The Economy: Aquino’s PPP – Puro Palabas na Palpak

ABS-CBN recently cited an article on Public Private Partnerships

There is uncontainable exuberance over five (5) PPP projects having been prioritized and which will be subjected to bidding within the year.

These are the P6.3 billion Metro Rail Transit Line 3, the P7.7 billion Light Railway Transit Line 1, the P1.6 billion Daang Hari-South Luzon Expressway link road, the P10.6 billion Ninoy Aquino International Airport Expressway Phase 2, and the P21 billion North Luzon Expressway-South Luzon Expressway connector road. The selection process for the service contractor for the first two (2) projects – MRT3 and LRT1 has already commenced.

Note that all these projects – Metro Rail Transit, Daang Hari-South Luzon Expressway, Ninoy Aquino International Airport Expressway Phase 2, North Luzon Expressway-South Luzon Expressway connector road are in the nature of public works.

The implication is that any investor who would like to particiate must first comply with the constitution and the implementing rules and regulations provided for in the Foreign Investments Negative List. What are these regulations?

8th Regular Foreign Investment Negative List A

Up to Twenty-Five Percent (25%) Foreign Equity

14. Contracts for the construction and repair of locally-funded public works (Sec. 1 of CA 541, LOI 630) except:

a) Infrastructure/development projects covered in RA 7718; and

b) Projects which are foreign funded or assisted and required to undergo international competitive bidding (Sec. 2a of RA 7718)

Up to Forty Percent (40%) Foreign Equity

17. Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution) *4

18. Ownership of private lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of CA 141; Sec. 4 of RA 9182)

19. Operation and management of public utilities (Art. XII, Sec. 11 of the Constitution; Sec. 16 of CA 146)

20. Ownership/establishment and administration of educational institutions (Art. XIV, Sec. 4 of the Constitution)

21. Culture, production, milling, processing, trading excepting retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the by-products thereof (Sec. 5 of PD 194) *5

22. Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation (Sec. 1 of RA 5183)

23. Project Proponent and Facility Operator of a BOT project requiring a public utilities franchise (Art. XII, Sec. 11 of theConstitution; Sec. 2a of RA 7718)

24. Operation of deep sea commercial fishing vessels (Sec. 27 of RA 8550)

25. Adjustment Companies (Sec. 323 of PD 612 as amended by PD 1814)

26. Ownership of condominium units where the common areas in the condominium project are co-owned by the owners of the separate units or owned by a corporation (Sec. 5 of RA 4726)

Obviously, the news that “A lot of countries have signified support for the Philippine PPP initiative. These are China, U.S.A., United Kingdom, Singapore, Japan, India, Korea, Qatar, UAE, Doha, and Abu Dhabi. Foreign governments and investors have manifested their desire to invest in the Philippines. International donor and financing agencies have likewise extended their technical and financial support for the flagship program of President Aquino” sounds good. This signifying support, however, is something that we have heard since the founding of the Republic. Yet, not much has changed.

Peter Wallace of the EIU raised this question in his recent speech “Perception Decides” at the Trade Union Congress of the Philippines. He said:

Do you see a pattern here? We all suffer the same problems, so why is the Philippines getting so much less investment? Just look at the numbers: Over the past six years the Philippines struggled to attract $11.9 billion in foreign investment. Vietnam, a country fast overtaking the Philippines, got over double that at $29.8 billion. Indonesia was three times at $36.3 billion, and Thailand, four times at $48.2 billion.

So I ask the question again: The problems of working in each of these countries are much the same, so why is the Philippines so far, far behind in attracting interest? If I were P-Noy, I’d be asking that question as the top question I’d demand an answer to. I suggest he put some bright people in a room, close the door, pass food and drink (red wine works for me) around and don’t let them out until they have the answer.

Given the reality that the Philippines is no worse than the others in the constraints imposed on business, is it just a matter of degree? For instance, infrastructure is inadequate everywhere, but worse here than over there. We’ve spent less than half (as a percentage of GDP) what the other countries have over the past 20 years. And it shows, fly into the worst airport in Asia and you know it immediately. Or is it perception?

As far as am concerned Peter Wallace’ question gives an indicator where this PPP agenda of Aquino is headed – NOWHERE. Why? Here’s why.

BEFORE THE FACT (before business registration)

South Korea, Japan, Taiwan, HK, Singapore, Vietnam, Thailand, Malaysia – allows investors to own up to 100%

The Philippines only allows foreign investors up to 40% equity.

