Nightmare scenario

A call came in from Channel News Asia which wanted my take on the hostage taking in Manila. I referred them to a colleague in instead. The folks at CNA serve as a kind of guide, to me, as to what Philippine news really matters overseas, and this is the first time they’ve called in a very long time (to my recollection, the last time I heard from them was during the arraignment of the Oakwood mutineers some months ago).

It’s when every parent’s worst nightmare -their children ending up in a danger, in this case, in the hands of a group demanding free education for 145 kids at the Musmos Daycare Center- happens that, however briefly, media’s and the public’s focus telescopes and everyone ends up peering at what is, fundamentally, a family tragedy (multiplied 32 times in this case: and representing, too, the despair, perhaps, of the kids at that daycare center). Media competition is fierce, updates are minute-by-minute. See’s coverage, that of GMA News.TV (with a cameo appearance by Sen. Bong Revilla) and ABS-CBNNews. The Associated Press and other wire services brought the story to the world’s attention.

The blogosphere here and abroad is abuzz: abroad, Corporate Engagement wonders why the hostage-taker, who’s done this before, isn’t in jail. Interesting observations and discussions in RedBlue Thoughts (who focuses on the hostage taker’s past activism and the symbolism of the current hostage-taking) and in idle eidolon who says its difficult not to take a cynical approach to the whole thing. Perpetual Malcontent finds the whole thing wierd. Tanuki Tales says something I agree with completely: whatever your motives, you don’t mess around with the safety of kids, period.

In the news, ABS-CBNNews reports party list seats allegedly being peddled by the Palace. Danto Remoto sort of, kind of, drops his senate bid. Personally, I’m very happy Dr. Jose Abueva showed up to manifest support for Remoto; Abueva and I have crossed swords in the past, but a few weeks ago when he guested on my show, we made our peace with each other.

News, in quick succession of what will be some controversial candidacies: Gen. Jovito Palparan, as a party list candidate; Virgilio Garcillano and Dato Arroyo also for the lower house.

There’s no need to worry that the boom in LPG for automobile use will affect household consumers. The number of LPG for cars filling stations popping up in Metro Manila is remarkable (I understand in Cebu, they were the first to use it for taxicabs), though a friend says smokers like me should stop smoking on the road as every time he rides an LPG taxi, it reeks of gas fumes and an idiot smoker like me might end up blowing him up due to a carelessly-tossed cigarette butt.

the brewing confrontation between the US Congress and the White House has Slate Magazine saying there’s a 75% chance the US Attorney-Genertal is going to quit. For an analysis of what the confrontation is about, see this article by By Walter Dellinger and Christopher H. Schroeder. Also, Burma has a new capital.

In the punditocracy, my Arab News column for this week is Command and Control (regarding the AFP and issues concerning command responsibility). On a related note, Davao Today provides a thorough report on Philip Alston presenting his report to the UN. The Inquirer editorial looks at the recent goings-on in the Hague, and what they signified.

Jarius Bondoc rather gleefully notes the handicaps of the opposition campaign but does note that the administration slate is headed for disarray, too, once the local races start and Lakas-CMD and Kampi start cannibalizing each other in earnest. Amusing tidbits on the campaign courtesy of Efren Danao. Marichu Villanueva takes a look at the political rehabilitation of the Senate.

Amando Doronila says the government has a problem on its hands with the Asian Development Bank and its skeptical attitude towards government’s claims of achievements. For the Palace’s rebuttal, refer to Rick Saludo. Speaking of Saludo, his pointing to typhoons as the cause of the hunger problem leads to a lighter, but pointed look, at “hunger as a lifestyle choice,” courtesy of Manuel Buencamino. The best passage:

Your secretary’s words must have inspired street urchins not to wait for the “ideal job to fall on their lap” for they ignored the political noise and took advantage of the strong peso, the stable political situation, and the investor-friendly climate to go into the sampaguita business.

Their profits will be reinvested in the stock market and soon, as a pundit said, they will be trading in their paper boats for yachts.

You can tell the whole world, “We have no child labor. We are a nation of child entrepreneurs.”

And you can add that investor confidence, as shown by the great number of street-urchin entrepreneurs, disproves the perception that your regime is the most corrupt in Asia.

Overseas, the People’s Daily Online looks at a survey detailing the consumer choices of Chinese aged 17 to 26 (who have no memory of either Mao’s rule or the Tiananmen Square massacre). Tulsathit Taptim pens an allegorical debate between democracy and corruption.

In the blogosphere, History Unfolding has a must-read entry on America, the confrontation over war aims between the White House and the House of Representatives, what American attitudes are towards war and why the war in Iraq has lost popular support. The latest showdown is in the US Senate, which has also held a vote to put forward a timeline for an Iraq pullout. Details in The Washington Note.

Here’s an interesting thing: a father and a daughter who both blog. The father, blogs at and pens a clear, concise, list of criteria he intends to follow in deciding whether or not to vote for certain candidates. He brings a lawyer’s precision to defining the issues he considers important, and ends his entry with the possibility he might not end up voting at all. His daughter, in crazy4this girl, suggests that to fight injustice, one must be willing to commit suicide.

Technorati Tags: , , , , , , , , , , ,

Manuel L. Quezon III.

143 thoughts on “Nightmare scenario

  1. “And who are dictating the policy to make us a creditor (debtor) of good behavior?”

    Our immoral politicians supported by our greedy big businessmen.

  2. Shaman… The MBA in you should remind you that the Republika Pilipinas borrowed the money, signed the contracts which requires it – Republika Pilipinas — to make scheduled payments to the lenders. And my understanding is the Philippines can only collect so much in taxes (which can be solved if Filipinos can earn 15% more, or the government can collect 15% more, or the Philippines sells Palawan to ???? for $$$$$)) and the number-crunching produces over-50% figure being sent for debt-obligations.

    My understanding is that the Philippines can sit down the lenders to renegotiate… but needed are proposals other than begging for lower payments nor “kalimutan na lang natin, brod!”. No, neither Cory (a heroine of genuine-EDSA) nor an EDSA-prime-agent (Tabako) nor ‘weather-weather’ whose time came, then went, nor GMA have declared the country bankrupt to force the lenders to wipe off the debt from their books.

