Duterte selling out sovereignty for Chinese funding – IBON

Research group IBON said that the Duterte administration’s downplaying of the hit-and-run by a Chinese vessel of a Philippine fishing boat in the West Philippine Sea (WPS) shows how it gives more importance to Chinese funding over Philippine sovereignty.

On June 9, a Chinese vessel rammed and sank the Filipino fishing boat F/B Gem-Ver and left the 22 fishermen on board adrift at sea.

President Rodrigo Duterte’s first comment on the issue over a week after it happened, on June 17, was to dismiss it as a simple “maritime incident” being played up by “stupid politicians”.  

The president echoed the Chinese foreign ministry’s statement a few days earlier calling the boat sinking “an ordinary maritime traffic accident” and warning against “irresponsibly politicizing” the collision.

IBON explained that the Duterte administration’s position is most likely influenced by how it is courting billions in dollars in aid, debt and investments from China.

The government is reportedly seeking as much as US$14.3 billion in official development assistance (ODA) from China to finance 29 ‘Build, Build, Build’ infrastructure projects costing US$16.8 billion.

China ODA has already increased by 24,200% under the Duterte administration – from US$1.5 million in 2016 to US$364.9 million in 2018, said the group.

China ODA is seen as essential to fund flagship infrastructure projects.

Loan agreements with China have already become controversial for having terms disadvantageous for the Philippines and compromising its sovereignty.

The most expensive infrastructure project to be funded by China is the Philippine National Railway (PNR) South Long Haul Project worth US$3.3 billion.

China is also being targeted to fund the Mindanao Railway Project Phase 1 worth US$677 million.

IBON also noted surging foreign direct investments (FDI) from China.

China FDI increased from US$0.4 million in 2016 to US$163.4 million in 2018.

Moreover, the Duterte administration also managed to get pledges from Chinese companies of around US$12.1 billion during the second Belt and Road Forum for International Cooperation last April 2019.

Prime Minister Xi Jinping also pledged US$148 million in grants to help boost the Philippine economy during the forum.

The Duterte administration is not asserting the country’s sovereignty or upholding the rights of the Filipino fishermen for fear of jeopardizing the China aid and investments it is so eager for, said IBON.

It is desperate to stimulate the Philippine economy amidst its sluggish performance.

Growth of gross domestic product (GDP) fell to 5.6% in the first quarter of 2019 from 6.5% in the same period last year.  

IBON also warned that China has already been implicated in controversial deals gone bad where governments were pressured to give up strategic assets like ports.

China-funded projects around the world have also been hounded by allegations of hundreds of millions of dollars in corruption and overpricing.

IBON said that a truly independent foreign policy includes asserting the country’s sovereignty and upholding domestic economic development including the welfare of all Filipinos.

The Duterte administration should stop privileging China in Philippine territory just because it is promising so much financing, the group said. #

Prices still higher now than since start of Duterte admin

Research group IBON said that while June inflation has slowed, the prices of basic food items are still higher, especially when compared to prices at the start of the Duterte administration. The wages and incomes of many Filipinos are unable to keep up with the high prices.

The group said that food prices will continue to increase as long as government neglects Philippine agriculture and the country becomes further dependent on imports.

The Philippine Statistics Authority (PSA) reported that nationwide inflation slowed to 2.7% in June 2019 from 3.2% the previous month.

Inflation in the National Capital Region (NCR) eased to 3.0% from 3.4%, and inflation in areas outside of NCR fell to 2.6% from 3.1%, during the same period.

IBON executive director Sonny Africa said however that this lower inflation is not being felt by the public.

He said that food is still generally more expensive than in the same time last year, and especially compared to July 2016 at the start of the Duterte administration.

For instance, in Metro Manila, between the first week of July 2018 and the same period in July 2019, rice is slightly cheaper but fish, chicken and many vegetables are much more expensive, Africa said.

According to the PSA, the prevailing retail price of commercial well milled rice in the first week of July 2019 was Php44 per kilogram (/kg), which is only one peso cheaper than the Php45/kg in the first week of July 2018.

The cost of fish like bangus and tilapia meanwhile was much higher, increasing by Php10 and Php20, respectively.

Retail prices for whole chicken, carrots, and potatoes also rose by Php10, Php40, and Php20.

Africa said that NCR food prices are much more expensive now compared to prices during the first week of July 2016, at the start of the Duterte government.

Commercial well milled rice is higher by Php4.00/kg; bangus by Php20; tilapia by Php10; galunggong by Php20; whole chicken by Php20; ampalaya by Php20; carrots by Php30; habitchuelas by Php20; tomato by Php30; potato by Php10; and eggplant by Php20.

