As Christmas and elections approach, the taxman also cometh, and is very much in the news.

We know about Oplan Kandado, where establishments not paying their proper tax liabilities have been conspicuously padlocked – and that is a good development, because it means that the BIR is saying it means business. Nothing under the table.

The BIR is hitting tax cheats where it hurts – by temporarily closing their operations, and by exposing them to public scrutiny.

And now we have the Operation Santax Claus, which is really nothing but the stricter implementation of already existing rules and regulations on tiangge (bazaars) and other similar retail operations.

Finally, there is the campaign withholding tax plan of the BIR, where politicians and political parties are challenged to show their civic spirit by withholding 5 percent of their payments to suppliers and other campaign contractors like TV and radio stations for immediate remittance to the government.

There's nothing wrong with that in principle and, actually, it shoots two birds with one stone: it forces the politicos to also put their money where their mouths are and ensures that the government gets the tax revenues it is entitled to according to the laws these politicians themselves have passed.

It also leaves a paper trail as far as campaign expenditure reports are concerned.

Is this campaign withholding tax set to harass opposition candidates?

Is this campaign withholding tax plan some sinister plan by the administration to harass Opposition candidates?

I don't think so. It applies to all candidates, after all.

As of September 2009, the revenue shortfall is estimated to be P39 billion.

The reported revenue shortfall – the difference between actual and targeted tax revenues – is estimated to be P39 billion as of September.

How much of that will Operation Santax Claus be able to recover?

Actually nothing because the BIR doesn't expect to get anything.

They just wanted to catch into the tax base these retailers who come in for tiangge operation, etc.

So, let's go to the next one which is the campaign contribution withholding tax.

Here the BIR has a firm amount it expects to collect, but P1.4 billion is less than 5 percent of what should be raised in terms of trying to get the shortfall to close.

Are there alternative operations or Oplans that would raise more than that P1.4 billion?

The Answer is YES.

I will give two examples, both of which will raise at least P20 billion a year.

One needs legislative action, but the legislative action required is very simple. It has to do with the tax on cigarettes and tobacco.

All the legislature has to do is to change the definition of what we call "the net retail prices" that are used as the basis for determining the specific tax on cigarettes.

Currently, those net retail prices are based on October 1, 1996 retail prices.

So if you remove that October 1, 1996 retail price and you use current net retail price, you'll get P20 billion a year additional.

Can you imagine that up to now, the net retail price the BIR uses by law to determine the excise tax for a pack of cigarettes is still the net retail price 12 years ago, except for the cigarette manufacturers that started after the law was passed.

Is it any wonder Philippine cigarette taxes are practically the lowest in the world? That's P20 billion.

The second measure – which also will also yield at least P20 billion a year – is to put a stop to the smuggling of oil products in the Philippines.

How could that be achieved? It is not as hard as one
thinks.

There are measures like putting a dye in the imported oil products directed at the export zones like Subic and Phividec, supposedly for so-called "constructive exports."

If oil products being sold locally have this dye, then obviously these are smuggled.

Another measure is to check gasoline stations at random and see whether they are issuing VAT-registered receipts.

Still, another is to clamp down on the three areas that are reputed to be the main recipients of smuggled products: Subic, Phividec in Misamis Oriental, and an oil terminal in Bataan.

Still another is to accompany the ships out of these places that are supposed contain oil products for re-export until they are out of Philippine waters.

But now, the final question: Why concentrate on Santax and campaign?

If this is indeed the case, why concentrate on Santax and campaign taxes?

Answer: Because the ones paying the taxes here are the small and medium enterprises; whereas if you stop oil smuggling and use current net retail prices as base, you will be tangling with very big fish – the tax cheats and their even bigger government protectors.

(Following is the transcript of the segment “Analysis by Winnie Monsod” which aired on News on Q on October 13, 2009. Prof. Winnie Monsod is the resident analyst of New on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

A book entitled “40 Centuries of Wage and Price Controls” traces price control attempts from as far back as to the Old Testament of the Bible, to the Code of Hammurabi, to the Roman Republic and Empire, to medieval Europe, to the first centuries of the USA and Canada, to the French Revolution, the 19th century, world wars I and II, the Nazis, the Soviets, including rent controls in the US in the 1970s under Nixon and Carter.

The Philippines is no exception.

Republic Act 4164, which was passed during the Commonwealth Era, aimed to prevent excessive price increases after public calamities – which is exactly what this government is attempting to do at present, after the ravages of Ondoy and Pepeng.




Both typhoons have damaged regions that account for over 60 percent of the country's GDP, over 40 percent of our agricultural production, and close to 40 percent of our rice production.

What do the lessons of history tell us?

Have price controls over 40 centuries been successful in achieving the objective of ensuring that the poor get their basic commodities at reasonable or affordable prices?

The answer, unfortunately, is a big fat no, whether for the Philippines or anywhere else in the world.

In fact, the complete title of the book is: “40 Centuries of wage and price controls: How Not to Fight Inflation."
Not only did imposing controls not work, they also caused additional damage, such as continued shortages and crime, and the encouragement of corrupt practices.

Let us explain once again, using a market demand and supply curve to illustrate the issue.

Suppose that the demand and supply for a basic commodity, say rice, are balanced at the current price, and that the government then fixes a lower maximum price.

The quantity of rice supply will decrease because the producers – whose costs are higher than the maximum price – cannot, of course, be forced to sell their products at a loss.

In the meantime, the quantity demanded will increase. The result will be an excess in demand.

The problem will be: how are you going to allocate the limited supply to those who want to buy?

Obviously, not all who want to buy will be lucky enough to purchase the rice at the lower price – those who are ahead of the long queues, those who have connections with the sellers (maybe long-time customers), and of course, those who are willing to pay a little cash on the side.

The creation and operation of black markets would be next.

Or government could issue ration coupons, which will require additional bureaucracy with, of course, the incentives for corruption or "patronage politics" coming to the fore. This essentially means that the poor, marginalized, and unconnected are not going to be among the lucky ones.

On the part of the suppliers, the imposition of price controls provide incentives to evade those controls.
One of the simplest forms of evasion is quality deterioration.

In the Philippines, when there were price controls on paper, the quality of notebook paper and pad paper was so bad that you could not use both sides of a sheet of paper because the ink on one side would show on the other side.

Newsprint was the same way – anyone reading the newspapers had to wash their hands because the inkprint would come off onto their hands.

Of course, the excuse for price controls is that they are temporary, and will last only a very short time.

But again, history does not back up that claim.

If price controls are not the solution, what alternatives are there to make sure the poor are really being helped through hard times?

For one, one can have a program targeted specifically at the poor instead of general price controls.

Last year, when the price of rice was spiraling up, the [Department of Social Welfare and Development] had already identified households that comprised the "core poor" or the "food poor."

Why not build on that?

And have the government purchase basic commodities, either here or from abroad, and allow the poor to use their cards to qualify them to buy these commodities at subsidized prices?

That way, the price system is allowed to work, there will be less distortion in the allocation of resources, and the poor are at least assured of access to food at prices they can afford.

