GMANews.TV - Winnie Monsod Blog

What's up with the Comelec's Second Division?

nospam@example.com (admin) — Wed, 24 Feb 2010 20:44:20 +0800

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on Feb. 22, 2010. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

That Comelec is the center of attention at this time is not surprising. The May elections are fast approaching.

But the nature of that attention is another matter altogether, focused as it is on the credibility of the Comelec as an institution.

A joint House-Senate Committee chaired by Chiz Escudero and TeddyBoy Locsin has been showing concern about the Comelec's ability to handle an automated election .

In particular, the problem of delays in the Comelec's schedule — delivery delays, training delays, deployment delays, the problem of security, and the obvious lack of a back-up or contingency plan that can be activated in case something goes wrong with the machines, or something is shown to be wrong with those machines, these all have been haunting Comelec officials as well as our legislators — who got cold feet after appropriating P11 billion for Comelec's activities.

But that is not the only reason why attention is focused on the Comelec.

Quite apart from the problems of automation, there is the problem also of the Comelec decisions with regard to election protests, particularly those emanating from the Second Division, which for quite some time now has been the subject of rumors and speculation, and has gained notoriety among election lawyers.

This Second Division, composed of Nicodemo Ferrer as head, and Elios Yusoph and Lucenito Tagle as members, have handed down three very controversial decisions in which incumbent governors have been declared losers and asked to step down from their positions: the governors of Bulacan, Isabela and Pampanga.

What has captured the public's attention is not that a decision was made — resolving election protests are after all a primary responsibility of the Comelec.

It is not even suprising anymore that the length of time that it takes the Comelec to make a decision is almost the length of time of the term of office of the contested position — which is three years for every office except those of Senators, and the President and Vice President.

Rather, what has captured the public's attention, and possibly outrage, are the identities of those who, in effect, have been accused of cheating.

Yes, let's call a spade a spade here.

Because when someone is unseated, the default scenario is that he must have cheated to win in the first place. Or to look at it from another point of view, declaring someone a winner three years after elections took place is practically the same thing as saying that that person had been cheated, and the Comelec is just making things right.

The only problem is that in at least the Isabela and Pampanga cases, the public is incredulous about the implication of cheating on the part of the sitting governors, and instead suspects foul play on the part of, or with the consent of, the Comelec's Second Division.

Let's take a closer look at two of the cases, involving the provinces of Isabela and Pampanga.

Who were in effect found to have cheated? Grace Padaca in Isabela, and Ed Panlilio in Pampanga.

One was a radio commentator, the other a priest.

Neither of them have money, neither of them had political machinery — both of them were novatos — new to the political world.

And to cheat successfully in the Philippines, as we saw in a recent analysis, you need guns and goons, or gold. You need private armies, or you need the money to bribe either voters or counters.

Neither of which neither Padaca nor Panlilio had. They had volunteers who gave of their time and effort to help.

And yet, what did the Comelec's second division find?

In the case of Padaca, the Comelec managed to find enough evidence of cheating to overcome the 17,000 vote lead of Padaca, and make her opponent win 1,051 votes. That takes some doing, and it took Comelec 12,000 pages to do it, including, in some parts of the decision, referring to Padaca as Sarmiento, and to her opponent Dy as Tuazon.

In the case of Panlilio, not only did the Comelec's second division turn down his request for more time to raise funds for paying the costs of the case, but they seemed to have a strong desire to speed up the counting by allowing twenty teams of revisors at the same time instead of only the usual nine — and of course, that required even more funding than the usual.

Thus, Panlilio was left with only one revisor for every three that his opponent had — with the blessings of the Comelec's Second Division, who scoffed at Panlilio's plea, and asked him to use the "volunteers" he claimed to have had.

But there also seems to be more overt bias on the part of the Comelec Second Division.

Such as in the Isabela case, the name Faustino Dy was credited to Benjamin Dy for governor, while the names Gris Padaca or Grace Padacca, with a double c, was not credited to Padaca.

In the Pampanga case, the name Nanay Baby was credited to Panlilio's rival, but the names Ed and Among were not allowed to be credited to Panlilio.

And that's how Panlilio's slim lead of over a thousand votes vanished, and his rival won instead by over 2,000 votes.

