TOWARDS GENUINE SOCIAL TRANSFORMATION:

A Critique of President Simeon Benigno Noynoy Cojuangco Aquino IIIs 4th State of the Nation Address (SONA) Delivered on the 22nd of July 2013 With Some Alternative Solutions to The Countrys Pressing Problems Which Successive Regimes Failed to Address*"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.- Abraham Lincoln

We can only serve our country well by telling the truth however bitter it must be.

- Jose Rizal*ESPECIALLY DEDICATED TO THE 40+ ACTIVISTS WHO WERE INJURED TODAY BY POLICEMEN WHO HAVE NO RESPECT FOR THE RIGHT TO PEACEABLY ASSEMBLE, INCLUDING 8 YOUNG ACTIVISTS WHO WERE DETAINEDLAUDABLE POINTS AND PROMISES

To present a balanced perspective, we emphasize that the SONA 2013 is not entirely useless. Firstly, as in his first three SONAs, Noynoy delivered his fourth SONA in Filipino. This makes it very easy for the Filipino masses to right away expose the emptiness of most of his SONA.

Secondly, the SONA 2013 enumerated some laudable promises (which we of course wish to be fulfilled as soon as possible): 100% enrollment of citizens in the countrys health insurance system called Philhealth (which is actually useless for preventive health check-ups, and is prone to bankruptcy due to the privatized hospitals that impose exorbitant fees for which the government pays via Philhealth); expansion of rural electrification (which is nevertheless useless as electricity rates are soaring, and many electric firms are privatized, profit-oriented, and deregulated); expansion of decent housing for informal settlers (a laughable promise as we all know government housing projects are built by private firms, and hence expensive, aside from the fact that these housing units are not so decent that no government official has volunteered to live in one); increase of additional funds that go to education, health, social services (a promise that will surely remain a promise as debt payments are the governments real priority since the Macapagal-Arroyo years); land titles for the land reform beneficiaries of Hacienda Luisita not later than September 2013 (and so he says); building more power plantsin other parts of the Philippines (a laudable effort which will be negated by the fact that the power sector is deregulated, privatized, and hence, profit-oriented); more vital road projects such as expressway linkages (which unfortunately are privatized and hence, profit-oriented).GENUINE ACHIEVEMENTS

To be fair, we concede that the SONA 2013 contains a list of genuine achievements too: elimination of corruption or overpricing in the books acquired by the Department of Education; support for intercropping in coconut farms (the only catch: some coconut farmers are still slaves of landlords who owned coconut plantations); cold storage facilities for fishermen in Palawan (similar facilities must be built nationwide); Geohazard Mapping and Assessment Program and Project NOAH of the DOST (however, destructive mining and logging need to be addressed for these programs to be really effective); robust tourism sector.ACHIEVEMENTS WITH A CATCH

However, it must be pointed out that some of the supposed achievements come with a catch and/or in fact anti-people in nature: increased job placements for TESDA-DOLE scholars (the government would want poor citizens to perpetually be in low-paying technical jobs, despite the fact that they can actually finish college and expand their career opportunities in the process, not to mention the fact that these workers labor in industries that mostly cater to the needs of foreign countries); tasking the DAR, DENR, LRA, and Land Bank to develop a framework for speeding up the parceling out of land (a project bound to fail as the current land reform program labeled as CARPER which contains some loopholes for landlords, and allows farmers to use land as collateral and hence possibly lose their land again is but an extension of the previous failed land reform program called CARP; a better law needs to be passed instead of merely developing a framework for speeding up the parceling out of land); more housing units for police and soldiers (teachers and other civil servants wonder when will the government offer them the same benefit); more guns for police personnel (we are increasingly becoming a costly police state where sooner or later, the acquisition of guns will be prioritized over resolving hunger and other problems that really cause insecurity among our people); continuous peace talks with the Bangsamoro representatives led by the Moro Islamic Liberation Front/MILF (final peace agreement is yet to be agreed upon and signed; and how about the peace talks with communist insurgents; Noynoy totally ignored the communists who are present in more than 90% of provinces, in his speech); an astounding 6.8 percent GDP growth in 2012 (which nevertheless failed to wipe out massive poverty in the country); growth of the manufacturing sector (which do not actually cater to domestic needs, but rather provide for the needs of other countries through exports); expos on corruption which led to some cases filed against culprits (big fish are still out there, and even those who are jailed are yet return their loot to the countrys coffers).BACCHANALIA OF HALF-TRUTHS AND SOME OUTRIGHT LIES

The SONA 2013, like other SONAs before it, is also full of half-truths and some outright lies: the claim that We have finally erased the backlog we inherited in books and chairs and the backlog in classrooms will be resolved before 2013 ends (easily proven untrue by reports from teachers in the field; in some schools, there are three shifts per day, hence the backlog in chairs is technically but not really resolved, as the quality of learning might suffer due to the ill effects of not-so ideal scheduling of some shifts like that of the early morning and late afternoon shifts; the same dilemma applies to the backlog in classrooms); strengthening of our agricultural sector (a total lie) as allegedly proven by the countrys decreasing rice imports (it must be noted that in the SONA 2012, Noynoy promised rice self-sufficiency, a unfulfilled promise, apparently) which maybe partly due to the fact that our poor countrymen are now too poor to buy rice, and hence may have involuntarily subjected themselves to rice dieting; the claim that We are also remedying the problem of flooding in Metro Manila (no remedy has been offered other than the demolition of urban poor houses near waterways, while at the same time allowing huge private real estate firms to dot the capital region with lots of condominium units that partly contribute to massive flooding; the Blumentritt Interceptor Catchment area is yet to be completed and no document is publicly available as to its merits).NIGHTMARISH REFORMS

As expected, the SONA 2013 outlined some nightmarish reforms that will be rammed down the throats of the people despite their being actually detrimental to the countrys over-all and long-term progress: implementation of the K to 12 scheme will shamelessly refashion the Philippine education system to suit the need of big foreign firms and their local partners for semi-skilled, low-wage and docile laborers that will perpetuate the countrys status as a non-industrialized nation of slaves, provider of raw materials and low-value and medium-value semi-processed goods, and repository of cheap yet educated laborers; expansion of the Pantawid Pamilyang Pilipino Program/4P or the Conditional Cash Transfer/CCT scheme which, while directly benefits the poor, actually further increases Philippine debts as the World Bank and other similar agencies provided loans for the 4P (funds which will be better spent for the countrys job generation schemes via land reform, agricultural modernization and industrialization, and to fund free education at all levels); implied call to increase the number of soldiers and police personnel (always a bad thing as George Orwells 1984 emphasizes, as true peace and security is guaranteed by holistic human development, rather than the militarization and/or institution of a police state that will ensure peace and order through terror and violence); increase in the SSS contribution rate (an extra burden for workers, which does not resolve the root cause of the dwindling funds of SSS mismanagement of SSS funds under the previous administration and continuous investment of SSS funds in the volatile stock markets); upgrading our Armed Forces (to his credit, Noynoy seems less inclined, at least rhetorically, to accelerate the acquisition of expensive weapons, though of course, actual reality might be different); increase in MRT and LRT fares (a bad thing for poor and middle-class workers who rely on the said train systems almost on a daily basis); Public-Private Partnership (PPP) which paves the way for the massive privatization of social services and public utilities, not to mention the expansion of foreign control over the countrys economy.LITANY OF THE UNMENTIONED: TOWARDS GENUINE SOCIAL TRANSFORMATIONIt must be noted that the SONA 2013 never mentioned the following vital matters, a certain proof that the current administration is not really interested in implementing sweeping reforms: Freedom of Information (FOI) Bill; Anti-Dynasty Bill; repeal of the 1995 Mining Act; genuine agrarian reform; national(ist) industrialization; review of the Labor Export Policy; immediate repatriation of Filipinos who now live in tent cities in the Middle East; resolving cases of enforced disappearances and extrajudicial killings; resolving the communist insurgency via addressing its root causes (landlessness of farmers, inequitable wealth distribution, massive poverty etc.); debt repudiation and renegotiation, and debt payment moratorium; addressing the massive destruction of the environment due to corporate and/or foreign-controlled mining and logging all throughout the country; landgrabbing perpetrated by rich countries for their food requirements at the expense of the Filipinos patrimony and domestic food needs; the continuous reliance on OFW remittances and foreign investments; a specific and feasible plan to wipe out poverty; free education at all levels etc.

It is in this context that enlightened elements of the Philippine society must persistently voice out the necessary steps needed towards genuine social transformation, away from the current regimes bogus inclusive growth strategy lamely bolstered with manufactured half-truths and rhetorical subscription to piecemeal reforms. Some of these necessary steps are discussed below.

