Monthly Archives: October 2011

One payroll system for all public service employees

I support this idea of having a single payroll system that can cover all Philippine public service employees. Please read this article from the Philippine Daily Inquirer (30 October 2011).

Centralized gov’t payroll exorcises ‘ghosts’


3:36 am | Sunday, October 30th, 2011

MALACAÑANG has called in the ghostbusters to rid the government books of fund-sucking phantom personnel and spectral spending, a move that could well result in “billions of pesos in savings,” according to Budget Secretary Florencio B. Abad.

According to Abad, one of the ways the ghosts can be busted is by cutting short the money trail when making salary payments, mainly through a centralized payroll system for the national government.

“By the end of next year, employees of the executive branch, including policemen and soldiers, will receive their salaries in their bank accounts directly from the Treasury,” he told reporters and editors at dinner at the Inquirer on Thursday night.

The budget chief said this will address fund leakage problems related to compensation, including the nonremittance of premiums to the Government Service Insurance System (GSIS), the state-run pension fund for government workers.

According to Department of Budget and Management (DBM) data, the national government has almost a million employees.

“Before this and for the longest time, the DBM had no record of how many employees we are paying,” said Abad.

AFP, PNP cooperating

Abad said the government was finally able to make the shift in the way state salaries are paid out largely because it was finally able to get the cooperation of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP).

The biggest chunk of the government’s workforce is in the Department of Education (DepEd) at about 579,000, but data on DepEd is relatively easy to get hold of compared to that of the uniformed services, said Abad.

There are currently 146,000 people working for the PNP and 125,000 for the AFP.

According to Abad, the PNP and the AFP had previously “refused to provide us data so we could not put up a government manpower inventory system that we badly need.”

“Because of that, salaries come through each agency, but we want to change that,” he said.

Instead of the current system, the DBM will just authorize the release of salary funds and the agencies will only have to prepare the payroll, he said.

“We will work with the Civil Service Commission, Bureau of Internal Revenue and GSIS to come up with a single roster of employees. That way we can check if the numbers add up,” Abad said.

“We can save potentially billions of pesos and put an end to ghost employees,” the budget secretary said.

Cashless procurement

He said the government will also be pilot-testing a cashless procurement system where the AFP will use debit cards when purchasing supplies.

The debit cards, which may be issued to a responsible officer, will come with a set list of authorized items for purchase aside from the authorized amount of credit.

“We will do this with the AFP and the Commission on Audit,” Abad said.

He said this will address the long-tolerated practice of “converting” the use of funds, which thrives in the current system where expenses are covered by cash advances.

“With that system that covered 46 percent of military spending, we don’t know where the money comes from and where it goes,” Abad said.

Gov’t supply depots

“This time, we will be using government-run supply depots,” he said.

This has been made possible with Administrative Order No. 17 issued last July, which directs the use of the government procurement service and electronic procurement system.

Abad said the DepEd is already using the depots which are scattered in the regions to buy teaching supplies.

The Army also now buys soldier’s boots from such depots, he said.

“With this system, there is no need for bidding because you are purchasing from the government itself at prices that are 39 percent less (than from private-sector suppliers),” he said.

“More importantly, government officials’ need to hold money will be less and less,” he added.

Government reform, civil society participation and social safety nets

Please read this article from the Philippine Daily Inquirer (28 October 2011) on the key success factors for the Philippines according to Robert Zoellick, World Bank president during his first visit to the Philippines.

People power, transparency keys to inclusive growth, WB chief says

by Riza T. Olchondra 12:10 am | Thursday, October 27th, 2011
FIRSTHAND VIEW World Bank president Robert Zoellick reacts as a boy places Zoellick’s hand on his forehead in the traditional gesture of respect during his visit to a slum community to get a firsthand view of the government’s Conditional Cash Transfer program for the poor at suburban Pasay city, Wednesday Oct. 26, 2011.In their statement, Zoellick is in Manila for a visit “aimed at strengthening the Bank’s partnership with the Philippines as it pursues reforms for good governance and to overcome poverty.” AP photo/Bullit Marquez)


For the Philippines to achieve inclusive growth, it must build on the foundations of “people power” through government reforms, civil society participation and social safety nets, World Bank Group president Robert B. Zoellick said in a statement.

“The People Power revolution of 1986 opened an opportunity,” said Zoellick, who arrived in the Philippines on Tuesday. The multilateral agency said the visit was aimed at strengthening the bank’s partnership with the Philippines as it pursues reforms to improve governance and to overcome poverty.