With that kind of decision-making process going on in Comelec, is it any wonder that it is fast losing whatever credibility it had?

For shame.

Private armies and free elections

nospam@example.com (admin) — Thu, 11 Feb 2010 14:49:23 +0800

(Following is the transcript of the segment “Analysis by Winnie Monsod” which aired on News on Q on February 8, 2010. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 PM on Channel 11.)

As we draw nearer to election day, so many issues are cropping up that catch the public's attention – particularly those dealing with the success or failure of automated elections.

Let us make sure, however, that we do not miss the forest for the trees.

As Article II, Section 1 of our Constitution says, sovereignty resides in the people, and all government authority emanates from them.

This sovereignty is exercised by means of suffrage – which is the right and obligation of qualified citizens to vote for their national and local officials, as well as in the decision of public questions submitted to them.

The election involves voting and then counting (and canvassing), and if these two procedures go well, then, the people's choice will indeed come out.

But there is a problem.

Even as the people express their will through the ballot, that expression can – and has been –subverted many times.

When and how can this subversion take place?

At two points during the election process: During the voting, and during the counting/canvassing, that's when.

And how? The expression “guns, goons, and gold” says it all.

The subversion can be accomplished either by force – "guns and goons"; or by bribery – "gold"; or some combination of both.

The guns and goons are the private armies, which have been part of the Philippine scene for at least the past 60 years, and have figured tragically and prominently in elections.

What else do we know about private armies?

1. They operate with the blessings, or the active participation of military and police elements, which in turn may be because of the explicit or implicit blessings of Malacañang.

Take the case of Negros Occidental governor Rafael Lacson, circa 1951, who reputedly had a 1,000-man private army and claimed closeness to the President Elpidio Quirino, claiming to have been instrumental in quirino's election.

Governor Lacson was enraged when a guerilla fighter, Moises Padilla defied him and ran for mayor.

Even though Padilla lost the election, he was arrested on trumped-up charges, beaten, tortured, and paraded around the towns of Negros Occidental as an object lesson of what happens when you defy the governor, and then he was shot.

That is eerily similar to the case, almost 60 years later, of Maguindanao Governor Andal Ampatuan, who claimed closeness to Malacañang, who reputedly has at least a 1000-man private army with control over the police, who was indeed instrumental in the election of Gloria Macapagal-Arroyo to the Presidency, and who was displeased because Toto Mangudadatu defied him and filed his certificate of candidacy to run for governor.

That's how the maguindanao massacre took place.

2. Poverty and private armies seem to go hand in hand – the poorer the area, the larger the number and the size of the private armies.

Take the Autonomous Region in Muslim Mindanao (ARMM).

It is the region with the highest incidence of poverty in the Philippines, and probably the lowest human development index.

The latest military and police report states that of an estimated 170 private armies all over the Philippines, 102 (60 percent) are located in ARMM.

3. There seems to be if not active cooperation, at least complicity by the police and military when it comes to private armies.

In the Moises Padilla case, Governor Lacson's co-defendants included three police chiefs, several policemen, and some special policemen. And of course, also in Maguindanao.

4. Indeed private armies can be dismantled – but it requires determination, like that showed by President Ramon Magsaysay and President Cory Aquino.

In fact, between 1993 and today, it would seem that the number of private armies has decreased from 562 to 170 or 132, depending on whether we accept the Army’s or [Defense Secretary] Bert Gonzales’ figures.

But the size of private armies, however, seems to have increased – from an average of about 43 to an average of 76.

If these armies are not dismantled, not even a perfectly operating automated election system can guarantee that the sovereign will of the people in their choice of leaders from the president to the lowest local officials will be obeyed.

The guns and goons operating in certain areas may be sufficient to change the real vote of the people.

In sum, we have to be vigilant with respect to automated elections.

But, we must also demand that the army and the police dismantle these private armies if our elections are going to be truly free.

Everything you wanted to know about the C5 project but were afraid to ask

nospam@example.com (admin) — Tue, 02 Feb 2010 17:55:13 +0800

(Following is the transcript of the segment “Analysis by Winnie Monsod” which aired on News on Q on Feb. 1, 2010. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on QTV Channel 11.)

