favors of the electorate come election time in 2010 (gigisahin na naman tayo sa sarili nating mantika ‘ika nga). For months and months, contributors cannot inquire on the state of their contributions, via the SSS website (it used to work pretty okay when it was under Corazon de la Paz) and many, many SSS contributors are apoplectic with rage, but it seems no one is taking notice of this.
This should be investigated by the Senate to check out the going-ons at SSS (while there is still time and not all senators have been bought by the hyenas beside the Pasig) and which should strike a real and direct chord with ordinary Filipinos, the middle class, including OFWs, and the businesses which faithfully shoulder half of the employees’ monthly contribution. It seems the government is using the SSS fund for their own political purposes and from tales of pensioners, the fund offers little in terms of security, come retirement day – meaning the money being put there is not being invested well (God knows what they do with it.). Good for those who could afford to get private pensions plans and pack on investments, but the SSS is looked on to by millions of working Filipinos who work in the private sector as their last refuge in their retirement years.
The opposite is true with government pension groups, especially the military and the police. We hear from people who are with the AFP and PNP, retired and active, officers and rank and file, — and GMA did a good job on them — across the board, fattening up their monthly pensions and raising their salaries (check this out: many said among the Presidents, it was only GMA who raised their salaries and pensions — not Ramos, not Cory, not Erap). This is the iceberg submerged, with the tip showing all these ex-military people getting juicy posts in the government. Not hard to see why there has never been a successful coup against the midget. The intellectual elite could bang all they want and end up raving in vain and frothing in the mouth (like Conrado de Quiros) but GMA goes straight for the moral jugular — slash a vein, shown them the money, and effectively kill/neutralize the righteous compulsion to kick her out. Not that our soldiers and policemen don’t deserve to be paid well.
Of course, that’s not the whole picture of the apparently generous Madam: public school teachers who cannot launch a coup d’etat with their ancient grading papers and crumbling blackboards, are still among the lowest paid. LOL. But at least, the GSIS website works and they could check where their money is.
When all else fails there is always the drug menace.
You are right: a serious targeted campaign to restrict the sale and possession of shabu and to treat addicts is badly needed but this is clearly not what this is all about. Unless I have missed something, this all sprang from the case of the “Alabang boysâ€Â, right? In other words, the alleged sale and possession of a recreational drug, used by a tiny number of people and not known to be addictive. Is this really one of the most serious problems the country faces, requiring the president to take personal control as the anti-drug czar? The whole thing is so absurd.
I think Gloria must have been watching the movie Drug Store Cowboy, in which William Burroughs waxes lyrical about the demonization of the drug “problemâ€Â. I am sure old Bill is having a good laugh as he looks down on this fulfilment of his prophesy.
http://www.mcc.gov/documents/score-fy09-english-philippines.pdf
The Philippine Scorecard
It would be nice if GMA concentrates on solving existing problems and not create new ones. But she won’t stop.
There is this new EO to create a committee to amend the the ARMM law. I say leave it as is. Use the P20 M money allocated to help the 5000 deported Filipinos from Sabah, a territory that the Philippines claim. Use whatever is left to create a committe instead to resolve the proprietary rights of the heirs. Sovereignty rights can be resolved later.
Stop the drug testing of students and use the P90 M allocated for it to finish the mapping of the continental shelf.
ChaCha can wait too. If she wants to run again for president in 2010 then let her run again. Let’s ignore that presidential term limit. Let’s allow past presidents to run again in 2010 even if they don’t want to run. Maybe they would all shut up if they lose.
In these trying times, some only heave a sigh, others go crazy scrambling for money to feed their families, while a few others are contented like fattened cows with overflowing money stuffed in their bank accounts.
And what do our leaders do? Just look at the agenda they have been discussing at the hallways of Congress: cha-cha to prolong their hold on power or make it even juicier, forcing Filipinos to speak a foreign language (English) better, investigating the “Alabang Boys” and the contractors for bribery, etc. Not to mention those who are positioning themselves for the 2010 elections.
What a MESS and WASTE of energy!
You’re right, Supremo. They focus their sights on creating more problems than solving existing ones. I’d like these leaders to use their talents before they die.
