Moving SLUSH FUNDs from NFA to DSWD is a “reform” that will reduce poverty. Really? Aquino government will not provide subsidized rice via NFA but through DSWD. It is an asinine juggling act -- another game of musical chairs being played using taxpayers money -- OUR money.
Here’s the situation -- 70% of Philippine poor are subsistence farmers. Aquino government keeps prices of rice low via NFA-dictated prices. Ergo, if buying price for rice is low AND there is no competition (choice is between local rice trader/miller or NFA) -- then rice farmers have low income and remain poor. The response of farmers to such poverty can be varied: a) join armed movements; b) diversify into high value crops; c) look for a job -- outside of agriculture; d) look for a job- -- inside the industry; e) migrate to the urban centers; f) be stoic and go with the flow; g) augment income with other sources of revenue. It is not uncommon for one farmer to have undergone the entire stew of options at one time or another -- or even have all those going on at the same time.
However, my focus is not on what farmers can do -- but what Aquino can do for farmers without prejudice to other Filipino consumers. Should farmers take solace in DWSD subsidies and sing hossanahs to Aquino, Soliman, and Abad. Or should farmers ask deeper questions such as -- If Aquino is really intent on reducing poverty of the Filipino poor (70% rural/subsistence farmers) -- doesn’t it make more sense to provide rice farmers with alternative income streams that generate more revenue instead of relying on government dole-outs?
No such thing as a free lunch
Remember that for every dole-out given by government -- is a taxpayer -- either an employee or a business whose income is being withheld and forcibly redirected to government coffers -- there is no such thing as a free lunch people. ??Every cent spent by Soliman, Abad, and Aquino from their slush funds were collected from you and I -- taxpayers. I don’t know if it’s just me, but I sure as hell would rather have MY money spent by ME than by someone else.
I am all for being compassionate and caring for the least of our brethren. However I am from the school that would rather teach men how to fish rather than provide the fish. Sure, I would love for the subsistence farmers to have increased prosperity -- but not at the point of increasing my payroll tax, increasing road use tax, land property tax, sin tax, sales tax, VAT -- so that President Aquino, Secretaries Abad, Soliman, and Mayor Pulbura and their gang of Tongsilors, tongressman, and SenaTong can play Robin Hood with my hard-earned money. It gets even better when the government secures a foreign loan and packages it with a fancy name and acronyms. They purchase a fleet of vehicles, have the government project name on it -- if there’s a foreign agency involved it becomes more prestigious. But you see at the end of the day -- if it is a loan, it has to be repaid. If it is a loan made in the name of the public -- guess who will do the repaying -- the public. Lemme remind you buster -- public means, you, me, mom, dad, lolo, lola, pamangkin, kapitbahay -- all of us paying for these loans one way or another -- through more taxes. Where else do you think is the government going to get the money?
It just floors me to think about Mister Aquino, Mister Abad, and Miss Solimans’s propositions. Creating a permanent class of mendicants is wrong. The Filipino farmers deserve better than to allow themselves to be shackled by a self-defeating self-imposed xenophobic constitutional economic restrictions -- along with the rest of us fools.
Enabling a Culture of Patronage
Reform within the NFA needs to be taken within a broader picture. The reform was being undertaken to optimize the workflow and reduce the touchpoints for getting access to the highly subsidized rice. Such a measure however misses the entire point. Before we get granular shouldn’t we first settle the existential question first. Is there a need for extreme rice restrictions in the first place? Is there a need for the conditional cash transfer in the first place?
MANILA, Philippines -- The National Food Authority (NFA), the state-owned grains agency, will no longer provide subsidized rice to the poor as this role would now be transferred to the Department of Social Welfare and Development (DSWD).
The move is part of efforts to reform the NFA.
Budget and Management Secretary Florencio Abad said that the provision of subsidized rice to poor consumers has now been proposed to be transferred to the DSWD through its conditional cash transfer program.
Abad said the DSWD, with its National Household Targeting System, is better positioned to identify and directly reach indigent households.
Citing data from the World Bank, Abad said that through the NFA route, subsidized rice do not reach enough poor households.
Is this really the right solution? The DSWD is turning out to be one huge slush fund machine. And the Aquino government is wasting no time in beefing up its patronage machinery. While the hoi polloi are treated to a media fest of probes into the AFP slush fund -- no one is left to keep score of how Congress, Senate, the Presidency, and the national government agencies are having an orgy of spending.
As the public gets enamored on the labyrinthine maze of paper trails within the AFP, the public remains clueless and oblivious of the bigger slush fund mess that’s going on before their very eyes. It was just a couple of months ago when the 2011 budget was passed -- it was heavily laden with slush fund spending:
allies of President Benigno Simeon Aquino III in the House of Representatives who led the Lower House in passing the P 1.645 trillion national budget for 2011 gave the latter P 68 billion in total pork barrel representing lump sum and unprogrammed funds.
“P 68 billion of lump-sum, unprogrammed and hold your breath audit free presidential pork barrel for 2011. This is extremely disturbing, mind-boggling and corruption-prone budget for the Office of the President,” said Pamalakaya national chair Fernando Hicap in a press statement.
Citing a study made by independent think tank group Ibon Foundation Inc., the Pamalakaya leader said the P 68-B presidential pork barrel fund is 27 percent of the P 245-B highly questionable lump sum and unprogrammed funds and 15 percent of the P 1.645 trillion budget approved by Congress for next year.
“What is the political rationale of Congress of giving Aquino P 68 billion in pork barrel fund which is 200 percent bigger that the budget allocated for Department of Health and 300 percent bigger than the budget allocated for state colleges and universities? For what noble purpose this budget is intended to? For foreign trips abroad? For the political allies of Mr. Aquino? For what purpose and for whom?” asked Hicap.
Pamalakaya said the Philippine Senate should closely scrutinize the P 68 billion pork barrel fund alloted to the Office of the President. “The Senate leadership under Senate President Juan Ponce Enrile should not let their guards down and allow the approval of the P 68 billion pork barrel for Aquino and other lump-sum items which should not be allowed by Congress.
The militant group said aside from the P 68 billion pork barrel to President Aquino, the Senate should also scrutinize and scrap the following items which Pamalakaya said are times for grandslam crime of corruption:
1. PhP29.29-billion fund for the vastly expanded Pantawid Pamilyang Pilipino program (4Ps) and National Household Targeting System, despite the failure of the Department of Social Welfare and Development (DSWD) to properly establish its capacity to implement the huge increase in the program and budget.
2. PhP15-billion fund divided equally for “public-private partnership support projects” under the Department of Public Works and Highways (DPWH), Department of Transportation and Communication (DOTC) and Department of Agriculture (DA).
3. PhP2.34-billion fund to the military for “support to national development” which should be left to civilian agencies of the government.
4. PhP1.46 billion in intelligence funds, which is PhP403 million more compared to 2010 budget
5. PhP1.19 billion for “major information and communication technology projects”, which is a copy cat of the controversial NBN-ZTE deal.
6. The PhP24.82 billion for the Priority Development Assistance Fund (PDAF), which increased by more than 100 percent from PhP10.9 billion in 2010.
Earlier, Pamalakaya noted that the budget for the Department of National Defense (DND) increased by 81 percent or P 104.5 B out of the total proposed budget of P 1.645 trillion for 2011.
Funny how Filipinos can be “enraged” about the AFP mess, and yet still fall for Aquino’s yarn about slush funds and anti-corruption when the bloke himself is an epitome of everything he is supposedly against.
If anything, the Chief of Staff and the higher echelon officers of the AFP probably felt that only the Congressmen and the President were having fun with their slush funds -- why complain, join ‘em. Of course, the top brass became so efficient at it- next thing you know, Congressmen wanna know what’s going on -- it’s a magnanakaw galit sa kapwa magnanakaw thing you know.
Give Fish to Farmers, Teach Farmers to Fish, Let the Government do the Fishing?
In his article “Do Farmers Have to Be Poor”, Cielito Habito, who served concurrently as the Director-General of the National Economic and Development Authority and Socio-Economic Planning Secretary during the Ramos administration, pointed out the following:
Do farmers have to be poor?
By Cielito Habito
Philippine Daily Inquirer
First Posted 03:53:00 02/01/2011Filed Under: Food, Agriculture, Infrastructure, Poverty
STATISTICS SAY that 70 percent of the poor in our country are in the rural areas, where agriculture and fisheries are the main sources of livelihood. But this is not because crops, livestock and fisheries are products that are inherently unprofitable. The rich in the countryside also mostly derive their immense wealth from these same products, but they are mainly the “middlemen,” composed of traders and processors. Indeed, one observes this inequity in farming areas throughout the country, where the most expensive houses belong to these people, often in stark contrast to the farmers’ and fishers’ humble abodes dotting the countryside. The situation suggests that the primary producers of farm and fishery products are not getting their due share of the final value of their products paid by consumers. Instead, it is the middlemen who manage to obtain a disproportionately larger slice of the value for themselves.