What are the specific charges against Senator Manny Villar?

Based on the Senate Report 780, stripped of all the legalese, the charges are that he used his position and influence to cause a government roadway — the so-called C-5 road extension project — to be built and that the road was unnecessary, financially disadvantageous to the government, and would actually yield him enormous financial benefits.

It was unnecessary, because there was already an existing project, the Manila-Cavite Toll Expressway (MCTEP), which was a Build-Operate-Transfer project to be built by private contractors.

It was financially disadvantageous to the government because the Villar-proposed project would be longer and would be built entirely by the government using public funds.

And it would result in tremendous financial benefit for Villar because it would pass right through his properties so that the government would have to pay him road right-of-way and at the same time, considerably enhance the value of those properties.

What exacerbates the situation is that the government, per the documentary evidence, paid much more for the right-of-way for the Villar properties than the other properties, that Villar allegedly used his position as a senator — in particular as the Senate Finance Chairman and then as Senate President — to make insertions that would ensure that his properties would be paid for right away.

Based on the Philippine Senate resolution 1472 filed by mostly Villar allies, the committee of the whole had no jurisdiction, that it adopted rules that were inapplicable, that it did not even publish the final rules, that there was an inadequate quorum reuirement; and most importantly, that Manny Villar was being singled out.

What does it then find?

Resolution 1472 finds that:

(1) there was no “double insertion” and that the same were actually “regular amendments”;

(2) that there is no realignment of the C-5 road extension project, much less one authored or done at the behest of senator Villar to secure that it passed through his real estate properties.

Why? Because there are two separate alignments: one is the C-5 road extension project, which is a public road; and the other is the MCTEP, a toll expressway project, which, if completed, would require the payment of toll for its use; and

(3) that there was no overpricing because the right of way payments were based on properly certified zonal valuations; that all requirements were complied with; and that there was no participation of villar or his staff in the acquisition of the properties.

What can we make of these conflicting opinions?

A picture is worth a thousand words.

A map prepared by GMANews.TV shows what the case is all about. [See: The C5 extension controversy: An interactive map]

Here, you see the original C-5 extension project, called the Manila-Cavite Toll Expressway Project.

The idea was that this would be a BOT project, with the private partner bearing the costs of construction, to be paid by future tolls, and the government’s exposure would be limited to P2.5 billion pesos which will be used to obtain right-of-way.

Here now is the new project.

We have super imposed the burnt orange line representing the new project again connecting SLEX to coastal road except it is very much longer and hits the coastal road farther along.

Here are the Villar properties.

On the basis of this map, it is clear that there are two alignments.

But it is also clear that one of them was unnecessary — why?

It has to be the burnt orange project, because the other project had been approved earlier.

It is also clear that the C-5 extension project is going to be more costly, first because it is longer, and second because it was built wholly with government funds; and third because of what the government spent on the road right of way for the old project will now be gone to waste.

Why will it go to waste?

Can you imagine the joint venture partner building this project which is a toll road, when a free road is almost right beside it — who will want to pay the toll?

And finally, it is very clear that the greater length of the C-5 extension project enables it to pass through all the Villar company properties — Golden Haven, Adelfa, Camella, Azalea.

There remains the issue of the overprice of the Villar properties.

Based on the documentary evidence that was presented in Senate Report 780, there were 22 properties that had to be bought to get a road right of way for the C-5 extension project.

The average price paid for the non-Villar properties was Php 2,422 per square meter.

The average price paid for of Villar properties was Php 11,519 per square meter for mostly raw land.

So, now i think we have sufficient basis, free of the posturing and screaming, to make our own decisions.

Why sugar prices are high

nospam@example.com (admin) — Mon, 01 Feb 2010 17:18:31 +0800

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on Jan. 29, 2010. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

With the growing attention on the prices of sugar, three questions have been asked:

Why are the prices of sugar going up?

Is there a need to import sugar?

Is the suggested retail price of sugar at P52/kg reasonable?

Let's take them one by one.

Why are the prices of sugar going up?

Actually, world prices of sugar have been rising since 2008, and are now the highest in 28 years, although at 30 cents per pound, they are still half of the levels they reached in 1981, which at that time was something like 60 cents per pound.

