November 2007

by Perry Diaz

Upon her return from the ASEAN Conference in Singapore last November 21, 2007, President Gloria Macapagal Arroyo ebulliently declared, “The Philippine economy and our people have only benefited from economic growth due to global engagement. Increased trade between ASEAN nations will continue to accelerate our economic growth, foreign investment and the creation of good jobs for our people.” Hmmm… Sounds like broken promises. For one thing, President Arroyo’s rhetoric never failed to amuse me.

One of my readers, in response to my recent article, “Road to Perdition or Redemption” (November 9, 2007), commented: “How can we talk about broken promises while our country is on the verge of economic ascent?” Indeed, economic ascent or “economic boom” is the new buzzword today. Why not? The peso has been gaining strength against the US dollar… The growth in the second quarter this year was a whopping 7.5%… More mega malls and high-rise condos are being built… The OFWs are sending more money to their families back home… And the government has been on a “borrowing spree” from foreign lenders — particularly China — to fund its infrastructure projects.

The three factors that contributed to the “economic boom” were: (1) OFW remittances; (2) weakening of the US dollar; and (3) foreign direct investment. Evidently, the estimated $15 billion in OFW remittances this year would be a major element in boosting the Gross Domestic Product. It would also compensate for the trade deficit this year which was already $11.68 billion in the first nine months, an increase of 38.6% over the same period in 2006. At the rate it is going — and with escalating oil prices — the trade deficit would most likely to be somewhere between $16 billion and $18 billion at the end of the year.

The weakening of the US dollar has immensely contributed to the strengthening of the peso. At the current exchange rate of P43.00 to US$1.00, President Arroyo couldn’t be happier. A weak US dollar means that the Philippines’ repayment of its foreign debt would decrease substantially. As a result, the windfall — P24 billion at the end of September — has prompted the government to propose huge budget increases for education, health and infrastructure next year.

Foreign direct investment (FDI) has been averaging at $2.5 billion in recent years. Although FDI into the country has been increasing gradually, according to former Economic Planning Secretary Romulo Neri — remember the guy who allegedly turned down a P200 million bribe from former COMELEC Chairman Benjamin Abalos? — “the ratio of investments to the GDP remained below 15 percent, which was not enough to ensure sustainability of high economic growth.”

Indeed, “sustainability” is the name of the game. In my article, “Gloria’s Enchanted Kingdom and the De Venecia Code” (August 4, 2006), I talked about “747: A Program for Economic Takeoff Toward Sustained Growth,” a study commissioned by Speaker Jose de Venecia about five years ago. The study identified seven strategic programs designed to generate seven percent growth for seven years in order to achieve a “Philippines without absolute poverty by 2010.” These are: 1) Rural modernization; 2) Creating a world-class service sector; 3) Promoting domestic competition; 4) Magnets for foreign investment and development aid; 5) Enhancing the assets of the poor, 6) Resource Mobilization; and 7) Political and administrative modernization.

Well, “747” never took off the ground. Instead, “economic boom” was achieved with the government doing nothing. The government has nothing to do with the weakening of the US dollar and the increasing inflow of OFW remittances. In other words, Arroyo was just lucky.

In a survey conducted by the Social Weather Station (SWS) from September 2-5, 2007, 30% (around five million families) said that they were “better off before” while 13% (around two million families) said they were “better off now.” A poll among families with at least one member working overseas (17% or around three million families), 45% said that the strengthening of the peso did not make any difference while 37% said they were “better off before” and 18% said they were “better off now.”

Recently, a “wild card” — the skyrocketing price of oil — suddenly came in to play in the grand scheme of things. Apparently, President Arroyo didn’t have any contingency plan on how to deal with out-of-control oil prices. Part of the problem is the Oil Deregulation Law which was implemented in 1996 to give big oil companies a free rein in setting the price of oil particularly at the gas pumps. Clearly, the oil profiteers are having a field day today.