****

Given:

1. You have a business idea.

2. You have capital of $1M to roll out your idea

3. To realize your idea in the Philippines – you can only spend $400K, you have to find a local counterpart who has $600K – to meet the constitutional 60/40 requirement for a project that’s worth $1M

4. The only Filipinos who can raise $600K to match your $400K are who?

What’s the probability that you will invest? Or that a foreigner will invest in this scenario?

The Philippines suggests getting dual citizenship for the foreigner in order to avail of 100% equity – Question is who would like to become a Philippine citizen just so he can own 100% in the Philippines – only the desperate ones.

We lose out – the foreigners just go elsewhere where they don’t have to put up with the 60/40 bullshit

When are PPPs advantageous?

The use of PPPs work in scenarios involving public monopolies as government uses industrial management principles to leverage economies of scale. The caveat as applied to the Philippines is that due to constitutional restrictions, we may not be getting the optimum offers from the private sector.

In underdeveloped or corrupt economies or like the Philippines, pursuing the PPP can wind up doing more harm than good.

In a society with substantial corruption, privatization allows the government currently in power and its backers to siphon a large portion of the entire net present value of state assets away from the public and into the accounts of their favored power brokers (BV: remember Meralco, NLEX, SLEX, PAL, etc). Without privatization, corrupt officials would have to slowly harvest their corrupt earnings over time. As such, efficient privatization depends on their being a very low of current corruption among the current government officials since it allows for far more ‘efficient’ extraction of corrupt rents.

Of course, corrupt governments can also extract corrupt rents quite efficiently in other ways – particularly by borrowing extensively to engage in spending on overly favorable contracts with their backers (or on tax shelters, subsidies or other giveaways). Generations of subsequent taxpayers are then left with paying back the debt incurred for corrupt transfers made decades previously. Naturally, this may lead to the sale of public assets….

In the end, the public is left with a government that taxes them heavily, and gives them nothing in return. Debt repayment is enforced by international agreements and agencies such as the IMF. Infrastructure and upkeep is sacrificed – leading to a further decay in the economic efficiency of the country over time.

http://en.wikipedia.org/wiki/Privatization

Without liberalization – don’t expect new results from the same old privatization or PPP for that matter. Let’s get our priorities straightened out – first things first – remove the 60/40.

About the Author

BongV has written 389 stories on this site.

BongV is the webmaster of Antipinoy.com.

Addressing the Filipino nature: we shouldn’t stop at merely coping

June 28, 2012

by Arche

It is on rare occasions that I suddenly recall, out of nowhere, a random scene from a movie I’ve watched in the distant past. As I sat in front of my computer, lamenting the loss of my butter cookies (which I’ve eaten up a few days ago), a scene from one of Keanu Reeves’ so-so films, The Day The Earth Stood Still, came to mind. This particular scene was about Professor Barnhardt’s discussion with the alien Klaatu (played by Reeves) regarding the capacity of sentient beings for change.

Professor Barnhardt: There must be alternatives. You must have some technology that could solve our problem.

Klaatu: Your problem is not technology. The problem is you. You lack the will to change.

Professor Barnhardt: Then help us change.

Klaatu: I cannot change your nature. You treat the world as you treat each other.

Professor Barnhardt: But every civilization reaches a crisis point eventually.

Klaatu: Most of them don’t make it.

Professor Barnhardt: Yours did. How?

Klaatu: Our sun was dying. We had to evolve in order to survive.

Professor Barnhardt: So it was only when your world was threatened with destruction that you became what you are now.

Klaatu: Yes.

Professor Barnhardt: Well that’s where we are. You say we’re on the brink of destruction and you’re right. But it’s only on the brink that people find the will to change. Only at the precipice do we evolve. This is our moment. Don’t take it from us, we are close to an answer.

It is a truth that reverberates throughout history, even today. Most of us usually act on something only when danger has already and visibly presented itself in our midst. Throughout our past, destruction and chaos had to take place before people man up and work towards change. The Black Death had to occur for mankind to pursue intense medical and hygienic research. Extreme political oppression and tyranny in ancient kingdoms had to take place for people to stand up and set things right with their own hands. Still, while we humans have a knack for looking for wipes while taking a dump (figuratively speaking), the fact that we as sentient creatures have the capability to change for the better is an unarguably good trait.

