Filipino rice farmers need support, not liberalization

by IBON Media & Communications

In a statement, National Economic and Development Authority (NEDA) acting secretary Karl Kendrick Chua said: “The Philippines generally does not have a natural comparative advantage in rice production compared with neighbors like Thailand, Vietnam and Myanmar which all have large flat plains, fewer or no typhoons, less history of land inequality, and access to the Mekong River system, which serves as a great source of natural irrigation, as well as lower population growth rates.”

On that basis, NEDA argues that rice liberalization is the logical thing to do and that the Rice Liberalization Law (RLL, or Republic Act 11203) is already benefiting the country. The problem with this argument is that it treats food security like a game that you lose just because you do not have the right starting conditions. That’s a free market-based argument that only has a semblance of sense in economics textbooks.

In the real world, and as proven by the experience of literally every successful developed economy, comparative advantage can and should be modified with government intervention. Chua omits how government neglect and policies like the Rice Liberalization Law (RLL) are what undermine Philippine rice production and domestic agriculture. The Philippines can improve productivity, increase production, and provide enough rice for Filipinos with sufficient government support to rice farmers and the rice sector. The government’s defeatist attitude and blind surrender to market forces is the biggest reason why Philippine rice production and domestic agriculture as a whole remains so backward.

The RLL is captive to that narrow-minded thinking and just makes things worse.

Misplaced praise

NEDA hails the Rice Competitive Enhancement Fund (RCEF), a component of the RLL, which supposedly guarantees Php60 billion pesos from rice importation revenues for six years. RCEF will supposedly help rice farmers to modernize and innovate. This seems to be helping rice farmers.

Instead, RLL is killing the rice industry. Over a year into RLL and because of unrestrained rice importation, palay prices have fallen to as low as Php8-10 per kilo. This is a huge 50% drop from the Php20 per kilo price of palay before the law was passed. Rice farmers have cumulatively lost some Php84.8 billion in earnings in the first full year of implementation or around Php35,328 per rice farmer. Earnings are not enough to pay for the cost of production.

As a result, farmers from Philippine rice granaries such as Isabela, Nueva Ecija, Laguna and Mindanao are already thinking to stop planting rice. At least 3,000 rice mills have already stopped operating.

Farmers were facing worse prospects for selling palay even before the RLL. The government earlier clipped the powers of the National Food Authority (NFA) to influence and support the price of rice in the market by restricting the amount of palay and rice it buys locally .

RCEF claims to enhance farmers’ competitiveness through mechanization, seeds distribution and trainings. However, its coverage is actually limited and can even aggravates farmers’ indebtedness.

RCEF reportedly aims to cover 1.9 million rice farmers listed in the Registry System for Basic Sectors in Agriculture (RSBSA) and Department of Agriculture (DA)-accredited rice cooperatives and associations. This still leaves out at least half a million rice farmers. The Integrated Rural Development Foundation (IRDF) has for instance already estimated that the annual Php10 billion RCEF allocation will not be enough to offset the losses that RLL causes rice farmers, which it computes to be between Php60-Php110 billion.

Loans may also just worsen indebtedness if productivity or earnings do not increase much and if farmers’ expenses are still too high. Loans are too easily eaten up by production costs such as for expensive commercial seeds, fertilizers, pesticides and tools. The government does not make any effort to make these more affordable. Landless farmers may just end up using loans to pay their land rent to landlords.

These are why so many government loan programs have just kept so many farmers in a cycle of debt. The Agricultural Competitiveness Enhancement Fund (ACEF) and the Sugar Industry Development Act (SIDA) also provide rural credit. RCEF and the older ACEF and SIDA reportedly make Php2.1 billion in funds available for easy credit to rice farmers. About Php2.5 billion of ACEF funds were allegedly lost to corruption in 2014. Meanwhile, stakeholders lament that SIDA funds reportedly amounting to some Php2 billion per year since 2015 have so far been underutilized.

Worsening neglect

NEDA’s negativity about the country’s rice industry glosses over the government’s accountability for the agriculture sector’s backwardness because of its long-standing neglect. Government policies on land and food such as the RLL, relying on imported agricultural products, allowing rampant land use conversion, and flawed land reform only worsen the impact of this neglect.

The agriculture sector shed over one million jobs between 2017 to 2019 which is the most jobs lost in a 3-year period in 21 years. The sector’s 2.1% average annual growth in the same period was below its 3.5% average annual growth for 70 years from 1947-2016. Agriculture’s share in gross domestic product (GDP) has fallen to its smallest in Philippine history at 7.8 percent. The agricultural trade deficit in 2018 was also the largest in the country’s history at US$8 billion.

Agriculture is still such a significant part of the economy and these signs of weakness point to how much needs to be done to bolster the sector. And yet, under the Duterte administration, the budget for agriculture and agrarian reform averaged just a measly 3.6% of the total national budget annually from 2017 to 2019. This is even slashed further to just 1.6% in 2021. This means that the government’s capacity to support farmers with facilities, subsidies and other assistance is declining.

Rice farming households are also among those who will not be getting any more cash assistance. Although agricultural production was among the least affected sectors by the pandemic, earnings from rice farming are so poor that many rural families also rely on various odd-jobs in the informal sector which have been adversely affected. Yet the proposed 2021 budget for cash assistance has been reduced to just Php9.9 billion from over Php260 billion under the emergency Bayanihan 1 and Bayanihan 2 laws.

Support our producers

The Philippines’ annual average rice self-sufficiency ratio over the last 30 years was 91% and the country was 93% rice self-sufficient as of 2017. Yet rice can be much cheaper and the country can be fully self-sufficient if only there was enough support, subsidies and facilities for the country’s 2.4 million rice farmers. We do not have to import our staple food and rice farmers can have decent incomes.

Why do we have to risk not having rice on the table from rice-exporting countries stopping exports to make sure that they have enough to feed their own people? How sure are we that the price of rice will remain stable if domestic production remains backward and global rice prices are volatile?