“Atty Roque has was the lawyer of the abaya vs ebdane case;
since ayaw nang mag file for motion for reconsideration ng mga petitioners maybe Roque can find some financial backers to file another case and plug the loopholes that caused the dismissal of the case”
since binanggit na din ni Roque sa philippine star ang abaya vs ebdane , I asked my dad baka pwede nila itong ituloy, he said, all Roque has to do is approach them.
http://www.philstar.com/Article.aspx?ArticleId=435628&publicationSubCategoryId=63
di pa tapos ang laban, madami nang nagyari
the justice secretary made the decison of Abaya vs Ebdane as an excuse during the ZTE hearings.
http://www.gppb.gov.ph/laws_rules08/laws/DOJ%20Opinion%20on%20NBN.pdf
Ebdane says, the WB gudelines are different.
Look at below.
http://www.gppb.gov.ph/cgi-bin/faq/faq_2.asp?fcat_id=22
ang labo nila covered daw ng section four tapos sa last paragraph, governed by the guidelines of the IFI.
what if their guidelines are contradictory to our laws, like what ebdane and the rest are saying?
guidelines are guidelines, we may agree with it or not.
the non passage of an irr b,really is important.
since no one wants to move,might as well amend the law.
“I heard chiz filed an amendment to the procurement law, my dad will be working with him. ”
he did file sb 1963, since he is the head of the committee on Constitutional Amendments and revision of codes and laws mas mapapadai nang gumalaw ang bill nya.
http://www.senate.gov.ph/lisdata/66045847!.pdf
“For our sea ports
The dotc handles marina,the coast guard and what else?
the customs is handled by the department of finance
ppa is another animal
we add pdea to the equation
we add the anti smuggling task force
our airports we also have their own alphabet soups
each with their own agenda.
the minimum requirement would be coordination,but rather than say easier said than done, I will just hope hat they will just do it.”
At least for the maritime security coordination, alam kong may gumagawa nito.
Kasali na ang transnational crimes which include drug trafficking and smuggling.
sa airport natin di ko alam kung me grupo gumagawa ng policy proposal para sa ating immigration and police.
Ang hirap nga sa mga policy makers natin ay pang national ang scope, tulad ng sinabi mo tungkol sa manifest, it may come in electronic form and a hard copy form pagdating sa manila pero pag dating sa province wala na.
Yung lumubog na barko last year di rin maayos ang manifesto nunng chemicals na karga nya.
Sharing of IFM(inward foreign manifest) is a must yung NSO nga hirap makakuha eh sa maynila lang yan pano pa kaya sa probinsya .
Now to ephedrine, this can be bought over the counter dahil treatment ito for hyotension at ginagamit for weight loss kaya pwede itong gawing tea.Kung tea na yan pano mo pa yan macocontrol kailangan lang ng no approved therapeutic blabla na requirement ng BFAD.
di BFAD na naman tayo babagsak pag walang incident abroad tulad ng melamine scare di sila gagalaw. Tapos sasabihin nilang kulang sa pondo at tao.
Kung yung Dibidi nga di natin makontrol ephedrine pa,na maaring dumagsa dito sa legal na pamamaraan.
Has the BSP and the PDIC now become part of partisan political machinery for raising funds?
Gabby Singson did it for FVR will Tetangco di it for GMA and her boys?
It sure looks like it.
Speaker Nograles’ protestation of innocence regarding his association with the Legacy Group and the brains behind it, Celso de los Angeles, only entangles him further in this sinister conspiracy to defraud the Filipino taxpayer.
Based on newspaper reports, Nograles professes his innocence by proclaiming that he is himself a victim. Newspapers quote Nograles as having placed as much as P14 million in Legacy (newspaper accounts vary – some quote P14 million, others P10 million, the fact is Nograles claims to have money in Legacy).
I was first under the impression that Legacy was just another Ponzi scheme. However, it turns out to be something much more disturbing. It is a deliberate plot to defraud Filipino taxpayers by taking money from investors under the guarantee that, should anything go wrong, their investments will be insured and paid for by PDIC.
Legacy carried out this insidious scheme by telling investors to make placements in several Legacy-owned Rural Banks in blocks of P250,000 or less, thereby guaranteeing coverage by PDIC. Obviously, it was taking advantage of a law in order to promote a scam.
I was approached a few years ago to invest in Legacy. The returns were too good to be true: double your money in 5 years. If the amount was large enough, they would even throw in the free use of a Ford Expedition, to be transferred to the investor’s name at the end of the 5-year period. My immediate conclusion was that there had to be something fishy to be able to guarantee those yields. I have found out that, in recent months, to appease some investors who wanted to pull out their money, the yields were raised to double your money in 3 years!
