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May 24

The Long View: Congressional tightrope

The Long View
Congressional tightrope
By Manuel L. Quezon III
Philippine Daily Inquirer
First Posted 22:37:00 05/23/2010

OUR constitution, in Article VII, ordains the procedure for Congress to follow in proclaiming a president-elect: “The returns of every election for President and Vice-President, duly certified by the board of canvassers of each province or city, shall be transmitted to the Congress, directed to the President of the Senate. Upon receipt of the certificates of canvass, the President of the Senate shall, not later than thirty days after the day of the election, open all the certificates in the presence of the Senate and the House of Representatives in joint public session, and the Congress, upon determination of the authenticity and due execution thereof in the manner provided by law, canvass the votes.”

Then, “The person having the highest number of votes shall be proclaimed elected, but in case two or more shall have an equal and highest number of votes, one of them shall forthwith be chosen by the vote of a majority of all the Members of both Houses of the Congress, voting separately.” How Congress actually goes about the canvassing is left up to Congress itself. The wrangling on the rules begins today: with the Constitution further specifying that “The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President, and may promulgate its rules for the purpose.”

Speaker of the House Prospero Nograles insists that Congress, sitting as the National Board of Canvassers, “will not sacrifice accuracy for speed,” while at the same time suggesting the legislature can complete its work by June 4. There are those who view Congress’ role as largely ceremonial when it comes to proclaiming the president-elect; others prefer to err on the side of scrutiny by means of vigorous debate over the documents submitted to the Senate. At the heart of the clash in approaches to Congress’ duties is a mistrust of our institutions and how they go about their duties.

The public consensus has been—to my mind, at least—that the electorate would trade justice for security to a large extent. The public would, on one hand, insist on the legitimacy crisis being resolved within our institutions and nowhere else, thus having to swallow the galling impunity of the administration if accountability mechanisms failed (as they did). It preferred the ensuing political war of attrition to matters being resolved by means of a blitzkrieg in the streets, since by all accounts the administration was prepared to kill to stay in power. And yet, by forestalling the larger risk of extremist solutions such as juntas and wacky transitional councils, the public emphatically reserved for itself the immense satisfaction of vomiting out the administration and its leading candidates by means of peaceful elections. The writing was on the wall for all to see from the mid-term elections in 2007 onwards.

The Palace refused to see it then; hence its trying to abolish national elections by means of various Charter change schemes and which failed (because public opinion was foursquare behind the principle that the electorate should vote for the next chief executive). It refuses to see it now; hence the schizophrenia exhibited by its having to trumpet automation as among its great legacies, to now being at the forefront at the efforts to turn all the many shortcomings of the system it willfully put in place, into an opportunity to deprive its replacement of the legitimacy it enjoys—precisely because the electorate made a national mandate by means of elections a non-negotiable objective.

In a similar manner its supporters who’d moved to subordinate the Supreme Court to a parliamentary government—for that was one of the long-desired objectives of “constitutional reform,” Palace-style—are now the first to demand upholding judicial supremacy, on the tried-and-tested administration principle that form trumps substance. The truth is, everything is expendable as the President tries to ensure not only her political survival, but the continued relevance of her brand of transactional politics which thrives on ambiguity.

Congress’ dilemma is it has to proclaim a mandate the public conferred despite every effort of the administration to prevent it; it is a dilemma because if it decides to railroad the proceedings, it bequeaths the administration’s own legitimacy crisis to the next: thereby saddling the next Congress with a problem the public precisely set great store in avoiding by enthusiastically trooping to the polls last May 10. But if it bogs things down in wrangling over the results, it also risks the kind of uncertain political situation where the whole house of cards comes crashing down with no certainty of who, if anyone, can pick up the pieces. This is precisely the sort of uncertainty the public insisted on avoiding from 2005 onwards by expressing its displeasure with all extremist proposals, whether to turn the country into a one-party parliamentary state, or put its fate in the hands of a junta.

Had a fully manual count at the very least accompanied the automation process—as Aquino and many others proposed going into the elections—this situation would’ve become impossible. But we have what we have. It will require a great balancing act on the part of Congress to avoid rubber-stamping its proceedings in “noted” fashion on one hand, and on the other, according minorities the democratic opportunity to manifest their objections in a manner that will not prejudice their right to take matters to the Supreme Court if necessary.

It can strike the right balance if it recognizes from the start that the public exactly knows how it voted; that the public recognizes fairness when it sees it; and is generous enough to accord Congress the opportunity to begin redeeming itself by ensuring Ms Arroyo moves into the biggest office in the Batasan not as a PM-in-waiting, but a glorified has-been.