Why make our farmers suffer? Along with other producers, they provide the nation with food to eat, yet they are among the poorest.

The government is liberalizing the critical rice sector out of blind adherence to so-called free market and globalization policies. All this does is create opportunities for giant agribusiness corporations to make even more profits from selling their expensive, chemical-laden, unhealthy, and environmentally-destructive products.

Filipino farmers have to deal with so many man-made woes aside from the vagaries of the weather. Yet they are not passive to these. Farming communities nationwide practice sustainable agriculture. These should be recognized and supported. Indigenous peoples’ schools teach organic agriculture and oppose corporate encroachment on their lands. These should be hailed not vilified or shut down.

Peasant organizations struggle for their own land to till. They deserve to be given these as well as given the means to make these productive. Precarious rural incomes and livelihoods should become a thing of the past. And, as every Filipino deserves, farming communities should have decent education, health and housing as well as the conveniences of water, electricity, telecommunications and transport. In all of these, the government’s role in running an economy for the people is the most important intervention of all. #

IBON asks: How much of Villar wealth is driven by BBB?

by IBON Media & Communications

Sen. Cynthia Villar has just been reported as the richest government official with a reported net worth of Php3.81 billion. Sen. Villar’s net worth is by far the biggest among the Senate, House of Representatives, and Cabinet. The Villar family is one of the largest property developers in the country. Because of this, IBON points out, it is among the biggest beneficiaries of soaring land values from transport projects under the Duterte administration’s flagship Build, Build, Build (BBB) infrastructure program.

Sen. Villar is the wife of the Philippines’ richest man – former senator Manny Villar who has a net worth of US$5.6 billion (about Php271 billion at current exchange rates). Similarly, their son Public Works Secretary Mark Villar has been reported as the second richest Cabinet member with a net worth of Php1.41 billion. The public works secretary’s personal wealth was even used by Presidential Spokesperson Harry Roque to argue that he is “above corruption”.

Corruption in public infrastructure projects is normally understood as referring to kickbacks or bribes from public works contractors. There are however also huge windfall profits to be made by well-placed real estate developers from public transport projects, IBON said.

The Department of Transport (DOTr) for instance has already pointed out how MRT-3 projects can cause residential and commercial land values within one kilometer of stations to increase four-fold, from Php3,700-6,300 per square meter to Php14,000-22,100 per square meter.

Likewise, real estate consultancy firm Colliers International Philippines sees residential land values around the planned Mega Manila Subway project’s stations rising by at least two-fold and commercial land values by at least three-fold from the start of construction to full operation of the subway. Another firm, Leechiu Property Consultants, meanwhile points out how real estate values around rail stations can even increase as much as thirteen-fold.

IBON noted that the Duterte administration’s BBB program has already increased public infrastructure spending nationwide from Php590.5 billion in 2016 to Php785.6 billion in 2019, increasing further to Php1,017.3 billion in 2021. Transport infrastructure projects include roads, bridges, rail, airports, sea ports and others. Out of the government’s 104 flagship infrastructure projects worth Php4.1 trillion, 70 are transport projects cumulatively accounting for Php3.7 trillion or 91% of the total value of projects.

IBON says that the huge windfall wealth for the country’s real estate developers including the Villar family is likely among the reasons for the Duterte administration’s stubborn insistence on its transport-heavy BBB program despite emerging pandemic-related needs for cash assistance, health systems development, and enterprise support.

The systematic use of public funds to support private oligarch wealth is among the reasons for 12 Philippine real estate developers to be counted among Forbes’ World’s Billionaires list, IBON noted. This raises huge conflict of interest issues around the Villar family’s direct involvement in government, IBON stressed, specifically in the Senate and Cabinet public works portfolio.

The dominance of real estate and related interests in the economy and their influence on economic policymaking also goes far in explaining the bias against developing domestic agriculture and Filipino industry, IBON said. #

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Kodao publishes IBON articles as part of a content-sharing agreement.

Dirty Duterte admin: More coal energy than ever

by IBON Media & Communications

In his address to the United Nations General Assembly in September, Pres. Rodrigo Duterte called on all signatories of the Paris Agreement to do their part in reducing carbon emissions. He said that he will consider declaring a “climate emergency” because mitigating the effects of climate change is a priority. Meanwhile, Congress is deliberating on a higher proposed budget for renewable energy.

This is a seeming turnaround from the president’s 2016 declaration that the Philippines will not honor commitments under the Paris climate change deal. But maybe not – the country’s increasing reliance on coal betrays the Duterte administration’s green turn as mere posturing. The government is maintaining the country’s high dependence on coal. This puts into doubt whether it is genuinely concerned about the Philippine environment and declaring a climate emergency. A higher proposed budget for renewable energy also does not necessarily indicate seriousness towards greener energy.

Using more coal than ever

A real shift to renewable energy will help the country phase out of relying on coal and fossil fuels. But the heavy and mounting use of coal shows that the government is not really keen on this. The highly privatized power sector is predictably choosing to source energy where it is most profitable for it.

Energy supply in the Philippines is still primarily sourced from fossil fuels. Non-renewable oil and coal made up 61% of energy sources in 2018, while the rest were renewable sources including geothermal and biomass. Oil is largely used for transportation and commercial purposes. The industry and electricity sectors meanwhile rely heavily on coal which takes up 32% and 31.5% of 2018 energy consumption, respectively.

The government is increasingly reliant on coal for power generation. Department of Energy (DOE) data shows that, under the Duterte administration, power generated from coal rose from 43,303 gigawatt hours (Gwh) in 2016 to 57,890 Gwh which is over half of total power generated (106,041 Gwh) in 2019. Only 22,044 Gwh of power was generated from renewable energy.