    As for Bautista-the-candidate, he forgot to mention that paying only 25% (of today’s budget) is not enough to meet the interest-costs, that the principal will rise, and that our grandchildren will be saddled with more debt. Bautista-the-candidate has not done enough homework, else he will remind us that there is a Mother-of-an-Obligation that is the albatross around the PHilippines — Marcos/Disini deal for the nuclear plant.

    The cash-flow situation for the Philippines is really dismal. I am sure you are aware that many times, free money is being given to the Philippines (for farms-to-market roads, other projects) with the PHilippines having to say “No, thank you… next time na lang” when the country failed to produce the cents-on-the-dollar matching funds that the donors wanted to see as a sign of the country’s earnest interest in the project.

    Shaman, you are right. It is atrocious and disgusting that the Philippine Republic is unable to generate the money to fund children’s education (and medical care for the elderly). I am left with the impression, however, that Bautista-in-the-Senate probably does not bring RepublikaPilipinas any closer to relief.

  3. One solution to the debt problem is to come up with the list of debts that needed to be renegotiated with the lenders asking them to stop charging interests until the country is capable of paying such. We do not want to run away from those debts, we only want to stop the accumulation of interest because of the current situation. More than 50% of the budget goes to debt servicing. If the country will stop servicing the debts for a year or two, then use the money to spur the economy, we might have a better education and other social services available. Housewives might stop working as domestics in other countries. The Filipinos were able to be freed as slaves by the Spaniards before, but now Filipinos go to Spain to work as domestics.

    If the lenders have forgiven other countries, why can’t they do it to RP? Do you think they gonna bomb RP if it will not pay its debt for a while?

  4. Please allow me to share here my take on the debt burden issue.


    I have reckoned the gargantuan debt burden and the laggard performance of the economic elites as the two greatest obstacles to our economic takeoff and to a sustainable economic development. So, let me somehow think loud on how to get the economic elites wrapped up into the debt burden predicament in a different light in the conceptual scenario that follows:

    Our economic elites (who own half of the debt burden), imbued with a deep sense of country, consider the possibility of entering into some form of “forbearance” with the national government with a view to a short-term moratorium on debt service payment, say, an 8-year temporary cessation. (This indulgence by the elites is in a way a matching counterpart to the acknowledged sacrifices of the OFWs, serving to keep the ship of the nation afloat.)

    During the moratorium, the government in partnership with the same forbearing private sector, or vice versa, ventures into vigorous investments, targeting specific industries such as: the manufacture of the imported component of the electronic exports; bio-fuel as alternative source of energy; or exploration in the extractive sector. (I’d prefer to treat the forbearance as some sort of passive investment on the part of the economic elites; after all, the first beneficiary of dependable institutions and infrastructures, productive workforce and booming economy would be none other than the elites themselves.)

    What’s withheld as otherwise rent payment, which, doubtless, is a considerable sum, may now be available for physical and social (certainly together with educational) infrastructure outlays as well as for state support for R&D. On the other hand, appropriate incentives like “tax holidays” for entrepreneurs directly involved in these targeted sectors are worked out.

    Aside from moratorium on debt service and on capital strike, similar challenge is posed to the labor sector to bite the bullet by committing to a moratorium on labor strikes and other concerted actions during the experimental phase.

    Foreign creditors and investors, not being importuned to make a change of position, are expected to regard the arrangement as a real honest-to-goodness resolve for internally driven strategic economic plan. On the other hand, in virtue of its ownership by local leaderships, the initiative is perceivable as one designed with a visceral sense of stewardship (to have lasting positive consequences for the next generation of Filipinos); hence, stabilizing and producing the effect of strengthening the country’s creditworthiness and standing in the world economy.

    Experts improve on this model.

    The above concept is neither ideologically populist nor elitist but motivated by the power of consensus is simply sensible. Quite unfortunately, the main problem with it at the moment is that President Arroyo remains hamstrung with legitimacy issue (principally because of the still unexplained Garci tapes fiasco) and as such may now be bereft of any political capital to bring to bear upon men of wealth and people in struggle.

  5. Great idea Abe. Your suggestion is one way our deadbeat elites can redeem themselves. My only concerns are (1)i’m not sure 8 years is enough, (2)we have to be careful on what industries to target and (3) we have to concurrently enforce capital controls on the pain of draconian economic sabotage laws if necessary. On the whole, however, i believe that your suggestion is right on track. It’s in line with what i have been reading in Alice Amsden’s “The Rise of the Rest” which has chronicled the different development models followed by our neighbors and other countries that have made a successful transition to manufacturing-based economies.

  6. Abe… you were paligoy-ligoy about it, but I believe that a cornerstone of your proposal is that firstly, GMA has to step aside. I also believe you’ll get agreement from Shaman, anna-Bencard’s penpal, cvj and a number of others who visit this blog.

    But without GMA, who will lead and who will follow?

  7. UPn Student, that’s for the people to decide. It could even be you, provided you are legitimately elected. In any case, Abe’s suggestion of ‘enforcing forebearance’ needs both political will and political capital the kind that can only come from a legitimate leader with a real mandate or a revolutionary government, which you said you prefer to forget.

  8. cvj… I actually resolved the quandary I presented, and my answer is “Irrelevant!” to the question regarding GMA’s role. In particular, GMA will be long gone by the time (if at all) that Abe’s proposal gets started.

    In other words, it is acceptable to not waste any more time contemplating GMA’s role in Abe’s “what-if?”.

    BUT… a related question is as follows. Abe’s proposal speaks of the current elite and by inference “THE GOVERNMENT”, which I assume will be members of the both houses of Congress and the movers-and-shakers within the Executive Department. Abe is proposing a Great Leap Forward with more funds (“more” to result from Abe’s expectation that the lenders will agree to deferred payments on the Republic’s debt obligations.)