And so is the ability to cope with present hardships, being a crucial part of change. Filipinos, apparently, are always known to smile no matter how bad it gets. Filipinos are known to cope with any problems they face and still survive for another day. This is one trait most Filipinos brag all the time to the rest of the world, always quick to point out the average Juan’s capability to withstand anything nature throws at him. “Adaptable,” “flexible,” “strong” and “happy” are some of the words usually attached to the Filipino identity. And, not surprisingly, they’re actually good traits. However, the problem starts when we stop at the “coping” part.

The problem starts when we remain adaptable, flexible, strong and happy for a looooooong time without any real plan ahead to actually ease the burden we currently experience. The problem starts when optimism is tantamount to acceptance of mediocrity and intellectual stagnation.

Nowadays, “mediocrity” is written all over our country. Mediocre governance, mediocre business and job conditions, mediocre economics, mediocre entertainment, mediocre values, you name it. And we as a people have coped up with all of this. Some foreigners visiting the Philippines for the first time might frown in disgust as the malodorous stench of the streets of Manila meets their noses, but we don’t mind it one bit. We have gotten used to it. We have coped up with the smell, no matter how bad it is.

We may have been under one mediocre administration after another, which left us severely lagging behind rapidly-growing countries economy-wise, but that’s alright. We might have been shamed, but we’ve finally coped up with it. We can make do with how things are going in our country. We can cope with anything.

Not that there’s anything wrong with “coping.” After all, psychology tells us that an unpleasant condition when repeated can become commonplace in an individual’s perspective, helping it adapt and survive. It’s a healthy biological instinct that kept our species breathing for a long time. However, we are also said to be the most intellectually advanced creatures in the planet. Why not utilize this reputation of ours?

“Coping” is good as long as it’s within rational bounds. “Coping” is good as long as we have a plan up in our sleeves to make our lives much bearable to live. “Coping” is good as long as change is on the way. But as it turns out, Filipinos seem to have confused “change” with “complacency.”

When faced with a worse situation, what we Filipinos have done is to merely change our lifestyles to fit the uglier scenario we are in. Things just got worse? Then we knock off a star in our lifestyle rating and deal with it. Looking at recent events, it seems that the Filipino view of “change” is merely taking the shape of our crappy container. Instead of a civilization that upholds the human value of “change,” we have become nothing more than chameleons.

Furthermore, it would seem that Filipinos are also becoming uncomfortable with things that can bring forth actual change. Dismissing senator-judge Miriam Santiago as a crackpot while not knowing how much we would lose once she leaves the Senate for good, refusing to let go of PNoy’s illusory reputation as a benevolent and competent president, apathy of the music industry towards the talented in obscurity in favor of the mediocre in the spotlight, such things attest to how “anti-change” we have become in the years that have passed.

The Yellow culture has pervaded the Filipino society for more than two decades. Political dynasties have thrived in our society virtually unchallenged. Metro Manila Film Festival films are consistently dreadful. It turns out that the trait we Filipinos are most famous for… is also the one that perpetuates our culture of crappiness. The trait that Filipinos are most proud of… has become a double-edged sword that cuts our collective skin every single time.

Perhaps this belief that we are a strong people has contributed to our steady ruin. We can withstand any strong wind that befalls us! And then we wait for it, and then we wait it out, while our country slowly withers around us. We brag that we are strong, yet our conviction is weak. We boast that we are adaptable, yet we have become spineless. We claim that we can cope, yet we cannot bring change.

Our story must not end with a dismal trend of coping while things become increasingly worse. We Filipinos must stop holding onto the idea that we are strong and can cope with anything, even just for a little while, and realize that not all bad things deserve to be cradled. Some bad things just get worse when unaddressed. Some bad things must be destroyed actively.

“Coping” is a step towards change, but “coping” is not change in itself. We Filipinos must realize that only when we shake off our nationalist hubris and recognize that there are things that we can’t and shouldn’t accept. There are things that we can’t and shouldn’t live with.

Criticize what needs to be criticized. Address every bad thing, even the ones we don’t really want to address. Dare to question that life we live, the politics we adhere to, the economics that drive our markets, the culture ingrained in our personalities. Dare to cast doubt on the ones who claim to be clean and just without the necessary evidence. Dare to ridicule the ones who try to dumb down the masses through monotonous TV shows and misleading news. Dare to dent, even break, the status quo of mediocrity that has solidified in our sorry country.

