February 2009 Archives

What, Apolinario Mabini asked, is a revolution?

By political revolution I understand a people's movement aimed at producing a violent change in the organization. and operation of the three public powers: the executive, the legislative and the judicial. If the movement is slow, gradual or progressive, it is called evolution. I say people's movement because I consider it essential that the proposed change answer a need felt by the citizens in general. Any agitation promoted by a particular class for the benefit of its special interests does not' deserve the name (of political revolution or evolution).

But let me suggest that it is equally valid to define a revolution as simply the replacement of one government, with another, against the will and in defiance of the institutional processes, of the government that falls. This means that whether that forced change is peaceful or violent, the process is the same: a the government that falls and by so doing, has its institutions repudiated.

Mabini said that by instinct and temperament, most people prefer change through evolution rather than by revolution, but that if development is blocked by the government, then a revolutionary situation arises:

But evolution is not possible where the social organization is not adjusted to it, just as a plant grows and flourishes only in suitable soil. When the government takes measures for the stagnation of the people, whether for its own profit or that of a particular class, or for any other purpose, revolution is inevitable. A people that have not yet reached the fullness of life must grow and develop because otherwise their existence would be paralyzed, and paralyzation is equivalent to death. Since it is unnatural for a being to submit to its own destruction, the people must exert all their efforts to destroy the government which prevents their development. If the government is composed of the very sons of the people, it must necessarily fall.

There continues to be a debate concerning public approbation of martial law. It is said Marcos himself was surprised by the docility of the public and the manner in which he successfully rounded up the opposition, padlocked the legislature, and cowed the courts. Metro Manila -his own political creation, a throwback to the Greater Manila established as a temporary wartime measure- erupted in protest by 1978, the famous noise barrage on the eve of the elections for the Interim Batasang Pambansa; yet 1981 would mark his apotheosis as dictator and his proclamation of a New Republic, officially burying the old Third Republic; by 1984, however, close to a third of the Batasang Pambansa was oppositionist, with bailiwicks in Batangas, Cebu, and places like Cagayan de Oro City. He was unpopular in large swathes of the sugar-producing regions, and the coconut-producing ones, where his efforts to establish monopolies under Benedicto for sugar and Cojuangco for coconut had spectacularly ruined those once-lucrative industries.

Still, opposition, perhaps, percolated upwards and not downwards until Marcos' economic mismanagement eventually led to a pincer movement, with the majority and the elite both edging towards the same conclusion: the dictator had to go.

Marcos' mistake was to galvanize opposition among those with a means to oppose him, by eventually seizing and engaging in extortion, the property of those who left well enough alone and had never engaged in politicking in the manner of his wealthy opponents.

To be sure, he'd already alienated the majority of people much earlier than that, as demonstrated by the noise barrage in 1978; but in 1983 he finally lost the middle class and in 1984, when he famously threatened the Makati Business Club, he finally lost the upper class as well. He lost major urban centers, too: Baguio, Cebu, Davao became even more firmly esconced as anti-Marcos bailiwicks of the opposition.

Over the past few years, I heard veterans of the Marcos era express the firm conviction that sooner or later (and sooner rather than later) it would duplicate Marcos's mistake and start muscling in on the corporations of its enemies, then muscle in on the corporations of its critics, and finally, start gobbling up the corporations of the uninvolved; at which point, the tide would turn against the government. This is, incidentally, a mistake Estrada made, surrounding by many of the same crowd that had porsued similar tactics during the Marcos era.

This is significant because of how tightly intertwined our society is; the upper class relies on the middle class for its mananers and they manage the masses who are employed; and all are tied, up and down, by ties of church, club, and school, the whole compadrazgo culture strengthened by the rituals of births, graduations, weddings, and funerals. Declaring war on a so-called oligarch is a declaration of war on a cascade of families belonging to the middle class and the masses. Which is why the goings-on among the higher political and business echelons of this country are avidly followed by everyone else -each one having a stake, major or minor, in the outcome.

This administration hasn't engaged in Marcosian engulf and devour tactics with one exception, the Lopezes; with all others, it has bared its fangs in public while showing every inclination to reach a mutually-profitable accommodation in private. But what sets it apart from the dictatorship is that instead of engulfing and then devouring, it seems to have hit off on a novel scheme: to leave everyone pretty much alone, and instead, carve out new financial territories for itself and its friends. In this case it left only one traditionally entrenched opponent, the Lopezes, while leaving everyone else, hostile or not, alone. Transco, for example; and even its assault on Meralco has been better camouflaged by restricting most of the action to the boardroom, the use of government shares as a battering ram and when that was thwarted, the sale of those shares to San Miguel Corporation which then floated, for public consumption, the rather tantalizing possibility that San Miguel can lower electricity costs by engaging in data transmission through electrical lines: establishing a new monopoly on virgin commercial territory and incidentally, driving a wedge in the otherwise united front presented by the existing telecoms companies.

History is never repeated; circumstances neither emerge nor combine in the same way at different times; for this reason, one argument perpetually put forward as some sort of mitigating factor in judging the present administration's political maneuvers has always left me skeptical: the President is no Marcos, the times aren't at all like Marcos's time, you do not see, for example, the outward manifestations of the New Society and its methods for thought and crowd control.

But of course. Every generation learns from the one that came before. And even the same players learn from the past.

According to some accounts, the Palace is hedging its bets and going slow on Charter Change, because of the public perception that it is in bad odor in Washington; one interpretation goes as far as suggesting the Palace is spooked by the possibility of Washington tacitly blessing a coup should any effort to prolong the President's stay in office proceed. Others suggest that the Palace all along prefers to be in "legacy mode," all the better to improve its chances in 2010, while maneuvering for a succession it can control.

The same accounts suggest that a modus vivendi between the President and Eduardo Cojuangco Jr. was ratified in Qatar, and that the President's visit to San Miguel Corporation's headquarters was the public manifestation of this agreement. At the very least, it kills two birds with one stone (knocking the Lopezes off their perch in Meralco, and placing the capstone in the carefully-built electric, power, and energy fiefdoms the administration's made possible), while keeping all others, including Charter Change, at the very least on the back burner and in play.

Some links to past readings by way of a backgrounder on the Marcos years and the anniversary of the Edsa Revolution: Marcos in retrospect, part 1 and part 2; the enduring strength of the idea that one can create a New Society; and some observations on the Philippine political culture.

To come full circle, though, as the Inquirer editorial Veto power suggests, the ultimate lesson might be, that if a revolution, and its acceptable manifestation in our country, People Power, is to succeed, it requires, at the very least, the repudiation both of the government People Power topples, and of its institutions including its constitutional rationale.

(image looted from the Interwebs)

My column today is Guns, goons, and gold. Basically, it seems to me more and more obvious that we have a shrinking liberal democratic constituency in Metro Manila and other urban areas of the country, while the rest of the country has been subdivided among warlords fueled by racketeering in smuggling, narcotics, and gambling.

Late last night I returned to Deceive and conquer: why Arroyo will stay in power, blogger Scriptorium's marvelous 2007 analysis which has stood the test of time. Unfortunately, the blogger never got around to penning Part II of his analysis, although I suppose his entry on the Chief Justice, The Supreme Court and Philippine politics, comes close; and so I'd like to present an extensive extract from it by way of an introduction to the rest of this entry. Scriptorium writes,

Because of the relative political uniformity of the governing class, we had not felt the politicization of the Court immediately after 1986, but the years since, particularly the controversial accession of the President in 2001, have vastly increased the Court’s profile and the importance of its individual members. This has increased even further in succeeding years due to the polarization of Philippine society between supporters and opponents of the increasing centralization of the patrimonial system.

The supporters, whose offices control government monies, count in their camp the advocates of a patrimonialist democracy on the model of Tammany Hall and, more classily and less cleanly, the Roman Republic. On the other hand, the popular base of the opposition (as distinguished from its politician wing) is composed of non-patrimonialists, among them the urban middle class and the Catholic Church, whose alliance comprises the political Center that guards the Constitution with its Liberal-Social-Christian Democrat orientation; and the Left, both the social democratic and the national democratic factions.