In its media release last November 16, 2007, IBON Foundation, a research-education-information development institution, pronounced: “ The already weak economy could only but worsen amid the high oil prices. In the coming months, we should expect more and more companies reporting plant shutdowns and retrenchment, aggravating job scarcity in the country, which has already been at its worst levels in history, and resulting in overall economic slowdown. With less businesses and wage earners to tax, government would have less domestic sources for its revenues. It will then have to increasingly rely on the regressive value added tax (VAT) on petroleum products that further drives up oil prices. The country is entangled in this vicious cycle with ordinary income earners shouldering all the costs.” Whoa! Are we ready for this?

With 50% of Filipinos poor — 40% of whom have experienced hunger — and with unemployment rate at 7.8%, what we will soon be hearing is the “astronomic boom” of discontent and the wailing cry of the helpless poor. Indeed, Arroyo’s boo-boo economics has created a short span of high — albeit false — expectations. She promised jobs for the people, yet more than one million Filipinos are leaving each year for jobs overseas. None of the seven strategic programs of de Venecia’s “747” has been achieved. In other words, the “economic boom” that the Arroyo government has been heralding is nothing more than a mirage.

It’s time for the government to do away with its practice of boo-boo economics and institute sound economic policies that would sustain real and long-term progress, peace, and prosperity.

By Perry Diaz

Since the 1960’s, the star fruit — or “balimbing” — has become the mark of a political turncoat. However, political turncoatism has been around since the Revolution of 1896 when switching allegiance was not uncommon among the followers of Katipunan “Supremo” Andres Bonifacio and his rival Gen. Emilio Aguinaldo. Bonifacio was the leader of the Magdalo faction of the Katipunan, which he founded, and Aguinaldo was the leader of the Magdiwang faction, a splinter group of the Katipunan.

The balimbing’s cross-section is shaped like a five-sided star; hence, a person who changes political loyalty is called a “balimbing.” Today, political turncoatism has become as common as the common cold. So be careful when politicians sneeze — it’s contagious.

After the Philippines gained its independence from the United States on July 4, 1946, Manuel Roxas — the leader of the “Liberal” wing of the Nacionalista Party — broke away and founded the Liberal Party. He ran for President against his erstwhile ally Sergio Osmena, Sr. — founder of the Nacionalista Party — and won. When Roxas died in 1948, Vice President Elpidio Quirino, also a Nacionalista-turned-Liberal, succeeded him. Quirino then appointed Ramon Magsaysay as Secretary of Defense. Magsaysay broke the back of the Hukbalahap insurgency and became popular with the people. However, he resigned due to a dispute with Quirino. In 1953, he left the Liberal Party to join the Nacionalista Party. He became the Nacionalistas’ presidential candidate and defeated his former boss.

In 1965, when President Diosdado Macapagal ran for re-election, Senator Ferdinand Marcos, his rival within the Liberal Party, left the party and joined the Nacionalista Party. Marcos became the Nacionalistas’ presidential candidate and beat Macapagal. Marcos’ victory triggered a mass exodus of Liberal balimbings to the fold of the Nacionalista Party. When Marcos ran for re-election in 1969, Senator Sergio Osmena Jr. who bolted the party founded by his father to become the Liberal Party’s presidential candidate challenged him. Marcos easily defeated Osmena. Before his four-year term ended, he declared martial law and stayed in power until he was overthrown in the People Power Revolution of 1986.

Gone were the days of the US-style two-party system. The Marcos dictatorship had put an end to that. He instituted a rubber-stamp legislature with token opposition. Virtually all politicians turned coats and joined his Kilusan ng Bagong Lipunan (New Society Movement). With the passage of the post-Marcos era 1987 constitution, political parties sprouted like kangkong (water spinach). Anybody who wanted to run for office then could form his or her own political party. Political affiliation became nothing more than a label on their shirts, which they could change anytime to conveniently suit their political agenda.

In the first congressional elections held under the 1987 constitution, there were 1,899 candidates from 79 separate political parties who vied for 200 House seats. There were also 84 candidates who ran for the 24 Senate seats. Virtually all the candidates who were supported by then President Corazon Aquino won. In the local elections held the following year there were 150,000 candidates — many of whom joined Aquino for self-preservation — who ran for 16,000 positions from provincial governor down to town council member.