Interestingly, there is clear indication that Filipino farmers are worse off relative to their counterparts in other Asian countries. One gets some proof of this from cross-country data on farm-gate and wholesale prices, readily available from the database of the Food and Agriculture Organization (FAO) of the United Nations. In rice, for example, the ratio of farm-gate price to wholesale price in the Philippines has been averaging 47 percent over the past 15 years. That is, Filipino rice farmers ultimately receive less than half of the value of their product paid at wholesale. The same ratio for Thailand is 63 percent, while India has 62 percent and China, 94 percent. In short, Thai, Indian and Chinese farmers are able to obtain a far greater share of the final price of their products than Filipino farmers are able to get. Only Bangladesh and Indonesia have ratios similar to ours, suggesting that these countries have the same market inefficiencies that end up squeezing the incomes of their farmers.
Why do Filipino farmers obtain such low prices for the product of their hard work?
I can cite at least three reasons. One, poor rural infrastructure has made it harder to physically bring products from the farms to the markets. While we have time and again been hearing of the need for more farm-to-market roads, we have made little progress in making markets more physically accessible to farmers. The joke is that most of our farm-to-market road projects end up as “farm-to-pocket roads.” And because the small farmer finds the cost of bringing his own produce to the market too prohibitive, he is likely to accept any offer from a trader who comes along to buy his output right at the farm.
Worse, the farmer is probably already committed to sell his entire yield to a particular trader, from whom he has borrowed money beforehand. Lack of access to formal credit from banks has traditionally driven farmers to obtain financing from informal lenders, particularly traders, who naturally obtain the interest payment in the form of much lower prices paid for the farmers’ yield. And you can guess that the effective interest rate charged will invariably be far more than what it normally should be.
Unfortunately, little has changed in this credit-marketing interlinkage in Philippine agriculture through the decades, which has been instrumental in keeping small farmers poor and perennially in debt. Making credit widely accessible to farmers has been one of government’s most miserable failures, and it continues to be one of its greatest challenges whose solution promises to change rural lives dramatically.
A third factor that keeps farm-gate prices relatively low in the Philippines is the prevalence of a monopsony (single buyer) or oligopsony (few buyers) situation in our farm areas. Thus, buyers are able to offer lower prices for farmers’ produce than would be the case if only there were more competition. There are two reasons for this: First, cartels are prevalent in local trading of farm products, especially because there are very few players in the market. Second, there is usually just one large processor of the farm product (be it coconut, rice or sugar) in any particular locality. This processor can thus dictate the buying price for the commodity, in turn determining the prices traders up the ladder will offer to farmers.
Addressing rural poverty thus means addressing the above factors that keep our small farmers poor. And we’ve always known what needs to be done; we simply need to do them seriously and a lot better. We need to improve farmers’ access to markets by facilitating movement of farm products to the market. Apart from farm-to-market roads, the Department of Agriculture is now pursuing cheaper transport alternatives like tramlines (cable transport systems) and even horses for remote upland communities where roads are not economically feasible. The DA is also working to provide accessible trading posts (bagsakan) for assembling the output of small farmers. More creativity is demanded in making formal credit accessible to small farmers, perhaps using the microfinance model that has been so successful in other contexts. And we need to foster greater competition for farmers’ output and widen their market options. To this end, small and medium-scale processors need to be fostered in the countryside to expand market outlets for our farmers.
Filipino farmers need not be poor. We just need to recognize that beyond targeting production, we should be making farming profitable for farmers. We owe it to those who are feeding all of us.
For short -- the perennial problem of Filipino subsistence farmers (who make up 70% of the Philippine poor) are: 1 -- lack of infrastructure that keeps cost of bringing goods to the market low; 2 -- lack of access to working capital credit, and; 3 -- a monopsony/oligopsony. Mister Habito provided good options based on the current constitutional policy environment.
However, those are not enough and I propose we go for the gold standard - remove the flaws in our constitution which create the conditions for a monopsony/oligopsony not just in the market for agricultural products -- but on the entire Philippine economy.
Don’t just give fish.Teach em how to fish, Improve, Innovate.
Upon removal of the 60/40 provisions and repealing the slew of protectionist discriminatory laws by opening the market -- FDI can participate in:
- a) infrastructure development
- b) credit services
- c) rice production and trading;
- c-1) local rice distribution;
- c-2) exports of premium local rice varieties ;
- c-3) rice importation -- depending on market conditions.
By removing the constitutional restrictions against FDI there will be more competition for farmers outputs, there will be more opportunities for access to credit, there will be more infrastructure developments or alternatives. This is anathema to the Philippine left which prefers nationalization of and socialization of misery. Just to be clear -- allowing FDI does not mean excluding LDI -- it means allowing both FDI and LDI to collaborate and compete as they see fit to deliver the goods, services, and jobs at prices that the market is willing to pay. The current 60/40 constitutional restriction limits the ability of FDI to augment the shortfalls and gaps in LDI thus causing the Philippines to hobble in the economic race to reach first world status by the 1st quarter of the 21st century. Somethings gotta give. We can’t keep on sending our best and brightest overseas -- we need to start bringing the jobs home. A good first step is to remove the constitutional restrictions against majority foreign-owned businesses.
The Additional Dimensions to Poverty Among the Rural Poor: Food Sufficiency Versus Food Security
The bigger question, to me anyways what are our options in the near-term given the following:
- a) an archipelago with a HUGE and GROWING population -
- b) diminishing -- land available for cultivation -
- c) a shift towards residential real estate utilization that is fueled by OFW remittances -- and a service and knowledge economy,
- d) opportunities in high value crop production
- e) opportunities to improve efficiency in rice production (i.e. Brazil, Vietnam, Thailand)
Should we be targetting self-sufficency or should we focus on food security? There’s always the ideal of self-sufficiency. However, assuming that we have fully optimized our processes and land use -- the enormity of our population poses signficant challenges on whether we ought to be aiming for self-sufficiency -- or food security or a mix thereof?
Rice sufficiency not likely by 2013, says IRRI official
By Marianne V. Go (The Philippine Star) Updated January 25, 2011 12:00 AM Comments (3)MANILA, Philippines -- Rice sufficiency may be achieved by the Philippines in five years or more, but not by 2013, a ranking official of the Laguna-based International Rice Research Institute (IRRI), said yesterday.
In an interview on the sidelines of the launching yesterday of the NMRiceMobile at the Department of Agriculture-Agricultural Training Institute (DA-ATI) in Quezon City, Dr. Achim Dobermann, deputy director general for research of IRRI, expressed doubts about the Aquino administrations goals of attaining rice self-sufficiency by 2013.
Dr. Dobermann said he believes that rice “self-sufficiency by 2013 is probably somewhat ambitious.”
A more realistic assessment is that it will take “more than five years for the Philippines to achieve sufficiency in rice.”
While the government should “rightfully” target rice self-sufficiency, Dr. Dobermann cautioned the Department of Agriculture (DA) against raising unrealistic expectations.
“You cannot raise unrealistic expectations,” Dr. Dobermann said, pointing out that a lot of factors have to be taken into consideration such as the weather, agricultural investments and population growth.
According to Dr. Dobermann, population growth is the “No. 1 factor hampering rice self-sufficiency.”
He pointed out that if the population increases two million or more every year, “how are you going to feed them? Young people eat a lot of rice.”
Dr. Dobermann said population growth should be addressed systematically “otherwise it will be a challenge,” warning further that that country “may be running out of options” in terms of expansion areas and production.
Importantly too, Dr. Dobermann said agricultural investment has to increase, adding that even if such investments are made now, the trickle down effect to the farmers will take time.
He said that based on IRRI’s own studies, adoption rates of new investments is still a low 30 percent to 50 percent.
Meanwhile, the IRRI and DA launched yesterday a mobile phone-based service, dubbed Nutrient Management Manager for Rice Mobile (NMRiceMobile) which will give farmers faster mobile access to information that will help them maximize rice production.
The NMRiceMobile can be accessed through Smart and Globe.
By dialing a toll-free number on their mobile phone, Filipino farmers and extension workers can get a text message recommending the optimal timing, amount and type of fertilizer to apply to their rice fields.
