A heinous situation

Dan Mariano writes on Bullying the business community. Even Philippine Commentary had to take exception to Rightist Poster Boy Enrile on this one. Previously, Tony Abaya said Senator Juan Ponce Enrile’s posturing in the Senate was due to his having an axe to grind with foreign businessmen over their complaints concerning smuggling in Port Irene.

The businessmen incurred the Enrile-Santiago tandem’s ire, because they dared remind the President of her previous policy of coddling them. But foreign businessmen are here only to profit, they don’t really decide the fates of regimes, because whoever is in power they will do business with. The problem, now, for the President, is that her past trump card -The Economy- is proving increasingly a weak one, because of the global situation. The President, for her part, knows as well as any Roman imperial official did in their time, that at all costs, the plebes must be provided bread and circuses. Or else.

The Business Mirror has two parallel reports: locally, Dispute over subsidies widens and regionally, Subsidies worsen food crisis .That this is a question the entire region’s wrestling with is explored Anwar’s False Promise on Fuel Prices . This report, Korea in Crisis, also provides a sobering tale (will it drive more South Koreans to come to the Philippines?).

Two views on these subsidies and policies, one from an official, the other from a citizen.

From Congressman Ruffy Biazon, on the one-time cash gift of the President to electricity consumers:Anyone who has ever spent time in the grassroots will tell you what will happen when you give dole outs in the field, especially if it involves money. Imagine dropping a piece of candy in the middle of an anthill.

From the outset, the government’s distribution plan was obviously a logistical nightmare. While indeed, government will eventually be able to had over the subsidy to the people, the cost of doing so will only highlight the inefficiency of their system and the incompetence of those who thought of it.

In order for the distribution plan to be implemented, government would have to mobilize manpower to do the distribution, secure the distributors and the money, maintain order in the distribution centers, and other measures needed to undertake such an activity. All these translate to expenditures just to carry out the plan.

Never mind if there was no other way to go about it. But as it turns out, there is another way. Common sense will tell you that the easiest way would be to turn over the subsidy to Meralco and have them deduct the amount from the next bill of the consumers. Simple as that. In the age of computerized banking and finance, it will only take minimum effort and a lot of savings to the government instead of what they are doing now.

But it turns out that the government officials handling this are not entirely ignorant to such an idea. In the provinces, where the other 2 million of the 4 million target beneficiaries are located, the government intends to implement the subsidy through the electric cooperatives, so that the subsidies will just be credited to the accounts of the consumers. No distribution centers, no lining up…

…I’m dumbfounded. While they are considering this scheme for the distribution of the subsidies in the provinces, where they will have to deal with dozens of electric cooperatives and private distribution units which service the estimated 2 million electricity consumers in the provinces, they did not think about doing the same with Meralco, the lone distributor of electricity to the estimated 2 million consumers in Metro Manila.

From , a citizen, b[email protected] on joining his mother to buy NFA rice:

When I lined up at the end of the queue, there were about 30 people before me. My mom was two persons before me, and she asked me to move behind her. But there were two persons between me and my mother, so I refused. The two women then told me to go ahead, since they were standing in for others anyway. Fine with me.

After 10 minutes, we saw several people load a tricycle, five persons each carrying five kilos of rice. Another 10 minutes, the same thing happened. My mom was surprised that “mga dayo” (those who came from much farther place) got ahead of us, who lives just across the street from where NFA rice was being sold.

We were lucky enough for the seller to sell maximum of five kilos per person; last Monday, it the limit was only two kilos.

Then we noticed that people ahead of us who got their rice were carrying their load using the same green plastic bag. We were told that the seller required every buyer to get their plastic bags from them for one peso per bag – no exemptions, even if you have a plastic bag with you. Not only it meant more non-biodegrable material to bring home, it also meant that the seller is making a profit out of those bags.

And a kilo of NFA rice costs twenty five pesos; the eighteen-peso is not available. Mom has been buying NFA rice for several weeks now, and she hasn’t bought the cheapest variety ever since.

The Mount Balatucan Monitor puts it very well:

With limited expense on power and fuel, expect government service to deteriorate. How can a government agency effectively deliver the best public service if its official expense is curtailed? Should the public endure sweatshop conditions in government offices because airconditioners are not functioning. Or field work will be hampered because government personnel cannot use their vehicle to serve far flung areas. To reflect it deeper, more money in millions are lost to corruption and other official shenanigans in the government than its actual official expense. They cut public expense but this government does not monitor or check the public money that were lost due to chronic corruption.

As economist Filomeno Sta. Ana III puts it in Populism and being Anti-Business:

The current populist rhetoric and actions are similar to those taken by Mrs. Arroyo before the 2004 elections. Recall that she reduced the Napocor tariffs and set about a spending binge for her to look handsome and secure partisan support before the elections. Which leads some to ask: Is Mrs. Arroyo setting her sights on the 2010 elections?

One adverse consequence of unsound populist measures is the aggravation of the fiscal situation. Thus, after the 2004 elections, the Philippines suffered a fiscal crisis. Government had to cut spending on health, education and infrastructure and impose higher taxes such as increasing the rate of the value-added tax from 10 percent to 12 percent.

The fiscal problem continues to haunt us. Tax effort remains low, and some taxes – those on sin products – are not adjusted to inflation. The brand of populism that Mrs. Arroyo promotes is exacerbating the problem.

Recall what I’d reported here years ago, in The President’s “sweet spot,” in 2005, which is what a Bear Sterns analyst said of the VAT: it was the source for patronage. The long and short of it, Sta. Ana argues, is that,

Arroyo’s populism is thus a disguise for her being anti-business. That this has gone berserk is likewise manifested in how her allies – the three stooges in the Senate, as my colleague Manuel Buencamino calls them – have insulted and bullied the foreign chambers of commerce.

