Legalizing DAP perpetuates the temptation to succeeding administrations

There’s the Rub

By Conrado de Quiros
Philippine Daily Inquirer
July 29th, 2014, Tuesday, 2:53 am

I don’t know what P-Noy said [in his SONA] yesterday. But last year, he sounded a note about legacy.

Midway into his term, he was at the top of his game. For two consecutive years up to that point, he had produced spectacular growth, a thing that, unlike the claims of his predecessor, Gloria Macapagal-Arroyo, was acknowledged and marveled at by the global community. That community noted that the Philippines had even surpassed China’s growth rate, which of course had to be taken in stride given where both were coming from: China from mind-boggling plenitude and the Philippines from mind-boggling want. But it was impressive enough for Arroyo herself to recognize it, retreating from her carp about her former student being big on the moral and small on the economic, and congratulating him for it.

There was just one problem, and midway into his term, it had become a glaring one. It was that he had no successor. He had no one to carry on his work. He had no one to perpetuate his legacy.

It wasn’t just that the future held the most tremendous uncertainties, it was that the future held the most tremendous perils. P-Noy himself had said repeatedly he would not extend his term by hook or by crook and, unlike his predecessor’s, his words the nation could take pretty much as gospel truth. That left the two main contenders to become president, neither of whom seemed fit, or desirous, to carry on P-Noy’s reforms.

Indeed, they seemed headed to wreck them. Mar Roxas seemed the last person guaranteed to unite the country. When P-Noy delivered his State of the Nation Address last year, Roxas hadn’t yet shown the bad manners and wrong conduct he subsequently would when confronting Leyte’s officials—it wasn’t a dialogue, it was a harangue—in the nightmarish aftermath of Supertyphoon “Yolanda.” Jojo Binay, on the other hand, seemed the last person for us to want to trust the national treasury to, particularly after it had grown considerably with sustained growth. The charges of graft that have been brought against him—of late by a group calling itself the “Save Makati Movement”—may be politically motivated (what isn’t in this country?) but that doesn’t mean they’re not true.

P-Noy himself addressed the problem in his Sona last year. That was by saying that he was confident his gains would not be lost because of two things. One was the culture of anticorruption, if not of honesty and dedication, that was sweeping through the ranks of the bureaucracy. The spirit of the “daang  matuwid” was taking root among government workers which could not be thoroughly undone by his successor. Two was that the people themselves would not allow it. Having tasted the fruits of “kapag  walang  corrupt, walang  mahirap,” they would not allow the gains to be lost.

Arguably, these were not entirely platitudes, or wish-fulfillments. Government workers had developed some pride in their work, which contrasted with the demoralization they were mired in during the previous regime. And despite the growth not being inclusive, or seeping down to the poor, the promise of it doing so in time, a perception borne out by surveys that said people generally felt bullish about their future, gave some assurance they would not want to go back to dark times.

But for all that, you had to wonder at how deeply rooted those things had become. You had to wonder if they would be able to withstand the winds of a subsequent regime not particularly given to the same mindset, thrust and direction. I didn’t share P-Noy’s confidence they would.

I myself thought that given that the next administration was very likely going to be vastly different from this one, the P-Noy administration’s best bet was to institutionalize the gains. It was to strengthen democracy’s institutions, particularly the one that insisted on separation of powers and checks and balances. It was to unleash a culture, or way of doing things, that said no one is above the law, neither pauper nor president, that is the path we have set before us, that is the  daang  matuwid. It was to make this way of life as universal as possible, as routine as possible, so that it took on the force of a natural expectation, so that it made the law impersonal, inexorable, majestic.

It is no small irony that that is the one thing this administration seems to have gone against of late. P-Noy’s defense of the Disbursement Acceleration Program (DAP) and rebuke of the Supreme Court for doing its duty have larger and more lasting consequences. They go beyond the fate of the DAP, they strike at the heart of P-Noy’s legacy itself. They do not strengthen democracy’s institutions, least of all the Supreme Court. They do not propagate a culture that says no one is above the law, where a law is violated there must be rectification. They propagate a culture that says some people are exceptions, where a law is violated there must be a presumption of good faith. They make it the hardest thing to institutionalize the gains.