However, as we pointed out earlier... the urban middle class is increasingly enfeebled by social forces, while the loss of her paramount leader and the weakening of her middle-class allies have weakened the Church politically (as we saw when the movement to extend compulsory agrarian reform was defeated in the landlord-dominated Congress, despite vocal support by the Church and a bishop’s actually joining the farmers’ hunger strike). As for the Left, it is too divided between the various hues and sub-hues of revisionists and reaffirmists. This leaves, as the main institutions of Liberal-Social-Christian Democracy, the noisy but fangless Senate and the passive but powerful Supreme Court. The Court in fact has waged a subtle campaign over the past few years to strengthen democratic institutions and human rights, like when it sponsored efforts against the killing of Leftist activists.

Enter the movement to revise the Constitution and create a federal, parliamentary, and unicameral government, which would get rid of term limits, separation of powers, and the gadfly Senate, the main barriers to smooth patrimonial government. With the ambiguity of the provision on constitutional amendment (which, because it was copied from the unicameralist 1973 Constitution, doesn’t say whether the 2 house of Congress would vote jointly or separately), the 1987 Constitution must be interpreted by the Supreme Court to determine whether the Senate can block, as it will certainly try to block, the proposed revision. This makes the decision of the Court critical, and its internal politics much more significant.

His description of the Philippines as a patrimonial democracy is a precise reference to a Sociological term, Patrimonialism:

"a type of rule in which the ruler does not distinguish between personal and public patrimony and treats matters and resources of state as his personal affair."

An illuminating example is Douglas Webber's paper on Indonesia as a "Consolidated Patrimonial Democracy":

The smooth functioning of patrimonial politics requires political competition to be confined to elites and mass political action to be suppressed or at least strictly controlled... Particularistic policies that are the hallmark of patrimonialism can hardly reach – or benefit – directly the masses of voters whose support parties and politicians require for their political survival. Rather – also in Indonesia - they offend widely-held notions of equality and fairness. Hence, effectively patrimonial parties are forced to appeal for or mobilize support on the basis of ‘communal affiliation’, personality the (in the case, for example, of Megawati, ‘inherited’) charisma of their leaders or the moral authority of village heads and/or the coercive capabilities of the military or police...

An interesting note, yet again, is what an Indonesian told me, which was that when the decision was made to directly elect the President of Indonesia, the Indonesians looked at the Philippines and settled on runoff elections to avoid what they believed to be the greatest post-Edsa liability of our system, that is, electing minority presidents. Consider Webber's description of the Indonesian political pros finding their well-ordered political lives destabilized by more independent-minded voters:

The post-Suharto elections have produced growing signs, however, that the traditional structures and relationship patterns on which successful election campaigning along these lines depends are breaking down. Parties and leaders that are widely perceived to have ‘failed’ in office and/or been very corrupt have been severely punished. Thus, the PDI-P’s vote collapsed between the 1999 and 2004 Parliamentary elections by almost half and its candidate Megawati was comprehensively defeated in the presidential elections. Despite having by far the best party ‘machine’, the Golkar did much less well in the 2004 Parliamentary and presidential elections that it had hoped and anticipated. Despite the party leadership’s support for Megawati in the second round, voters who identify with the party voted massively instead for Yudhoyono, who defeated Megawati by more than 20 per cent and ran his campaign with a ‘loose’, but extensive ‘network of grassroots organizations’, pitting ‘“people power” against Indonesia’s traditional mighty party machinery of the Golkar and PDI-P’ ... Political parties and leaders steeped in patrimonial traditions seem likely to face harder times in Indonesia: ‘The assumption that money politics and a strong party machinery are enough to deliver votes no longer holds’ ... Within many of the established parties, the pressure for internal reforms and more accountable leadership is intensifying. There seems to be a growing chance that the pressures of electoral competition will force parties and politicians to make a break with inherited patrimonial norms and practices. Polyarchal... democracy may thus possess the capacity to propel Indonesia away from its patrimonial political legacies towards a more liberal-democratic political future.

The party machines failed Jose de Venecia in 1998, they didn't keep Estrada in office in 2001 and didn't quite hold the line as much as should have been expected for the President in 2004 and in the legislative elections in 2007. The dilemma faced by Indonesian party stalwarts is one similarly faced by their Filipino counterparts, as Scriptorium pointed out.

And here's something else Scriptorium wrote in his entry on why the President will stay in power, and it has to do with the military:

Lastly, the military will not move against the President. First, it has never moved without a clear opposition-Church-middle-class alliance (the initial 1986 coup and the Oakwood mutiny fizzled out for lack thereof), and such an alliance, as shown above, is presently impossible. Second, the years after 2001 have led to a re-emphasis not on the military’s activist tradition but on its “professionalism”, interpreted in the narrow Prussian sense of allegiance to the State. Third, the military leadership has a vested interest in the continuity of the GMA government, especially since her regime, in membership if not in structure, has to a large extent become a civilian-military complex. For one, retired officers now populate appointive posts; and, though the custom of appointing them began under FVR, the present practice is to appoint indiscriminately, whereas FVR at least sifted for true officers and gentlemen like Rodolfo Biazon, Renato De Villa, and Arturo Enrile.

Over the weekend, a text went around advising people to expect a "Retired Military Manifesto" to be posted at General Danny Lim's blog. The text came from an operator in the camp of former President Estrada, which has been proposing an Estrada-Lim-Puno Triumvirate. As of this writing, the manifesto hasn't appeared on line. But it does indicate a kind of burning desire to stay relevant as the country seems poised to finally take the plunge and head towards presidential elections in 2010.

Enter the movie Valkyrie, which I saw last week. In Valkyrie, General Ludwig Beck advises his fellow conspirators, "Just remember this is a military operation: nothing ever goes according to plan."

A year ago, in The seven year itch, I pointed out that those who felt the President had to go had fallen into a trap: the idea that political events can be made to proceed according to a formula: unpopular president + explosive revelations + economic downturn + angry prelates + an appeal to past greatness, based on shared values + get enough people on the streets + officer corps defects = regime change. And yet, as Beck pointed out, "nothing ever goes according to plan." The politically adroit either plan for all contingencies, or marshal their resources to strike when opportunity arises or as contingencies unfold.

In Cory Aquino: An Intimate Portrait by Friends, there's a piece contributed by Teodoro Locsin Jr. in which he recounts how Aquino left nothing to chance and didn't rely on only one plan:

I had just spoken to—well, I suppose I still can’t say the name of this businessman who had just talked to the US ambassador about sending in warplanes. Things weren’t going too well for our side.

I was walking across the sward fronting the Palace over to the office I retained in the Guest House after being fired from the president’s staff—I kept it to the last day of her term.

Amid sharp sounds of gunfire and shelling from not too far away, a presidential security guard, crouching as though he were approaching a helicopter, came up to me. He said the president wanted me at the Arlegui house. I hadn’t told her yet what the businessman, the US ambassador, and I had been up to. I thought it might be about the same matter, but then again it might be about something else. You never knew with her. Cory Aquino never allowed current circumstances to dictate her agenda.

The door opened and I was shown into a parlor rather too sumptuously decorated for both our tastes. “I just had to have you try this cake,” she said and, turning to the maid, added, “give him a generous slice. Maur made it.”

I must say I could not disagree, and I always spoke my mind to her. The cake was just properly moist, excellent in every respect. Most of the thick curtains were drawn so flying glass would not hurt the children, she casually explained, except over the tall window that threw sunlight on the tea table between us. It was afternoon, that time of day.

Meanwhile, the arrangements she had secretly put in place long before, without telling any of us, even her closest advisers, were about to go into effect. Key and hitherto unknown combat officers whom the rebels assumed would side with them would suddenly turn their men and guns on the rebels. In retrospect, I can only compare—but only in respect to the quality of shared aplomb—that placid setting in the soft morning light to the one of Al Pacino standing godfather as the priest intoned, “Do you reject Satan? Do you…” and his men quietly went to work.

This revelation -over a decade after the events described- brings up the interesting problem of trying to learn from, or at least react to, events whose actual circumstances we still don't clearly understand or fully know.