Yes, she has her set of business cronies, but that doesn’t make her pro-business. To be pro-business is to apply the rules fairly to all businessmen, regardless of their political sentiments.

Worse, unlike Hugo Chavez who is seen as anti-business but pro-poor, Mrs. Arroyo is both anti-business and anti-poor.

Unemployment, poverty and inequality have become the trademark of her economic performance despite the growth. Even the subsidies that she is ostensibly offering to the poor are anti-poor. The subsidies do not reach those who deserve most the subsidy. Rice for the poor is scarce in Mindanao where there is a large concentration of poor, while it is abundant in Metro Manila, which has the least number of absolute poor. A power subsidy for small electricity users totaling two billion pesos will not benefit the poor either because in the first place the absolute poor have no access to electricity.

But why should we care for a leadership that is pro-business? Because being pro-business, if properly done, encourages investments and employment and is therefore good for the workers, for the unemployed, and for the poor.

While I’m often ambivalent about him, the grey eminence of the Ramos era, Jose Almonte, recently issued one of his epistles on the need to keep up the momentum for reform (as reproduced in Danton Remoto’s blog):

“Islands of Good Governance” should also seek constantly to spread their influence to neighboring provinces, cities, towns – most easily through economic complementation, economic clustering and administrative example.

So in contrast to the go-for-broke (literally) governance of the present regime, here’s splendid news: 2 governors, mayor share best practices in governance. A reform constituency coming together. According to the report, the three agree on:

[E]nsuring greater transparency and accountability in government dealings, curbing the pervasive illegal numbers game “jueteng” and illegal logging, and fighting for more local autonomy in the maintenance of law and order.

And with less than two years to go before the 2010 national elections, the three officials are now pushing for computerized elections and voters’ education.

Of their reform agenda, the third, is particularly interesting in the light of recent events. The bloated Philippine National Police bureaucracy has proven itself increasingly incapable of clamping down on crime (or extracting accountability from its own people: see Promotion of Lozada ‘kidnapper’ scored).

And crimes are getting increasingly vicious.

I first spotted the news last Tuesday afternoon on TV. Here’s the Inquirer report: Grisly end for 5 QC household members.

NGO circles received (and passed on) an email from the Association of Foundations (AF) asking for prayers for Oman Jiao and his family, and tersely detailing the murders:

At around noontime today, June 10, the house of Oman’s parents in Talayan Village, Quezon City, was robbed. Police suspect it to be the Akyat-Bahay Gang. Oman’s parents, three househelps, and Oman’s daughter, 3-year old Nina (who passed by her grandparent’s house after attending the first day of prep-school), were hogtied, and the house was torched down. Only Oman’s father survived the ordeal and is currently being treated in a hospital.

The gruesome news registered briefly (and hit “too close to home,” for some like village idiot savant), but didn’t gain the traction of say, the RCBC bank heist. Not least because the abduction of Ces Drilon swept all other news aside. The frustration of some local officials is that if they had more control over the local police, they could fight crime more effectively. A national police force is, after all, a recent innovation, dating back only to the martial law years; and as one frustrated citizen recently put it to me, “aside from ideologically-motivated crimes, if you look at all other crimes, sooner or later it brings you to the doorstep of the PNP.” Perhaps we ought to consider that the PNP (successor of the Constabulary) should once more be relegated to crimes that cross provincial boundaries, having SWAT teams, etc.

Although, as my column for today, The Rule of Glo (which took its cue from these articles: What was he thinking?!? in Uniffors, and Planting evidence remark only a joke – PDEA chief )points out, there are other problems, too.

Vergel Santos, veteran newsman and something of a walking conscience for the profession, writes up his objections to the media embargo on the story. Taking a cue from the Duke of Wellington’s famous reply to a blackmailer, Santos titles his piece Publish and be damned:

They may have all been convinced in their hearts that they were doing the right thing, but still they should be able to square it with the basic principle that governs their profession, the very reason indeed for which it exists – the people’s right to know. And if they insist on this case as a moral exception, they will be expected to judge by the same standard every comparable case that comes along.

But what exactly is that standard? So far as I can discern, it’s a variable and ineffable one, set by what feels right in one’s heart at the moment. Journalists are indeed given wide latitudes, but they still have to validate their judgments and actions against certain express rules and principles.

Obviously, a rule covering the entire profession doesn’t exist. As I see it, the problem is that when it comes to kidnappings, embargoes have been put in place more often than the public thinks, and even more often than the media (itself subject to the great shortcoming that afflicts most Philippine institutions, of having a feeble, at best, institutional memory) is aware. The best any individual outfit can do, is point out, off-the-record, that they have obliged victims’ families in this regard in the past; but neither the public or media as a collective knows this or can quantify how often, and so determine if Drilon enjoyed special treatment or not.

Here is a question that has been bothering me for some days now, ever since Driver claims military agent, not Abus seized Drilon team. And ever since Village Idiot Savant bought up The unthinkable.

If things start edging towards convincing proof that what actually took place was the abduction of Drilon by pet bandits of the AFP, then the horrifying conclusion of the whole thing will be her liquidation -as collateral damage in a botched rescue attempt by the military or the PNP. I hope my nervousness over At Midfield’s Howitzer Blasts, Tuesday “Deadline” Raise Tensions In Sulu Abduction Area are unfounded.