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on October 2, 2009. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

In the wake of Typhoon Ondoy, the latest reports show that at least 246 people have died, with 37 still unaccounted for; one in every 11 families in Metro Manila and Central Luzon were affected by the flood, with over 567,000 people still crowded in evacuation centers.

Property damage has been assessed at at least P4.67 billion. And no one has yet tried to estimate the loss in economic productivity as well as losses from dislocation.

No one questions that Ondoy was a natural calamity. But the damage wrought cannot be wholly attributed to nature alone.

Human acts and omissions contributed substantially to that damage, and must not be exculpated.

To wit:

PAGASA has equipment that will allow it to detect, among others, the wind velocity of tropical cyclones and their possible path.

What PAGASA still does not have — which is available — is the equipment, called Doppler radar, which, I am informed, allows the rain content of such storms to be determined as well — and therefore the intensity of flooding that might occur.

The irony of it is that this Doppler radar costs — and I got this from Google — a mere $300,000 to $1 million, or roughly P15 million to P50 million pesos.

Why “mere”? Because it is much less than the P70 million that is reportedly the yearly pork barrel allocation of a single congressman, and peanuts compared to a Senator’s annual P200 million share of that same pork.

Or how about comparing it to the cost of a Presidential foreign trip?

The cost per day of her trips two years ago (2007) came out to $255,000 from $46,000 thousand a day in 2002.

It is safe to say that by $2009, these trips average about $300,000 a day.

Therefore the Doppler radar would cost be roughly equal to anywhere from one day’s to a little over three days’ foreign travel of the President.

In any case, it would pay for itself almost immediately, in terms of the number of the number of lives saved, and property damage reduced.

Yes, PAGASA did issue flood and landslide warnings as early as September 24 – but saying that there may be flood and landslides is a different kettle of fish then saying something to the effect that “400 centimeters of rain is expected in the next ten hours — more than the average rainfall in a whole month.”

That will surely catch everyone’s attention, including the authorities.

In early August of this year, the state of Kentucky experienced its version of Ondoy, with more rain falling in one day than was normal for the month (actually Kentucky had worse experience — there was also lightning caused fires as well as hailstones).

But the authorities and the people were properly forewarned, so that while property damage was extensive, there were no deaths (except for nine animals in an animal shelter which was flooded).

Then you have the NDCC, which not only seemed to have ignored PAGASA’s warnings, but also seemed clueless as to what areas to prioritize as for rescue operations, depending — again seemingly — only on the texts that were coming in. This has to be inexcusable.

Architect Jun Palafox, who has an MA in environmental planning, informs us that as early as 1977 — or 32 years ago — the Metro Manila Transport, Land Use and Development Planning Project, funded by the World Bank, already identified the areas in Metro Manila that were vulnerable to massive flooding, probably because they were natural basins.

He should know.

He was part of that report, working for the DPWH under then Minister Dave Consunji, one of the best, if not the best DPWH heads we have had.

By the way, that report singled out Marikina Valley as problematic.

If this information had been an input to the NDCC plans, the boats should have and could have been transported to those specific areas as soon as the flood warnings were sounded, instead of waiting until the floods were upon us before starting the deployment.

An ounce of prevention is worth a pound of cure.

And so we had the spectacle of the Army and Coast Guard boats, 25 from the army and 18 from the Coast Guard, unable to be deployed to the areas where the floods were at their highest or their most dangerous, because by then, the roads were impassable with stalled cars.

The rescue teams from Subic could not reach Manila promptly either, for mostly the same reasons.

Which brings us to the third factor in a man-made disaster scenario.

We all saw terrible scenes of stalled cars on the roads, some being carried away by the force of the current.

But there is another angle to that.

In Marikina, for example, car owners, in their effort to keep their cars from being flooded, brought them to higher ground and parked them there.

The higher ground, unfortunately, happened to be the main thoroughfares — as in Bonifacio Avenue leading to Marikina.

What happened then was that cars on the road that wanted to go the sides to wait out the floods had no side to go to. So they stopped (or were stalled) in the middle of the road.

Which brought traffic to a complete standstill — and then prevented rescue operations from being undertaken.

And speaking of the public, there may have been some excuse for not listening to PAGASAs flood warnings on September 24 — how many times, after all, has PAGASA made the wrong call? — but there was no longer any excuse for not heeding the call of the local government executives — Marides Fernando of Marikina, for one, who asked sent out evacuation notices, asking the people to move to higher ground, because the Marikina dike was already in danger of being breached.

It may have been already too late for some; it also could have been that the barangay executives did not do their job well; but for others, the warning was heard, but not heeded.

They preferred to stay at home. Even when they were being rescued, they signaled that they would rather stay, at home, and just asked for food to be dropped to them.

And why? This is the most tragic part of all:

Because they were afraid to leave their possessions behind, afraid that these would be looted or robbed — they had no faith in the ability of government to provide security.

And a lot of those that did leave were — you guessed it — indeed looted and robbed.

Ondoy brought out the best — and the worst — in our people.

What can be done to reduce the man-made part of this disaster?

Well, as far as the PAGASA equipment is concerned, this is already being addressed by a bill that has already passed the Senate, sponsored by Sen. Rodolfo Biazon and cosponsored by Loren Legarda — called the Disaster Risk Reduction Act of 2009.

One has, however, no idea when the House version will be passed.

With regard to better disaster planning, apparently Sen. Gringo Honasan is sponsoring SB 1444 that replaces the present disaster mitigation procedures with one that is not so much focused on response as on prevention.

But our lack of faith in both national and local government, and — dare I say it? — our desire to look out for ourselves first, ignoring the spillover effects (just think of the humongous traffic snarls caused by counterflowers) is something that each of us has to face, and resolve.

We get the government, and the traffic jams, that we deserve.

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on September 21, 2009. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

Thirty-seven years after its imposition, and twenty three years after our liberation from the dictatorship that ensued, the Philippines still is haunted by the Pandora's box that martial law opened.

One among the major problems that found full flower during Martial Law and continues to flourish up to now is corruption.

This is not to say that corruption was non-existent before Martial Law, but the dictatorship brought it to heretofore unscaled heights to the point that Mr. Marcos ranks second only to Indonesian President Mohammed Suharto in the list of the World's Ten Most Corrupt Leaders compiled by Transparency International in 2004 – and he was second only because Mr. Suharto was dictator for 31 years to Marcos' 14.

It is estimated that in those 14 years, Mr. Marcos allegedly embezzled between $5 to $10 billion dollars from the country.

By the way, Mr. Estrada was in 10th place – making ours the only country with two leaders in the world's 10 most corrupt leaders list.

Now we are in the bottom 10th to 25th percentile as far as corruption is concerned – that is to say, only 10 to 25 percent of the countries in the world are considered more corrupt than we are.

The second unfortunate legacy is the politicization of the military – their encroachment into civilian life, the blurring of the civilian-military divide.

The practice of appointing military officers to civilian posts started during the Marcos dictatorship, when he would appoint officers still on active military duty to occupy civilian posts simultaneously.