Seeking Funds For National Development, Freeing The Country From The Debt Trap

The Philippines needs to immediately implement basic economic reforms to build the base for a strong people-centered economy, specifically through implementing land reform, agricultural modernization, and industrialization. All these reforms, more especially industrialization, require capital and aside from tax reforms there are other ways to raise capital for industrialization endeavors, without seeking foreign investors whose interest at times clash with the Philippines national interest. Instead of foreign investments, Filipinos must use indigenous capital to develop their country. Stopping foreign debt payments and decreasing domestic debt payments should be implemented so that the country will be able to instantly raise capital for the implementation of various socio-economic reforms. To jumpstart this, the Philippine government needs to cancel automatic debt appropriations by junking Section 31 of Presidential Decree 1177 (imposed by the Marcos dictatorship), and also Section 26, Chapter 4, Book VI of Executive Order 292 (Administrative Code of 1987) which is almost an exact copy of Section 31 of PD 1177. This is an act related to international debanksterization, as stopping foreign debt payments for a decade would certainly weaken the control of multinational financial institutions and their local tentacles on the countrys economy. To justify the need for temporarily stopping debt payments, it is necessary to briefly discuss the nature of the countrys debt problems.In a span of 13 years, (2000-2013), the Philippine government spent 8,240,289,000,000 pesos for debt payments. Using just this amount, the Philippine government can easily put up job-generating firms and factories for its citizens. A table showing detailed debt payments and debt data from the Bureau of Treasury is supplied:Philippine Debt Payments and Outstanding Debts in Pesos (2000-2013)YearInterest PaymentsPrincipal Debt PaymentsTotal Payments per yearOutstanding Debts

2000140,894,000,00086,949,000,000227,843,000,0002,166,710,000,000

2001174,834,000,00099,605,000,000274,439,000,0002,384,917,000,000

2002185,861,000,000172,098,000,000357,959,000,0002,815,468,000,000

2003226,408,000,000243,582,000,000469,990,000,0003,355,108,000,000

2004260,901,000,000340,771,000,000601,672,000,0003,811,954,000,000

2005299,807,000,000379,144,000,000678,951,000,0003,888,231,000,000

2006310,108,000,000544,266,000,000854,374,000,0003,851,506,000,000

2007267,800,000,000346,269,000,000614,069,000,0003,712,487,000,000

2008272,218,000,000340,464,000,000612,682,000,0004,220,903,000,000

2009278,866,000,000343,421,000,000622,287,000,0004,396,640,000,000

2010294,244,000,000395,555,000,000689,799,000,0004,718,171,000,000

2011278,996,000,000443,754,000,000722,750,000,0004,951,188,000,000

2012312,799,000,000416,975,000,000729,774,000,0005,437,104,000,000

2013

333,900,000,000449,800,000,000783,700,000,0005,800,000,000,000

GRAND TOTAL3,637,636,000,0004,602,653,000,0008,240,289,000,000

Unfortunately, Philippine debts pile up even as the government pays its creditors humungous sums every year. It must be noted that in 1947, the second year of the the Roxas administration, Philippine debts stood only at 62,964,649.98 pesos. In the year 2000, Philippine debts have ballooned to 2,166,710,000,000 pesos. At the end of 2013, Philippine debts are expected to reach 5,800,000,000,000 pesos. From 2000-2013, the Philippine government would have shelled out 8,240,289,000,000 in debt payments, yet instead of wiping out its debts, the amount of its debts more than doubled! It is not surprising that such horrendous scheme imposed by the IMF and the World Bank is called as debt trap by some in the academe, a scheme where the Third Worlds wealth goes to the First World financial institutions and its tentacles in the Third World, pushing the Third World to permanently trap itself in the vicious cycle of acquiring more and more debts. As the country pays its debts, its debts multiply because it uses new loans to pay for old ones at a rising interest rate, most of the times. It is unable to use its national budget to develop income-generating industries that will enhance its self-reliance. The humungous funds allotted for debt payments mean lesser and lesser budget too for badly needed social services such as education and health care (which in turn would have ensured that the countrys citizens will be educated and healthy enough to effectively contribute to the countrys development endeavors). Hence, the country must free itself from the debt trap if it is to achieve genuine growth and development.

The solution lies in issuing a moratorium on debt payments for at least 10 years, so that the savings could be used as capital for establishing industries, modernizing agriculture, and implementing other reforms. After 10 years, the country will be able to pay all its debts from the profits it has gained from industrialization. Aside from temporarily stopping debt payments, debt repudiation is another option that can be implemented to gain funds for national development. According ro a research by the African Forum and Network on Debt and Development o AFRODAD (2007), from 1986 to 2006, Filipinos paid US$1,900,000,000 billion, 23,000,000,000 and CHF (Swiss Franc) 107,100,000 to those who funded the Bataan Nuclear Power Plant (BNPP). This anomalous and overpriced nuclear plant was established by the Marcos dictatorship. It was built at the foot of Mount Natib (a dormant volcano) at a fault line, and it was unable to generate even just one megawattt of electricity.The BNPP is just one of the examples of anomalous debts that should be repudiated. With regard to the process of debt repudiation, the Philippines must coordinate with other Third World countries so that it will be able to promote the abolition or condonation of Third World debts to First World countries just like what anti-debt activists from the Jubilee South campaign for. SSS, GSIS, PAG-IBIG FUND: Treasure Chest for Industrialization

Aside from savings that would be realized from a debt payment moratorium, and selective debt repudiation, the Philippine government can also utilized the funds of the Social Security System (SSS), Government Service Insurance System (GSIS) and Pag-ibig Fund to establish industries that will generate jobs for Filipinos, and to modernize Philippine agriculture. This is a very feasible option, considering that the funds of the SSS, GSIS and Pag-ibig Fund are mostly currently invested in highly crisis-prone stocks of foreign corporations and private firms in the Philippines, all the more at this time that the stock market is always affected by market instability as proven by the 2008 International Financial Crisis, which caused the countrys fund managers to lose huge amounts in their foreign investment portfolios. Tax Reforms Toward More Funds for Development Endeavors Tax reforms would certainly yield more funds for national and international development endeavors. At a time when corporations and rich individuals are earning record profits, the Communist Manifestos call for A heavy progressive or graduated income tax, unites almost every sane mind. In the Philippines, some professionals pay more in taxes, percentage-wise, than corporations. For examples, some private university professors pay up to 32% of their income in taxes (on top of other taxes such as Value-Added Tax/VAT), compared with just a 30% corporate tax rate. It must be noted that in the Philippines, corporations have many ways to decrease the actual amount of taxes they pay, like donating money to so-called charities (most of which they have established merely to do away with taxes). Considering that expropriating big private businesses will be too revolutionary for many countries, and if avoiding bloodshed is a priority, progressive taxation imposing more taxes on those who reap record profits is the only bloodless way to go. Progressive taxation will provide governments around the world, more especially poor countries like the Philippines, additional funds for free health care and free education at all levels. At the very least, Scandinavias welfare statism can be a role model for those seeking a compromise between the demands of private businesses and the clamor of the proletariat: the government allows private businesses to thrive but progressive tax rates are imposed so as to redistribute income through levelling inequalities via free education and other free or subsidized social services. The French socialists plan to impose a 75% tax rate for euro millionaires is laudable although it was struck down by a French court.

Theres ample evidence that only political will is necessary to impose such taxes. For example, the German-dominated European Union recently forced the government of Cyprus to impose a 6.75% to 9.99% instant one-time tax on all bank deposits, as a precondition for the approval of a European bail-out for Cyprus (Wearden, 2013). The said scheme is unjust because it imposes an oppressive tax too even on small depositors who have nothing to do with the financial crisis. However, it sets a precedent for the imposition of similar taxes for the wealthiest corporations and individual capitalists. The imposition of a progressive tax rate can only work if implemented and somewhat harmonized on a global scale to ensure that there will be no tax havens for greedy capitalists. Food Sufficiency, Land Reform, and Agricultural Modernization

Among the pressing reforms needed for national development, food sufficiency is one the most basic concern that must be resolved. In the 2004 elections, the presidential candidate Fernando Poe, Jr. Declared that ALTANGHAP or ALMUSAL, TANGHALIAN and HAPUNAN (breakfast, lunch and dinner) is the main problem of Filipinos, hence he emphasized correctly that the government must focus on food sufficiency, first and foremost. The widespread hunger in the Philippines, amidst the abundance of natural resources in the country is primarily caused by the monopoly of some families over the main natural resource needed for planting food crops and hence, in feeding the people: none other than land.