One thing for sure -- the Japanese have invested in rice farmlands in Australia. Australia allows the Japanese to own and operate farms just like the locals. Instead of fearing the Emirs from Dubai, the Filipino agribusinesses can do business and sell high value crops. Then these revenues can be used to purchase lower-priced rice that was made elsewhere. It’s a simple straightforward model that can increase farmers income without having to resort to these policies which are landmines of corruption.
The subsidies are better spent on retraining the farmers for
- a) high value crop production
- b) entrepreneurship -- financial literacy
- c) technical upgrading
- d) marketing and export financial and technical assistance
Look at globalization and foreign direct investments under a new light.
The typical response of the Filipino in the street about liberalizing the economy has shown marked improvement lately. But it is still guarded and highly suspicious of foreigners. The greatest culprit would be the the not so good experience of the brutal and violent transitionary periods of the colonial past. Humanity has learned so much since then, except, maybe, us Filipinos. While we are stuck with our xenophobia, corporate Japan owns Hollywood! Europe and USA are doing business in Vietnam. For all the talk of the Filipinos who died in Tirad pass and how it was like Thermphylae where the Filipinos died fighting the Americans (quite a stretch, the Pinoy story talaga)- there is a longer line of Filipinos lining up at the US embassy and applying for a US visa, dreaming to leave the Philippines for good. But I digress.
Could it be that our distrust for foreigners is a reflection of our distrust of ourselves. That we, as a nation, are projecting to foreigners, our very own rapacious behavior and propensity to destroy or at least distort or pervert any thing or process that we as a society lay our hands on. When we distrust or believe that foreigners will circumvent our laws, does this not give a silent indictment that WE, OURSELVES, Filipinos -- circumvent Filipino laws, with impunity and enforce it via the culture of pakikisasa and utang na loob?
Let’s say just for one time -- we suspend disbelief that everyone is a rat. And trust that everyone is really a nice guy, just wants to have a piece of the action like everyone else -- and that good business is a reward for good service that results from being good stewards of nature. And that on this basis -- investments whether local or foreign -- if it generates good paying jobs, protects/preserves/enhances the environment, keeps families together should be encouraged. Corollary to this, businesses (local or foreign) which treat people like shit don’t deserve any support/protection at all.
****
It is time to reform the constitution -- a major component for reducing poverty in the Philippines - What Caesar giveth, Caesar can taketh.
and I’m not surprised that the poor in television are depicted as farmers.
[Reply]
Renato Pacifico Reply:
February 8th, 2011 at 9:09 pm
I am not surprised Filipinos in America are depicted as house slaves.
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For the Hacienda Luisita Mafia…Audit-Free Fund allocation is: Money, Money, Money…for the crook Enrile, if he approves it…Money, Money, Money…they want more Filipino OFW slaves to work for them…they subsidies Rice Farmers of : Thailand, Vietnam and China…
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If foreigners can own farm land, how can this solve the problem of low farmer income?
how will it solve the 3 issues of low farmer (labor) income:
1 — lack of infrastructure that keeps cost of bringing goods to the market low; 2 — lack of access to working capital credit, and; 3 — a monopsony/oligopsony.
[Reply]
BongV Reply:
February 5th, 2011 at 4:45 pm
gabbyd:
foreigners owning land is not enough – is just a fraction of liberalization – and is not the correct question.
the accompanying enabling environment of liberalization means
1 – allowing foreigner majority-owned/100% foreign companies to get involved in infrastructure projects (to compete against the local companies)
2 – allowing foreigner majority-owned/100% foreign companies to enter in the banking industry (to compete against the local companies)
3 – monopsony and oligospony are maintained through protectionist legislation such as the FINL. Removing the FINL will allow market forces to determine the price of the farmer’s products instead of keeping these prices artificially low under the terms of the heavily subsidized NFA – an agency whose operation we taxpayers have to pay for – and who provides preferential access to vested interests. Free the market.
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BongV, naman, naman ! As you know Jesus Christ, the appointed God, is also pro-poor. God so loves the poor that God makes all believer in him so pooooor. The poorest states in the United States are in the BIBLE BELT. The poorest people in United States are the blacks who are extremely religious. Philippines, the only christian country in Southeast Asia, is the corruptest and poor. Latin America is vehemently poor but better than PHilippines. Espanya is 2nd poorest country in European Union.
Since Benigno Aquino is PRO-POOR, he made them poor in Hacineda Luisita. Since he has accomplished making slaves of Hacienda Luisita, HIS FAMILY FROM BENIGNO AQUINO TO CORY AQUINO TO BENIGNO AQUINO DAYONYOR will see to it that true to his promise makes Philiphinos poor. AND THAT IS WHAT THE FILIPINOS WANTED TO BE POOR SO THEY ELECTED BENIGNO AQUINO to give them deliverance to be poor so they can pass thru the eye of the needle as what their God has promised “IT IS EASIER FOR A POOR FILIPINO TO PASS THRU THE EYE OF THE NEEDLE THAN A WEALTHY FILIPINO”.
I LOVE YOU NOYNOY, NOY-P, P-NOY, PENOY, aaaaaah WHATEVER NOY!!!!!
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I thoughted NFA buy high sell low. I thoughted NFA slush fun is subsidizing subsistence farmers like copra. NFA is deliberately depressing the prices of rice. NFA are also importing cheap, better quality rice from Vietnam to depress the price of rice and kill the subsistence farmers. WoW! That is a very genius way of controlling population. Kill the farmers thru depression of rice prices. Or … Or …. Maybe they Filipinos just prefer imported rice over locally produced rice. Remember Filipinos would rather have Nike-made-in-Vietnam-purchased-in-America than buy Nike-made-in-Vietnam-purchased-in-Gaisano
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NFA is actully recruiting potential farmers to NPA. Because NPA feeds them, protect them, treat them as human. NFA is NPA. NFA is NPA recruiter.
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Give Fish to Farmers, Teach Farmers to Fish, Let the Government do the Fishing?Don’t just give fish.Teach em how to fish, Improve, Innovate.
… AND THE FILIPINOS STARVE PRAYING FOR FISH ……
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Lookit, the Filipinos are not xenophobic. The Filipinos are not afraid of foreigners. Filipinos embrace foreigners. They are even proud working in Chartered Bank, Citibank, and other foreign banks in Makati in Cebu in Davao. Filipinos are proud to marry a foreigner. Filipinos lined the streets to US embassy in Manla to get a visa so they can voluntarily have their lives run by foreigners.
IT IS THE OLIGARCHS THAT ARE XENOPHOBIC. They are afraid their their businesses will be no more once the foreigners are here with their efficiency and professionalism and minimal corruption.
[Reply]
pugot ulo Reply:
February 5th, 2011 at 6:04 pm
Exactomundo! Pilipinas, Wala ng pagasa! That should be the DOT catchphrase. As long as the oligarchs are in control, nothing will change.
Maraming Tanga, Konting Linta is the population of the Philippines.
[Reply]
Ignorance and the drive to spreading ignorance prevails. Foreign corporations are allowed to build infrastructure. Most major infrastructure projects on Edsa was built with Jap funding and Jap companies. Banking is allowed for 100% foreign corporations. There are numerous foreign banks operating in the Phils.
My God in this day and age we still have what many economist call a paleo-monetarist. He still does not understand the fact that gold is inherently deflationary when it comes to prices. How the hell can one talk economics with an economic illiterate. We can not go back top the 19th century.
The rise of mass production gives rise to deflation if prices are tied to the price of gold where the supply increases at glacial speed while mass production techniques increased supply four to five fold. Value of gold supply is at $1 trillion while world GDP is at $60 trillion. But that GDP is to grow at 5-6%. The supply of gold obviously cannot keep pace. Friedman said that money supply should simply conform with GDP growth.
Hayekian ideologues do not recognize unemployment as an economic reality. They consider it all to be voluntary unemployment. They also believe that it is supply that drive demand. Hence they believe in micro economics and demand that the state not interfere in the economy and that there can be no demand side based collapse in the economy. Till today they continue to say that the state caused the depression. Friedman for his part had already moved to Monetary economics while insisting that fiat currencies should be like commodities and was the one who suggested the floating of national currencies with supply and demand determining the price.
The difference in farmers share in countries apart from the Philippines comes with state intervention. China the highest yield for farmers because state-trading companies through their massive buying cuts out most private traders. Farmers get most of the wholesale price while prices for urban workers are kept reasonable. In the Philippines the workers of land get even less than what Habito has posted since the landowners get the cream. In the rest of Asia it is the farmer owner that gets all and they have very small pockets of tenant farmers.
In the West state subsidies distort prices in agricultural products in many forms and this is one of the major stumbling blocs that is keeping the WTO Doha round from pushing forward. BongV is either ignorant or deceiving people when it comes to his analysis. What market determined agricultural price is he talking about?
