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

This premartial law editorial cartoon suggests the theme for today’s entry, which is: as a possible constitutional plebiscite or national election looms, the government, at a time of economic recesson, is going to be hard-put to find the cash it needs to put out to curry favor with the electorate and its allies.

I. The Economy and Jobs

New stories today range from 11-mo trade gap widens to $6.9B to Manufacturing output down 6.6% (for November, 2008, where Imports were down 31.5%). The Department of Labor calculates 23,485 job losses traced to crisis since October last year. Overseas, Bloody Monday: Over 71,400 jobs lost (200,000 lost since 2009 began; 2.5 million lost in 2008).

A few days ago, Jon Limjap wrote in Filipino Voices on IT and electronics industries in a binary of fuzzy fate:

The silver lining in this landscape of layoff despair is that the local IT (the internet and software part of it, not the hardware part) as well as the BPO industries are faring well, with some experts believing that the jobless can be absorbed by these industries altogether…

Not all is bright and dandy in those industries either, however…

And if you think the call center industry is safe, think again: late last year, Dell has started moving call centers back to the United States after constant customer complaints of having difficulty talking with Filipino and Indian call center agents. While the service has a higher price than Dell’s regular customer support services, it underscores the not-so-obvious fragility of the call center industry…

Meawhile, the government’s various activities (see the interesting discussion, in the comments section, in Marking out, on the NTC’s proposed order concerning telecoms content providers) is leading to a lot of hand-wringing concerning blogger ethics (see an excellent piece in It’s True! It’s True!), but also, apprehensions about whether e-commerce is going to start being intensively taxed.

The other day a colleague told me of a briefing Citibank held for some prominent businessmen, in which they were told “this year can be one of two things for you: bad, or disastrous.” If the bankers say that, and the businessmen say that, you know both will be telling the politicians, “so sorry, no money” going into 2010. And so, the need to find alternative sources of political funding. All the scandals being touted by the government can therefore be seen, from the perspective of needing to shake down enemies, identify vulnerable patsies, and rake in the money.

II. World Bank Report

Even as Ebdane: 700 firms on DPWH 2007 blacklist: 300 more to be added, Senate told, the Senate’s also been told, by Ebdane, 3 banned firms still have gov’t projects. Senator Miriam Defensor Santiago elicited chuckles from the public over her hare-brained tantrums in the Senate, but it might be interesting to see if all the entertaining heat is producing very little light.

Of course the President’s husband has been dragged into the fray, with a to-be-expected pooh-pooing of his critics courtesy of the Palace.

What I find even more remarkable, though, is that no one outside the Executive Department seems to have gotten hold of the World Bank report; nor has the WB been forthcoming in releasing the report either to the public or to the legislature.

III. Rural Banks

The Monetary Board, according to the Central Bank, has to decide whether to approve a loan to the Philippine Deposit Insurance Corporation, to cover payments to depositors in failed rural banks. See PDIC seeks P14-B loan from BSP:

According to PDIC president Jose Nograles, the insurer has started negotiations with BSP Governor Amando Tetangco Jr. for another loan worth P14 billion to boost its deposit-insurance fund.

The fund would cover claims of depositors of failed banks. By law, up to P250,000 worth of deposit per account is insured with the PDIC. Pending before Congress are bills that would double the deposit insurance to P500,000, a development Nograles and Tetangco support.

Nograles said the PDIC is now deep in debt, having incurred up to P72.5 billion in loans by the end of 2008.

The state-owned deposit insurer, however, has a deposit-insurance fund of only P60.5 billion. Thus the need to borrow from the BSP, Nograles said.

“We are borrowing P14 billion from the BSP to fund our deposit-insurance claims this year,” he said. The loan will be structured as a 10-year obligation of the PDIC.

As Manuel Buencamino pointed out in a column on September 3, 2008, the rural banking sector’s been shaky for some time now. Back in September, the House of Representatives wanted to relax rules covering rural banks’ capital requirements; the Rural Bankers Association objected to the measure; so did the Central Bank. As Buencamino pointed out, the House was trying to bail out the rural banks:

It seems undercapitalized rural banks lending money taken from depositors and creditors lured by outrageous interest rates are the intended beneficiaries of House Bill 3827. The bill will legalize “behaviors posing moral hazard.”

The BSP tried to place a number of undercapitalized but munificent rural banks under receivership, but the rural banks, acting in concert, were able to stymie the BSP with a temporary restraining order (TRO) from a Manila Regional Trial Court and a Court of Appeals division taking its sweet time on the BSP’s urgent appeal for a reversal of the TRO.

“Those rural banks, already enjoying the protection of the courts, might also get their meal ticket from the Batasan,” observed an apprehensive depositor.

An article in today’s Inquirer (the first of a four-part series) reports on Legacy banks’ double-money scheme: Former PDIC chief was alerted 3 yrs ago.

Ricardo Tan recalled that he was alerted by former Prime Minister Cesar Virata—who was then president of the Bankers Association of the Philippines—to the growing proliferation of “double-your-money” schemes that were being used to attract investors into putting their money in little-known financial institutions and rural banks.

“[Virata] called me up and told me that there were people soliciting deposits all over the country, offering double-your-money [schemes] and cars as incentives,” said Tan, who was at that time the president and CEO of PDIC, the government agency tasked mainly with insuring the people’s deposits in failed banks.

A probe of the banks that offered these schemes led to one name: Celso de los Angeles Jr., an Ateneo de Manila University and Asian Institute of Management graduate who already had previous entanglements with regulators in the 1980s…

“We invited him (De los Angeles) to our office to learn more about his business, and to my surprise, he showed up with a battery of lawyers,” Tan said.

The Philippine Daily Inquirer tried repeatedly to contact De los Angeles—who is now mayor of Santo Domingo, Albay—through his legal counsel, publicists, political allies, and at his offices to get his side, to no avail.

What followed and preceded this meeting was a chain of events that was directly linked to the BSP decision to close 13 small rural banks across the country just a few days before the long holiday break of December 2008, according to the former PDIC chief…

“What we found were fictitious deposits, [rotating] collateral from one bank to the other, unsafe and unsound [banking practices] and improper documentation.”

However, a weak regulatory and legal system—and the alleged involvement of high-profile politicians—also meant that PDIC would shell out 250 percent more to cover the banks’ insured deposits three years later.

“When I left PDIC [in April 2006], our exposure to [De los Angeles’] 12 banks [in terms of insured deposits] was P4 billion,” Tan said in an interview with the Inquirer. “Since then, PDIC’s exposure has risen to P14 billion.”…

..These banks linked to the Legacy Group are Rural Bank of Parañaque, Rural Bank of San Jose (Batangas), Rural Bank of Carmen (Cebu), Pilipino Rural Bank, Philippine Countryside Rural Bank, Rural Bank of Calatagan (Batangas) [now Dynamic Rural Bank], Rural Bank of DARBCI, Rural Bank of Kananga (Leyte) [now First Interstate Rural Bank], Rural Bank of Bisayas Minglanilla [now Bank of East Asia], San Pablo City Development Bank, Bicol Development Bank, Nation Bank and Rural Bank of Bais.

These banks closed voluntarily in late 2008 and were taken over by PDIC early this month.

Well, the slow burn finally led to a full-blown capitalization conflagration.

Meanwhile, House to start probe on Legacy fiasco:

Representative Teodoro Locsin of Makati City has described the failed banks saga as the “Celso de los Angeles Legacy scam.”

“He milked it, thinking it was a cow,” Locsin said of De los Angeles and the Legacy Group.

He added that “the mafia” in Philippine Deposit Insurance Corp. “took a dive for Celso de los Angeles.”

House Speaker Prospero Nograles is also calling for an investigation of the Legacy Group’s shuttered pre-need firms.

But what does the House intend to accomplish? Considering it had lobbied to keep the banks afloat and seems inclined to keep other troubled rural banks afloat, it therefore has to investigate itself -which is doubtful- even as it tries to apply pressure on the PDIC and the Banko Sentral.

As indicated by the Speaker’s interest in the pre-need activities of failed Legacy Bank, other regulatory problems are slowly simmering, too. See Gov’t mulls bailout for preneed sector even as 35 insurers warned on capital deficiency. You can expect insurance claims to increase as times get tougher and some businessmen turn to filing false claims (on the basis of arson, etc.) or when the coffers of insurance companies hard-hit by no new policies being sold, have to face unexpected big claims.

IV. Drug Menace

Related to the above, today’s Business Mirror editorial points to a statement by “four former presidents of the Philippine Deposit Insurance Corp. (PDIC), three of the most recent finance secretaries and two of the most senior former central-bank officials, among others”, warning of “the increased boldness and arrogance by rogue bankers and their political padrino.”

According to the editorial, the Central Bank governor is, at least, getting moral support. But what about whistleblowers? The editorial then goes on to say -and this is what makes it relevant to this sub-section of today’s entry- that other whistleblowers don’t have it so good:

But for many other bureaucrats, especially in regulatory bodies, who are waging lonely battles against wrongdoers in and out of government, the story is quite different. In fact, some of the names in the FSGO roster have themselves once suffered the kind of shabby treatment that this administration has come to be known for, when it comes to dealing with its executives. We all remember stories of Cabinet and sub-Cabinet officers, directors or heads of regulatory agencies—many of whom got on the wrong side of the administration by stepping on the toes of cronies—who were rudely told to quit, or learned about their “resignation” in the most embarrassing situations, often through the media. One ambassador learned he had been replaced just before undergoing surgery; another learned it from reporters while they were airborne. Perhaps the latest casualty is the chief of the National Printing Office (NPO), Enrique Agana, who was abruptly replaced last week, after a most curious string of events: Right after he firmly blocked a cabal of contractors linked to alleged anomalies in the past, he suddenly found himself facing the most unpalatable of charges—child molestation—and Mr. Agana is crying frame-up. This is not to conclude that Mr. Agana is innocent; it is simply a plea for the due process that was denied him. Child molestation is a serious charge; but equally deserving of attention, nay, a thorough investigation, is the man’s claim that the usual “syndicates” that had the run of the place for years are aggressively lobbying for more share of the pie. That Mr. Agana—a man with a clean work record as far as we can ascertain—is to be replaced by a controversial general embroiled in the “Hello, Garci” case only makes this latest Executive firing uglier. The Palace cannot accuse the opposition this time of beating a dead horse; the decision to name former Admiral Tirso Danga is an invitation to dredge up anew this issue against the President, considering the NPO prints sensitive election forms. Meanwhile, the people are losing another good public servant; and getting the signal that working in the bureaucracy here is much too hazardous for reformers.

The willingness of the current gangsters in government to go after its enemies by any means (and to keep probing the defenses of the public by trying to put in all sorts of characters into politically-useful positions -in place of Agana, the President tried to appointretired Admiral Tirso Danga, is something we ought to consider as the same government revs up its “War on Drugs.” The Palace hastily backtracked on Danga’s appointment when NAMFREL raised a hue and cry because of Danga’s having been implicated in the Hello Garci scandal.