Certainly, they make it the hardest thing to bind subsequent administrations to the same commitments, the same restrictions, the same proclaimed pursuit of straightness. Or, what is but the same thing, they make it the hardest thing to program government to go on autopilot, the way the US government for example does, allowing Americans to survive bad presidents along with good ones. Which is what we desperately need, given that P-Noy has only two more years to go.

Despite the tragedy, or farce, of the DAP, we do need to have a sense of proportion too, we do need to have a reality check too: The P-Noy administration’s accomplishments—in sparking growth, in establishing peace, in vastly improving public service, to name but a few—are no mean things. How to sustain these things? How to assure continuity? How to perpetuate a legacy?

With the administration’s recent moves, alas, there’s the rub.

The current administration has experienced for itself first hand how the power of the DAP system could easily corrupt people when it is in the wrong hands. Now they have the crucial opportunity to either put an end to it and kill this beast once and for all, or allow it to continue living and make it grow even stronger by legalizing it through congressional legislation and perpetuate this huge tempation to the succeeding administrations.


Achieving the Constitution

By Randy David |Philippine Daily Inquirer
July 13, 2014 | 12:06 AM Sunday

There are at least two types of laws found in the Constitution. The first defines the nature and limits of governmental power over the nation’s citizens. The other assigns state power to the various branches of government, demarcating their proper spheres and prescribing their relationship to one another. A constitutional regime is a government bound by such laws.

Violations of the constitution by a government could cause the impeachment of a president, just as they could be a ground for the criminal prosecution of the individuals responsible for the violations. But, unconstitutionality and criminal liability are not the same thing, nor do they necessarily imply one another. Indeed, the word “unconstitutional” is relatively new, appearing only in the 18th century. But it quickly became a legal reference point for declaring other laws, whether new or existing, as illegal.

Not being a lawyer, I could be wrong in my interpretation. But, it is obvious to me that there is a vast difference between pocketing huge sums of public money intended for public use, which is what the crime of plunder is about, and the rearrangement by the executive branch of the budgetary priorities previously approved by Congress, which is what the Disbursement Acceleration Program did. The first is a clear criminal offense. The second has been pronounced by the Supreme Court as a breach of the 1987 Constitution’s principle of separation of powers, but it remains to be seen whether any criminal liability proceeds from its being declared unconstitutional.

The high court did not say or assume that public funds were stolen. In fact, it praised the DAP’s intention of stimulating economic growth. But it emphatically said that this noble end cannot justify abuse of presidential powers, and must not be allowed. The Solicitor General, arguing for the government, maintained that, as a policy measure, the DAP was conceived on the assumption that it was in accord with the Constitution and the Administrative Code.

The Supreme Court ruled otherwise. In the wake of this adverse decision, critics of the P-Noy administration are calling for his impeachment and the criminal prosecution of his budget secretary. It would be interesting to see how far these attempts to undermine the legitimacy of the administration will go. My hunch is that they will not prosper. Still, as political moves, they may have already succeeded in diverting the public’s attention from the plunder cases, and in promoting the cynical view that since everyone’s hands are tainted, it is a delusion to think that this administration is capable of pursuing any enduring reform.

In previous columns on the subject, I have tried to show that, on the contrary, all these recent events tend to show that we are finally—albeit slowly—evolving into a nation that takes the democratic ideals of its Constitution seriously.

Our constitutions have always been historically too far ahead of our people’s capacity to enforce them. The doctrine of separation of powers and the principle of checks and balances, for example, mean little in a society whose political system remains a plaything of a few ruling families. The persistence of mass poverty and the sharp disparities in wealth and power among our people have fostered a culture of dependency and patronage that trumps virtually all attempts to professionalize governance.

But, look at what the Supreme Court has done by its recent rulings on the Priority Development Assistance Fund and the DAP. It has knocked down two of the most important pillars of political patronage—the congressional pork barrel system and the executive power to realign the budget as the president pleases. Before these rulings, hardly anyone considered these practices unconstitutional or criminal, or, least of all, immoral. These are long-standing political practices that have existed in one form or another under every administration.

The PDAF institutionalized the practice of setting aside lump sums in the budget to fund projects and activities to be identified by members of Congress. The DAP systematized and centralized the impounding of so-called government “savings,” and their subsequent use for purposes determined solely by the President. Neither of them is new.  What is new is the public awareness of what they mean in the light of our aspirations to political modernity—and how easily they lend themselves to large-scale graft and corruption.