It doesn’t take rocket science to decipher a plot to commit grand larceny when you are presented with a package that guarantees fantastic revenue and are assured that risk will be shouldered by the government, thru PDIC.
I may commiserate with some greedy souls who, oblivious to the implications to defraud the government, were blinded by the pot of gold at the end of the rainbow.
However, Speaker Nograles, while perhaps a greedy soul himself, is no ordinary soul. He is not only a legislator, he is also, by his own assessment, a brilliant lawyer. He could not have been oblivious to the attempt to defraud PDIC. As a lawmaker and the No. 1 official in the House of Representatives, he should even have been duty-bound to expose such a despicable scheme to swindle taxpayers. Because this scam wasn’t nipped sooner, the government stands to lose billions. I’m no lawyer myself, but, to my mind, this scam even qualifies as economic sabotage!
To add fuel to the fire, Nograles had his brother appointed as President of PDIC, which is like having the fox watch over the chicken coop.
I am sorry to say that Speaker Nograles’ crocodile tears fail to move me. Nor should they move Juan de la Cruz. On the other hand, the move should be one of outrage. And, if as sources say, the Vice President is also involved, he, too, has to account for having anything to do with this.
Carl, your inside info on Nograles is impressive. That’s the kind of business top honchos in policy making do, they insure themselves first before thinking of the ordinary taxpayers.
Nograles doesn’t deserve pity, the millions he lost to Legacy is not his in the first place – one can only surmise where it comes from, knowing him to be an astute politician.
That’s one kind of leader whom the Filipinos should not, and never, entrust their fate upon.
Congressman Nog Nog has a point though. After the Asian Crisis major banks in the Philippines were insolvent.
I know people who have been involved in litigation till today on issues relating to the crisis. However the BSP turned its eye away from the bad banking practices of the major banks.
A lot of the SPAVs are actually simply highly leveraged shell companies to warehouse bad assets. One such example exposed was the Lehman SPAV. There is a lot of shit that the BSP and the DOF have kept under wraps.
Don’t you love it when currency is based on political standards. For young men go to Congress or join government and get rich.
The BSP is a public monetary utility. “We the people” actually fund it. Yet they get away with grand larceny. Legacy is but the tip of the iceberg.
So much for the enlingthened citizenry…
http://www.philstar.com/Article.aspx?articleId=436650&publicationSubCategoryId=66
“The Asian bad bank solution”
“The US should also learn from the 1997 Asian crisis. Back then, Korea, Malaysia, Indonesia, Thailand and the Philippines faced similar problems like that of the US. These countries had fragile banking systems due to high non-performing loans (our own version of toxic assets) that were illiquid and hard to sell.”
“One central strategy for the resolution of the problem was the establishment of centralized asset management companies (AMCs) which are basically aggregator banks. Indonesia established the Indonesia Bank Restructuring Agency (IBRA); Malaysia, Danaharta; Korea, the Korean Asset Management Company (KAMCO); and Thailand, the Thail Asset Management Company (TAMC). The Philippines, due to fiscal constraints, was not in a position to institute a centralized AMC. Instead fiscal incentives were provided for the establishment of private AMCs, a.k.a. SPAVs. These AMCs helped clean out the bad loans problem, and in time, credit growth regained momentum.”
“The experience of these Asian countries also showed that the purchases of the AMCs helped arrest the freefall of loan prices in a buyers’ market, and consequently, helped prevent further bank losses. In the selling side, centralized AMCs also helped other sectors in the economy, particularly the real estate sector, in ensuring price stability.”
A strategy is what is needed
“While the creation of a “bad bank†has its pros and cons, what is important is something definite is being done. Whether it is good for the bank or bad for the bank, what is important is that there is a strategy, there is clarity and direction.”
“In the end, we believe the equity shareholders, the debt holders, and ultimately, the taxpayers, will have to share the pain (in one form or another) if that’s what it takes to stabilize the system and get the banks lending again.”
In August 2008, I attended the launching of the new product of Legacy Consolidated Plans named as Cash On Real Estate(CORE) presented by Celso delos Angeles. This new product will replace the double your money which scheme is until August 2008 only. The CORE product had impressed me because the investors are at least secured with a land title in case the company closes. However, there were no takers with the CORE product. Later, the double your money continued until the first week of October 2008. There are few things which I can hardly forget during the launching which Celso said to wit: 1) That he can see that all pre-need companies will collapse by 2009; 2) that, what he learned from AIM is use OPM-Other’s People Money. The closure of Legacy companies was well planned and not due to the restrictions of the government regulators.