But the wages and incomes of ordinary Filipinos are not enough to cope with these higher prices, he said.

IBON estimates that the family living wage (FLW) needed to meet basic needs is PHP1,008 for a family of five and Php1,210 for a family of six in the NCR as of June 2019.

But the NCR nominal minimum wage of Php537 is not enough with wage gaps of Php471 and Php673, respectively.

Africa said that food prices will keep rising and be unnecessarily expensive as long as government continues to neglect the country’s agriculture sector.

He noted that the budget for agriculture continues to shrink, with the Department of Agriculture (DA) budget cut by Php3.4 billion in 2019 and of the National Irrigation Administration (NIA) by about Php5.6 billion.

The country’s increasing dependence on food imports because of policies like the Rice Tariffication Law will only worsen the country’s agriculture crisis, Africa said.

Rice liberalization will not necessarily ensure a cheap and stable supply of rice while harming the livelihoods and incomes of Filipino rice farmers.

Increased rice imports may have been behind the falling farmgate price of palay which significantly dropped from Php21.36/kg last year to Php17.91 this year.

Rather than rely on rice imports, domestic rice production should be made more efficient and productive to make this cheaper, said Africa.

Africa said that lowering food prices through more developed domestic agriculture is essential for lower inflation.

He also said that low inflation will be more meaningful for the public if they have higher incomes to begin with.

The government can give relief to Filipino families struggling with high food prices not just by continuing to provide affordable NFA rice but also by substantially increasing wages and salaries. #

Duterte administration being dishonest about economic ‘gains’

Research group IBON said that the Duterte administration is being dishonest in its recent pronouncements about high growth, reducing unemployment, and reducing poverty. The group said that the government is taking liberties with statistics as part of its propaganda campaign that President Duterte is keeping his promise of real change.

In its pre-State of the Nation Address (SONA) forum, the Department of Finance (DOF) hailed the Duterte administration for its achievements during its first three years in terms of “rapid economic expansion”, “the lowest [unemployment] in 40 years”, “alleviating poverty”, and Tax Reform for Acceleration and Inclusion (TRAIN) law “benefiting 99 percent of taxpayers”.

According to IBON executive director Sonny Africa however, growth has actually been slowing since the start of the Duterte administration. Philippine Statistics Authority (PSA) data show that gross domestic product (GDP) growth has been slowing in the 11 quarters since the start of the Duterte administration from 7.1% in the third quarter of 2016 to 5.6% in the first quarter of 2019. There was a momentary increase to 7.2% in the third quarter of 2017 but growth fell rapidly after this. IBON also pointed out that the growth was slowing even before the budget impasse and election ban on infrastructure spending.

Africa added that the economic managers are being deceitful in claiming that the 5.1% unemployment rate in April 2019 is the lowest unemployment in four decades. He pointed out that the DOF is well aware that the change in the official definition of unemployment in 2005 drastically reduced the reported unemployment rate and number of unemployed which makes the April 2019 figure incomparable with the 25 years of data before 2005.

On the contrary, IBON said, computing according to the original definition of unemployment for comparability would show that the real unemployment rate in 2018 is 10.1% and the real number of unemployed is 4.6 million. These are much worse than the already high 9.0% unemployment rate and 4 million unemployed in 2016, again computed according to the original definition. In contrast, officially released figures for 2018 were a grossly underreported 5.3% and 2.3 million, respectively.

The high unemployment is a direct result of how only an annual average of 81,000 new jobs have been created since the start of the Duterte administration, from 41 million employed in 2016 to 41.2 million in 2018. This is the worst job generation in the post-Marcos period.

Poverty statistics meanwhile show seemingly less poor Filipinos only because of government’s very low poverty threshold, said Africa. The government’s Php69.50 daily per capita poverty threshold and only Php48.60 subsistence or food threshold in the first semester of 2018 are absurdly low and not conceivably enough to meet decent minimum standards for food, shelter, transportation, health care, and education, stressed Africa. He said that this leads to a gross underestimation of the real number of poor Filipinos.

Finally, Africa clarified that it is very deceitful to claim that TRAIN benefited 99% of taxpayers. The Duterte administration wants to make it appear that 99% of Filipinos benefited from TRAIN but the truth is that only 5.5 million personal income taxpayers with tax cuts out of 23 million Filipino families gain from TRAIN. The poorest 17.2 million or eight out of 10 Filipino families will pay TRAIN’s higher consumption taxes but without any personal income tax gains to offset these. The government is trying to distract the public from how a disproportionate part of TRAIN revenues come from the poorest majority of Filipinos due to additional levies on consumption goods including petroleum products and sugar-sweetened beverages, said Africa.

