Don’t Worry, Be Happy, The Situation is Crazy

Chinese new year is near, sweet rice cake, also known as is “Tikoy” like life , its sweet, can get sticky and hard to swallow…

In an article “Corruption, climate and Congress: Preying on PH resilience and faith” by Dr. Diane A. Desierto (JSD, Yale) last year, November 15, 2013, she quoted “Anyone born, bred, raised, and educated in the Philippines instinctively knows what it really means to “weather” through adversity, and literally getting up to rebuild again.  It’s a cycle we live with every year  – a cycle more terrible to recover from given the economic inequalities across the 7,107 island archipelago”.

We are used to more than twenty of the world’s worst storms coming through every year.  Floods devastate whole cities and communities everywhere. And every year, we do our best to rebuild, to understand sorrow, to find a way to make peace with loss, to find reasons to survive and to thrive, and to always look to “what’s next” in terms of what we can do for humanitarian assistance, disaster relief operations, community reconstruction efforts that will  take years.

In my opinion this includes, Extreme disasters due to ” killer ”  weather conditions, graft and corruption , injustice , cyber-attacks, mounting rates of unemployment , political turmoil, poor social welfare, and growing income disparities, to name a few.

Anyone who’s ever seen the unrelenting tenacity, hard work, adaptability, resourcefulness, optimism and faith of millions of Philippine nationals working abroad should realize that all of that , comes from somewhere.

As with any other of my countrymen and countrywomen, I have also lost, also grieved, also made peace, also had to rebuild.  It’s an art form we learn from birth.

Today’s rampage by the “world’s most powerful typhoon”, Typhoon Haiyan (Yolanda in the Philippines) is only beginning to be felt, and initial reports on the ground indicate that the deaths, damage, and devastation in the Visayan provinces of Cebu, Leyte, Samar, Bohol will be another one for the books.

According to Bernie Lopez in his write-up “Meralco Rates one of Highest in Asia, Ten Reasons Why”, these are the 10 reasons: First, the government, as part shareholder of Meralco (Manila Electric Company, the largest power distributor in the Philippines), is guilty of conflict of interest. It will approve rate increases for its own profits. Government equity in utilities should be banned. Second, Incumbent politicians are beholdened to the power sector as contributors to campaign funds. Malacanang defended the recent Meralco rate increases. Covert campaign contributions from oligarchs and their corporations should be exposed in the media. Next third is, there is an insidious partnership between local oligarchs who control the power industry and the World Bank–USAID–ADB-IMF consortium (the US-controlled international banking system) to control and dominate the Philippine economy. The power sector plays a critical role in the economy. Even Malacanang is a puppet to this partnership. It’s an all-powerful global force.

Fourth, the consortium authored the EPIRA (the power regulatory law) through proteges, namely, solons, some of whom were power oligarchs, and USAID-funded study groups. In the guise of breaking up the power monopoly, EPIRA achieved the exact opposite, strengthening the monopoly (oligopoly). A clear example is the latest rate increase. The WESM rate increased almost tenfold overnight on the pretext of the Malampaya shutdown just before Meralco purchased power. Meralco knew about the shutdown months before. Congress is presently investigating if power generators and distributors are in collusion to increase rates.

Next is the Energy Regulatory Commission (ERC) has consistently approved rate increases which the Supreme Court has consistently reversed in favor of consumers. The latest increase is in fact a violation of the EPIRA because it was automatic. There is no such thing as ‘automatic increase’ in the law. This requires approval and consultation first. Meralco and ERC consistently deny their partnership.

Sixth, The “modus operandi” of Meralco to increase rates is to pile up one application with the ERC after another, in the hope statistically even 70% are approved. These applications are so complex finance- and accounting-wise that no layman can understand the needles in the haystack to be able to launch a protest. Before the latest increase effective January, there was a previous one approved for November. Meralco has a team of expensive lawyers to manipulate and maneuver around the law. They know consumers cannot afford to match their legal service power. Another is Meralco illegally imposed an ERC-approved fee to cover future potential default on payments amounting to a staggering P26 billion, whose interest, protestors say, belong to consumers, not to Meralco. If you are a low-to-medium consumer of about 200 plus kilowatt hours per month, your new bill would mean plus P200 for default security payments (this is not consumption but insurance), and another P500, for the Malampaya shutdown increase. So your bill is jumping from P2,000 plus to P3,000 plus, an increase of 30% beyond the capability of the middle class. Meralco is bleeding the nation dry.

Eight, Meralco is not afraid of protests for two reasons, 1) it controls the media and has a PR budget of millions per month. They can come out with articles justifying increase and suppress articles saying these are unjust; 2) the threat of electricity cut-off is a powerful force that make consumers helpless. If they opt to not pay for unjust rates in protest, their electricity will be cut off. They have no choice and Meralco knows it.

Second to the last, the European, American, and Japanese Chambers of Commerce report that Meralco has one of the highest rates in the whole of Asia, higher than Tokyo’s, strangling their businesses. Some are threatening to move abroad, and indeed some have. And lastly, the powerful energy oligarchy is complex and has tentacles reaching out to a labyrinth of other sectors such as mining, which uses up a lot of power. It has agents in Malacanang, including the all powerful MICC, which ultimately approves all mining applications. There are oligarchs in the Cabinet, Senate, Lower House, Chambers of Commerce, etc.