    Abe’s expectation is that the current cast of characters (or members of their dynasties, or their clones) will do better if given more money to play with. The cynic part of me asks… is Abe sure? I am sure that Abe will agree that most likely (say 8 years from now), the houses of Congress will continue to be dominated by those Abe derisively call “trapo’s”.

    It is a huge assumption, isn’t it, to state that the business elite (Shaman says some of them are greedy) and the political leadership (many in this blogsite say many of the political leadership are corrupt) will do better? And you want to give them more money and more control of the economy. Why? Does a credit card with a higher credit limit change the spenders’ stripes?

    And what does “do better” mean? Better for whom? Why them?

  9. My perception is that Abe’s “what-if” is less important than two other questions, to wit:
    — how to get “better” people into the 2 houses of Congress as well as the local government units (“better” to mean elected officials that are representative of the wishes of the various segments of the population);
    — how to strengthen the government bureaucracy to (i)deliver services more efficiently (to include better tax collection); (ii) to better able to resist corrupting influence from —you-name-your-bogeyman-here— while simultaneously WEAKENING the central government’s ability to throttle down, if not terrorize, ‘THE OPPOSITION’.

    In regards the economy, I look poorly at Abe’s proposal for the government to take command of the economy and, as cvj says, for the government “…to concurrently enforce capital controls on the pain of draconian economic sabotage laws”. Sounds like “THOSE IN POWER” taking action against “THE OPPOSITION”, doesn’t it?

    Abe’s proposal, in my mind, will still lead to the concentration of economic power into the two-hundred-or-so names. Reason : ABE’S GOVERNMENT-TECHNOCRATS, when it comes to deciding which industries to send money to, will be unable to hear the politically-naive 30-year-olds and younger. ABE’s Government-technocrats will find itself bending to the wiles of those who are well-versed in the ways of the trapos. Has Abe forgotten the garment-industry experience of the Marcos era?

  10. So for Abe… the prime question that should consume more of your time and interest is “How do we get Mar Roxas into Malacanang in 2010?”.. and less of “..what do I tell Mar Roxas to do when he is the Malacanang resident”. If you really like Mar Roxas, then you’ll “toe the line he sets”, (but since you are in the US-of-A, it becomes more where you ask your friends and relatives and other contacts still in the Philippines to agree to Mar’s programs.)

    As cvj had stated… “… that’s for the people to decide” in regards who will lead…. but please don’t ask the person you want next in Malacanang to stomp his/her foot on the throats of THE OPPOSITION when he/she becomes the Malacanang resident.

  11. …for the government “…to concurrently enforce capital controls on the pain of draconian economic sabotage laws”. Sounds like “THOSE IN POWER” taking action against “THE OPPOSITION”, doesn’t it? – UPn Student

    My recommendation for ‘draconian economic sabotage laws’ has nothing to do with stifling opposition. To clarify, these laws are targeted against those who would move their capital overseas. This is to make sure that capital is spent over here for productive investments.

    I take the points you raised as valid concerns on the ability of the next government and business elites to play an active, more interventionist role in economic development. That’s how our capitalist neighbors went into high gear. None of them followed a minimalist approach to economic development, and all of them had to first break the back of the landed elite.

    If as what happened during the Marcos era, the political and business elite (aka cronies) gets in the way again, then perhaps we really need a dose of Mao to first level the playing field. I hope it doesn’t have to come to that.

    As cvj had stated… “… that’s for the people to decide” in regards who will lead…. but please don’t ask the person you want next in Malacanang to stomp his/her foot on the throats of THE OPPOSITION when he/she becomes the Malacanang resident. – UPn Student

    I don’t see anyone here is asking for what you have imagined, and that includes me. Considering the list of contenders (Lacson, there is a fair chance that, post-Arroyo, i’ll still be in the opposition. That being said, the best guarantee to minority rights tomorrow is if the minority (i.e. elite and middle class) show respect to the majority (the masa), which is why i advise you to take Hello Garci seriously. Ignoring the issue eats away at the principle of reciprocity which is needed for social cohesion.

  12. the manufacture of the imported component of the electronic exports;

    Do you have any idea what these imported components of electronic exports are?

    Do you know why we have to import them?

    Because it is part of the contract agreement.

    The mother companies put up the manufacturing plants in the Philippines in partnership with local companies to produce these electronic exports with the strings attached that materials are going to be provided by its sister companies in order to guarantee standardized and quality materials for the finished. The electronics business in the Philippines are mostly backward integration projects of foreign corporations.

    During the early years of Mc Donald franchising business in the Philippines, even the potatos used for french fries are provided by the parent company.

  13. the manufacture of the imported component of the electronic exports;

    Do you have any idea what these imported components of electronic exports are?

    Do you know why we have to import them?

    Because it is part of the contract agreement.

    The mother companies put up the manufacturing plants in the Philippines in partnership with local companies to produce these electronic exports with the strings attached that materials are going to be provided by its sister companies in order to guarantee standardized and quality materials for the finished products. The electronics business in the Philippines are mostly backward integration projects of foreign corporations.

    During the early years of Mc Donald franchising business in the Philippines, even the potatos used for french fries are provided by the parent company.

  14. the government in partnership with the same forbearing private sector

    When business activities are managed/controlled by the government, the entities become dumping ground of unemployed relatives of politicians/government officials with high salaries and fringe benfits. Haah

  15. Bautista-the-candidate has not done enough homework, else he will remind us that there is a Mother-of-an-Obligation that is the albatross around the PHilippines — Marcos/Disini deal for the nuclear plant.

    I agree with your observation. Lahat naman nang nagkandidato at naging subject itong malaking utang na binabayaran natin ay narerealize na imposible talaga ang hindi magbayad ng utang at pati interest dahil ang usapan dito ay international politics na.

    Pag-aari o kontrolado ng malalaking bansa ang bangkong pinagkakautangan natin kaya kailangang makipaglaro ng kanilang laro.

    Hindi tayo kasinlaki at kasinglakas ng Russia na mas malaki ang utang pero ang bahagi ay pinatawad at ang ibang bahagi ang naging dahilan ng pagcontrol ng interest rate para sila makabayad.Wala tayong oil na katulad ng Russia, wala na tayong mga natural resources na maari nilang gamitin.