IBON warned the public to be more discerning about the government claims and not to take these at face value. Yet the country can only start to take steps to real solutions when there is more candor and honesty, rather than self-serving propaganda, about the real problems the economy and the people face. #

I spent PHP100,000 on Grab in one year

By JOSE LORENZO LIM

One thing we can all agree on is that the country’s mass transportation is a nightmare. The MRT constantly breaks down. Buses are overcrowded. Taxis take longer routes for you to pay more. It’s a dismay. Thus, ride hailing apps such as Grab were marketed as an alternative to our dismal mass transportation system.

I was lucky enough that my grandmother supported my voluntary work at IBON by offering to provide me with a car instead of taking a jeepney to work. I decided that maintaining a car and fuel costs would be more expensive than just commuting. During my first weeks at IBON, I was taking four connecting jeepney rides just to get to work and another four to get back home. It was grueling. One exhausting day after work, I decided to just take Grab home regardless of the cost. This initial ride was followed by more rides.

Grab was convenient. I used the app when going to the office and coming back home every day. But this convenience came at a price. A huge price. My rides were anywhere between Php200-350. But when Grab’s absurd surge system hits Timog, it can go as high as Php650. Coupled with the rising cost of oil in October last year plus the fuel excise from TRAIN (Tax Reform for Acceleration and Inclusion Law), it was the perfect storm to reach a whopping Php98,246 by booking Grab rides every day. My grandmother decided to just give me an allowance for my rising Grab expenses.  But it ended up being more expensive than if she had bought me a car.

Let’s be clear, Grab will never be a solution to our disgusting mass transportation system. While it did provide me with an alternative to taking a bus, jeep or even the MRT, what Grab essentially did was profit from disgruntled commuters at the cost of adding more vehicles to our already crowded roads It further pushed the corporatization and monopoly of a public service.

Let’s not forget that mass transportation is a public service.

And it seems that the government, who should fix our transportation system, is not bent on fixing it.  Government is saying that Build, Build, Build would provide more roads and trains or even a subway. But if you just build infrastructure without planning how these would come together with existing modes of transportation, then it doesn’t make sense. A sustainable mass transportation system should be efficient, reliable, accessible, safe, and environmentally sound.

If government won’t fix the mass transportation system then all the funding goes to big-ticket, big-business infrastructure to build roads. These are not for public vehicles but to accommodate even more private vehicles, which studies say already occupy 70% of Metro Manila traffic.

Government should craft a comprehensive national mass transportation plan in accordance with economic development plans. Or else, the pathetic cycle of building more infrastructure favoring private motorists over a huge pedestrian population will just continue. ###

Bird Feed features the thoughts and views of our staff on socioeconomic and other issues. All staff are encouraged to share their own analysis.

JOSE LORENZO LIM: Researcher at IBON Foundation. His research topics include Build, Build, Build, the oil industry, and social services. Prior to IBON, he served as Editor-in-Chief of the UPLB Perspective for the academic year 2016-2017. When not in the office, Jose Lorenzo enjoys writing with his fountain pens and trying out new ink.

On Sin Tax: Raise direct taxes rather than consumer taxes –IBON

Research group IBON said that the passing of the Sin Tax Reform Bill made the country’s tax system more regressive by increasing consumer taxes that burden the poor while cutting income tax and corporate tax that make the rich even richer.

As part of the government’s tax reform agenda, Senate Bill No.2233 or the Sin Tax Reform Bill was recently passed that imposed Php45 excise increase per pack on tobacco products in 2020, followed by Php5 hikes until the excise reaches Php60 per pack in 2023, and an annual 5% increase thereafter.

IBON emphasized that the Sin Tax Reform Bill takes advantage of poor Filipinos’ consumption of tobacco products to generate revenues, instead of taxing wealthier Filipinos who can better afford higher taxes. 

While richer Filipinos consume more tobacco compared to poorer ones based on the latest Family Income and Expenditure Survey (FIES), the latter spend a greater percentage of their small incomes on tobacco, added IBON.

IBON recalled that Senate passed TRAIN Package 1 that imposed higher consumer taxes on petroleum products and tobacco while reducing personal income tax.

IBON said that with TRAIN, the richest 1% of Filipino families with incomes of Php1.5 million or more a year will have an average of Php100,000 to over Php300,000 additional take-home pay annually especially when income taxes are lowered further in 2023.

This is on top of how the rich will pay billions of pesos less in estate and donor taxes.

The 17.2 million poorest Filipino households do not benefit from lower personal income taxes, but all pay higher consumer taxes, explained IBON.

The Duterte government aims to use the Sin taxes collected from Filipinos to augment the Php62 billion funding gap needed for the Universal Health Care (UHC) Law.