47 comments

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  1. Carl Cid Inting

    I had thought that we had made great strides during that last election. Now the Inquirer reports this:

    “MANILA, Philippines—Thousands of election returns (ERs) transmitted from the precinct count optical scan (PCOS) machines are void because these do not comply with the country’s laws on digital signatures, according to the chair of the House committee on suffrage and electoral reform.”

    “Makati Rep. Teodoro Locsin, chair of the committee, said Sunday the ERs, on which the certificates of canvass (CoCs) are based for proclaiming the next president and vice president, had no digital signatures as defined by the country’s e-Commerce Law. The Electronic Commerce Act of 2000 (Republic Act No. 8792) gives legal recognition to electronic documents so long as these can be authenticated.”

    “But Locsin was hopeful that the joint session of the Senate and the House of Representatives, acting as the national board of canvassers for the presidential and vice presidential races, would just “close its eyes” on this “inadvertent mistake” and vote to recognize all the ERs.”

    “The oversight is so pervasive, in fact universal, that all the ERs are worthless and it is as if the elections did not take place. I don’t think my peers would allow this to happen. They will choose not to raise any questions and ignore this,” he said.”

    I know what the late Max Soliven would have said: “Sanamagan!!!”

    Can’t we do get anything right? No wonder most of our “kababayans” are so skeptical.

  2. mlq3

    Locsin said this on my radio show on May 21: http://mlq3.tumblr.com/post/618358255/radyo-inquirer-quezons-avenue-may-21-2010

  3. thecusponline

    I think a simple but effective solution would be for the Comelec en banc to validate by signing-off on the results of the automated election tally based on the random manual count. That should dispel any of qualms over legality of the COCs and ERs.

  4. Erineo

    “The oversight is so pervasive, in fact universal, that all the ERs are worthless and it is as if the elections did not take place. I don’t think my peers would allow this to happen. They will choose not to raise any questions and ignore this.”

    I can only say: “WTF?” and “OMG!”

    Would this only pertain to the Presidential and Vice Presidential races? If, as Locsin says, “all the ERs are worthless and it is as if the elections did not take place”, will the losers in Senatorial, Congressional and local elections take this sitting down and “ignore” this “inadvertent mistake”? We all know what poor losers our politicians are. How nobody loses, but is “cheated” in elections.

  5. alden40

    God forbid if that happens. I hope we just go with cusp suggestion. Learn what ever we can learne from the first automated election And move forward!

  6. mlq3

    The random manual count is another can of worms, you can listen to amb. de villa here:

    http://www.ourmedia.org/media/quezons-avenue-may-19-2010

  7. iwriteasiwrite

    According to the Comelec during the hearing earlier today the PCOS digital signature conforms to the Republic Act 9369: which left the issue of what constitutes a digital signature unspecified, which is why then they 8436 (was it?). If what I understood was correct, there was the option to use either a machine based or BEI based signature; the Comelec opted for a machine based signature based on their reading of the relevant laws.

    I guess the question now is, is their reading of the law correct? Sounds like we have the Pinoy version of the hanging chad.

  8. iwriteasiwrite

    *which is why some then referred to Republic Act 8436

  9. SoP

    We should turn a blind eye to the legitimacy of our successful elections like we turn a blind eye to Pacquiao’s steroid-abetted world boxing champion status.

  10. SoP

    Success, even if delusional, should be tolerated for the good and confidence of a nation.

    The Americans do it (a materialistic, consumption-based economy backed by credit binge). The Chinese do it (8% year on year growth at the expense of ecology). The Europeans do it (EU unification premised on unified currency).

    Why can’t our congressmen learn from these delusional successful nations and just shut the fuck up?

  11. SoP

    edit: The Europeans do it (political unification premised on faltering unified currency).

  12. iwriteasiwrite

    Actually, I’m fairly sure most of the Congressmen are the ones suffering from delusions…of grandeur that is.

    My favorite complaints have been “We’ve been in control for years! How can we have lost?!”

  13. SoP

    With respect to our comparative failure vis-a-viz other nations who took up electronic voting, we’re not that far behind. Look up “electronic voting” on wikipedia and the litany of controversies from other nations will give one a perspective on the regular fallibility of these systems.

    What surprises me though is the OA reaction of our congressmen, especially Teddy Locsin. For Christ’s sake man, WHY WEREN’T YOU OR OTHER CONGRESSMEN SHOUTING OVER THE TOP DURING THE MANUAL ELECTION CHEATING OF THE LAST 50 OR SO ODD YEARS?