What radically brought the nation to this realization was the shocking exposé of the empire of graft that Janet Lim Napoles managed to build over 10 years from the proceeds of the congressional pork barrel. Overnight, the public saw what a big fiction the control system of government was, and how it crumbled before the power of politicians and the temptations of bribe money. Despite its self-image as an institution standing above public opinion, the Supreme Court could not have been oblivious to the resounding public clamor for government accountability when it struck down the PDAF and DAP.

The administration gains nothing from merely claiming that the PDAF and DAP had good intentions. As things stand, nothing less than a full accounting of these funds can persuade the public that these were not plundered. Of course, there is a risk in detailing how the DAP funds were allocated. It is almost certain that doing so will reveal how much of the vaunted “daang  matuwid” has been paved in patronage. But I think that is still a small price to pay in exchange for achieving the Constitution.


A Repost: "Soon when you serve, forget not your own words"

Originally posted: January 24, 2010

Source link: "Soon when you serve, forget not your own words"

(This blog repost might be more impactful if, as we listen to the speech, we pretend that it is already the season for the 2016 election, and the one delivering the speech is a presidential candidate who is not allied with the current administration nor an ally of the current opposition.)

Part 2
Part 3
Part 4

Officers and members of the Makati Business Club, Your Excellencies of the diplomatic corps, ladies and gentlemen, my friends and countrymen.

Thank you very much for giving me the opportunity to address you. I trust your asking me first is not based on alphabetical order, or based on age, but perhaps, based on who you think will most likely win the coming election.

As managers, you recognize that one of the necessary skills of an effective manager is time management. Is it possible that you have invited me to determine if there is still a necessity to spend time with the others?

Baka naman inuna niyo ako upang malaman kung sapat na ako at hindi na kailangang pansinin yung iba?

I think we are all aware of the problems facing our country. We share the same statistics. We probably even share the same conclusions about the need for better governance. To rehash all of these problems at this forum would be a waste of your time. But what we have now is an opportunity for you to get to know me, to find out the advocacies that I champion, the perspective and philosophies I bring to the equation and some of my proposed solutions to give an insight into my inner persona.

Levity aside, the political exercise that we will engage in this May is a crucial one. It will be, as it is for every fledgling democracy, a test of the strength of our political institutions. The peaceful transition of power has become a symbol of political maturity across the world, with many still failing to achieve the credibility that is the cornerstone of a genuine political mandate. With the electoral scandals that have stalled our democratic progress as of late, it is not a test that we can afford to fail.

We have an administration whose mandate is clouded in doubt and overshadowed by allegations of fraud because it refused every opportunity to clear the air and be held to account. Its choices have limited its decision-making to seeking ways to ensure day-to-day political survival and self-interest. We must now become a government committed to accountability. A government that works with the people in achieving long-term change.

We must make the shift from bare economic survival to robust economic growth. We must make the change from treading water to keep afloat, to reaching that promised shore where we can all stand tall as healthy, happy, educated and responsible fellow citizens.

But why does transformation seem like such an impossible dream?

Isa sa mga tema ng ating kalaban, yung “ang pagbabago, madaling sabihin yan pero mahirap gawin,” is probably echoed by a lot of Filipinos. The oft-repeated question is, why can’t we advance? Why can’t we progress? What is it in us that limits or prohibits our growth as a people and as a country?

All of you are aware that most of the contenders have had years, possibly even decades, of preparation for this electoral exercise. I had no such ambitions to run in the 2010 elections but I responded to the people’s clamor. I am but the face of what we believe is the overwhelming demand of our people to repudiate everything wrong in the current administration.

Given that I only announced my decision to seek the presidency on September 9, and I only came to that decision the day before, I have not had material time comparable to our opponents. What is perplexing is that viewing the same problems, and having access to the same data for the most part, we believe the solutions have been there all along, and necessitate only clear political will to execute. But most of our opponents seem to indicate the contrary opinion that there is very little that we can do to change the situation. One has to wonder: did they overstudy the problem, or are they committed to preserving the status quo?

If the leader is not convinced that change is not only necessary, but extremely possible, how does he lead us to the promised land?

What is it that we want to change?

We want to repair the damage that has been wrought on our democratic institutions by those who have sought to manipulate them for their own selfish ends.