The lack of genuine and complete land reform in the Philippines is a centuries-old problem. The strong control of a few families over huge landholdings in the Philippines, a system reminiscent of old feudalism in Europe during theMiddle Ages, is yet to be reversed. Approximately 60% of agricultural lands in the country are controlled by rich families who compose only 13% of the population, and as a result, 7 out of 10 farmers are landless according to Ibon Foundation (2008). Such concentration of land at the hands of a few families is one of the causes of food insufficiency and lack of enough employment for citizens in the countryside, considering that there are no available jobs in most provinces other than those in the agricultural sector, as the countrys rural industrialization efforts remain anemic. The decreasing share of agriculture in the national economy caused by lack of land reform to expand the agricultural sector precipitates massive poverty and lack of opportunity in the provinces. According to the CIA World Factbook, 32% of workers in the countrys labor force are engaged in agriculture, 15% work in industries and 53% work in the services sector (call centers, fastfood chains, banks, malls etc.). The Philippines wont progress and develop unless it breaks its reliance on the services sector. Prioritizing agriculture and industry will save the country from poverty, as the success stories of Asia and Southeast Asia would attest. Countries such as Japan, Taiwan, South Korea, Malaysia, China and Vietnam achieved industrialization by first implementing land reform which instantly improved income levels for majority of their citizens who were then farmers. This income expansion resulted to increased demands for consumer goods which stimulated the growth of industries. Agricultural boom also provided raw materials for industrialization, proving that these two sectors are complementary in resource-rich countries.

Lack of land reform is one of the reasons behind the decades-old communist rebellion in the country. Therefore, resolving it will also resolve communist insurgency. Many communist rebels under the Communist Party of the Philippines-New Peoples Army (CPP-NPA) are peasants who support the said groups economic program which includes free land distribution to farmers as revealed in the 12-point Program of the National Democratic Front of the Philippines (NDFP), the political arm of the CPP-NPA. According to the NDFP, it is open to signing agreements that focus on socio-economic reforms, including land reform, as enunciated in the Concise Agreement for an Immediate Just Peace (CAIJP) which they proposed in 2005. All large agricultural landholdings (haciendas) in the Philippines must be subjected to land reform through free land distribution to landless farmers that the government will fund using the abovementioned income-generating projects. The old land reform programs like the Comprehensive Agrarian Reform Program (CARP) and the Comprehensive Agrarian Reform Program Extension With Reforms (CARPER) are weak because of the exemptions and loopholes that they provide for landlords, not to mention countless concocted criminal cases that the landlords file against CARP/CARPER beneficiaries to make it difficult for the latter to claim their lands. Moreover, CARP and CARPER offer no clear support mechanism for farmers. CARPER in fact allows farmers to pawn their landholdings. Even supporters of CARPER such as former Akbayan Rep. Walden Bello decried the Philippine governments slow implementation of land reform, proven by the 1 million hectares that still need to be redistributed to farmers even after decades of CARP. Farmers and Laborers as Managers and Business Owners: Cooperatives Versus CorporationsSo that managing the redistributed lands via land reform will be more efficient, the government must help farmers establish cooperatives that would replace the old management boards in their haciendas. The government must facilitate the establishment of these farmers cooperatives through coordinating with farmers organizations. These cooperatives will strnegthen the unity of farmers towards fast and efficient production, more than the capability of old corporate-style management boards whose members have no direct and concrete farming experience. The success of community cooperatives in Bulacan province and other parts of the world is testament to the peoples capability to organize and manage themselves. Through cooperatives, the government will have partners in the orderly, efficient and smooth flow of financial aid from the government and development NGOs to the farmers. Even in industries or factories, cooperative-style management has been proven effective: all workers are considered as co-owners and co-managers of the business. According to the article Challenges for Food Sovereignty by Steve Suppan, Senior Policy Analyst of the Institute for Agriculture and Trade Policy/IATP, Although food production continues to outstrip population (according to FAO/Food and Agriculture Organization), the persistence of hunger results in part from a lack of money to buy food and/or lack of access to, or control over, food producing resources. Access to resourcesland, water, inputs, training, post-harvesting technology, transport, financial credit, gender equality under the law, etc.is a crucial plank of the food sovereignty platform. In the Philippine context, land reform would only succeed if farmers cooperatives that would ensure strong government support for the agricultural sector from planting to transportation of harvests as mentioned by Suppan will be strengthened. Such cooperatives will also bring the level of cooperation between farmers and researchers to a higher level. To complement the farmer-led and state-supported cooperativization of haciendas, modernization of agriculture must be also jumpstarted. Cooperatives, farmers organizations, colleges, universities, and research centers around the country, particularly schools whose research in science and technology are advanced, will be partners in this endeavor. Agricultural modernization will ensure the countrys food self-sufficency. Such self-sufficiency is also a form of saving foreign exchange, as food importation requires dollars. In the past years Philippines has imported thousands of tonnes of rice, as proven by the following data from the National Food Authority (NFA):Summary of NFA Rice Import Arrivals (2000-2012)

Instead of spending money for importation, the government must use its funds to modernize agriculture and raise the productivity of this sector of the economy. Through agricultural modernization, the stable supply of raw materials for industries in the country will be assured. Indeed, agriculture is the backbone of industrialization. In general, agricultural renewal brought by land reform and agricultural modernization will expand the market in the Philippines through a stronger agricultural economu that would post enough surplus for additional capital for establishing more industries.Jobs and Progress For Everyone

Philippine progress wont be complete if the country will be content to be a mere agrarian economy. National and nationalist industrializtaion must be implemented so as to supply the needs of the people, with minimal importation as much as possible. Such process will also wipe out the countrys unemployment problems. Vital industries such as food, petroleum, energy, chemical, pharmaceutical, steel, mineral, communication, and transportation must be prioritized. It is but natural that the government leads this process because the private sector led by big businessmen is mostly motivated by profits and not public welfare. Meanwhile, the government is always mandated to uphold public welfare above anything else. The governments leading role in nationalist industrialization and nationalization of industries (stopping privatization and deregulation) will ensure that the countrys natural resources will be effectively utilized for the peoples welfare. The experiences of Singapore, Vietnam and Malaysia, where state-owned enterprises (SOEs) are still common today (Flowers, 2013), would serve as guide for the Philippines. Nationalization of Industries

Instead of building everything from scratch, the Philippines can also try what Cuba, Venezuela, Ecuador and Bolivia have done: partly or wholly nationalize some industries and/or businesses to gain more control over the accumulation of profits that can be used to bankroll social services, especially for the poorest citizens. As Salgado (1997) points out, the words of Pope John XXIII in Mater et Magistra or Mother and Teacher (1961) make it clear that ...the State and other public agencies should lawfully possess as property productive goods especially when they carry with them the opportunity too great to be left to private individuals...In modern times, there is a tendency towards progressive taking over of property whose ownership is vested in the State or other agencies of public authority. The fact finds its explanation in the ever widening activity which the common good requires of the public authorities to carry on. In the Philippine case, it has been proven that any attempt to industrialize led and dominated by big businessmen in the private sector is a failure, as evident in the Philippines unchanged non-industrialized status despite decades of private sector domination. Therefore, national and nationalist industrialization must be complemented with the scrapping of the privatization and deregulation of vital industries. Cuba, Ecuador, Venezuela, Bolivia and other developing countries offer a lot of lessons for the Philippines with regard to national industrialization and nationalization of industries. In Socialist Cuba, private firms have been recently allowed to operate on a microlevel, and the state still dominates almost all industries. In Ecuador, natural resources are explicitly declared as government-owned. In the case of Venezuela, the administration led by then President Hugo Chavez expropriated big oil plants such as the plant owned by Exxon (one of the worlds biggest petroleum firm). Meanwhile, Bolivia has nationalized its natural gas mines to ensure that all Bolivians will benefit from the profits, and to make sure that mining operations will be environmentally friendly. It must be noted that these countries, along with Asian countries where state-owned enterprises are still prevalent, outrank the Philippines in the Human Development Index (HDI) as they have sufficient funds for social services sourced from state-owned enterprises and resources:Levels of Human Development in Countries Where State-Owned Enterprises Are Common Vis-a-Vis the Philippines Where Private Firms Are Dominant

Lichauco (1988) gives a very eloquent defense of State intervention in the economy, asserting that it is an indispensable element of the development process as it is ...the highest expression of a peoples collective personality. As such, it is the ultimate repository of a peoples sovereign power, from the power to create their own currency, to the power to exercise proprietary rights over the nations patrimony and the power to engage in productive enterprise...If the government is inefficient and venal then the remedy is to make it an efficient and honest agent, to improve its performance, but not to foreclose its role... Lichauco went on to praise (t)he gigantic accomplishments of the Soviet Union and China... that attest to the almost limitless power of the state to create an economic miracle. In his words, (t)hese two giants...have constructed, in less than two generations, a powerful economic system which the entire capitalist world now respects and fears; and they did so without the aid of private enterprise, domestic or foreign. The Link Between Industrialization, Repeal of The Mining Act of 1995, Halting the Labor Export Policy, and Anti-Contractualization Law