In its study “The State of the Philippine Environment”, IBON noted that 11 of the 49 committed power projects across the country are coal-fired power plants and account for 78% of the projects’ combined rated capacity of 6,280 megawatts (MW). Out of 345 indicative power projects, 18 are coal-fired accounting for 28% of the rated capacity.

The Philippines is also increasing coal imports. Imported coal made up 13.1% of the primary energy supply mix in 2016, 15.8% in 2017, and 17% in 2018; the share of indigenous coal as well as renewable energy correspondingly decreased . Coal self-sufficiency fell from 45.2% to 37.9% over the same period.

IBON also stressed that coal is cheap but hazardous to the environment and the people. Yet, the country continues to receive imported fossil fuels, technology, and foreign investment. Some of these have been rejected or banned in their countries of origin due to environmental concerns. As a result, greenhouse gas (GHG) emissions in the Philippines increased by 425% annually from 1990 to 2016, mostly coming from power generation. Coal was responsible for half of the GHG emissions.

Serious about renewables?

Clearly, getting rid of the Philippines’ coal dependence will be a concrete step towards embracing sustainable energy. Environment-friendly sourcing of energy is possible through community-based, people-determined solar, air and water energy generators.

In the proposed 2021 budget for the DOE, the Renewable Energy Development Program gets a higher allocation at Php117.9 million from Php112.5 million last year. However, Philippine governments’ push for renewable energy – specifically geothermal, biomass, hydropower and biofuels, can actually harm the environment, IBON’s study bares.

The construction of geothermal plants destroys forest cover and disturbs the natural habitat. For example, in the Southern Negros geothermal area, trees near the well sites shed their leaves due to emissions of sulfur oxide.

Hydropower generation through large dams is meanwhile pursued to attract foreign direct investments. However, the large impounding areas common with such projects submerge the lands where they are built, disrupt the natural ecology of river systems, and displaces communities in inundated areas. They also cause sedimentation which eventually weakens power and water generation capacity.

The construction of the Kaliwa and Laiban dams, for instance, will displace over 6,000 households and flood barangays in Tanay, Rizal and General Nakar, Quezon, mainly where the Dumagat and Remontado indigenous people live. Agricultural, forest, and wildlife areas inside the Kaliwa Watershed Forest Reserve will also be flooded.

The Biofuels Act of 2007 aims to encourage investment in locally produced biofuels. This however diverts attention and scarce resources from food production and supply. Biofuel farms also usually involve the use of large amounts of fresh water, synthetic fertilizers, pesticides and herbicides, and fossil fuel, in agrichemical monocropping.

If the government is sincere about declaring a “climate emergency” and protecting the Philippine environment, it needs to give more value to the environment and to people’s needs over the profits of energy businesses. If it does so, then it can pursue more sustainable options in sourcing and distributing energy across residential, commercial and industrial sectors. #

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Kodao publishes IBON articles as part of a content-sharing agreement.

Transport budget for infra but none for affected jeepney drivers

by Jose Lorenzo Lim

The COVID pandemic has led to massive income losses for Filipinos. The Duterte administration suspended mass transport, including jeepneys, when the enhanced community quarantines (ECQ) in Luzon and other parts of the country were declared in March. Quarantine measures have eased in general community quarantine (GCQ) areas and public transport has resumed in phases. 

The government is attempting to usher economic activity back but public utility jeepney (PUJ) drivers keep getting left behind.

Lost income and jeepney modernization program

Three months into the pandemic, the social welfare department reported some 36,200 jeepney drivers of over 200,000 nationwide getting cash aid under Bayanihan 1. Even so, many jeepney drivers only received one tranche of the Php5,000-8,000 of social amelioration. IBON estimated that around 55,000-70,000 jeepney drivers in Metro Manila each lost an average of Php26,000 per month of lockdown over the first three months of suspended mass transport for a total of Php78,000 each.

When quarantine measures eased, the Department of Transportation (DOTr) prioritized modernized jeepneys in resuming operations in Metro Manila which left most PUJ drivers still unable to operate. More traditional jeepneys have recently been allowed back on their routes but physical distancing protocols make them operate on just half-capacity and, thus, their earnings are also halved accordingly.

The PUJ sector along with other vulnerable sectors have been calling for additional aid as the COVID-19 pandemic continues to rage. However, although the government is moving to gradually resume economic activity, it is allocating less and less for emergency subsidies.

The Php5.58 billion in aid promised PUJ and transport network vehicle (TNV) drivers under Bayanihan 2, for instance, only means an average of Php116-225 per driver per day* spread across four subsequent months of lockdown since the expiration of Bayanihan 1 in June 30. The 2021 proposed national budget allocation for overall emergency aid is even smaller at just Php9.9 billion.

The DOTr announced that it was doubling the subsidy for jeepney operators switching to modernized jeepneys from Php80,000 to Php160,000. However, this is still not enough as modernized jeepneys cost around Php1.6-2.2 million each.

The slow modernization of jeepneys is also a sign that the program is failing. During the 2019 budget hearing of the DOTr, it was reported that the jeepney modernization program was only able to modernize 1.5% of its initial target more than two years after it started. Thus, the DOTr took a step back on the jeepney modernization program and said that it will allow old jeepneys on the roads provided they pass “roadworthiness” standards.

Transport budget for infrastructure

The DOTr is proposing a Php143.1 billion budget for 2021. Of this, Php112.8 billion are capital outlays for railways, seaports and airports.

Of this, Php96.2 billion will be funded by ODA. Specifically, this ODA funding will cover the rail transport program or the construction of the Metro Manila Subway Project Phase 1, North-South Commuter Railway System, and Philippine National Railway (PNR) South Long-Haul Project.

If the government was sincere about its jeepney modernization program not displacing so many drivers and small operators, it could have increased the subsidy for this program. The government counterpart funding for these 3 railway infrastructure projects is worth Php12.6 billion. This could have been an additional Php181,000 jeepney modernization subsidy if shared among 70,000 jeepney drivers in Metro Manila. 