When the President's own husband recounted their strategy for bringing down Estrada (see my entry, Mike and Joe: The Second Battle of the Books, where I reproduced Mike Arroyo's interviews with Nick Joaquin) soon after the events concerned, he did so in a moment of celebratory candor. What strikes me as interesting is that a few years after that, the President's enemies and former allies seem to have failed to take into account how the tactics that toppled a government in 2001 could have helped keep the successor government in office.

Consider events of more recent vintage, namely 2005. The President had achieved that rare thing, the election of a Vice-President who was her running mate. And yet, as her enemies closed in on her, there was obviously the possibility that the Vice-President would get it into his head that the time had come to step in and offer himself up as a successor. Surely matters must have seemed headed in that direction when, at the height of the unfolding crisis, the Veep flew off to Hong Kong.

One version has it that the Vice-President, upon returning from Hong Kong, was met by a general close to the President and was sternly warned that his life was on the line. Another version, strenuously denied by former Senate President Frank Drilon, is that when the Veep showed signs of being willing to take on the mantle of the presidency, Drilon et al. demanded they should be the ones to select who would be the Executive Secretary -faced with the possibility he'd be a figurehead president, the Veep balked and went home.

Consider, too, that even as all the building blocks of People Power were put in place, the old pros who'd decided to bring down the President failed to bring in an ex-President, Fidel V. Ramos. Faced with being inconsequential, the crafty FVR decided to throw his support behind the President and saved her job.

Consider, as well, 2006, when the armed forces was faced with the dilemma of turning its back on some of its most respected officers and remaining loyal to the President, or turning their backs on their commander-in-chief and betraying what Scriptorium calls their Prussian-style loyalty to the State. One version has it that the Chief of Staff was inclined to support the withdrawal, and that everyone else was poised to fall in line, when negotiations broke down because General Esperon asked for assurances that he wouldn't be investigated for his possibile complicity in electoral fraud in 2004. The hotheads allegedly refused and denied a win-win solution, Esperon then countered the moves of the hotheads and this caused the Chief of Staff to waver. (Interestingly enough, Ramos in the same book shrewdly notes, in the book on Cory Aquino, in a kind of pointed aside, that no act punishable by the anti-coup law took place in 2006.)

Now we have to consider the background behind the supposed inclination of the top brass of the armed forces to seriously consider, instead of immediately dismissing out of hand, the plan to withdraw support from the commander-in-chief. One could argue that the military was essentially more democratic and civilian in orientation than civilians like the President and her close advisers, as they sought ways to stay in power.

The background to the 2006 attempt to withdraw support is thus the foiled plan to impose martial law in 2005. According to Ellen Tordesillas, the plan was as follows:

A Malacañang source said that in October 2005, when Arroyo was shaking from what the people heard in the “Hello Garci” tapes, she and her hardline advisers were almost ready to impose martial law. They would call it by some other name but the effect would be the destruction of democracy and in its place an Arroyo dictatorship.

The plan, the source said, was to explode a bomb at the Senate at 5 a.m.. Casualties would be avoided with the early morning timing but the explosion in one of the three branches of government would give Arroyo justification to declare martial law. Exactly like the fake ambush of then Defense Secretary Juan Ponce Enrile which was used by Ferdinand Marcos to declare martial law in 36 years ago.

A businessman in the Arroyo’s circle of “hawks” asked if the defense secretary (Avelino Cruz) and AFP chief of staff (Generoso Senga) were into the plan. They were not.

When Cruz and Senga were told about it, they objected. A visit by John Negroponte, then the US Director of National Intelligence, who conveyed American disapproval of the martial law option, forced Arroyo to abort the plan.

Newsbreak's Glenda Gloria in 2007 looked at the foiled martial law plan and the 2006 declaration of a state of emergency as follows:

July to December 2005 was the toughest time for the President. Nearly half her Cabinet left her, she felt under attack, and most of the power blocs surrounding her reinforced that siege mentality. “Each time somebody opposed her, she felt that person wanted to bring her down. She would defend a decision by saying, ‘but they’re attacking us,’” recalls a Cabinet official.

The First Gentleman had been forced into exile and the President’s other pillar, her brother, had turned overnight from a “dove to a hawk,” notes one of the private advisers of the President. Buboy Macapagal soon became the “shadow string-puller in the Palace,” as one senator puts it...

We have it on good authority that Macapagal and Gonzales tried to persuade the President to declare martial law during this period. This move culminated in a visit of Gonzales to Washington, D.C. to drop hints about it to Philippine Ambassador Albert del Rosario, who opposed the idea, according to a friend of Del Rosario’s. (Del Rosario was sacked in June 2006.)

There was a series of top-level meetings about extreme measures to save the President (i.e., media and Left clampdown, arrest of “corrupt” politicians), says an insider, but in the end the idea flopped largely because the security forces—the police and military leaderships—displayed enough body language that said they didn’t have the stomach for it.

Martial law further divided the shadow Cabinet. Drilon had by that time stopped attending the group meetings, but the extreme measures likewise didn’t sit well with Cruz and Villarama, among others.

Buboy Macapagal, too, had stopped attending the meetings, aware that some of his former allies now disagreed with him. The big three businessmen, however, remained influential with the President.

Executive Order 464, which banned Cabinet secretaries from appearing before Senate probes without Palace approval, also divided her official family. Presidential adviser Gabriel Claudio cautioned that this “was a declaration of war,” knowing this would create problems for the chief executive. Justice Secretary Raul Gonzalez and Gutierrez, who was then presidential legal counsel, saw nothing wrong with it, however...

Then came the foiled military coup in February last year. The President declared a state of emergency and, when agitated Marine soldiers tried to barricade their headquarters on February 26, considered shutting down the Lopez-owned ANC cable TV station, which was covering the incident live.

It took a phone call to the President from “someone” in the Iglesia ni Cristo for the hotheads to cool off, says the same Cabinet official. The discovery and subsequent defeat of the coup toughened the view that by this time had begun to run through all the loyalist groups.

It went like this: she’s survived the worst because her opponents are weak and the public doesn’t care. This allows us room to push hard for changes and look even beyond 2010. “We had become very comfortable with power,” the Cabinet official concedes.

It's been said that even when the President decided to proclaim a state of emergency in 2006 -using language literally cut-and-pasted from Marcos's martial law proclamation in 1972- two factions in the cabinet pretty much squared off, with one faction saying it essentially granted the President martial law powers, while another faction, to which the then-Secretary of National Defense Avelino Cruz Jr. belonged, publicly stated there were all sorts of limitations to the President's powers during a state of emergency.

Returning to Scriptorium, he pointed out that the President took care of "the activist Marines, who were then fed to the cannons in Jolo." And there they and all officers inclined to insubordination continue to languish.

In a footnote, Scriptorium points to two new blocs that have political potential, as of now, still untapped:

Two special cases should be mentioned: (a) the urban poor, which first became a cohesive bloc as the mass base of former President Estrada, but was neutralized by the suppression of the pro-Estrada protests of May 2001; and (b) organized labour, which has tremendous potential power but whose organization and numbers are exerted for economic and not for political ends. The political mobilization of these groups, as partially occurred for opposing sides in 2001, would end the unchallenged hegemony of liberal-patrimonial politics in the Philippines, but is not likely for the moment.

The question is whether these two "special cases" will matter in a 2010 electoral scenario.

Anyway, returning to the movie, and the dilemma it covered, a point of deep relevance to us is this work, How Much Obedience Does an Officer Need? Beck, Tresckow, and Stauffenberg--Examples of Integrity and Moral Courage for Today's Officer by Major (General Staff) Dr. Ulrich F. Zwygart. Stauffenberg himself said, "It is time to act. But he who dares must be conscious about the fact that he will be a traitor to German history. If he refrains from doing it, he will be a traitor to his own consciousness."

The British historian Robert Evans, in Why did Stauffenberg plant the bomb? Argues that the Count, always contemptuous of parliamentary democracy, a romantic nationalist, an unreprentant aristocrat,

There can be little doubt, however, that this would have brought huge military advantages to the Allies, and that the war would have come to an end several months sooner than it did, with the consequent saving of millions of lives.