We want to improve the situation of our people, who have suffered years of neglect because of a self-absorbed leadership obsessed with political survival.

They are poor. Many of them are homeless. Each year, we add some 2.5 million mouths to feed to our already hungry population. Of these new additions, one third were the result of unplanned pregnancies. We have a growing underclass that statistics tell us have given up looking for work. A permanent underclass that includes the five million of our countrymen that are illiterate, which means their opportunities in life will always be limited to living hand-to-mouth.

We want to give our young the opportunity and means to improve their lot in life.

It can only begin if our children and their parents are assured that money spent on education is money well spent. Unfortunately, students are at the mercy of our decrepit education system that allows double shifting, erroneous textbooks and substandard nursing schools to exist. No less than DepEd officials admitted that students in Grade 1 take three subjects in one class period. We have a procurement program so heedless of the need for excellence that it doesn’t care if it produces a textbook series riddled with 500 factual errors. For every hundred kids that start grade school with the hope of achieving their dreams, only fourteen will graduate from college and possess a tangible means to materially improve their lives.

To my mind, the crucial, lacking element in all these is a government committed to a transformation: from a society overwhelmingly poor to one overwhelmingly middle class.In every developed, progressive, prosperous democracy, it is the middle class that is the biggest class. Government, for one, has failed to make the conceptual leap from patronage to development. Efforts at feeding the hungry, clothing the naked, providing basic care to the sick, and offering a quality education aren’t only the people’s rights; they are the essential tools for individual self-improvement.

In 1998, when I first campaigned for office, one lady bluntly told me that regardless of who is elected, things would remain the same for her.

What did she mean?

That she was poor to begin with; that she would remain poor, and in fact, she would be lucky if she didn’t end up poorer, after the candidates leave office.

This brings up the question at the forefront of the minds of our countrymen still undecided on whom to vote for, and pursued by my critics. If this is a time that calls for national transformation, am I qualified to be that transformative leader? Having answered the call of duty, can I ask you or anyone to entrust me with your vote, on faith alone? Never having sought the presidency, I preferred to do my duty and not seek the limelight. Now that I have been thrust in the limelight, it is only fair to answer the question: before you tell us what we can do, what have you done?

I have always believed that the job of an effective legislator goes beyond merely proposing laws, for what are laws but written agreements entered into by members of society on how to harmonize their mutual relations? In fact, I do not believe that we suffer from the problem of too few laws. One of my proposed measures was the recodification of laws, in response to an appeal from the legal community to put some order into our laws, their amendments and those that have been repealed, because even our lawyers are at times confused.

Consider the recent controversy over who gets to appoint the next Chief Justice. We maintain that there are no ifs and buts in Article 7 Section 15 of the Constitution where it states that the current President cannot appoint anybody within two months prior to a presidential election up to the end of her term. An exemption exists, but it applies only for positions in the Executive Department. Yet you have two retired justices arguing exactly the opposite. How can former justices of the Supreme Court be so seemingly confused, when the fact is that the provision regarding presidential appointments is stated clearly in the law?

Our problem is the lack of political will to faithfully implement the many world-class laws that our legislature has passed. A preference for ambiguity even when times call for clarity, leads to artificial controversies. Insecure or overly ambitious leaders need to create a climate of doubt, because it’s in the grey areas that its ambitions thrive.

It is in addressing this problem that I focused on the fiscalizing aspect of a legislator’s job – on Congress’ oversight and investigative functions.

Consider intelligence funds. In the proposed 2010 budget, a total of 1.4 billion was allocated to confidential and intelligence funds.

Woodrow Wilson once wrote that oversight is always preferable to investigation, which is like putting out a fire instead of preventing one. We proposed that if the Executive wants orderly transactions, at least a few members of Congress should be privy to all of the details to determine if they were spent properly. However, this proposal was dismissed out of hand without even a single hearing for the reason that they undermined the Executive’s privileges.

And yes, the investigations were a vital part of my functions, too. I don’t think anyone will begrudge me my efforts in this regard. From Hello Garci and the impeachments, to NBN-ZTE and the fertilizer scam, I did my duty at the forefront of these issues.