But IBON said that the said law would only further fund the privatization of healthcare in the country.

UHC would divert government funds to create supplementary coverage by private health care providers such as private health insurance and Health Maintenance Organizations (HMOs) as well as provide network-based licensing, contracting, and accreditation of health facilities.

In the end, IBON said that consumer taxes such a petroleum, tobacco, and even alcohol excise are welcome only if there is a progressive tax system in place with high direct taxes and lower consumption taxes.

However, the Duterte administration’s tax reform agenda is doing the opposite by shifting the tax burden from the rich to the poor and ensuring private profits rather than public health. #

Sin taxes, UHC to fund privatization of health services–IBON

Research group IBON said that government must allot a higher budget for public health services rather than fund private health providers through the Universal Health Care (UHC) Act.

Also known as Republic Act (RA) 11223, the UHC Act ostensibly aims to provide all Filipinos with promotive, preventive, curative, rehabilitative, and palliative health services “without causing financial hardship”, and prioritizes Filipinos who cannot afford such services.

The UHC would need Php257 billion in its first year of implementation.

The sin tax reform law on the other hand is allegedly intended to augment the funding gap of around Php62 billion in the first year alone.

But IBON observed that the UHC would use government funds to create supplementary coverage by private health care providers such as private health insurance and Health Maintenance Organizations (HMOs) as well as provide network-based licensing, contracting, and accreditation of health facilities.

This further privatizes health services, the group said.

The UHC, IBON explained, stipulates that Filipinos would automatically be enrolled in PhilHealth or the National Health Insurance Program (NHIP) either as a direct contributor who would pay premiums or as an indirect contributor.

Moreover, the NHIP would have an increase in membership rate by 0.5% annually to fund the UHC.

The group observed that this is not as socialized as it appears to be, as high-income individuals would contribute the same percentage of their salary as low-income earners.

Also, IBON noted, to ensure that basic accommodation services are met, UHC states that government hospitals would operate not less than 90% of their bed capacity as basic accommodation, not less than 70% for specialty hospitals, and not less than 10% for private hospitals.

However, IBON observed that hospital beds in the country are not enough to begin with.

The World Health Organization (WHO) recommends 20 beds per 10,000 population.

The Philippines has never reached the recommended ratio, the group said, and this indicator even worsened from 14.4 beds per 10,000 population in 1990 to only 9.9 beds per population in 2014.

The number of government hospitals even fell from 732 in 2011 to 423 in 2015.

Moreover, said IBON, the UHC assures that a National Health Human Resource Master Plan would be formulated to ensure the provision of health programs and services through a guaranteed permanent employment and competitive salary of all health professionals and health care workers.

Yet for every 10,000 population the country had only 0.3 government physician and 0.6 public health nurse in 2017.

Despite the scarcity of government health workers, data from the Philippine Overseas Employment Administration (POEA) show that the country has been exporting nurses for decades, which is worsening the brain drain of the health sector, observed IBON.

The Philippines deployed 19,551 nurses in 2016 or 53 nurses per day.

IBON emphasized that the UHC is the continuation of the privatization and commercialization of health services of previous administrations, from the Health Sector Reform Agenda of the Estrada administration, Fourmula One for Health of the Arroyo administration, and Aquino’s own UHC agenda.

These programs advance less government and more private role in healthcare, making provision of health services less direct and more insurance-driven thus prioritizing private profits over public health, said IBON

2019 midterm elections results: Harsher policies ahead

Administration-backed bets dominated the 2019 midterm elections especially in the Senate. The Duterte administration will certainly fast track its priority neoliberal policies as soon as the 18th Congress opens. It already used its super-majority in the 17th Congress to pass socioeconomic measures aggravating the country’s jobs crisis, poverty, and underdevelopment. More and harsher ones loom with many elected officials unlikely to favor any policy reversals from neoliberalism.

Questionable results

The electoral success of administration-backed candidates and party-list groups was controversial. The 2019 midterm elections were marred by massive vote-buying, widespread breakdown of voting machines, and suspicious delays in the transmission of results. The Duterte administration also visibly used public resources not just to support its preferred candidates but also to sabotage the campaigns of its opposition. Progressive candidates, party-list groups, and their supporters were subjected to particularly virulent attack.

Duterte-endorsed Hugpong ng Pagbabago (Faction for Change) candidates took nine of 12 senatorial slots: Cynthia Villar, richest senator and wife of the country’s richest oligarch; Taguig representative Pia Cayetano; reelectionist senator Sonny Angara, son of the late senator Ed Angara; reelectionist and former senate president Koko Pimentel, son of former senator Aquilino Pimentel; Special Assistant to the President Christopher “Bong” Go; former chief of police Ronald “Bato” dela Rosa; Imee Marcos, eldest daughter of ousted dictator Ferdinand Marcos; jailed plunderer former senator Ramon “Bong” Revilla; and former Metro Manila Development Authority (MMDA) chief and presidential political adviser Francis Tolentino.