  14. drdavisjr

    What I do not understand is, during Gov. Barbers testimony today, he alleged that in November 2009 he was approached by operators selling him votes for 50M pesos. Why wasn’t anyone up in arms on his “complicity” in the fact that he didn’t expose these operators at that time. Why is it only now that all these allegations of CF card tampering coming out? I mean, if you really wanted to ensure honest and clean elections, why not expose these crooks months ago? Sounds like a lot of rubbish. If it is ever proven that the elections were accurate and credible, these people that are trying to derail the elections should be charged and imprisoned. How much of taxpayer’s money is being spent in this kangaroo court of a hearing anyway???

  15. baycas2

    If I remember right, Amb. de Villa said during the start of the “random” sampling for the RMA that in Batanes, precincts in far-flung areas were excluded from the sampling population. It’s obvious that the RMATs will have a difficult task in getting to those areas. I don’t know what they did in other parts of the country.

    How will it become a probability sampling when individual members of the population didn’t have an equal chance of being selected? A representative of the NSO is part of the TWG-RMA. Was a non-probability sampling acceptable to him/her? I think this will affect the percentage of error.

    Besides, is a Non-random Manual Audit violative of R.A. 9369?

  16. d0d0ng.0fw

    The media has credibility issue on election reporting. It is just only adding confusion.

    1. Only Congress can proclaim the president and vice-president.

    2. Election return is not an issue. Congress is not counting every election return (that is impossible). It will count only the tally in the COC (certificate of canvas) by the CBOC (city) or PBOC (provincial).

    3. COC only become questionable when the tally exceeds the count of registered voter per province or city (there are 80 provinces and 1,634 cities).

    4. Over count is verifiable and can be resolve by checking duplicated PCOS transmission (which was allowed for comparison purposes, to highlight error). This is also the reason why 250 million vs 50 million voters in the server.

    At the end of its work, Congress will publish the result of the correct tally based on verifiable COC with right count of voters.

  17. d0d0ng.0fw

    drdavisjr on “Gov. Barbers testimony today, he alleged that in November 2009 he was approached by operators selling him votes for 50M pesos.”

    This is already a foregone conclusion -all hot air.

    1. Comelec has jurisdiction, not Congress.
    2. Even if Barber testimony is true, it has no evidence that his opponent Matugas paid 50 million (Matugas by the way has less resources than Barbers to begin with).
    3. Barber families had been in local politics for too long and residents are not that too happy to see another Barber again.

  18. Erineo

    The Inquirer reports that, “going by the stories of losing candidates, a group of “koala bears” must have been roaming the country during the election period offering to fix votes for a fee ranging up to P50 million”.

    Going by the number of “whistleblowers” coming out of the woodwork, all losers by the way, it was more like an army of koala bears swarming the country from Aparri to Zamboanga and Sulu. Yet, nobody reported anything strange going on until after the elections.

    I must correct the Inquirer story, though. Fees range up to P1 Billion, if the koala bear himself is to be believed.

    On the flip side, it is gratifying to note that we have so many honorable and principled politicians, who turned down opportunities to win at all cost. They all seem to be paraphrasing Capt. Renault of “Casablanca” fame: “I’m shocked! Shocked to find that cheating is going on here!”

  19. drdavisjr

    Just curious, but could there be some substance to the theory that, for the first time in Philippine election history, the will of the people was observed by the implementation of the AES. And the true will of the people was OUT with GMA and most of her cronies.

    Obviously, this isn’t good for her since she is trying to gather support for a speakership bid and eventually even have the constitution changed and return as PM.

  20. baycas2

    The random manual count is another can of worms…

    Auditing the machine count
    by Mahar Mangahas

    Philippine Daily Inquirer
    First Posted 00:03:00 02/13/2010

    xxx

    In short, the manual audit should be equally as reliable as the old-fashioned manual count for that precinct. After completion, both the manual count and the PCOS count should be revealed to everyone present.

    Surprise random auditing. Each RMA precinct should be chosen by a credible random process from among all precincts located in the congressional district (as given in Sec. 29) to be represented. I think a simple lottery system, by an independent committee, before witnesses, is easy to do, costs little, and is more credible than a “computerized random selection.” To save real-time, lotteries can be done simultaneously.

    The actual lotteries should be done as late as possible—say mid-way during voting hours on May 10—in order to minimize advance-warning of the RMA precincts. For every precinct/BEI to be audited, the auditor-BEI should be selected (also by lottery, to minimize collusion) from precincts conveniently nearby. Then the auditee and the auditor should be informed by telephone. Thus all BEIs should prepare for the possibility of being audited, or else of being assigned to do a traditional manual count in the precinct of a different, nearby, BEI. Likewise, all official watchers and observers should be ready for the possibility of their location being audited.

