The Supreme Court dismisses charges against congressmen of the Left, and hands down a stinging rebuke of the Secretary of (in)Justice:
The obvious involvement of political considerations in the actuations of respondent Secretary of Justice and respondent prosecutors brings to mind an observation we made in another equally politically charged case. We reiterate what we stated then, if only to emphasize the importance of maintaining the integrity of criminal prosecutions in general and preliminary investigations in particular, thus:
[W]e cannot emphasize too strongly that prosecutors should not allow, and should avoid, giving the impression that their noble office is being used or prostituted, wittingly or unwittingly, for political ends, or other purposes alien to, or subversive of, the basic and fundamental objective of observing the interest of justice evenhandedly, without fear or favor to any and all litigants alike, whether rich or poor, weak or strong, powerless or mighty. Only by strict adherence to the established procedure may be public’s perception of the impartiality of the prosecutor be enhanced.
John Nery in Inquirer Current says the Supreme Court’s sent Gonzalez a pretty clear warning:
Reading the Carpio decision, and remembering Gonzalez’s recent string of defeats in Supreme Court cases (his legal philosophy these days, it seems to me, is based on an untenable assertion of the executive’s privileges), I cannot help but think that, however subtly, the high court is sending him, not merely a message, but a warning.
The Inquirer editorial seems to think so, too. But it’s not all’s well that ends well: Rep. Crispin Beltran faces the irony of being unable to pay for the hospital arrest to which he was subjected by the government.
Namfrel curls up and dies: Namfrel ends parallel count with 88% coverage; it’s 8-2-2. The Palace embraces Justice Cruz’s proposal to proclaim a 13th senator-elect. In his column, Fel Maragay goes into the pros and cons of the idea. Meanwhile, Nene Pimentel’s 2 votes shy of toppling Manny Villar for Senate President.
It’s interesting that Lito Gagni points to the candidacy of Rep. Pablo Garcia as something businessmen are moderately bullish about:
Speaker de Venecia is now battling a pernicious perception of the House as an institution that initiated the emotional-driven Charter change that resulted in deep division in the country. That division is something that the business groups do not want to happen as it takes out the entrepreneurial drive.
Because of the proposed changes in the Constitution, many businessmen had to forego their expansion plans and even their projections in view of the possible repercussions from the emotionally charged atmosphere brought about by the proposed Charter amendments.
In fact, some businessmen are again wary of another de Venecia speakership as they fear that the proposed changes could again come about.
The opinions of the businessmen does point to a way forward, if stability is indeed something desirable in terms of economic growth. Garcia was a proponent of a constitutional convention to achieve Charter Change; electing him Speaker would send the signal that Charter Change with the possibility of extending the President’s term of office or allowing her to become prime minister is dead; the assurance that the President has no choice but to step down in 2010 will help clear the political air; and with all side focused on a fresh start under a new administration, there would, indeed, be a greater likelihood of a modus vivendi until 2010.
On the economic front, further: Radstock deal OK’d by the counrts.
Bloomberg reports inflation has probably accelerated for a second month: Associated Press reports further rise in stock market driven in part by China’s decision to increase its tax on stock purchases; in the Business Mirror, details on the winners and gainers with the 1st Quarter numbers:
The agriculture, fishery and forestry sector grew 4.2 percent; industry at 5.3 percent and services at 9.1 percent - the latter growth being the highest since 1983, prompting economic officials to describe it as the linchpin in the economy.
Services contributed 4.4 percentage points to overall GDP growth, followed by industry with 1.7 percentage points and agriculture fishery and forestry with 0.8 percentage point.
Among other production side indicators in the first quarter, manufacturing gross value added slowed to 4.6 percent from 5 percent during the same period last year; construction went down to an 8.6-percent growth from 10.7 percent; trade up to 9.1 percent from 5.3 percent; private services increased pace to 8.9 percent from 7.7 percent, and government services posted a 7.1-percent growth from 3.7 percent.
“There are some indications that some manufacturing establishments are increasingly engaging in other economic activities, particularly, trading,” Romulo A. Virola, secretary-general of the National Statistical Coordination Board, said of the sector’s continued major contribution to industry despite a seeming slowdown.
On the expenditure side, personal consumption expenditure picked up to 5.9 percent from 5.3 percent; government consumption to 13.1 percent from 7.6 percent; capital formation nudged up 0.6 percent versus 0.3 percent before and exports posted a 9.1-percent growth against a faster 13-percent expansion during the first quarter last year…
The Philippines’ first-quarter growth is third highest in the region, next to China and Vietnam.