Many winning party-list groups are either linked with or outrightly backed by the administration: the Sara Duterte-backed Anti-Crime and Terrorism Community Involvement and Support (ACT-CIS) party-list; Duterte ally Gloria Arroyo-backed AKO Bicol Political Party (AKB); richest multi-billionaire congressman Michael Romero’s One Patriotic Coalition of Marginalized Nationals (1 PACMAN); Ilocos Norte warlord Rudy Farinas’ Probinsyano Ako; and Duterte-endorsed Marino, whose nominees are Davao-based businessmen. Election watchdog Kontra Daya described these groups as ”dubious and making a mockery of the party-list system”.

Meanwhile, the Makabayan bloc of progressive party-list groups defied systematic state-sponsored attacks and vilification to take six seats in the 18th Congress, only one less than it got in the last elections. Bayan Muna (BM) obtained over 1.1 million votes to get three seats for the first time since 2007. Gabriela Women’s Party (GWP), ACT Teachers Party, and Kabataan Party-list all won one seat each. The last member of the bloc, Anakpawis, whose farmer- and worker-dominated machinery suffered violent attacks and killings however failed to retain its seat in the House of Representatives (HOR).

The systematic state-sponsored attacks on progressive candidates and groups to prevent them from being elected into government exposes the flawed democracy of Philippine elections. Military, police and local government officials vilified Leftist candidates, sabotaged their campaigns and political alliances, and attacked their party-list machinery. This is another manifestation of government’s intolerance of activists advocating for genuine change and raising public awareness on issues and proposing genuine solutions.

Looming sell-out and repression

The overwhelming number of winning candidates are from the same political parties, political families and elite interests behind the system of anti-people and anti-development laws in the country. They are likely to reprise or keep on with more of the same to the further detriment of the economy.

Among the exclusionary measures passed by the 17th Congress under the Duterte administration is the Tax Reform for Acceleration and Inclusion (TRAIN) law, which lowered personal income, estate, and donor taxes on the rich while burdening the poorest majority with higher consumption taxes. Another measure is the Rice Tariffication Law which liberalized rice trade, making the country over-reliant on a narrow global market for its staple food, amid still merely token production support for millions of rice farmers. There is also the extension of Martial Law in Mindanao, despite the Commission on Human Rights (CHR) already noting rampant human rights violations in the region.

Senate president Vicente Sotto III said that the Senate will take up amendments to the Public Services Act (PSA) and the Human Security Act (HSA) in the closing days of the 17th Congress until June. The amendments to the PSA open critical public utilities such as power, telecommunications, and transportation to excessive foreign ownership and control. This compromises national security and civil defense, on top of making vital public services expensive and inaccessible especially for lower income families.

Amendments to the HSA meanwhile threaten to further restrict civil liberties and human rights. As it is, the Duterte administration is already coming down hard on supposed drug personalities and alleged ‘terrorists’ and supporters in gross disregard of due process and the law. Critics fear that HSA amendments will only give the government freer hand to crack down on the political opposition and other perceived threats to its rule.

The electoral results will also likely embolden the Duterte administration to push for Charter change (Cha-cha) serving its narrow political agenda. Amendments to the 1987 Philippine Constitution focusing on federalism and full economic liberalization remains priority legislation for the Duterte government.

From the time of Fidel Ramos to the current administration, various efforts for Cha-cha were consistent in seeking to lift restrictions on foreign exploitation of natural resources and on foreign ownership of land, public utilities, education institutions, and mass media and advertising . The rationale is that attracting foreign investments will supposedly be the key for economic development.

The same rationale is behind other bills considered important by Malacañang pending in Senate committees, such as the National Land Use Plan, supposed contractualization ban, and the Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO). Aside from pushing PSA amendments, the National Economic and Development Authority (NEDA) reportedly also plans to recommend the following to the Legislative-Executive Development Advisory Council (LEDAC): sugar industry liberalization, creating a Department of Water, and exempting government’s line-itemized projects from the election ban.

All these seek to make it easier to do business and profit from public utilities, land and natural resources, and building infrastructure. The TRABAHO bill is also a misnomer because its real focus on lowering corporate taxes and rationalizing incentives may, if anything, actually even squeeze employment and workers’ salaries. Even the supposed law ending contractualization may end up being a smoke-screen that creates the conditions for legitimizing contractual arrangements rather than ending this.