Which is why the point raised by John Nery in his column Drugged (or, PDA for PDEA) , yesterday, needs to be more widely discussed:

Lost in all the noise is the enormous power of the beast that is coiled inside the law creating the PDEA.

Tito Sotto, chairman of the Dangerous Drugs Board (DDB) as reconstituted by Republic Act 9165, hinted at the stirrings of the beast, with his appeal for a return of the death penalty. PDEA Director-General Dionisio Santiago, once one of President Gloria Macapagal-Arroyo’s favorite generals and for five months Armed Forces chief of staff, let the ghostly cat out of the bag when he admitted that PDEA agents sometimes planted evidence. “We sometimes do this although this is against the rule of law. Definitely we only apply this matter to some cases, like a subject who is publicly known to be peddling drugs but always escapes arrest. This is when we enter the picture.”

Now, the President’s impending appointment of Palparan, the so-called “Butcher” at whose whetting stone the Melo Commission laid the blame for some extrajudicial killings, to the DDB is the virtual pronouncement of the Arroyo administration’s new strategy, its own version of “narcopolitics.”

Call it paranoia, but perhaps we should brace for a future where critics, whistleblowers, just plain annoying people can be removed from (political or media) circulation with a timely dose of planted evidence.

Note that Section 11 of RA 9165 provides that mere possession of “any dangerous drug” (the provision specifies the quantities) can result in “life imprisonment to death and a fine ranging from five hundred thousand pesos (P500,000.00) to ten million pesos (P10,000,000.00).”

…We should hold the PDEA’s feet to the same fire we have started for the DoJ. Far from a simple black-and-white fable, we are dealing with the human narrative in all its messy glory: flawed human beings, doing sometimes contradictory things, for not necessarily simple reasons.

For instance, my instinctive reaction to the House hearings (a different matter from the newspaper reports) was formed largely by an aversion to the PDEA chief legal counsel, Alvaro Bernabe Lazaro. I did not know him from Adam (or Adan), but the way he comported himself during the first televised hearing triggered internal alarm bells. In particular, his attempt to raise the stakes by bringing in something Resado said about Chief State Prosecutor Jovencito Zuño in a phone conversation was shameless.

After much hyping of the phone call, Lazaro then recalled Resado saying, “Pare, delikado, ‘wag tayo sa telepono mag-usap. Eh kasi si Chief Zuño pumirma, eh.” [Buddy, this is risky. Let’s not talk on the phone. It was Chief Zuño who signed it.] After insinuating proof of wrongdoing, he then said (I am recalling from memory): But I am not insinuating anything.

Santiago is another flawed character. In 2005, he was charged before the Ombudsman with a graft case, based on a military probe alleging that after he had retired as AFP chief of staff he “defrauded the government” by depositing an P8-million check in his personal account. I do not know what happened to the case, which his successor Gen. Efren Abu had announced. I can find no further reference to it.

What about Marcelino? He remains unsullied by all the back and forth, a good man trying to do his best in a sordid though necessary job. But he strikes me as Ruben Guinolbay redux: The Scout Ranger captain emerged a hero from the Lamitan siege, but his personal bravery could not mask the reality that, in Lamitan, the Armed Forces suffered one of the worst debacles in its history.

I’d pointed out the disquieting statements of Santiago in my June 15, 2008 column, The Rule of Glo .

I’d like to raise some additional points, here, that I originally raised in the discussion going on Smoke’s blog entry, Militarization is it?.

If you’ve noticed, reports on the illegal drugs trade, specifically on the manufacture and sale of Shabu (a danger posing a real National Emergency, in my opinion), always point out there are several factors at play.

The first is that foreign drug syndicates won’t engage in “technology transfer,” so chemists come and go, to cook up batches of the stuff.

Have we heard of a concerted plan to increase the scrutiny of foreign arrivals, in cooperation with the drug agencies of foreign countries?

The second, is that ephedrine is a necessary raw material. Tons of the stuff is imported under false pretexts.

Have we heard from officialdom, first of all, how much ephedrine is required for legitimate purposes? Next, have we heard of any sort of scheme to beef up customs inspections, and fortify the system of permits and documentation?Have we heard of a doable plan to secure our coastlines, scrutinize private ports and docks, keep tabs on interisland shipping? Keep track of cargo manifests outside Metro Manila, in a country where Marina officials keep track of these things by scribbling data on yellow legal pad, which indicates the absence of a timely and reliable national database on interisland and international commerce?

The third is, if you recall the saturation drives conducted by the armed forces in Luzon during the time of Palparan, and similar efforts undertaken in urban poor areas last year, one benefit people did point out, was that public disorder and things like the drug trade were dramatically affected by the saturation drives. And yet, we have not heard of any plan to integrate the police and armed forces in simply maintaining the high visibility of law enforcement agents, in a manner that inspires confidence and not unease, in the public. This is particularly true in far-flung provincial areas where the drug trade seems to be taking root as things get hot for the syndicates in the metropolis.

The absence of a holistic picture, informed by facts which could be gleaned from a government that is looking at the big picture -interdiction, patrols, scrutiny, as wel as the more dramatic rounding up of petty pushers-  is why we ought to consider whether this is really a serious effort to fight the Drug Menace or a great to-do in aid of extortion and growing the administration’s campaign kitty. As the economy takes a downturn, the government will be hard-pressed to raise taxes, to pay for patronage, and to build up a war chest for whatever comes next -and so, needs to farm out favors, in the tradition of tax farming.

Cocoy, in his Filipino Voices entry All Your Drugs Belong to Me , had also pointed out that oodles of money’s to be made from drug testing, when a drug testing policy requires safeguards being put in place. Yesterday’s Cebu Daily News editorial, Drug tests can be abused, lays out the dangers of a blanket policy of drug testing for kids:

Still there are fears that, like in the Alabang Boys case, the police and the PDEA may manipulate drug test results, a convenient way to extort money from students.

There are grave concerns about how the drug tests will be conducted and its potential for abuse.

Urine samples can be switched. Test results can be manipulated.

Just observe the hole-in-the-wall health centers that abound near the Land Transportation Office where adult drivers have to pay for a certification that they were tested for drug use.

Users anticipating a test can also abstain from their vice or flush it out of their system in time for the exercise.

Then again, random drug testing is also known to produce false-positive results. A person can show misleading positive results after having taken over the counter medicine like Ibuprofen, a common pain reliever.

The whole system of managing the information that comes out of a surprise drug test is supposed to be conducted in strict confidence and under controlled terms for results to be reliable.

Imagine the damage to a youngster’s self confidence or reputation, when rumor spreads in school that he tested positive in the screening test? (A confirmation test would have to be made before one concludes that illegal drugs were found in one’s system.)

Another cause for concern is when school officials conduct drug tests with specific targets in mind, namely students they consider troublemakers. The test would be a convenient means to bar enrollment or defer graduation of an undesirable.

A lot of assurances will be have to be given that the right of students to privacy, to refuse the test and not to incriminate oneself without due process are guarded.

Again, this is a question of government going for the spectacular, and expensive, shotgun approach to the headline-hogging crisis of the day. Schools, for example, could have been encouraged, as a matter of policy, to undertake drug tests, but leaving the details to the schools themselves. Greater education and a kind of neighborhood watch could be encouraged, too; at the same time training in detection and the counseling of kids, has to take place among educators and school staff, the kids themselves, and parents.

V. LPG and Gasoline

In my on LPG entry the other day, I quoted industrialist Raul Concepcion as saying he expected oil prices to go down. But instead, Oil firms hike gasoline prices (including, interestingly, ethanol blend gasoline). The third time prices have gone up for gasoline this month (while the price of Diesel continues to fall):

According to data from the Department of Energy, the regional benchmark Dubai crude climbed to an average $46 a barrel as of January 26, from an average $41 a barrel last month.

The price of unleaded gasoline based on the Mean of Platts Singapore (MOPS) benchmark for refined petroleum products likewise increased to a $51-a-barrel average as of January 26, from its December average of $41 a barrel.

The reason for this is put forward by the International Energy Agency in its Oil Market Report:

Crude oil prices rose to nearly $50/bbl in early January, supported by cold weather, the Russian/Ukrainian gas crisis and fighting in Gaza. Subsequently, weak global refinery demand and an increasing crude overhang have pressured Brent futures to currently around $45/bbl, while WTI was at $35/bbl, distorted by record-high Cushing stocks.

Other news has OPEC and other producers slashing output to keep crude at the $50 a barrel range for this year. Maybe Concepcion didn’t take this into account in his ad.

A caption to a front page photo in the Inquirer says LPG prices are expected to go up 5 Pesos per kilo next month (with no answers, up to now, about the ongoing shortage in supply).

Yesterday’s Inquirer editorial brought up the dangers of Narcopolitics. Last year, I pointed to the blog Third Wave, who I believe was the first to bring up the issue of Narcopolitics with regards to the 2010 polls. More recently, he had this to say in his entry, Just a social user: No big deal?:

The war against dangerous drugs is the most dangerous job.

The entrapment operation of Philippine Drug Enforcement Agency (PDEA) on September 20, 2008 that caught young and affluent drug suspects will prove the risks of the job. The wealth and political connections of so called Alabang Boys has became the greatest threat of honest drug enforcers of PDEA.

Let the money moves. Let political influence change things. Behold wealthy suspects, you’ll soon be free!

I don’t wonder why the Alabang Boys appear so confident and relax. They know wealth and influence can save them.

One of the parents admit that he knows that his son is using drugs. He said, (my son) is a social user but not an addict. It’s no big deal.

If all of the parents of 6.7 million drug users in the Philippines think the same way, the war against drug in the country will not prosper. (Data based on 2004 survey of Dangerous Drugs Board).

The entry provides an insight into the awareness of many citizens that illegal drugs presents a grave threat to society, and the desire of many citizens for something to be done; and that law enforcement when it comes to the drug trade means tangling with mad, bad, and dangerous people.

But it all points to the problem that the best way to tar and feather anyone is to bring up the “D” word. Another insight into the uphill struggle for those insisting on a scrupulous regard for rules of evidence and so forth, is the obvious skepticism with which government lawyers’ actions are often met. A good example is in Pinoy Politics:

In our country, you can buy your freedom as long as you have connections and money. I remember my American friend who teased me about our judicial system. He said, in the Philippines, “it’s better to drive without license, than to drive without money.” Funny, but true! Maybe, for some “onion-skinned” Filipinos, they might be offended. But come on, guys, let’s be real!

If the buy-bust operations happened to “Talayan Boys” or “Payatas Boys”, would the hullabaloo that beseiged DOJ happen? I don’t think so! Immediately, these “Talayan Boys” or “Payatas Boys” would be annihilated. There’ll be no intervention from influential people from down abyss, or even from high-heavens. These fucking people who intercede on behalf of “Alabang Boys” must be prosecuted, or even burned to death. They don’t deserve to be in the government, they’re doing great diservice to the people. Putang ina, wala kadikadecalideza ang mga hayup na ito. Eh si Zuno nga madalas kong makita sa Cafe Adriatico at kung sino-sinong kameeting na babae dun. Pati din si Blancaflor madalas din sun. If both of them are really guilty, let their heads roll!