But over the past year alone, the world prices have roughly doubled. So why didn't we notice until now?

Because unlike in the case of rice or oil, sugar expenditures constitute a very small portion of the household budget.

The factors that contributed to the increase in world prices naturally have to do with a combination of demand and supply factors.

For one there has been reduced production in Brazil and India – which are two of the largest world sugar producers – due to bad weather, as well as, the diversion of sugar resources to ethanol production in the case of Brazil.

On the demand side, there is not only the growth of population, but also the stronger presence of what is called the "sweet-tooth" in consumers who are eating more candy and sweets.

As far as Philippine prices are concerned, the Sugar Regulatory Administration has mentioned the rising costs of production and the influence of the world price on mill gate prices.

And to that must be added that there has also been a not insignificant diversion of sugar resources to ethanol production, which in turn has been partly influenced by the effort to avoid agrarian reform.

Now what are the predictions with respect to world prices?

World prices will continue to rise at least up to next month.

The good news, however, it is expected that the increasing prices of sugar will encourage sugar producers to increase their production by devoting more acreage to it, diverting from other crops, and then the prices of sugar will come back down. What goes up must come down.

Second question: Do we really need to import?

There are two possible reasons for importing: One is that the volume of domestic production plus what is in stock, is less than the apparent domestic consumption or demand.

SRA Administrator Rafael Coscolluela, has stated that the production of sugar this year is actually greater than last year's production.

But what has happened – and this is really ironic – is that the increase in world prices has discouraged the smuggling of sugar into the Philippines.

It seems that the usual situation has been that world prices are lower than Philippine prices, but because of a 38 percent tariff on sugar, importing legally is too costly. So smuggling is resorted to.

But now that world prices are high, traders have turned to the domestic market.

The result is that apparent consumption, according to Coscolluela, has increased by 280,000 metric tons.

Computations made by the SRA show that while there is a current buffer stock of 300,000 metric tons to tide us over until the next harvest, the amount needed is 360,000 tons, so that there is need to import 60,000 tons.

However, if an attempt is made to control prices, all bets are off. You have to import more or there will be shortages.

Third question: Is the SRP of sugar at P52/kg reasonable?

Well, if we compare this price to the prices prevailing for example in India which is a very large producer of sugar the answer is yes because the prices in India come up to 51.50 rupees/kg which is about P52/kg in the Philippines.

If we are comparing that P52/kg with the landed price of imported sugar, including tariff, the answer is also yes because that price would be, including the retail mark up, something like P68.12/kg.

That's why, they are suggesting, if we are going to import sugar, to remove the 38 percent tariff.

Has Comelec failed to meet its own poll automation schedule?

nospam@example.com (Winnie Monsod) — Tue, 22 Dec 2009 15:53:49 +0800

If one were to judge how the Comelec is doing on automation based on its original schedule of activities, Comelec would be turning in a failing performance.

According to that schedule, delivery of the PCOS – the Precinct Count Optical Scanner – machines and the systems should have taken place between Nov. 11 and Nov. 16; the testing of these systems and machines should have started on Nov. 17; the field test should have taken place on Nov. 25, and if a second field test had been deemed necessary, it should have taken place by Dec. 5, so that Mock Elections could have been held on Dec. 12.

That was the original schedule. And none of those events have taken place as yet.

Of course, we know why: problems among the contractors delayed the approval and signing of the contract, and the notice to proceed was delayed by one and a half months.

So, the Comelec prepared a revised timeline last Oct. 10, which is posted on its website.

How is it doing, if we use this timeline as a basis for judgment? I'm afraid, not so good either.

According to that schedule, delivery of 12,000 PCOS machines should have taken place by last month, and 30,000 machines this month.

Instead, after two pilot runs conducted between October 15 and Nov 14, a "pre-production" run produced 120 units, and 100 of them, which will be used as training units, will be delivered "soon" (this from an email dated Nov. 26).

But the Comelec is apparently still sanguine.

Per the ICT consultant, production would have started in earnest at the beginning of this month, and the factory in China is capable of producing 3,000 machines per shift per day –supposedly 10 minutes to produce a machine.

But then the picture is spoiled when he also says that 83,000 PCOS will be produced in less than 60 days.