In the meantime, noteworthy entries on the abduction can be found in Tingog.com, and The Write Stuff and in Pedestrian Observer. Also, see earlier commentary in khanterbury tales, in AlterNation101, from Manilenyo In Davao and in notes of marichu c. lambino and Tongue In, Anew. In his blog, RG Cruz pens an eloquent, personal, tribute to her. Another one, by Muslim journalist Samira Gutoc, provides an insight into why Drilon was so often in Mindanao:

Throughout her career, I grew to respect her for her sense of commitment in good reportage. But this respect was heightened with how I saw her commitment in the coverage of under-reported stories as the peacetalks and ARMM development . Ces had covered the ARMM elections and the two peace talks spanning three decades – the government (GRP)-MNLF in the 1980s and the current GRP-MILF peace talks .

Yesterday’s Inquirer editorial, Lame-duck Congress, took the current, 14th Congress to task, and today’s Inquirer editorial, Unparliamentary?, focused on a fight within the Left in the House. What is interesting is the insight the intra-Left squabble provides, on the kind of tactical approach that would support landlord-driven opposition to the current agrarian reform program, in order to (consistently, mind you) push forward a party’s alternative proposal for collectivizing lands. As Mon Casiple suggests,

Of course, as in any contentious legislation of a divided body as the Philippine Congress, there will be compromises. However, on balance, if a measure will improve the present situation, then there is a basis for supporting such a measure.

It is in this light that the position taken by those who advocate the so-called “Genuine Agrarian Reform Program” or GARP effectively weakens the interests of the Filipino peasantry. By advocating an extremely radical proposal of giving the peasants “free land”, they seemingly represent their highest interests. However, they well know that this will not get anywhere near a majority support in a landlord-influenced Congress.

What are they then after? The only political logic is a posturing for a “revolutionary” solution to the agrarian reform issue–which is represented by the CPP agrarian revolution proposal. The problem, of course, is that the battleground here is the parliamentary arena, specifically the Philippine Congress, not the “democratic coalition government” or even the “National Democratic Front” led by the CPP. By this position, the GARP advocates try to persuade people of the necessity for their “revolutionary” solution–only attainable, by their own admission, through a protracted “people’s war.”

There is an effective collusion between the landlords and GARP advocates in blocking the extension of CARP, although they come from different motivations. The former wants to hold on to the land; the latter wants to sharpen class contradictions. The former wants to maintain an archaic, feudal and regressive social system which has consigned millions of our peasants to poverty; the latter wants to foist an unrealistic, if seductive, vision in service of a failed strategy.

Tangentially related to the above is a thought-provoking reading from F. Sionil Jose in Rizal, Ninoy and revolution:

Ninoy believed in revolution; he expounded on it before a small group he knew very well but we didn’t know to what extent he had worked to advance it. I saw glimpses of it only after he died. During all those years that he was in prison, he continued reading - but his reading now included books on philosophy and religion. And when he was released on furlough, on my second visit to the Aquino house in Times Street in Quezon City, he took me to one of the rooms where we could be alone. The house was crawling with soldiers in civilian clothes, among them the late Willie Jurado who, Ninoy said, was Marcos’ personal agent.

He assured that the room was not bugged and he said that he still believed in revolution but that we couldn’t afford a million Filipinos killed as was the case with Vietnam.

There must be a way, he said, by which violence could be minimized. A million Filipinos – that is too much. Perhaps just a few hundred will do.

I told him that once violence was unleashed there was no way it could be controlled - I was repeating the old argument that Pepe Diokno used.

Therein lies the problem with regards to social and political change: radical solutions require radical methods, and every instance of radical methods in pursuit of radical change requires unleashing more misery than previously existed under the existing, but unjust, social order.

Manuel L. Quezon III.

127 thoughts on “A heinous situation

  1. Magkano na ba ang 21 gun salute?


    ‘Lt. Col. Ernesto Torres Jr., Armed Forces of the Philippines (AFP) spokesman, said Daboy was a Chief Petty Officer of the reserve force of the Philippine Navy, assigned at the 203rd Naval Squadron based in Navotas and with a rank equivalent to that of Filipino boxing idol M/Sgt. Manny Pacquiao (reserve).’

    GMA news

    CEBU CITY, Philippines – Slain lawyer Richard Sison was laid to rest with 21-gun salute Thursday at the Catholic cemetery in Lapu-Lapu City, GMA regional news Balitang Bisdak reported.

  2. djb, i was sitting in on an economics class recently and the professor was discussing how the global economy seems to have moved beyond the boom and bust phase that characterized the world previously. unless, the professor said, the next year or two reverses that and brings us back to the way things were, before. he said the world’s managed to steadily grow for a decade which is unparalleled.

    but ireland shows in many ways how globalization can reinvigorate the nation-state, the country was a failed state for half a millenia and transformed within a generation -and has turned the e.u. on its head recently.

    you know what mark twain said about the premature publication of the news of his death.

  3. it would be wrong, i think, to confuse a 21-gun salute with heroism. it’s a privilege accorded to those entitled to a military burial, that’s all, same as having the flag on your coffin and a military honor guard. if you’d done something heroic you’d have gotten the medal of valor or the legion of honor some such award.

  4. mlq3,
    there were Three Stooges in the Senate berating the JFCC. But as I recall there were at least Four Stooges. So I must add Chief Justice Puno to the group for his unethical political speech against “economic colonizers”–so Constantinoesque. But what if one of these cases gets to the Supreme Court. What happens to the Code of Ethics now against judges making such speeches? it was disgusting display by a grandstanding CJ.