    Kapag hindi tayo nagbayad, para ring nasa kumonidad tayo na ang balasubas ay iniiwasan ng mga kapitbahay.

    Sabi nga, ang mga taong mga hindi pa nakaupo sa mainit na silya ay hindi malalaman na talagang mainit ito kung hindi sila pauupuin.

    Ang sabi ko nga, parang Don Quijote si Bautista sa paglaban sa kultura ng politika sa bansa nguni’t ang pinakamahalaga ay may isang taong nagsindi ng kandila kaysa nagrereklamo ng kadiliman.

  16. Camry… The Ca t provides an answer to your question about why some countries have gotten relief from their debt obligations. As The Ca t said, Russia got relief (on portions of their debt) IN ORDER FOR THEM/RUSSIA TO BE(BETTER) ABLE TO PAY THEIR DEBTS. Lenders are practical — they know that dead patients can’t pay their bills.
    The more common principle (similar to when one gets a house-mortgage or car loan)is that better customers get better terms. GMA appears to be from this school (versus “If I cite morality-blah-blah-blah, maybe they’ll feel guilty and give me some relief”), as evidenced by GMA improving the Republic’s payment-record and debt-to-income and other financial ratios so that the Republic gets a better credit rating which allows the Republic to renegotiate for better terms.

  17. cvj and Abe… here is a great test about the “ABE-proposal”. Assume that you hear today that secretly for the past 3 months, GMA had been sitting down with the Ayala/Zobels and the Tans and Gokongwei’s and other of the 200-names, and they now say that they will implement the program and tools that you are proposing, will you really sing “… Hallellujah, praises, oh… praises!!!”, or will you moan and groan about “… same-o, same-o…… Marcos-cronyism is a-coming again!!!”

    Abe’s proposal, to my perception, is the same old solutions proposed by old people to old problems, except for mention of “.. components of electronic” versus garments. Marcos even mentioned “..breaking the backs of the landed elites” if my understanding of the history serves me well.

    Instead of forking over an extra P100Million-a-year-for-5-years on projects to be overseered by a handful of old people with old calculators and old goals (but of course, you only grant participation to the special who are on “your team”, “pulling for you” and they will change their ways so that more “trickle-down”… but of course, you get your cut without deductions), why not directly target the faces and people (whose names you would admit you really don’t even know) and light their engines. I guess you did not hear Karl Garcia nor schumey when they railed against the high interests for small-business loans, or the bong austero piece about mulcting.

    Mao did say “.. let a thousand flowers bloom”, didn’t he?

  18. Let a thousand flowers bloom…. let a thousand entrepreneurs start to flap their wings.

    Here’s the plan:
    (1) Objective : lower the interest rate on business loans for SMALL enterprises
    (2) TOOL : buying down the rate
    (3) HOW :
    (3-a) only applies to loans of P150,000 or lower;
    (3-b) administration : via regular channels, i.e.
    local banks and lender-institutions;
    (3-c) who bears the risk? The banks… if the loan sours, the banks take the hit.
    (3-d) government’s role : buying down the interest rate
    where the government gives the bank P3,000 (or less) for especially-defined loans so that the bank charges a lower interest rate than “market” to the borrower;

    P30-million pesos will help 10,000 entrepreneurs or small-enterprises. P300-mil helps 100,000 entrepreneurs or small-enterprises while P300Mil on an ABE-targetted factory helps two or three “familiar-family names”.

    And if Shaman were to say “… but the entrepreneur still has to go the bank for the loan”, my answer is “YES”. Or would you rather the entrepreneur/business owner go to his congressman to obtain a government grant?
    The entrepreneur better have a well-documented business-plan. And if cvj were to complain that ‘… only those who know how to write a business plan’ can participate, my answer is “YES”, this is the plan.

    And if Abe says “.. it is more efficient to deal with 10-or-so “familiar names” than dealing with thousands and thousands of entrepreneurs”, I’ll question what Abe really wants to make happen.

  19. Assume that you hear today that secretly for the past 3 months, GMA had been sitting down with the Ayala/Zobels and the Tans and Gokongwei’s and other of the 200-names, and they now say that they will implement the program and tools that you are proposing – UPn Student

    If it follows Abe’s specs and is done in conjunction with addressing inequality, i’d approve, but will still demand her resignation. (For the nth time), we have to distinguish between legitimacy and governance. In a democracy, the latter does not justify the former. As i said previously (January 9th, 2007 at 1:20 am) – the overriding issue today is Gloria’s legitimacy and we have to resolve this before we can move on to tackle issues related to good governance.

    Abe’s proposal, to my perception, is the same old solutions proposed by old people to old problems, except for mention of “.. components of electronic” versus garments. Marcos even mentioned “..breaking the backs of the landed elites” if my understanding of the history serves me well.- UPn Student

    Execution matters. The difference between us and our more successful neighbors is that the latter actually implemented the plan. In contrast, Marcos did not dismantle the landlords, built-up his own cronies and failed to prevent (and even participated in) capital flight. Most importantly, Marcos did not do anything to tackle the problem of inequality.

    As Alice Amsden mentioned in her book, ‘The Rise of The Rest’:

    All four countries [China, India, Korea and Taiwan]…shared two fundamental traits: all had colonial manufacturing experience and, hence a disruption in the pattern of foreign ownership after decolonization; and all had equal income distributions” [emphasis mine] “Income distribution (by class, race, region and ethnicity) influenced the allocation of subsidies and, hence, the nature of the firm. The less divided an economy by inequalities, the greater the concerted effort to create nationals leaders and proprietary skills..

    That’s the reason why i mentioned above that Abe’s program has to be implemented together with a program of promoting equality.

  20. Abe, business matters made me unable to read, digest and react to your 3/30 11:51 am post. It really doesn’t matter much to me what you think of Magno. I wouldn’t be presumptuous as to fight his own battles, and most certainly wouldn’t be as capable as him to defend himself in the bar of public opinion.