The original design of the NBN-ZTE project required a BOT agreement between government and the supplier, not a government loan. But during the NBN-ZTE hearings, we learned that the project was entered into through a government loan despite instructions to the contrary from no less than the President herself. The cost of the intended government loan was P40 billion, (in which P16 billion was for the backbone and P24 billion was for the CyberEd project.) Jun Lozada belied this when he cited P5 billion as the actual cost of the entire project. Ito yung sinasabi niyang kalakaran ng gobyerno, kung saan sa sobrang laki ng patong, bubukol na.

SCTEx took around 8 years to construct before it finally opened. Projects of this scale normally require two years to complete. Furthermore, when SCTEx finally became operational, it was found that the central hub, which was Clark, did not have an exit, excluding Clark from the Subic Clark Tarlac expressway itself. How can one justify these kinds of delays where opportunities are lost, costs have escalated and the people’s burdens, instead of being reduced, end up being compounded?

My active role in these congressional hearings has put me at odds with the administration. In 2005, it cost me my post as Deputy Speaker. It continues to put me at odds with the coalition of self-interest that currently holds power. It puts me at odds with other candidates for the presidency.

To lead transformation, you cannot be part of the problem. As I said when I accepted the people’s draft, the job of chief executive is about the efficient allocation of resources. If you have hogged those resources for yourself, if you have lied, cheated, and stolen to gain power, how can you be trusted to lead the transformation our country needs?

Going back on the issue of appointing a Chief Justice prior to the forthcoming elections. If we are to transform the country, it begins with doing what we can, now, to limit the damage and give our people a fighting chance to rebuild our damaged institutions. The Constitution imposes a blanket prohibition with few exceptions concerning midnight appointments. A candidate cannot ask for the people’s mandate, pledging to improve the situation tomorrow, if he becomes complicit in worsening the situation today.

Hindi naman mahirap gawin ang tama. Alam naman ng lahat yan eh. Wala namang magic, wala namang sikreto. Pero bakit pilit pa ring ginagawa ang mali?

There is a widespread perception that success in the business milieu can almost be directly correlated to your closeness to the powers-that-be. Because of this, some players in the industry are forced to focus their activities on maintaining relationships in order to retain the favors that they receive in exchange for cultivating that relationship. This has fostered the wrong kind of competitiveness. While it may work, locally, for now, it has not enabled these players to become competitive in the world market, where the rules of the game do not take special relationships into consideration.

We will encourage free and fair competition in a level playing field. One not need be a crony in order to succeed in the field of business. More importantly, government will not compete with business. Nor will government use its regulatory powers to extort, intimidate and harass.

We will transform our systems to foster service to the public instead of making citizens jump through hoops. We will streamline the approval process, not only for setting up new businesses but also in the regular day-to-day transactions with government, such as the payment of taxes. We will do this on a national as well as the local level.

In 2010, our next President will inherit a continually bloating deficit. As of November 2009, the deficit of the national government already reached P272.5 billion, or 4.1% of GDP.

In addressing the looming fiscal crisis, good governance and the drive against corruption are critical components in our strategy. We will refrain from imposing new taxes or increasing tax rates.

I strongly believe that we can collect more taxes at the BIR and higher duties at Customs if we become more serious in curbing and punishing tax evasion and smuggling. The BIR’s collection dropped by 5.5%, while that of Customs declined by 16.6%. This is the first time in recent history that absolute revenues have actually declined.

Our initial focus then will be to capture a good part of the revenue leaks caused by smuggling and evasion. In this effort, we will not be starting from zero. Be assured that those smugglers and evaders are not faceless and unknown entities. The ideas to improve tax administration and to control smuggling have been there for some time and some programs have been initiated in the past. One of these successful programs was the RATE or Run After Tax Evaders. In fact, some of the people at the Department of Finance and the BIR who have tried to implement reforms before are with us now, and together with reform-minded career executives, we intend to put their commitment and talents to good use under my administration.

My vision is to transform our country into one where we have lower tax rates enjoyed by all, rather than have some enjoy absolute tax exemptions while we burden the rest of the economy with very high tax rates. I believe that markets are better than government in spotting where the growth opportunities are, and, with universal low tax rates, we will encourage entrepreneurs and enterprises to invest and create jobs in any industry. We will, therefore, pursue the rationalization of fiscal incentives early in my administration.

There is a lot of room for our revenue base to grow. Our tax effort has gone down from 17% at its peak to a worrisome 13% today. If we can only bring this back even to just the 15% level, that will translate to P150 billion in additional revenues, which would make a significant dent in cutting our deficit.