It is good. It is healthy. It’s not just some kind of a cheap anger management therapy. It is also a way for us to affirm that we’re not limited to “coping.” It is a way for us to affirm that we are also capable, even in teeny-tiny steps, of “change.”

Ambiguity and lack of intent – creative devices lost on Pinoys

June 27, 2012

by FallenAngel

For all the exposure that da Pinoys have to not only Western culture, but other Asian cultures, you would think that some of their more creative aspects, such as literary devices, would have rubbed off on them. Yet no, there remains a sizable part of the Pinoy population who remain imprisoned by their “heritage of smallness”, the inability to see the bigger picture, and their predilection towards finding offense in everything that they come across.

One such striking example we have recently come across is that of a commentator, by the name of “jong” from the Filipino Freethinkers, who made much ado about nothing in this portion of Ilda’s most recent write-up:

In the same manner, it is easy to judge Philippine President Benigno Simeon “BS” Aquino by the way he treats his political enemies particularly former President and Pampanga Congresswoman, Gloria Macapagal Arroyo (GMA).

Commentator jong regarded the above statement as “tantamount to name calling”, and that it seems out of place with the finer points established in the article.

So how do ambiguity and lack of intent fit in?

It is clear and evident that BS represents the initials of our President’s first name. Somewhere along the line, our “dear leader”, developed an ability to spout statements and to do actions within the scope of his presidency that ultimately amounted to bullsh*t. So put them together, BS Aquino can mean Benigno Simeon Aquino, and/or Bullsh*t Aquino.

The thing with the “BS” moniker is that it is an acronym which is open to multiple interpretations. In short, it is ambiguous. The author did not exactly give any reason for wanting to use BS, not that she has to; it’s a literary device! Therefore, since the use of the acronym is ambiguous, it is impossible to definitively glean or infer exactly what the intent of the author was in using BS. In short, there is lack of intent/motive.

Ambiguous statements are useful when an author desires that the readers draw their own conclusions from the context. If one can noisily claim that the author’s intention was to emphasize the “bullsh*t” definition, then that’s the bias of the reader, not the author. The reader has no right to claim that that was the intention of the author because:

1) He/she didn’t write the article

2) He/she gravitated towards his/her own biases, but blamed the author for putting it in his/her head

What exactly is difficult about taking statements at face value anyway? Kind of hard to grasp for a Pinoy mind that chooses to judge and/or suspect instead one that seeks to understand or just accept, isn’t it?

Perhaps, if jong had asked what Ilda’s intentions were in using BS instead of telling her outright what he thought it was, then this “debate” would not have occurred.

If you claim to be free from the dogmatic thinking of religion yet you cannot overcome the inborn Pinoy predilection toward judgmental thinking, paranoia and pettiness, then exactly what is your thinking free from?!

No wonder our country remains Asia’s basket case. Because we imprison ourselves with such “small” and “unimaginative” thinking, we remain unable to “move on” while we’re being left behind by other people who didn’t “sweat the small stuff”.

Get used to not being poor

DEMAND AND SUPPLY

Get used to not being poor

By Boo Chanco

We really have to get used to the idea that our country is not poor. Yes, we have a lot of poor in our midst… that’s obvious. But if we are talking about the economy, the Philippines is no longer among the poor countries of the world. Those who are protesting that billion dollar assistance to Europe are operating from a wrong premise about our country being poor.

Our problem is a very bad distribution of wealth. Our country taken as a whole has enough resources to start financing some of our infrastructure projects with little or no assistance from the usual ODA sources. Our problem is convincing wealthy Filipinos to invest here instead of warehousing their money with the banks or bringing it elsewhere.

The Bangko Sentral just reported that as of the end of last year, resources in Foreign Currency Deposit Units or FCDUs (remember the accounts of Corona that couldn’t be opened) are up by 1.4 percent to $30.1 billion from the previous year. Resident depositors accounted for 97.5 percent of total deposit liabilities.

The FCDU was initially conceptualized to attract forex deposits from non resident foreigners. That’s why there are those iron-clad secrecy rules similar to what they have in Switzerland and Singapore. But most of those using FCDUs are Filipinos who trust the dollar more, people like Corona.

Then there is the special deposit account (SDA) which has reached the level of P1.6 trillion and it is estimated to hit the P1.8 trillion-level by end 2012. The SDA is a means by which the BSP mops up excess liquidity in the system so as to manage inflation.