Less than 60 days? Can we do the arithmetic?

If 3,000 machines can be produced per shift, then it should take either slightly more than nine days to slightly less than 14 days to produce 83 thousand units, depending on whether two or three shifts a day are being used.

You know, even if only one shift were employed, it would take slightly more than 27 days!

So why are they talking less than 60 days?

Unless of course, they expect a very large rejection rate as far as quality control is concerned. Or, the ICT consultant cannot do simple arithmetic. Either way, I am not reassured.

Unfortunately the Comelec and its partners have become very defensive, and tend to label people who ask questions as obstructionist and sourgraping – as if we don't want automated elections to succeed. Of course we do.

But the higher priority is that the elections itself must succeed – whether automated or not.

So at the risk of being called obstructionist, there are some very important questions that must be asked the Comelec:

Number 1: Given the delays in the automated election system, at what point in time is Comelec going to evaluate whether complete automation can no longer be achieved, and fall back on Plan B? And what is Plan B?

Even assuming that the automated election system pushes through, there are many more ways in which cheating can take place.

Therefore, what is Comelec doing about implementing the safeguards that it promised, and the safeguards provided for in the election law (RA 9369).

Let me just name a few of these safeguards:

a) RA 9369 provides that "Once an AES or automated election system technology is selected for implementation, the Commission shall promptly make the source code of that technology available and open to any interested political party or groups which may conduct their own review thereof."

What is so important about a source code? Well, it is the set of instructions to the computer on its basic operations and on what to do with the election data in accordance with Philippine election laws.

Who gives the instructions? The programmer, provided by Smartmatic.

That's why those instructions should be subject to review.

b) another safeguard provided by RA 9369 is a random manual precinct audit – the election results of one precinct chosen at random in each congressional district will be tallied manually to validate the machine tally. And if there is a discrepancy (possibly indicating that the machine had been tampered with), that would signal that the rest of the precincts should be tallied manually too something is wrong.

There are other safeguards, this time promised by Comelec: that the PCOS would provide a voter verified paper trail so that the voter could be assured that his vote was recorded properly;
another safeguard the PCOS would be designed to inform the voter why his ballot was rejected, if it was rejected.

None of these safeguards have been implemented so far.

In sum, I am willing to attribute to Comelec the best of intentions. But it must also be reminded that the road to hell is paved with good intentions.

Arroyo has no business declaring martial law

nospam@example.com (Winnie Monsod) — Wed, 09 Dec 2009 16:55:58 +0800

(Following is the transcript of the segment "Analysis by Winnie Monsod" which aired on News on Q on December 7, 2009. Prof. Winnie Monsod is the resident analyst of News on Q which airs weeknights at 9:30 p.m. on Q Channel 11.)

The President's declaration of martial law in Maguindanao has sparked an enormous amount of controversy.

What should we make of it?

Is she justified, or is this just another of the Administration's "baka-sakali" ("what if") moves – like declaring a state of emergency or pushing for a people's initiative or trying for a constituent assembly?

To be able to answer that, we have to break the question into its component parts.

First, under what conditions can the President declare martial law?

The answer to this question is found in Article VII of the Constitution, dealing with the Executive Department.

Section 18 of that article says: "The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, where the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law..."

Are we clear on that, folks?

The only time martial law can be imposed is when there is invasion or rebellion – it has got to be actually occurring – it cannot be imposed just because there is an imminent danger of one, or because one is looming.

I make this distinction because, precisely, the 1987 Constitutional Commission removed that clause “imminent danger” which was present under the 1935 Constitution, and which was used by Marcos to impose martial law.

So now that we know that the President can declare martial law only if there is invasion or rebellion, and where the public safety requires it, the logical second question is: Do these conditions exist in Maguindanao.

Let us immediately rule out invasion, of course. Is there a rebellion in Maguindanao?

To answer that, we have to first define rebellion, and here, again, it is defined specifically in our Penal Code: "The crime of rebellion is committed by rising publicly and taking arms against the Government for the purpose of removing from the allegiance to said Government and its laws, the territory of the Philippine Islands or any part thereof... depriving the Chief Executive or the Legislature, wholly or partially, of any of their powers or prerogatives."