    As for the Catholic Church, they most certainly are to blame for overpopulation in the country. It is fallacious to say they aren’t even if it were true that Muslims are to blame for overpopulation in ARMM.

    In any enumeration of our problems: energy, food, education, social services, governance, it is that huge denominator for which they are absolutely, indubitably responsible that degrades any possible palliative or solution.

    Take the problem of going from a 10 year public school system to a more decent K-12. Just can’t do it because of that self-inflicted problem.

    That is how I interpret their recent withdrawal from politics and disavowal of Edsa Dos (ahem, ahem, ahem!) — they know what harm they’ve done and how they are responsible for unending miseries, deprivation, hunger, disease and crime. Blast them!

  5. Manolo (at 1:04 am), thanks for your response. Just to clarify, the reason i bring up the experiences of Vietnam and China is not because i advocate armed revolution but more to clarify the policies that they implemented to make their economies take off. It is clear from their experience as well as that of our Capitalist neighbors that a measure of Equality is a prerequisite to economic development. The problem is that these successful examples get discarded because of knee jerk anti-communism or because the Oligarchs won’t allow it, or both.

    DJB (at 6:30am), i’ve worked for MNCs for two decades so i’ve heard my share of globalization-rhetoric and my view from the inside is that it’s nothing like that ‘phase transition’ stuff you’re talking about. Globalization is a construct of nation states. It does not exist outside the State. Any Multinational who does business in Mainland China and has no choice but to abide by its rules would instantly realize that. And as any Filipino who needs to apply for a Visa also knows, our place in this globalized world is a function on our standing as a nation state.

  6. cvj, my discomfort with bringing up china and vietnam is that they modernized their economies, in a sense, despite their failed efforts at traditional socialism of the marx-lenin (and mao) variety. the orientation as a whole was different, and both china uprooted and dispersed their middle classes in an effort to liquidate them. in the absence of the old middle, they then had to create a new one, in an effort to erase the mistakes of the past.

  7. I don’t have the stats, but anecdotally I would say that there are more Igorot nurses per capita in New Jersey than any other Philippine group, even Ilocanos. This may be because they are in fact the ONLY English-speaking “indigenous people of the Philippines” on CJ Puno’s IPRA list. Practically every family I know in Sagada has a nurse or nurses sending back money, accounting for the glittering new roofs in the mountains there.

    I think the lesson is that we must embrace our Igorothood in the world and play to our strengths. We do not have to build a society like China as the Maoists of the CPP NPA suggest, complete with basic heavy industries and manufacturing.

    Although nations won’t disappear, they will become more like the States, separate but united by a common reality. We must evolve from the thinking of nationalism of many small separate entities, to being part of one Human Nation.

    Basic to all of this is that unlike men, our democratic philosophy does not declare that all nations are created equal.

    I think this is actually what separates “nationalists” from “globalists”–whether or not you believe that “All Nations Are Created Equal”.

    There are not, even if human beings “are”.

    A guy like Puno (and most unsophisticated nationalists) begin with the assumption that “true independence” ought to have solved most of our problems, because they believe quite wrongly (as Constantino unfortunately taught them) that those problems were created by the “colonizers”, when really they might have been endemic or inherent to the condition of the colony and its inhabitants.

    The hell that is being run by Filipinos just can’t be blamed on the Spaniards and Americans after we’ve had a go running the place ourselves.

    And as the Muslim insurgency proves, nationalism itself breeds nationalism after the common master leaves.

    Xenophobic blame-gaming is just an excuse for our own failures and idiocies.

  8. mlq3, the mistakes and excesses of China and Vietnam are there for all of us to see. What failed was Collectivization, back-yard Industrialization (aka the Great Leap Forward) and Central Planning (with no regard for the market). We don’t have to replicate the above mistakes. On the other hand, what succeeded was Land Reform, home grown industrialization and Central planning (that takes the market into consideration). We may want to study this so we can figure out how to implement similar reforms in our setting.

    The mistake is to believe that the successes of Deng’s Reforms (and of Vietnam’s similar reforms) have no foundation in the past policies. China’s and Vietnam’s market reformers were able to succeed precisely because the problem of Inequality has already been previously addressed. Over here, we implemented market reforms without directly addressing the problem of the Oligarchs.

  9. Over here, we implemented market reforms without directly addressing the problem of the Oligarchs.

    They have to be ‘de-coupled’ from the State. In the Philippine setting, state and oligarchs have been traditional partners and to transform that partnership into something else would be next to impossible without us agreeing to ‘give up our rights to move this country forward’. There are radical ways to dismantle the oligarchy but that would involve the state not propping them up or protecting them but by opening them up to competition. By focusing on the oligarchs, we seem to forget that in our country, it is the state that is as big a problem, but no one is talking about dismantling the state, or at least giving them fewer powers. That’s the kind of people we are I suppose.

  10. “As for the Catholic Church, they most certainly are to blame for overpopulation in the country”
    Poverty and Overpopulation are closely related.
    Poverty is a failed policy and overpopulation is lacking implementation of education.

    The poorest social groups are incredibly ignorant. They don’t even know how a woman becomes pregnant. Some of them believe they are infertile while they are still breast-feeding their new-borns and others have never even heard of prevention or contraceptives. Others still are terrified of unknown side effects. That’s why women keep having more children, even though they neither want to nor have the economic means to provide for them.
    Church: is against abortion, sterilisation and all other forms of contraception. The church is also an opponent of sexual education. Instead, the local priests encourage women to try and guess their egg cycle in order to prevent pregnancy.

    Fact: the poorest seldom go to church. they don’t go at all. The church do not preach about population everyday not even every week. The church allow egg cycles to prevent pregnancy.