While these expansive mass transport projects will provide faster trips across longer distances, Filipinos still rely on jeepneys as a mode of transportation for short distances or the first or last miles. Increasing subsidies for jeepney modernization is actually a win for both the government and jeepney drivers with the government taking strides towards its goal and jeepney drivers keeping their livelihood.

Keyword: Pandemic

Because of the coronavirus crisis, the Land Transportation Franchising and Regulatory Board (LTFRB) issued Memo Circular 2020-017 which only allows modernized jeepneys and traditional jeepneys under a corporation or cooperative to operate. This leaves out small jeepney operators and drivers. Unlike big corporate fleet operators, they can ill-afford the costly modernized jeepneys, or even the fees and requirements to form a cooperative. They are even less able today after months of lost incomes and depleted savings.

The government should prioritize subsidizing small jeepney drivers and operators and at least postpone costly infrastructure projects that are less urgent because of the pandemic. More railways, seaports, and airports might always seem like a good thing. However, it has always been questionable if these deliver the best economic and development returns for the huge spending on them and the increased debt taken out. Certainly, the emerging needs of vulnerable sectors because of the pandemic should be a more pressing use for scarce funds.

The Duterte administration should support drivers and operators with emergency subsidies for upgrading or replacing their units to meet safety, health and environmental standards. Getting them back on the road will contribute to spurring economic activity. It will also increase the mobility of the working people who are the most crucial elements in economic recovery. #

Fighting for our rights to food, a healthy environment and development

by Xandra Liza C. Bisenio

In a forum on the role of consumers in agroecology, Commission on Human Rights (CHR) Economic Social and Cultural Rights (ESCR) Center Assistant Chief Klarise Espinosa stressed that the right to food is recognized in the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Article 11 states that “everyone has a right to an adequate standard of living… including adequate food, clothing and housing, and to the continuous improvement of living conditions.” As duty bearers, governments are expected to make sure that the right to food and the factors enabling it are realized, clarified Espinosa. The ESCR Center is currently reviewing to what extent the Philippine government facilitates and provides sustainable, available, and accessible food.

The ICESCR underscores that the right to food is linked to having decent living standards and the availability of essential needs, services and utilities for an individual and families. For campaigners of People Economics, asserting the right to food is inextricably connected to the people’s struggle to realize their rights to produce food and other basic needs, to industrialization, to a nurtured environment, to the comprehensive range of working people’s rights, to progressive fiscal systems, and to economic sovereignty.

Right to food challenged

In the Philippines, the government gives only token attention to the right to food, as well to the rights to an adequate standard of living, services such as health and education, and even to utilities such as water and electricity. Neoliberal policies have also kept the economy backward and underdeveloped, thus leaving the environment in bad shape, and affecting the availability of safe and sufficient food.

The Philippine government’s food threshold is very low and set at a measly Php50 per person per day. But the Philippines should not have to be counted among the top countries with moderate to severe food insecurity and high levels of malnutrition as per the food and Agriculture Organization (FAO) had the government not abandoned and liberalized agriculture, IBON Research Head Rosario Guzman said.

The critical state of our natural food sources, namely Philippine agriculture and the environment, is due to government neglect and mispriorities. This helps to explain why Filipinos’ access to safe and sufficient food is problematic.

The agriculture sector, which produces our food, lost 1.4 million jobs from 2017 to 2019, or even before the pandemic. The sector’s annual growth was only at 2.1% on average in the same period and its share in the economy has reached its smallest in Philippine history at 7.8% of gross domestic product (GDP) in 2019. Combined agriculture and agrarian reform budgets were at their lowest in 21 years being only 3.6% on the average also from 2017-2019.

In the middle of the pandemic, government even defunded agriculture further with a meager 1.5% allocation in the 2021 budget. This pales in comparison with the agriculture budgets of rice-exporters Vietnam, Thailand, and Indonesia, which are at 6.3%, 3.6%, and 3.3% of their national budgets, respectively.

Land degradation and land use conversion have also disrupted the ecological balance and affected food systems.

The country’s forest cover is now down to only 23.3% of the country’s land area which, according to environment scientists, is ecologically unhealthy. They say that the country’s geography and terrain should sustain a 54% forest cover.

The use of inorganic chemicals and input-dependent crop varieties meanwhile has caused severe erosion in 70.5% of the country’s land area. Moreover, land conversion for corporate agriculture, cash crops, real estate and infrastructure has also added to ecological disruption. The current administration is for instance pushing for almost one million hectares of oil palm plantations in Mindanao. Its Build, Build, Build infrastructure projects, including the Kaliwa, Kanan, and Laiban Dams, threaten to destroy communities, livelihoods, farms, forests, and water sources.

IBON infographic

Hunger and government’s unsustainable ways

Philippine agriculture is in contradiction as a food system, affirms Dr. Charito Medina of the Magsasaka at Siyentipiko para sa Pag-unlad ng Agrikultura (MASIPAG). Farmers and fisherfolk producing food, he says, struggle to eat, and are the poorest sectors with 36% and 34% poverty incidence, respectively, according to official 2018 poverty statistics. Land planted to food kills instead of extending life because it is heavily infused with chemicals. Agricultural lands produce not for people but for big business in the case of feeds and biofuels production. Food wastage is high. Ultimately, corporations, not farmers, control and profit from agriculture. Government policies even prioritize importation and cash crops for export instead of strengthening local food production.

Rural, urban, and indigenous folk affirm how government policies have made food more difficult to both produce and avail. Zen Soriano of the Amihan National Federation of Peasant Women (Amihan) said that during COVID, farming communities are practically being hamletted during the lockdown. This makes it difficult for farmers to transport their produce and for farmworkers to transfer from one planting area to another. There are even cases when peasant missions to deliver food aid were terrorist-tagged. She also said that the rice liberalization law has caused palay prices to fall and millers to close down.