The Asian Political News of August 26, 2003 reports that during her term, President Cory Aquino pressed into civilian service 22 retired military officers; President Fidel Ramos appointed more than 100 of them; even President Estrada, during his truncated presidency appointed at least 18, and President Arroyo, since 2001, had appointed 80 to 100.

Moreover, since 1987, more than 50 former military men have run for political office.

The third legacy of Martial Law that still has not achieved closure has to do with the human rights violations that saw thousands of life damaged, destroyed, or lost.

According to the estimates of historian Alfred W. McCoy, 70,000 Filipinos were incarcerated for political reasons during the martial law regime, of whom 35,000 were tortured.

McCoy also lists 3,257 extra-judicial killings, of which 77 percent, or 2,520 were the victims of "salvaging." Add to this the 737 desaparecidos – Filipinos who just disappeared from the face of the earth.

Although human rights victims had been awarded $1.9 billion in exemplary and compensatory damages by a US court, and although the Swiss government had turned over to the Philippine government in 1997 about $624 million dollars from Marcos deposits in Switzerland.

The sad fact is that the Philippine legislature has yet to pass the bill awarding them compensation and as of now there seem to be two groups claiming to speak for these victims – SELDA and Claimants 1081. This division between the victims has probably resulted in more delay.

Like world-class corruption and the politicization of the military, human rights violations like extrajudicial killings, and torture still seem to be part of the modus operandi of our military – with the implicit approval of the executive branch of government.

In June 2006, bonnet-wearing armed men forcibly took UP students Karen Empeno, 22 years old, and Sherlyn Cadapan, 29 years old, and a local farmer in Hagonoy, Bulacan.

Both students were doing research on Central Luzon farmers at that time and Cadapan was reportedly pregnant then.

Until now, the two women are nowhere to be found.

Melissa Roxas is luckier. She was released after six days of mental and physical torture in what she believed was a military camp.

She and two others were abducted in Tarlac just last May while conducting research for a future medical mission in the area.

And, just last month, the Court of Appeals ruled that Melissa's claims of abduction and torture are "factual and true," and granted the victim's petition for a writ of amparo.

Actually between 2001-2007 there have been 834 victims of extra-judicial killings.

So now that we see how insidious and long-lasting the effects of martial law have been, where its consequences is still reverberating to society and economy is there a possibility that it might happen again?

Here, at last, we can end on a hopeful note. The answer is that it is highly unlikely.

Firstly, there are enough safeguards in the 1987 Constitution against its imposition a la Marcos.

And even more importantly, survey after survey show that the Filipino people are adamantly opposed to it, and do not think that it is the answer to our problems. The same is true for international public opinion.

Never again.

Did you notice the so-called clamor to revisit the Oil Deregulation Law follows a cyclical pattern. It gets very loud at a time of rising international oil prices, and dies down when these prices decrease.

So let us try to put to rest once and for all the issues that have to do with oil prices, such as: is there a cartel in the Philippine oil industry?

Are the prices charged by these companies higher than what they should be charging, or higher than the prices that would have been charged under a regulated regime?

Are the oil companies making excess or monopoly profits?




Actually, these questions were addressed as early as 2005 (when oil prices were rising, and the clamor was loud) by an Independent Review Commission formed by the Department of Energy and headed by former SGV head Carlos Alindada, with members from the labor sector, transport sector, private sector, academic sector, and the petroleum dealers association.

Their study was updated in 2008, with the commission being headed by Peter Lee of the University of Asia and the Pacific.

Let's look at these issues one by one.

First, about cartels. A cartel is a combination of firms or nations designed to limit competition or fix prices.

There is a cartel in the oil industry, the cartel known as the Organization of Petroleum Exporting Countries or OPEC, who try to influence prices by setting production quotas, thus influencing the supply side of the international oil market but a cartel in the Philippines is another matter altogether.

The Alindada commission found no evidence of a price cartel.

Then why are the prices of the three oil companies very close, if not identical, to each other, one may ask.

The answer is quite simple: in the same way that the prices of firms operating under conditions of pure competition are the same, the oil companies cannot afford to have prices very different from each other.

If one firm's prices are higher than the others, it starts to lose market share, and therefore has to move its prices back down in order to survive.

But the point is thanks to oil deregulation law even if the Big 3 oil companies in the Philippines wanted to conspire to set prices, they will not succeed – because the moment their prices are out of line with international oil prices plus transport cost to bring to the Philippines, the smaller firms (there are now about 80 of them in the
industry) will jump at the opportunity to import the petroleum products and undersell the Big 3.

In other words, while the Big 3 oil companies account for about 90 percent of the Philippine market, that market is contestable – because the Oil Deregulation Law, which made the entry of the 80 firms possible in the first place, also allows the importation of petroleum products –ready to compete with the Big 3.

Which brings us to the second question: Are the prices being charged by the Big 3 higher than they should be?

The National Economic and Development Authority or NEDA presented a paper that asserted that based on historical data from February 2005, and interpolating it to the present, there may be a P6.00-P8.00 per liter overprice as of April 2009.

But it turns out that its assumptions were too stringent – failing to take into account of other factors.

Apparently the introduction of bio-fuels adds something like P1.00 per liter to the pump price of gasoline, and the use of double-hull ships adds another peso.

Plus, pump prices used in the base year were reflecting the international crude oil prices of the previous month, rather than the current month.

By the way, according to the DOE, Philippine pump prices are cheaper than most Asian countries who are also importing oil. Go figure.

And again, the final test: if the big oil companies were overpricing, the smaller players would have had a field day bringing in imports, underselling the big players, and making huge profits. This did not happen.

It is not deregulation that has caused the price increases, but the increases in the international crude oil prices, as well as currency depreciation.

And finally, aren’t the large profits of the oil companies an indication that they are charging excessive prices?

Well, “large” is a relative thing.

Put it this way: If a company had profits of P500 million, that sounds like enormous profits.

But if you factor in the information that the company's equity, or its “puhunan,” was P50 billion, that changes the picture entirely.

Because now you find that the rate of return on equity is only 1 percent –which means that if the company had just put its money in the bank, it could have earned much more than that.

It turns out that, and this according to the Independent Review Commissions, between 1998 and 2008, the oil companies made average returns 5 percent on equity.

Bottom line: there is no basis for the suspicion of cartels, overpricing, and excess profits.

If anything, deregulation and making the Philippine oil market contestable, seems to be working. The system isn't broken. It does not need to be fixed.

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on August 31, 2009. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

Weeks after the PCIJ report on the President's Statement of Assets, Liabilities, and Net Worth came out, the President still has not explained, as she must, why her net worth has more than doubled between 2000 and 2008 – from P61.9 million to P144.5 million.

Certainly her salary as President, which is P60,000 a month or P720,000 a year, cannot justify such an increase.

One should also eliminate from the equation possible gains from stock market trading because unless she or her stockbroker are trading geniuses, making the kind of killing she would have to make to justify her net worth increases would be very improbable because of the stock market decline in 2008.

Thus, she would have to show very large increases in her other income which would be most naturally attributed to the income of her spouse. This, she still has not done.

