October 2005

PerryScope
By Perry Diaz

FederalismWith a strong movement going on in the Philippines to change the form of government from a unitary presidential system to a parliamentary system.  The proponents of charter change, while agreeing on a parliamentary system, are divided between the supporters of Federalism and those that decry Federalism as an unworkable political system. Instead, the anti-federalist group is pushing for the adoption of a unitary parliamentary system for a good reason.

With the two groups locking horns on this issue, let’s look at these two forms of government. On the one hand, according to Wikipedia online encyclopedia, “Federalism is a system of government in which power is constitutionally divided between a central authority and constituent political units (like regions or provinces).” On the other hand, in a unitary government, the central government has all the power. Federalism appears to be more democratic, isn’t it? Don’t nod your head in agreement yet because there is something I want to tell you about.

To get a pretty good “feel” of how Federalism works, let’s look at Australia. In 1901, Australia adopted the Federal Parliament and government with the six States giving up some of their powers, but remaining independent. The Australian Constitution states, “The legislative power of the commonwealth shall be vested in a Federal Parliament.” In addition, the constitution gives a range of powers and responsibilities of the Federal Parliament. Powers not identified in the constitution reside with the States. Each of the six States has its own constitution, parliament and government. A perfect arrangement for the six States. How could they go wrong?

However, in real life, there is a lot of overlapping between the Australian Federal and the State governments. A history of competition between the Federal government and the State governments exists. Since the Federal government controls tax collection, it has established its dominance in the political system. The States became dependent on Federal financial assistance.

In terms of tax collections, the Federal government gets 70-80% of all tax revenues. The Federal government then divides the expenditure of the tax revenues between the Federal and State governments. This created ongoing financial negotiations — and haggling — between the Commonwealth and the States.

The website www.AustralianPolitics.com has identified the advantages and disadvantages of the Australian Federalism. However, the disadvantages far outweigh the advantages, some of which are: duplication of government; overlapping or conflicting policies in different parts of the country; State education systems with differing curricula and grading methods; financial inequality which leads to unhealthy competition and rivalry between the States; neglect in important areas of, to cite a few, public policy and public transportation; and over-government. The website claims, “it is often argued that a nation of 19 million people cannot afford to have 15 houses of parliament, plus hundreds of local governments.” It looks like an inverted pyramid, isn’t it?

According to a study conducted by the University of Sydney, the question was asked: “Has Federalism outlived its usefulness in Australia?” The study concluded: “It is obvious that the advantages no longer exist and the advantages are overweighed by the numerous disadvantages. It is truly time for Australia to make major reforms for it to remain an effective government process.”

The Australian experiment with Federalism that started at the same time when the Philippines was taken over by the Americans in 1901, is in need of an overhaul — just about the same time that the Philippine presidential government is being considered for replacement by a parliamentary system. The question is: Should the Philippines go with a Federal or Unitary Parliamentary form of government?

In my opinion, Federalism for the Philippines is a folly. Let’s look at some numbers. Today, the Philippines has a population of 87 million. There are 79 provinces and 115 cities. In 2004, it’s work force was 35.8 million of which 20% are in agriculture, 33% industry, and 47% in commerce and government; Gross Domestic Product (GDP) was $84.2 billion; GDP per capita was $976; exports were $39.6 billion; and imports were $40.3 billion.

With a GDP per capita of $976 per annum — one of the lowest in the world — the Philippines could not afford the cost of Federalism. First of all, most of the big industries and manpower resources are concentrated in Metro Manila and its surrounding provinces, Cebu City, Davao City and a few other places. Provinces that are agricultural-based would be hard-pressed to collect taxes to maintain their government structure, which would consist of a legislative body, judicial system, education system, health professionals, law enforcement, social services and several other agencies. After the Federal government has taken its bigger share of the tax revenues, the amount left for the provincial governments would not be enough to sustain their existence.

On April 12 2005, Rep. Herminio G. Teves of Negros Oriental delivered a privileged speech in Congress. He said that inefficient tax collection and massive tax evasion have led to deficit spending. Revenue collection vis-à-vis GDP has been on a continuous decline from 17% in 1997 to 13% in 2003. The national debt as of 2004 was P3.4 trillion. Interest payment comprises 32% of the 2005 budget.
If you add the cost of sustaining 79 autonomous provincial governments in a Federal system with no substantial increase in GDP, deficit spending would rise to unprecedented level. To cope with deficit spending, the government would have to print more money, which in turn would cause the value of the peso to drop. Pretty soon, we’ll end up with yap-yap money similar to the ones issued during the Japanese occupation.