Under the theme “Making Growth Work for the Poor,” the World Bank Group has been supporting the Philippine Development Plan. The multilateral agency said that as of September this year, it has a total commitment of more than $2 billion, with an additional $185 million from its private sector arm, the International Finance Corp.

Zoellick’s visit to the Philippines comes almost a month after President Aquino gave a speech during the Annual Meetings of the World Bank-IMF in Washington, DC, outlining his moves to boost good governance and accountability to benefit the poor.

“The World Bank shares the view that fighting corruption and boosting transparency are vital to development,” Zoellick said. “We know corruption is a drag on the economy, taxes the poor, and strangles opportunity, so I am looking forward to seeing firsthand and learning from some of the reforms President Aquino has put in place to improve governance.”

The focus on good governance could help boost economic growth as better governance would improve the investment climate as well as help ensure efficient public spending, he said.

While in the Philippines, Zoellick will meet President Aquino and the country’s economic managers. Zoellick will also meet with leaders and representatives of civil society organizations as well as the private sector.

A strong and engaged civil society could also combine with transparency and good governance to make for more resilient societies and stronger, more inclusive growth, Zoellick said.

The World Bank president will also visit a poor community to meet with people benefiting from the government’s conditional cash transfer program “Pantawid Pamilya,” which provides families with cash if they send their children to school and comply with health checks.

Launched in 2008 with support from the World Bank, the program has benefited about 2.2 million households that include 6 million children up through age 14.

Sugar free from the Philippines

Could this be the next sugar free substitute? Please read this article from the Philippine Daily Inquirer (29 October 2011).

Sweet solution to rising number of diabetics in the Philippines


9:25 pm | Friday, October 28, 2011
Maura de Leon grew up in a farming community in Bocaue, Bulacan, so she might say she has an insight into how her fellow farmers have been forced to eke out a living amid falling prices for agricultural produce, diminishing yields and the town’s hopes to be industrialized.

“Our connection to the land was intimate. We realized a long time ago that communities, no matter how sophisticated, should never shun the importance of agriculture. To ignore the importance of having dependable sources of food was to risk malnutrition and starvation,” says the 57-year-old president and CEO of Glorious Industrial and Development Corp., a company that manufactures various plant-based products.

Since 2002, De Leon’s company has been supporting some 30 families, teaching them the ways on how not to depend solely on rice crop.

“During my search for another useful crop, I came across the plant Stevia, a South American herb that has been used as a sweetener by the Guarani Indians of Paraguay for hundreds of years. The plant is mainly grown for its leaves as sugar substitutes, also called artificial sweeteners. When I was able to secure some samples, I decided this could be the key to help my community,” De Leon says.

But growing the Stevia in Bocaue proved to be a challenge, as De Leon spent years experimenting on the best way to raise and cultivate the plant.

“It is a very delicate plant to raise and you need to balance everything, the soil, water, the organic fertilizers as well as the amount of sunlight. Another challenging aspect is how to make Stevia a viable source of living. We were able get the assistance of the Department of Science and Technology personnel who taught us how to process the Stevia leaves into a marketable powdered form,” she relates.

Indeed, the Stevia has huge economic potential as the whole plant—from leaves down to the roots—tastes sweet, about 10 times sweeter than table sugar. Because of this, only a tiny amount is needed for sweetening the food products or in preparing drinks.

“But what is most interesting is that the steviol glycosides—the sweet extracts from the Stevia plant—are not metabolized by the body so there is no caloric intake. Even diabetics can use the powdered Stevia because it does not cause any unfavorable effects to blood sugar levels,” according to De Leon, who has, in fact, been serving the sweetener to several diabetics in her family.

Indeed, proponents claim that Stevia is a better option than regular table sugar because it is sweeter and has zero calorie.

According to Mayo Clinic, it’s not actually the Stevia itself that has approval for use as a sugar substitute but rather only certain highly refined Stevia preparations that contain rebaudioside A.

In fact, the United StatesFood and Drug Administration has declared certain highly refined Stevia preparations as “generally recognized as safe” or GRAS, which means that they can be used as sugar substitutes.

De Leon agrees that supporting the Stevia business will enable her fellow farmers and growers enough reason not to abandon farming. “We are also helping them build other forms of business, like teaching them how to use the Stevia products in their food preparation.”

She believes that with more research as well as more support for the Stevia business, the country may have a strong ally in helping the estimated 3.4-million Filipinos who are afflicted with diabetes.