…Gen. Santiago and the PDEA have been working hard to eliminate drugs. But with these misplaced people in the government, who lawyered for the accused instead of prosecuting them, the country is indeed going to the dogs. Putang ina nyo, mamatay na sana lahat ng mga sangkot sa cover ng Alabang Boys.

What makes me angry is the fact that on mere “technicality” the people in DOJ tried everything to mitigate the case against Alabang Boys. Bakit kaya? May porsyento ba sila o sangkot kaya sila. Well, your guess is good as mine!

But the “technicalities,” when anyone’s life, liberty, or property are at stake, are everything. This is because aside from the harsh and disturbing realities Pinoy Politics points out, there is another reality, and that is, the prevalence of official extortion and the flipside of the impunity the wealthy and well-connected exhibit when it comes to the justice system -the non-wealthy and non-connected, if targeted unfairly by the authorities, are completely at the mercy of officialdom.

A Simple Life has this to say:

The curious case of the Alabang Boys, who allegedly are connected to a big-time drugs syndicate, would have been one of those countless cases that got dismissed “due to technicalities”, if not for the righteous indignation of the PDEA.

While PDEA agents were spending sleepless hours staking out and apprehending illegal drug pushers, DOJ undersecretaries and state prosecutors were apparently busy conniving with drug criminals and their lawyers, in duping the seemingly clueless Justice Secretary into signing dubious resolutions to dismiss drugs-related cases.

I don’t contest that the indignation may be righteous, indeed, but that ignores the quite obvious problem here: enthusiasm and a zeal for interdicting and apprehending drug pushers (minor or major) means nothing if the cases aren’t ironclad. And the even more basic issue is whether you have the right sort of people in charge of law enforcement in the first place. Major Ferdinand Marcelino has become a kind of (Middle Class, at least) folk hero for his fiery and uncompromising nature, something the public tends to admire and sorely misses in officialdom.

But Mon Casiple points out the odds stacked against Marcelino:

The so-called “Ayala Boys” case and the facts that came out exposed the subject that is usually only whispered about: the extent of and intertwining of drugs, politics, and the justice system. It points to a frightening combination that may have already undermined the very integrity of the current democratic system.

It is an open secret that drug money provides a major source for campaign money in Philippine elections, right up to the level of the campaign for national political positions. Drug, jueteng and other criminal money is expected to play a major role in the financing of many candidates in the 2010 national and local elections.

It is also an open secret that–despite the decades-old anti-drug campaigns–the drug problem not only persisted but has grown and spread to every nook and cranny of the archipelago, corrupting government officials, policemen, judges, lawyers and other components of the the whole justice system.

From time to time, there may be petty drug criminals who were convicted but by and large, major players–especially those big fishes (operators of shabu laboratories, distributors, and smugglers–are freed on technicalities, escaped, or simply had their cases dismissed. The drug syndicates’ core leaders are never caught.

See also Malou Guanzon-Apalisok’s 3 biggest drug scandals, which details the woes of one whistleblower:

The 2001 investigation conducted by the House dangerous drugs committee, then headed by Cebu City Congressman Antonio Cuenco, is worthy of mention not only because a top NBI official insulted the members of Congress by playing golf instead of attending the House hearings, but also because today one of the whistleblowers, Bernard Liu, is bearing the brunt of the legal action filed by the brothers Peter and Wellington Lim as a consequence of Liu’s testimony and the committee’s failure to pin the businessmen down on illegal narcotics activities. Trying to vainly fend off before the Court of Appeals the warrant of arrest issued against him by the Cebu Regional Trial Court three years later, the witness bewailed why he is being punished for testifying. Liu’s fate has had a chilling effect on those who may have inside information on the illegal narcotics trade.

And how bizarre things can get as officialdom tries to be responsive to public opinion while failing to achieve anything:

The case of a very large cache of amphetamines that went missing after it arrived in the port of Manila from Seoul, South Korea, in November 2001 was a subject of a probe conducted jointly by the committees on dangerous drugs and public order and security. Then National Bureau of Investigation director Reynaldo Wycoco revealed that Seoul counterparts tipped him that about 100 kilos of shabu hidden in a cargo of vermicelli or noodles will be transported to Manila in a 40-foot container van via Hong Kong. Wycoco confirmed the illegal cargo arrived shortly after midnight of November 17 on board the vessel Manila Star but after two days in the Customs container yard the shipment was released reportedly without the knowledge of NBI officials.

Shocked over how a large shipment of illegal drugs could disappear under the very noses of NBI and Bureau of Customs officials, Ilocos Norte Congressman Roque Ablan exposed the anomaly in a privilege speech. Summoned to appear before the joint House committees, the officials described a bizarre entrapment operation that allowed the delivery of the drug cargo to a fictitious address in Binondo, Manila, only to be led to nowhere in Bulacan. The House hearing abruptly ended after Congress was fed with a letter from a supposed police authority in Seoul, saying that the drug shipment was just 500 grams of amphetamines.

This discouraging reality is what inspires an admiration for vigilante justice in fighting illegal drugs. As Patricio Mangubat wrote, back on January 2 in Filipino Voices,

One source revealed that Johnny’s son is not really a hardcore drug pusher-addict. The real pusher is one of the two young guys arrested. He’s said to be the close friend of the high-society drug lord who’s closely associated with a retired general. This guy should be the one arrested by PDEA. But, for some unknown reason, they always fail to catch him in his Valle Verde lair and his BF homes-Paranaque tambayan. Maybe, they’re scared of the father who’s very close with the First Golfer.

I would not even be surprised if some showbiz personalities fall in the next few weeks. This young druglord is highly connected and very well known in the underworld and in showbiz. He’s the one who supplies the drugs to artistas, social climbers, the Fort habitues, and those partygoers. In the future, he’ll be unmasked and brought to justice. For now, the public is encouraging the Alabang boys to spill the beans. Time to rehabilitate yourself. There’s still time for you to repeat and turn a new leaf.

By the way, those Magdalos inside the PDEA—again, thank you. You did a great job. The nation hopes that you’ll continue your good work. Dismantle these drug cartels. Kill the bastards.

I fully subscribe to Mangubat’s call for the parents to put their kids in rehab and for the kids to spill the beans. The cautionary note to his call for the liquidation of evil drug dealers is this comment on his entry. And at least one columnist also perceives the whole thing to be The lynching of State Prosecutor John Resado.

Let me add that another problem is that Marcelino, who obviously admires his boss, Santiago, is still subject to a chain of command with a flawed sense of way to go about things.See No PDEA post but Palparan was briefed:

Santiago said he could make Palparan his deputy for “special concerns” in case the controversial former military officer is appointed to the PDEA by President Gloria Macapagal-Arroyo.

“We will discuss with him how best we can utilize him at PDEA,” Santiago told the Philippine Daily Inquirer Sunday in a phone interview.

Santiago said he gave Palparan an overview of what PDEA does during a briefing last week. Afterward, he said, the retired general “seemed to like” the idea of joining the agency.

A President who would appoint such a man; a PDEA chief who would welcome him -this should be enough to say, “whoa, there, hold your horses!”

So even as PMA alumni back Dionisio, Marcelino. one has to distinguish if Santiago and Marcelino deserve to be put on par with each other, and the disquieting reality that the Philippine National Police as an institution still hasn’t overcome its Philippine Constabulary origins, and is riddled with brass who graduated from the PMA: and that is part of the problem when it comes to law enforcement in this country, it still lacks a firm grounding in civilian-minded law enforcement.

Still, considering past efforts to exact accountability from our elected officials, why this sudden insistence on my part on precisely the sort of thing I’ve challenged? If “where is your evidence, prove it in the proper forum!” was a noxious mantra with regards to asking the President of the Philippines to resign or impeaching her, why should it matter in the case of people like drug dealers, whether real or alleged?

Hence my column today, The Untouchables. The genesis of this column was my dissatisfaction with the whole issue of the collision between the Philippine Drug Enforcement Agency (PDEA) and the Department of Justice (DOJ).

And my having recently watched The Changeling (on a related note, read more on the Wineville Chicken Coop Murders).

At the heart of my column are two things:

1. It is wrong to put a civilian undertaking like law enforcement in military hands, the military mentality is incompatible with evidence-gathering and the prosecution of offenders; the reason the military’s colliding with civilians is that the vigilante-minded soldiers have been sent to run after drug dealers but in such a manner as to keep the truly powerful drug dealers beyond the reach of these soldiers; and so-

2. The whole issue is a sideshow because it parades parasitic socialites before the gallery (which always generates applause), but ignores the really powerful drug lords.

Concerning the second point, I brought up the need for an Elliot Ness, instead of a George S. Patton, to lead the fight against illegal drugs. The Federal Bureau of Investigation, in response to a Freedom of Information Act request, has made available significant portions of Ness’s FBI File. Something of interest is his response to his pursuit of a poential suspect as the Cleveland Torso Murderer (a 1930s serial killer):

One very strongly suspected individual was Dr. Francis E. Sweeney, who voluntarily entered institutionalized care shortly after the last official murders were discovered in 1938 and remained in such in various hospitals until his death in 1965. Significantly, Sweeney worked during World War I in a medical unit that conducted amputations on the field of battle. Sweeney was later personally interviewed by Ness, who oversaw the official investigation into the killings in his capacity as Cleveland’s Safety Director. During this interrogation, Sweeney, whom Ness code-named “Gaylord Sundheim,” is said to have “failed to pass” two very early polygraph machine tests administered by polygraph expert Leonard Keeler, who told Ness he had his man. Nevertheless, Ness apparently felt that there was very little chance of obtaining a successful prosecution of the doctor, especially as he was the first cousin of one of Ness’ political opponents, Congressman Martin L. Sweeney. Sweeney {d.1960}, a political ally of and a father-in-law to Sheriff O’Donnell {d.1941}, and an opponent of Republican Cleveland mayor Harold Burton, had hounded Ness publicly about his failure to catch the Butcher. After Sweeney committed himself, there were no more leads or connections that police could make to him as a possible suspect. The killings apparently stopped after Sweeney committed himself. He died in a Dayton veteran’s hospital in 1965, though he did continue to mock and harass Ness and his family with threatening postcards well into the 1950s.

This is of interest because of the refusal of Ness to exceed the parameters established by the law. This is what separates the law enforcer from the vigilante.