    As Karl Marx reasoned, “rapid population growth is a consequence of economical and social inequalities, not its cause.”

  11. Make it illegal for the military to be used against citizens. That the state is using the military to go after Filipinos is a travesty. If they are to be used against Filipinos, make congressional approval a requirement on a case-by-case basis.

  12. Many many years ago, it was the Industrial Revolution (when jobs that did not depend on land were not only available but had such “velocity” as to allow the non-landed elite to gain superb wealth) that broke the landed oligarchy’s monopolistic grip on power.

  13. UPn: The PNP is the instrument used to establish order among the citizenry.

    You mean ‘the PNP is an instrument…’. Im saying they should be the instrument.

    And UPn, in this country, the oligarchy is protected by the State. Sometimes even protected by the army. The middle class who tried to go into manufacturing got hammered by smuggling. State-protected smuggling, allegedly.

  14. jeg,
    “we seem to forget that in our country, it is the state that is as big a problem, but no one is talking about dismantling the state, or at least giving them fewer powers. That’s the kind of people we are I suppose”

    The causes of why the state is a big problem are both external and internal.
    Internal Causes:
    1. poor political and economic administration
    2.widespread corruption
    3. excessive military budgets combined with inadequate spending on health and education
    4. fratricidal wars
    5.defective markets
    6. entrepreneurial freedom erroneously understood as the right to the unbridled pursuit of profit
    7.violations of the principle of subsidiarity
    8. cultural-historical factors that define norms of behaviour inimical to the pursuit of integral development
    To put it simply, the hungry are hungry because they are excluded from the land or cannot earn enough to survive and not because of a natural limit to the amount of food that can be produced.

    Externally, we are victims of an inequitable distribution of the world’s resources as well as of international trade and financial arrangements, which work against us. IMF and World Bank, which claim to be working to alleviate poverty and assist poorest of the poor, are actually making our lives miserable. Our poor country is often over-burdened by foreign debt. Problems such as these can only be eradicated through the pursuit of social justice, which will enable integral development to occur.

    parang sirang plaka na ko dito… anyway.. we must elect the best president who can manage both at the same time. hindi isa isa… ang tagal na..ganun pa rin.

  15. so.. if one of you become the president… first day in office… KNOWING the causes of our problem, what will you do.

  16. “…in this country, the oligarchy is protected by the State. Sometimes even protected by the army. The middle class who tried to go into manufacturing got hammered by smuggling. State-protected smuggling, allegedly.” – Jeg

    We go back to the issue of how the Filipino-Chinese made it. Surely, many of them started with much less and were also discriminated against.

  17. The Senate blew a chance to have an honest to goodness dialogue/debate with foreign capital and their so called deference to the idea of free markets, free competition and free trade. It would have been a great opportunity to educate people but I am probably reaching for too much from the Senate.

    It is not only sad but tragic. Another golden opportunity lost.

    Example –The upcoming dialogue between the Chinese government and the U.S. government.


    “This time, the Chinese side is trying to change its attitude to be more active, to be more aggressive, to balance the two sides,” said Song Hongbing, author of “The Currency War,” a best-selling if conspiratorial book on the American economy. “They just started to change their attitude for the future.”

    “Chinese officials are expressing their disdain in forums around the world. Last month, Liu Mingkang, the chairman of the China Banking Regulatory Commission, delivered a lecture at the British Museum in London in which he blamed the American government for the subprime mortgage crisis that came close to freezing Western debt markets and required extensive intervention by the Federal Reserve. The turmoil, he said, was “counteracting the course of global civilization.”

    “Does moneymaking or doing business justify the regulators in ignoring their duty for prudential supervision and their job of preventing misbehavior?” he said.

    One of Mr. Liu’s colleagues, Liao Min, told the newspaper The Financial Times in late May that the “Western consensus on the relation between the market and the government should be reviewed.”

    “In practice, they tend to overestimate the power of the market and overlook the regulatory role of the government, and this warped conception is at the root of the subprime crisis,” said Mr. Liao, director general of the commission.”

  18. “In practice, they tend to overestimate the power of the market and overlook the regulatory role of the government, and this warped conception is at the root of the subprime crisis,” said Mr. Liao, director general of the commission.”

    This is the Asian way and more attuned to our sensibilities. So now what? Are we all willing to give up some of our rights to move this country forward? I am if you are. 😉

  19. Leytenian,
    Overpopulation is neither essential cause nor effect of poverty, though paradoxically it is of course a little bit of both. I find it most useful to compare it to obesity, which is also neither the essential cause of heart attack and death. But it is as if the Catholic Church bans the use of dieting and exercise because that would lead to the prevention of the production of more living cells.

    Unfortunately in this country, obesity has already infected the brain of the body politic as well and too many otherwise intelligent people want to give the Church the benefit of the doubt it does not deserve…not after comparisons with countries like Thailand.

    The problem is the hierarchy has made their dogma a matter of infallible teaching, when really it is their prestige and political power on the line and needs preserving (in their eyes). They have painted themselves into a corner of ultimate hubris with infallibility for they can never admit they are wrong on anything they’ve infallibly taught without self-destructing.

    It’s the same with Islam…Theocracy is fat-headed fatuousness though Roman Catholicism is a bit sneakier nowadays, preferring to live under democracies that they actually control from within through surrogates, superstition and inertia.

    Only a cultural revolution involving science and reason and secular education can cure this mental illness that has plagued us for centuries.

    That and the slow but sure march of Darwinian natural selection.