PH economic problems are politically related

This is an unusual article (Business World 24 October 2011) written by an economist on his views the solutions to most of the Philippines’ economic problems are political. Interesting concept.
Thinking politically

To solve our economic problems, we have to think politically. Yes, you read that right. We need political solutions to economic problems. We don’t lack capital. Our savings rate exceeds the investment rate. There are 1.5 trillion pesos in Special Deposit Accounts in Bangko Sentral that banks are unwilling or unable to use for lending. With interest rates in the US and most developed countries near zero, there are trillions in capital that can be tapped for investment projects here.

We don’t lack technology. Technology can be imported especially in an age of globalization in markets, finance, and transportation. Singapore, for example, has powered its industries with imported technology in such areas as biotech, medicine, and IT. We can do the same.

We don’t lack skilled human resources. We have the scientists, engineers, doctors, and accountants, not to mention the craftsmen, plumbers, and electricians who can provide the soft capital for growth. We even have a surplus of human resources relative to jobs here. This is why we are exporting them.

We don’t lack natural resources. In fact, we have plentiful natural resources, compared to a country like Singapore or Taiwan.

What we lack is in the political realm — in the realm of institutions, governance, accountability, and rule of law. People normally ascribe their parlous material condition to “corruption.” However, “Corruption” is a catchall phrase because what we confront are problems of collective action, regulatory capture, rent-seeking, and patrimonialism.

The recent floods in Bulacan and Pampanga illustrate the political dimension of economic problems. Because of the floods, investors now hesitate to put up factories and generate jobs in those flood-stricken areas for fear of a repeat of the disaster. However, is climate change to blame for the floods or is it government failure?

Scientists have pinpointed fish pens impeding the flow of water to Manila Bay as a cause but nothing was done in the past to dismantle them. The state is too weak to assert public interest at the expense of narrow vested interests.

Furthermore, disaster prevention, response, recovery, and rehabilitation are public goods that the state must provide. However, the state has failed miserably to fulfill a major function, partly due to lack of resources: lack of money for dams, drainage canals, communications equipment, rescue boats, medicines, etc.

And why does the state perennially lack resources? Again, because it cannot assert the public interest at the expense of narrow, private interests. It gives away valuable communications spectrum instead of selling them. It gives away tax revenues in the forms of tax and duty-free incentives to economically and politically powerful groups, such as mining companies, renewable energy developers, cooperatives, etc.

How do we go about thinking politically to strengthen the state?

1. We need to separate the political class from the economic class. Only a political class that’s accountable to the people via credible elections can provide the power balance to the economic oligarchy.

To do this, most feasible idea at this point is the public financing of political parties, and possibly of electoral campaigns. Without public financing, the political class would be totally financially dependent on the economic oligarchy to fund increasingly expensive campaigns and its own political activities. The other alternative for the political class is to self-finance campaigns through its own corrupt money-making schemes, which undermines its will and capacity to do good governance. We have seen how the corrupt schemes in the Erap and GMA administrations can be very destabilizing.

2. We need to solve the collective action problem of the political class. Because of the absence of genuine political parties, the political class is simply outmaneuvered, outmanaged, and outclassed by the economic oligarchy. The economic oligarchy has its conglomerates and legions of agents who can do collective, unified action on its behalf. The political class, however, is dependent on kaklasekabarkadakabarilankanayonkumparekapamilya or other fragile ties cemented by personal relationships to do its unified, collective action. Because the political class lacks the organizational ability to act on behalf of the public interest, it’s too weak to confront the maneuvers and machinations of the economic oligarchy.

The vacuum of collective action in the public sphere is sometimes filled by religion (hence, the outsized influence of the Catholic Church in Philippine politics), an unhealthy characteristic for a supposedly secular society.

3. We need to strengthen the bureaucracy. The political class alone cannot act to balance the power of the economic oligarchy. By its nature, the political class has a very short-term orientation since it’s fixated on the next election. It also must raise money, somewhere, somehow, perhaps illegally or from donations given by the economic oligarchy, to be able to get elected again and remain in power.

We must strengthen the bureaucracy because it can complement and provide a balance to the political class: it can have a longer-term orientation than simply the next election, it can be professionalized so that merit rather than politics can be the basis for positions, and it can provide stability to policies since the bureaucracy will be there, irrespective of who gets elected.

Will mining companies invest in the country if the government can’t provide basic security? Will manufacturers invest if distributors of fake imported goods cannot be caught? Will farmers plant if their produce rots because the roads are too bad to transport goods on? The answer is obviously No, and not because interest rates are too high or the yield curve is too steep.