In the first post-Aquino presidential elections in 1992, there were seven presidential candidates. Retired General Fidel V. Ramos ran under the newly formed Lakas ng Tao-National Union of Christian Democrats (Lakas-NUCD), a union of Ramos’ Partido Lakas ng Tao (People Power Party) and Raul Manglapus’ NUCD. Ramos won the presidency but his vice presidential running mate, Emilio Osmena, lost to Joseph Estrada.

In 1994, Lakas-NUCD formed a coalition government with the Laban ng Demokratikong Pilipino (LDP) in preparation for the 1995 congressional elections. As expected, the coalition — Lakas-Laban — captured the majority in both Houses of Congress.

In the 1998 presidential elections, there were 10 presidential candidates. Joseph Estrada formed his own party, Laban ng Makabayang Masang Pilipino. Meanwhile, then Senator Gloria Macapagal Arroyo defected from LDP and formed Kabalikat ng Malayang Pilipino (KAMPI) that she planned to use as her vehicle to propel her to the presidency. However, it never took off the ground and she decided to mothball KAMPI and accept an offer to become Jose de Venecia Jr.’s vice presidential running mate under the newly formed tripartite coalition Lakas ng EDSA – National Union of Christian Democrats-Union of Muslim Democrats in the Philippines (Lakas-NUCD-UMDP). It was a good move for Arroyo because Estrada was formidable. As expected, Estrada captured the presidency in a landslide and Arroyo clobbered eight vice presidential candidates with almost 50% of the vote. Thus, the stage was set for an Estrada-Arroyo confrontation that ended with the “constructive resignation” of Estrada in January 2001. Estrada’s departure catapulted Arroyo to the presidency.

Prior to the 2004 elections, the Lakas-NUCD-UMDP was changed to Lakas-Christian Muslim Democrats (Lakas-CMD). But in an unexpected move, Arroyo resuscitated the moribund KAMPI and ran for President under the banner of Lakas-KAMPI Coalition. Arroyo beat the popular actor Fernando Poe, Jr. in a field of five candidates. However, her victory was marred by the controversial “Hello Garci” election cheating scandal, an issue that never ceased to hound her.

With the 2010 presidential elections just around the corner, the race for President has already started in earnest. Makati City Mayor Jejomar Binay indicated that he is interested and declared, “I have what it takes to be President.” Meanwhile, Senator Richard Gordon issued a statement denying that he is running for President. He did say, however, “if and when I run for President, I will look not to the past but to the future.” My take is: “when” is more likely than “if.” Other “presidentiables” being bandied about were Senators Manny Villar, Loren Legarda, Panfilo Lacson, Mar Roxas and — guess who? — Joseph Estrada.

As President Arroyo comes closer to the end of her tumultuous term, her political influence began to diminish. And like chameleons, her supporters’ political colors would soon change to blend with those who are perceived to be running strong in the presidential derby. New political parties and coalitions would once again sprout like kangkong. Some would wither right away and some would struggle to survive. Yes, it’s balimbing season again.



By Perry Diaz

The Vice President landed at Ninoy Aquino International Airport from a trip to Europe and addressed a large enthusiastic crowd. “My beloved countrymen, after prayer and discernment, I have left the cabinet of the administration to join the true cabinet of the people,” the Vice President said. “As a public servant and as an individual person, I believe it is my duty to do what is right and do my best, and then let God take care of the rest. We must show the world that the Filipino of EDSA is still with us. His spirit is alive. He has not lost his moral bearings. He will put his house in order. My faith in God is absolute. If we work together, we will bring our country back on the road to propriety, stability, and progress.” The people were enthralled. Hallelujah! A messiah has finally arrived.

The Vice President then outlined a program of government that would converge on four core beliefs: “(1) We must be bold in our national ambitions, so that our challenge must be that within a decade, we will win the fight against poverty; (2) We must improve moral standards in government and society, in order to provide a strong foundation for good governance; (3) We must change the character of our politics, in order to create a fertile ground for true reforms. Our politics of personality and patronage must give way to a new politics of party programs and a process of dialogue with the people; and (4) Finally, I believe in leadership by example. We should promote solid traits such as work ethic and a dignified lifestyle, matching action to rhetoric, performing rather than grandstanding.”