    Lucky they made no infallible teaching about Erap and some God has given them the ability to admit the error their ways in that infamous foray into politics. It’s good practice for when empty pews give stark evidence that empty minds have come into short supply at the cathedrals of empty piety.

  20. cvj,
    Even the Igorots have had to confront the reality of the nation state, despite the same sentimentality for tribalism you seem to display for nationalism.

  21. “Make it illegal for the military to be used against citizens. That the state is using the military to go after Filipinos is a travesty. If they are to be used against Filipinos, make congressional approval a requirement on a case-by-case basis.”

    This is true.

  22. We go back to the issue of how the Filipino-Chinese made it. Surely, many of them started with much less and were also discriminated against. – PSImeon

    Compared to their Korean, Taiwanese and Japanese counterparts, the Filipino Chinese do not measure up. Where is our Samsung, LG’s, Toyotas and HCI Semiconductors?

  23. cvj: there were no Samsungs, LG’s and Toyotas when the jobs-laden middle-class of Europe (whose Industrial Revolution jobs did not depend on the land) wrested more power away from the landed Oligarchy of Europe.

    Now I will tell you this. The Gokongweis and Lucio Tans, even the Villas of Las Pinas, have significantly much more political power than a thousand of you, wouldn’t you say, and I dare say it is because of the wealth they have accumulated (even if from old-line businesses like real estate, airlines, cigarette manufacturing, insurance). One Doc Bautista probably won’t make it, but if there were half-a-million more of you, and this half-a-million of cvj’s are all in Pinas — that is a lot of votes!!!! and a hundred pesos times half-a-mil going to a political cause is real clout —- then the march moves on towards wresting more power away from the Landed Oligarchy of Pinas.

    It is jobs, jobs, jobs that I am talking about. It really is the economy, stupid!!!! And the individual has to get his or her own job while it is the state’s duty to give Pinas citizens (in rural as well as urban) the quality primary-and secondary-education needed.

    You are where you are because of college-DLSU, benign0 where he is because of college-Ateneo (along with the “mental conditioning” from primary- and secondary-education).

  24. djb, a chief justice has no business attending ceremonies and making speeches. really, none

    Very true, yet depends on the Subject and the Message the Chief wants to Spread around…
    Here, before the Bar Association, a CJ had a very important message that may led to the re-thinking of how the Justice System be someday become a Basic Right, like Education and Health care, universally accessible to all…

    Chief Justice-Access to Justice a Basic Right

  25. and cvj…. do you really want to use China or even Korea as role-model?

    I’d prefer the democracies and economies of the UK or France… but this is me talking. In fact, China’s or Korea’s economies/democracies are the pits compared to that bastion of AynRand economics called USA!!! USA, USA!!!! But this is just my personal opinion…. different folks, different strokes.

  26. hey, vic… Canada’s democracy and economics… much better (in my opinon) than China or Korea.

  27. Canada is A-okay…. even if Canada continues with fighting in Afghanistan on the side of the US-of-A (real fighting… not pretend-only fighting as the French or Germans in Afghanistan do).

  28. Wow… Too much data to process…

    Alright, to cvj, regarding to the Tsinoys who have not been innovating, it’s basically that mechantile mindset, that’s why chinatown’s filled with them. It’s rare to see manufacturers here… Which just saddens me, because I feel innovation is lacking here, even if we have the materials we have to study those foreign products and step up the ante. Or to make rice research ourselves, instead of buying some foreign thesis for millions of pesos. Innovation… All I’m gonna have to say, since we have intellectuals here.

    To Leytenian,

    I’m going to agree with DJB Rizalist, because overpopulation is a minor part of both sides. I say we take drastic action and go with contraception, but I’m still saying no on abortion though… Chastity is only possible to only a select few and contraception is a bitter pill we have to swallow. The other bishops went to even lower depths to call GK as an instrument of ‘evil’, just because they took sides, instead of being objective. So think about it. There is always a pro and a con to every decision.

    @DJB Rizalist,

    “Only a cultural revolution involving science and reason and secular education can cure this mental illness that has plagued us for centuries.”

    From which perspective is this one from? Marx or Rizal? Just can’t take this one in, because I prefer to take a Weber approach to solving the mental illness which gripped us. Ideas shape society and the throwing off the idea of religion is something I cannot take, because rationality has its limits, just as morality has its own limits as well.

    Looks like you want to propose another age of reason, but I don’t see that coming in 30 years. There has to be another way… And I think it is through attacking and solving the problems on the grassroots, without all that primadonna stuff those politikos are doing with their posters and tv commercials, that we can change the problem of our backwardness.

  29. UPn, in order to industrialize, the USA also followed a model similar to China and South Korea. Early in its post-independence history, there was a debate between between Thomas Jefferson and Alexander Hamilton on whether to promote an agricultural based economy or pursue a policy of promoting home-grown manufacturing-based industrialization. Jefferson favored the former, while Hamilton proposed the latter approach. Stated in more contemporary terminology…

    “Two classic approaches offer conflicting answers. One may be characterized as ‘Jeffersonian’ and the other as ‘Hamiltonian’ in perspective.

    The [Jeffersonian model]…emphasizes collectivity and cooperation. The relatively small, highly specialized firm is the agent of progressive change. It is able to cut bureaucratic costs through individual initiative and achieve speed and flexibility in entering new industries by being networked. What it lacks internally it overcomes by being part of a cluster of firms that mutually create ‘external economies’ (as analyzed by Alfred Marshall in his Principles of Economics). Such economies promote innovation and the efficiency needed to compete abroad.