Mimi Doringo of the urban poor group Kalipunan ng Damayang Mahihirap (Kadamay) meanwhile said that for families whose breadwinners lost their jobs or are in precarious work amid the coronavirus crisis, more expensive food and services make it more difficult to cope. Kakay Tolentino of the BAI Indigenous Women’s Network agreed that many government policies have interfered with indigenous people’s food systems in ancestral lands, from the commercialization of palay seeds to destructive mining, export crop plantations, ecotourism projects, and militarization.

These are happening while the pandemic crisis batters especially millions of the poorest and informal workers. The widespread distress is driving calls for heightened aid, food security programs benefiting all marginalized sectors, junking rice liberalization, and a halt to corporate landgrabbing and the commercialization of land and crops. Strategically, the calls are for land reform so that tillers can make their land productive and benefit from this, and for a healthy and robust environment that is not being maimed in pursuit of so-called development that only benefits a few.

Call to consumers

As rights holders, consumers can establish solidarity with producers and themselves begin sustainable practices in producing and consuming food. They can demand the production of and access to safe and sufficient food. Consumers need to also thwart the corporate onslaught on agriculture. Consumers can assert not only the right to food but the right to produce it, and other economic, social and cultural rights.

Solidarity with producers can range from forming relationships to directly procure local farmers’ produce and help raise farmers’ incomes, to standing with farmers in their campaigns for land and life. While maintaining this connection with local producers, consumers can also engage in urban farming to grow what they eat and eat what they grow.

In demanding the production of and access to safe and sufficient food, consumers can call out government neglect of the country’s own production sectors. They can push for ample budget allocation to agriculture and industry, free land distribution and stopping land use conversion, and boosting local production by giving farmers financial and infrastructure support. They can push government to procure local produce and to ensure local stocks for adequate supply.

Consumers can demand that the price of food be reasonable. They can demand subsidies in times of crises and emergencies such as during the COVID-19 pandemic. There are so many households, displaced workers, farms and small businesses in need.

The corporate onslaught on agriculture and on Filipino producers and consumers also has to be thwarted for local production systems to break free from big business and foreign profit-driven objectives. This means saying no not only to the highly chemical and artificial farm inputs detrimental to the soil and the people’s health, but also to all policies that prevent Philippine agriculture from flourishing into the nation’s giver of food and material for development. This means saying yes to Filipinos’ indigenous, traditional ways of farming, while improving food and agricultural programs towards being ecologically sound, scientific and sustainable conduits of progress. #

* “The Role of Consumers in Agroecology” was co-organized by the Samahan at Ugnayan ng mga Konsyumer para sa Ikauunlad ng Bayan (SUKI), Magsasaka at Siyentipiko para sa Pag-unlad ng Agrikultura (MASIPAG), IBON, and the AgroecologyX Network

Four reasons why the Kaliwa Dam Project loan is onerous

by IBON Media & Communications

The loan agreement for the New Centennial Water Source-Kaliwa Low Dam Project (NCWS-Kaliwa Low Dam) is onerous and should be cancelled. President Duterte has reportedly ordered a review of loan agreements to determine if any are onerous and disadvantageous to the Filipino people. Yet the Kaliwa Dam project which has come under fire for its unfavorable Chinese loan agreement has already started.

The Php10.2 billion (US$211.2 million) loan agreement financing most of the Php12.2 billion NCWS-Kaliwa Low Dam has the following questionable provisions:

1. Costly to pay. The commercial loan agreement has a 2% annual interest rate, commitment fee of 0.3% annually, management fee of US$633,600, and a 20-year maturity with a 7-year grace period. The nominal interest rate is higher than other recent loan agreements with Japan or Korea which range from 0.08-0.26 percent. The loan is also not necessarily the cheapest loan even if US dollar equivalent interest rates are used.

2. Project is exclusive to Chinese contractors. While a Philippine project,only Chinese contractors are qualified to bid and Philippine corporations were excluded from the process. The China Energy Engineering Company, Inc. (CEEC) bagged the project. The contract is between the Metropolitan Waterworks Sewerage System (MWSS) and Chinese corporations.

3. Loan agreement is biased for Chinese laws. Article 8.4 of the loan agreement stipulates that Chinese Law will govern disputes pertaining to the agreement. Meanwhile, Article 8.5 says that disputes will be dealt with under the auspices of the Hong Kong International Arbitration Court.

4. Philippine patrimonial assets and property may be compromised in case of default on the loan. In the Article 8.1 Waiver of Immunity, the country “waives any immunity on the grounds of sovereignty or otherwise for itself or its property in connection with any arbitration proceeding”.

The loan agreement is financially disadvantageous, tied to Chinese contractors, and an affront to Philippine sovereignty. These issues are also on top of other issues raised by the Dumagats and Remontados, farmers and community folk, environmentalists, engineers, hydrologists, scientists, public servants, consumers, and many more. The dams projects will displace communities, inundate ancestral lands, and destroy the environment.

The Philippine government should not enter into loan agreements having such terms whether with China or any other sources of official development assistance (ODA). The Filipino people bear the burden of paying these onerous loans. This is even getting worse under the Duterte administration which is imposing new and higher consumption taxes while lowering taxes on the rich and on corporations. #

Proposed 2021 health budget shrinks, neglects public health–IBON 

by IBON Media & Communications

Research group IBON said that the lower budget for the public health in the proposed national government budget for 2021 will keep health care inaccessible and expensive for too many Filipinos. The pandemic highlighted the lack of capacity in the privatized health system. IBON however criticized the merely fleeting increase in health spending and the cuts next year in important health areas.

The Department of Health’s (DOH) budget is at least Php171.5 billion in 2020, consisting of the Php104.5 billion under the General Appropriations Act (GAA) 2020, Php49 billion under the Bayanihan 1 law, and at least Php18 billion under the recently passed Bayanihan 2 (RA 11494). IBON noted that the proposed Php131.7 billion DOH budget for 2021 is Php39.8 billion or 23.2% less than this.