Some people argue that a Federal government is the only way to give freedom and independence to the Filipinos. In today’s globalized economy, what is freedom and independence? In my opinion, freedom is “financial freedom” and independence is “financial independence.” Real freedom and independence can only be achieved with wealth and the ability to compete in the global market. If we free the Filipinos into creating their own country without financial freedom, then they will become slaves of their own country. And the only freedom left for them would be the freedom to die.

(PerryDiaz@gmail.com)

PerryScope
by Perry Diaz

The latest problem involving Hacienda Luisita has brought to the forefront one big issue that has caused societal and economic problems — and bloodshed — in the history of the Philippines. “Land ownership,” the Filipinos’ ultimate dream, has been theexclusive domain of the rich. Truly, “land ownership” separates the rich from the poor — the landed from landless.

“Land ownership” for the rich has its beginning when Miguel Lopez de Legazpi, upon colonizing the Philippines, instituted the Encomienda system. He divided the archipelago into large parcels and assigned each parcel to a favored Spaniard for administration and care. Encomienda, which means “to entrust,” was adopted in Spain to reduce the abuses of forced labor. It was implemented in Spanish America and the Philippines to take care of the economic and spiritual welfare of the natives. However, its benevolent purpose was circumvented and abused by the Spanish grantees — the “encomenderos.” They collected tribute from the natives. Pretty soon the tribute became rents to powerful landlords and the natives became share tenants. In the end, the natives became virtual slaves of the encomenderos. In 1674, the Spanish Crown abolished the Encomienda system in all of its colonies. However, for more than 100 years after its abolition, it remained in effect in the Philippines.

The Encomienda system evolved into the Hacienda system. Land grants were given to the “hacenderos” — “Filipinos” (pure Spanish), mestizos (mixed Spanish and native), and the favored families (the “indio” elite). The hacenderos expanded their influence in all sectors of the economy. They became the political masters, second only to the Spanish masters.

When Spain ceded the Philippines to the United States at the Treaty of Paris in 1898, the Americans were precluded from touching the Friar lands because the treaty bound the US to protect the land owned by religious orders. When Gen. Emilio Aguinaldo established the first republic in 1899, he promised to confiscate large estates particularly the Friar lands. But that did not materialize because he spent his time fighting the Americans until he was captured and forced to pledge allegiance to the new masters.

During the commonwealth period under American colonial rule, the Rural Program Administration, created in March 1939, provided for the purchase and lease of haciendas and their sale and lease to tenants. However, the tenants were so poor, they simply could not buy the land they were farming.

When the Philippines gained its independence from the United States in 1946, the hacenderos had complete control of the economy. They also became the political masters of the new republic. They constituted the new aristocracy and the oligarchy, all bundled into an exclusive class.

The new Philippine government grappled with the problems of land ownership. Numerous agrarian reforms were instituted. During the presidency of Ramon Magsaysay, former HUK dissidents and landless farmers were resettled and given land ownership. His untimely death stopped the program. Subsequent presidents, including Cory Aquino, continued to implement agrarian reforms.

In 1987, a new constitution was adopted. Interestingly, a provision was inserted in the constitution exempting landowning corporations from land reform provided they give out shares of stock to the tenants. In June 1988, President Aquino signed the Comprehensive Agrarian Reform Law (CARL). Under CARL, 10.3 million hectares were targeted to be given away to farmers. At last, the long-awaited land for the landless. However, only 24% of that target were given away. The 76% not given away included the 6,300-hectare Hacienda Luisita owned by President Aquino’s family, the Cojuangcos. According to a newspaper account at that time, “the hacienda is the largest single piece of contiguous land in the Philippines.”

To comply with the special provision of the 1987 constitution, Hacienda Luisita gave away stocks to its farmers… on installment. The catch: until the stocks were fully paid for, the Cojuangco family retained the voting rights; thus, remaining in full control of the hacienda.

In May 1989, a stock distribution option (SDO) — as opposed to outright distribution of land — was agreed upon after a referendum by the farmers approved it overwhelmingly. The SDO would give the farmers 33% of the shares of the corporation, Hacienda Luisita, Inc. (HLI), that will own the land.

In October 2003, the farmers of Hacienda Luisita petitioned the government to revoke the SDO, saying that HLI was not giving them enough dividends and profits. If the SDO is revoked, Hacienda Luisita would be distributed outright to the farmers. On September 23, 2005, a special legal team from the Department of Agrarian Reforms submitted a report recommending the revocation of the SDO. That would mean that the hacienda has to be distributed to the farmers as prescribed by CARL.