The West wants the emerging economies to lift their tariffs to their agricultural and industrial sectors while refusing to lift their subsidies and protective tariffs on their agricultural products.
\
Examples of subsidies in the U.S. are on corn, tobacco and cotton. Protective tariffs on cane sugar and ethanol. Surplus production of wheat/rice are sold overseas using state subsidized credit under PL 480
While he is entitled to writing his opinions and publishing Friedmans theories which have all already crash landed. He Bong V is not entitled to his own set of facts.
Freidmans basic theory of monetarism has long been discarded. Central banks do not target monetary aggregates they target interest rates and some target an inflation rate.
Friedman himself conceded to the Financial Times in 2003: “The use of quantity of money as a target has not been a success. I’m not sure I would as of today push it as hard as I once did.”
http://forestpolicy.typepad.com/economics/2008/04/james-galbraith.html
http://www.huppi.com/kangaroo/L-chimonetarism.htm
[Reply]
Miriam Quiamco Reply:
February 5th, 2011 at 9:58 pm
I see your point, the West seems to favor trade liberalization only when it suits them. You are right in saying, the agricultural sector has to be managed by the government with prices of basic agricultural products subsidized if need be to promote food self-sufficiency. This is why the Chinese empower their farmers, with hungry farmers, the politicians in Beijing run the big risk of being unseated, many Chinese revolts were staged by hungry peasants. It is a matter of national security to keep the countryside prosperous. This is truly an enlightened policy on the part of the Chinese politicians.
Our farmers on the other hand are docile and are too passive, even those who join the ranks of the NPA are weak-willed, they could never be the red army of Mao or Lenin, that is because this is the 21st century, the state has more resources to keep itself in power compared to in the past.
Liberalization of the agricultural sector is a contentious issue everywhere, I am not sure this is the solution to poverty in the countryside, although in Davao, huge agribusinesses in the partnership of the oligarchs and multinationals have provided jobs to the rural poor. I know that in Davao, the pineapple and banana plantations there have employed thousands who are able to rely on their monthly salaries to sustain life. Roads have also been built to facilitate the transport of the fruits to processing plants. Will there be a difference in the management of these estates if they were 100% foreign-owned? I am not sure. . . We certainly have lots of idle lands that the government could lease to foreigners or to those who are willing to engage in agribusiness. I know that Arroyo had attempted to lease to the Chinese some idle lands, whatever happened to that idea?
[Reply]
Jay Reply:
February 6th, 2011 at 12:49 am
see at least that is one of the advantages I am for is the better utilization of land than what the state/oligarchs can’t do with. Of course they would be driven batty as well with crap infrastructure that goes from place to place and the inability to have different traders for their products. There are still many variables, but at least something positive and progressive than the poison currently implemented than what can be made with opportunities presented with newer variables.
[Reply]
Renato Pacifico Reply:
February 6th, 2011 at 10:46 am
If Benigno A is populist, he needed to subsidize agriculture. Or, if there comes a time people are gainfully employed away from agriculture let us import them where it is cheaper. Food is essential for the survival of Filipinos.
[Reply]
BongV Reply:
February 5th, 2011 at 10:08 pm
jag:
1 – can you tell the difference between 60% and 40%? and 100%:)
2 – can you tell the difference between A) a filipino company (60% majority) that used japanese financing VERSUS B) a 100% japanese company
3 – can you tell the difference between 100% ownership of a company versus – 100% ownership of 40% of stocks
4) The issue isn’t about monetary policy – the issue is about the protectionist policies in the constitution which cause an inefficiency in the market. To work toward the symbolically important but geographically unrealistic goal of rice self-sufficiency, the Philippine government has a long, costly and ultimately unsuccessful history of limiting imports.
The professed goal is to motivate Philippine farmers — with higher prices in a protected market — to grow as much rice as they can. For nearly a century, this has meant that Filipino consumers have paid higher prices for rice than people in countries where the grain is grown more efficiently. Still, local farmers are falling further and further behind the rice-consuming demands of a country where the poor eat far more rice per capita than the rich or middle class and are by far the fastest-growing segment of the population.
To head off potential rice riots, the government reigns as the primary buyer of imported rice. Its official policy is to sell the imports to the poor at a price they can afford.
Jesus Foncardas, an unemployed father of five in Manila, was one of tens of thousands of Filipinos who queued up this week to buy subsidized rice from the National Food Authority. Its price is about 20 cents a pound, half the price of rice in stores.
“We used to ignore this government rice, but the price of rice in the stores has gone up so much,” said Foncardas, 57. “I had to stand in line for a half-hour to buy from the government.”
While government-imported rice is supposed to be for the poor, getting it to the poor at a price they can afford has proved difficult.
For decades, unscrupulous traders have bought this rice at the subsidized price, then repackaged and resold it at the higher market price, pocketing a handsome profit. “The system promotes corruption, with bureaucrats in the National Food Authority in cahoots with the traders,” said Dy, the professor of agribusiness. (WASHINGTON POST – http://www.washingtonpost.com/wp-dyn/content/article/2008/04/11/AR2008041104162_3.html)
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ChinoF Reply:
February 6th, 2011 at 4:58 am
Thing is, why are we still getting these foreign investors despite the law, and then creating circumventing laws to help out? Are the investors or foreign entities pushing themselves onto us? Nah. I’d say we need them. That’s why all these things like the NAIA 3 fiasco happen. We need foreign investments, but specific local parties want to steal these investments for themselves, aided by the 40% foreign equity limit (the limit requires foreign entities to look for a foreign partner). Without the equity limit, the foreign investors could work transparently and without any or with very little threat of hoodwinking by the local partner.
People may say, “Forget foreigners! We have money! Just get the Filipinos to invest in their own country!” OK why don’t they do that? Perhaps they prefer to invest in election campaigns that depend on people who want dole-outs from the government and who are too poor to start their own business, so that they have no choice but to buy only the products of these local vested interests. Perhaps those who had money for investment or have businesses end up fattening the pockets of the overpriced Meralco. But in the end, kung gusto, maraming paraan. Kung ayaw, maraming dahilan. Mukhang maraming dahilan ang local investors… so let’s ask someone else then.
Be a citizen of the world, not of your own small mind.
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Renato Pacifico Reply:
February 6th, 2011 at 10:48 am
Filipinos has no extra money to invest. Majority of their earnings are spent on housing and food and load sa cellphone.
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This pork barrel spending that our infrastructure development in the countryside has been made dependent on is the culprit of our long-time misery. I saw this clearly in our barrio in Davao, the congressman dishes out partial budgets for roads and he seems to find it convenient to speed up the building of roads during election season. Most barrio residents have no electricity and water system. A lot of the energy of the barrio folks are spent on hauling water and “moony-moony” at nights due to lack of electricity. With internet, farmers could potentially find direct buyers of their produce and could innovate using information available online. This congressman I am sure has stopped road-building now that election time is over. I heard too that his wife goes on shopping spree for designer goods, we are letting our natural tendency for human avarice affect our national development by giving to politicians un-audited pork barrels to the tune of billions of pesos. No wonder our politicians behave like gangsters!!!
What is going on with the government, it sounds like a big mafia organization with all these elected politicians getting big chunks of the budget for their discretionary spending. This will never happen in a parliamentary form of government where appropriate government agencies are empowered to implement national projects, monitored strictly by the lawmakers and the office of the prime minister. Politicians will have limited budgets specified only for special trips they need to do to their constituencies and to run their offices which will help in policy-making. We should really speed up the campaign for charter change. The Philippines is lagging behind because even though technocrats like Habito have brilliant ideas, they are sidelined in the implementation and budget allocation because politicians manage the funds without audit!!! What a big mafia the current system is. Why are our people tolerating this situation? We should really push for the revision of the constitution by holding teach-ins, everywhere to educate the people, the media is useless in doing this, we need a movement like Green Team Pilipinas to systematically educate the public on why Charter Change is our ultimate salvation.
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The one thing I’ve primarily been concerned about is not whether the oligarchy can compete if foreign ownership is allowed, but rather if the oligarchy will be the only ones who can compete with the foreign companies.
SM can compete with WalMart and Safeway, Jollibee can compete if the Americans decide to take their franchises back, San Miguel can compete with Asahi Brewery or InBev. But when you have all this corporate competition making good products available wider and cheaper, smaller enterprises have no chance of edging into the market.
I think the biggest beneficiaries in whatever system would be the “middlemen” that make the most profits, since they’ll have all the companies and farmers going through them. They can decide who gets the training and equipment and thus who prospers.