Instead of bringing development, Cha-cha and the rest of the Duterte administration’s priority bills are likely to worsen the effects of the business-biased, neoliberal policies of the past decades. The economy today is characterized by shrinking agriculture and Filipino manufacturing, dismal jobs generation, and chronic poverty. This cannot be cured by further opening up to foreign capital and without the state more actively intervening in the economy for strategic industrial development, redistributing income and wealth, and providing needed social services.

Keeping watch

The executive, legislative, and judicial branches of government are overpopulated by administration allies or otherwise intimidated into passivity. The manufactured results of the midterm polls strengthens the hand of the Duterte administration and its elite supporters to implement self-serving economic and political measures at the expense of the Filipino public.

More than ever, the country’s patrimony and sovereignty and the people’s rights and welfare are at stake.

Also more than ever, the steadfast resistance of organized basic sectors is critical. The decades-strong social movement is the most reliable bulwark against the distortion of the economy to serve narrow elite interests. The progressives in Congress and their allies in government, down to the local level, can help push an alternative economic agenda. Domestic agriculture and Filipino industry can be developed, the environment protected, people’s welfare upheld, and economic independence attained. – With report from Casey Salamanca

Slower economy affirms undue hype over credit rating upgrade

Slower gross domestic product (GDP) growth during the first quarter of 2019 belies any claim of a healthy Philippine economy.

Research group IBON stressed that the Duterte administration’s enthusiasm over the recent credit rating upgrade that the country got is unwarranted.

Instead of hailing business-biased programs, government should look to more sustainable undertakings in order to push genuinely inclusive economic growth.

The Philippine Statistics Authority (PSA) reported that Philippine GDP grew at its slowest in 16 quarters at 5.6% in the first quarter of 2019 since the 2015 first quarter GDP growth rate of 5.1%.

This is slower than the 2018 first quarter GDP growth of 6.5 percent.

Trade and repair of motor vehicles, motorcycles, personal and household goods and financial intermediation were the drivers of the first quarter growth with faster rates, but the rest of the economic sectors slowed down.

Agriculture had stagnant growth in the last three years, while manufacturing and real estate registered the slowest first quarter growth in the past decade.

News of the economy’s slower growth came at the heels of a credit rating upgrade of BBB+ from Standard & Poor’s, which the Duterte administration attributes to its economic reforms.

The administration’s economic team is also hopeful that with the credit rating upgrade the country could encourage and attract more foreign investments.

IBON however said that the slowdown proves the Duterte administration’s economic centerpiece to be unsustainable, all the more rendering the credit rating upgrade to be meaningless.

The unsustainability of the infrastructure program, Build Build Build, IBON pointed out, was underscored by the slowdown of the construction and real estate sectors, which the National Economic and Development Authority (NEDA) attributed to the delayed enactment of the 2019 national budget.

Construction slowed significantly to 3.9% in the first quarter of 2019 from 10.2% in the same period last year.

A closer look reveals that public construction nosedived from 22.6% to -8.6% during the same period.

Private construction, meanwhile, was slightly faster from 8.1% to 8.6% within the same period, however registering a substantial slowdown from 19.3% in the fourth quarter of 2018.

Real estate, renting and business activities continued its slowdown from 8.7% in the first quarter 2016 to 4.1% in the first quarters of 2019.

IBON added that the budget delay, which reportedly stifled government spending as agencies were compelled to operate on a reenacted 2018 budget, even puts government’s determination for rapid growth into question.

Any government that is solid on its development vehicle, in this case, an ambitious infrastructure program, would not waste time to promptly allocate the needed budget for it, said the group.

IBON said that instead of focusing on the infrastructure program to boost GDP growth, loans, investments, and even employment, government should exert greater efforts towards sustainable sources of inclusive growth.

The group noted that contrarily, the country’s production sectors are stagnant or on a continuous slowdown.

IBON noted that growth in agriculture, fishery, and forestry fell to 0.8% in the first quarter of 2019 from an already negligible 1.1% in the first quarter of 2018.

Manufacturing slackened further to 4.6% from 7.3% in the same period.

Agriculture registered 1.7 million jobs lost from January 2018 to January 2019, the largest contraction of agriculture jobs across all January rounds post-Marcos administration.

Manufacturing created only 110,000 jobs in the same period, only a fourth of the seasonal jobs created in construction.

IBON reminded that government’s bid for the pro-business Build Build Build and for foreign investments will not bring long-term benefits to the country unless accompanied by a solid agriculture and industry centered development plan.