A few weeks ago, HLI revealed that portions of Hacienda Luisita was mortgaged to five banks due to losses suffered by HLI. The question is: If the SDO is revoked and the land is distributed to the farmers, who will pay off the mortgage?

After 107 years of the largest land deal between Spain and the United States — $20 million for the “sale” of the Philippine archipelago to the US — land ownership continues to be an issue that divides the rich and the poor… the landed and the landless.

(PerryDiaz@gmail.com)

PerryScope
by Perry Diaz

The latest problem involving Hacienda Luisita has brought to the forefront one big issue that has caused societal and economic problems — and bloodshed — in the history of the Philippines. “Land ownership,” the Filipinos’ ultimate dream, has been the exclusive domain of the rich. Truly, “land ownership” separates the rich from the poor — the landed from landless.

“Land ownership” for the rich has its beginning when Miguel Lopez de Legazpi, upon colonizing the Philippines, instituted the Encomienda system. He divided the archipelago into large parcels and assigned each parcel to a favored Spaniard for administration and care. Encomienda, which means “to entrust,” was adopted in Spain to reduce the abuses of forced labor. It was implemented in Spanish America and the Philippines to take care of the economic and spiritual welfare of the natives. However, its benevolent purpose was circumvented and abused by the Spanish grantees — the “encomenderos.” They collected tribute from the natives. Pretty soon the tribute became rents to powerful landlords and the natives became share tenants. In the end, the natives became virtual slaves of the encomenderos. In 1674, the Spanish Crown abolished the Encomienda system in all of its colonies. However, for more than 100 years after its abolition, it remained in effect in the Philippines.

The Encomienda system evolved into the Hacienda system. Land grants were given to the “hacenderos” — “Filipinos” (pure Spanish), mestizos (mixed Spanish and native), and the favored families (the “indio” elite). The hacenderos expanded their influence in all sectors of the economy. They became the political masters, second only to the Spanish masters.

When Spain ceded the Philippines to the United States at the Treaty of Paris in 1898, the Americans were precluded from touching the Friar lands because the treaty bound the US to protect the land owned by religious orders. When Gen. Emilio Aguinaldo established the first republic in 1899, he promised to confiscate large estates particularly the Friar lands. But that did not materialize because he spent his time fighting the Americans until he was captured and forced to pledge allegiance to the new masters.

During the commonwealth period under American colonial rule, the Rural Program Administration, created in March 1939, provided for the purchase and lease of haciendas and their sale and lease to tenants. However, the tenants were so poor, they simply could not buy the land they were farming.

When the Philippines gained its independence from the United States in 1946, the hacenderos had complete control of the economy. They also became the political masters of the new republic. They constituted the new aristocracy and the oligarchy, all bundled into an exclusive class.

The new Philippine government grappled with the problems of land ownership. Numerous agrarian reforms were instituted. During the presidency of Ramon Magsaysay, former HUK dissidents and landless farmers were resettled and given land ownership. His untimely death stopped the program. Subsequent presidents, including Cory Aquino, continued to implement agrarian reforms.

In 1987, a new constitution was adopted. Interestingly, a provision was inserted in the constitution exempting landowning corporations from land reform provided they give out shares of stock to the tenants. In June 1988, President Aquino signed the Comprehensive Agrarian Reform Law (CARL). Under CARL, 10.3 million hectares were targeted to be given away to farmers. At last, the long-awaited land for the landless. However, only 24% of that target were given away. The 76% not given away included the 6,300-hectare Hacienda Luisita owned by President Aquino’s family, the Cojuangcos. According to a newspaper account at that time, “the hacienda is the largest single piece of contiguous land in the Philippines.”

To comply with the special provision of the 1987 constitution, Hacienda Luisita gave away stocks to its farmers… on installment. The catch: until the stocks were fully paid for, the Cojuangco family retained the voting rights; thus, remaining in full control of the hacienda.

In May 1989, a stock distribution option (SDO) — as opposed to outright distribution of land — was agreed upon after a referendum by the farmers approved it overwhelmingly. The SDO would give the farmers 33% of the shares of the corporation, Hacienda Luisita, Inc. (HLI), that will own the land.

In October 2003, the farmers of Hacienda Luisita petitioned the government to revoke the SDO, saying that HLI was not giving them enough dividends and profits. If the SDO is revoked, Hacienda Luisita would be distributed outright to the farmers. On September 23, 2005, a special legal team from the Department of Agrarian Reforms submitted a report recommending the revocation of the SDO. That would mean that the hacienda has to be distributed to the farmers as prescribed by CARL.

A few weeks ago, HLI revealed that portions of Hacienda Luisita was mortgaged to five banks due to losses suffered by HLI. The question is: If the SDO is revoked and the land is distributed to the farmers, who will pay off the mortgage?