A countrys economic redemption from neocolonialism can be only possible through industrialization. The Philippines has huge potentials for industrialization because it is very rich in vital natural resources, as discussed in the critique of the Philippine Mining Act of 1995. The Philippine government needs to repeal the Mining Act of 1995 to ensure that the mining sector would serve the countrys need for industrialization rather than foreign industries. Indonesias recent espousal of resource nationalism should serve as a guide for Philippine policymakers with regard to mining and industrialization. Moreover, so that industrialization would become more successful, the government ought to junk the countrys Labor Export Policy (LEP) because as emphasized in the previous discussion on the LEP, the countrys brain and brawn power that First World countries exploit, is the same brain and brawn power that would transform the Philippines from Third World to First World. Our workers contribution to the economies of First World countries is testament to their capability to work wonders for any country, all the more, for their native land. To entice OFWs to return to the country, the Philippines should try to replicate South Koreas scheme of encouraging its workers and professionals abroad to return to the country and help in nationbuilding. More importantly, the government must ensure stable permanent employment for the people thru passing an Anti-Contractualization Law. Such law would ensure stable employment for most people, and eventually, such stable employment would lead to the streghtening of their buying power, which in turn is necessary to expand the domestic market for goods that Philippine industries produce. Decommodification of Health Care, Research and Education

Health care, research and education should be prioritized too once the country is able to raise funds for national development, as healthy and educated citizens are necessary actors in any developmental objective. The campaign for the decommodification of health care, research and education is a relatively easy one because it is tantamount to merely upholding the spirit of the Universal Declaration on Human Rights. Free health care and accessible research and education will enable Third World peoples to maximize their potentials as citizens who are capable of transforming their societies for the better. Even the Roman Catholic Church supports state intervention in the field of social services which Pope John XXIII called as socialization in the social encyclical Mater et Magistra or Mother and Teacher (Salgado, 1997). Seemingly echoing the Occupy Wall Street Movement and even socialist and communist parties around the world that promote state intervention in the social services, Pope John XXIII in Mater et Magistra went on to assert that It is clear that socialization, so understood, brings many advantages. It makes possible, in fact, the satisfaction of many personal rights, especially those called economico-social, such as, for example the right to indispensable means of human maintenance, to health services, to instruction at a higher level, to a more thorough professional formation, to housing, to work, to suitable leisure.

Socialist Cuba and Venezuela, and welfare statist Norway and Sweden are shining examples on the importance of providing free health care and free education to citizens. To illustrate Cuba, Venezuela, Norway and Swedens relative success, it is necessary to compare the level of human development in those countries, and in Third World countries like the Philippines and India where health care and education in the tertiary level are not free and accessible to all: Levels of Human Development in Countries Education and Health Care Vis-a-Vis the Philippines and India Where Education and Health Care Are Not Free

In Scandinavia and other Western European countries such as Denmark, education is free at all levels. Typically, their PhD students receive salaries as researchers. In Norway, a starting PhD student receives around 200,000 pesos as monthly salary. Such prime importance that they give to education ensures that Scandinavia will lead in innovation and research, which are very vital in any development initiative. For example, Denmark, Sweden, Norway, Finland, and Iceland are among the top 10 countries in the field of innovation. It is not surprising that countries from Scandinavia and Western Europe are consistently in the top 20 countries of the United Nations Human Development Index too. Their investment in education has raised productivity levels of any countrys most important resources: human resources. Science for Society: Renewable Energy, Agricultural Revival and Alternatives to Mining

As early as the 1930s, the genius Albert Einstein emphasized the importance of science in society: The most conspicuous practical effect of science is that it makes possible the contriving of things that enrich life...inventions such as the steam engine, the railway, electric power and light... Scientists/researchers in these times must further contribute to this long list of life-enriching scientific inventions. The advances in science and technology in recent decades, most especially on renewable energy and biotechnology, drastically maximizes the worlds capacity to sustain earthlings while sustaining itself. Renewable energy sources such as solar power, when further developed, would make cheap and clean energy available to most of the worlds citizens. In turn, such availability of cheap and clean energy can be harnessed to strengthen industries and support agricultural revival. While current research on biotechnology still point out to many disadvantages, it is possible that in the coming years, scientists will find a way to safely harness this technology to eliminate world hunger.

Possibilities are boundless if previous inventions are to be used as a gauge of mankinds awesome capability to invent useful things that resolve social problems. Perhaps, safe and environment-friendly synthetic materials will be discovered and mass-produced soon to eliminate the need for destructive mining in forests, mountains, hills and other similar sites. Perhaps, living sponges can be genetically modified to gobble up floodwater and convert it to a form of bio-energy which can be utilized for electricity. Making science serve society will only be possible if research and education are decommodified. In Einsteins words, we need ...an educational system which would be oriented toward social goals. Products of a publicly subsidized research and education system are expected to contribute much to the society that nurtured them and gave them the chance to maximize their potentials. Hence, making education free at all levels (decommodification of education) is part and parcel of making scientific inventions and research serve society, instead of profit-oriented corporations.Budget and Other Educational Reforms

To ensure quality education and research, government funding for this sector must be drastically increased. Presently, only 2.8% of the countrys Gross Domestic Product (GDP) is allotted to education. Meanwhile, heres the percentage of GDP allotted by top 10 countries in the United Nations Human Development Index 2012: Norway (7.3%), Australia (5.1%), United States (5.4%), Netherlands (5.9%), Germany (5.1%), New Zealand (7.2%), Ireland (6.5%), Sweden (7.3%), Switzerland (5.4%) and Japan. Heres the percentage of GDP allotted by nearby countries to education: South Korea (5.1%), Vietnam (6.6%), Timor Leste/East Timor (10.1%) Singapore (3.3%), Japan (3.8%), India (3.3%) Malaysia (5.1%), Thailand (3.8%), and Nepal (4.7%). In a global list, the Philippines is ranked 151st among no. 173 countries when it comes to the percentage of GDP allotted to education. It must be emphasized the UN standard for education budget as percent of the GDP is 6% and in no school year has the Philippines reached that minimum standard. The country is thus left behind by its neighbors. Instead of a change in curriculum, additional funding for education is needed. Such will ensure that education is accessible to most citizens.

To further ensure that the education system will serve the countrys needs, every citizens nationalism must be developed. Such initiative will necessarily mean weaning the country away from the use of English as a primary language of instruction. From 1906, English has been the primary language of instruction, more especially in tertiary education and beyond. In recent years, the promotion of English has escalated, with advocatres claiming that English is the language of globalization. Such language policy widens the gap between the masses who speak native languages, and the elite that has mastered only the use of the colonial tongue. As a result, the implementation of research findings is slow in the country, because English is the language of research but ordinary workers and farmers who are tasked to implement research findings in their respective fields use Filipino and other local languages. A cursory check of universities in countries listed in the top 20 of the 2010 Human Development Index and it will be proven that the websites of reknowned universities there use their native languages as default languages: ; ; ; . This is in direct contrast with the practice of Philippine universities: ; ; ; . This illustrates how transforming the language policy can do a lot of wonders for a country like the Philippines. Professor Gonzalo Campoamor II in a research entitled The Pedagogical Role of English in the Reproduction of Labor, clarified why prioritizing English is tantamount to the perpetuation of the lack of industrialization in the country (which in turn causes unemployment): Symptomatic of the blatant neglect to industrialize the country by suiting its economy to the needs of developed nations, political and economic chieftains have found it more rewarding to foster a market-specific kind of English rather than propagate a national language that has already been a product of decades of struggle. Hence, the reversal of the current pro-English language policy in the country is not only something that will raise the level of nationalist consciousness among Filipinos, but more importantly, it will compel Filipinos to seek economic self-reliance as an alternative to dependence on foreigners (which has been tried yet failed since colonial times).

Vital Political Reform: Anti-Dynasty Bill

The success of the abovementioned reforms will be only possible if the government is comprised of people whose only will is to serve. Sweeping reforms ranging from debt repudiation and debt payment moratorium, genuine agrarian reform, modernization of agriculture, national and nationalist industrialization can be only implemented by a government not beholden to big business. Therefore, to complement the call for a sweeping people-centered socio-economic agenda, there is a pressing need to make sure that honest and service-oriented people will be elected in positions of authority. In this connection, implementing political reforms such as enacting an enabling law for the constitutional provision that bans political dynasties, and another law that will strengthen the voice of marginalized in the halls of power, is a must.