Those were the words of then Vice President Gloria Macapagal Arroyo on October 17, 2000 when then President Joseph Estrada was besieged for a series of corruption scandals. Arroyo was riding high on the crest of a popular movement to oust Estrada. Three months later, Estrada stepped down and turned the government over to Arroyo.

Sad to say, Arroyo’s government did not go anywhere close to the way she painted it seven years ago. She finished Estrada’s term with abysmally lackluster performance. Within a year after she won the 2004 presidential elections, the “Hello Garci” and Jueteng scandals were exposed. Calls for her resignation spread like prairie fire. Former President Fidel V. Ramos rescued her from the brink of collapse. She survived; however, her credibility and integrity were eroded beyond repair and she lost the respect of the people.

Like a can of worms, scandal after scandal crawled out into the open: the Joc-Joc Bolante fertilizer scam, Mike Arroyo’s “Jose Pidal” bank account, the Nani Perez power plant deal, the Diosdado Macapagal Highway overprice, extrajudicial killings, Arroyo’s secret bank account in Germany exposed by Senator Cayetano, the COMELEC automation fiasco, North Rail project, NAIA-3, Venable contract, ZTE National Broadband Network, Cyber-Ed Project, and the recent wholesale bribery of congressmen and governors. The list goes on and on.

Looking back to the four core beliefs that Arroyo espoused seven years ago, she achieved not a single point: (1) She promised that within a decade she’d win the fight against poverty. A survey conducted by the Social Weather Station (SWS) last February revealed that one in every five Filipino families or 3.4 million households — a record high of 19% — suffered from “involuntary hunger” in the first quarter at least once. SWS also reported that hunger has been at double digits since June 2004. What that means is that hunger doubled since she took over the presidency. In March 2007, Fr. Shay Cullen, in his column “Reflections,” said “hunger is not the lack of food, but the lack of money to buy it.” In other words, poverty is the cause of hunger. Further, he said, “the roots of poverty are in the dictatorship of the elite.” Indeed, the rich became richer and the poor became poorer during her administration.

2) She promised to improve moral standards in government and society. Recently, Bishop Angel Lagdameo, President of the Catholic Bishops Conference of the Philippines, stated: “Our country is not only suffering from economic bankruptcy but also moral bankruptcy which, disappointingly, is being shown by our leaders.” Other bishops followed with demands that Arroyo resign on grounds of moral turpitude. The Philippine Council of Churches, the largest network of evangelical and Protestant churches in the country, deplored the “culture of corruption in government” and said that majority of Filipinos are living in poverty. Sen. Antonio Trillanes IV — supported by prominent political leaders — started an online petition calling for the resignation of President Arroyo and Vice President Noli de Castro. The petition stated that Arroyo “has completely lost her moral authority to govern this country” and called for a snap election within 60 days.

3) She promised to change the character of politics in order to create a fertile ground for true reforms. Instead, what Arroyo created was a fertile ground for graft and corruption at all levels of government. Instead of reforming the government, she deformed it into a monstrosity. Today, the Philippines is branded as the most corrupt country in Asia.

4) She promised to lead by example and promote solid traits such as work ethic and a dignified lifestyle. But the record shows that her leadership style bred and nurtured corruption and decadent lifestyles for her family members and high-ranking officials in her administration.

Arroyo’s dismal failure and egregious disregard — and disrespect — for the people’s sentiments should be grounds to abrogate her mandate of government. In six and a half years of usurped authority, Arroyo is embroiled in a quagmire of corruption and deception. She implemented ineffective programs and projects that only fed the voracious appetite of kleptocrats in her government. Indeed, as several bishops and political leaders have stated, Arroyo no longer has the moral authority to lead the people. Under Arroyo’s leadership — and skullduggery — the country is on the road to perdition. It will no longer be the “Sick Man of Asia” but will soon become the “Somalia of Asia” where anarchy would be the order — or disorder — of the day and warlords reign supreme in their fiefdoms.

It’s time for Arroyo to face the music. It’s time for the Filipino of EDSA to put his house in order. It’s high time for the Motherland’s redemption from moral decay. And, once again, it’s time for mass action.