    [Hamilton’s model], on the other hand, attributes modern manufacturing success to big business and internal economies, with Joseph Schumpeter as one of its most prominent partisans (see his Capitalism, Socialism and Democracy). It posits that in the course of economic development, as more and more physical and human capital is applied to manufacturing, the agent of change becomes the firm that makes a ‘three-pronged’ investment in (1) plants with minimum efficient scale, (2) in managerial hierarchies and proprietary knowledge-based assets, and in (3) global systems of marketing and distribution. The ‘first mover’ to do so enjoys advantages in the form of entrepreneurial rents that arise from scale economies, novel products and processes, and the managerial skills and capital to diversify into still newer industries.” – Amsden & Chu, Beyond Late Development: Taiwan’s Upgrading Policies


    Hamilton’s model won out in the USA which is why it became a leading indusrial power within a Century after its independence. Japan, South Korea, Taiwan and China followed a variant of Hamilton’s model. (I thought you would have known this by now from reading hvrds’ comments.)

    Also, the reform of the USA’s property system in the 1870’s was the inspiration for Hernando de Soto’s Property Reform [aka Urban Land Reform] proposals which we discussed in the previous thread.

  30. PhilwoSpEditor, here in Singapore, Lee Kuan Yew also complained about the Chinese’ business sector in a speech early in his rule:

    “…the old family business is one of the problems of Singapore…One of the reaons for our floating an industrial development bank is because of the sluggishness with which people change habits. They are accustomed to buying and selling. And business is kept in the family. They have done this for hundreds of years…Business management is a professional’s job and we need professionals to run our business effectively.”

    The author of the book i got that quote from further explains:

    Lee’s disdain for the traditional Chinese family business is one-sided but does put into clear perspective what the PAP technocrats thought of the traders’ worldview of the Chinese business community. Brushing aside a century and a half of the economic essence of Singapore as a trading and entrepot port, he equated modern with industrial and assumed the pre-eminence of the modern, Western management model. – Sikko Visscher, The Business of Politics and Ethinicty: A Hisgtory of the Singapore Chinese Chamber of Commerce and Industry

    In its defense, one Tsinoy commenter explained that they were initially in manufacturing but moved out because other businesses were ‘more lucrative’.


  31. mlq3 on, “Ireland shows in many ways how globalization can reinvigorate the nation-state, the country was a failed state for half a millenia and transformed within a generation.”

    Ireland imposed a policy of restraint on government spending thus dramatically reducing public debts. Hardly, Filipinos can rein the spending of Malacanang and the pork barrel of lawmakers.

    Ireland used EU aid to increase investment in education and infrastructure. In contrast, US aid is a suspect for the CBCPs with any population undertone.

    When it enjoyed spectacular growth in tax revenues over 5 years, Ireland reinvested it on local improvements and tightly focused local spending to reinvigorate the economy. Philippines has the import mentality.

  32. talking about economic models. I think everyone of us here have their own preference… but here’s what I can say… looking at the cause of problems,
    1. poor political and economic administration
    2.widespread corruption
    3. excessive military budgets combined with inadequate spending on health and education
    4. fratricidal wars
    5.defective markets
    6. entrepreneurial freedom erroneously understood as the right to the unbridled pursuit of profit
    7.violations of the principle of subsidiarity
    8. cultural-historical factors that define norms of behaviour inimical to the pursuit of integral development

    which model will fit to those problems…
    I believe our system ( structural ) is already in place. it’s organization is modeled from the US.

    I think we have to find functional model that will fit and solve each of those intern and external causes… Functional model is actually unknown… It is in the collective skills of our politicians to have one common goal. To serve the people right. 2/3 of Congress must be for the people.

    kanya kanya kasi… wala namang resulta na magaling talaga. puro pointing fingers and pogi points… wala bang ganda points? LOL

  33. “In order for the distribution plan to be implemented, government would have to mobilize manpower to do the distribution, secure the distributors and the money, maintain order in the distribution centers, and other measures needed to undertake such an activity. All these translate to expenditures just to carry out the plan.”

    bakit malabo ang maynila… gastos nang gastos. puede na man pa lang i distribute thru meralco? i think these people in office are not prejudice to the provinces but prejudice within their own backyard… Gloria- pro business … I don’t think so. i don’t see result. pro-poor .. yes… maraming pobre.

    out of topic: politician’s lifestyle are not justifiable. they should not take home their government funded vehicles and use it to transport their families for personal purposes. imagine the gas prices? that’s an extra unnecessary expense. I have encountered a blogsite with government official spending, i can’t find it.

  34. Leytenian,

    again with those laundrylists!

    baka sabihin mo ikaw lang ang kaya ko, di naman para me mapag usapan lang.

    On the us reaching out to china, Nixon did that nagkataon lang na kasabay ito ng rise of opec kaya di rin nya alam ang gagawin nya,many things happened during nixon’s time.

    Wala akong magawa me nakita ako libro sa powerbooks: In their time the
    greatest business leaders of the twentieth century by anthony mayo, for the life of me di ko alam pero ang tinutukan ko yung panahon ni nixon.
    dito makikita yung sinasabi ni hvrds na removal of gold standard,etc,etc;rise in oil prices na naman ni gerald ford.

    ganyan ang style dito kung di mo agad bibilhin ang libro unti untiin mo,pag nakumpleto mo na di mo na kailangan bilhin, (joke).

    sa chinese pinoys

    kahit mura murahin mo,kinapin ng kapwa tsinoy they still rise to the occasion. who are the top ten billiopnaire pinoys aside from villar,ayala.

    o sige hindi ito chinese pero manufacturing.
    manufacturing can be done outside,punta ka sa bar sa isang Hong Kong hotel anong flag ang nakatapat sa san miguel beer, di ba hong kong.
    retail and banking at f and b mostly ang tsinoys,pero teka di ba sabi entrepreneurial spirit.bakit natin pagpipilitan ang manufacturing ,US ousorces them world wide. Dell pioneered with outsourcing all over,di ba ginaya din sila ng competitors nila.Pogi points lang ang democratic party to stop out sourcing.

    ito trade secret: dahil wala na akong balak bumalik sa call center for now.before this year, every call from a democratic party member is to be transferred outright to the US,ngayon for some reason the democratic party guys suddenly have no choice but to speak with pinoy csrs.