    One thing that I cannot find myself to agree with you is your implicit suggestion that Magno cannot be sincere because he is a “paid hack” of the interest he serves at the moment. But isn’t this an indictment of all media practitioners who do “journalism” for a living? Korina Sanchez and Ted Failon cannot be more beholden to ABS-CBN than Mike Enriquez is to GMA 7 or John Nery to Philippine Inquirer. Could you imagine what would happen should these “hard-hitting journalists” spouse a position that is diametrically opposed to that of their employers? Of course, there is always a token, half-hearted mention of the opposing view to present a semblance of “balance” but that fools no one but the uninitiated.

    Every once in a while, we witness giants in the field who would sacrifice their career or pocketbook for their principle. Max Soliven, Teddy Locsin, Sr., and Joe Burgos come to mind.

    In any event, a journalist’s loyalty to his employer should not automatically taint his point of view. Well-reasoned opinions, backed up by irrefutable facts and logic, that resonate in the mind of the thoughtful reader is, I submit, the yardstick that measures the journalist’s sincerety and integrity. Flawed reasoning results in “spurious” opinion that, in turn, misinform and mislead the gullible.

    With respect to your remark that, as a lawyer, I should appreciate the necessity of impeaching the President, it is precisely because I am a lawyer that I cannot see the merit in the layman’s (and some lawyers’)insistence that a “probable cause”, let alone a prima facie case, for impeachment exists. We have debated this matter at length in this blog where I argued that, even if true, having a conversation with a Comelec official and wishing to win by a million votes did not rise to the level of an impeachable offense. Moreover, as a lawyer, I have to respect the “law of the case” as laid down by Congress, the Constitutional body charged to determine whether or not an impeachment should be given due course. As to the so-called “Jose Pidal” allegations, why is there no one, among the vociferous accusers in the senate or elsewhere, initiating a prosecution in a court of law, the proper forum for these kind of charges (not in the senate or the media)? The answer, to my mind, is that the “case” cannot prosper simply because, with the quality of the alleged “evidence” on hand, it cannot meet the burden of proof.

  21. UPn, Cat,

    I thought I’ve been clear about three things in my proposition. FIRST, it is just a conceptual design (and therefore the devil is yet in the great details, e.g., Is death penalty a deterrent for capital flight while the experimentation is ongoing? or What industry to target), SECOND, it requires the intervention of experts (I am just a kibitzer with a blog), and THIRD, it demands “consensus” (what I prefer to call in other posts as the “Bayanihan Pact”).

    There are only a few of you right now who are vetting it in this thread and yet the pros and cons that are emerging while revealing both outright skepticisms and bold confidence are quite healthy. Hence, at this point, to deride the proposition as “minimalist” is quite reactive because precisely it is intended to be an alternative to traditional incrementalism, the Alex Magno “trickle-down” variety of sort.

    The Arroyo factor. Despite the claim that she is an economist, I believe President Arroyo could be one of the least inspiring to lead this project for two reasons: One, I consider her to be an out-and-out incrementalist. “I have no grandiose ambition of being great” she confessed early on (and remember too that right after EDSA II she was quick to announce that the guiding principles her domestic and foreign policies are “market and democracy”), and two, I believe she has lost her political capital after the “Garci tapes” scandal to have the efficacy to be persuasive with men of great wealth and people in struggle.

    One reason why I’ve mentioned Mar Roxas (thanks UPn for visiting my blog na nilalangaw yata), he seems to be the most daring (and perhaps one of the most competent) to experiment with other paradigms than the regime of “market and democracy” dictated, ironically, by the Washington Consensus. I have yet to know, or read more about, Mar Roxas but I think he is showing signs of great pragmatism that is needed for out-of-the-box leadership.

    I fully appreciate cvj’s thoughts that the proposed conceptual design may be carried out either under authoritarian rule (of the Washington Sycip ideation) or democratic consensus (of what I prefer to call the Randy David design). Indeed, I have come to realize the same dilemma as, for someone like me who likes to profess to have great faith in the deeper tides of democracy expressed in terms of “people power,” I have in fact fiddled (at the height of People Power II and before Erap abandoned the Palace) with the idea of a tripartite power sharing among: GMA, representing the People Power II coalition, FVR (former President Ramos), the civilian representative of the military, and Edgardo Angara, then Erap administration’s executive secretary. The trio would exercise revolutionary powers largely to put the house in quick order for needed economic reforms but only during the unexpired term of Erap and until normalcy would be returned in 2004 in time for the constitutionally prescribed presidential elections. Obviously that wishful thinking has been overtaken by several events.

    I have also considered as viable alternative the South Korean route. South Korea, a highly homogeneous society, took the innovative route of (officially) embracing crony-capitalism while subjecting it to strict discipline by imposing performance standards, down to the activities in the shop floor, upon business recipients of state largesse. The chaebols then assumed industrial leadership by risking into productive enterprises instead of simply preserving their rent-seeking activities. The state subsidy (from borrowed foreign funds) for diversification into new industries proceeded in tandem with the decision to invest heavily in education. Official cronyism and education, while still conforming to market mechanism, lay at the heart of the late-industrial expansion of South Korea. With fewer multi-national corporations in Korea than in any late-industrializing countries, its economy took off on the basis of nationally owned firms.

    I’ve likewise looked at Taiwan as another best practice model. Through broad distribution of land ownership and capital, and high returns to labor (this may be address what cvj calls as “a program of promoting equality”) the individual Chinese was greatly motivated to produce much of the rapid growth of Taiwan’s economy. Taiwan’s small-scale capitalism (“letting a thousand flowers boom”?) as a base for industrial development can indeed serve as just another paradigm for accumulation.

    There certainly are other economic models that could be investigated for the best practices we can learn from or from which we could “indigenize” our own. (The China model, playing the globalization game by the Hamiltonian or Keynesian rule-book, stares us in face today.) But the ones that appear to stand out as common denominators for success are: 1) the reciprocal relations between the state and the private sector (businesses, as well as civil societies I wish to add), 2) extensive investment in education and 3) the grandiose ambitions of their pioneering leaders.