Actually the Philippines has very strict laws that if implemented properly, would show unexplained wealth and possible graft and corrupt practices by government officials right away.

Our 1987 Constitution mandates it.

And previous to that, there is RA 1379, passed way back in 1955, which provides that... “Whenever any public officer or employee has acquired during his incumbency an amount of property which is manifestly out of proportion to his salary as such public officer or employee and his other lawful income and the income from legitimately acquired property, said property shall be presumed prima facie to have been unlawfully acquired.”

Note that the burden of proof is on the public officer: he has to show that he has lawfully acquired the property.

The presumption of innocence does not apply here; and if the judge is not satisfied with the explanation, he will declare the property in question forfeited to the State.

Then there is RA 3019, passed in 1960 and known as the Anti-Graft and Corrupt Practices Act, which requires every government officer and employee to file every year a SALN, including a statement of the amounts and sources of his income, the amounts of his personal and family expenses, and the amount of income taxes paid for the next preceding calendar.

Finally, there is RA 6713 passed in 1989 also known as the Code of Conduct for government employees which gives all the details for filing the SALN, when and where to file, who to file it with, who is supposed to be the repository agency, and what are the penalties for non-filing; and this law includes the fact that the SALN is public information available to any taxpayer.

In spite of all these safeguards and laws, however, we all know that the Philippines' performance with regard to reducing corruption has been miserable.

The very fact that it was a media organization, the Philippine Center for Investigative Journalism, that researched and analyzed the President's SALN, instead of the Office of the Ombudsman, gives us a clue.

Another clue is given by the data shown in a paper presented to an international conference in Jakarta in 2007 by Deputy Ombudsman Pelagio Apostol: Between 2002 and 2007, the average number of complaints filed yearly with the Ombudsman for failure to file a true and detailed SALN was 27; the average number of complaints filed for forfeiture of unexplained wealth was 15.

Compared with the 1.4 million employees who file SALN yearly, the proportion is negligible.

The message that comes out loud and clear in all this is that the agencies that are repositories of the SALN, particularly the Ombudsman, don't seem to know what to do with the reports they get, or don't have either the time or the inclination to do what must be done.

The Office of the Ombudsman should be monitoring the President and Vice President, as well as the chairmen and members of the Constitutional Commissions.

Why didn't it blow the whistle on the President's seemingly unexplained wealth?

The Ombudsman created a much-publicized SALN data bank three years ago – and the public should be told exactly what is being done to all these computerized records.

Instead, they just seem to wait for complaints to be filed by the public and act only then.

What a pity. Can we do anything about this? Yes.

First, we can make sure that the persons we elect to leadership positions have no reputation for “kurakot.”

Second, that they do not choose cronies to fill up important positions, but rather choose the most qualified for the job.

And third, we must also make sure that we are ready to file complaints against government officials who are living beyond their means – we have to be a nation of whistleblowers.

That is what the times call for. We must heed that call.

In other words, it is really up to us.

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on August 17, 2009. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

President Gloria Arroyo has left the country around 72 times since she assumed the presidency in 2001. That's an average of 8 trips a year.

She in fact has spent almost ten percent of her time abroad, because out of the 3,125 days she has been in office as of August 11, at least 310 days have been spent out of the country.




During this time, she visited 40 foreign countries, 21 of them at least twice and has managed to visit the United States at least once a year.

Actually, she has visited the US a total of 15 times in the past 8 and a half years.

As with practically everything else she does, her peripatetic tendency has been criticized – with her critics wondering why, when the country is pressed for financial resources, so much of the Filipino taxpayers' money is being used for what is considered an unnecessary expense.

The countries the President has visited are either our major trading and investment partners, major oil suppliers, major employers of our overseas Filipino workers, and major sources of foreign assistance or some combination of the above.

And generally, the more important the country in these categories, the larger the number of visits: the US has been visited 15 times (although attending the UN General Assembly in New York is one of the reasons why), China 9 times, Japan 7 times, and the major ASEAN member countries anywhere from three to five times.

Could she have done this with virtual visits? Yes. Certainly, but it would not be as effective as pressing flesh, as it were.

Nothing like a warm, personal relationship that allows you to then pick up the phone and call your foreign counterpart to ask a favor or the head of a large corporation to invite it to set up shop in the Philippines.

What benefits have been reaped from these visits?

It's really hard to estimate the marginal benefits that arise from her trips abroad, or distinguish them from what would have occurred anyway.

I do not doubt, however, that the expected reduction in overseas employment as a result of the global crisis did not come to pass partially because of the President's visits.

And, certainly, the release or pardon of Filipino workers in jail in those countries has to be attributed to the personal diplomacy she exercised. Let us give credit where it is due.

Having listed the benefits, now let us focus on the costs.

And this is where the criticism against the President's trips do have basis.

We have data on the expenditures of the Office of the President on foreign travel from 2002 up to 2007.

What can we glean from these data?

In terms of US dollars, which we use to remove the influence of changes in exchange rates, the cost per day of the President's trips rose by almost six times in that five-year period.

From $45,880 per day in 2002 to $255,600 in 2007.

That horrendous increase cannot be attributed to inflation – hotel and airline and food prices in dollar terms cannot have increased by more than 20 percent in that period and certainly not by 600 percent.

So the only explanation is that a size of her official entourage must have increased tremendously, or that their per diems must have gone up enormously, or both. Now, that is totally unnecessary.

In other words, even if she did not pay for that $20,000 dinner in Le Cirque in New York, and I am morally certain she did not pay for it, she still has a lot of explaining to do.

$45,000 to $250,000 per day in five years. Excuse me.

Bottom line? Continue the trips, but cut down on the expenses. How? Don't use it for rewarding political favors or in exchange for them.

In the future, I think the President should report not only the benefits that these visits bring, but also within two weeks, the cost that they entail – so that the Filipino people, who are not dumb, can judge for themselves whether these trips are worth it.

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on August 14, 2009. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)


There is no question that cheaper and quality medicines for the Filipino people are a consummation devoutly to be wished, and the enactment into law of RA 9502 in June 2008 is certainly an accomplishment of this administration.

Chapter 3 of RA 9502 deals with the price regulation of drugs and medicines, giving power to the President to impose, upon the recommendation of the Secretary of Health, these maximum retail prices.

This was supposed to be a last resort, to be taken only if the pharmaceutical companies refuse to voluntarily reduce the prices of very important drugs and medicines, which studies had shown to be highly overpriced in the Philippines, compared with the prices of the same drugs in various countries in Asia, including Thailand, Taiwan, Malaysia and India.

But, the drug companies made no move to reduce their prices, and only did so when it was clear that the DOH meant business.

But their response came so late, and they dragged their feet so much that President Arroyo went ahead and signed the executive order imposing maximum retail prices on 5 medicines

Maybe, my threshold of satisfaction is too high.

But, I don't see why cutting the prices of certain medicines by fifty percent should be considered such an achievement by our health officials.

Why? Well, some of those medicines cost in the Philippines ten times what they cost elsewhere.