The Inquirer editorial for June 2 says that the markets have learned to take political developments in stride, pointing to Texas Instrument’s decision to boost its local exposure:
Even more important, investors are putting more money into the economy. The Mall of Asia, an expensive gamble by Henry Sy, is a retail and tourism success story rolled into one. A Saudi prince is investing over $100 million in upscale projects.
The biggest vote of confidence in the Philippines, however, is Texas Instruments’ decision to invest all of its expansion money in new Philippine plants (including a site inside the Clark economic zone). This decision is particularly gratifying, not simply because the alternative the company considered but ultimately dismissed was Thailand, the regional hub for many multinationals in Southeast Asia, but also because Texas Instruments is no stranger to the Philippines.
Unlike some of the businessmen surveyed by the Hong Kong-based Political and Economic Risk Consultancy in its annual corruption report, Texas Instruments has been in the country for decades. Thus, the company, one of the country’s largest exporters, knows the Philippine business environment very well indeed.
The editorial also points out when, precisely, election spending’s effects on the economy will be noticed:
We can expect the election spending factor to continue to have an impact in the second quarter, since April and May are right smack in the center of election season.
But the editorial also believes believes the kind of news that can have a (to borrow a Palace phrase) have a destabilizing effect on investor emotions, is human-rights-related news:
Political risk is the main uncertainty facing the economy. But we have a slightly different take on what constitutes political risk.
The intramurals between the Lakas-CMD and Kampi parties for control of the House of Representatives, the final cast of winners in the Senate elections, the resumption or the scuttling of Charter-change initiatives, the possibility of yet another impeachment campaign against the President — these are not especially risk-laden concerns. The business community has learned to discount some of the political turmoil crowding the front pages and the TV screens.
It is the still unresolved issue of the political killings, however, that is the real sword of Damocles hanging over the economy. Already, the foreign chambers of commerce in the country have warned Malacañang about the costs of inaction. The United Nations and the European Union have expressed alarm over the possibility that the government may be complicit. If the killings continue, it is only a matter of time before the scandal cancels out any goodwill the country enjoys from the good news on the economy.
While the Business Mirror editorial argues that,
Now that we have praised ourselves with this new growth figure, we need to ask whether or not the service-driven economy is the most desirable growth path for us. Growth per se is good; an expanding pie somehow means that more and more people got the crumbs. But crumbs are crumbs and they are not going to create adequate nourishment for the broader sectors of the economy.
Consider these facts: interest rates are low (read: capital is cheap) and the peso has been “strong” (read: imported machines, technology, packaging products and equipment are cheap). And yet, durable equipment has not been rising. That could be interpreted to mean that business organizations are not investing in new machines and are not refurbishing their offices. Isn’t that a sign of a wait-and-see attitude? If it is, investor confidence, therefore, is not yet fully restored.
The real reason probably lies in the structure of the economy, i.e. its being a service-driven one. Service companies, business-process outsourcing (BPOs) for instance, usually don’t import huge machines, nor do they build factories. That means they are not likely to hire workers en masse the way a factory, requiring thousands of skilled and unskilled workers, would. Do we ever wonder why despite all the decent growth we achieved in the last three years, we can’t seem to address joblessness? That’s the reason.
The counterpoint seems to be that the services economy actually creates jobs fast, since setting up a service company like a BPO doesn’t require so much capital infusion. All that is required is a nice building with reliable broadband Internet connection and voilà! hundreds of call-center agents or software programmers are hired.
That’s true in the case of the country’s cyberservices industry. But the one thing that is ignored in this debate is the fact that the services sector has the tendency to hire call-center agents, accountants, medical transcribers, lawyers and software engineers first before they get janitors, street sweepers and errand boys. The ideal thing to do is to provide jobs for both accountants and the like, as well as janitors, street sweepers, farmers and factory workers.
India should provide a clear example to us. India is far ahead of the Philippines in terms of service-driven growth. Bangalore, Chennai and Delhi are full of information-technology campuses that glittered like urban utopias.
A few blocks from these campuses are stark manifestations of the continuing poverty, inequality and the perennial failure of the public sector to provide much-needed social services and urban infrastructure. Indians are aware of this and are actually looking at China’s manufacturing-driven growth with great envy.
The point here is that our service-driven growth is good, but we should start looking beyond that to spread the benefits of an expanding economy beyond the upper strata of society.
Romulo Neri, director general of the National Economic and Development Authority, actually acknowledged these limitations and has outlined crucial reforms and expenditure programs to boost both the farms and factories.
We wonder whether or not government has actually done something to address the bureaucracy’s absorptive capacity, as well as its tendency to waste public money to graft and corruption. It’s something that mass media and the general public should watch for as we approach the second half of 2007.