  35. Karl, we need to re-focus on manufacturing because a country’s economic development is based on continuously improving its technology capability and pattern of specialization in domestic production. As Dani Rodrik says, ‘rich countries product rich country goods’. Look at these pictures which show “the pattern of specialization of different parts of the world, and how different commodities are related to each other in product space according to a particular metric of proximity.”:


    As Rodrik explains:

    …think of the product space as a forest, goods as trees, and entrepreneurs as monkeys. Countries develop as monkeys jump from tree to tree. Trees further away are harder to jump to. Some parts of the forest are denser than others. What trees you have monkeys on today determines where your monkeys will be tomorrow. And it goes from there. – Dani Rodrik – July 28, 2007

    How to breed more monkeys (aka entrepreneurs) and grow more trees (areas of business activity) near each other in a way that would make it easier for the monkeys to swing from tree to tree is the role (and challenge) of industrial policy.

  36. “The Philippine ruling class is a failed ruling class.” – DJB Rizalist

    The ruling class may have failed Philippine society as a whole, but it has endured, and even prospered, through the years. Never mind if it has been at the expense of the rest.

  37. chuck,
    I wont be the one of those guys who will say akala ko ba advocacy mo land and urban reform kung meron mang magtatanong sayo nun..

    Sa tingin ko consistent ka naman akala lang ng iba wala kang two sides of the coin.

    now semicon, which rego,nash and maybe someothers can attest to is our top export and a far second is garments.

    As I said before nasa atin ang J and J pero ngayon nasa thailand and vietnam na. Ang unilever and P and G dati dito rin ngayon me konti pang natitirang manufacturing ang dalawa pero distributor na lang.
    ang ating marikina shoes wala na ngayon can we blame henry sy for that?

    Rodrik sure why not.

    kahit reverse engineering wala tayong inubra sa japan
    although the japanese can acknowlege every pinoys contribution to its technology because of their open suggestion box type of systems.

    sa link ko above ni abaya: he kept on questioning the minimum wage law na sikat ngayon sa headlines dahil tinaggal sila sa tax base.
    what if we lead it to the market forces and allow them to fail.

    sabi nga ng isang commenter dito:

    Wouldn’t it be neat if the Central Banks simply stepped aside and let the financial markets correct [themselves]?

    Let the markets play chicken with deflationary pressures even to the extent of bringing down the financial markets.

    Dometic political pressures then could be brought to bear when the realities of a hard crash happen.

    Nothing educates as much as letting people experience market failures.
    Posted by: R Hiro Vaswani — 24 March 2008 1:32 pm

  38. Karl, thanks. What i can’t believe is that we are still stuck at the level of leaving our economic growth to market forces. We have to realize if there is such a thing as government failure, you can also have market failure. Why we have to experience market-failure first hand is what escapes me since we already have a lot of real-life examples to learn from.

    BTW, Abaya is wrong to say that it was foreign investments that fueled China’s economic growth in the past two decades. I think he says that because, like many others, he is too fixated on China’s Special Economic Zones which is only part of the story. During the first decade of Deng’s reforms, the source of growth was mostly domestic. The foreign investment only follows once they see that a country has proven potential.

  39. more on minimum wage law, wala pala sa link ko above:

    Since we are talking of manyfacturing, can we now reconsider our minimum wage law na sikat na naman ngayon because they are removed from the tax base.


    “Despite the other fact that Filipino managers were already familiar with American business practices, while most Chinese managers then were not.

    So our competitive advantages were nullified by the bottom line: the cost of labor. Because our labor was more expensive and because we had a minimum wage law, we began to lose out to Hong Kong and Taiwan as early as the 1960s.

    Our initial statutory wage was, believe it or not, seven pesos a day. But since the rate of exchange then was two pesos to one dollar, that amounted to US$3.50 a day. In 2005, the statutory minimum wage is P325 in Metro Manila. But since the rate of exchange now is about P55 to the dollar, that is equivalent to only $5.91 a day.

    So in US dollar terms, our statutory minimum wage increased from $3.50 to $5.91, or by only $2.41 in 48 years, or a measly average of only five cents every year, discounting inflation and the fluctuating value of the dollar. Only the insurmountably stupid and the hopelessly uninformed will conclude, as Mr. Anno’s comrades no doubt will, that the Filipino “elite” have no feelings for the “poor” and deserve to be pulled down to the dust.

    What the niggardly small annual increases in our daily minimum wage, in dollar terms, really means is that there were not enough economic activities in this country during those 48 years, to drive wages up significantly, in dollar and, therefore real, terms.

    Wages do not need any artificial boost from Congress to go up if there are frenetic business activities in an economy. Entrepreneurs, impelled by their own self-interest, will push wages up as they bid higher and higher for the workers and employees that they need to man their companies, from a pool of unemployed and underemployed that shrinks smaller and smaller..”

  40. I like what you said about us already having enough lessons to learn from about market failure.

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