So, why should I be happy if they now cost 5 times what they cost elsewhere?

It is therefore sincerely to be hoped that these drug companies are forced to bring their prices down some more – not by law or fiat – but by making the local market, dominated by multinational companies, a contestable one; which means, by the exercise of parallel importations, where the cheaper, same quality goods are imported from abroad.

The government should show the way by making these parallel importations, so that the companies are forced to bring down their prices some more than that, or lose their share of the market.

And while we are on the subject, the Private Hospitals Association of the Philippines has threatened to declare a "hospital holiday," where they will only accept emergency cases, unless the government gives them more time to sell their inventory of medicines, bought at the old prices, before having to cut their prices.

They claim that they are facing financial losses that will force them to retrench their employees or even close down.

That is nothing more than blackmail.

This seems to be a favorite ploy of the PHAP to get what they want, because they threatened the same thing about two years ago. It is irresponsible and unwarranted.

Irresponsible, because it jeopardizes the health and well-being of citizens, and it is unwarranted because:

(a) these hospitals knew since June of 2008, when the bill was passed into law, that maximum retail prices could be imposed and they should have been planning ahead on their inventories since then

(b) they were in on the consultations that were being conducted by the DOH and never said a word, and

(c) it is impossible that they have such large inventories of costly medicines

Why? No hospital worth its salt would tie its money down on large medicine inventories, particularly when, the turnaround time between order and delivery is only 24 hours!

In any case, I challenge the members of the Private Hospitals Association of the Philippines to open their books for audit by the COA or certified public accountants from the NGO community, who can then attest to the accuracy or inaccuracy of their claims.

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q following President Arroyo's last State of the Nation Address on July 27, 2009.)

As expected, the President put the best face she could on the accomplishments of her administration – this is not unusual, as all her predecessors have done the same thing.

Cardinal Gaudencio Rosales asked her to admit to her failures, but the last time she apologized to the country for inappropriately talking to a Comelec Commissioner, that apology was twisted beyond recognition, and was interpreted as admitting to cheating. So I didn’t think she was going to make the mistake of admitting a shortcoming.

But were the accomplishments that she bragged about accurate?

On the whole, they were, and her administration certainly had many – particularly on the fiscal, financial and monetary side, as well as on the infrastructure side, such as roads, airports, bridges.

But one would expect such accomplishments.

After all, the amount of resources she had at her disposal since 2001 – that is to say, the sum of the national government annual obligation budgets from 2001 to 2009 – amounts to P8.963 trillion (almost 9 trillion pesos – that’s 9 with 12 zeroes after it), with the amount for capital outlays equal to P971 billion, or almost 1 trillion pesos.

So there must have been some accomplishments.

The issue is not whether she accomplished anything, but whether she accomplished what she set out to do, what she said she would do.

Unfortunately she did not get to that part in her SONA, and to be fair, her predecessors were just as cavalier about comparing accomplishments with targets – that seems to be the sakit of most politicians – they make promises and then forget about them.

As in the BEAT THE ODDS legacy that she said she would leave to the Filipino people by 2010. Notice that she made no mention whatsoever of BEAT THE ODDS .

B - Balanced budget,

E- Education,

A- Automated Elections,

T- Transportation and Digital Infrastructure,

T- Terminate Hostilities with the NPA and MILF,

H- Healing the wounds of Edsa's 1, 2 and 3,

E- Electricity and Water for all,

O- Opportunities for livelihood and ten million jobs,

D- Decongestion of Metro Manila,

D- Develop Subic and Clark

As I said earlier, on the whole, the accomplishments she talked about were accurate. With two very glaring, and very important exceptions.

The first is that she reported that the number of poor decreased by 2 million during her watch, and I almost fell off my chair.

The latest objective data we have is based on 2006, and official figures show that the number of poor people increased by almost 3 million people – about 2.8 million people, actually. Where she got her data, I have absolutely no clue.

But I can state categorically that those figures are wrong.

The second glaring inaccuracy is in the claim on jobs created.

As I have said before in this show, 2.8 million new jobs were created between 2004-2008, or about 700,000 jobs every year. That is a far cry from the SONA claim that more than 1 million new jobs a year were created.

And an even further cry from her BEAT THE ODDS target of 10 million jobs in six years.

Then, there are what I would call the attempts to slide over the unpleasant facts.

One such is the education situation. Her target was education for all. What she said was that no developing country would be likely to attain that target by 2015.

What she didn’t say is that (a) she promised that everyone who was of school age should be in school by 2010, and that (b) the progress in that direction has been at a snail’s pace – (net participation rates went up by 3.54 per cent in five years when it should have gone up by 18 per cent in six years).

Moreover, it is very cold comfort to say that 700,000 poor families have been helped by the Pantawid Pamilyang Pilipino program – very cold comfort , that is, to the other 4.1million families who live below the poverty line.

On the other hand, she must be given credit for spunk.

She turned the tables on her critics, and gave them as good as she got.

She is one tough cookie, and she wasn’t about to go out with her tail between her legs as it were.

Her critics would call that being unrepentant and defiant, and kapal muks, and say that it was beneath the Presidential dignity, stooping to mudsling the way she did – but her Congressional audience clearly enjoyed her performance as much as she did.

I certainly am not going to judge her on that.

(Following is the transcript of the segment “Analysis by Winnie Monsod” which aired on News on Q on July 20, 2009. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

Last week, we started evaluating the performance of the President on her “BEAT THE ODDS” desired legacy to the Filipino people as listed in her Medium Term Philippine Development Plan (MTPDP). We graded her according to the proportion of the target that she set that had actually been accomplished by the administration.

We’ve finished with “B.E.A.T.” – “B” for balanced budget, “E” for education for all, “A” for automated elections, and “T” for transport and digital infrastructure.

Now, let's examine the rest of her “BEAT THE ODDS” plan.

“T” FOR Terminating NPA/MILF Hostilities

The target is that peace will have come to Mindanao and all insurgency areas by 2010. Obviously, there can be no quibbling. This has just not happened.

Unfortunately, there is no quantitative way of determining how far along we are on the road to peace. I will go the middle-road between her critics and her supporters and give her a 50 per cent grade – in recognition of the administration's efforts and negotiations. Pasang awa (barely passing).

Now, “H” is for healing the wounds of EDSA.

The MTPDP lists the following action plan:
1. Accelerate compensation to victims of human rights violations; no action here, folks. Zero.
2. Consult people nationwide regarding their views on how to pursue reconciliation and national unity; this has not been done. So a grade of zero.
3. Provide safe venues, where both sides can interact – both oppressor and victim. Again, not done. Zero.
4. Pursue reforms in the military; attempts have been made and one would think that there would be some kind of result. Maybe 30 per cent done.
5. Design and implement creative approaches for handling conflicts involving leading figures of the administrations deposed in February 1986 and on January 2001. Very little done here.
6. Implement effective national security reforms with a balanced focus on both internal and external concerns – this is not relevant for us.

The result of all these is a grade of 30 divided by five which means a grade of 6 per cent.