According to Article II, Section 26 of the Philippine Constitution: The State shall guarantee equal access to opportunities for public service and prohibit political dynasties as may be defined by law. Unfortunately, this provision is yet to have its enabling law because political dynasties block its passage. From Batanes to Tawi-tawi, these political dynasties maintain turfs as if theyre their kingdoms or feudal holdings. The Philippine Congress adjourned in 2013 without passing House Bill 3413 (Anti-Political Dynasty Act) which was co-authored by the following partylists: Bayan Muna, Gabriela Womens Party, Anakpawis, Kabataan and ACT Teachers. In 2001, Bayan Muna Partylist started filing its anti-dynasty bill. Political democratization means empowering the masses and weakening entrenched political dynasties. Through the massive participation of workers, farmers and other poor citizens in politics against the traditional reign of landlords and big businessmen, quantitative and qualitative changes in the legislative, judicial and executive branches would be achieved. Partylist System in the Senate, Congress, and Palace

Aside from the Anti-Dynasty Bill, the Philippines can adopt other political reforms such as reorienting the electoral system to mirror the German, Swedish and Norwegian system. Instead of a contest of individuals from dynasties and the entertainment industry, legislative and executive elections in those developed countries are a battle of ideologies, of genuine political parties. Instead of names of politicians, people will choose the names of parties in the ballots. Posts in the Senate will thus be divided proportionally among the parties that got votes. The president will come from the party with the biggest legislative vote. Each legislative district will elect their representative by naming the party of their choice too in the ballot. This system that emphasizes parties and ideologies instead of individuals will dilute the power of dynasties, and strengthen the edge or advantage or partylist groups (that represent marginalized peoples), considering that the common folks are used to choosing the names of these groups even in the old system. Hence, marginalized groups will have more chances of being elected to more positions if the electoral system of Germany, Norway and Sweden will be replicated here. A number of these partylist groups deserve a fairer share of political power as their legislative records prove their service to the people via progressive legislation such as wage increase, stopping contractualization, land reform etc.It is about time that the political system be transformed so that what Atty. Soliman Santos, Jr. considers as a failed system be overhauled for the better: Capitalismhas not been much of a success in the country. Over the past few decades, the Philippines has lagged behind its neighbors in economic growth. Massive and abject poverty and economic inequitycontinues to be there, if not worsen. On the political side, there is revulsion against traditional elite politics. Philippine democracy has remained largely formal and truncated and not deepened into a more participatory and egalitarian one. The oligarchic elite has become more predatory, plunderous, and has engaged in much more corruption, rent-seeking and violence in maintaining its economic and political power. Orwells Implied Prescription: A War to End All Wars

On a global scale, aside from higher taxes on wealthy individuals and corporations, additional funds for social services can be acquired if wars around the world, especially those instigated by imperialist powers, will be stopped. In George Orwells 1984, the sinister agenda of imperialist wars has been exposed: War is a way of shattering to pieces, or pouring into the stratosphere, or sinking in the depths of the sea, materials which might otherwise be used to make the masses too comfortable, and hence, in the long run, too intelligent...The war is waged by each ruling group against its own subjects, and the object of the war is not to make or prevent conquests of territory, but to keep the structure of society intact. Simply put, wars squander the worlds financial resources which could have been used to resolve social problems. Against such a gloomy war economy where societys excess wealth are used to develop weapons of mass destruction, Orwell envisions a world where machines and technologies will eliminate ...the need for human drudgery, and therefore to a great extent for human inequality..., explaining that If the machine were used deliberately for that end, hunger, overwork, dirt, illiteracy, and disease could be eliminated within a few generations.

Joseph Stiglitz, a former chief economist of the World Bank, seemingly contextualizes Orwells ideas by revealing that the American government spent more than $3 trillion for the Iraq War (Stiglitz and Bilmes 2010), an amount 24 times as much as the Philippines total debts (around 5 trillion pesos) and this is just one war. If expenses for other wars will be totalled, its possible that the world will have enough funds to resolve hunger, poverty and other social problems. Within the Philippine context, Filipinos are entreated to campaign against major imperialist war efforts, and clamor for the rechannelling of such funds to aid for the Third World. In the encyclical Pacem in Terris or Peace on Earth (1963), Pope John XXIII logically explains how wars, the arms race, and lack of development, are tied up: ...We note the enormous stocks of armaments that have been and still are being made in the more economically developed countries with a vast outlay of intellectual and economic resources. And so it happens that, while the people of these countries are loaded with heavy burdens, other countries as a result are deprived of the collaboration they need in order to make economic and social progress. The money which governments around the world could save by decreasing military expenditures would instantly translate into billions of dollars of funds for global development. Otro Mundo Es Posible: Towards a New International System

In view of the aforementioned, it is now obvious that beyond local issues, those who want development for the Philippines should also seek the transformation of the international system, considering that some reforms (such as debt repudiation, tax readjustment, and decrease in military expenditures) require broad alliances among Third World countries, and even with First World countries. Hence the Philippines must contribute towards the creation of a new international system where the hegemony or monopoly of First World countries is all but finished. Presently, the international system represented by the United Nations (UN) is dominated by First World countries through the UN Security Council.

Years before he was killed in a West-instigated Civil War, Colonel Muammar Gaddafi of Libya, voiced out his vision for a new international system, before the United Nations General Assembly on September 2009: We should resort to the majority of the votes of the General Assemblyif the General Assembly takes a vote, it should be implementedand no one should say that I am above the General Assembly. Anyone who says hes above the General Assembly should leave the United Nations and be alone. Democracy is not for the richThe Security Council is security feudalism, political feudalism for those who have permanent seatsit should not be called the Security Council, it should be called the Terror Council Iranian President Mahmoud Ahmadinejad mouthed the same idea in the 2009 UN General Assembly: It is unacceptable that a small minority should dominate the politics, economy and culture of vast parts of the world through a complicated network and establish a new form, in fact, of slavery At times, even the UN Security Council is sidelined by the most powerful country in the world, the United States of America. It must be noted that the UN Security Council did not authorize the USA to invade Iraq, yet the Americans occupied it for seven long years. Somehow, Third World countries without seats in the powerful UN Security Council are given the chance to ventilate all their grievances through the UN General Assembly but as the deceased Venezuelan President Hugo Chavez said in the 2006 UN General Assembly, it's good to bring us together once a year, see each other, make statements and prepare all kinds of long documents, and listen to good speeches But we, the assembly, have been turned into a merely deliberative organ. We have no power, no power to make any impact on the terrible situation in the world Chavez ended his speech by calling for the reestablishment of the United Nations through the democratization of the UN Security Council. Former Brazilian President Luiz Incio Lula da Silva echoed Chavez concern in the 2008 UN General Assembly by saying that The strength of values must prevail over the value of strength. Only legitimate and effective instruments can assure collective security. The United Nations has spent 15 years discussing the reform of its Security Council. Todays structure has been frozen for six decades and does not relate to the challenges of todays world. Its distorted form of representation stands between us and the multilateral world to which we aspireIt is also multilateralism that must guide us toward solutions to the complex problems of global warming, based on the principle of common but differentiated responsibilities. The UN system is reflected by the World Bank, the International Monetary Fund and other multilateral political and economic agencies. Thus, working for a new international system where all countries will have a part in decision-making is a must.

A scrutiny of the past (2011) and present (2013) composition of the UN Security Council will prove that the Third World is not well-represented in that global decision-making body. China, France, Russian Federation, United Kingdom and United States have permanent seats (with veto powers too; which means they can block any UN Security Council resolution). In 2011, Bosnia and Herzegovina, Brazil, Colombia, Gabon, Germany, India, Lebanon, Nigeria, Portugal and South Africa had non-permanent seats (non-permanent seats are acquired on a rotational basis through elections; these seats carry no veto powers). Among those with permanent seats, France and the United Kingdom are from Europe, the United States is from North America, China is from Asia, and the Russian Federation comes from Eurasia. Among the permanent seats holder, no country is from Africa despite the fact that Africa is the second most populous continent. Theres no permanent seat holder too from South America and the Middle East.

Socio-economically, the UN Security Council is a rich nations club. According to data from the 2010 Human Development Report of the United Nations, members of the 2011 Security Council, such as the following have very high o high human development: France, Lebanon, Russian Federation, United Kingdom, United States, Bosnia and Herzegovina, Brazil, Colombia, Germany and Portugal. Officially, the following countries are considered as having medium human development: China, Gabon, India at South Africa. Nigeria is the only country in the Security Council having low human development. Meanwhile, according to data from the 2013 Human Development Report of the United Nations, members of the 2013 Security Council, such as the following have very high o high human development: France, Russian Federation, United Kingdom, United States, Argentina, Australia, Azerbaijan, Luxembourg, and South Korea. Officially, the following countries are considered as having medium human development: China, Guatemala, and Morocco. Pakistan, Rwanda and Togo are the only countries in the Security Council having low human development. It is clear that the number of Third World countries must be increased in the UN Security Council so that the international system will be more democratic. Such democracy will lead to reforms in other multilateral institutions such as the IMF, World Bank etc.