    After all, isn’t the main purpose of the RMA to positively keep all those in the AES process on their toes? The statistics would be a byproduct only.

    xxx

    There goes the “surprise” audit as the RMAs are still not done days after the election.

    There goes too the “random” audit…

    It’s not only in the “lottery” way of selection but sampling starts on the representative “balls” that were included in the lottery drum (tambiolo). The sample will be unrepresentative of the population if certain precincts of the total are excluded from the sample.

    Not including remote precincts (as what I heard Amb. de Villa said, around 11am on election day, as regards Batanes) causes a “biased sample” as a result of “sampling bias.” Generalization may not be inferred from the results.

    This particular Comelec resolution further bears me out as even those who were already selected for RMA are also being excluded:

    RESOLUTION No. 8930

    IN THE MATTER OF THE CONDUCT OF THE RANDOM MANUAL AUDIT IN THE SELECTED PRECINCTS IN LUBANG, OCCIDENTAL MINDORO AND BONGAO, TAWI-TAWI

    xxx

    Considering that the location of the clustered precincts subject of the random manual audit in Lubang, Occidental Mindoro and Bongao Tawi-Tawi are far-flung areas/island municipalities, the Commission RESOLVED, as it hereby RESOLVES, to approve the foregoing recommendation of Commissioner Lucenito N. Tagle to authorize the Technical Working Group of the Random Manual Audit (TWG-RMA) to randomly select other precincts from other highly accessible municipalities as substitutes

    (Emphasis mine.)

  21. nick

    “On the flip side, it is gratifying to note that we have so many honorable and principled politicians, who turned down opportunities to win at all cost. They all seem to be paraphrasing Capt. Renault of “Casablanca” fame: “I’m shocked! Shocked to find that cheating is going on here!”-Erineo

    So sad that those many honorable and principled politicians happened to be confined in a single category…election losers. Sad indeed. They should be hailed as heroes.

  22. ramrod

    We have just seen the biggest gathering of losers in one place.

  23. Ace

    Signature lack legitimized by SC, says lawyer

    MANILA—The absence of digital signatures from the boards of election inspectors on election returns transmitted by the counting machines is against the poll automation law, but has been “legitimized” by the Supreme Court, a professor at the UP College of Law said Tuesday.

    Lawyer Harry Roque is one of the convenors of the Concerned Citizens’ Movement that filed two petitions against the Commission on Elections and Smartmatic-TIM’s automation of the May 10 elections.

    “Rightfully or wrongfully, this has been legitimized by the Supreme Court” when it dismissed petitions against the automated elections, Roque said of the Comelec guideline that told BEIs to no longer encode digital signatures for the election returns generated by the precinct count optical scan (PCOS) machines.

    Roque said the CCM in its petitions against the Comelec and Smartmatic, supplier of the PCOS machines, included the issue of the instructions to the BEIs to forego the encoding of the digital signatures as one of the arguments against the automated election system.

    “The Supreme Court didn’t pay attention to it,” Roque said.

    He said the Supreme Court ruled that there was “no grave abuse of discretion” on the part of the Comelec in coming up with the guideline.

    Roque said the Supreme Court ruling upholding the Comelec and Smartmatic’s automated election process despite the guideline that supposedly violated the poll automation law and the rules on electronic evidence “legitimized” the practice.

    A Comelec resolution directed each BEI member to press “No” when asked by the PCOS machine if he or she would like to digitally sign the transmission files with a BEI signature key. A BEI has three members, usually public school teachers.

    The poll body said the move was aimed at removing one step in the transmission process to minimize human intervention and protect the results of the balloting.

    Smartmatic on Monday said that each of the PCOS machines had its own digital signature.

    The Comelec noted that the poll automation law did not say that it was the BEI that should digitally sign the election results.

    Roque still believed that the Comelec guideline violated the law and the rules of court but indicated that not much could be gained if the results of the balloting were questioned because of the election returns’ lack of digital signatures.

    “It has already been legitimized by the Supreme Court,” Roque said.

    By a vote of 13-2, the Supreme Court in February last year upheld with finality the P7.3-billion poll automation deal between the Comelec and Smartmatic.

    “The court harks back to its parting message embodied in its Sept. 10, 2009, decision, but this time even more mindful of warnings and apprehensions of well-meaning sectors of society, including some members of the court, about the possibility of failure of elections,” said the high court ruling.

    “The court, to repeat, will not venture to say that nothing could go wrong in the conduct of the 2010 nationwide automated elections. Neither will it guarantee, as it is not even equipped with the necessary expertise to guarantee, the effectiveness of the voting machines and the integrity of the counting and consolidation software embedded in them,” the ruling added.