Now, “e” is for electricity and water for all.
According to the plan, power and water shall have been regularly provided to the entire country. Where do we stand?

The most recent statistics show that around 80 per cent of households have access to safe water and about the same percentage (81 per cent) have access to electricity.

With respect to water, the progress has been at snail's pace... an accomplishment rate of 5 per cent.

With respect to electricity, the measurement we use is the percentage of barangays energized. This percentage went up from 89 per cent at the end of 2003 to 98 per cent at the end of 2008. There is every chance to reach 100 per cent by next year. That corresponds to a grade of 100 per cent.

But, if we use interenational measurement of percentage of households with access to electricity, that unfortunately has not increased over the next 5 years. It means a grade of zero.

100 per cent plus zero, divided by 2 is 50 percent for electricity.
Plus 5 per cent for water divided by 2, you get 27.5 percent. That's what she gets for the “E.”

Now, let's go to the “O.D.D.S.”

“0” for opportunity to create 10 million jobs.

Will she have created 10 million jobs in 2004-2010? The answer is NO.

Let's see why.

The MTPDP projects anywhere from 3.3-3.9 million of those 10 million jobs would be created this year and next year. So, we have to remove that from the 10 million to find out how she has performed so far.

That leaves 6.1-6.7 million new jobs that should have been created over the period 2004-2008. How many new jobs were actually created?

Per data from NSO, 2.8 million additional jobs were created, which means that the president accomplished 42 per cent to 46 per cent of her target employment, which means the Arroyo Administration's grade is 44 per cent.

Now, the two D’s – decongesting Metro Manila and developing Subic-Clark hub.

Decongesting Metro Manila, according to the MTPDP, will be accomplished among others by:

a) establishing new centers for government; that’s a grade of zero.
b.1) the Northrail Project; experts estimate a 10 per cent completion rate, so grade is 10 per cent
b.2) the Southrail project; accomplishment rate is much less than 10 per cent, considering that so far only the Caloocan-Alabang portion is finished. Grade is 5 per cent.
c) Improve transport within Metro Manila. Experts give this an accomplishment rate of 90 per cent.
Adding these three sub-targets (90 per cent +10 per cent +5 per cent) and dividing by three, the grade for decongesting Metro Manila is 35 per cent.

How about developing the Clark-Subic corridor, which includes the creation of Hong Kong or Singapore-type enclaves which are the most competitive in Southeast Asia?

Well, the SCTEX is completed, beautifully and that is a 100 per cent grade.

But, creating the most competitive Hong Kong- or Singapore-type of enclave is another matter altogether.

At most 30 per cent of that has been achieved and therefore, the average of the 2 is 65 per cent.

What can we conclude from all of these?

Well, the Arroyo Administration wanted to be remembered for a 10-point legacy with the acronym BEAT THE ODDS

If one were to grade the actual performance on these areas, here is what we get:

B - balanced budget - 100
E - education for all - 36.7
A - automated elections - 50
T - transport and digital infrastructure - 57.5
T - terminating npa/milf hostilities - 50
H - healing the wounds of EDSA - 6
E - electricity and water for all - 27.5
O - opportunity to create six million jobs - 44
D - decongest Metro Manila - 35
D - develop Subic-Clark hub - 65

If these points were “subjects” of the Arroyo Administration, then it would have passed one subject with flying colors, 2 subjects by the skin of its teeth, another 2 subjects with a low passing grade, and 5 subjects failing miserably.

That's a general average of 47.17 per cent – where 50 per cent is the passing mark.

The question that seems to be in the minds of people is whether she should be kicked out or she should be made to repeat.

But, aside from the legacy she wants to leave behind, Pres. Arroyo will also have to answer for 3 perhaps unintended legacies:
1. The increase in corruption
2. The increase in human rights violations
3. The increase in bureaucracy and overall demoralization of the civil service
These are going to be on her conscience.

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on July 13, 2009. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

Last week, we compared the Arroyo administration with previous administrations in the areas of economic growth and poverty alleviation.

And, we determined from the data published by the NSCB [National Statistics and Coordination Board] that while the country's economic growth did much better under Arroyo, poverty did not dramatically decline in her time and as a matter of fact increased between 2003 and 2006.

What we're going to do now is to examine her goals that she set for herself as organized into the slogan "Beat the Odds."

B for balanced budget.

The Arroyo government must be given a grade of 100 per cent.

The original target for 2007 was a budget deficit of 2 per cent and its actual deficit was only .2 or 2/10 of 1 per cent and last year 2008 it kept its budget deficit on track.

Next in Beat the Odds is E. Education for all.

This is broken down, by the way, into a 100 per cent net participation rate meaning to say everyone of school age is in school that's the most important.

The other subgoals are: 3,000 school buildings a year being built and a computer put in every high school.

Have these been accomplished?

At the elementary level, net participation rate or the proportion of the number of enrollees 7-12 years old to population 7-12 years old for school year 2003-2004 was 81.72.

By the way, in 2001 to 2002 that was already 97 per cent.

Anyway, it means that to achieve the education for all this percentage must rise by 18.28 percentage points in six years to reach 100 per cent by school year 2009-2010 as envisioned.

How much has it risen?

For 2008-2009, the DepEd reports an elementary net participation rate of 85.12 per cent.

In other words, in those 5 years it only increased by 3.4 percentage points in 5 years when it should have increased already by 15 percentage points.

The President therefore has accomplished only 19 per cent of her target.

So she gets a grade of 19 in this examination – a dismal failure.

This comprises 80 per cent of her grade for education.

The other 20 per cent would come from the two other targets – school buildings and computers.

With respect to school buildings, it was determined that the more appropriate target would be in terms of classrooms.

Assuming an average of 3.3 classrooms per building, which is what the statistics show, then you need 10,000 classrooms a year.

Well, the total number of classrooms built, as of June 15, 2009, amount to 68,888 for a 115 per cent accomplishment rate and so I give her 115 per cent for this particular goal.

With respect to one computer in every high school, I talked to Paul Soriano, a DepEd official, to get the data.

It turns out that it is not just one computer in every high school but computer lab composed of 11 computers, 10 for the students, 1 for the teacher in every high school that they are trying to achieve and the latest data showed 4,019 out of 6,650 high schools already have their computer labs – an accomplishment rate of 60 per cent, with another 650 schools in the final bidding stages and 325 schools having started the bidding.

Not only that.

Director Soriano also reported that the 2009 budget includes the money for the computer labs for the rest of the 1,631 schools that still don't have these computers and he is positive that by the end of this school year 2009-2010, all public high schools in the country will have been equipped with computer labs.

So for this computerization, I think the grade should be 100 per cent.

Aggregating these grades and giving them proper weight, 80 per cent for elementary school participation rate, 10 per cent each for buildings and for the computer you get a weighted average of 36.7 per cent grade for education.

Now for the automated elections.

Since the target that it will no longer raise a doubt about its integrity is a target that is impossible to achieve, given the tendency of politicians to insist that they lost because they were cheated, so we're not going to grade that.