- David Michael M. San Juan National Council Member, ACT Teachers Partylist

ADDENDA:

On The Conditional Cash Transfer/CCT Program

The Conditional Cash Transfer (CCT) program is a neoliberal income redistribution scheme aimed at the poorest of the poor. Under the World Bank-supported Philippine scheme started by the Macapagal-Arroyo regime in 2006, poor families identified by the Department of Social Welfare and Development (DSWD) are given monthly cash doleouts in exchange for ensuring that their of-school-age children go to school regularly, and that their children (more especially the younger ones) are regularly brought to the community health care center for check-ups and nutrition evaluation. As of 2011, the government through the DSWD claims that 5,255,188 out of 10,909,456 households enumerated, are eligible to receive cash assistance through the CCT scheme. Under this scheme, for each child, a family receives 3,000 pesos a year (divided into 10 months which is equivalent to a school year) as educational assistance, but the maximum number of children covered per family is 3. On top of the educational assistance, a yearly grant of 6,000 pesos (divided into 500-peso monthly grants) per household is given for health and nutritional expenses of children and pregnant women. After five years under the CCT, beneficiaries will stop receiving cash from the government, but through the Self-Employment Assistance Kaunlaran (SEA-K) scheme, non-collateral and interest free loans amounting to Php10,000, to serve as capital seed fund for their sustainable livelihood, would be made available to them. According to a DSWD report, As of March 2013, a total of 117,388 beneficiaries were provided with capital seed fund amounting to Php 912,864,516.00. Out of the aforementioned, 19,064 beneficiaries were served from January-March 2013 amounting to Php 159,644,527.00.Officially, the Philippine government calls the CCT scheme as the Pantawid Pamilyang Pilipino Program or 4Ps. In 2007, the 4Ps was initiated with 4,587 pilot beneficiaries, and further expanding coverage to benefit 341,000 households in 2008; 666,000 in 2009; and 787,807 as of September 2010. Such coverage is of course still negligible, considering that, officially, the Philippine poverty rate in recent years has never gone lower than 20% of the population (as per current population estimates, around 20 million citizens). In 2011, the Philippine government allotted P21.2 billion for the expansion of the CCT program, having targeted to cover 2.3 million households, which the current administration plan to increase to 4.3 million by 2016. The Department of Social Welfare and Developments (DSWD) Program Implementation Status Report for the 1st Quarter of 2012 claims that As of 31 March 2013 the Pantawid Pamilya is being implemented in 143 cities and 1,484 municipalities in 79 provinces where a total of 3,967,517 households are enrolled as of date exceeding the target of 3,809,769 for 2013. Of the total households, 1,636,879 come from Luzon, while 1,519,518 and 811,120 are from Mindanao and Visayas, respectively. The total cash grant paid to eligible and compliant Pantawid Pamilya household beneficiaries for the first period of 2013 covering January and February total to PhP 6,908,317,600.00. Of this amount, PhP 3,729,952,600.00 was for education and PhP 3,178,365,000.00 for health. The figure below shows the household coverage of the CCT from 2008-2013:

Household Coverage of the CCT (2008-2013)

The second Aquino administration has devised the Modified Conditional Cash Transfer (MCCT) too on top of the regular CCT, which covers 66,500 households. According to the DSWD, The MCCT is a program of Pantawid Pamilya that caters to families in need of special protection (i.e. street families; itinerant indigenous families; displaced families due to man-made and natural disasters; families with differently abled children, child laborers, children in conflict with the law; and other families with members with terminal disease, exploited, abandoned, victims of trafficking, etc.) It aims to target beneficiaries that are not covered by the Regular Conditional Cash Transfer Program. In addition, MCCT-Extended Age Coverage (MCCT-EAC) program covers Pantawid households with 15-17 year old children who were not able to complete the 5-year program period due to no-longer having 0-14 year old children. Without doubt, the CCT scheme directly benefits poor citizens in the country because they can right away use the money for educational and nutritional needs.

World Bank Support for CCT

However, what should bother any nationalist is the fact that the CCT is a cash-intensive program for which the government has no sufficient funds. In fact, the Philippine government acquires loans to finance the CCT. This is the reason why the World Bank vocally supports CCT in the Philippines and in other Third World countries. The CCT scheme is a thickly-veiled attempt to further drag Third World countries into the debt trap. In fact, the CCT was piloted in two provinces and two cities covering some 6,000 households through a loan from the World Bank (Somera 2010). The following table showing the funding sources for the 4Ps, was reproduced from an IBON Facts and Figures Special Release on the CCT scheme (2010) that cited data from the World Bank and the Asian Development Bank:CCT-Linked Foreign Loans and Grants SourceUS$

(in millions)TypePayment TermsCounterpart funds from the Republic of the Philippines (in US$ millions)

World Bank (for 2009-2013 to cover 376,000 households)405LoanFive years grace period and 0.25% annual interest rate payable in 25 years 107

Asian Development Bank (2009-2015) for 582,000 households400LoanFive years grace period and 0.01% annual interest rate payable in 25 years but subject to LIBOR484

Asian Development Bank1.30Grant40

AusAID (technical assistance for CCT 2008-present)2.55Grant

Subtotal for foreign loans:805.00

Subtotal for foreign grants:3.85

TOTAL:808.85631.20

Officially, CCT funding is listed in the General Appropriations Act, hence it is clear that loans partly finance it, because any national budget deficit is always resolved through the acquisition of loans. As Somera (2010) points out, Having ADBs US$400 million in addition to the World Banks US$405 million, makes two-thirds of the whole 4Ps from 2009 to 2014 comprised of loans! A news report revealed that in 2012, the World Bank granted an additional CCT loan amounting to US$100 million. It is now certain that the humungous amount spent for the CCT scheme from 2008 to the current year, amounts to a mountain of debt which cannot really produce a huge impact even in the short-term, considering that the program is bound to end in 2016. Since loans are partly used to finance the CCT, its continuation also brings the country closer to the World Banks much-reviled structural adjustment programs that further stunt the growth of Philippine industries, and the countrys capability to pay its debts. It must be noted that the CCT loans were acquired at near-market prices (at interest rates similar to that offered for income-generating projects). A briefing paper on the CCT (2010), reveals a strong proof that the CCT scheme is in fact part and parcel of the much-dreaded debt trap in the Third World: The US$400 million loan with the ADB comes from the Banks ordinary capital resources (OCR) which are near commercial rate. It also comes with a .15 per cent annual commitment fee. This loan is payable in 25 years which includes a five-year grace period. These terms usually accompany large-scale projects like roads, railways and hydropower dams...The Aquino administration may only have to pay the commitment fee but its successors will shoulder 0.827 per cent by March 2016 up to 5.55 per cent by September 2035. In reaction to the CCTs debt trap potentials, even the moderate civil society organization Social Watch Philippines was compelled to oppose the CCT scheme in a statement (2010) saying: ...it not only increases our public indebtedness, which is cause for concern in itself, but more so because the government is infusing massive investment on a strategy, as it is currently conceived, that, at best, will have very limited impact on poverty reduction. A Philippine Center for Investigative Journalism (PCIJ) report (2011), quoting a progressive think tanks conservative estimate, reveals that ...interest payments to the World Bank for the CCT program could reach $94.6 million. The corresponding figure for the ADB loan $107.4 million, for a combined total loan service of $1.007 billion (P44.31 billion)...for every $4 borrowed by the government to help finance the CCT, the country will need to pay $1 as interest.Another aggravating factor that all the more makes CCT a negative scheme in the long run is the fact that corruption entails its implementation. Countless cases of irregularities have been reported to the DSWD. The following table shows the number of beneficiaries who were delisted because of fraudulent acts and other reasons:

Total Number of Delisted Beneficiaries (As of 31 March 2013)

Related to this, the Commission on Audit (COA) also reported that out of 575,726 households under the CCT scheme in 2011, 9.52% or 54,809 were of doubtful validity. The COA also pointed out that only P10,716,588,449.28 of the total CCT disbursements for 2011 (P14,486,750,011.28), were properly documented and verified. In other words, there are P3.77-B in unacounted disbursements; deficient supervision over the registration of qualified households; and questionable and extravagant purchases using program funds.Meanwhile, the CCTs failure to make a dent in beating poverty in the Philippines is exposed by the governments own poverty statistics released in 2013 which shows that poverty incidence in the country remains statistically unchanged since 2006, even after the humungous funds for CCT were disbursed:

Monthly Poverty Threshold and Poverty Incidence Among Families in the Philippines (2006, 2009, and 2012)

Finally, it must be emphasized that the money set to be spent for CCT as estimated by an investigative report US$1.29 billion for 923,000 households just from 2009-2014 is better spent for industrialization and agricultural modernization as these schemes would certainly create millions of jobs for Filipinos. For example, the money set to be spent for CCT from 2009 to 2014 is enough to match five times the total corporate tax paid by Smart Communications, Inc., the top corporate tax payer in the Philippines in 2011 (paid a total of Php10,235,358,541.64 in taxes). Hence, it is possible that the same amount can be used by the government to acquire a big corporation that provides jobs to citizens. Instead of giving the people small fish to eat, jobs will enable them to learn how to catch their big fish, and hence be self-reliant in the long run. That way, the country will also avoid further entanglement in the World Banks web of dangerous debts that have been costing the country so much as proven by its humungous debt payments which in turn limit the budget for badly needed social services. An electoral information packet prepared by a consortium of NGOs sounded the alarm on the soaring Philippine debts which the CCT scheme further worsens: Government debt was P4.40 trillion as of end 2009...more than double the P2.17 trillion inherited from the previous Estrada government...Over 2001-2010, the Arroyo administration has paid P5.85 trillion in debt service, which is over three times the P1.8 billion in debt payments made over 15 years by the Aquino, Ramos and Estrada administrations combined. In view of its proven link to the debt trap and the inefficiencies associated with the program, the CCT clearly makes the Philippines more dependent on foreign multilateral institutions, without really resolving poverty in the long run.

On The Public-Private Partnership/PPP Scheme

The Public-Private Partnership/PPP scheme is a program that encourages private corporations including foreign firms to participate in Philippine infrastructure development. It is anchored on the Philippine governments recognition of the supposed ...essential role of the private sector as the main engine for national growth and development. In accordance with this, pertinent incentives will be provided to stimulate private resources for the purpose of financing the construction, operation and maintenance of infrastructure and development projects normally undertaken by the Government. Uniquely, the PPP includes an assurance ...to protect investors from certain regulatory risk events such as court orders or decisions by regulatory agencies which prevent investors from adjusting tariffs to contractually agreed levels. Such regulatory risk insurance could take the form of make-up payments from the government to PPP investors, other guaranteed payments, and adjustments to contract terms. Simply put, the PPP provides a framework for the private sectors almost risk-free and profit-sure involvement in Philippine infrastructure development.

In a presentation (2009) before the UNESCAP Interregional Expert Group Meeting on Public-Private Partnerships in Infrastructure Development in Bangkok, Thailand, the Department of Trade and Industry enumerated the projects that are eligible as per the PPP scheme: Power Plants; Highways; Railroads & Railways; Ports; Airports; Transport Systems; Telecommunications; Information Technology; Canals, Dams, Irrigation; Water Supply; Land Reclamation; Sewerage, Drainage, Dredging, Solid Waste Management; Tourism, Education; Health Facilities; Industrial & Tourism Estates; Markets, Warehouses, Slaughterhouses; Housing; Government Buildings; Other Infrastructure/ Development Project. In other words, the PPP covers any big and vital project geared for national development. The vital nature of the projects covered by PPP is easily confirmed by the list of projects rolled out for bidding as of this writing: CALA Expressway (Cavite and Laguna Side); NAIA Expressway Project; LRT Line 1 Cavite Extension and Operation & Maintenance; Modernization of the Philippine Orthopedic Center (MPOC); Rehabilitation, Operation & Maintenance of Angat Hydro Electric Power Plant (AHEPP) Auxiliary Turbines 4 & 5; PPP for School Infrastructure Project (Phase II); Automatic Fare Collection System (AFCS); Mactan-Cebu International Airport Passenger Terminal Building (MCIA). Meanwhile, the following projects have been approved by NEDA and regional development councils (the initial step prior to bidding): NLEX-SLEX Connector Road and Talisay City Plaza Complex Heritage Restoration and Redevelopment. Studies are underway on the feasibility of PPP for the following projects: Establishment of Cold Chain Systems Covering Strategic Areas in the Philippines; Grains Central Project; Operation & Maintenance of LRT Line; Operation & Maintenance of the Puerto Princesa Airport; New Centennial Water Supply Source Project; Rehabilitation of Quirino Highway Project; Integrated Transport System (ITS) Project; Bulacan Bulk Water Supply Project. The following projects with the planning stages ranging from the ongoing procurement of advisors to projects under development are also being considered for the PPP: El Nido Water Supply and Sanitation System Project; Manila-Makati-Pasay-Paranaque (MMPP) Mass Transit System (MTS) Project; Regional Prison Facilities through PPP; Integrated Luzon Railway Project; Plaridel Bypass Toll Road; Batangas-Manila (BatMan) 1 Natural Gas Pipeline Project; LRT-1 Extension to Dasmarinas; Manila Bay-Pasig River-Laguna Lake Ferry System Project; Operation and Maintenance of Iloilo, Davao and Bacolod Airports; Logistics Support for Agri-Fishery Products Supply Chain; Central Spine RORO Project; Ferry Passenger Terminal Buildings Development Project; Manila Bay Express Way; Pasig-Marikina Express Way; Manila-Bataan Coastal Road; East-West Connection Expressway; Panguil Bay Bridge; Cebu-Bohol Translink; Panay-Guimaras-Negros Link; Davao-Samal Bridge Project; C-6 Extension (Laguna de Bay Flood Control Dike Expressway); Calamba-Los Banos Toll Expressway Project; Philhealth Information Technology Project; Metro Cebu Expressway Project; Tagum-Davao-General Santos High Standard Highway; Global City Mass Transit (Monorail System) Project; Improvement/Modernization of Kennon Road; Modernization of Region 1 Medical Center Project; Socialized Housing Project; Bayabas Small Reservoir Irrigation Project; Operation and Maintenance of Clark Airport; C-6 Expressway (South-East, East, and North Sections); Manila Heritage and Urban Renewal Project. These projects are mostly national and regional in scope and significance. Most are road and transportation projects, highlighting the extent to which the Philippine economy will be affected by the deluge of foreign involvement in PPP, considering that the transportation sector is very vital in the delivery of goods and services within the country, and from the Philippines to other nations.

In the official government site about the PPP, the foreign investors involvement has been explicitly emphasized too: The Build-Operate Transfer Law which governs the PPP allows participation of both local and foreign companies in PPP projects. Regardless of nationality, anyone is encouraged to invest in the Philippines. With the liberalization of the foreign investment law, 100% foreign equity may be allowed in all areas of investment except those reserved for Filipinos by mandate of the Philippine constitution and existing laws. Nonetheless, foreign companies are welcome to participate in the competitive bidding of projects and in providing transaction advisory for projects under the Project Development and Monitoring Facility. As a matter of fact, the Philippine Daily Inquirer reported as early as 2012 that ...a number of Chinese, British and Japanese companies have bought prequalification documents with the aim of participating in the bidding for two key projectsthe LRT Line 1 Cavite Extension project and the Naia Expressway Phase II project.

Meanwhile, a Business World report (which was a confirmed one as it is posted in the official government PPP website) revealed that nine big consortiums that include foreign investors formally expressed their interest on another big PPP project ...involving a fare collection system for Metro Manilas three light railways. The said paper reported that the following consortiums submitted prequalification documents for the said big project: the San Miguel Transport Solution Corp. Consortium, which includes Optimal Infrastructure Development, Inc., Catchweight Holdings, Inc., Deltracrest Holdings, Inc., Allcard Plastic Philippines, Inc., Korea Railroad Corp., Singapore Technologies Electronics Ltd., Philippine National Bank, Korail Networks Co. Ltd. and VIX Technology (East Asia) Ltd.; the AF Consortium led by BPI Finance Corp. with Metro Pacific Investments Corp., Smart Communications, Inc., Globe Telecom, Inc., AC Infrastructure Holdings, Inc., NTT Data Corp., Cubic Transportation Systems (Australia) Pty. Ltd., Octopus Transaction Ltd., MSI Global Private Ltd., Accenture, Inc. and Indra Sistemas S.A.; the SM Consortium led by SM Investments Corp., with BDO Capital Investments Corp., Advanced Card Systems Ltd., Penta Capital Investments Corp., SM Retail, Inc., Goldsign Data Co. Ltd. and BDO Unibank, Inc.; the MTD-PRLM Consortium led by Malaysian firm MTD Capital Bhd. with Puregold Realty Leasing and Management, Inc., Puregold Price Club, Inc., Transit Link Pte. Ltd. and Maybank Philippines, Inc.; the Megawide-Suyen-Eurolink Consortium led by Megawide Corp. with Suyen Corp., Eurolink Network International Corp., EZ Link Pte. Ltd. and China National Software and Service Co.; the Comworks Consortium of Comworks, Inc. and Berjaya Philippines, Inc. with Kaohsiung Rapid Transit Corp., Acer, Inc. and Info-Champ System Corp.; the Lamco Consortium led by Lamco Paper Production Co., Inc. with New San Jose Builders, Inc., Land Bank of the Philippines, NEC Philippines, Inc., Busan Transport Corp. and SAMWON FA Co. Ltd.; E-Trans Solutions JV Inc. led by Tera Investments, Inc. with East West Banking Corp., Sagesoft Solutions, Inc., Pilipinas Micro-Matrix Technology, Inc., Pulsat Advancer Technologies, Inc., and JTKC Equities, Inc.; and the Mega-Lucky United Consortium led by Asia United Bank Corp., with Dignitas Equity, Mega Cellular Network, Inc. and Gravitas 777. The contract for the P1.72-billion Automated Fare Collection System (AFCS) project involves a 10-year contract to finance, design, construct, operate and maintain a contactless automatic fare collection system for the Light Rail Transit Lines 1 and 2 and the Metro Rail Transit Line 3, Business World added.