How do you kill the oppressive energy oligarchy? You don’t and you can’t unless you want to be a martyr. The only thing that can kill the oligarchy is people power, but that is a tall order. People power rises only in crisis situations like EDSA. When power rates have increased three fold, maybe there is a chance. The latest increase is churning up a tsunami which is still in its infancy. We are slaves of the oligarchy. Greed is the name of their game.

Three years into his term, President Benigno Aquino has helped the Philippines regain its long-lost confidence. With the Philippines emerging as one of Asia’s fastest-growing economies, gone are the days when our country was dismissed as the “sick man of Asia.” according to Yahoonews Philippines.

Richard Javad Heydarian said “Once again, the Philippines is becoming a regional growth pole, catching the attention of international observers, who have come to see our country in a more positive light. Finally, we can legitimately lay claim to the idea that it is ‘more fun in the Philippines’.”

But the purported turnabout in our economic fortunes has been underwritten by a shift in the political landscape. After all, the Philippines has been gifted with an auspicious cocktail of robust demographics, bountiful natural resources, strategic location, and an educated population.

Such potentials, which today are driving growth and fueling optimism in the economy, are not unique to recent years.

Instead, it is the rising confidence in the political leadership, which has facilitated a revival of confidence in our markets. Aquino’s “good governance” (daan na matuwid) initiatives, couched in a moralistic crusade against age-old institutions of corruption, played a pivotal role in recasting the Philippines’ image as a country in search of self-regeneration. As a result, slowly but surely, more and more individuals are beginning to once again envision the Philippines as a beacon of prosperity and democracy in the region.

A maturing democracy

It was precisely such initial positive steps, however, which explains the contentious nature of our politics in recent months. After decades of hibernation, the Filipino middle classes have finally regained their rightful place in the democratic playground.

With growing hopes in the fortunes of their country, it is increasingly impossible to expect a passive, demobilized electorate, which is willing to accommodate political ineptitude, oligarchic collusion, and lack of democratic accountability in state institutions. They will no longer be satisfied by empty rhetoric and populist dole-outs. There are growing signs that we are finally moving in the direction of a more mature democracy.

Against the backdrop of an energized middle class, the Philippines will face at least three major challenges in the year ahead.

1) Aquino’s declining ” political popularity”

Aquino’s declining popularity is a reflection of an increasingly critical electorate, which is more rigorously scrutinizing the mettle of political leadership in the country. The problem, however, is that historically, as a reformist leader faces growing domestic opposition, he tends to become either more defensive and cloistered or weakened and wobbly. So, quite paradoxically, an incessant “bottom-up” pressure tends to extinguish “top-down” reformist forces, allowing the opponents of reform to undermine recent democratic gains.

A wholesale critique against all forms of discretionary funds and all government officials could translate into a counterproductive situation whereby pro-reform movements could unintentionally throw out the proverbial baby with the bathwater. What we need, instead, is a coordinated, targeted effort between reformist forces within the government and the broader civil society to usher in a new period of democratic accountability and effective governance.

2) Lack of inclusive economic growth

While the recent macroeconomic gains (e.g., stable inflation, moderate interest rates, strong GDP growth, and healthy balance of payments) are certainly laudable, the Philippines has yet to decisively tackle double-digit underemployment and poverty. The Yolanda fallout also exposed how low infrastructure spending, regulatory uncertainty, and corruption undermine the nation’s ability to cope with natural disasters. With roughly two years before the next presidential election campaign, it becomes crucial for the Aquino administration to undertake a concerted effort at ensuring that the fruits of recent economic gains are not concentrated in the hands of few and (unproductive) sectors.

It should also make sure that we don’t compromise the interest of our agricultural and manufacturing sectors in the ongoing negotiations over establishing a common ASEAN market in 2015.

3) Rising tensions in the West Philippine Sea

Despite earlier hopes of a multilateral, diplomatic resolution of territorial disputes across the Western Pacific, what we have seen, so far, is instead greater military mobilization, more aggressive territorial jostling, and less room for meaningful compromise. More than ever, the Philippines will need to revisit its current foreign policy, and ensure that it adopts a more effective means of reaching out to the moderates in China, garnering support from the international community, pushing the ASEAN to implement a binding Code of Conduct in the West Philippine Sea, and developing our own military capacity before the end of Aquino’s term in 2016. Otherwise, we face the real possibility of a major military conflict in the region.

According to Bettina Faye V. Roc and Ann Rozainne R. Gregorio of Businessworld, ECONOMIC managers are not worried over the peso’s weakening, which they said was not unexpected and the impact mitigated by the country’s strong fundamentals.

“When the peso depreciates a bit, it makes the productive sectors more competitive, whether it is exporting or import-substituting,” Socioeconomic Planning Secretary Arsenio M. Balisacan said at the sidelines of the Bangko Sentral ng Pilipinas’ (BSP) annual reception for the banking community last Friday.