I agree with Jag that there should be a strong(er) state presence than there is now. If a system change (parliament etc.) could minimize corruption to allow that, then they could use state control to build up the farmer base (i.e. allowing direct foreign investment and talent to build up local farms but not so much to have them completely run by any party, like a two-way 60/40) before fully opening them up at a point where the farmers, not the middlemen can make the choice for themselves.
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BongV Reply:
February 5th, 2011 at 11:25 pm
you already have a VERY STRONG government intervention in the market by way of the NFA – and what has this led to? dealings with vested interests – as predicted, and validated – vested interests/traders/millers who have sold the prices at high rates to government but bought it at lower rates from farmers.
with an open market – government need not be the only market for farmers output – farmers have choices of who to sell their produce to – government or other markets – whoever fetches the best price. middle men will not be happy with that – but if they innovate, there are efficiencies that can be tapped to generate revenue – for instance – product packaging
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GabbyD Reply:
February 5th, 2011 at 11:37 pm
actually NFA buys from farmers and coops.
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BongV Reply:
February 5th, 2011 at 11:39 pm
do farmers have the option of selling to anyone other than the usual suspects?
****
Hunger in the Philippines as President Aquino cuts food subsidies
By Joseph Santolan
20 October 2010
The plenary session of the Philippine legislature has just approved the 2011 budget proposed by president Benigno ‘Noynoy’ Aquino. The budget for the National Food Authority (NFA), the agency responsible for the purchase and sale of rice at subsidized prices, is part of wider cutbacks to social spending.
Only four out of ten people in the Philippines receive adequate nutrition, according to the latest statistics released by the National Nutrition Council. A national survey conducted by Social Weather Stations reported in June 2010 that 21 percent of the population consistently experience involuntary hunger. Of Filipino children below the age of five, 27 percent are reported as being underweight and underheight, a figure comparable to sub-Saharan Africa.
Rice is the staple food of the population. It is the centre of every meal and provides the majority of caloric intake for Filipinos.
Poor families use numerous coping mechanisms to extend their meager diet of rice and quell their belly pangs. The foam that tops a pot of rice when it reaches a boil is scraped off and served as milk to children. This is called ‘am.’
The cheapest rice is composed largely of broken grains, and often has a foul scent that is suppressed by adding leaves to the boiling pot. If no accompanying dish, or ulam, is available, the steamed rice can be eaten plain. Those eating will dip the tips of their fingers in a small portion of a watery pink shrimp paste, bagoong, before picking up a bite of rice. This practice is called tapik-tapik and gives the plain rice a salty, fishy taste but no additional nourishment.
The cheap rice that is available in the marketplace is being sold at reduced prices subsidized by the NFA, which was formed in the 1970s during the Marcos dictatorship to monitor and control food prices. In the 1980s its mandate was gradually reduced to the regulation of the price of rice. It purchases rice from local farmers at prices higher than that paid by rice merchants, stockpiles rice to maintain an adequate supply in the event of a food shortage, and sells the rice at reduced prices.
The majority of rice farmers work a hectare, perhaps two, with a carabao, a water buffalo. It is backbreaking work. Entire families and communities work under the blazing tropical sun, planting rice, transplanting rice seedlings, and harvesting the rice. The mud sucks up to their ankles; they cannot stand up and they cannot sit down. They work bent over for the duration of the day.
If they are fortunate they will sell their harvest to the NFA. The NFA pays 17 pesos per kilo for palay, unmilled rice. Private rice merchants pay 11 or 12 pesos. The capital expenses of a rice farmer—seed, wages for those assisting in the field, pesticide, fertilizer, feed for the buffalo—can often total 13 pesos per kilo. The NFA currently purchases only 5 percent of rice grown in the Philippines. The majority of farmers have to sell to predatory food merchants at exploitatively low prices.
The NFA imports cheap rice from abroad, mixes the imported and locally grown rice, and sells the rice at reduced prices to the public. NFA rice can sell for as low as 18.25 pesos per kilo, 25 pesos less per kilo than the cheapest non-subsidized rice. For decades, rice merchants, mill operators and grain importers have been demanding the privatization of the NFA.
In the 2011 budget originally proposed by the Aquino administration the NFA’s allotment was cut to zero.
Aquino entered office under sharp pressure from the International Monetary Fund (IMF) and World Bank to reduce the budget deficit, service the national debt, and reduce social spending. His first target was the NFA. In his 2010 State of the Nation address, Aquino spoke of rice rotting in NFA warehouses. This, he claimed, was an example of government corruption and inefficiency and pointed to the need for the privatization of key governmental departments.
Media coverage of the budget deliberations has been muddled and poor. The majority of papers have reported that the 8.5 billion peso budget has been restored to the NFA. This is not the case.
The remaining NFA budget for 2010, 6 billion pesos, had been placed on hold pending budget deliberations. This money, already allotted by the previous Arroyo administration, has now been released. Congress transferred 2.5 billion pesos from the proposed 2011 budget of the Department of Agriculture to the NFA. By combining this sharply reduced budget with the release of the remainder of this year’s money, Congress and the Aquino administration have disguised the slashing of the NFA’s budget to less than a third of its original size.
The NFA in the coming year is going to cut its buffer stock of rice. It has in the past kept a supply of rice adequate to provide 30 days worth of consumption. This amount is going to be cut in half.
The NFA will end its program of subsidized rice importation. The Philippines is the largest importer of rice in the world, with 95 percent coming from Vietnam. Philippine imports make up 10 percent of the world rice trade and its rice policy is closely watched by commodities speculators. The proportion of rice consumed in the Philippines that is imported has risen from 8 percent in 2000 to 15 percent.
The Aquino administration justified the ending of import subsidies during recent deliberations by claiming that the goal was to achieve rice self-sufficiency. This is belied by two facts. Aquino has not increased the amount of rice purchased locally by the NFA beyond the 5 percent of the rice harvest. Aquino has also gutted the budget of the Philippine Rice Research Institute (PhilRice), a government funded research organization whose stated purpose is to achieve national rice self-sufficiency. The PhilRice budget was cut from 435 million pesos in 2010 to 91 million pesos for 2011.
Aquino has increased the budget of the Department of Social Welfare and Development to support a 21 billion peso program of conditional cash transfers (CCT). This program has been touted by Aquino as the solution to poverty in the Philippines. Poor families will receive from 1,000 to 1,400 pesos per month to supplement their income, provided they meet certain requirements such as keeping their children enrolled in school.
These welfare dole outs will not provide enough income to compensate for the programs and infrastructure which Aquino has slashed from the budget. It is unlikely that the poorest sectors of the population will receive any income from CCT at all. The hungry, those teetering on the brink of starvation, live in squalid urban shantytowns and remote mountainous barrios. They are often undocumented in official surveys. They frequently lack valid identification, birth certificates or other paperwork which would enable them to receive the CCT handouts.
The limited NFA rice purchase means that the vast majority of farmers wind up selling their harvests to private rice merchants. They will labor in the fields all year, and barely break even when they sell their harvest. Their survival will depend on lining up to receive the crumbs of a dole-out. Bureaucratic anomalies, bad documentation, the inability to enroll a child in school who has been working in the fields for the past few years—these will mean that many supposed recipients of the CCT will not see a penny.
Aquino and the IMF tout the virtues of the market over government planning and development. The supposed virtues of the market will see hungry people pushed toward starvation next year.
The NFA will continue to buy rice from farmers at subsidized prices, but without supplementing this locally grown rice with cheap imports, and without increasing the amount purchased from local farmers.
There will not be enough NFA rice to feed a hungry populace next year. Poor families will be forced to pay forty pesos or more per kilo for rice. The rural poor will go without rice and turn to digging up cassava roots to feed themselves.
There is a looming rice shortage. The NFA projects a shortfall of 1.5 million metric tons of rice next year—equivalent to more than 10 percent of the annual consumption. This shortfall was projected after having already reduced the calculated per capita consumption of rice from 122 kilos to 118. In other words, the NFA first projected that an already hungry people would go even hungrier and then still found that there would not be enough rice to feed everyone. Part of the shortfall will be made up through imports by private businesses, which is likely to drive up prices.
Aquino campaigned as a pro-poor candidate. He continues to repeat mealy-mouthed shibboleths about helping the “poorest of the poor”. He has taken away their rice. A malnourished population is going to suffer even greater hunger next year thanks to his policies on behalf of local commodity capitalists and international finance capital.