As it is, the whole thing has gotten bogged down in the minutiae of the accusations and counter-accusations. An interesting perspective is provided by Ang magulong pag-iisip ni Pulis Na Pogi:

so where did things most probably went wrong?

for pdea: they did everything right except entrap the bribers. for all we know, pdea double crossed the suspects (accepted the bribes–but not major marcelino i think–and still filed the case anyway.) this might have given rise to the outburst of one of the relatives of the suspects as narrated during the congressional inquiry.

for resado, he was very coarse in his diskarte. he should have not rendered an inquest resolution right there if he had the intention of receiving the expected bribe. he should have talked to his supervisor first. but habit may have overtaken him this time. it is common to see cases recommended for filing by the inquest prosecutors on the night of the inquest proceedings when the arresting offices are present, overturned the next morning by the chief inquest when the resolution is forwarded to him. during the interim, you and i knows what happens.

for the doj, they had tolerated their people for so long that verano thought that even in this high profile case, he can get away with the blatantly illegal things that he used to do all the time.

for the family of the suspects, they should have known better than bribe pdea. with a bagito marines as team leader of the arresting team, they should have known that he is still incorruptible. had they bribed resado at the very start, they could have won right in the very first round. resado could have written: “there are things that need to be clarified in a preliminary investigation. release of the suspects is hereby ordered unless detained for other lawful grounds.” the only recourse of the pdea then is a motion for reconsideration.

this happens all the time!

And so, my column was an effort to try to zero in on just what, exactly, was bothersome about the whole issue.

Late last night, long after I’d submitted my column, I ran across this January 10 entry in Torn & Frayed in Manila, “Alabang Boys” – give us a break:

Here are three conclusions you might have arrived at from the relentless coverage of the “Alabang Boys” case in recent days.

• Drug taking in the Philippines is almost unknown — this is why this exceptional case has attracted so much attention.

• The Philippines must be as incorruptible as Singapore — this is why the papers are so outraged at this alleged bribery attempt.

• The Philippines has no serious problems to attend to — this is why the papers are devoting so many acres of newsprint to this trivial case (not to mention the ruckus at a golf club that competed for space on the front page).

• This place is weird.

Unlike the Inquirer, which has clearly decided that the Brodett family is guilty (or so it seems to me), I haven’t reached a conclusion about the rights and wrongs of the case.

Given the way things work here, it seems to me quite possible that the Brodetts may have tried to pay money for their sons’ release. Facing similar circumstances, many of us might have done the same.

On the other hand, it also seems quite possible that, realizing that the young men were from a wealthy family, members of the Philippine Drug Enforcement Agency (PDEA) either set them up or tried to use their sons’ predicament to “encourage” a bribe from their parents. After all, it would not be the first time such a thing has happened in the Philippines.

That’s why we have courts; to decide which of prima facie equally plausible explanations reflects what actually happened.

I have reached a couple of conclusions about the furor over the case though though.

• The PDEA claim that the three young men represented “a syndicate that sold illegal drugs at the Metro Manila club circuit and did business online” isn’t too convincing, if only because it has supplied no evidence of this, beyond dropping the name of Embassy (surely an easy target), which the club has strongly denied.

• It seems much more likely that this whole thing is about young people taking drugs for fun, an activity that has been widespread throughout the world for at least 40 years and will still be practised long after the Brodetts, the PDEA officers, you, and me have all kicked the bucket. So why can’t we have a public policy that reflects the realities of the 21st century rather than those of the 1940s?

That about says most everything that needs to be said, and quite nicely.

And it tells us the limitations of the coverage in our media. Everyone, like the French officer in Casablanca, seems shocked, shocked! That drug-dealing (and taking!) is going on here. But there’s a certain feigned ignorance about the whole thing.

And yet, the implications of such scandals is dire.

More recently, stories have started cropping up, pointing to N. Mindanao tagged as RP’s new illegal drugs capital while there are other areas of the country long blighted by Narcopolitics: Calabarzon ‘narco-politics’ under watch.  In the past, even the New People’s Army has been shocked, shocked, they’d even be thought of as possibly coddling the drugs trade! You can be sure the NPA will find itself the target of an offensive justified by the War on Drugs. Which may be why Palparan is chomping at the bit to be assigned to PDEA (see Insurgency Re-examined, from the Free Press Centennial Issue, on the self-perpetuating nature of the Communist insurgency and the military’s response, which helps feed the beast).

As the Roman saying goes, who will guard the guardians? If PDEA says Narcopolitics’ a factor in 2010 polls, and yet assuming (as I do) the good, even noble, intentions of the young officers in PDEA, this still brings up the need for caution, as Ding Gagelonia points out in Filipino Voices:

This narco-politics spin, unsubstantiated as it is, fits well into a scenario where even genuine, non-criminal dissent may be stifled.

The onus is for Santiago to put his money where his psy-war-prone mouth is and present to Filipinos real hard evidence about national level narco-politicians.

Throw your suspects in jail, Mr. Santiago, and spare us your histrionics and psy-war tactics!

Could it be that this one-time Marcos-era Metrocom officer may actually be engaged in a politically motivated black propaganda push where the ultimate beneficiary is the anti-drug trafficking Czarina and not Philippine society?

For background, here’s Aljazeera’s The shackles of shabu. It takes a look at the crystal meth trade in the Philippines, and the prominent role Chinese triads play in the manufacture and distribution of the drug. See Howie Severino’s Blood for Shabu.He tells the story of addicts who sell their blood so as to have money to pay for the addiction.

See also Ecstasy party pill; shabu drug of choice.Recently, Vera Files has reported As ’shabu’ price rises, Ecstasy use up, and along the way puts forward official statistics on drug use:

The figures seem small, don’t they? While Baby Boomers, the generation that embraced the Drug Culture in the 1960s and 1970s, are now a relatively smaller portion of the population than the under thirtysomethings that comprise the overwhelming bulk of our population, surely their percentage of drug use would raise the overall percentages? But if true, I wonder how the percentages compare with other countries.

In other news, SMC-allied group buys 7% of Meralco: Board changes seen Monday. The end of an era?

Back in December, I wrote about the then-unreported loss of jobs in the Call Center industry, which some readers disputed as a “half-empty” sort of thing to say; still, hard news started trickling in (for example, Accenture Manila cuts hundreds of jobs).And while, indisputably, the industry itself is trying to maximize its potential (see BPO industry short by 20,000 jobs of its target last year) it has to do so while grappling with harsh global realities (see BPO industry sees consolidation amid uncertainty in US economy ). To be sure, if companies are nimble, there are actual opportunities:

Tholons Philippines country manager Jo-An Darlene Chua was quoted as saying that with the country’s BPO export value aggregating close to 50 percent of India’s, companies may well find the Philippines as a good alternative.

Tholons said the same for Vietnam “as a solid alternative to India on the IT side.”

Sañez said he can’t see any backlash yet on the US government’s move to generate domestic jobs that may impact the BPO industry.

“It doesn’t matter whether the policy of President-elect [Barack] Obama may rein in offshore activities because outsourcing and offshoring are business decisions.”

But as blogger Marocharim, over at Filipino Voices, recently wrote a timely reminder of the very human face of all these statistics: the layoffs are real, the concern among young Filipinos, acute.

Today’s headlines focus on the closing of Intel’s Philippine operations and disclose job loss figures that are disheartening, though also, confusing: Export drop affects 34,000 jobs; Gov’t fears 60,000 IT job losses (surely some overlap between these two separately-reported figures); and RP 2008 growth may be weakest in 7 years. No one doubts this year will be tough; the ongoing economic crisis is global and of course affects us, too (see Layoffs for January 2009 at America’s 500 largest public companies:71,450).

However, if the country is to weather the storm, or position itself to recover as quickly as possible, then it surely helps to see where the bad news has been fostered by existing conditions.

This Intel story, for example, began close to two years ago. On April 3, 2008, blogger SEAV, in Intel Cavite Closing Down, for Real? pointed to Yugatech first blogging about the possibility “almost one year ago,” and then mentioned information that surfaced in the comments section of an entry of his in another of his blogs, Vista Pinas (see Intel Philippines, Cavite Plant). One comment in SEAV’s blog (April 4, 2008; seconded by an April 7, 2008 comment) explained the closure as follows:

The complete story is that, and this has been extremely misrepresented in various circles thus far, there are issues with the current building where Intel CV is operating and given Intel’s utterly strict standards on safety and building code compliance, this is deemed more as a long-term move for safety reasons (think Hanjin and you know what I mean) rather than an immediate pull-out of busines operations. In order to sustain the business, a set of options have been formulated by Intel Corporation as a whole with the most promising being that a new building should be identified where all operations can be transferred to and resumed. This part of the story is still not resolved and a second announcement is due by end of June to finally roll-out the official plan, a full closure being one of the alternatives, if a building is not identified and the economic climate of the Philippines continue to be inferior versus Vietnam and China and the rest of the world.

According to Yugatech (in Intel to shut down Cavite facility by year-end), has been steadily paring down its workforce since April, 2008 (when SEAV’s entry came out), reducing it from 3,000 workers at the time, to the 800 who made the cut but who will now lose their jobs. It seems reasonable to deduce that the economic reversals of the company at present meant it had to dispense with finding a win-win solution for the problem it’s wrestled with for some time now:

According to a source who received the memo, Intel will no longer continue its plans to transfer its operations to Laguna (the one by NXP Semiconductors, formerly Philips Semiconductors, plant in Cabuyao as reported earlier). Intel has been taking bids and contracting 3rd party providers for the transfer but suddenly scrapped them altogether. The memo did not specifically indicate the reasons for the sudden reversal of decision.

Now there’s a moral to this story, and it is, that if we are to not only entice, but retain, foreign investments, you can’t muck around with “puwede na” slipshodness and that problems, once identified, ought to be resolved within a reasonable period of time, otherwise the window of opportunity might simply close, leaving ordinary employees in the lurch -and further retarding the competitiveness of the country (and other issues were raised concerning the waning enthusiasm of Intel: high taxes, high power rates, etc.).

In a letter to the editor today, Peter Wallace comes up with an answer to the ongoing debate about the 2007 economic figures touted by the government:

As to 2007 being a good year, we can’t fully agree. The reported growth of 7.2 percent was not because of a strongly growing economy but because of a numerical oddity. Import growth is subtracted in the equation for the gross domestic product (GDP). In 2007 imports fell by five percent, the double negative meant that this rate of fall was added to GDP — a double-negative becoming a plus. Had imports grown at their previous more normal rate of around five percent, GDP growth would have been about 4.8 percent, much more in line with anecdotal evidence.

One must ask: How could imports have fallen if the economy was growing strongly; intriguingly how could oil imports fall by some 6.6 percent? The only explanation we can think of is that smuggling must have been up.

But then the problem is that data is ever disputable. But Wallace’s letter, which ends with his opinion that the World Bank’s blacklisting of some domestic firms is a step in the right direction, brings me to another point related to my point concerning Intel’s shutting down its Philippine operations, and my blog entry, yesterday, on the government and its possible anxiety over the handling it will get at the hands of the new American administration.

Personally I think Amando Doronila is being alarmist (and if you want my view on the matter, there’s my commentary, New era of intervention ; the best overview, remains, to my mind, in Torn & Frayed’s blog). So f what the country can expect is more assistance for development, but no encouragement for secession, and also, increased scrutiny on human rights, then this means the Palace had better nip all this talk of ex-Gen. Palparan being put in charge of the anti-drug agency of the government! And more to the point, it had better start finding some big fish to fry as far as corruption is concerned.

Philippine Commentary links to a Dow Jones Story, World Bank Bans 7 Firms, Some China Government-Owned, In Philippines:

Following a major investigation spanning several years by the Integrity Vice Presidency, the World Bank found evidence of a “major cartel involving and international firms bidding on contracts,” it said in a release.