I was a war refugee in August 1990 from Kuwait and placed all my war reparations to the double your money in preparation of my retirement. Now, I am very angry to learned that I am a victim of the greedy scammers. All I ask from Mr. Celso delos Angeles is to have a conscience of returning the money to all the victims.
Rose if the Legacy head told you that he felt that all pre-need companies would collapse that would mean he had an awareness of the impending credit crunch about to come to come.
Lehmans collapse had all but effectively shut down the interbank markets around the world.
That means that the wholesale markets for funds had all but shut down.
Inflation would soon reverse course and lead to deflation. Banks and financial institutions like Legacy live on inflation and inflationary expectations…. They need high interest rates to happen and they can make money on the huge spreads.
If the trust funds in the hands of the pre-need funds were to use fair value accounting today on today’s asset valuations of the equity and/or bond markets they would be found lacking…
What he did when he moved placements in his pre-need company to his bank to offer protection to his clients. That is exactly what the government of the U.S. did with investment banks who saw their asset valuations collapse and to save their clients and their stockholders the U.S. government allowed them to apply for a banking license to get FDIC insurance.
You went for higher yields and placed all your eggs in one basket. It is an issue of fairness. Other people who were more discerning chose lower rates but are protected. Why should they now come in to save you together with other taxpayers?
When the regulators cut the kite strings the leverage collapses.
That is the problem with sudden shocks to financial or banking institutions. An organized shutdown would have been desirable in all cases.
Shock treatment sends wrong signals. That betrays a fundamental flaw with the regulators for letting it get out of hand. If they want to treat it like any other private business they should legislate waring labels that people should be careful that they bear the risk personally.
I have some friends who were caught in this Legacy scam, so I have found out a bit about it. But that information about Celso de los Angeles is amazing! He foresaw the collapse of the pre-need industry in a matter of months, yet he didn’t do anything to save his investors. I’m also amazed that he talked so openly about it. It’s almost outrageous!
From what I’m told, he did give advice to have investors place their funds with him in individual accounts in the different Rural Banks owned by Legacy. And to break down this investments into lots of P250,000 or less, in different names (wives, children, parents, in-laws, etc.), in order to qualify for reimbursement from PDIC. This already shows that there was a systematic plan to defraud PDIC. And, unknowingly, most investors were complicit in this fraudulent plot.
I do support the idea of deposit insurance. The intention and the concept of PDIC is a good one. However, in the case of Legacy, it was methodically and cold-bloodedly taking advantage of a well-intentioned law in order to defraud its investors and, eventually, the Filipino taxpayer.
this is what’s so intriguing about the whole thing, aside from the people who were hurt. a tremendous amount of effort seems to have been made by the house of representatives to bail out the legacy owner and friends. efforts that went back months. and if you’ll remember, there were proposals to raise the deposit coverage of pdic to deposits amounting to 500k. now since we have a tiny middle class, which is considered inconsequential by the politicians, i wonder if they think any backlash from middle class types will matter, politically. but it does strike at the heart of let us have stability so as to grow the economy mantra. because now that the tree is barren of fruit, there is the very real possibility people will have turned their back on their principles only to see they themselves got screwed by the people they were willing to keep in place for stability’s sake.
again, the banking regulators in the country were caught with their pajamas down their knees. and again i’ll give a few examples why our Banking and Financial system is the soundest and safest in the World today…
1..no de los Angeles can own more than 10% of any financial institutions, thereby can not control it’s operation..
2..the banks rates for interest for deposits and savings, short terms and guaranteed long terms are within the the guidelines and competitive among banks.
3..banks should maintain a percentage of cash liquidity.
4..pre-needs is regulated the same as insurance companies..
just from these few measures and a constant monitoring of banks operation, have to hear a single bank or any pre-need or insurance firm failed under questionable circumstances…actually no bank has ever failed..Few years ago, banks wanted to go Big by Merging, but due to the lack of Lobbying in the Parliament, and the foresight of then Finance Minister Paul Martin, that Bankers have the Tendency to destruct themselves if given the opportunity, he blocked the plans and instead put more measures to regulate them closely…telling the Bankers that he was just Trying to save them from Themselves.