As per an Philippine Daily Inquirer report, the first project bid out under the PPP scheme the P2-billion Daang Hari-South Luzon Expressway link road was awarded to the Ayala group in partnership with Getinsa, a Spanish engineering company with deep expertise in infrastructure project globally. In the same report, Ayala Corp. president and chief operating officer Fernando Zobel de Ayala provided clues as to how the PPP mainly serves the needs of big businessmen in the Philippines: This road project provides significant opportunities for synergies within the Ayala group, especially our real estate group, Ayala Land, as it cuts travel time to our residential and commercial projects in this rapidly growing part of the metropolis. While the second public-private partnership (PPP) project to build 9,301 classrooms worth P16.3 billion was awarded to a group led by former Metro Manila Development Authority chief Bayani Fernando and publicly-listed construction firm Megawide Corp., groups that are Filipino-owned, the fact that the other firm is publicly-listed means foreign investors can still be involved in this project by buying Megawide Corp., stocks, considering that foreigners could own up to 40% of the said firm.

As observed in the abovementioned data, especially on the approved PPP projects, the PPPs contribution to the strengthening of foreign hegemony on the Philippine economy has been established. Foreign firms engage in consortiums with domestic firms as the latter have insufficient funds and/or experience for big infrastructure projects. In the words of BAYAN Sec. Gen. Renato Reyes: ...big domestic businessmen engage in PPP with foreign partners...That will worsen if charter change pushes through, because PPP and the foreign case of cha-cha would mean 100% foreign ownership of utilities and other businesses that were previously reserved for Filipinos... Meanwhile, the governments assurance of profits for the concessionaires is tantamount to the deregulated status of fees, something which will benefit the concessionaires, including foreign firms who are engaged as consortium partners. The sheer number of projects that are being developed for the PPP is testament to the imminent monopoly of foreign-dominated consortiums in running the countrys economy, more especially through the very vital transportation sector.

An analysis of the prospective bidders for the projects recently rolled out will further validate the assertion that foreign involvement in the PPP scheme has become so huge as to exert great influence on the Philippine economy. The following table provides data on the projects recently rolled out under the PPP and the foreign bidders for the said projects:

Foreign Bidders in Recently Rolled Out PPP Projects

ProjectForeign BiddersLocal BiddersEstimated Amount of Project

Mactan-Cebu International Airport (MCIA)GMR Infrastructure Limited (India)Aboitiz Land Inc.; Filinvest Land Inc.;JG Summit Holdings, Inc.;Macroasia Corporation; Megawide; Metro Pacific Investments; Prime Power Holdings Corporation; San Miguel Corporation; First Philippine Holdings; Premier Airport Group (c/o SM Investments Corporation)Phase 1: (Initial Investment) PHP 8.873 BillionPhase 2: (Future Expansion) PHP 8.647 Billion

Automatic Fare Collection System (AFCS)Part of AF Consortium: Cubic Transport Systems (Australia) Pte Ltd.

Part of Comworks Inc. group: Taiwan-based Kaohsiung Rapid Transit Corp., Acer Inc.

Part of Megawide Suyen-Eurolink consortium: China National Software and Service Corp.AF Consortium (BPI Card Finance Corp., infrastructure conglomerate Metro Pacific Investments Corp., Smart Communications, Globe Telecom, Ayala Corp.s AC Infrastructure Holdings Corp., NTT Data Corp. and its partners include Bank of Philippine Islands, Smart International Pte Ltd, Octopus Transactions Ltd, MSI Global Private Ltd, Accenture Inc., IntraSystems SA)

SM consortium (SM Investments Corp. (SMIC), BDO Capital Investment Corp., Advanced Card Systems Inc., Penta Capital Investments Corp., SM Retail Inc., GoldSign Data Co. Ltd., BDO Unibank Inc.)

Comworks Inc. group (Berjaya Philippines Inc., Philippine Gaming Management Corp. (PGMC), and Info Champ Systems Corp.)

E-Trans Solutions JV Inc. (Tera Investments Inc., East West Banking Corp., Sagesoft Solutions Inc., Pilipinas Micro-Matrix Technology (PMT Joint Venture) Inc., Pulsar Avancer Technologies Inc., Kentkart EGE Electronic San VTE, JTKA Equities Inc)

Megawide Suyen-Eurolink consortium (Megawide Construction Corp., Suyen Corp., and Eurolink Network International Corp. while its partners include Easy-link PTE Ltd.)PHP 1.722 Billion or USD 42.9 Million

Rehabilitation, Operation and Maintenance of Angat Hydro-Electric Power Plant (AHEPP) Auxiliary Turbines 4 and 5K-Water Resources Corporation (Korea)

Marubeni Corporation (Japan)

DMCI Power Corp.

EEI Corporation

First Gen Energy Philippines

Kaltimex Energy Philippines

Meralco Power Generation

SN Aboitiz Power

Sta. Clara Power

Sunway Waters and Electric Co.

Trans-Asia Oil and Energy Development Corp.PHP 1.155 Billion or USD 27.5 Million

Modernization of Philippine Orthopedic Center GE Electric Philippines Inc. (American subsidiary)

Philips Electronic and Lighting Inc. (Dutch subsidiary)

Siemens, Inc. Health Sector (USA)

Nihhon Sekkei, Inc. (Japan) and Data Trail Corp. (Philippines)Megawide Engineering Excellence

Metro Pacific Investments

Strategic Alliance Holding, Inc

Mount Grace Hospital Ventures

Sta. Clara International Corp.

PHP 5.70 Billion or USD 135.5 Million

LRT Line 1 Cavite Extension, and Operation and MaintenanceMarubeni (in partnership with DMCI)

MTD Samsung Consortium (Malaysian-Korean consortium)

SMC Infrastructure Consortium Inc.(Korean): composed of GS Engineering and Construction Corp, and POSCO Engineering and Construction Co Ltd., and Korea Railroad Corp.DMCI Holdings

Light Rail Manila Consortium (Ayala-MPIC)

PHP 59.20 Billion orUSD 1.25 Billion

It must be noted that among the so-called local bidders, some have big foreign stockholders like Metro Pacific Investments Corporations (MPIC) - 31.05% owned by PCD Nominee Corporation an entity classified as Foreign, on top of Chinese citizen King Lun Wong who owns 132,148 shares, Chinese citizen Qiu Yi Man who owns 50,000 shares, Chinese citizen Pei Zhi Lin who owns 35,000 shares. Aggravating the pro-foreign nature of PPP schemes, financing PPP projects means additional loans too for the Philippine government. Usually, PPP projects adopt the principle of contingent liability where the government underwrites the debts incurred by private firms for PPP deals. Technically, the PPP scheme allows private corporations to reap guaranteed profits, at the expense of risks for the government that signed the PPP agreements. According to a research by IBON Databank, IFIs (international financial institutions) and funding agencies of rich governments are injecting billions for more PPP projects to be implemented. The Australian Agency for International Development (AusAID) and the IFC have been aggressive in expressing their interest to provide loans and grants. AusAID, World Bank and IFC will give grant funding of US$4.5 million from 2011-2013 on top of another US$8.5 co-financing scheme with the ADB. Also, the Korea Export Import Bank has expressed interest in being the main financer for the Php19-billion Jalaur River Multipurpose Project II in Iloilo that is being eyed by Korean construction firms. With these things in mind, the PPP clearly strengthens the hegemony of foreign firms on the Philippine economy.Bureau of the Treasury. National Government Debt Service CY 2000-2012. Web. 20 June 2013.

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