That led to four Chinese state-run firms being barred for the first time from doing business with the World Bank for a period of between five and eight years - the China Road and Bridge Corp., China State Construction Corp., China Wu Yi Co. Ltd. and China Geo-Engineering Corp.

A Philippine firm E.C. de Luna Construction Corp. and its owner, Eduardo C. de Luna, were each banned indefinitely. Two other Philippine companies, Cavite Ideal International Construction and Development Corp. and CM Pancho Construction Inc., were each barred for four years.

“This is one of our most important and far-reaching cases, and it highlights the effectiveness of the World Bank’s investigative and sanctions process,” said Leonard McCarthy, vice president of the World Bank Integrity department, in the statement.

The investigation began in 2003 after the World Bank team grew suspicious about collusion in the bidding process for a contract during the first phase of the Philippines National Roads Improvement and Management Program. The road improvement program was partially financed by a $150 million World Bank loan, though none of the sanctioned firms received any money.

In August 2008, the inquiry led the bank to ban a South Korean firm working on the roads project, Dongsung Construction Co. Ltd., for four years.

The government, from what I’ve been able to glean, saw the writing on the wall as far back as October last year. In broad strokes, the story goes like this.

In October, the government got wind of the Millenium Challenge Corporation’s attitudes cooling towards the government.

It seems some officials in the President’s official family decided that some sort of public to-do had to take place. The private sector was approached, in an effort to net, as the saying goes, a big fish or two.

The idea, as proposed by the members of the President’s official family to representatives of the private sector with whom they met, was to mount some sort of investigation and undertake prosecutions to prove that the government was serious about curbing corruption.

The private sector suggested that one way would be to focus on issues that were festering, such as the Diosdado Macapagal Highway issue or even electoral fraud in the 2004 presidential elections. But the officials balked at this.

OK, so why not look into the National Road Improvement Project and the findings of the World Bank, the private sector suggested, by way of a compromise. Apparently the World Bank findings were already being discussed not just in government circles by this point.

But when the private sector asked for a copy of the World Bank report, the officials balked, although it seems the government was in possession of the report in full, and not just an executive summary of its findings. Along the way, the Ombudsman seems to have received a copy of the report, but with the interesting proviso, on the part of the World Bank, that the report not be used by the Ombudsman for prosecution: if a prosecution was to be undertaken, the Ombudsman would have to do her own investigating (interesting, because it suggests the World Bank didn’t want to get dragged into domestic politics, or had little confidence in the report being used for anything more than window-dressing by the Ombudsman).

So the whole thing fell apart because the private sector failed to be convinced of the good faith of the officials that made the approach; I wouldn’t be surprised if ongoing efforts in Congress will simply be written off as  the government deciding it would be better to go through the motions of doing something regarding the World Bank report rather than opening up other investigations. To be sure, the World Bank report deserves a congressionaly inquiry.

The World Bank’s report probably had an impact on the American government’s Millenium Challenge Account Philippine Threshold Program and its decision to cut funding for the Philippines. At first, it seemed that essentially what the country had was a P.R. problem. See Millennium Challenge Corp. cuts Philippines aid:

The Millennium Challenge Corporation (MCC), an American government aid agency, has restricted aid flowing to the Philippines due to concerns about corruption. The MCC is setting aside a prior decision to promote the country from “Threshold” to “Compact” aid status, which would have secured significant funding for development projects. The decision appears largely based on the World Bank Institute’s aggregation of corruption perception surveys, which report a worsening public perception of corruption problems.

After she’d taken great pride in the supportiveness of the Millenium Challenge Corporation, the President obviously knew she’d have a lot of explaining to do once news of this reversal leaked out. But more than perception, it seems, the problem of the government was that the Millenium Corporation seems to have been affected by the World Bank’s findings -and they were factual. Which pulls a rug from the government’s beloved “where is your proof? Prove it in the proper forum!” mantra.

After all, it could undertake precisely what’s going on -its own investigation, within the controllable parameters of congressional inquiries.

Score Fy09 English Philippines

Still, the damage has been done. The charts above shows the inexorable slide, downwards, of the Philippines’ ratings concerning corruption. But if the Millenium Challenge Corporation hands you lemons, make lemonade.

If the government’s going to suffer a black eye -and a loss of funding and the accompanying erosion of its prestige- it could, at least, keep its China Card in play, as an antidote, fiscally, and politically, to its having lost the American Card. Which, one could argue, is what it’s doing.

On the principle that even if stories end up unfolding slowly but surely, so long as you keep the public distracted, it can’t detect the slow, inexorable, unfolding of events. So you can blame the closing of Intel’s plants on the global economic downturn (which is true, of course) while sweeping any domestic culpability for it, under the rug. You can thunder and shrill about the World Bank report while downplaying what you used to trumpet -the Millenium Challenge Corporation’s decision to put things, at the very least, on hold.

Today, a full page ad came out (see above) answering a question posed in this Plurk thread, about the shortage in some places, of LPG. The whole question -why isn’t there an adequate supply of Liquefied Petroleum Gas?- itself is the sort of thing that’s been bothering me for some time now, going back to the questions raised when the government had to make a pretty large adjustment to its GDP figures (the Financial Times, it seems, lodged an inquiry with the government over the 2% adjustment at the time, which exceeded the adjustments governments “normally” make to to their figures).

Think about it. Basically, you have to spend 100,000 Pesos (more or less the cost of a full-page newspaper ad), to tell the government that it lacks data, and to ask the government to mount an investigation into the operations of the market, because no one, rich or poor, can answer why consumers can’t find LPG. Raul Concepcion seems to think it’s worth spending hundreds of thousands of Pesos to make such an appeal. Obviously consumers have been grumbling about the shortage in LPG supplies for months; some (see the Plurk linked to above) have families that have had to use electric ranges; think of commercial establishments that require cooking gas and the family joins the business consumer in… impotence. So you need an industrialist to take it upon himself to rattle the cages of the powers-that-be.

The result of course, as Concepcion put it in his ad, is “public doubt and confusion” concerning what on earth is going on:

Since December and into the New Year, consumers particularly housewives have been complaining about the scarcity of LPG. While the major suppliers of LPG, particularly Petron and Shell, have acknowledged the increased consumption of LPG especially during the holiday season, they have nonetheless been assuring the public of adequate supply.

The LP Marketers Association, through its president Arnel Ty, has admitted that retailers have started to increase prices due to the “lack of supply.” DOE Secretary Angelo Reyes meantime has brushed aside reports of queuing of 30 to 50 delivery trucks in front of Petron and Liquigaz plants as “normal.”

In the ad, Concepcion then asked the Department of Trade and Industry, Department of Energy, and the Department of Justice to “immediately exercise their respective regulatory powers” by publicly disclosing the total capacities for LPG of the various suppliers Petron, Shell, Liquigaz, Total, Petronas, & Pryce Gas -including the value and volume of their inventories. (His secondary purpose is to point out that the oil companies should reduce their pump prices of gasoline by 5.50 Pesos and 4.50 Pesos for Diesel by January 23; my own question is perhaps there is collusion between the oil companies and the government to keep oil prices a bit high, so as to ensure profits for the oil companies and additional tax revenues for the state?).

But my point is that it may be reasonable to propose that government really lacks the information being asked of it by consumer advocates; that even if the data is there, it may not be collected in a timely manner; and that even if collected, may actually be beyond the competence of officialdom to use in a timely and effective manner, whether in terms of collections, regulation, or policy-making.

Now this is just a hunch, but a hunch getting stronger all the time. It just seems to me that reliable information is beyond the grasp of officialdom, and that even if you grant that most officials are well-meaning, their good intentions are useless because it’s all basically bumbling in the dark.

The bumbling and the darkness being a direct result of slipshod data gathering, antiquated record keeping, and sloppiness among officials.

Take the concern expressed by techies as a consequence of suggesting a proposed new National Telecommunications Memorandum Circular. Here’s the news item on the proposed circular: NTC issues draft circulars on content development, applications and ensuring access to limited band.
Bloggers Kiven and Mike Abundo among others, called attention to the “extremely broad” definition of online content in the draft. While the NTC seems pretty clear that its objective is more concerned with enabling content providers to increase their profits, concerned bloggers point out that in the hands of unscrupulous or simply idiotic officals, the draft could conceivably provide a license for extortion.
Over at Filipino Voices, Cocoy approaches the proposal from a broader perspective:

NO more added layer of REGULATION. Government should know the Importance of Private Enterprise in Economic and Social Development.

Seriously.

It just fraks the market up. The market is doing just fine without government poking its nose into something, it clearly has no understanding or interest in learning the culture and norms.

To sort things out, some bloggers decided to attend the public hearing. What ended up happening was that a scheduled public hearing was unceremoniously canceled by the NTC.

Colleague John Nery, over at the new home of his blog, Newsstand, yesterday observed that this passage from Barak Obama’s inaugural address:

To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist.

Might give the present dispensation the creeps:

The… passage… must have been aimed at the Putins and Mugabes, but I won’t be surprised if Gloria Macapagal-Arroyo will find herself perceived (by her critics and perhaps by others too) as being in the subset of the admonished.

Well, not just by her critics but perhaps by the Palace, too. For sure enough, the Palace began to spin-a-win.

This gem from the Executive Secretary:

“First of all, our President is ahead of Obama and probably, I would think that if there’s anything to be learned, it should be President Obama learning from President Arroyo. And wouldn’t we be proud to say that the Philippines continues to be an ‘island of calm’ because of the present crunches?” he said, when asked by media what lesson Arroyo could learn from Obama.

He said the President could even be a model or the “proper conduct under pressure.”

Followed by this one, from Lorelie Fajardo (colleague John Nery’s favorite official, incidentally!):

The President finds President Obama’s inaugural address profoundly moving and inspiring. His words deeply resonate with the President’s dream for the nation and the world — to celebrate and welcome hope, to allow peace and cooperation to reign and to triumph over the economic and diplomatic challenges that we face.

We are two nations blessed with two leaders bound by the same vision and ideology.

The real problems of the administration are twofold.

First, its inability to dispel the rumor that the President and her husband are in some sort of money-laundering trouble Stateside.

Second, that the new dispensation, when it finally gets around to noticing the Philippines, won’t be friendly towards the current regime, because of the corresponding general, creeping, disrepute into which the country is sinking, in terms of perceptions of official corruption.

The way that Indian company blew up because of the World Bank’s blacklisting has its domestic counterpart here with allegations of the World Bank’s findings concerning corruption by local contractors.

But more on this point, tomorrow.

In Why the Pangandaman Issue Refuses to Die or At Least Abate, the Warrior Lawyer points to the archetype of the Bullying Official as the reason behind the longevity of the Valley Golf Beating Story. There seems to have been a kind of bewilderment in official circles that the beatings became headline material. Warrior Lawyer explains why:

Furthermore, the Pangandamans lost the war for public sympathy from the onset, the circumstances of the event being what it is. Setting aside the question of who gave provocation, it’s clear from the versions of both sides that the De la Paz family were at the losing end of the encounter. There was the father, no spring chicken, and his 14-year old son and college-age daughter, against able-bodied young men, powerful and influential people at that, and their armed bodyguards. Who’s being bullied here ? Pinoys will always sympathize with the underdog.