But the target that the election process will be computerized was definitely achievable, particularly because the election computerization law was first passed in December 1997, and was intended to have been accomplished in 1998, or at the very latest, in time for the 2001 elections.

I would put a grade as 50. Why? It can go either way.

Then, we go to T for transport and digital infrastructure.

Under the transportation target, the Arroyo administration aimed at linking the entire Philippines through a nautical highway.

Per expert judgment, the Western Nautical Highway is 100 per cent complete so she gets 100 per cent for that and the Central Nautical Highway is 80 percent complete.

Now for the digital part of that infrastructure target, she gets a grade of 25 per cent. Why so low?

Simply because we do not have as yet our digital highway complete. And, why is that?

Because of ZTE and all the controversy that came about because of corruption involved in the bidding for that project.

So putting that all together, her grade for digital and infrastructure 90 + 25 divided by 2 she gets a grade of 57.5 per cent.

So that takes care of the Beat part of Beat the Odds.

Part 3 of our pre-SONA analysis next week, we will take care of “The Odds” part and also next week we will give the final grade of the Arroyo administration according to the goals it set out for itself. Meanwhile, this is Winnie Monsod on Q.

(Following is the transcript of the segment "Analysis by Winnie Monsod," which aired on News on Q on July 6, 2009. Prof. Winnie Monsod is the resident analyst of News on Q, which airs weeknights at 9:30 p.m. on Q Channel 11.)

President Arroyo has done better than her predecessors have as far as growth is concerned, fared badly in reducing poverty.


The State of the Nation Address or SONA that the President will be delivering on July 27 will be her ninth and last one.

No other President, except the dictator Marcos, who sat as President for more than 20 years, has held the presidency as long, and this being her valedictory, the SONA will surely deal with her administration's accomplishments.

Because this is a run-up to the national elections in 2010, more than the usual effort will be made by the administration to present its performance in the best possible light, while the opposition will be doing the exact opposite.

So, from a non-partisan viewpoint, what can be said about the performance of the Arroyo administration?

Let's start with broad strokes.

If we set as our metric the broad goals of economic growth and poverty reduction, and use as a basis of comparison the performance of her predecessors, here is what we find: in terms of the country's economic growth, President Arroyo has done better than her predecessors have, as we can see.

The average GDP growth rate of the country between 2001 and 2006 was 4.5, higher than that achieved by the others. I am not including GDP rate for 2001 and 2008 because as we will see our latest poverty estimates are 2006.

But if she did better than her predecessors as far as growth is concerned, she performed worse in the field of poverty reduction - as again we can see.

On a fixed level of living or consistent basic needs basis, poverty incidence went down by 6.5 percent during Mrs. Aquino's watch, it went further down by another 9.5% during Mr. Ramos' watch.

Under Mr. Estrada's watch, however, the percentage of people who were living below the poverty line increased and under Mrs. Arroyo's watch, poverty incidence first declined between 2000 and 2003, and then it increased such that the number of poor families increased by 650,000 and the number of poor people increased by 3.8 million people, between 2003 and 2006, so that for that whole period, there was no significant change in poverty, and the absolute number of the poor increased.

Now having done the broad strokes, let's get into a little more detail, to find out why the broad strokes look that way.

This time, we will compare her performance not against the performance of her predecessors, but against what she herself set out to accomplish, as stated in her administration's Medium Term Philippine Development Plan (MTPDP) for 2004-2010.

According to the MTPDP, and I quote: "By 2010, this will be the 10-point legacy of the Arroyo administration:

1. Ten million jobs shall have been created.

2. Everyone of school age will be in school. Three thousand school buildings a year shall have been built and a computer put in every high school.

3. The budget shall have been balanced with the right revenues collected and spending on the right things ensured.

4. The network of transport and digital infrastructure on which the Arroyo government embarked in 2002 shall have linked the entire country by 2010.

5. Power and water shall have been regularly provided to the entire country.

6. Metro Manila will have been decongested with economic activity growing and spreading to new centers of government, business and community in Luzon, in the Visayas, and in Mindanao.

7. The Subic-Clark corridor will have become the most competitive international service and logistics center in the Southeast Asian region.

8. Elections will no longer raise a doubt about their integrity.
The electoral process will have been completely computerized.

9. Peace will have come to Mindanao and all insurgency areas.

10. The divisive issues generated by EDSA 1, 2 and
3 will have had a just closure."

These all by 2010.

Rearranging these 10 targets results in the acronym "BEAT THE ODDS," which the Arroyo administration has used as its mantra.

Did she indeed beat the odds? We'll answer that in part 2 of our pre-SONA analysis next week.

(Following is the transcript of the segment "Analysis by Winnie Monsod," which aired on News on Q on June 29, 2009. Prof. Winnie Monsod is the resident analyst of News on Q, which airs weeknights at 9:30 p.m. on Q Channel 11.)

Now that the winning bidder in the election automation project has been announced, there is a tendency for the public to sit back, and maybe heave a sigh of relief that the Philippines has entered the modern era as far as elections are concerned.

Come election day, all we have to do is vote, and the dagdag-bawas will be a thing of the past.

Nothing could be further from the truth. Instead of sitting back, the public has to be ever more vigilant, to make sure that we don't find ourselves facing total chaos on election day and - the worst scenario of all - a failure of elections.

What are the reasons for this call for vigilance? Only consider: if you Google the winning bidder, Smartmatic, you will find that whereas it is presented to us as a Netherlands-based company, in other words you get the impression it's doing business in the Netherlands and operates from there, the truth is that it merely was incorporated there, and most of its principals are Venezuelans.



How the company got its start, how it won its first project in Venezuela is very murky, involving shares of stock that were bought by the Venezuelan government of Hugo Chavez. Suspicions have been voiced that the elections in Venezuela, which were automated by Smartmatic were tainted with fraud.

The point here let's face it is that the company, which was investigated by the U.S. Congress, whose activities in the U.S. have been dogged by protests and investigations, and whose Philippine project is the biggest that it has been undertaken, is not exactly a
company where we can put our complete trust in.

It has to be watched and monitored carefully.

Then there is the question of the Comelec's management capability to implement nationwide in one step a radical change in the way elections are conducted.

None of the Comelec commissioners has any management experience, not one has any expertise in information technology.

Add to this a very tight schedule they imposed on themselves that has to be adhered to for everything is to be in place by election day, and you have a recipe for disaster.

As of mid-June, the Comelec is already one month behind schedule - it should have signed the contract for the project on May 27.

Which means that the delivery of the machines - and we are talking of 82,200 machines here, whose delivery most likely will be delayed - which will mean that their testing and inspection will be delayed, which will mean that their configuration - which involves inputting the names of 340 candidates will be delayed.

And this does not even consider the very tight original schedule, which for example implies that 2,740 machines a day have to be tested and inspected. Does that arouse confidence in your breasts, knowing that under the best of conditions, these machines almost caught fire?

And third, is that it should not be assumed that just because there is automation, there could be no cheating. Given new technologies, it is possible that cheating can occur on an even more massive scale unless steps are taken to prevent that.