That alone was justification enough for Stauffenberg's act. In failing, he failed comprehensively. The war continued: millions more were killed. Anti-democratic, elitist and nationalist, he had nothing to offer the politics of the coming generations, still less the politics of today. In the end, too, for all the desperate heroism of Stauffenberg and his fellow-conspirators, Germany's honour was not rescued. The conspiracy encompassed only a tiny minority of the German people. The vast majority continued fighting to the end. Most were shocked by the news of the assassination attempt and relieved at Hitler's survival. As a moral gesture, Stauffenberg's bomb was wholly inadequate to balance out the crimes that had been committed in Germany's name and with the overwhelming support, or toleration, or silent acquiescence, of the German people. As the Catholic schoolteacher turned army officer Wilm Hosenfeld noted on 16 June 1943, more than a year before Stauffenberg's attempt: "With this horrendous murder of the Jews we have lost the war. We have brought an indelible shame upon ourselves, a curse that cannot be lifted. We deserve no mercy, we are all guilty together."

Yet in A Worthy Conspiracy William Doino Jr. makes this essential point:

Certain academics have an “unappealing habit” of dismissing the 20 July plotters as reactionaries, “while earnestly extolling the self-sacrifices of the underprivileged Communists,” to quote historian Michael Burleigh. But there are no heroic Communists in Valkyrie, and shouldn’t be: most Communists opposed to Hitler, after all, were Stalinists, who simply wanted to replace one murderous dictatorship with another. The honorable Resistance, in contrast—ranging from social democrats to conservative aristocrats—were fighting to rescue and preserve Western civilization.

bonhoefferblog points to the Schwarze Kapelle (Black Orchestra) entry from The Oxford Companion to World War II and in New American, there's Selywn Duke's entry on what's admirable about Stauffenberg and Co.Also see Valkyrie: When is Character Defined? by Julian Park.

The thing that kept bothering me while watching Valkyrie, was that so many cast members had appeared as villains in Conspiracy, yet here were some of the same actors, playing Germans yet again, but this time, with most of them as "good" Germans.

Conspiracy happens to be one of my favorite historical films. Informing it is the concept of the "banality of evil," as Hannah Arendt made famous in observing Eichmann,played in the film by Stanley Tucci.

Over the last couple of weeks I attended two public speaking competitions, as a judge and as a member of the audience. The first was the Voice of Our Youth (VOY) National Impromptu Speaking Competition, and the other was the Volvo Voice of Leadership competition. The VOY contest is a well-established one, involving as it does, elimination rounds in the provinces conducted under the auspices of various Rotary Club districts. The students generally spoke very well, but what struck me were some observations made by fellow judge Butch Dalisay on the sidelines of the competition. I asked him how the students compared to, say, his generation and the oratorical contests they participated in. He immediately brought up the Voice of Democracy competitions of his youth, and observed that the schoolchildren of today speak better. But he was troubled by what he felt to be a lack of curiosity about the world on the part of the kids, and said he couldn't shake off the impression that the otherwise impressive rhetorical ability of the kids masked a lack of depth when it came to issues, and the real world. For example, even as the kids generally bewailed the depressing lack of genuine service among today's leaders, and condemned corruption, and violence and the degradation of the environment, Dalisay said he was constantly waiting for the kids to exhort their audience to take up a good book, or read the papers, or watch the news, so as to be better informed of the many issues swirling around them. The Volvo contest, on the other hand, is the first one ever, and included a camp activity. For my part let me suggest that the parameters of the contest betrayed excessive caution on the part of the sponsors. But then again, being a privately-sponsored contest one really can't quibble with the overarching limitation of the contest's definition of leadership:

It advocates the development of youth leaders who shall embody the character of true leadership – that with both integrity of heart and excellent skills that is rooted in God-centeredness and exemplified by accountable and responsible stewardship – and who shall articulate the voice of leadership that would move and inspire, innovate and instigate leadership transformation among the youth.

That overarching parameter, I suppose, doesn't bother schools like the Ateneo de Manila in the least, though for people like me, who are trying to focus the public's attention on the need for a more secular approach to national problems, chalk up another win for those who advocate religious supremacy in all things. Contests like these help provide a glimpse into the minds of young people, how they process information, and to what extent they're armed with the tools necessary to become not just reliable employees, but active citizens. For some time now, I've believed that an active civic sense is what needs to be fostered, because we're paying the price for the manner in which nurturing that civic sense was effectively abandoned by educators. A couple of years ago, at a forum in Jose Rizal University, former Senate President Salonga, asked by a student what would get the country out of the logjam it's in, thundered, "what this country needs is not Charter Change but character change!" and received a tremendous ovation in response. Every seems agreed on that point, but then seems stumped on how to accomplish that change. Organized religion seems to be moving more effectively towards a "God-centered" solution to all things. The best proof of this is the stir which the present Chief Justice himself caused, but that's for another entry. Anyway, here are the three winners of the Volvo competition, which have helpfully been uploaded to YouTube. The winner of the competition, John Xavier Valdes of the Ateneo de Manila: The first runner-up, Regina Isabelle Rananda of Miriam College: And the second runner-up, Christian Earl Castañeda of LaSalle Greenhills: They are remarkable performances, each and every one (and so were the rest, on the whole). Hopefully, in the future, the VOY competition will also consider posting the performances of their winners on line. The winners of the Allied Bank-sponsored, Rotary-led competition, go on to represent the country in public speaking contests overseas.

(picture looted from the Interwebs)

Snapshot, Monday:

Snapshot, today:

Agence France-Presse reports San Miguel: Not taking over Meralco which seems to be believed by no one. Whatever the news that emerges going into what's expected to be a showdown for control of Meralco during it's May stockholders meeting, the rise in Meralco share prices has become newsworthy in itself.

The Philippine Stock Exchange couldn't ignore the movement of Meralco's share price; but in the end, not much seems possible to do . While personally, the Meralco and San Miguel moves are of direct relevance to me (since I have a show on ANC and I own some San Miguel shares), what's more relevant to this blog is the way big business and government seem joined at the hip in this particular case. Some of government's losses have been made up by San Miguel acquiring government shares (helping buttress the bottom line of the government at a time when Moody’s gives RP no credit upgrade; the government is going to be hard-pressed to have cash on hand for patronage and running the government: see Government spending P7B to hire ‘temps’ and State workers set rally vs layoffs ); on the other hand, government's hostility to Meralco is also well served by San Miguel's possible hostile takeover of Meralco.

If, for example, the interests of Eduardo Cojuangco are served by a cozy relationship with the present administration, could it then possibly be a sign of a confluence of interests that extends to the 2010 elections?

The administration, unlike its enemies, has the resources (money and manpower) to keep game plans running on parallel tracks, to see which will prosper. Among its many options remain Charter Change, emergency rule, and holding presidential elections as scheduled in 2010. But the last option, if it's to be viable, requires sinking in resources now, and reaching an agreement with potential candidates sooner rather than later. These potential candidates -and their backers- themselves have different options running on parallel tracks (the Cojuangco interests, for example, would be interested in the prospects for Charter Change, and in elections in 2010, and perhaps, apprehensive of emergency rule, and must consider which option to invest in most effectively). The more these tracks converge, the more it would seem logical to pursue an existing, and lucrative, relationship as far as it will go.

Much as I thought 2004 marked the passing into history of the Marcos era and its henchmen, I may have underestimated both their staying power and their ability to groom a successor generation (Enrile is at his apogee, and not nadir, as a public official; Cojuangco seems headed for new heights of economic and political influence; Ronnie Puno seems entrenched as ever; and Francis Escudero seems the Second Coming of Ferdinand Marcos himself).

So when the Philippine Stock Exchange also allegedly (the allegation bering made in Lopez-controlled media) acted selectively in backing down from imposing a fine on San Miguel for violating disclosure rules , it seems a return to the days of impunity of the early 1980s (but if so, they're in good company, see HK tycoons up in arms over trading rule and HK backs down on trading blackouts; relevant readings are Roubini: Anglo-Saxon model has failed and High Noon: Geithner v. The American Oligarchs). Which only goes to show the clout of the country's only home-grown multinational.

I've had a hunch for some time now that the real news -the real political news- is taking place in the business pages, where reporters and pundits both are least well-equipped to report and comment on things.