Every time the BSP intervenes in the forex market by buying dollars to keep the peso from appreciating too fast, a flood of pesos get into the system. Unless these pesos are taken out of the system through such means as the SDA, inflation may rise. That means higher prices for things we buy in the local market.

All these money in our FCDU and SDA accounts indicate we are as an economy saving more than we are spending… we have a lot of idle capital resources in the vaults of banks and the BSP. If those Filipinos who own these accounts had more faith in our country, our government and our economy, these funds would be invested in things like factories and infrastructure and thus create more jobs.

Then there are the Chinoy taipans moving out their money and investing abroad, mostly in China. That too is quite substantial. If invested here, we may not even need as much foreign aid as we are begging for now. Lucio Tan and company are boosting the already strong Chinese economy instead.

Lucio Tan, George Ty and even Henry Sy are big investors in China. They are investing money they made here in the Philippines. In a sense, we can see that as capital flight. I don’t know if they can show sufficient repatriation of profits made by their foreign investments. (But in fairness to Henry Sy Jr., he invested a large part of his share in the family fortune to modernize the NationalGrid).

All the news stories we hear about increased confidence in the economy are so far just press releases. We have yet to see these people who are talking good about the economy actually taking their money out of the bank vaults and putting these where their mouths are. Talk is cheap and unfortunately that’s all it takes to be in the good graces of Malacañang. But the real economy requires action.

Last Monday, my colleague Marichu Villanueva raised the point in her op/ed column that Official Development Assistance loans tied to companies in a donor country are more expensive than if we had a competitive bid. We are no longer so poor as to have no choice but to accept onerous ODA loans.

Citing the case of the LRT modernization requiring the procurement of some 156 LRVs or train coaches, Ms. Villanueva reported that the estimated cost of one of these LRVs is a whopping $3,279,666. On the other hand, competitive procurement under a completely untied loan will likely result in a cost ranging from $2 to 2.5 million per LRV.

Ms. Villanueva did some basic arithmetic and found out that “procurement of LRVs costing $2.5 million would result in principal and interest repayment of $474 million or savings of $37 million. A winning bid of $2 million per LRV would cost an estimated $379 million all in, saving the taxpayers $132 million or about the same amount as the commissions unscrupulous government officials and brokers had hoped to pocket in the infamous ZTE-NBN project.”

Ichu makes very good points. We should be able to raise the amounts needed for those LRVs domestically if the right financial package is designed and offered to local investors.

Government can enhance its PPP program with a scheme whose aim is to reduce the costs of PPP projects by using the government’s cheap borrowing costs (from ADB or WB, for instance) to finance a private sector operator selected in a tough competitive bidding.

DOTC Sec. Mar Roxas was talking about something like this early on. It is time for the finance guys to sharpen their pencils and devise such a scheme… something like what ADB is doing for those electric tricycles but better thought out and a lot more meaningful.

Incidentally, BSP Governor Say Tetangco in reply to my query responded that “under its Charter the BSP can’t engage in development financing like infra... But we can sell foreign exchange to the National Government if they have forex requirements for their projects.” Some uninformed people are saying the billion dollar assistance to Europe be used to finance development here instead.

In sum, we have to stop thinking of our country as dirt poor. And because we now have some means, we have to start assuming some obligations in the community of nations. What we have to work on is vastly improving the distribution of wealth in this country. And in the meantime, those who do enjoy control of this nation’s wealth, specially the taipans, should make the effort to invest in this country before moving capital earned here to investments overseas.

Davao City

I received this e-mail from Herbert Ignacio.

I’m a regular reader of your column in the Philippine Star. I greatly appreciate your insights and views on matters that affect the general public.

We have almost the same outlook on certain issues. In fact, on today’s issue, you emphasized the importance of peace and order to entice the investors to do business. At some point, you mentioned about Bayani Fernando of Marikina and Tomas Osmeña of Cebu doing a Lee Kuan Yew of Singapore.

Yes, I agree that our country needs leaders like them, strong willed and determined. However, I’d like to suggest that the names of former Davao City Mayor Rodrigo Duterte and current Tagum City Mayor Rey Uy be included in the list. These two people have shown exemplary record in maintaining peace and order in their respective LGUs that should have been emulated by other LGUs in the country.

I may sound biased because I’m a resident of Davao City. However, the peace and order situation is the main reason why I emigrated to this great city years ago from a small town in a southern Luzon province. I have traveled almost every corner of the Philippines as my work demands, but I have never seen cities as peaceful and orderly as Davao City and Tagum City in Davao del Norte.