Central bank governor Amando M. Tetangco, Jr., also told reporters that the peso’s drop was “not totally unexpected, just like the weakening of other regional currencies or other emerging market currencies for that matter, because there remains uncertainty about the speed and duration of the [US] Fed’s tapering that is causing market volatility.”

The peso hit P45 per dollar last week as positive US economic data led investors to favor the greenback. It closed at P45:$1 last Wednesday and weakened further to P45.12 on Thursday — the weakest since Aug. 23, 2010’s P45.13 — and then recovered slightly on Friday, returning to P45:$1.

It has depreciated by 1.36% from its P44.395 per dollar close at the end of 2013.

The currency’s fall, Mr. Balisacan said, does not signify a weakening economy.

“Our advantage over countries like Indonesia and India is we have very strong fundamentals. Our current accounts position is positive … Our remittances are very strong,” he noted.

The Development Budget Coordination Committee expects the exchange rate to stay within a range of P41-44:$1 through 2016.

“If the current rate would persist, then we would have to revisit our assumptions. But our view is this could be temporary,” Mr. Balisacan said.

“We expected a lot of remittances because of the disasters, and I think the November number is historically high. That’s likely to continue until December and January. And then you have the other sectors, like exports of services and manufactured goods, investments, those will have offsetting effects,” he noted.

Mr. Tetangco, meanwhile, said: “The macroeconomic fundamentals of the Philippines remains strong and our external position remains healthy,” which provides enough of a buffer against external shocks.

“In fact, we are projecting another BoP (balance of payments) surplus this year and that surplus is due to a current account surplus, which is good because it shows a real improvement in the position,” he added.

In a write-up in Manila Standard Today, tourist arrivals in the Philippines in the first ten months of 2013 reached a record high 3,867,386 visitors, data from the Department of Tourism show.

According to the DOT, this figure showed an 11.19 percent increase compared to the 3,478,285 foreign visitors in the same period in 2012. It represents a 70.32 percent of the goal of acquiring 5.5 million arrivals for 2013.

The agency noted that the increase was brought about by the consistent monthly growth in arrivals, with the month of February registering the highest growth of 15.52 percent while January recorded the biggest arrivals of 436,079.

South Korea contributed to the biggest arrivals with 990,486 visitors, which was 25.61 percent of total inbound traffic, registering a growth of 18.99 percent vis-à-vis its arrivals of 832,437 in 2012 covering the same months.

In Business Mirror written last January 12, 2014, “in order for tourism in the Philippines to work, the government—both at the national and local levels—should exert its best efforts to improve it, Tourism Secretary Ramon Jimenez Jr. said late last week, quoted by Azer N. Parrocha.

In a statement, Jimenez said “tourism is only as strong as the local governments working behind it.”

“We have already created the demand, with the Philippines now enjoying extensive international media mileage. But our job does not end there,” the tourism chief said.

“We will need the continued support of our local counterparts—our partners for success—in order to develop tourism destinations, diversify tourism packages and sustain demand,” he added.

He explained that the Department of Tourism (DOT) can never go wrong with ecotourism, which has always been one of the country’s strongest competitive advantages relative to other destinations in Asia.

The DOT is pushing for the development of new tourist destinations, geographic markets, segments, niches and routes, in accordance with the country’s National Tourism Development Plan.

Part of this development is assisting the provincial government of Oriental Mindoro in addressing the lack of a budget allocation in setting up its own local tourism offices.

In a separate statement, Department of Tourism (DOT) Region 4 Director Rebecca Labit said the organization of a strong and competent tourism work force is vital to make tourism successful.

“While not all local executives may fully believe in the power of tourism, it has proven its worth in many local destinations, bringing in new opportunities and generating new jobs,” Labit said.

“Oriental Mindoro can count on the Department of Tourism (DOT) as long as it needs us and until it can already stand on its own,” Director Rebecca Labit added.

Oriental Mindoro is one of five provinces—the others are Occidental Mindoro, Marinduque, Romblon and Palawan—that make up Region 4B, or Mimaropa.

The province is also envisioned by its local government as a “green paradise” that has rich marine biodiversity and a diverse ecosystem that can compete with those of the Galapagos Islands.

In December the Department of Tourism (DOT) partnered with Oriental Mindoro to help local government units there craft their individual tourism master plans.

In my opinion, Mindoro is short of infrastructure projects, such as an International Airport, and the need to expand its seaport to accommodate luxury liners. Mindoro as a whole is a “unpolished diamond” one of the Philippine’s best tourism destination area.

We Filipinos are survivors. In every crisis, there are opportunities like the urban renewal, infrastructure development, reconstruction of destructed municipalities and cities affected by the Yolanda storm surge.  Real estate practitioners must seriously consider expanding to new regional areas outside Metro Manila.

 Unfortunately, acts of demolishing political enemies is talking an adverse negative reaction. Its is not good nor healthy,  to the economy and business environment. My advice is to ignore these politicians who are just lobbying and positioning for the 2016 elections. One must focus in doing what is right, proper and help the nation through private initiatives , focus on your work. with the sense of optimism  and not worry, but  to be happy,  even if the political situation is crazy.


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