Hunger hardens very quickly into anger. With a looming rice shortage and sharply rising prices, food riots will not be far behind.
http://www.wsws.org/articles/2010/oct2010/phil-o20.shtml
BongV Reply:
February 5th, 2011 at 11:40 pm
yeah.. NFA buys from farmers and coops… Mikey Arroyo is a security guard.. and Aquino has a simple lifestyle
GabbyD Reply:
February 6th, 2011 at 5:49 am
do u have anecdotal evidence (or better) otherwise?
BongV Reply:
February 6th, 2011 at 9:13 am
anecdotal evidence? – heck I have neighbors who are farmers – we have tenants who grow rice –
go grab yourself a plane ticket and go to the countryside
The Lazzo Reply:
February 6th, 2011 at 3:27 am
Or, with an open market, you might have the similar effects as they have on the Mexican Corn Industry post-NAFTA:
The countryside wasn’t supposed to hollow out in this way when the North American Free Trade Agreement linked Mexico, Canada and the U.S. in 1994. Mexico, hoping its factories would absorb displaced farmers, said it would “export goods, not people.”
But in hindsight, the agricultural elements of the pact were brutal on Mexico’s corn farmers. A flood of U.S. corn imports, combined with subsidies that favor agribusiness, are blamed for the loss of 2 million farm jobs in Mexico. The trade pact worsened illegal migration, some experts say, particularly in areas where small farmers barely eke out a living.
Read more: http://www.mcclatchydc.com/2011/02/01/107871/free-trade-us-corn-flows-south.html#ixzz1DAIEpSOy
I especially find it interesting that despite your stated pro-free-market principles, you link an article from the World Socialist Web Site, run by the Trotskyist ICFI.
http://en.wikipedia.org/wiki/WSWS
http://en.wikipedia.org/wiki/International_Committee_of_the_Fourth_International
But that’s beside the point.
The problem is, our government has a large presence but is not strong enough in enforcing it against the middlemen, or using it to build up the industry toward actual self-sufficiency as much as it can. This lack of enforcement combined with a more open environment can only lead to farmers fleeing to literal greener pastures at the first opportunity, and more imports over the long term.
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BongV Reply:
February 6th, 2011 at 9:20 am
same thing – the socialist website describes in great detail – what’s wrong
it’s solution though – is to nationalize it.
and i beg to disagree – seeing who tends to wind up in nationalized industries leadership – cronies – no can do.
on mexico’s corn farmer’s folding up – here’s the thing:
1 – mexico’s corn consumers got a better deal – that balances out with the social impact on farmers
2 – by subsidizing corn – american taxpayers subsidize corn prices for mexican consumers
3 – by putting the mexican corn farmers out of work- america sees an increase in Mexican immigration
4 – displaces mexican farmers take advantage of the american social safety nets
- In the end, mexican corn farmers seemingly “lost” but compared to the dirt poor revenue from using existing practices, they have better revenue from going overseas – why should they trap themselves with dirt poor local market rates?
should you rejoice at high consumer rates and prices because they are “FILIPINO”?
dude – when prices are high – it does not matter whether it is foreign or local – the impact on the consumer is just as painful.
our government needs to get out of the rice business – remove those stupid constitutional restrictions
The Lazzo Reply:
February 6th, 2011 at 2:32 pm
How can I put it this way. I think the government should function as the intermediary in place of the middlemen, and be stern and efficient over their enforcement of the reformed laws that AP believes they should operate on. Private companies (domestic or foreign) that choose to invest here after removing the constitutional restrictions will be forced to play by similar rules to keep a level playing field.
- In the end, mexican corn farmers seemingly “lost” but compared to the dirt poor revenue from using existing practices, they have better revenue from going overseas – why should they trap themselves with dirt poor local market rates?
Yes, why shouldn’t they add to America’s “undocumented labor” woes and stoke racial tension in places like Arizona? You seem to have failed to notice that most of this immigration is illegal, and that it’s causing ultraconservative politicians to advocate outright immigration reversals makes a mockery of all the people that have to literally go through $1000s of paperwork just to legally stay there. It also feeds the coyote syndicates that profit from smuggling them across the border.
should you rejoice at high consumer rates and prices because they are “FILIPINO”?
No, but I’m not exactly going to party in the streets when our OFW (and by proxy, TNT) population skyrockets because they need to feed their families at home and there literally won’t be that many jobs left because the grass is always greener on the other side. But that’s okay, the competition makes the prices low…
I think we can both agree that our so-called “nationalization” is really half-assed. It’s quasi-privatized with the so-called “national” food authority competing with private middlemen and distributors to see who can squeeze price hikes out of the consumer, and it needs reform. Whether it’s toward your free market or my all-out nationalization, it has to be straight-out, thought-out and above all constantly enforced against becoming half-assed again.
A nationalized industry can still be productive if the system is disciplined enough to make sure both the domestic and foreign investment is geared to ensure it delivers its products to the people – see Petronas, the state oil company of parliamentary Malaysia. There’s a reason they’ve got the Petronas Twin Towers taller than the old WTC, a Petronas Formula 1 GP and a Petronas Formula 1 team. They were disciplined enough to build their success properly.
Jay Reply:
February 6th, 2011 at 12:39 am
@Lazzo
the corruption that really denies all of this goodness that can come about is highly affected in the infrastructure between the breadbaskets/farmlands and to markets, both big and small. I’ve watched reporters notebook episode regarding how the food costs gastronomically increase from where it comes from and where it ends up with cabbage losing out the most in quality when it comes to the biggest market, Manila. Odd enough, most of the profit made is with the middlemen dealing in those respected markets. And what did the NFA officials in those regions have to contribute to the issue? Nothing. Hell, the implementation of a supposed industrial fridge to help store goods that perish during the heat was bad, considering it was too small and not even within the proximity of the market itself, hence money down the drain. Hell, when it gets to the city even Manila’s enforcers try to get a piece of the action as well.
Middlemen intervention can be fixed with the proper infrastructure and enforcement as to guidelines in how to deal with farmers. I don’t think they would go away, but leveling the playing field certainly helps so they don’t try stiff the providers because they know along the way they will get stiffed as well.
My opinion now, small enterprises have a shot once a respectable market is created where there is a broader selection. If anything, government should also help give partial investment in letting certain products grow. Especially when it comes to niche/special products. Though your points reminds me the fact that even if Pinoys come to a foreign country and have more access to area’s own superior made products, say a prime made sausage from a deli, they would still go after the pinoy taste, like the pinoy hotdog, which is nothing more than grinded-up bits of beef/pork/chicken, flour, spices and hell lot of preservatives. I go back to the concept of adapt or die when a very golden opportunity presents itself like that.
@GabbyD
Kaygandang Kwento, Kapatid. Yun nga kung bakit humawak sa patalim ang mga nag aararo.
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The Lazzo Reply:
February 6th, 2011 at 3:40 am
Exactly. The creation and enforcement of a proper infrastructure – along with properly-directed investment – can better prepare a country for an open market.
) If they come from America, you can bet they’ll also bring them back in good ol’ American bulk.
Though your points reminds me the fact that even if Pinoys come to a foreign country and have more access to area’s own superior made products, say a prime made sausage from a deli, they would still go after the pinoy taste, like the pinoy hotdog, which is nothing more than grinded-up bits of beef/pork/chicken, flour, spices and hell lot of preservatives.
Having been at the opening of dozens of Balikbayan boxes over my lifetime, it’s not so much the “pinoy taste” as it is bringing back higher-quality products that you can’t really find here (like “Filipino” cookies from Spain. Deee-lish.
In essence, it’s both quantity and quality (and like we prefer, the ability to have them whenever, wherever). Right now we should be thankful that the Chinese have only mastered the former because “Made in China” quality isn’t often by Chinese brands themselves. The Philippine industry can compete in quality where it counts if there is a proper enforced structure in place to create a trusted brand. It’s like how taxi drivers still buy Toyota Vios over Chery Cowins, and tricycle drivers and motorcyclists trust Honda, Yamaha and Suzuki over…whatever the Chinese equivalent is.
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BongV Reply:
February 6th, 2011 at 9:04 am
Philippine has been protected since 1935 – and what do you guys have today – LOUSY INFRASTRUCTURE.
Up to when will the Philippines be protected – till kingdom come – ? kulelat
Puro kayol IF – here’s the reality – LOCAL PINOY’S SUCK – let those who can do the job handle it – open up the economy – we don’t need local retards in the wheel
Jay Reply:
February 6th, 2011 at 2:37 pm
@Lazzo
That is ALSO the point as BongV have already said: infrastructure has been LOUSY and has not made the leaps and BOUNDS to break away to become a free market. The oligarchs and government don’t want anything to do with it because they have become complacent and won’t look at the possibilities, rather than their bottom line. Getting foreign competition may improve it drastically as they too are certainly concerned about their bottom line AND possibilities as well, plus trying to compete with the locals as well.