In Davao City, smoking ban in public places has been strictly implemented for 10 years already. Besides, the law on liquor ban from 2 A.M. to 6 A.M. has been enforced. Firecrackers are not allowed since 2002.

On top of that, Davao City is the first city with the so-called ‘911’. Moreover, the city has the most advanced traffic light system in the country that impressed Ayala Land president Antonino Aquino so that he’s incorporating it with the redevelopment plan in the Makati CBD.

In Tagum City, roads and sidewalks are well-paved. Tricycles are all colored green and the public cemetery is well-organized. Traffic violators are arrested and fined.

These two cities are the classic examples of peaceful and orderly LGUs. What makes it ironic is that, these are situated both in Mindanao, a place often tagged as dangerous because of bombings, kidnappings and the like.

Both Davao and Tagum cities have not received enough media attention on the favorable peace and order situation. More investors should have poured in billions of pesos had they known enough about these two cities.

Thanks and more power!

Economy

Saw this line on the web.

The US economy is getting so bad a truckload of Americans was caught sneaking into Mexico.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

PHL Inbound FDI Increased by $850M in Q1 2012: So What?

The Philippine sycophant media has been bragging recently about the 72% growth in FDI – which in absolute terms is $850M. The basis of comparison was based on the Philippines year on year performance. Then like a blinding flash of the obvious – I had to ask and I wondered what the performance of our ASEAN neighbors were?

So what if the Philippines had 72% growth in FDI? On first glance it will appear impressive. But you have to dig deeper.

The Philippine economy takes 2 steps forward, say from Point B to Point C (FVR’s time, Arroyo’s Time).

Then it takes takes 3 steps backward from Point C to Point A (Erap’s time, BS Aquino’s time).

Then when the economy move from Point A back to Point B or halfway between B and C, the Philippines economic managers trumpet this impressive “growth”.

Meanwhile, during the same time period our neighbors have moved from Point A to Point B to Point C to Points D and E and beyond. Thus, their growth numbers may not be as impressive as 72% BUT in absolute terms – they are way past Points A, B, and C – the band where the Philippines merely oscillates.

So, when Aquino and the Philippines brag about the 72% growth – they are just talking about moving from Point A to Point B.

Flashbacks of BS Aquino’s campaign promises about meaningful statistics anyone?

For short – percentages can be misleading and will need to be cross referenced against the absolute figures. Singapore’s FDI data for Q1 2012 was not available so I will just stick to the Philippines, Vietnam, Malaysia, Indonesia, and Thailand.

When Vietnam talks about its 0.8% dip or when Indonesia mentions its 30% growth – it will appear that the Philippines outperformed Vietnam, Malaysia and Indonesia. But, in absolute terms, nothing can be farther from the truth as shown in the chart and table below.

Philippines vs Vietnam

Vietnam’s 0.8% dip in FDI still resulted in $2.5B – an amount which is greater than the $850M of the Philippines – nearly THREE TIMES of the PHL.

Philippines vs Indonesia

Indonesia’s 30% growth still resulted in $5.6B – still greater than the $850M of BS Aquino’s Failippines – 6.6 times or nearly 7 times bigger than PHL FDI

Philippines vs Malaysia

Malaysia only had 15.38% increase in FDI.A total of RM7.5 billion in foreign direct investment (FDI) for the first quarter of the year, or 2.3billion U.S. dollars – 2.7 times bigger than the FDI which went to PHL

Philippines vs Thailand

Here’s another one to blow BS Aquino’s socks off – Thailand’s FDI grew by 106% during the same period Q1 2012. Thailand’s BOI recorded 231.1 billion baht or $7.3B – that’s 8.67 or roughly NINE TIMES bigger than PHL’s $850M.

Philippines vs Malaysia, Indonesia, Thailand and Vietnam.

The total FDI that went to these five countries was $18.55B. Of the total, the Philippines recieved 5%, Vietnam – 13%; Indonesia – 30%; Malaysia – 12% – Thailand at 39%. The Philippines was the only country with single digit share of FDI – everyone else had double digits!

The 72% growth in FDI of the Philippines does not hold much water when during the same period, the country only captured 5% of the total FDI that went to Philippines, Malaysia, Indonesia, Thailand and Vietnam.

This is not the time to be bragging. This is the time to identify and eliminate the investment policies which keeps the Philippines to a single digit share of total FDI that goes to ASEAN.