IBON said this indicates a merely short-term response to the pandemic and an unchanged trajectory of health privatization including allowing the public health care system to whither away. In particular, health infrastructure spending and support for public hospitals are seeing large cuts next year.

The proposed 2021 budget for the Health Facilities Enhancement Program (HFEP) covering the building of health infrastructure and purchase of medical equipment is just Php4.8 billion. This is 62.9% less than this year’s Php12.9 billion budget composed of Php8.4 billion under the GAA 2020 and Php4.5 billion under Bayanihan 2. 

The HFEP budget has actually been falling steeply under the Duterte administration in the regular GAAs even before the pandemic, IBON pointed out. It was Php30.3 billion in 2018, Php15.9 billion in 2019, then Php8.4 billion in 2020. The group also noted that the government’s Php1.1 trillion infrastructure program for 2021 only allots Php2.3 billion or one-fifth of one percent (0.2%) to the DOH, which is also a 36.7% cut from the GAA 2020. 

Health privatization-driven budget cuts for public health facilities like this have already caused public hospitals numbering 730 in 2010 to fall to just 433 in 2018.

The proposed 2021 budget for health workers and supporting the operation of DOH hospitals also falls by Php1.7 billion or a 2.6% cut, from Php64.3 billion in 2020 to Php62.6 billion next year. This is because the Php12.6 billion increase in Human Resource for Health (HRH) and DOH hospital budgets in the GAA 2021 from GAA 2020 is off-set by the discontinuing of Php13.5 billion in fleeting support under Bayanihan 2.

The government has played up how the 2021 budget for Human Resources for Health (HRH) Deployment increases to Php16.6 billion from Php10 billion in 2020 to hire 26,035 health workers. This seems urgent because the government doctor-to-population and government nurse-to-population ratios have been worsening under the Duterte administration, between 2016 and 2018 – from 1:32,644 to 1:33,909 doctors and from 1:17,269 to 1:17,769 nurses.

However, the health sector group Alliance of Health Workers (AHW) has pointed out how this increase is only temporary and does not indicate a sustained increase in health workers for the public health system. They highlight that 14,553 DOH plantilla positions will still remain vacant in 2021 with public hospitals still understaffed and government health personnel still overworked over the long-term.

AHW also points out that 23 of 66 DOH hospitals, which many of the poor depend on, will see their maintenance and other operating expenses (MOOE) budgets cut by Php4 million to as much as Php209 million. IBON meanwhile noted how the budget of two COVID-19 referral government owned- and -controlled (GOCC) hospitals will also be cut next year. The Lung Center of the Philippines sees a 2.9% budget cut to just Php405 million in 2021, and the Philippine Children’s Medical Center (PCMC) a 13% cut to just Php1 billion.

The budget of the Epidemiology and Surveillance program that is crucial in controlling the spread of diseases through timely data and research has already been cut by over 50% from Php263 million in 2019 to Php116 million in 2020. Yet despite its obvious importance in dealing with pandemics, IBON said, government proposes to reduce it further to Php113 million in 2021.

The budgets for the National Reference Laboratories (NRL) and Health Information Technology (HIT), which are vital in detecting, testing, databasing and reporting coronavirus cases and other emerging diseases, are also slashed.  The proposed allocations for NRL and HIT decrease from Php326 million to Php289 million, and Php1.2 billion to Php97 million, respectively.

The second biggest chunk of the proposed 2021 health budget, or Php71.4 billion, still goes to the Philippine Health Insurance System or PhilHealth. While noting recent corruption controversies in the agency, IBON pointed out that it is difficult to reconcile the unchanged budget with increasing health expenses of Filipinos. At the same time the group stressed that government resources are better spent on expanding and improving the public health system rather than subsidizing private health sector profits.

IBON said that the Duterte administration should increase funding for health infrastructure, personnel, and operations. Filipinos right to health and affordable health care cannot be realized if, as is happening today, more and more of the country’s health system is being turned over to the profit-driven private sector. The group stressed that this will always result in health care that is too expensive and health capacity that, as the pandemic has shown, is insufficient for public health emergencies. #

Ombudsman’s efforts hide admin corruption

by Sonny Africa

n 2016, Pres. Rodrigo Duterte famously warned government officials against corruption: “Not even a whiff or whisper – I will fire you.” 

The Ombudsman restricting access to the statement of assets, liabilities and net worth (SALN) of public officials and proposing to do away with lifestyle checks is only this administration’s latest effort to hide the growing stench of corruption. Yet with the government’s infrastructure budget bloating and the pork-filled 2021 budget being railroaded through Congress, every check on corrupt government officials is more urgent than ever.

Developments with the proposed pre-election 2021 budget make vigilance especially critical. The unprecedented Php1.1 trillion in infrastructure funds takes up almost one-fourth (24%) of the Php4.5 trillion national government budget. Infrastructure projects are notorious sources of corruption with so-called SOP (‘standard operating procedure’) of 10-40% on projects still acknowledged as pervasive. Presumbably most under scrutiny are the administration’s flagship infrastructure projects but these only account for Php158.2 billion or 14% of total infrastructure projects, implying Php941.8 billion worth of projects prone to ‘SOP’ across the country.

The Office of the President (OP) also has an equally unprecedented Php27.3 billion in potential pork barrel funds consisting of the OP’s Php8.2 billion budget and the Php19.1 billion National Task Force to end Local Communist Armed Conflict (NTF-ELCAC) recently created under it. The Commission on Audit (COA) has already lamented being unable to audit the president’s intelligence and NTF-ELCAC funds. The presidential declaration of a state of calamity until September 2021 also threatens to give legal license for public funds to be misused.