And if the rumors are to be believed, the Pangandaman camp have little idea of how the blogosphere operates. They have allegedly tried to find out and “profile” the persons behind the blogs attacking them to find ways to counteract such efforts. If true, then they betray a total lack of understanding of the viral nature of the beast. It’s not the individual blogs that dictate the agenda (not that there is even one) of the blogosphere but the medium itself: the immediacy and rapid dissemination of news and opinion among community members numbering in the tens of thousands. Issues take on a life of their own in the internet, by reason of the sheer momentum generated by information speedily passing from one person to another through blogs, social networking sites and the like. The only way to deal with it is on its own terms, by battling it out in the democratic space provided by the internet.

Moreover, the blogosphere is not a universe unto itself. Bloggers are, like it or not, part of the world at large. They are not immune from political and societal forces and will not be restrained from, at the very least, commenting on the issues of the day. They simply won’t keep quiet and anyone who tries to make them shut up would be like King Canute commanding the tides of the sea to roll back.

In his blog (see The Golf Incident: The Trouble with Mirrors), baratillo@Cubao, a person inclined to be judicious at all times, was concerned over what he perceived to be yet another case of the mob mentality of the blogosphere:

The initial reaction and predictable one is to call for the resignation of the politicians involve in the case. Related to this a series of debate has ensued on Net both via the blogs and the comment threads. The huffing and puffing of beliefs and opinions.

These are all well and good on a certain level but it would be unfortunate if it becomes an issue of trial by posts and a discussion/debate that would pull out all known political and social beliefs and theories. The first one falling into a lynch mob mentality and the second one reminds one of the ineffective men of the floating island of Laputa (from Jonathan Swift’s Gulliver’s Travel). The citizens of Laputa intelligent men that they were had one tragic flaw - so indulged in the pursuit of knowledge and reasoning that they did not use their knowledge for any practical use: to much into the thought process and no input in the action.

After a reasonable time … debate without action is as effective as cupping a corpse.

So here we are…

I am not really a fan of trial by posts. It is a blind rage that can be destructive to those who receive and uses its power. Rather it would be better to use this “power” to ensure that the case is monitored and not left to die. Legal measures are a welcome resort in such case and for the politicians involved in the case - leave of absence or resignation would also be appropriate.

And again when the debate goes way for argument’s sake - well it becomes useless and at some point deadly - apathy is not the only thing that kills a cause.

This medium is truly like a mirror and reflects the actions of all those involved.

His concern was for the truth to emerge; I engaged him in discussions on this over several days, arguing that there were two issues at hand, a political one, and one of personal justice, and that the political issue had resolved itself when the Secretary hadn’t even deigned to offer to go on leave, move to resolve matters, or in any way relinquish (at least temporarily) his authority so as to foster an unimpeded investigation; that the other concerns were properly the province of the courts as far as assigning compensation for any damages, etc. The very fact a national official reacted by going to Baguio to be seen to be “malakas” with the President, not relinquishing his post or going on leave, would send a message (implicitly supported by the President’s silence on the matter and her New Year’s activities in the secretary’s bailiwick) he was untouchable.

Baratillo prefered a more phlegmatic approach, waiting for evidence to trickle in. In subsequent conversations, Baratillo brought up the movie Rashomon as an apt comparison to the whole golf mauling brouhaha:

The film depicts the rape of a woman and the apparent murder of her husband through the widely differing accounts of four witnesses, including the rapist and, through a medium (Fumiko Honma), the dead man. The stories are mutually contradictory, leaving the viewer to determine which, if any, is the truth. The story unfolds in flashback as the four characters—the bandit Tajōmaru (Toshirō Mifune), the murdered samurai (Masayuki Mori), his wife (Machiko Kyō), and the nameless woodcutter (Takashi Shimura)—recount the events of one afternoon in a grove. But it is also a flashback within a flashback, because the accounts of the witnesses are being retold by a woodcutter and a priest (Minoru Chiaki) to a ribald commoner (Kichijiro Ueda) as they wait out a rainstorm in a ruined gatehouse identified by a sign as Rashōmon.

On the other hand, The Marocharim Experiment compared it to a story by Guy de Maupassant and observed,

Yet for all the bitching and whining that is taking place between the Hauchecomes and the Malandains of this issue, we’re pretty much privy to it. Like the villagers who saw the fight between Hauchecome and Malandain as nothing more than a battle of differences between strings and pocketbooks, many still see this as a battle of whodunnit first at the golf course many of us can’t afford to go to.

While they squabble about who struck the other first, some of us fail to frame this issue along - not to separate it from - the many different injustices we all suffer. The fact that something occured means that it cannot be denied.

To be sure, that is what’s unfolded since the first account, by Bambee dela Paz, emerged. This is a public issue only insofar as a public official is involved, a minor was physically harmed, and that the official took it to the point of repeated physical confrontation because he had the ultimate check on any efforts to impose reason and sobriety -his bodyguards- and continued to brandish these things as the case became a publicly-discussed one.

In a comment on Journaling on the Net, columnist Ducky Paredes took the opposite tack from my entry on the subject, where I’d pointed out that this was a case of provincial warlordism colliding with metropolitan expectations of limits on official behavior:

I am glad that some on the blogsphere want to know what really happened and not what they want to believe. It’s tough for the Pangandamans; they’re in government and with the unpopular Gloria Arroyo plus they;re outsiders being from Mindanao and Muslims. Tough but all of that has to be factored in.

Accepted that the beating up was too much — an overkill; but as a Valley golfer, let me just say that the ones who breached etiquette were the De la Paz twosome who even drove the ball and almost hit Mayor Pangandaman.

The world has gone crazy? Yes. It has dumped on the Pangandamans mainly because of ther being in government, with Gloria and are outsiders.

This is not to say that I condone what was done to the De la Paz father and son; but, could it be that they had it coming?

This is basically the case for the Pangandaman’s defense, cleverly argued indeed (there is a certain truth, perhaps, to pointing out anyone associated with the President won’t get much by way of an assumption of any kind of innocence; but the “from Mindanao” and “Muslim” arguments are canards, because first of all, there are no “outsiders” on the golf course, their being golfers making them part of the more cosmopolitan golf-playing set; and the Muslim part being totally irrelevant because what is colliding is not religion but rather, wardlordism, is equally represented among Muslims and Christians).

The whole thing has been furiously argued -and in great detail- in all sorts of places though the forum that is quoted a lot happens to be a particular thread on Pinoygolfer.com. Here, two commenters, “rge,” and “jick” basically give the pros and cons for both sides, with “rge” laying the case for the Pangandamans and “jick” taking the skeptical side (see “rge’s” Fri Jan 02, 2009 4:39 pm post on page 13; then “jick’s” response, Fri Jan 02, 2009 9:15 pm on page 14; where he questions the alleged preview of the fact-finding committee’s finds as being awfully close to the Pangandaman side posted on page 5 of the forum). Add to the various eyewitness accounts, the Incident Report first put online in a scoop by At Midfield.

I’ve taken the liberty of reproducing the efforts of “jick” to put together the two main eyewitness accounts (Bambee dela Paz’s, in green, and a member of the Pangandaman flight, in red) with his observations and his reference to the Guards’ report (in blue):

So this is all very interesting in a CSI sort of way, but it’s interesting to note that the pertinent facts emerged early on and have not changed: an official and his group, beat up a citizen and a minor. The only thing that has changed is that after some time, the officials got out their version and went on a media counter-offensive; and that other details began to be revealed, such as, that the fight may have originally been picked by the citizen; and aside from that, there seems to be imputations of aggressive/unpleasant behavior concerning both dela Paz, Sr. and Pangandaman, Jr. In other words, as with most fights, it was between gorillas. But it was all taken a fight too far (since there were, apparently, two, as was known from the start).

The whole problem is if it had stayed at fight one, the Secretary, the Mayor, et al. would be in the clear and could argue they put a gorilla in his place; fight two showed they were gorillas, too -and with armed goons, to boot.

But I also believe that the window of opportunity, so to speak, for this to be a public issue, has already closed. The moment the dela Pazes took it to court, and the Pangandangans filed their counter-suits, it has become a battle over compensation which is for the courts to decide, and in which the public ought to have little interest -except the more general one, for all cases, that it be concluded by means of a speedy and fair trial. But as far as the political resolution of the political part of this issue: where public pressure ought to have been applied to pressure the Secretary to make manifest his willingness to be held accountable for the incident, and for the President to suspend the Mayor, the chance for that has passed. As it was expected to, of course.

I can’t quite put my finger on it, but I am not completely sold on the P50-M bribe allegations involving the so-called “Alabang Boys.” Perhaps it’s the way the PDEA has cast a rather large net; I cannot quite see Ric Blancaflor being in on the bribe. And a couple of DOJ prosecutors seem genuinely innocent. I don’t know; the plot, as they say, thickens. (Then it sickens.)

The Speaker has declared a ceasefire but that’s far from raising a white flag of surrender as Doronila thinks is the case. I had my misgivings about the rally, and the way it turned out, despite the bravura of all present, can only give the proponents of amendments before 2010 increased optimism. Before the rally took place, Mon Casiple had this to say:

The rally is not yet THE people power that would decisively settle the political crisis. Its importance is not yet in its number. Its significance is in its broad participation–ranging all the way from the Left to the anti-GMA groups in the Right of the political spectrum. GMA and her allies stand all alone, by their lonely selves, dancing in the twilight of power.

The rally throws the political gauntlet before the Arroyo administration. The line is drawn. Henceforth, all attempts to pursue the GMA charter change and imperil the holding of the 2010 elections will be met by a combined people’s opposition. Such is the stuff people power is made of.

Unfortunately, this situation also invites desperate countermoves. The people should be prepared for the possibility of violent reprisal by Malacañang as it confronts a wall of protests. The stakes are simply too high for GMA to back down gracefully without a compromise or a try at victory.

Picking up the gauntlet means setting the stage for some form of martial rule to disorganize the charter change opposition and terrorize the people. This means battening up to weather a coming storm.

Not picking up the gauntlet means powering down the charter change train and letting election scenario to develop peacefully.

Either way, the GMA administration loses.

Which may be so, and despite the lack of numbers, most groups were, indeed, represented and the message was sent that here was a dry run, and if the Palace wants more, the various opposition groups are prepared to put up a fight.

The question is whether the fight will be pursued to the bitter end; and in such a fight, not everyone in the ruling coalition has an incentive to fight to the bitter end.

Then again, sensing an opportunity for extracting concessions, there’s no reason to quit the fight while mercenary motives are still in play, as Mon Casiple broadly hints at in his follow-up post to the above:

This week counts as the last days of Congressional session before the holiday break. If Con-Ass is not passed now, it will have a more desperate timeline in the first quarter of 2009. It may require the iron hand then.