    The high court said that difficult and complex undertaking “belongs at the first instance to the Comelec as part of its mandate to insure orderly and peaceful elections.”

    Poll officials have disputed the claim of Makati Rep. Teodoro Locsin that the electronic returns bore no digital signatures that would attest to their authenticity.

    Despite the Comelec’s explanation and Roque’s opinion, former lawmaker Homobono Adaza said proclaiming any victor in the presidential and vice presidential race would be a crime.

    Adaza, a lawyer of a losing candidate for vice mayor of Tagaytay City, said any proclamation would be null and void because of the absence of the BEI digital signatures in the election returns transmitted by the PCOS machines.

    He said all ballots should be manually counted or elections could be held again. —-inquirer.net breaking news

  24. Ace

    Whiners deserve to lose, says ex-GMA poll lawyer

    MANILA, Philippines—The election lawyer who defended President Macapagal-Arroyo against fraud allegations in 2004 believes similar tales hounding this year’s elections were incredible, saying candidates alleging offers of machine-switching or electronic vote manipulation may well have been victims of scams.

    “Impossible” was how Romulo Macalintal on Tuesday described stories of fraud attempts offered to certain candidates now coming out in Congress as he scolded the complainants for reporting only after they lost.

    “I do not believe that there was such switching of PCOS (precinct count optical scan) machines or of memory cards. Could you imagine the phenomenon of doing that in every precinct? There could be a pandemonium of sorts. It is impossible that those syndicates could have done that,” said Macalintal.

    He said candidates may have just fallen victim to a scam, where syndicates pretending to have the means and connection to pull off electronic election magic would offer to cheat in their favor for hefty fees.

    But in reality, the likes of “Koala Bear,” the evasive whistleblower who allegedly padded votes for paying clients and shaved votes from their contenders, may well have had no capability to conduct such sophisticated way of cheating.

    He also reprimanded candidates recently coming out with tales of cheat offers for their “sin of omission,” their failure to report the incidents immediately, if they indeed happened. Reporting such grave violations should have come as a matter of civic duty especially to public servants, he said.

    “You really deserve to lose the elections if that’s what you did. You do not deserve to be elected. You do not have the right to say that you are looking after the welfare of our nation. Because if you have concern for our country, that would have been what you did: have them arrested,” Macalintal said.

    inquirer.net breaking

  25. d0d0ng.0fw

    baycas on “The random manual count is another can of worms…”

    Random manual count addresses efficiency and limited in scope. Due to its small size, it cannot be used as a basis to change the overall election result.

    There are 30 copies of COCs distributed to different parties. Unless one copy is different from the others, there is no basis that the tally is wrong.

    Only Comelec can do a recount if a case is filed. With all the noises, nobody filed an election case with the Comelec.

  26. d0d0ng.0fw

    Ace on, “Signature lack legitimized by SC, says lawyer”

    Unfortunately, UP College of Law Professor Atty Harry Roque is just making a mountain out of a mole hill which is bad for the academe.

    Each PCOS machine has its own digital signature which is enough for traceability. Roque wanted the digital signatures from every election inspector (3 BEIs for each ) added. That is only creating more confusion – manual bureacracy.

    We might as well go back to manual rather than electronic.

  27. d0d0ng.0fw

    “Adaza, a lawyer of a losing candidate for vice mayor of Tagaytay City, said any proclamation would be null and void because of the absence of the BEI digital signatures in the election returns transmitted by the PCOS machines.”

    Another lawyer who is ignorant of the law. SC already uphold Comelec rules on digital signature (PCOS machine instead of election inspectors). The losing candidate should instead fire his lawyer to cut on his losses.

  28. baycas2

    Define “random:”

    random [?rænd?m]
    adj
    2. (Mathematics & Measurements / Statistics) Statistics
    b. chosen without regard to any characteristics of the individual members of the population so that each has an equal chance of being selected

    Does exclusion of “far-flung precincts” as representative samples of the population conform to the above definition? Will the remote areas in Batanes have an equal chance of being selected when they were excluded, as I heard, before the “lottery?”

    Why were the Lubang and Bongao precincts excluded when in fact they were already randomly selected? Is it only due to the inconvenience on the part of the RMATs? It’s like a “reverse exclusion criterion” for a population of precincts.

    Randomization is important for two reasons: First, it provides a sample that is not biased, and second, it meets the requirements for statistical validity. This is “probability sampling” that SWS and Pulse Asia generally employs in their surveys.

    The process that the TWG-RMA used was a “Non-random sampling” or a “Non-probability sampling.” I believe the law on Random Manual Audit (R.A. 9369, Sec. 24), as the title implies, refers only to a manual audit that is to be done with “probability sampling.”