Without boosting the country’s production base, sustainable and inclusive economic growth will remain elusive, said the group. #

Group challenges Senate: Stop Charter change

Research group IBON is challenging the succeeding Senate to prove its independence by rejecting the proposal to amend the 1987 Philippine Constitution or Charter change (Cha-cha). Lawmakers should keep in mind the dangers that Cha-cha poses on Philippine economic sovereignty, said the group, and not be swayed into passing other laws that fulfill the consistent goal of Cha-cha to open the economy to full foreign participation.

In December last year, the Lower House transmitted its approved, consolidated version of proposed constitutional amendments, Resolution of Both Houses (RBH) 15, to the Philippine Senate. Aside from establishing a federal state and removing term limits, Cha-cha would implement neoliberal amendments to the Philippine constitution.

IBON said that while RBH 15 expires on June 30 this year, the Duterte government has sustained its espousal of Cha-cha by organizing an Inter-Agency Task Force on Federalism and Constitutional Reforms and can easily restart or expedite deliberations under an administration-dominated 18th Congress.

Partial unofficial tallies show a majority win for candidates backed by the Duterte administration, IBON noted. An administration win can bring standing Upper House support for Cha-cha to 11 comprised of incoming senators Bong Go, Ronald dela Rosa, Pia Cayetano, Imee Marcos, Francis Tolentino, Sonny Angara, Aquilino Pimentel III, Bong Revilla, plus incumbent senators Vicente Sotto III, Juan Miguel Zubiri, and Manny Pacquiao.

IBON stressed that Cha-cha would strike out the nationalist provisions of the constitution and liberalize the economy to foreign investors. Moreover, said the group, Cha-cha will limit government’s role in protecting the Philippine economy and allow foreign ownership of natural resources, educational institutions, mass media and advertising, public utilities, and strategic enterprises.

The proposed amendments also remove pertinent provisions affecting Philippine employment opportunities, labor rights, and access to basic social services.

Cha-cha would remove provisions on using the preferential use of Filipino labor and limiting professions to Filipinos, noted IBON. This will worsen the country’s jobs crisis. For instance, more Filipinos go abroad for work than new jobs are created locally. In the first semester of 2018, the average number of Filipinos who went abroad for work daily was 5,757, while only 2,263 new jobs were created on average per day during the same period, said IBON.

The group added that important stipulations on labor rights such as security of tenure, humane conditions of work, and a living wage, are deleted in the proposed Cha-cha. Already, IBON observed, 2018 data shows that 8.5 million workers of private companies and 985,000 workers in government agencies are still non-regular workers. Meanwhile, the Family Living Wage (FLW) as of March 2019 is at Php1,004 for a family of five compared to which the National Capital Region’s (NCR) minimum wage of Php537 falls short.

The proposed Cha-cha also narrows government’s role in providing basic social services such as health development and affordable housing by adhering to the neoliberal policy of privatization, IBON said.

The group further warned that proposals to open public utilities to full foreign ownership such as proposed amendments to the Public Services Act (PSA), and to increase areas that are open to foreign investments such as through revisions to the foreign investments negative list (FINL), are in the works and ground breaking the eventual neoliberalization of the highest law of the land. IBON said that legislative amendments such as these are being prioritized by government and will serve the same purpose of opening the economy for big business and foreign profit-seekers. Nationalists and people’s rights defenders among the country’s lawmakers, if there are any left standing, should be vigilant against these moves.

IBON pointed out that the midterm elections are fast concluding with incredible results that will be favorable to the Duterte administration’s neoliberal legislative agenda. The Filipino people have reason to doubt that the passage of Cha-cha and other laws surrendering national patrimony will not be as ‘magical’ as the election results, IBON added. This will be so unless nationalists and people’s rights advocates shall continue to challenge the Philippine legislature.#

WANTED: An Independent Senate

By Jose Lorenzo Lim

Midterm elections have always been crucial for any incumbent, as results will either affirm or reject the programs and policies so far of the ruling party. The 2019 midterm elections, however, appears to be different, as it happens at the heels of the Duterte administration’s implementation of harshest neoliberal economic policies and undermining democracy. The Duterte presidency has seemingly consolidated the Executive, Lower House and even the Judiciary under its influence, and the Senate could be the last stronghold of democratic processes.

After weeks of campaigning, the 2019 midterm elections is near. Candidates vying for senatorial posts have traveled around the country seeking to convince Filipinos to vote for them. It remains to be seen whether or not we will have a truly independent senate after the May 2019 elections.

Quick voters scan

Looking at data from the Commission on Elections (COMELEC) shows that there are 61,843,750 voters in the Philippines with an additional 1,822,173 registered overseas voters for the 2019 midterm elections.