There is the suspicion that various accommodations by the GMA administration of Danding Cojuangco’s San Miguel point to a negotiated political agreement to use the Cojuangco influence in the AFP to augment its own. GSIS and other government shares in Meralco were given to the conglomerate. A favorable Sandigangbayan decision on the coco levy issue was then issued.

It may be that the GMA group is being taken for a ride on this but there is a need to be vigilant about military and police moves in the coming weeks. We are certainly entering a critical period in the political crisis.

Critical in the sense that everyone can thereafter relax and focus on the presidential campaign, or critical in that instead of limping along to 2010 in expectation of the President stepping down, she will, instead go for the constitutional jugular.

Meanwhile, she’s not the only one averse to permanently closing off options.

In fact, what the Speaker is preparing to do is to take the fight to the country-at-large, in the hope that provincial and municipal councils can arm the House with a mandate to pursue Charter Change. This helps explain his statement that the House will fight it out until March.

But then a report says the House isn’t inclined to immediately impose a ceasefire, and that there may be fireworks tomorrow in the House Committee on Constitutional Amendments, whose chairman, Rep. Victor Ortega, is supposed to be miffed over the way the Villafuerte-led Kampi campaign is being waged in such a way as to ignore his committee altogether, a galling prospect for a veteran legislator and who has some pretty strong ideas of his own about the process.

It seems to me the stubborness of Rep. Ortega has to be taken in the context of his feeling slighted by the Villafuerte effort. Committee chairman are zealous over the prerogatives of their committees and the need for any proposed legislation to go through the committee wringer prior to being reported to the floor for plenary debate. It would seem logical, too, that if Ortega has his own preference for a constitutional convention, and if that preference is in harmony with other party leaders, including the Speaker himself, then stubbornly insisting on the prerogatives of his committee makes sense from the perspective of every chairman’s desire to guard his turf, as well as from the general procedural points senior legislators take pretty seriously. Nor does this stubborn insistence close off other, perhaps more face-saving options. Including the option of a convention, yes, but prior to 2010 and composed of appointed commissioners as proposed by the President’s personal lawyer, Romulo Macalintal.

My column today, Like herding cats, tackles the ongoing debate over Charter Change from the perspective of a cultural difference between the two main factions of the ruling coalition: the take-no-prisoners approach of the President’s pet party, Kampi, and the more pragmatic wait-and-see attitudes of Lakas-CMD. By all accounts, solidarity within Lakas is stronger now that de Venecia is out of power, with Speaker Nograles running an apparently smoother and more consultative House leadership.

From that perspective, the point of division within the ruling coalition, is that Lakas can ultimately afford to bide its time, while Kampi is approaching the zero hour of its political life expectancy as the President’s pet party. And yet both sides of the ruling coalition have an incentive to cloak their own desire for a parliamentary government and even term extensions (more precisely, the lifting of term limits) beneath the President’s vast unpopularity. The whole thing boils down to calculating political risk, including the prospects of electoral blowback from pursuing a Charter Change gambit if it fails.

Now the question on everyone’s minds is, can the President afford to fail? On one hand, proving her critics wrong by stepping down in 2010 has to be tempered with avoiding the disgrace of arrest or years of being bogged down in legal cases -with the risk of arrest- after she leaves office. Since the President has always been inclined to game out various scenarios, all the better to take advantage of whatever possibilities open themselves up to her, it’s worth looking at what former Chief Justice Panganiban, as studied by Dean Jorge Bocobo, put forward as the President’s present menu of options:

ART PANGANIBAN (formerly Chief Justice of SCoRP, turned PDI Pundit) addresses Arroyo’s Options in case the chacha choo choo fails to leave the House. She could (1) declare martial law; (2) assume emergency rule; (3) run for Vice President in 2010 and assume the Presidency, again, like she did in 2001; or (4) play the new Kingmaker and control the next admin.

Caveats in reverse order:

Option 4 would be the conventional dismount and is probably the safest course. But it is fraught with risk because if her horse doesn’t win, and stripped of Presidential immunity, Gloria Arroyo could face years of prosecution.

Option 3 is interesting for its novelty and would be legal. She could run with Noli de Castro for example, win the Vice Presidency and have Noli resign for her to have six more years. (Yippee!)

Option 2, as Panganiban points out, would be highly unpopular and even face international censure.

Option 1 – the martial law option — is the most important and fascinating. Long before either the writ of habeas corpus is suspended or martial law imposed, Filipinos ought to familiarize themselves with the following provision of the Constitution. Although the 1987 charter is reputed to be full of anti martial law features, the reality is, under the present provision, the Lower House, by itself, in conspiracy with the President, COULD impose martial law indefinitely.

Option 4 could also be called the Mexican Model, which is how the ruling party in Mexico took care of its own for close to three generations. We also had a pretty well-developed tradition of leaving ex-presidents alone, however much they were demonized by those who eventually replaced them. Even Marcos was allowed, indeed, given no choice, to flee to avert a potential civil war and avoid the thorny problem of what to do with him.

When Joseph Ejercito Estrada was arrested, all the old rules were broken and every president thereafter, including Estrada’s successor, will have to live with the possibility of a post-presidential political vendetta being pursued. Another precedent established by the President -pardoning her predecessor, with conditions- may provide ultimate comfort but still leaves the possibility of detention for a politically-determined and convenient duration. When Edsa Tres took place, it gave us a glimpse of what might have happened had Marcos remained in the Philippines after Edsa, and how much worse it might have been, had that happened in 1986, and how much more violent it could have been in 2001 if led from the front and with more tactical cunning and resolution.

If you assume -as I assume- that there are two main camps within the President’s circle of advisors, the hard-liners, led by the President’s husband and her Secretary of the Interior, with their associated retired military and police generals, on one hand, and the pragmatists, composed of the other politicians in her orbit but who are also interested in cutting deals with a new administration, on the other, and if you were the President, who likes to explore all her options, the menu above sounds about right.

I think only lawyers will make distinctions about the emergency rule versus martial law options, rather, one will merge with the other: a crisis situation could create the conditions for emergency rule which would, in turn, lay down the basis for imposing martial law. The latest news on the Palace drum-beating a revival of the peace process in Mindanao, and the MILF making a ritual rejection of the prospects of a resumption of talks, helps expand the options for such scenarios to unfold, too. Solving, incidentally, along the way, the thorny question of the armed forces being more of a stickler for constitutionalism than the civilians who command them. A sudden deterioration in law and order, in Mindanao or elsewhere, opens up the military being trapped by their obligation to maintain law and order, and obey instructions from a government armed with legitimately-derived emergency powers. And it doesn’t require violence to accomplish: Boo Chanco (see below) describes Senator Angara’s budget sponsorship speech as saying, in so many words, “what may be described as the economic equivalent of a national emergency.”

Option three, to my mind, is remote: the President would be better off running for the House to represent her son’s district or for a seat as convention delegate for her region, enjoying parliamentary immunity until she could run for a seat in parliament.

But also, much depends on the composition of the Supreme Court, which already has a fairly reliable number -7- of Justices who vote along the administration’s lines in cases that count, with the prospects of appointing an almost equal number of dependable justices in 2009 (and if you recall the Kampi spokesman’s scenario, accomplishing Charter Change prior to 2010 might include putting in the Chief Justice as Acting President during the transitional period from the ratification of the amendments, to parliamentary elections in 2010, to the first few months of that new government, as parliament sorted out the election of the new Prime Minister: this would also, incidentally, purge the Court of a Chief Justice considered hostile to the President). Today’s column by Jarius Bondoc gives us a glimpse of why the Chief Justice is considered a thorn in officialdom’s side. More significant, though, is how heavily politicized the selection process for new Justices is becoming, with so much at stake, not only for the President but those putting forward particular candidates.

In such matters what’s actually going on is less important than what is perceived to be going on. Whether say, Chavit Singson, a force to reckon with inside the President’s official circle, is actually pushing forward the candidacy of one potential Justice while the President tries to pay old debts by going through the motions of supporting the candidacy of the Solicitor-General (if the President was hell-bent on appointing her, she would have been required to settle all her pending cases prior to entering the appointments process) is less important than legal circles avidly discussing the matter, putting pressure on members of the Judicial and Bar Council along the way, either to toe the administration line, or show independence. The postponement of the JBC’s decision on the matter can only raise eyebrows.

But rather than explore those darker scenarios, it’s easier for all concerned in the ruling coalition, to weigh its options concerning amending the Constitution ahead of the 2010 elections.

Going back to the House, the remainder of the week then, will be dedicated to tackling two pieces of legislation: the national budget and the proposed extension of the Comprehensive Agrarian Reform Law. The former will be required to fund Charter Change and provide the basis for a government stimulus package for what everyone expects to be a lean 2009. In his column, Boo Chanco speaks glowingly of Senator Edgardo Angara, who says:

Our problem is serious because “by next year, of the 5.1 million Filipinos working abroad, 590,000 are at risk of losing their jobs.” Senator Angara identified the groups most vulnerable among our OFWs:

• 129,000 in the US under temporary working visas, particularly those in hotels, casinos as well as agricultural workers;

• 48,000 seafarers in cruise ships;

• 268,000 factory workers in South Korea, Taiwan and Macau;

• 130,000 household service workers in Singapore, Macau and Hong Kong;

The senator said some 50,000 to 100,000 are losing their jobs now to include:

• 30,000 to 40,000 holders of temporary working visas in the US;

• 5,000 to 15,000 seafarers in cruise ships and 15,000 to 30,000 factory workers in South Korea and Taiwan.

Strangely enough, the Secretary of Labor recently said we are still okay because the crisis has not affected the oil rich Middle East. He should subscribe to the Financial Times or the Wall Street Journal or tune in to Bloomberg TV. Last week, it was reported that massive lay-offs have begun in Dubai. Nakheel, a major property developer that built the Dubai Palm, recently shed 15 percent of its workforce, a bit of news Sen. Angara shared.

How should we react? Sen. Angara suggests “a two-pronged strategy: first, we focus our country’s limited resources to job creation and investments in human capital.” Recall that Gov. Joey Salceda also prescribed a big investment in human capital.

Secondly, the senator stressed the importance of coordinated spending among agencies. It was suggested that we should target our spending on basic infrastructure, education and health, housing and the environment. Impeccable coordination where government agencies work together like a well oiled machine to maximize benefits from our limited resources isn’t normally associated with our government today. We also need a minimum of corruption, another impossibility. Crisis requires good governance!

Sen. Angara thinks the 2009 budget debate is the best platform to warn our citizens of impending trouble. He has actually studied the budget submitted by Malacanang which the puppet House of Representatives passed by rote after assuring that their pork is protected. He shifted spending priorities to send a clear message that we are girding for a coming storm. Even if OFW remittances will be at a record high this year, the senator wants us to prepare for slowed remittances and weak export markets next year.

Sen. Angara wants government to pump prime the economy by investing in infrastructure. “Infrastructure spending is the best way to create jobs and stimulate consumption, especially in the rural areas where we need it the most. Public Works put money in the pockets of our citizens. This will provide us with a safety net for our people.”