    —–

    d0d0ng,

    No one is saying that the RMA will, in your words, “be used as a basis to change the overall election result.”

    It is an audit…basically to gauge or assess how well (or how poor) the AES worked, as Mangahas has opened his article. He, however, required RMA to be a “credible random process:”

    “Each RMA precinct should be chosen by a credible random process from among all precincts located in the congressional district (as given in Sec. 29) to be represented.”

    Are they doing the RMA right in the first place? Flawed methodology will affect the conclusion from the gathered results. Generalization may not be inferred if the selected samples are unrepresentative of the whole population.

    So, at the end of the painstaking task of RMA, can the public believe Amb. de Villa? Indeed, yes…ONLY if the proper first step is followed…

    —–

    Incidentally, I heard on radio yesterday that Ermita already filed an election protest with the Comelec.

  29. baycas2

    A walk-through of the process here:

    http://www.scribd.com/doc/28476535/Pcos-Lecture-for-Bei-Seminar

    They said “NO” was pressed for the digital signature prompt prior to transmission (slide 97). The initial 8 copies of the PCOS count upon closing the vote were not digitally signed and so are the remaining 22 copies upon transmission.

    The BEI’s “iButton key” should have been used prior to transmission (slide 99).

    Comelec will explain the process, I expect, this afternoon.

    Let’s wait and see how will this option of omitting the BEI digital signature be appreciated by the Canvassers…

  30. Erineo

    The irrepressible Homobono Adaza will bring Manoling Morato as his star witness to the wholesale cheating and vote-buying during the last elections. This is turning into a soap opera.

  31. Ace

    Locsin admits error on s-signature

    MANILA—Makati Rep. Teodoro Locsin said Wednesday he was wrong in his position on the absence of the digital signatures of the Boards of Election Inspectors on the election returns.

    Locsin, at the hearing of the House committee on suffrage and electoral reforms, said the digital signatures of the precinct count optical scan machines were enough compliance with the law. He had said earlier that the BEIs should have encoded their owns signatures on the electronically transmitted results.

    “I admit I was wrong. There is a real reason why a PCOS signature is a practical equivalent of a digital signature,” he said. —inquirer.net breaking

  32. Carl Cid Inting

    Whew! I hope Locsin doesn’t cry wolf again. While he can be very witty and engaging, this guy is very mercurial. He can blow hot and cold in an instant. He suffers from the same disease as all our politicians. An extremely bloated ego.

    I really hope we get past these elections soon enough. There are so many pressing problems to tackle. Huge as the collective egos of our politicians may be, our problems loom much larger.

  33. UP n Grad

    Huge problems, yes, the budgetary shortfall is one of them.

    Those attentive to Noynoy’s own statements would have realized that Noynoy had modified his “NO NEW TAXES” promise to the Makati Business Club. Noynoy promised “NO NEW TAXES” based on his promises that anti-smuggling anti-tax-evasion efforts will result in (1) people being jailed by October or November 2010; (2) BIR revenue collections to spike as tax-evasion/smuggling drops. In the weeks before May elections, Noynoy has quietly released refinements to his “NO NEW TAXES” promise. His corrections raise the possibility that he won’t be successful in the jailing of smugglers/tax-evaders. Failure to jail smugglers translates into failure to increase tax collections.

    Noynoy gave himself six months. By January or February 2011, Noynoy may be announcing EVAT and other tax-increases if the budget shortfall has not been solved by his “I HAVE A LIST AND I”M WILLING TO USE IT” program.

  34. eyesgonzales

    I’m really wondering how he’ll deal with the fiscal problem. I’m betting he’ll take the easy way out and slap taxes left and right. And as a reporter covering the Finance department, I wonder who will take the Finance portfolio. What a suicidal! 🙂

    Iris Gonzales (www.eyesgonzales.blogspot.com)

  35. UP n Grad

    The budget shortfall widened by P3Billion a year as tarriffs on many imports (asphalt, others) were reduced to zero.

    “GMA-talsik Diyan!” will blame GMA : tariff action is just spite to further hobble incoming administration. Outgoing GMA-admin puts the tariff to zero as Pilipinas compliance wtih ASEAN agreements.

  36. Carl Cid Inting

    The Finance portfolio will be a difficult one, especially if fiscal prudence were to be order of the day. It isn’t just the U.S. and Europe who are trying to rein in spending and deficits. Even China is now preaching fiscal conservatism, and is trying to “cool down” its economy. Noynoy has inadvertently hinted that he will appoint Mar Roxas to a cabinet position, after Mar serves out the one-year ban on losing candidates. Will he throw Mar this hot potato? After all, Mar is qualified, and he’s already been at DTI which, in comparison, is not half as challenging. In the meantime, there are other possible choices, such as Joey Salceda. Although he may not want to give up the governorship of Albay. Particularly if he were just to warm the seat for Mar.