    Not being an expert, I have no great the confidence in my perception on economic matters the way I perhaps would on certain constitutional issues (that is why I am submitting my proposition for vetting) or, for instance, in whether, GMA, aside from the legitimacy question, has the vision and the time for a dramatic changeover to address those common denominators that I have identified (again, correctly or incorrectly).


    Amsden’s book is out of stock but I guess have read enough reviews online that really sound very interesting for our purpose. The bookstore said she has another book coming out in May.

  22. Bencard,

    You’re right, Alex Magno is a very effective wordsmith (I wish I could write like him). But I find him adroitly disingenuous without appearing to be one, which makes him hazardous to “the unitiated” or “the gullible.”

    About the Philippine media and journalism, please read carefully again my commentary about the issue and I’m sure you will find that our views are far from being dissimilar.

    On prima facie case: If I were President Arroyo’s defense lawyer in the impeachment case, I would be able to sleep well every night even if I advance the wild argument that “having a conversation with a Comelec official and wishing to win by a million votes did not rise to the level” of a probable cause of the impeachable offense of “betrayal of public trust”; but I will consider failing any student in my class in criminal procedure if he gives the same answer.

    Re Jose Pidal, I am one of those who happens to believe that Congress is not a mere lawmaking body and that the purpose of legislative power is the preservation of the commonwealth itself and of persons living in it, which is the first and fundamental natural law. As such Congress does not use its investigatory power only or solely “in aid of legislation.” The reason for it is that the entire legislative process provides an avenue where the conflicts of public life or of society itself are deliberated upon in the public view even without making laws or recommending someone, subject of its investigatory power, to be prosecuted pursuant to the laws Congress makes. What appalls me then was the claim of Alex Mango that the supposed circus atmosphere during the Jose Pidal controversy was “harming all institutions” when on the contrary, in a representative government, that is the very reason for Congress’ being. Congress is the paramount public space for exchange, a debating society of the first order. Laws or their enforcement are just the end product of the majority views prevailing in those debates.

  23. Abe, as a lawyer, what precisely do you mean by “wild argument? Is any argument that rebuts your proposition “wild”? I think you need to elaborate on why you think that way rather than rely on a conclusory labeling. You can start by defining what “betrayal of public trust” consists of.

    Every president takes an oath before assuming the office that he/she would, among others, uphold the law and the Constitution thereby creating a public trust that he/she would do just that. If she does something that implicates a hitherto unsettled constitutional issue, but which, in good faith, she believed to be within the Constitution and then later on, in a proper case, was declared unconstitutional, did he/she commit an impeachable offense of “betrayal of public trust”? I’m sure she would not be chargeable with culpable violation, since she did not “knowingly” violate a settled constitutional rule.

    While criminal procedure, as any other rule of court, is suppletory to and may be used, in certain instances, in an impeachment proceeding, it is not appropriate as to govern the conduct of the impeachment body simply because impeachment is NOT a criminal prosecution. If you were my professor and you forced me to believe otherwise on pain of receiving a failing grade, you would leave me no choice but to quit and try to transfer to another school.

    As to “Pidal”, how can you use it as a basis for impeachment in the absence of conviction and a court finding that GMA is responsible in any way?

  24. Ben, I would like to make peace with you. I’ll change “wild argument” to “not so untenable argument” or, maybe, drop it entirely. Happy?

    But, but I’m still gonna respect your decision to quit or transfer for your own good.

    (As to what is “betrayal of public trust,” I think that’s quite plain to me, hence, I would rather that a layman define it, after all the constitution is for everybody to understand and respect. Sometimes, we lawyers muddle the meaning of its language so often and too much.)

  25. Abe… that really is not how you teach, is it? I don’t mind a (law) professor being opinionated, but isn’t the role of a law professor to train his students on how to search for and how to present the legal arguments that support the soundness of an opinion? Isn’t it a betrayal if a law professor threatens to fail any student with an opinion different from the law professor in total disregard of any legal arguments the student presents to support his position?

  26. South Korea, a highly homogeneous society, took the innovative route of (officially) embracing crony-capitalism while subjecting it to strict discipline by imposing performance standards, down to the activities in the shop floor, upon business recipients of state largesse. The chaebols then assumed industrial leadership by risking into productive enterprises instead of simply preserving their rent-seeking activities. – Abe

    It is precisely the element of risk that distinguished South Korean from Philippine style cronyism and it showed in the records. As Amsden noted:

    If a targeted firm in Korea proved itself to be a poor performer, it ceased being subsidized – as evidenced by the high turnover among Korea’s top ten companies between 1965-1985.”

    It’s also instructive that in Korea, the architect of that successful program was assassinated (ostensibly because he was too authoritarian), the two ex-Presidents that followed him has been convicted and jailed, and a couple of Chaebol CEO’s have either been convicted and/or committed suicide. This has prevented power from becoming too concentrated and allowed the rest of Korean society to move on.

  27. Upn, it is because the student is supposed to learn the right law first before learning how to go around it to make a living as a lawyer.

    cvj, thanks for the distinction. You do have the eye of a good lawyer.

  28. Work-related matters prevented me from tuning in earlier. (So, Mita, my boss does not have any reason to mind my blogging.)

    Abe’s proposal is one way to address the debt burden. Cap the repayments, unilaterally declare or negotiate for a moratorium, or whatever, but the fact of the matter is that something radical must be done to get the money to spend for the millions who are going hungry for lack of food or are dying for lack of health care.

    Let us remember that many of these loans are tainted with corruption (think Bataan Nuclear Plant) and some have even been already repaid many times over with the interest payments alone.

    Between the obligation to the international creditors (for tainted loans at that) and the well-being of the people, I’ll take the latter anytime. I’d even surrender my academic degrees, if need be, just to do it.

    Let’s put it this way. Faced with the choice between spending my available money to pay my bank loan or to send my sick child to the hospital, what to do you think I would do? Right, the bank would have to wait. It’s as simplistic as that. Any other considerations would be irrelevant.