Celso de los Angeles did more than learn his lessons well at AIM. Regarding Other People’s Money, he more than used it. He took other people’s money, albeit through some smoke and mirrors.
This is an interesting article in today’s Inquirer:
http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20090203-187087/Legacy-head-hit-for-fraud
It’s interesting to note the huge amount (by Philippine standards, at least) that de los Angleles took from other people:
“The Bangko Sentral ng Pilipinas (BSP) ordered Legacy’s 13 rural banks, which have a combined P14.03 billion in insured deposits in 132,642 bank accounts, closed just before last Christmas for being insolvent and for engaging in unsafe and unsound practices.â€Â
And, how, despite swindling other people, de los Angeles can still boast of being a very rich man:
“In his defense, Angeles said he had other assets amounting to P1 billion, net of liabilities.â€Â
The guy’s a billionaire!
Last Sunday’s Inquirer also had an interesting editorial on Nograles’ legacy in Congress:
http://archive.inquirer.net/view.php?db=1&story_id=186726
Why are we so focused on the actions of Speaker Nog Nog and ignoring the bigger picture.
The disparity of power. You save the big and destroy the small.
Let us look at the role of the technocrats who raised free markets to an exact science. They loved being called scientists instead of the theoreticians that they are. Now they are all looking at corruption as an excuse for the flaw in their theory.
It pays to blame the corrupt political system but this is the effect of wrongheaded doctrinaire based policies.
Some one should be organizing those poor devils who lost their money but more than 90% of them will get their money back if they put it in banks anyway.
Banks are win win situations for the owners. It is the only business that guarantees return of capital and yield to the owners from the taxpayers.
Get government out of the picture and let it fall. That is where markets work best.
Now these wise guys will build a platform to run on this and get elected and do it all over again down the road.
Being sodomized is a way of life in these islands.
“February 2, 2009
Op-Ed Columnist
Bailouts for Bunglers
By PAUL KRUGMAN
Question: what happens if you lose vast amounts of other people’s money? Answer: you get a big gift from the federal government  but the president says some very harsh things about you before forking over the cash.
Am I being unfair? I hope so. But right now that’s what seems to be happening.
Just to be clear, I’m not talking about the Obama administration’s plan to support jobs and output with a large, temporary rise in federal spending, which is very much the right thing to do. I’m talking, instead, about the administration’s plans for a banking system rescue  plans that are shaping up as a classic exercise in “lemon socialismâ€Â: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.
When I read recent remarks on financial policy by top Obama administration officials, I feel as if I’ve entered a time warp  as if it’s still 2005, Alan Greenspan is still the Maestro, and bankers are still heroes of capitalism.
“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,†says Timothy Geithner, the Treasury secretary  as he prepares to put taxpayers on the hook for that system’s immense losses.”
We should stop making ethical and moral judgments about corruption and just let things slide. In weak states that is the way markets redistribute wealth.
Criminality in all forms are ways in which inefficient markets correct unequal power structures. Wealth redistribution is accomplished. Look at the kidnappers of the Red Cross workers. The foreign community would like to help but who do they use to provide their help. Commander Bravo or Kato?
Markets first and foremost are social institutions based on trust. Criminal syndicates also work on that principle. Breaking the code warrants a death sentence.
Look at Mike and Gloria Arroyo. They are forced to share and distribute the wealth amongst their supporters in order to gain and preserve loyalties.
That is the basic core principle of trickle down economics.
Now all the Presidentiables are all there dying to take their turn at the wealth generating office. Tama na GMA, kami naman.
I need to know the latest legacy group news that is why I am blogging about it also, mahirap nang mawala pa ang inenvest ko. here is my blog about it http://alfredo.palconit.com/legacy-group
Although I have no interest to protect, I do have relatives who have been hit by their investments in the Legacy rural banks.
After much hand wringing and “how could you be so stupid,” all I could tell them that they would get their principal back provided they are within the minimum.
Whatever assets that were the invested vehicles (stocks, bonds etc) will go to the guys in the government.
We have a black hole that is known as the BSP…..
My husband, brother in law and my father in law has decided to invest the money at legacy double your money in 3 years in order for us to sustain our needs and for the welfare of our children. But we are shocked that this happen, the only money we invested be gone in a click of an eye. Now, we are quarelling about the money. Sana Mr. de los angeles can think that he had ruined the life of many flipinos who are the victims of his company.