    There seem to be some silver linings to the economy, however. 1st quarter growth amounted to a whopping 7.3% this year.

    2nd quarter should be as promising, due to election spending. The restraints will be agricultural productivity, which will probably decline due to the dry, hot spell. And, of course, we cannot ignore the power shortages of the past few months. Those should take a toll on productivity.

    Anyhow, whether the economy expands impressively or not, the new administration will not be able to take credit for 1st half, 2010 growth. The sitting President isn’t at all shy about taking credit for that:
    http://business.inquirer.net/money/breakingnews/view/20100527-272367/Arroyo-buoyant-after-RP-economy-grows-73-percent

    After the 1st half, all bets on the economy are off. Leonor Briones, former national treasurer, sees an economic slump after the new administration takes over in July. See Inquirer article:
    http://business.inquirer.net/money/breakingnews/view/20100527-272358/RP-economy-headed-for-slump-says-former-national-treasurer

    We will see about Briones’ prediction. However, Noynoy’s choices for cabinet positions so far have not been inspired ones. The unimaginative “recycling” of GMA appointees has been disappointing, and has already elicited criticism from different sectors. So far, it looks like GMA circa 2001-2004. Will “retro”, rather than “change” be the “new look” of the next administration?

  37. thecusponline

    The growth in the tax effort from 10-11% of GDP plus the seeming V-shaped recovery that Q1 seems to indicate bodes well for the remainder of the year. Economic and fiscal experts Medalla and Diokno indicate that keeping the deficit to within 2% of GDP which is achievable is all you need to soothe the worries of bond markets. Balancing the budget would be misguided in their view given the recessionary headwinds blowing from Europe.

    Tidying up loose ends here, the digital signature issue seems to have died. The fraud issues can be refuted by the results of the RMA which show less than a 1% discrepancy as reportedly observed by Melo (subject to NSO confirmation). Congress has begun its tally. Just as the doomsday No-El scenarios failed to eventuate, it seems the No-Proc scenarios will likewise peter out.

    With GMA given a “midnight” blessing of a recovering economy in the form of Q1 GDP figures, it provides a fitting backdrop to an amicable handover of power on June 30. It is time for all the paranoid prognostications to finally come to an end in my view.

  38. ramrod

    With GMA given a “midnight” blessing of a recovering economy in the form of Q1 GDP figures, it provides a fitting backdrop to an amicable handover of power on June 30. It is time for all the paranoid prognostications to finally come to an end in my view.
    —————————————–

    I hope you’re right…looking forward to a smooth, uneventful transition of power…

  39. Carl Cid Inting

    Diokno and Medalla are better as talking heads than when they were at the economic helm in the Erap administration during the Asian financial crisis. But I believe that they would normally be correct to damn the torpedoes and go full speed ahead this time.

    However, let’s not forget that Philippine public-sector debt servicing consumes about 2/3 of our national government expenditures. We have not extricated ourselves out of the debt trap, despite some optimistic projections. Social and capital expenditures will still be severely limited.

    Last week, Bloomberg reported about Greece’s dire straits. How, with their austerity plan, they will be forced to commit as much as 25% of their national budget to debt servicing. And how such a heavy debt service would result in turmoil and social unrest, as essential services would have to curtailed. It was almost funny, if it weren’t so sad! We have been living in much worse conditions for decades, yet nobody even has taken note. All the more, the Philippine elite have to thank Filipino perseverance and tolerance as, if it were in another country, we would have had a bloody revolution decades ago! 25% debt service a disaster! It’s nothing compared to 70%!

    Let’s also not forget that much of the optimism is based on the hope of riding on China’s economic coattails. But, outside of natural resources and labor, we aren’t in as good a position as our Asian neighbors to take advantage of a resurgent China. We don’t even produce enough food for our needs. And the power outages are a testimony to how badly our energy situation remains. Not to even mention how high our energy costs are.

    So, while there may be rays of hope and silver linings around mostly dark clouds, let’s not forget how fragile our economic condition really is. Leonor Briones’ comments in my posting above may be a bit too negative. But being forewarned is to be forearmed.

  40. alden40

    on energy Situation. I havent heard or read about nonoy campign promise on these area, I really beleive that we have continued with the Bataan Nuclear Power Plant.

  41. UP n Grad

    I don’t really expect it to happen, but against the odds, I wish that the incoming administration will put more resources into POVERTY ALLEVIATION. The incoming administration should keep many of the GMA anti-poverty programs. In fact, Noynoy should double the money allocated to Pilipinas programs to eliminate Child Labor, e.g. Pinas-version of Latin American policies which provides cash stipends to low-income families who keep their children in school and out of work.