The other day, in Has the payoff begun? the Inquirer editorial cautioned against moving too quickly and too slowly on the case of the collapsed rural banks owned by Celso de los Angeles. The editorial points to the messy interlinked interests of the parties involved, in particular, the Speaker and the House of Representatives and the PDIC and even the Monetary Board (which has to authorize loans to bail out the PDIC as it bails out depositors in de los Angeles' rural banks).

But an entry in Stuart-Santiago (reacting to a Dan Mariano column) points to another possibility altogether: that de los Angeles is undergoing a hatchetjob at the hands of the big national banks, and was the victim of a campaign to spook his depositors. The possibility of intraindustry rivalries is something worth considering.

On another note, compare the two views on the LPG shortage in the columns of Rene Azurin and Dean de la Paz. Actually, both believe that the shortage was more along the lines of a hiccup in the market.

Azurin says what happened was this:

I tried to ferret out an explanation. What I’ve come up with is simply a tale of market forces acting as they might be expected to act in a deregulated competitive environment.

To begin, high oil prices throughout most of last year caused the benchmark Saudi contract price for LPG to peak in July 2008 at $940 per metric ton. As can be expected, local LPG demand in that month was at its lowest — about 76,000 MT — as households restricted their use of LPG and switched to other available fuels like charcoal and kerosene.

But, after peaking in July, the Saudi contract price for LPG suddenly dropped steeply and hit its lowest level in November 2008, around $330 per MT. Expectedly again, the suddenly very low LPG prices stimulated demand as households switched back from other fuels. Local demand in November and December was estimated to average around 96,000 MT per month, the highest levels so far experienced.

Despite the sudden spurt in demand, however, there was enough supply to meet the surge because importers had already increased their importations. From an aggregate importation averaging 47,000 MT per month from January to October 2008, the six importers brought in 67,000 MT in November and 66,000 MT in December. They upped this further by importing 81,000 MT in January 2009. When you add beginning inventories of about 35,000 MT and Shell’s local production of about 10,000 MT per month — Petron had an emergency plant shutdown in December — one arrives at the conclusion that Energy Secretary Angelo Reyes was absolutely correct in telling congressmen and the public that aggregate LPG supply was still adequate to meet total demand.

Why then was there a perceived shortage? Apparently, consumers who experienced difficulties in getting LPG were customers supplied by certain independent refilling plants mostly supplied by Liquigaz. Liquigaz supplies about 35% of the local market and is the largest importer of LPG but buys its supplies from the spot market. Presumably, in September and October 2008, Liquigaz (like any astute trader) tried to take advantage of projected falling prices by delaying the placing of its orders until LPG prices had hit expected lows. This — coupled with unexpected disruptions in LPG flow from Russia to Europe that upset the delivery timetable of Liquigaz — caused Liquigaz to be unable to fully supply its refilling plant customers during the critical December-January period.

This is why LPG dealers and retailers dependent on Liquigaz-supplied refilling plants were screaming shortage. In the battle for market share, Shell, Petron, Total, and other importers who had available stock naturally supplied only their own refilling plants and dealers, and refused to supply others. Customers of the LPG brands of Liquigaz refilling plants could therefore buy LPG but only if they were willing to shift to another brand or to another dealer. There is no supply shortage if some dealers and retail outlets have no stock, but others do.

Despite the problems that arose from its decisions, Liquigaz was of course justified in timing the placing of its orders to try and maximize its profits. Similarly, in a deregulated, competitive environment, Shell, Petron, Total, and others were justified in their refusal to supply those who were not their regular dealers in order to try and grab market share from rivals.

In a deregulated, competitive environment, government authorities like the Department of Energy and the Department of Trade and Industry cannot make output or pricing decisions for industry players. In fact, a policy of deregulation "to ensure a truly competitive market" requires that government authorities ensure that the industry participants are actually competing and not colluding with each other. In the current situation, not sharing supply with rivals so as to grab their market share is indicative of competition. Sharing supply with rivals so that market shares remain unchanged might be evidence of collusion.

While de la Paz says this is what happened:

In the run-up to December, global oil prices fell sharply and such crashes in values affect how oil companies manage inventory. Hoarding would have been stupid. In a temporary regime of falling prices, it would be imprudent to store large quantities as they would be forced to sell at lower prices than that from which inventory was accumulated. As a seasonal increase in demand of 50 percent is rather expensive given falling prices, the oil companies kept inventory at its economic quantity levels to sell at reasonable margins.

Because the LPG producers kept lower inventories, the burden to respond to the increased demand fell on importers. Of these, there is only one that can supply the inventory slack.

Importers service refillers from whom most of the lower-income market relies and where prices are more elastic. Without the same kind of distribution network owned by the major oil companies that produce LPG, a distribution problem can occur leading to marketplace shortages readily felt by those sensitive to incremental costs.

True shortages ensue severely aggravated officials threatening to prosecute dealers that sold over an imaginary price parameter that did not reflect true costs and the effect of prudent inventory management.

In such a situation, by importing only as needed and gradually raising prices to reflect economic realities, the shortages were soon alleviated in markets serviced by the top three suppliers. In niches serviced by refillers, shortages could still be felt as these outside the mainstream distribution networks.

In this rather revealing episode, if there is one thing evident, it is that we really need officials who understand the profound vagaries of the business and do not aggravate it by appearing clueless, running after scapegoats and imposing unrealistic demands.

Both seem to suggest that the current Secretary of Energy is not up to scratch.

The Warrior Lawyer comments on the Supreme Court's decision on who gets custody of that convicted American soldier. The Inquirer editorial, Time to talk, says the Philippine government ought to be negotiating from a position of strength on this one, as it can call the bluff of the new American administration. But it seems the government is inclined to drag it out, doing Uncle Sam a favor even before it's been asked for one.

The other day, I was asked yet another question about intelligent electorates. Do Filipinos vote for the most popular, even if the most popular are not necessarily the most qualified? Or (to use the terms the interviewers used): Is the Filipino "audience" intelligent? How about the Filipino "electorate"? I gave a qualified answer, of course, making a distinction between the way we vote for the presidency and the way we vote for the Senate. I use that same distinction in my column of February 10, where I propose that our next president, come May 2010, can only be either of the following: Kabayan, Loren, Manny Villar, Chiz, Ping, and Mar. (Is the fact that Manny Villar does not have a ready one-word handle boon or bane?) But it is possible, even when we only have a single vote to cast rather than the 12 we can use for the Senate, to send clear signals to the candidates, a point I raised in passing in my column of February 3. Consider the case of Loren Legarda. The 1998 Senate topnotcher, she did not do well in the voters' preferences surveys conducted by SWS in the run-up to the 2004 vote. In the December 2002 survey, for example, Raul Roco and FPJ topped the list, with Kabayan and GMA in striking distance. Loren, however, had a measly dieter's slice of the pie. In that same survey, however, Legarda did quite well in the vice-presidential list. She placed second to Kabayan (who had just topped the Senate race a year and a half before, in 2001). As it turns out (here is an SWS news release for its November 2003 survey, about a year after the first poll), Legarda's vice-presidential qualities (to coin a phrase) impressed more and more Filipinos. By November 2003, the race between De Castro and Legarda had become a real contest. My point: In 2004, voters were discriminating enough to make a distinction between Legarda as president and Legarda as vice-president. (In contrast, voters were equally happy to say they would vote for Noli de Castro either as president or as vice-president -- at least until FPJ threw his hat into the ring.) I see that distinction-making as a sign that, in fact, and by and large, voters in the aggregate know what they want. Here, then, is intelligence, of a sort, at work.

Since some readers follow the market and are knowledgeable about it, here's a bit of scuttlebutt to make sense of which whichever way you will:

Meralco share prices are in play. Started last week. They will try to push it to mid 80s range before unloading.

