(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.