My budget team estimates that for 2009 alone, around P280 billion of our national budget was lost to corruption. If we take the years 2002 to 2009 the total estimates exceed one trillion. Estimates vary, but everyone agrees that the numbers are huge.

If we agree that change is necessary, how can a Presidential aspirant, whose own financial and political ethics are questionable, be effective in leading transformation as the head of the bureaucracy? How can a leader, who is benefiting from the status quo, be able to restore a civic sense and pride in our citizenry? The leader, who has used public office for private gain, will always be the most committed enemy of change.

Rich or poor alike, we have a tangible experience of the sorry state of public infrastructure at present: traffic, which eats up time, which as the saying goes, is money. Railways are built at bloated cost; urban transport is constructed, but not enough trains are on track. Our people are the first to experience the effect of something that works and conversely, something that is badly done because bad intentions handicapped the project from the start.

It is time that our infrastructure agencies and LGUs transform into cooperative ventures with the private sector by bringing forth an agreed public infrastructure program, based on a cohesive plan that optimizes the value of the entire network. In our conversations with members of the private sector, there has been a lot of positive feedback about possibly working with government on this endeavor.

To transform infrastructure projects from sources of waste and scandal into examples of cooperation and efficiency, we will set objective criteria for different types of projects and develop a scorecard that will assess various projects against benchmarks transparent to the public.

Initially we want our infrastructure program to transform from being the means to enrich a few, to being labor-intensive and biased for employment as a means to pump-prime the economy.

When I read about countries that have invested in their agriculture sectors and succeeded, it always pains me to find that these countries – Vietnam and Thailand, to name just a couple – had started by sending their experts to be educated in the Philippines. It seems that we cannot implement among ourselves the lessons we successfully imparted to experts from elsewhere. This will have to change. We must be able to harness our homegrown talent in order to further our local industries.

When we change administrations, there must be a complete review of all the programs in the Department of Agriculture. We can do a lot for our farmers given the present budget of the Department if we eliminate the leaks and focus on the efficient use of resources. For example, we must stop eating up millions in mere administrative costs as in the case of NABCOR, which charged our government P60 million because it served as a useless conduit to regional offices. We will also support efforts such as supply chain management that minimizes losses, creates jobs, consults with stakeholders, and capitalizes on our competitive advantage.

Our core belief is that the current approach to governance and power must change. That is why our terms of reference always begin with the present government, what it has done, and how different our institutions and our nation must be six years from June 30, 2010.

In a small-scale operation it is easy for everyone involved to visualize that entity as the combination of their collective efforts. As opposed to, say, when you are a bigger firm, and there is the management side and there is the labor side. In Tagalog, it’s even more dramatic. Kayo at kami, sa halip na tayo.

We must find a unity that transcends the divisions of today, based on a shared commitment to transforming our country into one that works: One where traffic flows well, garbage is collected efficiently, crimes are solved, justice is served, and our kids are educated properly. It works in the sense that you do not have to flee the country to move up in the world, improve your lot in life, and rise to the highest level your personal merits can achieve.

We are a nation of sacrifice, of diligence, dedication and, idealism, because we are a people imbued with compassion even when we have officials who lie, cheat, and steal. Our faith teaches us that we are our brother’s keeper. Our logic should tell us that in taking care of others, their growth equals our own.

In the movie “Invictus,” Nelson Mandela says, “In order to rebuild our nation, we must exceed our own expectations.” It requires us to insist, always, that we are not a nation of crooks, of thieves, of murderers who get off scot-free and where justice is won by the highest bidder.

In May, you will be asked to make a choice. Will you choose transformation and change or will you choose to uphold the status quo?

We have already made our choice. Ours is a journey towards transformation. I ask you today to join us in this journey now.

Thank you.

If you yourself will also keep them in your own heart, your constructive criticism of the weaknesses of the present administration and of the other candidates will become your own protection against your own weaknesses during times of temptation when you will soon sit in authority.

While maintaining a good character is especially necessary when in public service, it is foolish to underestimate one's own dark side.

Leaders don't fail because of the enormities of the frontiers without; they fail because they lost the battle within. The inner battle is a never ending struggle and must be overcome every time in order to achieve significance and effect positive change on the challenges outside.