Who, exactly, wants to unload, is a mystery, but whoever they are seem to be in "loading mode." Anyway, let's see how this turns out. *** The President rushed off to Washington, trumpeting her invitation to the National Prayer Breakfast, where she failed to get as much as a photo opportunity with the new American president. The problem was that the Palace itsel was trying to hype-up the President's Washington visit. Eventually, the President tried to make the most of a perfunctory, courtesy conference at the State Department, which was remarkable for Hillary Clinton's focus on domestic politics. There was an effort to hype-up the visit as resulting in a commitment for Clinton's visiting Manila but that doesn't seem to be in the cards. The best picture of where the administration's at, however, might actually be this one: In power, but going around in circles. An administration in perpetual survival mode actually surviving, but reduced to going through the motions of governance without actually resolving anything. Meanwhile, everyone is a little more tired, a little more cynical, a little more out of ideas, and running out of options. The President has taken to trying to sound oracular:

“When we were abroad we were hearing strange, huge numbers that just depress the people, but really are very far from what [the situation] really is,” said Arroyo, who returned Sunday from a weeklong swing through Switzerland, Saudi Arabia, Bahrain and the United States.

Things ain't so bad? For whom? Her foes have been kept at bay, but there is little triumph in survival, and endurance only serves to prop up more speculation that her luck is finally running out. Which is more likely than not, wishful thinking. But still... The administration has managed to consolidate its power to the extent that when things go wrong, it has no one to blame for its problems but itself. It has to keep several balls up in the air; this takes energy, and attention; it also makes for frayed nerves. It's quite a juggling act, but the longer it's kept up, the more that everyone expects one of the balls to fall. That is highly ironic reward for political longevity. Take two examples. The first is a gut issue: fuel and food. Recently, Uniffors blogged about hearings on the LPG supply problem:

So who or what is behind the shortage? Arnel TY, president of LPG Marketers Association, said the problem started last December when the Big Three- Shell, Chevron, and Petron- started buying LPG from Liquigaz instead of relying on their own supplies. The Big Three said they were caught flatfooted by the sudden increase in demand. Didn’t they have any projections? Well, they said it was difficult to make an accurate prediction because the independent refillers and dealers buy on the spot market. Petron said, “We are continually selling to allied refillers …They are assured of their regular volume because they follow the rules of the industry. But the demand of independent refillers is hard to project.” In other words, there would be no shortage if everyone signed up with the Big Three. That’s the golden rule. They wish. And so what Ty said with regards to hoarding - that it was easier for the Big Three to connive to withhold LPG from the market, to control the supply as it were, than it is for thousands of independent refillers and dealers to do so - makes sense. And Reyes is blaming the independents, accusing them of hoarding.

In her blog, Marichu Lambino points out that the best that Angelo Reyes can do is to keep reiterating his desire for a departmental army, for emergency powers:

What the Energy Secretary probably meant when he asked for police power is what most people think of when they refer to what police officers do when they make arrests, searches, seizures. That’s not police power. It’s called law enforcement. You don’t need more legislative enactment for that, all the references you need are the Rules of Court and criminal statutes. The Energy Secretary can on conditions of a valid search, conduct raids of all LPG dealers or the oil cartel in order to arrest the artificial shortage, he can strike fear in the hearts of the greedy and the hoarders in order to avert a full-blown crisis. All he has to do is ask his lawyers how to go about it (i will not give the procedure here); he has to do it as a campaign, not piecemeal; he has to have all the legal bases covered; he has to be swift and discreet. It’s called: Doing your job. But in this government, no one is doing their job, no one is enforcing the laws, it’s a field day for crooks, fixers, the greedy and the incompetent.

Besides the ongoing problem of the LPG shortage, people are reporting that the price of NFA rice has started to go up again (with stocks apparently fairly healthy; so officialdom now has to look busy: see Agri chief inspects prices of rice at Pasig public market). The second is the problem of everyone having to tighten their belts while more and more of officialdom gets caught with their snouts in the trough. Yesterday, the Inquirer editorial, Exposed, examined the ambiguous feelings of the public, when it comes to whistleblowers and their revelations -and what ends might truly be served by their exposes. This ambiguity -or unwillingness to take risks- served the purposes of the administration and helped foil the ambitions of its enemies. But having been so thoroughly and consistently whipped, the administration still keeps getting into hot water, and it's running out of conspiracy theories with which to deflect serious scrutiny. And what seems to be the growing ability of the public to separate posturing from real action. Senator Miriam Defensor-Santiago, who is of course casting a moist eye on re-election in 2010, has taken to appearing so hot-headed as to be an "unreliable" ally for the President. But is she? Every time she throws a fit, the story centers on her, and whatever peppery thing she has to say; but it detracts from connecting the dots (to the foot-dragging of the Ombudsman, for example) and relentlessly focusing on what the Senate has shown and which the House tried to whitewash -that allegations of conspiring contractors won't go away and leads pretty high up, indeed. Add to this the ongoing mess involving the failure of rural banks, a connected pre-need company, and the sort of cozy collusion that had congressmen trying to exonerate contractors put on the hot seat by the World Bank. You can see where this is all going: officialdom going around in circles, tripping itself up as everyone gets exposed as being hand-in-glove with other racketeers. *** As more discouraging news appears (see Motorola lays off workers in the Philippines), news like this -Outsourcing Gets Crimped by Recession: Discretionary IT projects are getting the ax as companies review costs, hurting sales and growth for outsourcing providers- compounds the sense of doom and gloom -and of being adrift. Here at home, I have to agree with Bong Austero's view that there seems to be too much self-defeating doom and gloom while not enough focus is being made on what opportunities have arisen or what, really, the big picture is, concerning jobs:

The People Management Association of the Philippines conducted a study in the second and third week of January to get a quick pulse of the employment situation in the country. PMAP is the national association of human resource managers—the people in charge of hiring and firing. The sample of the study was limited, with only 177 companies participating, but it was statistically valid. The study pointed out that “although information from member companies in the electronic and export sectors confirm news reports of heavy layoffs, the survey showed that for the companies represented in the survey, layoffs are limited to 10 percent of respondents.” In short, the layoffs and downsizing do not comprise a general trend. In fact, 60 percent of the respondents of the study revealed that their companies may increase headcount this year. Of this, 43 percent said the increase in manpower would be due to growth in business while 39 percent said it would be due to more aggressive business strategies. Unfortunately, the dark cloud cast by our prophets of doom seemed to have spooked most business organizations. Actual hiring is being done cautiously, with 48 percent of total respondents saying they are only doing replacement hiring for critical positions and a further 10 percent freezing hiring for regular positions. According to the study, “the most optimistic sector seems to be [business process outsourcing], with 10 of the 13 company respondents saying they may increase headcount in 2009 due to business expansion. However, four companies out of the 13 respondents say they are also only hiring for critical positions at present. A proportionally bigger number of outsourcing companies among the respondents are also giving lower salary increases this year, compared to 2008 (6 out of the 13). Fifty-two percent of respondents say projected salary increases for this year is 6-10 percent. This proportion of respondents is lower than the 64 percent last year who reported giving actual increases of 6-10 percent. About 30 percent say that they are currently giving lower salary rate increases to respond to more difficult times. Employees in about 25 percent of respondent companies in manufacturing, 30 percent in outsourcing and 17 percent in services are also not being asked to render overtime work. Less than 10 percent of respondent companies (8 percent in manufacturing and 6 percent in services) have resorted to shortened work hours. To sum up, there a number of companies directly affected by the global recession but this is a minority—more of an exception at this point rather than the trend. Second, majority of business organizations in this country are on an expansion mode due to business growth and aggressive business strategies. However, and this is the sad thing, most companies are being cautious and are deliberately holding off their expansion programs and consequently, their hiring programs, thanks to the prophets of doom in this country.

But then, what is the official response? Something that can be boiled down into a slogan: "Let us intensify overseas deployment!" Take a look at this lavish two full-page ad spread, in today's newspaper, courtesy of the Technical Skills Development Authority (TESDA). Besides the doom and gloom Austero objects to: There ought to be some sort way to keep government ads from being exercises in amateurishness. Including official sloganeering: "Filipinos are the Wonder Workers of the World (Wow-Wows)" says Secretary Tito Boboy Syjuco. "Wow-Wows"!? Blogger Smoke does a fine job shredding this ad. TESDA is, ideally, a very important government agency; in visionary hands, it could help jump-start competitiveness and be a force for social mobility. But instead, it's turning into a patronage vehicle for "titoboboy.com.ph" and whatever campaign he has in mind for 2010. But then TESDA isn't alone in merely politicking instead of problem-solving; or put another way, the only problem it's trying to fix is whether or not Syjuco can win election in 2010. I do believe that we're pretty much adrift, because our whole system of keeping track of economic activity in any but the haziest of ways, has broken down. So everyone's a blind man describing the elephant. The merry-go-round whirs around, but it's all a blur. Observers on the outside, though, seem to think it's all lunacy. Nick Nichols (who recently penned a fascinating look at the potential pros and cons of electricity generation policies in the Visayas) pointed out this graph: Originally found here, the graph includes the Philippines, in yellow, with its steep climb. A discussion of what this means can be found in The Unlawyer.