So there you have it: there is a rebellion if there is a public rising and taking arms against the government to deprive the Chief Executive or the Legislature of any of their powers or prerogatives.

Now that we know what a rebellion is, the next logical question is: Is there a rebellion in Mindanao?

Obviously, the President thinks so, and in her report to the Legislature (which she is required to give within 48 hours of declaring martial law), she specifically cites 2,413 armed combatants – note the specificity of the information – coming from various municipalities, possessing 2000 firearms/armaments.

Unfortunately, the numbers cited in the report do not add up – they look like they were very hastily put together: 2,413 armed rebels is given as the total with 2000 firearms.

But if we add up the numbers deployed in different areas, they come up to only 1,460.

And then at the end of that portion, there is a sentence that says: "the strength of the rebels is itself estimated to be around 800 with about 2000 firearms."

The picture one gets is that there is a rebel force of between 800, or 1,460, or 2,413 rebels, take your pick – with 2000 firearms.

And yet, the report also proceeds to talk about the firearm caches that they discovered, a lot of them military issue – enough arms, the military says, to equip a batallion.

They were also able to confiscate ammunition and various vehicles – plus high powered firearms and ammunitions – from the 400 security escorts of Datu Andal Ampatuan Sr.; plus the other weapons turned over when there was a big show of cancelling licenses of the civilian volunteer organizations. That's the President's version of what happened.

Needless to say, aside from the inconsistencies with respect to the count of the firearms and the so-called rebels, there are other things that don't add up.

For example, before the massacre, those who carried weapons, a lot of which were military issue, had the blessings of the Chief Executive and the military, and were called Civilian Voluntary Organizations.

But barely a week after the massacre, these very same people were now labeled rebels whose objective is to remove the allegiance of their province from the central government.

What is more, despite the fact that government forces arrested 62 of their leaders, including the Ampatuan patriarch, not one of the rebels fired a shot in their defense or protection.

Nor was any attempt made to resist the Armed Forces as they entered Ampatuan mansions and property to dig up weapons and ammunition and vehicles.

Have you ever heard of a rebellion in which, after only three days, the military is already claiming victory, with nary a shot fired? Please.

All of these lead to an inescapable conclusion: Yes, there is lawless violence in Maguindanao, which was unfortunately nurtured or acquiesced to by the central government and the military.

Yes, the President as commander-in-chief should send the army there to restore law and order. No, there is no rebellion. And therefore no, the President has no business declaring martial law.

What is more, if she insists on it and there are abuses, she may truly have a rebellion on her hands.

Alternatives to the campaign tax

nospam@example.com (Winnie Monsod) — Fri, 20 Nov 2009 18:44:15 +0800

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.

Why price controls will fail

nospam@example.com (Winnie Monsod) — Fri, 16 Oct 2009 15:01:04 +0800

(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.

‘Ondoy’ brings out the best and the worst in Filipinos

nospam@example.com (Winnie Monsod) — Sat, 03 Oct 2009 13:59:56 +0800

(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.

Still haunted by Marcos' martial law

nospam@example.com (Winnie Monsod) — Tue, 22 Sep 2009 15:02:54 +0800

(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.

Is there an oil cartel in the Philippines?

nospam@example.com (Winnie Monsod) — Tue, 15 Sep 2009 21:03:20 +0800

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.

A nation of whistleblowers

nospam@example.com (Winnie Monsod) — Fri, 04 Sep 2009 15:14:24 +0800

(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.)

Philippine President Gloria Macapagal Arroyo and her husband Mike Arroyo are driven to their destinations after arriving at Japan’s Narita airport for a four-day visit in June 2009. The President’s net worth more than doubled between 2000 and 2008, according to her statement of assets and liabilities. AP Photo

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.

Analysis: Arroyo's foreign trips

nospam@example.com (Winnie Monsod) — Tue, 18 Aug 2009 20:01:32 +0800

(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.

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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.

The business of drugs

nospam@example.com (Winnie Monsod) — Mon, 17 Aug 2009 20:24:53 +0800

(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.

SONA Analysis

nospam@example.com (Winnie Monsod) — Wed, 29 Jul 2009 14:33:20 +0800

(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.