Keep your heart with all diligence; for out of it flow the issues of life. (Proverbs 4:23)


Endure short-term difficulties to secure long-term gains

No pain, no gain: legacy of Aquinomics?

By Cielito F. Habito
Philippine Daily Inquirer
July 8, 2014, 12:09AM, Tuesday

Is “Aquinomics” losing steam? In the last four years, it appears to have led to a breakout in the country’s economic performance, seen especially in the growth of aggregate investment and manufacturing activity. Business confidence has been spurred by perceived improvements in governance, notably in the fight against corruption. The result has been economic growth that has averaged 6.4 percent annually in the last four years, after averaging only 4.9 percent in the preceding six years. Observers have come to believe that the Philippine economy has ascended to a new growth plane, and can sustain faster rates of growth in the years ahead.

Has it really? Recent events lead some to worry that the economic momentum of the past four years may be dissipating in the face of natural and manmade mishaps. The latest threat to the growth momentum is last week’s Supreme Court decision that declared certain “acts and practices under the Disbursement Acceleration Program (DAP)” unconstitutional. Prior to that, the pork barrel scandal had already slowed down government spending amid heightened cautiousness by government agencies. The first quarter slowdown was in fact partly attributable to this. The DAP decision will likely lead to even more caution, not just on the part of implementing agencies, but on the part of the Department of Budget and Management itself. Government’s leeway to “pump-prime” the economy with the DAP would effectively be curtailed, even as the Supreme Court actually acknowledged it to have stimulated economic growth.

Evidence of significant slowdown in government spending already shows in the numbers. From January to May, total government revenues grew 12.2 percent over the same period last year, and yet total expenditures rose by only 4.7 percent. The result has been an unusual budget surplus of P8.5 billion—not at all good news for a government that has a great deal of catching up to do in infrastructure and other vital public investments. Indeed, textbook macroeconomics teaches that deficit spending is a potent way to stimulate overall economic activity. The ongoing “cleansing” of government spending—ridding it of dubious transactions that line corrupt pockets, and now, of expenditures not authorized under constitutional limitations—has to come at the cost of slowing down economic growth.

This is certainly not the first time in recent memory that we’re seeing this happen. Barely three years ago, government’s efforts to clean up public works projects of erstwhile massive leakages dramatically slowed down economic growth from 7.1 percent in 2010 to only 3.7 percent in 2011. Public construction spending fell by nearly a third, and government came under fire for effectively choking the economy. That year, government revenues rose by 12.6 percent while expenditures only went up 2.3 percent. It was this situation that impelled the Development Budget Coordinating Committee to find ways to speed up spending, egged on by comfort that leakages in the Department of Public Works and Highways had mostly been plugged. Thus was born the DAP, and in the following year, expenditure growth (14.1 percent) well outpaced revenue growth (12.9 percent). By the second half of 2012, economic growth had surged beyond 7 percent.

Now the brakes on spending are being applied all over again, and the prospect of significant economic slowdown is again very real. Is this the price of finding our way to the daang matuwid? While I do believe we are moving in that direction, it has been a bumpy, and at times slow, road indeed. It seems we must really be prepared to see things get worse before they get better. No pain, no gain.

I see the same phenomenon in other efforts of government to pursue long-term change for the better. Over at the Bureau of Customs, the new leadership may be succeeding at curbing the smuggling of rice and other commodities, but the immediate impacts of this success have not been too palatable. In a market formerly awash with contraband rice, garlic and other commodities, prices will inevitably rise if smuggling is effectively curtailed, as we indeed see prices moving up lately. The benefit to local producers hurt by unfair competition from smuggled goods comes at the short-term cost of rising prices for all. Similarly, recently tightened accreditation requirements on importers, while lamented to be impeding commerce now, could ultimately curb the very practices that have traditionally raised the cost of doing business at Customs.

In a similar vein, the process of decongesting Metro Manila by getting more shippers to use nearby Batangas and Subic ports appears to have begun. Japanese shipping line NYK has just announced a direct service to the Port of Batangas from Japan beginning this week, providing an “option to shippers challenged by the Manila truck ban.” Hopefully, more shipping lines would follow suit. It’s obvious that achieving rationalization of shipping traffic among the three ports would not come easy. The ongoing squeeze on commerce forced by Manila’s audacious move could well be the inevitable short-term price of getting to the desired long-term outcome.