    And yea, I’ll vote for Dr. Bautista to complete my 12 (and I’ll write his name first just to be sure) even if only for his idea on the debt problem.

  29. Fair enough, Abe. As to cvj, I bet he won’t be able to enter a decent law school until he learns the rudiments of good logic, sound syllogisms, and he ceases to be too presumptuous in arguments.

  30. Abe, as to your response to Upn (if you don’t mind, Upn), I would rather be a bad lawyer winning my clients’ cause than a bad law professor teaching the “wrong” law and helping idiots become lawyers, assuming they get lucky in the Bar exams. cvj would be your ideal student.

  31. Bencard… the legal system, to my mind, has the following process. There are at least 2 layers of judges (the other is when one appeals) whose roles are to ensure that the processes and procedures followed by the both sides of the argument are proper. The lawyers then have the responsibility to work their butts off to research the facts and present them in a manner for the judge to better able to decide whether the prosecutor’s truth is more true than the accused’s truth.

    Having said that, what adjective do you then use for
    a lawyer who wins his client’s case.
    (a) lazy???? (b) dogmatic????
    (c) uninformed??? (d) lazy????
    (e) spokening good English kasi, eh???

    Abe… Law students, wouldn’t you agree, should be taught that KNOWING IS NOT GOOD ENOUGH. More precisely, it is not enough to intuit that one’s position is correct. My understanding is that the legal system demands “busting your tail off” hard-effort on the lawyer’s part so that the position gets presented in a complete, thorough and coherent manner to win confirmation in the court of legal decisions.

  32. UPn, let me put it this way: I have been very lucky to belong to a law class that has been under the tutelage of the country’s two greatest jurists, Chief Justice Fernando and Chief Justice Concepcion. Neither taught us the law (Constitutional Law); Fernando showed us how to study as a law student and Conception how to read the law. That’s all. During the entire semester, they simply challenged us to think (yes, you’re right UPn, THINK) like a lawyer while we strove to find the law ourselves. Also, they did not prepare us just to pass the bar; they both wanted us to aspire to be like them. Well, at my age now, I’ve probably failed them. And yet, I comfort myself with the fact that at least for a brief stint, I became a law professor (as well as a trial lawyer) myself.

    My students will probably still remember this line on every first day of my class: “You are here to THINK like a lawyer.” Then, they would go “busting (their) tail off” while I asked the dumb questions like: “Is the State inside your pocket? Why and why not? (How do you answer those, Ben?) And on the last couple of days just before the end of the semester – the only time I really gave a lecture or summation – I would end the session by pulling their class cards for a quick recitation. I would ask, just like Fernando: “Have I taught you anything about Constitutional Law?” Those who tried to be nice to me usually wound up with a parting 5.

    btw, our professor, Dean Andres Narvasa, in Remedial Law (the entire course actually includes Criminal Procedure wherein the concept of “probable cause” is taken up) became a chief justice too. He is also the country’s leading authority in Remedial Law. After 6 or 7 years as a trial lawyer, I commenced to teach Criminal Procedure with all the confidence of a Narvasa student.

    That was more than a quarter of a century ago. (Wow, ganon talaga kabilis ang panahon! But wait, I started teaching law at age of 26 and quit at 34).

    Now, UPn, can we talk more instead about the country’s debt burden?

    Ben, never mind, don’t answer the questions anymore. I’m the one quitting on this one.

  33. abe, I’m not going to answer your questions any further but for the benefit of cvj who again presumes that I slept in my law class, I also studied under Concepcion, CJ (Constitutional Law), Narvasa, CJ (Evidence), Feria, J. (Remedial law), and Prof. Antonio Gregorio (Criminial Procedure), among others. So you can tell your friend cvj that you just can’t sleep in class under these great but very strict professors, which fact was probably the reason why I got the highest Bar score in my class on first try. I also attribute my obtaining a second law degree from a decent law school in the U.S. and being admitted to the Bar of two States, in addition to Federal District and Appeals courts of said States, after also passing the Bar, to having a good foundation in law through those great jurists and tutors. I won some cases and lost some more, but then again, you can’t have it all.

    Now, on with your theorizing on Economy.

  34. Abe… then I am glad to have asked my questions, for you really gave me the impression that you thought highly only of those students who got to know the answers you wanted to hear and echoed them back to you. I wanted you to correct me, and I am glad you did.

    As for the country’s debt burden and this matter of forbearance, I think to remind ourselves to understand the businessmen bearing gifts. Success in the hard-nose world of business requires knowledge of the architecture of the trojan horse and the art of the deal, which means their agreement to terms (of forbearance) is probably not from charity nor “sacrifice for the masses” but a realization that buying into a deal is in favor of their business soon enough.

  35. The other side of the coin is that you can pin your hopes on an initiative based on forbearance ONLY if you can model the economics and estimate the rate-of-return associated with that forbearance. If the rate of return is nonsensical, it is more honest to just ask for a charity-check.

  36. If the rate of return is high for the political group in power but nonsensical for the business enterprise, the options are “or else” — at the point of a gun — or “because” — machinations to raise the rate of return for the business’s participation. The latter can be done done by awarding a monopoly-franchise to the business, a tax-refund package or other concessions.

    And Abe…. the reason that I look askance at the approach and the examples you have illustrated is that you chose a directin that is inclusionary only of the 200-or-so-familiar-names, yet you and cvj both say the program will guarantee-almost result in “income equalization”. But you also said it may be okay to imitate Korea crony-capitalism, so I suppose you remain consistent.

  37. UPn, what I’m looking for is to flesh out the conceptual design first with the talent resource in here (our accountants, management gurus, lawyers, engineers, IT professionals, writers, journalists, researchers, etc., who visit mlq3 blogsite, with Manolo’s permission of course) for the purpose of building a “business case” (i.e., show me the money) for it.

    And this will require facts, facts and facts which, once we have, we will try to process online. For example, who are these domestic creditors, and how much RP exactly owes to each of them. What we seem to know is that interest pmts alone account for 1/3 of the gov’t expenditures of around $21 billion, and if we are right that half of that is domestic that translates into about $3.5 billion annually during the moratorium period.