A breakdown of the voters shows that Region IV-A has the highest number of voters with 14%, followed by Region III with 11%, and the National Capital Region (NCR) with 11.4 percent. The Cordillera Administrative Region (CAR) has the lowest number of voters with only 1.6% share of the total number of voters. The poorest regions also have a low number of voters. Both Region IX and the Autonomous Region in Muslim Mindanao (ARMM) only have 3.5% of the total number of voters.

For overseas voters, the Middle East and African regions have the highest number of voters with 48.7%, while the European region has the lowest share of voters with only 10.2 percent. 

While the huge number of voters does not automatically translate into voter turnout, in 2016 the country had an 84% voter turnout compared to 2013 with 77.3% and 2010 with 74.9 percent. Unsurprisingly, a high voter turnout can also be an indicator of dubious activities like flying voters.

Finding the right candidate

Instead of dancing around and telling rehearsed jokes repeatedly, what does IBON think candidates should stand for to deserve the Filipinos’ vote in the upcoming elections?

First, candidates should adhere to the advancement of socioeconomic strategies. Filipino industries should be protected and supported instead of allowing foreign companies to dominate the Philippine economy. An example is protecting and promoting the agriculture sector through production and price supports instead of flooding the market with imported agricultural goods, as is the rationale behind the Rice Tariffication Law, to lower inflation.

Candidates interested in genuinely effecting long-term reforms for the country’s production sectors should support genuine agrarian reform. The failure of the Comprehensive Agrarian Reform Program (CARP) to redistribute land to the tillers has only intensified landgrabbing and land use conversions for land market speculation. Department of Agrarian Reform (DAR) records show that as of January 2019, there were still 549,920 hectares that need to be acquired and distributed. From 1988 to 2016, meanwhile, 98,939 hectares of land were approved for conversion while 120,381 hectares were approved for exemption from land reform coverage–but this is a conservative count as the real extent of land conversion may be underreported. After CARP, majority of so-called agrarian reform beneficiaries still do not own the land awarded to them or are in the process of being dispossessed because they are failing to amortize.

Third, candidates should be upholding people’s rights and welfare. Candidates should be firm in ending contractualization. It is still very much in place: Employment data shows that in 2018, 8.5 million workers of private companies and 985,000 workers in government agencies are still non-regular workers.

Additionally, legislating a national minimum wage of Php750 should also be a major agenda. Raising the average daily basic pay (ADBP) of Php401 nationwide to Php750 will in turn add Php7,649 to employees’ monthly income and Php99,432 to their annual income (including 13thmonth pay). This will cost the 35,835 establishments nationwide just Php465 billion or only 21.5% out of their Php2.16 trillion in profits.

Moreover, Republic Act (RA) 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law should be repealed instead of taking out taxes especially from petroleum products which are socially sensitive. TRAIN means less money in the pockets of 8 out of 10 Filipinos as only 5.5 million Filipino families benefit from lower personal income taxes (PIT) while the remaining 17.2 million poorest households do not benefit from PIT but all pay higher consumer taxes.

Candidates should also ensure that basic social services will be accessible to every Filipino. That is why there is a need to build more public schools and public hospitals aside from allotting higher budgets to education and health. But 2019 budget for the Department of Health (DOH) for instance was cut by 8.13% compared to last year.

Lastly, candidates should promote environmental sustainability. For example, a candidate should be firm to stop destructive large-scale mining, as this causes irreparable damage not only to the country’s natural resources but to many indigenous communities. Another part of this is encouraging rational consumption. Our resources are finite – what we produce and consume must only be within our needs. Candidates should also promote an environment-friendly agriculture and industry.

The public has heard the candidates’ stances on various pertinent issues such as the TRAIN Law, Rice Tarrification Law, contractualization, and jobless growth. Now the candidates should bear in mind that whatever promises they made during the campaign period would be remembered by the people, who will hold them accountable when they take their posts this June 2019.

The last stand

The new senate should carry out the task of defending the current constitution against the Duterte administration’s push for federalism, neoliberalism, and self-serving political goals. The most consistent is the intent to fully liberalize the Philippine economy for foreign investors.

Relatedly, pending proposed amendments to the Human Security Act (HSA) aim to prevent critics, thereby putting basic human rights and civil liberties in peril. The HSA could expedite terrorist tagging and linking and subsequent surveillance, arrests, and restricting of legitimate people’s movements. The new senate should stand against this creeping authoritarianism.

The Philippine Senate could be the last democratic institution for the government’s checks and balances, independent of and not beholden to the power ambitions of the presidency and expected to side with the people and defend whatever remains of Philippine democracy, people’s rights and welfare, and the country’s sovereignty.

With all these considered, the 2019 midterm elections could be one of the Filipinos’ last stands for freedom and democracy. Depending on how their favorite candidates have explained these to them, they can now vote wisely. #