    Many of the Noynoyistas are clamoring for business and income tax reduction. I hope Noynoy fights this. Pilipinas DSWD needs as much money as it receive for poverty alleviation programs. A visit to “eyesGonzales” blogsite (mentioned above) or a google-search for “Youtube Pagpag children” will provide stark reminder what this “Over 33% of Filipinos live on less than a dollar a day” really mean.

  42. SoP

    I’m the opposite UP n Grad, I hope Noynoy will cutdown on social programs. He should eliminate it actually.

    I sympathize with the poor, I’m not those cold-hearted assholes who think the poor are poor because they’re lazy or whatever.

    But here’s my reasoning: they’re already poor anyway, so would it hurt if we keep them that way for six more years and focus on eliminating our debt?

    In fact, I think the administration should depress the economy for six years, to focus on the debt problem.

    Here’s who Noynoy can do it: the government should monopolize the US dollar currency market by mandating all dollar remittances go through it.

    With our debt standing at $70 billion, and our annual OFW remittances at about $16 billion, the government can allocate $11 billion a year of the remittances to pay off the debt ($11 billion X 6 years = $66 billion)

    The $5 billion that’s left per year is all that can be used by the business sector.

    Of course “buying” $11 billion means the government has to raise $495 billion (at $1 per 45 pesos exchange rate) to exchange with remittances.

    $495 billion is half of our budget, which is why it’s critical to cutdown on non-essential government programs and raise taxes.

  43. SoP

    edit: Of course “buying” $11 billion means the government has to raise 495 billion pesos (at $1 per 45 pesos exchange rate) to exchange with remittances.

    495 billion pesos is half of our budget, which is why it’s critical to cutdown on non-essential government programs and raise taxes.

  44. SoP

    I envision most government money should only go to primary education, DOJ and Ombudsman, and police and armed forces (to quell riots when hunger riots brake out).

    Of course, Noynoy won’t go for it. What we’ll probably have is more of the same same mean more debt debt for years to come.

    And more of the middle class going poor indefinitely.

  45. Carl Cid Inting

    Noynoy inadvertently let the cat out of the bag when he said that Mar couldn’t take a cabinet position until after the 1 year ban on losing candidates. But, should Noynoy want to throw Mar a bone, Mar could fit into the finance portfolio. It could actually be a hot potato, instead of a bone, but it’ll certainly be challenging, to say the least.

    Of course there are others qualified to head Finance. I just hope it won’t be the usual suspects. Noynoy, in his usual unimaginative way, will probably appoint a Makati Business Club crony. Noynoy’s cabinet choices so far have already been criticized by several sectors. “More of the same” is the correct term. It’s actually GMA redux, circa 2001-2004. It’s not “change”, it’s “retro”.

    The surprisingly strong 1st quarter growth can be seen as a silver lining. 2nd quarter should be strong as well, as election spending kicks in. Although there will be some drags, such as agricultural productivity due to the hot, dry season. And, possibly, the effects of the intermittent power outages. But, overall, the 2nd quarter should continue to be robust.

    But this shouldn’t be cause for joy or complacency. The sitting President hasn’t been shy to claim credit for whatever growth we will have in the 1st half this year. And, without the pump-priming of election spending, the 2nd half will probably not be as robust.

    Former national treasurer Leonor Briones has come out with a bleak scenario of her own. Briones says that “the new administration would be facing an economic slump because the budget for the year has already been depleted”.

    “The biggest item in the budget is infrastructure and all the infrastructure projects for the entire year have already been bidded out,”

    Briones also mentions that service, not industry, is where growth was attained. That is very volatile. Industry and agriculture actually declined. There are also severe challenges in addressing the deficits, revenue shortfalls and the debt burden, which is the elephant in the room.

  46. SoP

    I would like to correct myself. I totally forgot about our 300,000 barrel oil binge per day at $20 to $40 per barrel.

    This equates to 2 billion to 4 billion dollars per year.

    So, after allocating for debt and oil, I’m afraid there’s little to no dollars left for the business sector.

  47. Carl Cid Inting

    At least oil is taxed and sold. So there’s revenue generated. Although oil smuggling must be addressed. It’s a very big business. It won’t be as easy as it may seem. The tentacles are long and widespread. And we have thousands of kilometers of shoreline.

    There’s also the matter of food importation. We really do import a large part of what we eat. Rice, flour, corn, soybean meal, beef, chicken, even sugar…not to mention fertilizers and pesticides.

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