Which is why it is imperative that we the public ask the Comelec even now, to prepare a Plan B, a back-up plan which may involve either scaling down or even aborting the program if by a certain date – say November or early December, it has been unable to achieve or revert back to its original time schedule.

And, which is why we - the public - must be doubly vigilant.

The bottom line here is that under no circumstance should a peaceful transfer of power in 2010 be prevented or postponed.

(Following is the transcript of the segment "Analysis by Winnie Monsod"
which aired on News on Q on June 15, 2009. Prof. Winnie Monsod is the resident analyst of News on Q, which airs weeknights at 9:30 p.m. on Q Channel 11.)

Let's break that question down into several sub questions, and let's start with, what exactly do we mean by recession?

A recession is a period of temporary economic decline, generally identified by a fall in GDP in two successive quarters. In other words, the growth rate is negative during those quarters.

The good news, therefore, is that this has not happened, so far anyway, in the Philippines, unlike in Thailand, for example, or Singapore or Hong Kong, where the growth rates have been negative, 6 per cent for Thailand.

The Philippines has not posted a negative growth rate since 1998. That's good news.

The bad news is that the country's most recent growth rate of 0.4 per cent is four tenths of 1 per cent is actually very close to negative, which is the reason National Statistical Coordination Board Secretary-General Romy Virola said that the economy is "teetering" into recession.

So, the next question is, given that we are "teetering" or at the brink of recession, what is the probability that we will actually fall into recession?

Let us see what the historical data tell us about this.

I looked at the quarterly growth rates from the first quarter of 1982 to the first quarter of 2009 - that's a 27-year period - and found out that in 19 out of those 27 years, or more than 70 per cent of the time, the first quarter growth rates were either lower than the annual growth rates in 15 of the 19 or equal to them, 4 of the 19.

So that is good news - because 70 per cent of the time, the country didn't get worse after the first quarter, it either remained the same, or it got better.

The bad news though, comes out when we zero in on the country's recession years.

Four times in the past 27 years the country experienced recession - in 1984, 1985, 1991, and 1998. And in three out of those four recession years, or 75 per cent of the time, the first quarter growth rates were higher than the growth rates for the year. Meaning to say, things got worse after the first quarter. Ouch.

Let's take this one-step further.

Independent forecasts predict that the country would grow at about 2 per cent this year.

So, why then did we grow much slower than expected in the first three months of the year? Well, let's look at the usual suspects.

International trade figures show a very large contraction but then, exports and imports had been contracting since October of last year, so that was already part of the equation, factored in the forecasts.

So, hindi na 'yan kasali.

Was the culprit the remittances from OFWs? The answer is NO.

The forecasters had factored in that these remittances would be reduced, and slow down the economy as a result, but surprise, surprise remittances from overseas Filipinos increased - by 18.9 per cent in dollar terms, and 38.5 per cent in peso terms, thanks in part to a hefty 44.7 per cent rise in deployment in the first quarter, from 254 000 to 368,000 Filipino workers. Credit for that, by the way, must be given to the Arroyo administration, whose efforts in seeking jobs abroad have been unstinting. Let's face it.

Well then if it’s not trade, if it’s not overseas... sirit na.

One identified culprit is the marked slowdown in personal consumption expenditures - which accounts for roughly 80 per cent of GDP.

These expenditures grew by only 0.8 per cent in the first three months of this year, compared to a 5.1 per cent growth last year, a 5.9 per cent growth two years ago.

In fact, the last time it was anywhere near .8 per cent was in the last quarter of 1991, that was 17, 18 years ago, a recession year, when consumption increased by only 1 per cent.

Another identified culprit is more a crime of omission. The sad fact is that not a single centavo of the government's much touted stimulus package, was spent in the first quarter.

Why? Well, Congress didn't pass the budget until mid-January, and the President didn't sign it until mid-March. Tapos na ang quarter.

So, is there hope of averting the recession? Yes! Please, households, don't try to save more at this stage of the game.

Because when individual households try to save more at this time, you might end up saving less because you might lose your jobs.

And please, government, spend that stimulus package in a manner that will end up in the pockets of the people rather than in the pockets of politicians.

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on June 1, 2009. Prof. Winnie Monsod is the resident analyst of News on Q, which airs weeknights at 9:30 p.m. on Q Channel 11.)

At least 22 million Filipinos are right now preparing to go back to school or start school for the school year 2009-2010 - which means cash out for tuition and other fees, books and other educational materials, not to mention clothing and transportation expenditures.

And while tuition is free in public elementary and high schools, average expenditures for the rest of the items are in the order of P15,000 - P20,000 per year.

Now, for tertiary education, tuition alone averages P437 per unit for the country as a whole, with tuition in Metro Manila almost double that - P855 per unit, which translates to tuition averaging P16,000 to P30,000 per year, although annual tuition can go as high as P125,000 a year.

Little wonder then that the higher the level of education, the larger the number of dropouts.

According to the latest Philippine Human Development Report, out of 1000 children who enter grade 1, by grade 2 some 140 will have dropped out, and by grade 4 another 100 will have dropped out.

Out of these 760 children who reach grade 4, only 670 will make it to grade 6, and only 650 children will actually complete the full elementary cycle of six years.

But the story does not end there.

Of those 650 who finish elementary school, only 580 will go on to high school. Seventy will dropout of these 580 and only 420-430 will graduate from high school.

Of those high school graduates, only 230 will enroll in college. It used to be 260 when I first started tracking these figures. Out of that 230 who go to college, only 120 of them will actually graduate, or obtain a college degree.

In sum, only 120 out of 1,000 Filipinos who start grade 1 will finish college, the other 880 will have dropped out along the way.

And the worst is yet to come: Of those 120, who finish college only 1 will come from the poorest of the poor - from families at the bottom 10% of the income ladder.

In other words, most of the dropouts are going to be from the lower income groups, whose poverty is perpetuated because they lack the necessary education and skills.

It is a vicious circle, which, as yet, the government has been unable to break.

Another way of illustrating the magnitude and depth of what has been called the crisis in Philippine education is to look at enrollment figures, as shown in the recently launched Philippine Human Development Report of 2008-2009.

The annual average growth rate in public elementary and high school enrollment over the 12-year period 1995-2007 was about 1.78%.

But one sees declining rates over the period, starting with 3.37% growth rate between first and second year of that time period, and ending with less than 1/3 of 1% between the 11th and 12th year.

And not only that: The absolute number of enrollment actually declined in school year 2005-2006 for the first time in recent memory.

At the college level, the same thing happened in school year 2002-2003 (from 2.47 million enrollees to 2.43 million) and in 2004-2005 (from 2.43 million to 2.40 million).

The bottom line so far, with respect to enrollment and dropouts, is that as of 2007, there were 1.84 million out-of-school youth ages 6-11, and 3.94 million ages 12-14; that a total number of out-of-school youth will be 5.8 million young Filipinos who will be eventually entering the labor force with very few skills, and not enough education to allow them to increase those skills and therefore their earning ability.

These almost 6 million unfortunate Filipinos should be the prime targets of the so-called stimulus package of this government.