Critique of 2012 State of the Nation Address (SONA) of BS Aquino – Part 5 – Expanding The Welfare State

This part of the SONA shows the expansion of the Philippine welfare state. The Philippines has yet to learn the lessons of the Scandinavian debacle in the 90s – and the implosion of the West European welfare states while closing its eyes on the stability of the liberal Polish economy after repudiating the commie welfare state.

From the womb, to school, to work, change has touched the Filipino. And should a life of government service be chosen, our people can expect the same level of care from the state, until retirement. Our administration will recognize their contributions to our society as public servants, and will not withhold from them the pensions they themselves contributed to.

Womb to tomb – waddya know – it’s the Pinoy Welfare State. I recall a columnist from Philstar who said there’s no such thing as a Philippine welfare state. Yeah right – ika nga, we can only be kept in prisons we don’t see. You know what that sounds like? A herd of sheep whose wool will be fleeced by the shepherds – and ultimately butchered into mutton in the slaughterouse.

As Europe’s welfare states are imploding from unsustainable government spending – the Philippines ramps up more government spending on welfare. It seems Aquino wants the Philippines to get to bankruptcy faster than the Eurozone.

Yup Filipinos can expect the same level of care from the state – LOUSY, INEFFICENT, WASTEFUL, and CORRUPT – from cradle to grave.

Each Filipino should learn to take care of oneself and not put their care in someone else’s hands then complain that they don’t like the care.

Consider: some retirees receive less than 500 pesos a month. How does one pay for water, power, and food, daily? Our response: With the New Year comes our resolution that all old-age and disability pensioners will receive no less than five thousand pesos monthly. We are heartened that we can meet their needs now, without jeopardizing their future benefits.

A greatly improved economy would have provided for various pension funds that are managed better than government and have better pensions than government. Another source of revenue would be businesses that retirees have set up for their old age. What’s the point in paying for water and power without receiving those services in the first place.

The face of government has truly changed. Our compensation levels are at par with the private sector’s at the entry level. But as you rise through the ranks, private-sector pay overtakes the government.

The face of government has changed – it has become thicker, more calloused, more expensive to maintain – and CRAPPIER than ever. And we are paying five agencies to watch, monitor, audit, exercise oversight, and review in aid of legislation – one private sector employee to change a light bulb.

We will close that gap in time; for now, we have good news for government employees: Performance-Based Incentives. In the past, even poorly performing agencies would not have any employees with ratings lower than “very satisfactory.” To maintain smooth interpersonal relations, supervisors would have a hard time giving appropriate ratings. Exceptional employees are not recognized: their excellence is de-incentivized, and receive the same rewards as laziness and indolence.

Here is one of our steps to respond to this. Starting this year, we will implement a system in which bonuses are based on their agency’s abilities to meet their annual targets. Employees now hold the keys to their own advancement. Incentives may reach up to 35,000 pesos, depending on how well you do your jobs. This is in addition to your across-the-board Christmas bonus.

We are doing this not only to boost morale and to show due appreciation of our public servants. This is, above all, for the Filipino people, who expect sincere and efficient service—who expect that they will continue to be the sole Bosses of our workers in government.

What? More raises for government employees who do nothing but keep costs of consumer goods high – whether it is the BOC, the NFA, the DA, the BIR, DoE, DoTC. More raises for government who run one scam to another – whether it is DENR, DPWH, DSWD, DOST, CHED, or DAR.

Taxpayer’s taxes are wasted in spending for all these bureaucrats who only complicate an otherwise straightforward process. Take for example – the days it takes to register a business – at least 31 days in the Philippines with fixers and clearances galore, 3 days in Singapore – and half an hour in Florida – from the convenience of your keyboard.

Sincere and efficient service comes from the private sector – either render the best service or go bankrupt because the consumers will go take their money to those who provide the best value. In contrast – government provides the lousiest overpriced service there is. Sure the service is “free” but what “service” are you talking about – there’s none – the fees you paid just went to the government’s suppliers of expired pharmaceuticals and what not. Short-changed. Duped. Suckers.

There have always been people who have questioned our guiding principle, “If there is no corruption, there is no poverty.” They ask if good governance can put food on the table. Quite simply: Yes.

Principles are weighed based on outcomes. Poverty, jobless, underemployment, hunger remains at an all-time high. Nominal fluctations due to seasonality do not hide the long-term trends that the Philippines remains the most corrupt among the ASEAN-6 according to Transparency International.

What kind of food has Aquino’s “good governance” put on the table? Pagpag – that’s what! For those luckier – you will have expensive rice (euphemism: stable prices) – courtesy of the Bureau of Customs, the NFA, and the rice traders – consumers and farmers are left with empty pockets.

No worries – the modern carabaos aka OFWs will send remittances that you can spend in Shoemart, Gloriettas, Ayala Center, Robinson’s, the Mall of Asia.