To wrap up these views, Solita Monsod tries to point out that critics and skeptics and Palace boosters are both off tangent:
Of course, the critics are not the only ones who can be faulted for showing their pessimism. The government, too, has a tendency to get carried away — on the other end of the spectrum. President Arroyo and some of her economic team are now claiming that this is a portent of things to come, and that the current targets and projections are too low and should be increased. This has happened before, and it will happen again: they usually fall flat on their collective faces. The moral of the story is that the public should not believe the propaganda of either side so readily.
She has a relevant word for those whom she believes are skeptical of official figures because they seem different from what people actually experience, economy-wise:
Finally, to those who are wont to scoff that these figures cannot be correct because they see no improvement in their living standards or their well-being, the following must be repeated or emphasized:
First of all, the 6.9 percent GDP growth in the economy does not mean that every single sector and sub-sector in the economy has grown at that rate. There are huge disparities that are hidden by that average. For example, the real growth rate in nickel mining was 120 percent while the real growth in tobacco manufacturing was negative (it contracted by 34 percent). The growth rate for beverages manufacturing was also negative at -5 percent. (I call attention to the “contraction” in beverages and manufacturing because these figures are belied by the 8 percent and 7 percent growth in consumption expenditures on these two products respectively. The inconsistency suggests underreporting of production on the part of some firms, which calls for action on the part of the Bureau of Internal Revenue.)
Second, while growth is a necessary condition for the increase in well-being of the people, it is not sufficient. That is why there is a distinction between economic growth and human development. The quality of that growth is important. The UNDP Human Development Report warns about jobless, ruthless, voiceless, rootless and futureless growth. The acid test is whether the growth we are experiencing is the right kind.
That was the point of the Business Mirror editorial above, by the way. Is the current growth the right kind?
Financial woes of Manny Pacquio affects the banking system: Manny’s millions shake banks.
Overseas: Indonesia’s president faces allegations of having used campaign slush funds.
In the punditocracy, my column for today is A history of the House.
Oscar Lagman in his BusinessWorld column (unavailable online), compares Fr. Panlilio’s victory to similar revolts by the middle and upper classes in the 1950s and 1960s:
In 1959, the residents of Quezon City, exasperated at the poor performance of those running the city government, organized the Citizens League for Good Government which subsequently fielded a full slate of candidates, from mayor to councilors, in the elections of that year. The standard bearer of that ticket was a former Philippine Navy officer, Captain [Charlie] Albert and the nominees for the city council included former Supreme Court justices and an ex-president of the University of the Philippines. All the League’s candidates were swept into office.
Inspired by the success of the Quezon City citizens movement, the people of Pasay City, much more aggravated than the Quezon City residents, also formed their own Citizens League for Good Government. And like its counterpart in Quezon City, the league scored a resounding victory in 1963.
But the old politicians of the two cities would not allow a new breed of public officials to run their respective fiefdoms. They resorted to their old tricks and methodically worked their way back to power. Never again did a citizens league emerge.
Incidentally, in addition to the above, and ask asked in a comment by Gus Lagman, the QC citizen’s league was also composed of veteran politicians like former Senator Proceso Sebastian; but they were up against the machinery of mayor Amoranto, who had introduced the squatter vote into Quezon City -the squatter vote serves as an antidote to whatever votes middle class reformists can put together; not to mention the fact that the candidates of the league were generally elderly individuals while Charlie Albert died young.
He also urges Randy David to provide counsel to the new Pampanga governor:
Among Ed first urged Randy David to run for governor of Pampanga. Unlike the President, David is a full-blooded Pampango. He was born there and he grew up there. He speaks Pampango fluently. He goes back to Pampanga regularly, not for political show but to be with his cabalens.
But David parried Among Ed’s prodding, telling the good priest that public service is not his calling. Among Ed next asked Ping de Jesus, Cory’s one-time Secretary of Public Works and Highways, and recently retired Chief Justice Artemio Panganiban. It was only when both declined that Among Ed decided to run himself.
Now that Ed Panlilio will be governor of Pampanga in the next three years, maybe David can at least act as counsel to Governor Panlilio just like Apolinario Mabini was to President Emilio Aguinaldo and Loenzo Tanada to President Cory Aquino. With his profound understanding of Philippine politics and intimate knowledge of the Pampangos’ psychology, David can help Governor Panlilio do all the things he says in his column to bring down the politics of patronage and bring about a new brand of governance.
In the blogosphere, The Journal of the Jester-in-Exile on the kind of improvements our navy really needs. Iloilo City Boy returns to the blogosphere with an election post-mortem:
So I guess the message of the people to their leaders is this: “We don’t want GMA removed, but we want her every action closely guarded and scrutinized.”
And Torn and Frayed points out the kinds of foreign ownership allowed by the government -which might surprise Filipino readers (and he also asks, why keep the professions closed to foreigners?).
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