The path to economic progress doesn’t lie in economic reforms alone. We need to think politically. Making that connection — between politics and economics — is the real meaning of “kung walang korupt, walang mahirap.”

Calixto V. Chikiamco is a board member of the Institute for Development and Econometric Analysis.

For comments and inquiries, please e-mail us at

Article location : politically&id=40369

Growing a casino industry in the Philippines: Do we really need this?

In Australia, the government is introducing new legislation to control the opportunity of gambling’s dangerous effects on the community. At the same time, in the Philippines, the lure of gambling for tourists is slowly giving way to large scale Las Vegas and Macau size investments. I think there are better ways for economic growth than the promotion of gambling to generate jobs and provide a higher quality of life.


Gaming instinct: Growing casino industry in Philippines


9:43 pm | Saturday, October 22nd, 2011

MODERN slot machines offer multi-sensory experience that many players find hard to resist.

A crowd huddled around a group of slot machines tied together with a horse racing type of jackpot game.

The P1 million maximum limit for the grand prize is about to be reached which means that there will be a sure winner possibly within a few hours.  The suspense is made even more exciting with the increasing frequency of smaller jackpot prizes.  All seats are taken and big bettors play intensely hoping to be chosen at random by the machine.  Finally, the grand horse race begins.  The victor had a bet of P250 for the winning spin and competed with others who even put in more.

On another day, a chance visitor at the casino started her first few games on a 50-centavo machine.  A P25 spin (equivalent to P12.50) led her to win the grand carousel jackpot of almost P1 million.  It came as a complete shock and happened during idle and quiet hours at the casino.  In the previous days, another lucky P30 bettor won the approximately P3 million whopping prize.

Jackpots are the casino’s main attraction (that includes winning at the card games).  It is one reason why so many people spend a substantial amount of money.  But since there can only be one winner per jackpot, there are of course much more losers in the long run.  It is also common knowledge that the house always has the edge.

In an exclusive CBS network “60 Minutes” presentation, Lesley Stahl highlighted the burgeoning casino centers around the US as well as the possible addicting qualities of more modern slot machines, with some reference to heroin addiction.  While not everyone interviewed agreed that the machines are addictive (others say that it’s the people who get addicted since not everyone gets hooked), the report detailed how subliminal messages or images on the slot machines delivered constantly and speedily, can have some effect on thebrain.  There was also an example of a gambler who developed the addicting habit when the casino locationcame nearer her home.

In the Philippines, the above consideration comes in light of the country’s growing casino industry (extending to the provinces), one that has been compared with Las Vegas type developments.  A visit to Resorts World in Parañaque confirms such possibilities.  To date, it is the first integrated casino center in the country—during a recent holiday, the place was overflowing with foreigners and locals who filled the humungous gaming can like packed sardines on the brink of over stimulation.

THE privatization of Pagcor remains an unresolved issue in the country.

But it doesn’t end there.  The consortium of Belle Corporation and Leisure Resorts World Corp. (LRWC) has already started to build an even bigger, more impressive and integrated Manila Bay gaming resort complex, one that is faced with opposition from other sectors of society.  To date, Pagcor has already licensed four groups to implement the project:  Travellers International Hotel Group Inc. (of Resorts World), the SM group, Bloomsberry Investments, and the Aruze group.

Nevertheless, certain people have cited that building such a casino project in Manila Bay goes against a Supreme Court ruling:  “In a unanimous 36-page decision penned by Justice Presbitero J. Velasco, Jr., the Court ordered petitioner government agencies to coordinate    the cleanup, restoration and preservation of the water quality of the Manila Bay, “a place with a proud historic past, once brimming with marine life and, for so many decades in the past, a spot for different contact recreation activities, but now a dirty and slowly dying expanse mainly because of the abject official indifference of people and institutions,” in line with the country’s development objective to attain economic growth in a manner consistent with the protection, preservation, and revival of our marine waters.” [Supreme Court News, December 2008]

Manila Bay’s unforgettable, centuries-old history does not include casino gaming.  For many Filipinos who are predominantly Catholic, the issue of gambling is also a moral one.  Many years ago, the Catholic Bishops Conference of the Philippines (CBCP) issued an unequivocal statement on gambling, one that does not rule out all forms of gaming:

To inform the public better about the reasons for this CBCP position, we present the following moral teachings and pastoral imperatives:

1. The Catholic Church teaches that “games of chance or wagers are not in themselves contrary to justice. They become morally unacceptable when they deprive someone of what is necessary to provide for his needs and those of others. The passion for gambling risks becoming an enslavement” (Catechism of the Catholic Church, no. 2413). This moral teaching does not prohibit some forms of gambling in certain situations.  In consequence, it does not prohibit people or institutions, even church- related ones, from receiving benefits from such gambling.