Tough luck, Filipinos will not be enjoying the items of 100% foreign owned retailers like Walmart, TjMaxx, Dillards, Ross, Marshalls, Ikea, JC Penney, Bloomingdales, Macy’s, Neiman-Marcus, Gap, Old Navy, Target, Bealls, and the outlet malls where the 100% foreign owned stores of Calvin Klein, Nine West, Nike, Skechers, Ecco, Abercrombie and Fitch, Clarks, Apple, Best Buy, Radio Shack, etcetera etcetera can operate and provide better value than the overpriced boutiques of Shoemart.

Think about it: Doing business in the Philippines was once considered too risky—the rules were too opaque and they were constantly changing. A person shaking your hand one day may pick your pocket the next.

The Philippines has a two-tiered economy. One for the oligarchy who are funded by global sources through the PSE. And then there’s the nobodies – who are not members of the PSE – and who are restricted from joint ventures and jobs where foreign partners own more than forty%.

The rules of doing business is no longer opaque – the vested interests still had reservations before; today – with the PPP those reservations are gone. Government legitimizes plunder in exchange for a share in the revenues of the private sector partner. Pinoys are cooked deep deep fried – twice – as taxpayers and consumers.

With Aquino’s “level playing field” – the person picking your pocket today – will still be the same person picking your pocket tomorrow – Lopez, Ayala, Cojuangco, Pangilinan, Tan, Sy – and their merry men in the Makati Business Club.

Now, with a level playing field, and clear and consistent rules, confidence in our economy is growing. Investments are pouring in, jobs are being created, and a virtuous cycle has begun—where empowered consumers buy more products, and businesses hire more people so they can expand to keep up with the growing demand.

Investments are pouring in- but not to the Philippines.

Investments to the Philippines are pouring in- in trickles.

Investments are pouring in droves to Thailand, Vietnam, Indonesia, Malaysia, and Singapore.

In fact the Philippines has a net outflow of investments – investments are going out as the cost of electricity increases faster than you can say Ford Philippines. Of the $331B in FDI that went to Asia in 2011, the Philippines only received $2B while the rest of the ASEAN-6 was easily getting three to five times to twenty times. This year the BSP has readjusted its FDI targets to $1.2B.

The 60/40 economic restrictions in the Constitution written by Cory Aquino’s handpicked constitution writers have ensured that “empowered” consumers buy more lousy products from Shoemart, pay higher bills for non-existent electricity of MERALCO, pay higher airplane tickets to always late Filipino airlines with customer service worthy of Muntinglupa prison.

Prudent spending has allowed us to plug the leaks in the system, and improved tax collection has increased revenues. Every peso collected is properly spent on roads, on vaccines, on classrooms and chairs—spent on our future.

We have fixed the system by which we build roads, bridges, and buildings—they now go where they are truly needed. Our roads are properly paved; products, services, and people reach their destination quickly and with greater ease.

“Prudent” spending has led to more DWSD CCT scams, ovepriced roads, bridges, and buildings built with substandard materials – if not inferior building standards because world standards are “too strict”.

Our roads are properly paved – but for how long till they peel off, crack, and get ridden with potholes.

Products, services, and people reach their destination quickly and with greater ease – assuming your destination is just a block away.

Otherwise, it will be the usual congestion and pandemonium- due to lack of foresight.

Now if you have the money, you can go on the tollway – but it will be more expensive than usual – not to mention the developers who lobby to have the tollway diverted to their proximity in order to increase the valuation of their property.

Yes – foreign investors can hit a double – triple whammy – if they get in bed with the oligarchs in a 60/40 venture or a 25/75 equity structure if participating in public utility projects. In order to hit the foreign partners desired revenue targets – and still meet the 60/40 or 25/75 rule – the foreign partner’s increase in revenue will have to be accompanied by a corresponding increase in revenue of the local partner. Who’s gonna foot the bill? Taxpayers and consumers that’s who.

Because of good governance in agriculture, food production has increased, prices don’t fluctuate, wages are stable, and our economy is stronger.

What this means is that due to restrictive regulations, prices are still high because imports are prevented from coming in – wages are still low – and the economy of the vested interests (poultry and livestock growers, rice/sugar/coconut/coffee traders) is stronger but the personal economy of consumers is WEAK – as in BROKE.

It is true: A resilient and dynamic economy resting on the foundations of good governance is the best defense against global uncertainty. We have been dismantling the obstacles to progress for two years, and now, our success can only be limited by how hard we are willing to work for it.

We achieved all these things even as countries around the world were surmounting their own challenges.

A resilient and dynamic economy isn’t driven by government spending – as Portugal, Italy, Greece, and Spain will have you know.

A resilient and dynamic economy isn’t driven by OFW remittances – as Singapore and Hong Kong will have you know.

The best defense to uncertainty is an open market which is able to quickly bounce back with the tides of the global economy.

When we insulate ourselves from the risks – we also insulate ourselves from the harvest. Learning to compete, learning to provide value, learning to improve continuously, learning to streamline and re-engineer processes, learning to serve consumers with the best services at the price they are willing to pay for is the best defense against uncertainty – not more regulation, more taxes or subsidies for that matter.

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(A blow by blow rebuttal of the 2012 SONA. Don’t be overwhelmed by BS Aquino’s flood of misinformation. AP removes the fluff and focuses on the bacon – or the lack of it. To be continued)