-oOo-

Data Sources:

http://articles.chicagotribune.com/2012-04-22/news/sns-rt-indonesia-economyinvestment-update-1l3e8fk55z-20120422_1_foreign-direct-investment-rupiah-new-investment, Accessed 06/13/2012

http://thailand-business-news.com/investment/37796-investment-applications-in-thailand-grew-106-in-q1-2012-boi#.T9iQucFdiNc, Accessed 06/13/2012

http://www.reuters.com/article/2012/03/26/vietnam-economy-fdi-idUSL3E8EQ1YW20120326, Accessed 06/13/2012

http://www.mmail.com.my/story/malaysia-attracts-rm75-bln-fdi-q1, Accessed 06/13/2012

BongV has written 387 stories on this site.

BongV is the webmaster of Antipinoy.com.

Aquino slammed on $1-B IMF 'loan'

By Fernan Marasigan / Reporter

CRAZY!

This was how Party-list Rep. Teodoro Casiño of Bayan Muna described the Aquino administration’s plan to lend $1billion to the International Monetary Fund’s (IMF) emergency pool.

“The Aquino government’s plan to lend $1billion to the IMF is plain crazy. Our national debt just breached the P5-trillion level early this year, meaning we are more in debt than ever. Why on earth lend money when we ourselves need it?” said Casiño.

Instead of lending the amount to IMF, Casiño said it could be offered to small and medium enterprises in the country and the millions in the informal sector.

This developed as workers, led by labor center Kilusang Mayo Uno (KMU), condemned Mr. Aquino for saying that the $1-billion loan to the IMF will be used to help countries suffering from the global economic crisis and that it will redound to the benefit of overseas Filipino workers (OFWs).

The workers, who picketed the Bangko Sentral ng Pilipinas (BSP) office in East Avenue, Quezon City, on Monday, said the multilateral agency is not really helping workers and the poor in other countries.

“The IMF is not helping the workers and the peoples of Europe and the world. It is in fact making life harder for them by imposing austerity measures in exchange for aids and loans,” said Leadro Gerodias, KMU deputy secretary-general.

Instead, the workers suggested that Mr. Aquino should find ways of using the country’s foreign-exchange reserves in ways that actually benefit OFWs and Filipino workers.

“More than 700,000 micro, small and medium enterprises in the country plus millions in the informal sector are so desperate for credit that they have to borrow money from usurious‘ 5-6’ lenders due to the lack of proper credit facilities. Dapat ipautang na lang ’yang perang ’yan sa maliliit nating negosyante,” said Casiño, chairman of the House of Representatives’ Committee on Small Business and Entrepreneurship Development.

Also he said the plan is not sanctioned by Congress and has never been discussed in budget deliberations.

“Only Congress has the power to allocate such a huge amount for this purpose. Enough of such craziness!” said Casiño.

Party-list Rep. Rafael Mariano of Anakpawis criticized what he described as action pitching of the Aquino administration for its plan.

“The Philippines’s $1-billion pledge to IMF will only give more bragging rights for [President] Aquino, currently the favored Am-Boy [American Boy] of the Obama government,” said Mariano.

The multi-billion dollar crisis fund, also known as the ‘firewall fund’ is aimed at helping the financial agency respond to the euro-zone debt crisis. Portugal, Ireland, Greece and Spain (PIGS) have asked the IMF for assistance after being locked out of debt markets. The total pledges announced at the G-20 Summit in Los Cabos, Mexico, totaled to $456 billion.

“It is at the height of hypocrisy and insensitivity that the Aquino government would commit a staggering $1 billion to the IMF when Filipinos are in dire need of additional budget for basic social services like health, housing and education,” said Mariano.

The militant legislator urged Malacañang to pull-out the donation, saying that contributing to IMF’s crisis fund when the country is in a chronic economic crisis is highly illogical and unacceptable.

“The Philippines is not even a member-country of the IMF. [President] Aquino’s commitment is of his own volition. The actions of President Aquino favoring foreign interests have further disadvantaged Filipinos. He is a blind follower of foreign dictates. He would willingly sell-out the country only to satisfy the whims of foreign financial agencies and governments,” Mariano said.

He said the $1-billion fund would be more beneficial if used to fund the shortage of education materials and equipment for public schools.