The President -and the Palace- is extremely pleased about wangling an invitation to attend the National Prayer Breakfast in Washington, D.C. on Thursday, thereby dispelling the conventional wisdom that it is in bad odor with the Obama administration, and that the President and her husband are in hot water concerning their financial transactions. To be sure, the ever-active rumor mill says the President enjoys diplomatic immunity and so, wouldn't undergo any actual indignities going to, or while in, the United States; but that it's an entirely different story for her husband (and so supposedly explains his sudden deplaning in Tokyo and his absence at the Pacquiao fight). The Palace is being unusually tight-lipped about who, exactly, invited the President and who or how the invitation was wangled; it remains to be seen if the President actually gets any face time with the new American president or a superficial "photographed in the same room" Kodak moment. Still, the signal's clear: reports of the President's sinking status in Washington are greatly exaggerated. Interestingly enough, a Filipino in Macao apparently texted a sighting at the international airport, of the President's husband. No announcement has been made in the media of his having gone off overseas for what can only be a bit of R&R, since Macao is the last place one would go for cardiovascular convalescence or treatment (note that the President and her husband have been there quite often). What's significant about this sighting, if true, is that it's par for the course as far as the President's husband and political issues heating up are concerned. The moment an issue starts pointing to him, he hies off overseas, beyond the clutches of media, the courts, or Congress. And the issue's getting closer and closer to the President's husband:

Right before him, “(They) first discussed bribes. They had a rough approach.” From that meeting, it was impressed on him that “(bribe) money was important to do business in the Philippines.” This was how the Japanese contractor described his meeting with First Gentleman Miguel “Mike” Arroyo and a former senator to World Bank investigators who looked into alleged collusion and rigging in the Bank's funded road projects. On another occasion, the Japanese executive met the former senator and “it had been made clear to him that there would be no business in the Philippines without paying money,” the WB report, as prepared by its Integrity Vice Presidency (INT) unit, noted. He was also told “that money would have to be paid as high up as the president, senior government officials and politicians in order to do any further business in the country." The Japanese contractor, however, had no direct contact with the President. The report further added: “To win a contract, it would also be necessary to pay the head of the bureau and politicians several million yen.” We obtained parts of the World Bank report but we are not disclosing the name of the Japanese contractor and other witnesses. The Japanese contractor has since left the country. The Japanese contractor was among those interviewed by the INT in connection with its probe on bid rigging. His firm purportedly participated in two bid packages, which were later confirmed to be false. In fact, the company denied placing any bid and that the signatures of the company president were forged. It was the only direct testimony in the WB inquiry alluding to the First Gentleman’s possible link to bid rigging controversy that has led to the blacklisting of seven firms and one individual for alleged collusion in WB funded road projects worth $33 million. Three other interviewees gave testimonial evidence that indirectly linked Mr. Arroyo to bid manipulation.

The problems of the congressmen's patrons aside, this is not a good time for the House of Representatives. While I was in the hospital, much as I try not to follow the news, I had the impression the whole World Bank contractor issue, combined with the Legacy Group's collapse, could have been much worse. Consider the situation of the Speaker of the House. Uniffors lays it out as follows:

Mikey Arroyo’s errand boy, putative Speaker Prospero Nograles, is in deep shit because of the collapse of rural banks owned by Celso de los Angeles Jr. His ever-changing stories about his relationship with the man whose classmates at the Ateneo called “Boy Kadena” have been the subject of an editorial by the Philippine Daily Inquirer. See “Prospero’s Legacy?” Also, a former president of the Philippine Deposit Insurance Corp revealed that Nograles tried to pressure him to go easy on de los Angeles. Nograles disputes the expose. But here’s something Nograles admitted and Boy Kadena confirmed at the Senate hearing on the Legacy collapse. Nograles invested millions, around 18 to 20M, in the failed banks. So the question is this: Was Nograles’ investment in the form of deposit accounts? You see,according to a PDI news report “The rural banks held a combined P14.03 billion in insured deposits in 132,642 bank accounts that each held amounts at or below the P250,000 limit of Philippine Deposit Insurance Corp.” So the enticement behind the de los Angeles’ double your money ponzi scheme is that all your deposits are guaranteed because they are insured by the PDIC. Your capital is safe. However, the maximum amount any one depositor can collect from the PDIC is P250,000. So, even if one has multiple accounts, those accounts will still be considered as one depositor account. In other words, the limit is on the depositor not on the account. So, to get around this limitation, depositors use fictitious names for their other accounts. However, they still run the risk of getting caught by the PDIC and, if caught, if the PDIC finds out about the dummy accounts, those accounts will be counted as accounts in the name of one depositor and will be subjected to the P250,000 limit. Now, Nograles had 18 to 20M in the Legacy banks. Was he a depositor with a single account? Or were his deposits made under different names? If his deposits were made in his name then he will recover only 250K from PDIC. If his deposits were in different names, then Nograles knowingly participated in a scheme to defraud the PDIC, which incidentally, his brother now heads.

Now if Nograles has a brother in the PDIC, which has to bail out banks, like the ones Speaker Nograles invested in, that's quite a big public relations pickle to be in. Worse, it plays straight into the hands for someone lusting for the Speakership or simply, to take Nograles down. Personally, besides the long-standing mutual antipathy between Lakas Speaker Nograles and Kampi Grand Pooh-Bah Villafuerte, the Speaker is embattled on a front in which Villafuerte happens to have some experience -investment banking- and let no one forget Villafuerte's wife sits in the Monetary Board, which has a say in the bailing out of the PDIC which has to bail out depositors; who wouldn't put it past Villafuerte to have politically career-killing information on the Speaker now, thereby toppling him? That would make two Lakas Speakers toppled for careless deal-making, and strengthen Kampi's demand to be the dominant partner in the new Ruling Party. But instead, it seems the full arsenal of administration crisis management's been deployed. Step I: Delay The Palace and friends had months to digest the contents of the World Bank report and dot all the i's and cross all the t's with regards to a legal defense, as well as lobbying; after doing their bit to maneuver legislation that might be beneficial to the Legacy Group and other friends, and failing, the House still had time to maneuver things so that when the issue broke wide open, some sort of damage-control could be undertaken. Notice the length of time the Ombudsman's been in possession of the WB Report, with no preliminary investigations taking place. But then, if pressure keeps up, they can use preliminary investigations as a way of buying time (remember the handling of ZTE?) Step II: Dispute The Senate wants to investigate contractors? The House will investigate, too -faster, and gentler, too (see Contractors in Congress). At the very least everything's reduced to House-said, Senate-said. Step III: Decamp The President goes overseas. Her husband goes overseas. Out of sight, out of mind. No lightning rods. Step IV: Divert And so, after being so quiet as to make everyone think they were comatose, or resigned to the status quo, the Committee on Constitution Amendments of the House has announced that the Nograles Resolution has made it out the gate and can be sliced and diced in plenary, which will hog the headlines for a few weeks, making opposition and administration congressmen happy. Richard Gordon's given Congress another way to get what it wants (so long as enough of them get reelected... see, it's all connected, somehow!):

Gordon... said that the Charter should be revised by the elected lawmakers of the Senate and the House of Representatives sitting as delegates of a Constitutional Convention. He filed Senate Joint Resolution 20, which calls for a Constitutional Convention after the May 2010 elections with the newly-elected members of the 15th Congress as its delegates.