He gave some specifics. “For 2009, we allocated P177 billion for infrastructure projects. Of this amount, thirty percent (30 percent) or P54 billion will be for direct labor. Since every P100,000 creates one job, this P54 billion means that 540,000 Filipinos will be employed.

“The same approach applies to housing, whose total budget for 2009 is P5.3 billion. By using data provided by the shelter agencies, an additional 607,003 jobs will be created. These domestic employment opportunities will serve our people well in the coming year, when working abroad will start losing its luster and the outsourcing jobs we currently rely on will slowly shrink.”

Regarding the latter, blogger Jae Fever says the law’s in danger of being watered down:

After twenty years, the agrarian reform law is once more on the threshold of uncertainty. Without a new law, funding for land acquisition and distribution is set to expire. After December 31, 2008, the DAR will no longer be granted funds to continue the process of redistribution. After December 31, 2008, farmers who do not own the land they till will have no more hope of owning it. After December 31, 2008, yet undistributed landholdings will never go to the farmers and will forever be held by the original landowners.

Last week, on Wednesday, landed congressmen floated a new proposal, said to be their quid pro quo for passing the law: take away COMPULSORY ACQUISITION. My head spun upon hearing this. Without the compulsory nature of agrarian reform, agrarian reform is dead.

Agrarian reform is precisely the act of a State exercising its power to break up elite interests over huge landholdings, even amidst opposition of a self-interested few. Without compulsory acquisition, the Constitutional mandate of agrarian reform is rendered nugatory and the gains that can still be expected shall no longer be reaped.

It also bears emphasizing that most of the lands yet undistributed are located in agrarian reform hotspots, where landowner resistance has resulted not only in non-redistribution but also in oppression and outright violence. If they have succeeded in retaining their lands under a legal regime where compulsory acquisition is worded into the law, it is sheer foolishness to expect them to give up their lands when acquisition and distribution is at their option.

The thing is, does the reform constituency lobbying for land reform still have clout? Two Catholic bishops are going on a hunger strike to lobby for passage of the law.
There’s an intriguing item in Mindanews on the President saying Qatar could be a new ally in the peace process. Almost immediately, though, Ding Gegelonia blogged that the Palace was spurned not just by the MILF, but by Malaysia, too. But as I mentioned above, this may simply be playing into the Palace’s hands.

My column yesterday was Christmas tragedies. Read Tony Abaya’s column Consuelo’s Stimulus where he says the real economic hammer blow’s going to be on the electronics exports sector, and he calls for scrutiny of public spending. See also Lito Banayo’s column, Gloom. For the global situation, see 8 really, really scary predictions in Fortune.

And the administration, besides embarking on borrowing money at a time when people aren’t inclined to lend (for its stimulus package, and here the ongoing investigation of the Fertilizer Scam is extremely relevant), is frittering away its remaining political capital on Charter Change.

Let my put forward two concepts I’d like to return to, in the near future: “Honest Graft” vs. “Booty Capitalism”. The American Tammany Hall politician George Washington Plunkitt called it Honest Graft: to my mind, this was the model for Filipino politicians during the American era. What followed, the innovation under Ferdinand Marcos two generations later, was what has come to be called Booty Capitalism. A column by Clarence Henderson back in 2001 put it all in the context of Philippine business.

This topic comes to mind as the President’s poised to go off to Qatar, as part of her (and every president’s need to conduct economic diplomacy) but piqued my interest because there’s also news of the plans of San Miguel Corporation to aggressively expand in the power and energy sectors and telecoms, too (tie this in with Transco’s privatization, and the ability of power lines to carry data, as well as provisions existing in infrastructure such as the MRT to carry data through the power lines) and how this can all be aided or hindered depending on the attitude of the administration to such potential investments and expansions. It seems the two groups poised to establish a strong presence in the power industry are the Aboitz and San Miguel groups, squeezing out the Lopezes (and here, an interesting alliance is in the making between Roberto Ongpin and Eduardo Cojuangco’s interests).

The President’s husband, for his part, is in hot water in the United States, according to the scuttlebutt, fueling even greater speculation on the various firms in which they’re alleged to have pecuniary interests (an “A List” that includes everything it seems from Chevron to Ashmore. See Why was there no Mike in Manny’s fight? and Diarrhea in the Air and FG’s costly bout with diarrhea .

And then tie this in with Charter Change, where there was also talk that the President’s sons have been courting first term congressmen to hop onto the Charter Change bandwagon.

Meanwhile, as the President’s preparing to go overseas, in Makati City, the protest rally versus the House’s moves to propose amendments is set to take place today. While being portrayed as the showdown, or, as Doronila puts it, a test of the remaining viability of People Power, it may be more realistic, as Ellen Tordesillas points out, to view the Makati protest today as the “opening salvo” in what may have to be a sustained confrontation. The timeline for forcing through Constitutional amendments stretches into the first quarter of next year, at a minimum.

You cannot find a more eloquent explanation of why it matters to go to Makati City today, than what caffeinesparks has written in her blog.

The Secretary of the Interior (and a key player in the President’s political team, and who has been maneuvering the revival of Charter Change since 2006) for his part says the push is on, and it comes at the heels of the posturing of one of the nabobs in the President’s pet party, Kampi, going on a media offensive.

Rep. Villafuerte, also of the President’s pet party, has been cruisin’ for a bruisin’ with the leadership of Lakas-CMD in the House.

But Puno says there’s no real rift between the two main factions of the ruling coalition, but the differences do seem to be there, as the Sun Star reports:

Cebu Representative Antonio Cuenco, however, said it would be best for the House to sit down with senators to discuss convening a Constitutional Convention (Con-con) because the upper House has declared its openness to it.

“We’re banging our heads to the wall,” he told the committee on constitutional amendments. “If we have our own way, our own separate way, we’ll get nowhere.”

The committee, chaired by La Union Representative Victor Ortega, has already decided to suspend deliberations on Speaker Prospero Nograles’s House Resolution 737, which seeks to allow foreigners and foreign corporations and associations to own land.

“Next week, we’ll vote on what committee thinks and whether to have amendments or not,” Ortega said after the panel wrangled on which mode should be adopted in proposing the amendments.

Or then again Ortega could simply be tipping the ruling coalition’s strategy, and thus, Puno might just be telling the truth. Veteran newsman Ding Gagelonia in fact thinks the Palace is poised to push forward a Convention -but before 2010, and possibly appointive in composition, as trial ballooned by the President’s personal lawyer and possible Supreme Court nominee, Romulo Macalintal- and indeed, according to the Star (December 6), the President’s pet party has it all planned out:

Kampi spokesman Jose Solis told The STAR in an interview the other day that the installation of the chief justice would be done once they succeed in amending the Charter through a Constituent Assembly, which he said is just 14 votes short of the needed approval to convene Congress into a Constituent Assembly.

“If the people will approve the shift of the parliamentary system during the 2010 elections, the chief justice may act as the head of state because by that time the term of President Arroyo will already expire,” he said.

He said the Chief Justice may sit as the head of the head and may call for a general election for the new members of Parliament.

“Within three months the chief justice may call the election for the members of Parliament and once convened they can elect the Prime Minister,” Solis said.

He said however that the installation of the Chief Justice is only among the options they will tackle once they convene into a constituent assembly to amend the Constitution.

Solis said as of Friday they have already gathered 173 signatures but their political game plan may be derailed after Speaker Prospero Nograles announced his full support to Constitutional Convention as the mode to amend the Constitution.

Note: the above includes scenarios and a situation that most definitely goes beyond merely amending the existing Constitutional provisions on land ownership and foreign participation in businesses. Another factor to consider is the wrangling within the ruling coalition might also include jockeying for advantages for particular leaders. Rep. Villafuerte, for one, is widely seen to want the Speakership very badly, and that there is a corresponding move to offer the current Speaker, Nograles, a seat in the Supreme Court as a face saving way out of office.

For those interested in the legal niceties of the whole issue, the report in the Sun Star puts forward the constitutional interpretation of the President’s pet party:

Camarines Sur Representative Luis Villafuerte bared this recently, anchoring his arguments on his interpretation of the intent of Article 17, Section 1 of the Constitution, which provides that “any amendment to, or revision of, this Constitution may be proposed by Congress upon a vote of three-fourths of all its members.”

He believed that so long as the constitutional requirement of three-fourths vote is met, it is enough to start the process of proposing amendments because the Constitution does not mention the words “House” and “Senate” and merely states “Congress.”

“It is not the institutional representation that they make. It is as members of Congress, because in proposing amendments or revisions, the Senate and the House, as an institution, cannot act as members of Congress in that context,” Villafuerte, proponent of the resolution calling for Congress to convene into a Constituent Assembly (Con-ass) to propose changes in the Charter, said.

He also admitted that his interpretation would be enough to force the Supreme Court (SC) to finally rule on the issue of whether Congress should vote jointly or separately in proposing amendments.

According to him, the Constitution clearly delineates Congress’ legislative ordinary function from its power to amend or revise the Constitution and therefore, there is no need to seek the Senate’s concurrence if it does not want to participate.

Villafuerte, however, told Parañaque Representative Roilo Golez, who engaged him in a plenary debate Monday night that “it will require the participation of the Senate, if they are so willing to participate.”

“But what if they (senators) do not (agree to Con-ass)?” Golez asked to which Villafuerte replied, “We should not impel the concept of three-fourths of all the members of Congress.”

He added that when it comes to amending or revising the Constitution, there is no institutional participation. “It is the participation of congressmen and senators acting as members of Congress for the purpose of exercising not a legislative power as in the bicameral system but in exercising a constituent power for proposes of amending the Constitution.”

Villafuerte said the framers of the 1987 Constitution adopted a procedure, which “conforms to a unicameral system but adopted in a bicameral system.”

Golez, who is also the spokesman for the House minority, said by forcing his issue, Villafuerte was offering a “very creative interpretation of the Constitution.”

“That to me is quite shocking,” he said. “Because when we speak of constitutional change by Congress, we are talking of institutional intervention, not individual intervention.”

“This is very misleading,” Golez said to which Villafuerte replied, “The word whole is equivalent to the word all just to distinguish from voting separately and as a whole.”

Cebu Representative Antonio Cuenco, however, said it would be best for the House to sit down with senators to discuss convening a Constitutional Convention (Con-con) because the upper House has declared its openness to it.

Countering this is Dean Jorge Bocobo’s entry, Vivisecting Villafuerte and There Is Nothing For SCORP To Decide. And see SC must look to the Senate’s lead, by Abe Margallo.

Some links for reference, on the grisly Sucat shooting: Sucat Shoot-out: 17 Dead as Robbery gang and Cops battle in Metro Manila suburbs and Sucat Shootout update: Police arrest 7 gunmen as Investigation continues into deadly firefight in Parananque, both in Mike in Manila. Snapshots in On Izzy’s Mind.

Iloilo Views points to similar situations in the provinces. For the personal reactions of people, see Gossip Gehl and public_class_kc, and At Midfield.