CHED and Aquino: Expanding the Miseducation of Filipinos

So what if K12 is being implemented in the Philippines? Will it lead to more productive, critical thinking empowered Filipinos? Or, will it just lead to more domestic helps that can be deployed overseas – who will send remittances so that SM’s Henry Sy can maintain being number one in the Philippines Forbes 40 richest Filipinos?

What’s the point in extending the years of being educated when the content of Philippines public education remains uncompetitive? Extending the number of years learning the same old concepts – using the same old methods of rote learning just leads to more zombies, cannon fodder for people power, warm bodies who will sell votes, and domestic helps in the Middle East and Hong Kong.

We have focused too much on “protecting” Filipino schools. Have we, however, “protected” the Filipino students or have we left them as prey for the operators of Filipino schools?

Remove the Middle Men

Don’t you find it amusing that the top professors of UP, AIM, Ateneo, De La Salle, and what not – are sent for schooling overseas – Harvard, Stanford, Cambridge, Oxford, and the like. Then these same “scholars” return to the Philippines and regurgitate the content in the Filipino schools.

Why should Filipino students settle for regurgitated content when they can get the content direct? The thing is – they can’t get the content directly, because the Philippine constitution restricts foreigners from owning schools in the Philippines – allegedly to “protect” Filipinos.

“Protect” Filipinos from what exactly? From “evil” foreign influences? Really? Let me tell you straight up buster – evil influences are not a monopoly of foreigners – Filipinos can be just as evil, scheming, and manipulating – you don’t have to go far, it’s just in your own backyard.

What’s not being said

The unsaid component of K-12 is that by extending the length of stay in the schools: 1) “protected” Filipino schools make more money from unprotected students; – and, 2) students are delayed from entering the job-scarce labor market of the Philippines.

These exposes a cocktail of interrelated challenges that have in its root – a flawed constitution that protects Filipino businesses at the expense of Filipino consumers. Think about it – should a consumer be protected from getting better service at lower prices? The notion is ABSURD!

Education is a service – not an entitlement

Education, just like any other market for services will be affected by the government regulations – in the form of preventing the increase of suppliers in the market. Note that CHED has routinely prevented the opening of degrees under the guise of preventing “over saturation”.

“Oversaturation” means the sectarian schools behind Bro Luistro are averse to facing competition – and instead of improving their course offerings and redesgining their service delivery mechanisms – these school operators have instead lobbied for restrictions – at students and taxpayers expense.

The better solution is to open the education market – allow foreign investors to own majority shares in locally registered companies that own and operate schools. The impact of this policy is to increase supplies and drive prices down for consumers.

It also reduces the need to allot more tax money for public schools and state universities – which also leads to a reduction in corruption because there is less tax money available for pilferage by CHED, Congress, and the vested interests.

Rethink “Public” Education

We need to rethink the fundamental assumptions about public education. Does public education mean that education needs to be funded by public funds? Or does it mean allowing the public to access education services in the manner which reflects their personal values and preferences?

The former ensures that incompetent government policy reverberates throughout the education market. The latter allows people to regain control of their education.

Lastly, allow me to address the myth that private schools are expensive – or if they are low cost the services are inferior – by providing a video from TED talks which shows how private schools are serving the poorest of the poor at costs which are lower than public schools – and with better outcomes.

Low Cost Private Schools – The Elephant in the Room

Seminal research in the slums and shanty towns of Asia and Africa shows not only the numbers of low-cost private schools around the world but why, how and by whom they are run and patronised. Dr. Pauline Dixon looks at parental choice, the comparison between government and low-cost private schools as well as innovative initiatives that are currently underway in India and Ghana such as vouchers and chains of private schools. The talk also considers what the wider world can learn from this market success story.

Stories such as those narrated by Pauline Dixon need to be celebrated. Government however will put these stories in a back burner because it highlights the monumental failure of government intervention in markets. As pointed out in an article in the Freeman Online

National governments are threatened by the existence of this counterrevolution in private education, for if they can’t get basic education right, then people might wonder: what can they do? Aid agencies might wonder whether they have been backing the wrong horse for decades. And development experts feel ideologically snubbed: they believe that the poor need aid channeled through government schools; they’re offended that instead, the poor seem to have their own ideas about how educational needs can best be provid­ed. But poor parents know what they are doing. They want the best for their children and know that private schools are the way forward. The question is: will anyone with power and influence listen to them?

Filipino students or consumers of education services deserve better or do they?

BongV has written 387 stories on this site.

BongV is the webmaster of Antipinoy.com.