If Aquinomics is indeed about enduring short-term difficulties to secure its legacy of long-term gains, then things may not be as bad as they seem. Still, we all need to work together to get over the short-term pains as quickly as we could.

“Aquinomics: 2010-2014 and Beyond” is the theme of the Ateneo Center for Economic Research and Development’s Eagle Watch Forum on July 16, 8:30 a.m.-12:00 p.m. at the Ateneo Rockwell campus in Makati City. E-mail admueaglewatch.soss@ateneo.edu or call 02-426-5661 for details.

Fighting corruption is a perpetual war

"PNoy may have lost a battle, but he is winning the war against corruption."

-- Sen. Alan Cayetano

PTV News
July 07, 2014, Monday

"Although Malacanang lost the battle, I think they have won the war."

Senate Majority Floor Leader Alan Peter Cayetano said this as he welcomed the recent decision of the Supreme Court declaring specific acts under the President Aquino's Disbursement Acceleration Program (DAP) unconstitutional.

"Malacanang lost in the sense that mali na na-augment nang walang item sa budget, mali na i-consider ito na savings na hindi pa nagagastos... But it shows that democracy is alive, it shows checks and balances, it shows the respect of the President sa Supreme Court, kaya dapat sundin natin ang desisyon ng Supreme Court," the senator said.

The Chief Executive and Budget Secretary Florencio Abad have earlier defended the controversial initiative, saying it was necessary to fast-track growth in the economy.

This, however, was criticized by SC justices, who pointed out that the cross-border transfer of funds from one government branch to another was not allowed in the Constitution.

Following the high court's decision, several groups have expressed their dismay over the President and the budget chief for implementing the stimulus fund. Some advocates also called for Abad's resignation and for Aquino's impeachment.

But Cayetano believed that instead of considering the decision as a defeat by the current administration, people should look at it as one of Aquino's great achievements insofar as the justice system in the country is concerned.

"The decision shows that the justice system works... Noong panahon ng Arroyo administration, either hindi yan i-take up o patay-malisya lang," he said.

Reacting to calls for an impeachment trial against the President, the Senate leader said Aquino cannot be held culpable for merely adopting what the previous administrations did, adding that the money which was allotted to fund several projects were spent in good faith and were not stolen.

"Iba yung ninakaw mo, iba yung in good faith. Ginawa mo ang akala mong tama, pero sinabi ng Supreme Court, mali ang proseso. Agree ako na mali, agree ako na Kongreso ang dapat mag-appropriate. But disagree ako sa nagpapalabo ng isyu na sinasabing ikulong na ang mga yan dahil hindi naman nila ninakaw ang pera," he said.

"The DAP was an honest mistake on the part of Malacanang because they adopted what the previous administrations did. Some constitutional bodies and other departments also did the same thing. Mauubos ang nasa gobyerno kung tuwing merong unconstitutional, ipapakulong niyo sila, kasi ang illegal, immoral at unconsititutional, magkakaiba yun... Let's be reasonable, let's welcome the decision and implement it fully but let's not go overboard," he added.

No, PNoy is not yet losing the battle. What is happening now with the uncovering of the abuses and misuses of PDAF (and DAP?) is that the Philippines as a nation has finally started fighting corruption in the main battlefront with the PNoy administration as its commanding warrior leader. But this administration can quickly lose in this battlefront if it continues to hold on to the seemingly double standard attitude by being aggressive against non-allied corruption-implicated public officials and individuals while at the same time showing an attitude of liniency towards friends and allies who are (or may be) implicated in any form of corruption or major mistake (honest or otherwise). Because of this attitude of the administration, people's doubts are beginning to mount, and if these doubts reach a tipping point, this present administration could lose in this major battlefront, and if it loses this battleground how can the nation even advance forward to continue fighting and win the war against corruption?

PNoy is (or maybe) the leader ordained to start and lead a real fight against corruption on its main battlefront. But it will take [a] generation[s] of honest, dedicated, and ever vigilant successors and people to win the war against corruption -- because fighting evil is a perpetual war.

On the deeper aspect: Corruption is evil, and evil's domain is in the spiritual dimension. All the physical means to fight it is just simply so insufficient. The spiritual battleground of corruption is incomparable to its physical battlefront. Thus, in the fight against any works of evil, spiritual warriors and spiritual weapons are even much more necessary in order to combat and subdue evil.