    What do we do with $35 billion on a ten-yr interest pmt only moratorium, for example? Set up a special development bank? Who will manage the bank? The same forbearing creditors or in partnership with civil society or experts appointed by a coalition of RP/Civil Society/Domestic creditors, etc? What industries are to be targeted where RP may have a competitive advantage? Paper, pharmaceuticals, electronics, mining, service, tourism, BPO, machineries, etc. or one, two three or more of them? Or big ticket industries or SMSB, manufacturing or agricultural, etc.? What are the conditions for the state largesse or who will monitor performance to warrant continued subsidies. Are there potential WTO and other trade agreement or similar violations? How much of the fund be set aside for social expenditure? What would be the effect of it on banking and finance, the money supply, etc. or business in general? Or on investor’s confidence, rating agencies, etc.? How do we project GDP or employment growth because of it? These kind of things.

    Once we come up with some rough paperwork here, then we can invite experts, economist from AIM, UP, Ateneo, La Salle, etc., or volunteers from global Pinoy to fine tune, change, trash, insult, ok, etc. it

    Supposing there’s a business case for it, how do we market it? And to who? To Dr. Bautista, to a military junta, to a revolutionary government, to Congress, to GMA, to One Voice, to CBCP, the OFWs, the Taipan 100, Ellen Tordesillas, coup plotters, Inquirer Current, Mar Roxas, etc. etc. Know what I mean, UPn?

  38. For example, who are these domestic creditors, and how much RP exactly owes to each of them.

    When the country borrows, it floats bonds. So whoever buys the government bonds, they are the domestic creditors.

    There are bonds which are issued for a specific project. The yield or interest rate is not as high as other credit instruments but the risk is lower since it is guaranteed by the government.

    The maturity dates range from 20 up years. But there are bonds that can be reacquired before the maturity dates.

  39. What are the conditions for the state largesse or who will monitor performance to warrant continued subsidies.

    Are we talking about quasi organizations or subsidized industries?

    IF you are talking about hybrid organizations or quasi-organizations or simply known as government incorporated, most of the case analyses along this area
    shows the issues of control and accountability.

    If you are talking about nationalization of some industries then you can look at the case of NAPOCOR, a government entity incorporated in 1931 as a non-stock corporation by the grandfather of our MLQ3.

    Problem with a government corporation is that it becomes white elephant and “dumping ground” for people who are accommodations of sponsors/supporters of the incumbents.

    One of the top brasses in a government-owned TV network is a son of a powerful leader of a cult who can command votes for certain politicians. So when you see him visible in the media and suddenly becomes quiet, rest assured that his recommendee get the plum position in government corporations.

    I am trying to understand your model but you are talking gibberish. Let’s talk about business by simplifying it.

  40. Ca t, Abe’s model is understandable enough to me. Maybe you can try to do some further background reading so you can get up to speed.

  41. Agriculture industries in the US are subsidized by the government, France by some European nations.

    When we talk about subsidies, we are not talking about revenues with positive bottom line figures. We are talking about taxes being used to support the industries and to protect the consumers.

    Soybean industry growers are heavily subsidized in the US so that soybean products became very competitive in the world market to the extent of killing their competitors.

    Countries producing soybeans cried of FOUL and they threatened to bring the complaint to the World Trade.

    Other non-subsidized crops in the US are also clamoring for similar subsidies threatening
    to dump their produce to the government if they can not sell them in the open market.

  42. the money supply

    Bangko Sentral ng Pilipinas has the sole authority to manage country’s liquidity that is to influence money supply in circulation.

    Contrary to the understanding of some who think that supply is increased by printing more monies, that is not the way it is done. Printing is authorized to replace old paper currencies which they withdraw from circulation by disposing them.

    But the control of the money supply is done by the BSP thru its rediscounting windows.

    What does it mean?

    When you go to the private or small development bank for a loan, you are asked of collaterals. The bank gives you the money AND runs to the BSP to rediscount the loan by submitting the collaterals.

    So if the bank charges interest rate of 12 per cent, the BSP rediscounts the loan at 8 per cent, the difference is the profit of the bank from the loan transaction. Not only that, it gets back the money loaned out and lends it again to another borrower and the cycle continues.

    With so much loans granted and monies spent, supply of money is high so that inflation occurs. Bang.

    The BSP closes its rediscounting windows momentarily. Banks refuse to grant loans, if ever they did, interest rates are high.

  43. Sorry for the lecture but I have been reading the intellectual “intercourse” by the lawyers and UPn for the last few days trying to digest what’s being proposed.

    These privatization and nationalization “thangs” make me take a look at the CMC project of Bangko Sentral ng Pilipinas.

    Bangko Sentral is a government entity which was granted an autonomy by the law approved by Fidel Ramos in 1993.

    In 1998, the CMC project came into the picture. What is CMC. This is supposed to be the privately -owned-but BSP funded Cash Management Center which was designated to take over BSP’s function of accepting/storing and distributing cash reserves of Metro Manila banks.

    What’s these cash reserves?

    BSP mandates all banks to maintain cash reserves to satisfy withdrawal demands. This represents a certain percentage of their total deposits and notes for the day. So if you see an armored car on its way to the Central Bank, that means the banks are depositing additional reserves.

    For banks in the provinces, bank examiners expect these reserves in their bank vaults at any given time that they suddenly drop by to audit. A penalty of a certain percentage of the cash reserve required is charged to the bank that fails to meet the requirement.

    Now what’s wrong with the privatization of this BSP’s function of “storing the cash reserves”?

    One reason for the project given, if I can remember is that it is providing facility and accessibility to the depositing banks which was baloney since BSP is also in Metro Manila and the banks covered are also in Metro Manila.

    I am not cleared as to how it is going to generate revenue for the BSP since, if it is only keeping the money as rserves, then there would be no transaction.

    If it is providing facilities for the BSP, why privatize it when the money to fund the project came from the government?

    So there goes your case of privatization of some services.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.