Meanwhile, get the 2010 Beauty Contest going, just to create buzz but no real political momentum. Take your pick: A. Scuttlebutt on candidates, such as Bossman Eduardo Cojuangco anoints Escudero and not Teodoro; or Manuel Villar wooing Vice President de Castro to join the Nacionalista Party. B. Ordering that long-delayed merger to proceed. C. Additional efforts to muddle things by means of spectacles (see Pagcor chief launches 2010 Coalition) that give reform a bad name. Message 1: don't tread on us. Message 2: The Speaker's a statesman. Message 3: We're all in this together, nyah, nyah, nyah. What's happening is a whitewash on one hand, and juggling political balls in the air to help the whitewash. All these things carry a price, and they're not of the opposition's making. The two issues involve collusion between the private sector and officials firmly in the administration's ranks. The ranks of the administration, meanwhile, have an election coming up and need to grease the wheels of governance through pork barrel spending. As Ricky Carandang recently pointed out in his blog,

The P50 billion in additional spending will be used for infrastructure and social services. Much of that will be funneled through administration friendly lawmakers districts. The pork comes in two forms: first is the outright earmarks that have increased in the 2009 budget. The second is in te form of “hidden” pork. Outlays included in the budget of the Department of Public Works and Highways that must be spent “in consultation with lawmakers.”

Mon Casiple, in his blog, apropos of the long-delayed Lakas-Kampi merger, describes the lay of the land:

The situation on the ground in the 2010 national and local elections is one wherein, in many places, it is Lakas and Kampi political dynasts who are vying for elective positions, including scheming at electoral cheating and, in some cases, at electoral violence. It’s a dog-eat-dog world out there, in the absence of a strong political party system. The only attraction a GMA-brokered merger brings to the table is the political weight the presidential endorsement carries, including the financial resources and government network that goes along with it. Many, if not most, of those in the ruling coalition will definitely need it and thus will be expected to echo the merger call. However, such an attraction will have to be tempered with the sobering fact of a hugely unpopular president. Her endorsement of a candidate–in many places–is the sole factor for a great many voters to drop the candidate. It is a kiss of death in national electoral contests and in many local contests. The GMA endorsement will matter only in those contest areas where her popularity is not an issue. Ironically, there it will not matter much. The money and the government resources from the presidential deepwell will be the major reason if ever a candidate in these areas accepts the endorsement. The merger likewise will actually weaken both parties in the coalition when a spurned Lakas or Kampi member who wants to run under the merged coalition bolts out and run as an independent or under other parties. As I said before, party affiliation is based on the interests of the candidate-member, not the party. GMA’s motive in calling for a merger obviously has everything to do with her political situation and nothing to do with the 2010 prospects of Lakas or Kampi. She needs to fend off as long as possible–at least in appearance–the lameduck character of her post-Cha-cha administration. She also needs the leverage to maintain her influence over her chosen presidentiable and ensure the candidate’s victory. A merged ruling coalition (or the appearance thereof) is crucial.

Whichever way you put it -from the perspective of a President saddled with a mercenary political coalition, or the point of view of the mercenaries in that coalition, and the mercenaries in the opposition for whom election or re-election is as much an end-all and be-all imperative- this requires money. And you wonder why there are rumors of grand heists?

LPG shortage (?)–>justifies raising LPG prices. Rice price increase (again?) without any justified reason in sight. Power Lotto, on top of several megamillion Super Lotto and Mega Lotto prices recently. Buy-in in Meralco, Petron, Liberty Communications. New mining corporations. No land reform but million-hectare corporate farms carved out of public lands and land reform areas. Huge national budget, including funds for mega-infrastructures or (a new favorite) recession-proofing and poverty-alleviation. And, horrors, a jack-up in smuggling cars, rice, drugs, DVDs, and what have you. Also, “taxing” drug lords and jueting lords or arranging tax amnesties for tax evaders or laundering for a fee the infamous hoards of corrupt officials.

But now the whole cozy system's been subjected to an unwelcome spotlight, arming political opponents (whether just as dirty or not) up and down the line with a juicy issue: squandering resources at a time when belt-tightening is in order. And pursuing a policy of shifting resources around. Today, Jarius Bondoc writes that half of the 50 billion stimulus plan will come from the Social Security System (and only revealed because the SSS Chief, Romulo Neri, Jr., was asked about it by the opposition). As Abraham Lincoln famously said, "too many piglets, too few teats." Which may help explain news stories like Investors see RP defaulting:

ADB senior economist Dr. Cyn-Young Park said the widening credit default spreads lead many investors to think that the Philippine government may default on its debt, or not pay these when it becomes due. “This is the investors’ assessment of the creditworthiness of the Philippine government,” Park said in a seminar organized by the Yuchengco Center and the De la Salle University. “Generally, the market is more cautious in giving credit… that’s why sourcing funds overseas may be too costly at this [time],” she added. A company’s credit-default swap spread is the cost per annum for protection against a default by the company. Park, however, said that with the global economic crisis, the Philippines fares well compared with newly industrialized economies in Asia, such as Hong Kong, Singapore, South Korea and Taiwan. She said most of these have been heavily affected since they have a “substantial financial market,” mainly being linked with the United States market. It will be in the hands of the national governments in the region to spur the economy—such as what the Arroyo administration is doing—by providing stimulus packages to perk up market and consumer demand, she said.

Here are some readings on the issue. As far as the (reading, and specifically, On Line) public knows, what is floating around is pretty much an Executive Summary from the World Bank. Much has been made of "collusion" being the main, provable, offense. To understand the process is to see where people like the President's husband come in (see Newsbreak's Bidders spill names, modus operandi in bid fixing):

But this time, it is now the politicians who set the rules. “Contractors engage in a sort of auction, where the contractor willing to pay the largest bribe can win the politician’s support,” one local contractor told WB probers... Normally, one has to deal with politicians in both the national and local level—the former who controls the implementing agency and the latter, whose area is hosting the project... At this point, word of honor is not honored. The one who has the money reigns supreme. Bribe, preferably, should be given at once to seal any agreement. It is also crucial to be in the favor of the ‘facilitator’ of the bidding manipulation, which bidders say is contractor Eduardo de Luna, owner and proprietor of the now-blacklisted E.C de Luna Construction Corp. for public works projects. Contractors interviewed by WB says de Luna has connections in the public works department who are part of the cartel... Several witnesses told WB probers that de Luna enjoys the backing of First Gentleman Miguel “Mike” Arroyo. De Luna, they say, acts as Mr. Arroyo’s go-between in foreign assisted projects. One contractor said E.C de Luna is so powerful that it controls most of the bidding at the Department of Public Works and Highways. The WB source said it was through E.C. de Luna operations that China Geo Engineering Corp., China Road and Bridge Corp, and China Wu Yi Co. Ltd., three of the blacklisted firms by the WB, won the bidding for WB-funded projects. The source had predicted that these three Chinese would win the bids before the tender offers were opened. Once the ‘winning’ firm has been identified with the blessing of the cartel, the sham bidding begins. Designated ‘losing’ bidders, in collusion with the syndicate, complete the charade. The previous standard operating procedure (SOP) was for the ‘winning’ bidder’ to provide three percent of the advance payment for the project to the losing bidders. SOP to the politicians is also taken from the advance payment... But recently, the practice is to split a percentage of the advance payment between the politicians and the intermediary. A lawmaker who acts as sponsor to the bidder gets 15-20 percent of the project value while local officials share between 2-3 percent. The intermediary is responsible for the share of the losing bidders... The kickback is nothing to scoff at. Total payoff, according to the local contractor, ranges from 15-27 % of the total value of the contract. This does not include up to 20 percent in “unnecessary costs added to the project,” a former government official with intimate knowledge of bidding in the public works told the WB’s Integrity Vice Presidency unit. The “unnecessary costs” are mean to cover the costs incurred for the bribe. Expectedly, all payments are in cash. “Company books do not reflect any of these payments in any event, because the books are faked to avoid taxes, ” said a local contractor. The former government official supported this assertion, adding that bribery extends to internal revenue officials to keep the company’s financial books above board.

For a report on how this process may have worked, see the PCIJ's Special Report on the World Bank's bidding findings (As for why the behavior of Congress can be said to constitute a whitewash, see the Inquirer editorial, Whitewash, from January 30, 2009. You may want to visit The Legacy Group Watch blog, set up by a disgruntled investor. For a broader perspective, see these papers: Corruption in Asia Pervasiveness and Arbitrariness And Japan Korea the Philippines and China Four Syndromes of Corruption