After 107 years of the largest land deal between Spain and the United States — $20 million for the “sale” of the Philippine archipelago to the US — land ownership continues to be an issue that divides the rich and the poor… the landed and the landless.

(PerryDiaz@gmail.com)

PerryScope
By Perry Diaz

“Balkanization” is the division of a country into several small political units, often unfriendly to one another. So defines the New Dictionary of Cultural Literacy. The word is derived from the Balkan Peninsula — the southeastern Europe — that was partitioned as a result of the Balkan Wars of 1912-1913. It was also a precursor to World War I — the war that was supposed to end all wars. However, the wounded pride of a vanquished Germany led to the mother of all wars, World War II. From a regional conflict to a global conflagration, one wonders if those who started the wars among the Balkans had any idea that their “family” feud would drag the great powers of the world into the arena.

While a global war was raging, members of the Zionist movement dreamt of establishing a country of their own, millennia after their people dispersed during the Great Diaspora. At the end of World War II, incensed at the news of the Holocaust, they were determined to create a State of Israel. The Zionists battled the British masters of Palestine, while their Arab neighbors watched with apprehension. After all, the Jews and the Arabs — genetic cousins with different religious beliefs — had lived side by side in their ancestral land.

On November 29, 1947, the United Nations — after 10 months of deliberation — voted to partition Palestine into a Jewish State, an Arab State, and an international Jerusalem. This was the beginning of the end. In 1950, Jordan annexed the Arab State’s West Bank and Gaza was taken by Egypt. The Palestine Arabs became stateless within the Jewish State of Israel. To date, peace has yet to dawn on the partitioned land.

After the fall of communism in Eastern Europe, the former communist country of Yugoslavia started to break down with the secession of Slovenia, Croatia, Macedonia, and Bosnia and Herzegovina. Four wars ensued: War in Slovenia (1991), War in Croatia (1991-1995), War in Bosnia (1992-1995), and the Kosovo War (1996- 1999). A British journalist labeled them the “Third Balkan War,” 78 years after the end of the original Balkan Wars. The trademark of these wars was “ethnic cleansing.” It was the ugliest of wars. Yet, these were people who lived side by side, peacefully, for centuries.

Indeed, Partition or Balkanization has taken an ugly face. The fear of “Balkanization” is being used by White Supremacists in the United States to exclude other races, particularly people of color, from entering the United States. They are saying that immigration of non-whites will only lead to the “Balkanization” of America.

In the Philippines, proponents of partitioning the country are making the threat of “Balkanization” or secession. “Partition or secession” is their battle cry. They believe that a Philippines sliced into five sovereign and independent countries would end practices of corruption, crime, poverty, disease, and a slew of bad things. They believe that partition would bring peace and progress. Really? Or should “piecemeal retrogression” aptly describe what would happen after partition?

Let’s look at the proposed five new countries: Luzon, Cordillera, Visayas, Mindanao, and Bangsamoro. The proponents of “Partition” insist that it would give the ethnic “nations” the ability to rule themselves and not by outsiders. Well, if this is the fundamental reason for partition, then it is a flawed plan, one that could lead to ethnic strife and further balkanization. Take for example, Luzon. What is the likelihood that the Ilocanos, Pampangos, Pangasinense, and Bicolanos would sever their ties to the Tagalogs — presumably the dominant political entity in “Imperial Manila” — and demand to have a country of their own? How about the Warays, Ilonggos, Boholanos, Leytenos, and Aklanons? Would they allow to be governed by a central government in Cebu? And how about the Muslims in predominantly Christian Mindanao, and the Christians in predominantly Muslim Bangsamoro? Would they resort to forced deportation or ethnic cleansing? Can the Cordillera tribes manage to stick together in spite of their varied dialects?

According to ethno linguistic scholars, there are at least 244 languages and dialects spoken in the Philippines. Would it be fair to assume that 20 or more ethno linguistic groups would opt for secession from the five successor countries? The bottom line is: there is no guarantee that partition would bring peace and prosperity to the new countries. On the contrary, I believe that partition would only lead to perpetual turmoil in an area that is smaller than 5% of the world’s land mass.

In my opinion, the Philippine government must pursue the proposal of former President Fidel Ramos and Speaker Joe De Venecia to change the form of government to a parliamentary system. It’s time that we discard a borrowed American two-party presidential system that has served its purpose and outlived its usefulness. A European-style parliamentary system provides the flexibility of working with a multitude of political parties and address regional and local issues more effectively.

(PerryDiaz@gmail.com)