SALNs are vital tools for the public to keep watch of government officials. It is common knowledge that SALNs are routinely understated but there is just so much lying that can be done under oath so even inaccurate SALNs can be indicative. Combined with lifestyle checks on spending habits, the public can start to get an idea if public officials’ lifestyles are commensurate to their lawful income.

SALNs are weaponized because this is exactly what they are – weapons against corrupt public officials. Unlike private citizens, public officials have powers that can be abused for self-serving gain through bribes, kickbacks and malversation. Any flaws in how they are used should just be corrected because discontinuing them will favor corrupt public officials more than benefit honest ones.

None of which is to say that SALNs and lifestyle checks are currently effective in curbing corruption. The Ombudsman and Presidential Anti-Corruption Commission (PACC) are understaffed and grossly lack the resources to properly check on over 1.7 million government officials and employees. The Ombudsman and PACC are also helmed by San Beda schoolmates of Pres. Duterte – Samuel Martires and Danilo Yang, respectively – which cannot add confidence about how the office will be used especially against those close to the president.

In this context, media and the public are vital force multipliers to combat systemic and entrenched corruption in government and should be empowered. However, the Ombudsman’s retrogressive efforts significantly cripple media and the public from their vital watchdog role. The Ombudsman is also rolling back gains from the Ill-Gotten Wealth Law (RA 1379) which boldly, even on paper, put the burden of proof on government officials to show that wealth and assets not commensurate to visible sources of income were lawful.

The majority of public officials and employees are honest and do not fear SALNs. Indeed, holding public office also only becomes more honorable if public servants allow themselves to be held to a higher standard. Conversely, hiding corruption and hindering the vigilance of citizens only diminishes public office and officials. #

Budget for infrastructure towers over health, social protection, MSME support–IBON

by IBON Media & Communications

Research group IBON hit the Duterte administration for prioritizing transport infrastructure in its proposed 2021 budget over the country’s more pressing needs at the height of the pandemic crisis. The group said resources for health, social protection, and production support are more urgent areas needing attention to genuinely usher the economy to recovery but are only receiving paltry amounts.

The budget for infrastructure in the proposed 2021 General Appropriations Act (GAA) is at Php1.1 trillion, of which only Php2.3 billion or 0.21% would be used to build hospitals and health centers. Such a token allocation for health infrastructure shows how unconcerned government is about the public health emergency that the country is facing and about ensuring affordable health care, IBON said.

The group said that the need for medical facilities and equipment became obvious as the country’s health system was overwhelmed with the swelling number of COVID-19 cases . Yet the government barely increased the share of health facilities in the infrastructure budget from last year, IBON said. Of the Php989.2 billion budget for infrastructure in 2020, only Php1.8 billion or 0.18% was allotted for hospitals and health centers. The allocation for health infrastructure has been dropping significantly under the Duterte administration. In 2017, the infrastructure outlay for hospitals and health centers was Php18.6 billion.

In contrast, IBON said, the infrastructure outlay for road networks is getting much of the funds at Php404 billion or 36% of the 2021 proposed budget for infrastructure. In 2020, road networks were given Php349.8 billion or 35.4% of the Php989.2 billion infrastructure budget.

IBON also noted that the proposed Php1.1 trillion infrastructure budget towers over recommended allocations for health, social protection, and support for micro, small and medium enterprises (MSMEs).

The proposed 2021 health budget is only Php212.3 billion. The group observed that while the absolute amount is an increase from the allocation for health in the 2020 GAA, areas important to dealing with the pandemic are defunded in 2021. IBON said that it is ironic that the allotment for facilities enhancement, epidemiological surveillance, laboratories, research, information technology, and human resource capacity management, for instance, were all reduced right when the country’s public health system sorely needs a boost.

IBON also said that government’s questionable bias for infrastructure becomes all the more conspicuous when comparing its budget with social protection budget. The group criticized government’s decreasing the proposed social protection allotment to Php454.1 billion from last year’s Php534.3 billion even as millions of Filipinos are reeling from massive joblessness and collapsing household incomes due to the COVID lockdowns.

The support program for MSMEs decreased by 7.4% in 2021 compared to 2020. Even taking the Agricultural Competitiveness Fund of the Department of Agriculture (DA) and the Small Business Corporation program under the Department of Trade and Industry (DTI together, MSMEs only get Php5.1 billion in the proposed 2021 budget.

IBON added that despite government hype about focusing on the digital economy through improved internet systems, demand for which increased during the pandemic, the budget for communication networks also decreased in 2021. The 2021 infrastructure outlay for Communication Networks is just Php106 million or a 30% decrease from PHp150.8 million in 2020.

From 2017-2021, the bulk of infrastructure projects (Php364 billion) were in the National Capital Region, followed by Region III (Php94.8 billion), the Autonomous Region of Muslim Mindanao (Php79.5 billion) where Marawi is located, and Region IV-B (Php79.1 billion). In the same period, nationwide infrastructure outlays were at Php659.4 billion, while the Central Office got Php2.9 trillion.

IBON said that the 2021 budget is crucial for the country’s health system and economy to manage and overcome the coronavirus crisis. The government’s fiscal response is the key to improving the economic situation, said the group. Health and social protection even in terms of infrastructure should therefore be prioritized. Instead, said IBON, these are dwarfed by programs such as roadworks and grandiose transport projects that are not as urgent as medical services and socio-economic relief. #

It really hurts: Economic infrastructure over health

by Jose Lorenzo Lim

The Philippine economy contracted 16.5% in the second quarter of 2020 which was attributed mainly to declines in manufacturing, transportation and storage, and construction. The Duterte administration is counting on infrastructure to stimulate the Philippine economy’s recovery. To do this, the Development Budget Coordination Committee (DBCC) is allotting Php1.1 trillion for the government’s infrastructure budget in 2021.

Are the planned infrastructure projects really what the economy needs right now after everything that’s happened this year? How much of the infrastructure helps fight the COVID-19 pandemic? Or is the government just building the same road and transport infrastructure from its pre-pandemic plan?