Ironically, you don’t necessarily have to bring them back as opposed to manufacturing them back home as long as most of the raw materials are obtainable. Pinoys have been used to poor taste that is the food processing industry in the country and if you think about it, with the rising cost of produce, processed foods almost stay static. So those of low income depend more on Oligarch manufactured processed foods for sustenance due to its cheapness than say HEY, if you fix the whole route to the breadbasket/farmlands of the country, you would actually pay for what you get: a full head of cabbage, fresh fish that can be made available and other produce!
The Philippine industry can compete in quality where it counts if there is a proper enforced structure in place to create a trusted brand.
To sound off BongV’s dissent, that is like over 60 years of IFs. Infrastructure is VERY BASIC in development and long term planning! The fact they didn’t pay attention to this at all is really betrays the IFs to the point where you honestly have to force the issue.
ChinoF Reply:
February 6th, 2011 at 5:02 am
Question is, if foreign companies are not allowed to create jobs in the country, who will? That’s the problem.
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The Lazzo Reply:
February 6th, 2011 at 8:09 am
I’m not saying they shouldn’t, mind. I’m just saying there should be a system in place that prevents irregularities on a wanton scale as we have now and allow smaller businesses to compete. Otherwise it’ll just be adding more corporate domination to the mix.
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BongV Reply:
February 6th, 2011 at 9:22 am
opening up the market ain’t about market domination
it’s about market competition – lousy locals who don’t shape up should be put out of business instead of being sustained by stupid protectionist legislation
ChinoF Reply:
February 6th, 2011 at 10:00 am
That would probably need Constitutional Reform too, since our regulatory system seems poorly enforced, and we have some laws that need changing as well.
Allowing smaller businesses to compete… foreign investors aren’t all big baddies. That’s exactly why we want foreign investment to be less restricted – it could help the smaller business grow. The 40% equity limit actually favors the larger local businesses.
Jay Reply:
February 6th, 2011 at 2:24 pm
@Lazzo
So tell me, do you want oligarch domination, where honestly the rules are written specifically to benefit them? Or corporations with a huge advantage, but with sufficient strategy and know how, can be taken head on due to rules that only benefit open opportunities?
The Lazzo Reply:
February 6th, 2011 at 2:56 pm
Definitely not the first option, but the second I’m taking with a grain of salt.
I want a level playing field with a unitary set of rules that everybody has to follow, domestic or foreign, big and small- and a government that can effectively tell “good” from “bad” foreign investment and is disciplined (a la LKY) to know what to do if the investment is “bad.” Constitutional reform can achieve this if applied right. Definitely no 60/40 bull****, and the only real “discrimination” would be telling which businesses are S, M or L for tax purposes.
Quite a few big corporations have become ruthless in using their so-called advantage to exploit open opportunities (and their respective governments) wherever they see fit with little benefits to others apart from the end consumer and stockholder. It’s already happened here with domestic corporate monopolies. And it’s also happened elsewhere with foreign corporate monopolies.
Regardless of their point of origin, it isn’t about having a competing presence, it’s about having the only presence by any means necessary. You can open the market all you want, SMEs that are able to gain a hard-earned measure of competitiveness (thanks to foreign FDI?) have no chance in a society that’s already been trained to look for the BIG BRAND NAME. Eventually you’ll have to go Teddy Roosevelt and wield that anti-trust stick.
But red ranting aside, I essentially want a government that says, “Look, you can invest here, but if you step over the line you can bet your sorry asses you won’t be getting a golden parachute.” Again, this goes for both domestic and foreign big business. Paraphrasing Mr. Wikileaks, “Free markets work because they are forced to be free.”
Jay Reply:
February 6th, 2011 at 6:39 pm
ruthless because they were allowed to run rampant, or because the locals had no motivation competing and instead tried pointing to self pity instead? The solution for a society to look for a big brand name? BREAK THEM! Besides we wouldn’t know if these people we refer to would be given more options for products AND services, because they were never given one!
We don’t have much options in trying to help initiate the change. You aren’t the first pull the old improve the infrastructure, make the low hanging fruits attractive and they will come. As much as you downplay competition, it can work considering these foreign companies can help initiate changes that take away all the pressure of making things work in Manila and establish another big city with opportunity. Thus making it possible for even locals to try play with other areas in the country rather than Manila, overseas or bust as their primary choices.
The Lazzo Reply:
February 6th, 2011 at 11:49 pm
As I keep saying, it can work if both small-medium domestic enterprise and foreign companies are placed under an open yet well-enforced system of rules that can help establish centers of activity outside of Manila.
But as BongV has neighbors out in the farmlands, I’m unfortunate enough to have relatives in influential provincial families. And I can say that there are also quite a few among them that want full FDI as well. The problem I see is – and I haven’t said this in front of them yet for obvious reasons – it’s possible that the benefits get concentrated among their preferred clients, rather than across their entire constituency.
BongV Reply:
February 7th, 2011 at 12:00 am
it’s possible that the benefits get concentrated among their preferred clients, rather than across their entire constituency. – IF they provide good products at good prices there’s nothing wrong with that.
IF they provide lousy products at steep prices and pass legislation to favor themselves – that’s not a free market
daaaang! slow down, fellas…. the african continent is being “farmed” by the wealthy petro states… the produce go straight to the grocery stores of the desert metropolitan cities of mideast for their consumption… the local africans consume the spoiled and discarded produce, get slave pay… china is doing the same… using ‘merka’s green bucks, it farmed vast fertile land of the dark africa to feed ‘sang tambaks na billion tsekwas…
in flipland, thousand of acreage of aquaculture in the south of ‘tang inang imperial manila is financed by the tsekwas… the fish produce go straight to the mainland tsekwas… flips, hayun, nagdidildil ng hampok na galunggong at tuyo…
watch what you guys ask for…
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BongV Reply:
February 5th, 2011 at 11:48 pm
guys gamitin ang utak when structuring a deal.. not the utin
in wadabs – the banana “rejects” are sweeter, larger – will rot by the time they reach the overseas markets.
the “rejects” and “spoils” become … voila… banana chips.
the more enterprising allah eys… buy the “rejects” and ship it to tutuban –
the other option being to join NPA????
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ulong pare Reply:
February 6th, 2011 at 12:28 am
daaaang! bongv naman naman namnn….. flips, to use the “utak” when structuring a deal?… flip dealers will deal… alrighty then…
like a card game 9… nueve na eh, hihirit pa… putok tuloy…
banana chips exported to ‘merka’s fliptowns…. actually, i shoplifted a bag of banana chips from seafood city… (hay salamat, i confessed…. now my conscience is clear)
[Reply]
ulong pare Reply:
February 6th, 2011 at 12:58 am
pahabol… flip produce would not make it to ‘merka’s dining table…
kasi, flips “doctored” the export inspection documents… “doctoring” is one of flips’ expertise…
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Jay Reply:
February 6th, 2011 at 12:20 am
Buy Filipino talaga, hahaha.
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What did Alexis de Toqueville call this kind of dilemma again? Oh yeah, it’s called “soft tyranny”.
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Those who advocate 100% Filipino ownership forget one important rule of life – Murphy’s Law. Don’t forget that this is one reason why our country’s sunk. Just because Filipinos are the de facto citizens of the Philippines doesn’t mean they know how to run things right. Murphy’s Law, people… In the Philippines, Filipinos are running the show… and they screw up. In the words of our dear president, “nobody’s perfect.” Go for 100% Filipino ownership because Filipinos are the best managers of their own resources… yeah right. North Korea and Cuba are the best managers of their own resources indeed… In the first, millions are starving, and in the second, it’s being bailed out by Venezuela.
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The Lazzo Reply:
February 6th, 2011 at 3:51 am
Conversely, Murphy’s Law is why I take Orion’s/Dodong’s PARLIAMENT NAO! and BongV’s FREE MARKETS ROCK! stuff with a salt shaker in one hand, and why I try to keep the debate nice and hot. Ultimately, it must be a culture that – to paraphrase – “acts locally but thinks globally” that is successful.
If the Filipino can’t handle their own affairs on their own soil, what happens when faced with an opportunistic influence from abroad (as UP observes above, they’re not all good?) MLQ might have been right in that case.
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ChinoF Reply:
February 6th, 2011 at 4:41 am
That’s why I take the position converse from yours, that Murphy’s Law is applied more to Filipinos handling their own stuff. If we can’t handle our own affairs on our own soil, can’t we seek help from others? I would take UP’s reports as well with a salt shaker. MLQ is a complete hack for me.
Since you mentioned culture, let me say… my 100% Filipino ownership being a mess point is best applied to media and education.
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The Lazzo Reply:
February 6th, 2011 at 7:22 am
Going back to that World Bank article though, you would be surprised how restrictive even many developed East Asian countries are when it comes to their media. There’s next-to-nothing in the way of majority foreign equity especially in terms of television. Sure, it’s legislated instead of constitutional, but that should be a moot point.
http://iab.worldbank.org/Data/Explore%20Topics/Investing-across-sectors/Media
Of course, given that we want to have a media that’s more productive to the people than more Willing Willie, perhaps presenting more enlightened Filipino views would have a better effect than throwing the doors open to Rupert Murdoch or CCTV.
BongV Reply:
February 6th, 2011 at 9:09 am
you already have your local media in control 100%.
if they wanted to introduce something new – they would already have since they own it totally.
FACT is – THEY HAVEN’T.
Open up the darn economy – let new players come in – enough with these LOCAL RETARDS.
ChinoF Reply:
February 6th, 2011 at 9:49 am
I looked at the WB chart. Yes, some other countries are restrictive, like Indonesia. But even that still has a 20% under M&A. Philippines seems to be only one with flat 0% in everything. That’s not just restrictive. That’s totally blocked out. We’re still unique in a sense.
I’d like to focus on Singapore. It has some restrictions not just in equity, but in regulation and content. I like that better. Also, was it you who told me that Singapore’s media companies are mostly state-owned? I find that acceptable. They still pay well anyway. And that way they can effectively cut away the Wowowee entertainment. Singapore knows how to play it smart, though I do agree press freedom can be problematic there.
Compare that to the Philippines where media is almost always privately owned by local companies – these local media companies basically run the government. They fund the candidates in exchange for “favors.” Even if Wowowee is banned, they just need to bribe their puppies in gov’t, the show goes on. Just another example of how the Filipino way sucks.
I just hope breaking up the 100% ownership limit will help open up the way for better content through the participation of better quality companies. And besides, there are so many other companies that could some in aside from Murdoch’s.
The Lazzo Reply:
February 7th, 2011 at 3:12 am
Indonesia, Vietnam and China are all totally blocked out from foreign investment as well. But how is it that they’re able to promote productivity better than we can? How is it that China isn’t still broadcasting the Little Red Book as often? Maybe it’s that good ol’ discipline those ol’ Commies love to emphasize (or for a capitalistic perspective, LKY.) Or they can invite the foreign perspective, but that’s not exactly tangible like cold hard cash.
Especially in the age when you have sites like this, which technically are part of the Filipino Media. Maybe a relatively-obscure media with about as much readership as a provincial peryodiko, but part of the media nonetheless. With the internet technically not having any ownership limits whatsoever (yet), perhaps AP has its finger on a way to change hearts and minds to something more productive.
BongV Reply:
February 7th, 2011 at 10:49 am
Indonesia, Vietnam and China have FDI – more FDI than the Philippines – so how can they be “totally blocked out from foreign investment” when they have FDI – lots of it –
the statement “Indonesia, Vietnam and China are all totally blocked out from foreign investment as well” is incoherent and does not make sense.
ChinoF Reply:
February 6th, 2011 at 5:31 am
BTW, I know there’s a lot more to do. We at AP may want economic liberalization, decentralization and parliamentary form as our first causes. But that’s not all. Improvement in infrastructure, law enforcement, overhaul of certain laws, better regulation, better business laws (like elimination of minimum wage law for me), etc, we believe in too. But we believe Constitutional Reform is an important first step to achieving these.
Removing the Filipino-only limit on media and education, and perhaps all other fields, is something I really want done.
The 40% foreign equity limit was put in our 1935 Constitution, during Quezon’s time. I suspect him of putting that in, although it can’t be confirmed. I still suspect local vested interests anyway as responsible for that provision.
For others’ benefit: I also looked around Constitutions of other countries. Malaysia, Indonesia, Thailand, Japan, Mexico, America, etc., none of them have any foreign equity limits. Only the Philippine Constitution has such a provision! We should strike it out. Thus, if we want any foreign equity limits, they should be in legislation and not in the Constitution
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The Lazzo Reply:
February 6th, 2011 at 7:48 am
For some odd reason I’ve figured that a sensible first step is to transfer all the restrictions as-is to legislation. The only thing that’s changed is what sacred paper it’s written on. THEN you can work things out piecemeal from there as attitudes and systems change.
ChinoF Reply:
February 6th, 2011 at 9:51 am
Yes, I agree with that. A step which should be taken.
BongV Reply:
February 6th, 2011 at 9:02 am
who says influence from abroad is always opportunistic? that’s ridicluous. heck – stop using the internet – it’s influenced by america. stop using electricity – it’s foreign influenced. don’t write in English it’s foreign. don’t step on a road – it’s foreign.
if Pinoy’s can’t handle their own affair – let someone else who can do the job – do it.
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Jay Reply:
February 6th, 2011 at 2:40 pm
Philippine were governed by overseas overlords and what do pinoys have to say about it; LOL it was a bane, it was hard tyranny, etc.
I doubt the Philippines themselves could stumble on the k-12 public education system by themselves.
The Lazzo Reply:
February 6th, 2011 at 2:58 pm
@Jay: Even if we’re effectively the last nation on earth that doesn’t use it. LOL
A bit OT: “For all the talk of the Filipinos who died in Tirad pass and how it was like Thermphylae where the Filipinos died fighting the Americans (quite a stretch, the Pinoy story talaga)”
Incidentally, I just finished A Question of Heroes by Nick Joaquin. His reading is that Gregorio Del Pilar was Aguinaldo’s hatchetman. He was merely buying time for Aguinaldo to escape and failed to defend a pass that otherwise would have been successfully defended by a competent leader. In addition, before the battle, Del Pilar was cavorting with women of a local town, and when shots rang, he dismissed it as revelry even if it was really an attack. It thus casts Del Pilar as another inept leader and a testament to Da Pinoy mediocrity.
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Basically, giving the NFA to DSWD is really bad. It reduces our own local suppliers into providers of dole-outs to the poor… farmers may be made to make rice just to dole out to people who are not working. Who knows if the suppliers and farmers are even being paid right. They might just be told, “make rice, thank you nalang ang pambayad mo,” and may be told that they’re helping the poor, while they themselves are poor. All the while Soliman is pushing her socialist agenda, increasing the deficits of the government with dole-outs. It won’t do anything for our food security except increase the insecurity.
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Tama na kasi ang pag tatanim ng bigas
Kanin at ulam lng ang alam ata ng pinoy, bakit ba hinde tayo matuto mag tanim ng patatas o kamote, kahit mais maayos nang staple food un.
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Jay Reply:
February 6th, 2011 at 2:44 pm
sadly, market is controlled by supply and demand. If anything, the ordinary diet of pinoys is high in empty carbs, low on REAL raw nutrition and high on manufactured and chemical ones (the cheapo foods where they add your nutrients like crazy) and high on sodium (salt and MSG on everyday cooking). The Philippine breadbasket is even more beautiful, if made affordable. Now guess who has a hand in controlling it?
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I wanted to add that from the reporters notebook show I watched, because of the situation the farmers face, some are desperately FORCED to take alternative measures for income: DRUG AND NARCOTICS TRANSPORT. And these simple, hard working people who are forced to play with this hand because of the dirty rules, or lack of dirty rule enforcement. Then all of a sudden the National Drug Admin starts waking up as if this was a big concern.
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D ko gets kung ano ang problema sa pagbigay ng funds dsdwd… DSWD na raw ang mag-susubsidise sa mga farmers? So, ano ang mali d2–maliban na pang-slurpee ito?
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It’s funny how this government loves to import Vietnam’s rice supplies rather than continue subsidizing rice production that should 1.) help moderate prices of rice in the market, and 2.) Give more $ to our farmers. What’s up with the ****ing doleouts? :/ They’re not squatters, they just want better opportunities from this sorry ass student council government.
PS: Angelo Reyes died. Now I hear angelic music from the radio… What’s next? Gun salutations, and a hero’s burial?
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This article mirrors the sentiment of the earlier article I wrote on how FILIPINO POVERTY IS PIMPED in the name of corruption and slush funds. http://www.ich9.com/philippine-economy/prostituting-the-filipino-poor/ I detailed how CCT is just the LATEST of a long string of FAILED policies that seek public support for funding for projects of dubious effect. See the article above for the list of failed projects and their effects.
The bottomline is simple:
Cut spending to cut down on the oxygen of corruption. The PHL budget requires public scrutiny to maximize responsible spending.
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