Unchanged priorities

Long before COVID, the Duterte government’s Build, Build, Build (BBB) Program planned Php8-9 trillion in infrastructure projects from 2017-2022. This included supposed high-impact projects such as railways, urban mass transport, airports and seaports, roads and bridges, and “new and better cities”.

The government’s priority for such infrastructure projects and economic infrastructure stays, as reflected in the proposed 2021 budget. The budget for the Department of Public Works and Highways (DPWH) is Php613 billion for roads (Php59 billion), bridges (Php157.4 billion), and flood management projects (Php125.8 billion). There are also allocations for local programs (Php176.1 billion), and the convergence and special support program (Php50.2 billion).

Interestingly, Php23.9 billion of the convergence and special support program is for access roads leading to tourism destinations, Php1.9 billion on access roads to airports, and Php2.5 billion on access roads to seaports.

The Department of Transportation’s (DOTr) proposed 2021 budget meanwhile spends Php107.4 billion on railways, aviation, and maritime infrastructure programs. Of this, Php107.2 billion will be spent on railways. The Rail Transport Program includes projects from the 100 infrastructure flagship projects (IFP) such as Metro Rail Transit (MRT) 3 Rehabilitation, the Metro Manila Subway, North-South Commuter Railway System, and the PNR South Long-Haul Project. The DOTr also proposes Php1 million on aviation infrastructure and Php166 million on maritime infrastructures.

The National Economic and Development Authority’s (NEDA) 100 IFP list includes 15 infrastructure projects targeted to be completed in 2021 worth Php181 billion. Eleven of these are in the transport and mobility sector, one is in information technology, one is in urban development and redevelopment, and two are for water resources. This affirms transportation and mobility as BBB program priorities.

However, the infrastructure priorities are puzzling and the government seems to be getting ahead of itself with all that interconnectivity infrastructure.

As it is, the coronavirus still hasn’t been contained over seven months since the pandemic broke out in the country. Many businesses aren’t able to reopen and many families are still jobless or have low incomes even with lockdown restrictions eased. It is not just unclear but actually doubtful that many of the infrastructure projects proposed will help all those who will remain distressed next year.

The pandemic also exposed how inadequate the country’s public health system is. First, in containing the pandemic with insufficient mass testing, contact-tracing, isolating and smart quarantining. And, second, in treating all COVID-19 and non-COVID-19 patients needing health care.

Health neglect

What is the state of the country’s health facilities? Government data shows that there are 1,236 hospitals as of 2017, 65% of which are private-run. Privatization has resulted in there being more private hospital beds (54,317) than public hospital beds (47,371) as of 2016.

These private hospitals that dominate the country’s health system are the same ones that are now charging exorbitant rates to COVID-19 and non-COVID-19 patients to attain their desired profitability. For them, health care is about returns to investment more than returning the sick to good health.

Privatized health is also the reason why bed capacity is falling further and further behind the country’s needs. For a profit-seeking hospital, excess bed and healthcare capacity is in effect idle capital and correspondingly a drain on profits.

The Philippines has never reached the World Health Organization’s recommended ratio of 20 beds per 10,000 population. Philippine Statistics Authority (PSA) data shows that the situation has even worsened from 14.4 beds per 10,000 population in 1990 to only 9.9 beds per population in 2014. In terms of community health services, only 47% of barangays across the country had health stations in 2018.

The country is very much in need of healthcare workers as well. The PSA reports a ratio of one government physician to 33,000 Filipinos, which is far from the WHO-recommended 1:1,000 doctor to population ratio. The number of public health nurses is also concerning at a ratio of 1 to 50,000 Filipinos. Add to this how Filipino health frontliners are themselves succumbing to COVID-19 due to poor working conditions and lack of equipment, facility, and financial support. The dearth in health facilities and health care workers will persist if the government continues to neglect the health sector.

Has the government’s infrastructure program been adjusted to meet deficiencies in health infrastructure highlighted by the pandemic? The government has actually touted some health-related infrastructure to help fight COVID-19.

The latest IFP list is yet to be released. In a recent interview though, Secretary Vince Dizon, Presidential Adviser for Flagship Programs and Projects, announced that 8 projects that could not be completed anytime soon had been taken out from the 100 IFP. These were replaced by 13 projects related to the digital economy, water projects, and healthcare.

Dizon said that the most important healthcare project is the Virology Institute that would be built in New Clark City. A Virology Institute could really complement the Philippine healthcare system, if only there were enough healthcare facilities to begin with. But the opposite is true.

A look at the Department of Health’s (DOH) proposed 2021 budget shows that the Health Facilities Enhancement Program (HFEP) only gets Php4.8 billion. This is a huge cut from its Php8.4 billion budget this year and especially compared to its Php30.3 billion budget in 2018.

The proposed HFEP budget is just as much as the DPWH’s Priority Bridges crossing Pasig-Marikina River and the Manggahan Floodway Bridges Construction Project valued at Php4.8 billion, which is just one of the agency’s projects in Metro Manila.

The country needs more health infrastructure more than ever. COVID-19 and non-COVID-19 wards are overwhelmed yet the government decides to slash the budget for health facilities and still prioritize economic infrastructure in the form of roads and bridges. Many other essential elements of the health budget are also being defunded in 2021.

Time to reprioritize

The onslaught of COVID-19 exposes the insensitivity of the Duterte administration and how irrelevant the BBB program is in meeting the country’s most urgent needs. Health infrastructure clearly needs to be expanded.

Yet the priority is still disproportionately for infrastructure projects supporting the profit-making of transport contractors, foreign transport sector firms, and corporations in the service- and trading-oriented sectors of the economy.

The government has to invest much more in strengthening the public health system, in building public health facilities, and in advancing health research and development. Health care workers also need to be protected, paid decently, and supported to be able to give Filipinos the quality and affordable health care they deserve. #