2. However, applying the general moral principle to the specific Philippine situation, the CBCP has deemed it necessary to state on several occasions that the form of gambling that is organized, widespread, and systemic, whether legal or illegal, is not desirable. It is creating a culture of gambling that is seriously eroding the moral values of our people. In its illegal form, especially jueteng, gambling has bred a clandestine network of corruption that feeds itself on the hundreds of millions of pesos lost to gambling especially by the poor.

3. Therefore, the CBCP has made it a collective policy:

To denounce illegal gambling in all its forms and prevent its legalization;

To combat the expansion of organized and systemic legal gambling;

To refrain from soliciting or receiving funds from illegal and legal gambling so as not to promote a culture of gambling; and

To encourage church personnel and church institutions to refrain from doing the same, even when the objective may be that of helping the poor.

Given the factors stated above, it is at the very least, an opportune moment for the whole nation to weigh heavily on the multi-billion casino projects in the pipeline.  Tourism bigwigs face a predicament—would the Philippines want to become known as the next Macau in Asia, like a copycat of sorts—where many beautiful churches sit amid grand and magnificent entertainment structures?  As most people are aware, casino gaming is a major income earner in Macau.

During a recent one-on-one interview with Andrew Scott for World Gaming Magazine,  Francis Lui who launched the newest integrated resort Galaxy Macau in Cotai mentioned his country’s tourism challenge:  “We had 25 million people come to Macau last year, but they only stayed for 1.5 days on average.  Our belief is that we can drive that 25 million people up, but at the same time, hopefully have them stay longer with us, spending not just on the tables, but also in shopping, entertainment and dining.”

Investors are generally optimistic about the Philippines and it is only a matter of time before money is fully invested. It also appears that the government, under the leadership of Mr. Aquino, fully supports the upcoming projects.

The Philippines gaming report on details the local industry’s strong growth potential: “The gambling industry in the Philippines is worth an estimated P100 billion  ($2.08 billion per year), while illegal activities account for a further P50 billion  ($1.04 billion). Dean Macomber, speaking at a 2007 GEM expo in Manila, estimated that 66 percent of gaming revenues comes from operations in Metro Manila. He also provided an estimate of the future potential growth in gaming revenues, stating: “I estimate in 2007 Philippine gaming revenue reached $792 million. It’s not stretching things too far to say this market could be doing $1.8 billion in gaming revenue by 2013, even without Manila Bay Integrated City – that would amount to a doubling of the domestic market and a tripling of the VIP business.”

In view of its unique cultural and religious heritage, the country currently faces a critical national identity crossroad that needs to be addressed and defined by every Filipino. The prospects have been laid bare on the table. Consequently, it is the defining moment to speak up.

That is, if a few ordinary citizens even have the gumption to break the silence.

Looking out into the horizon, a virgin sits on the precipitous cliff of no return.  Her heart pulsates in quiet anticipation knowing intimately that her future will not stay uncertain for long…

photos by Ma. Esther Salcedo-Posadas, Contributor

Philippines is 136th best in Doing Business

The Philippines slipped a number of places two places in terms of World Bank’s Doing Business guide. That’s not good but then again even Australia slipped 4 places down from 11th to 15th.  The country has to make a number of reforms like other countries to raise its standings. Let’s hope next year would be better. Please read the details the following article from Business World  yesterday.
Philippines slips in Doing Business rankings

THE PHILIPPINES is lagging in terms of reforms aimed at making it easier for firms to conduct business, with the country ranking lower in a global comparison made by the World Bank and the International Finance Corp. (IFC).

Results of the latest Doing Business report — which measures regulations applied to businesses over their life cycle — placed the Philippines 136th out of 183 economies, down two places from last year’s report, with only one positive reform cited from two previously.

The country’s ranking in previous 2011 report was adjusted from 148th due to data corrections. The Doing Business 2012 also added access to electricity as a new indicator. Singapore was again ranked first.

“The Philippines and Singapore are not reforming as consistently as other East Asian and Pacific economies. In the case of Singapore, it’s clearly because it’s already at the top of the rankings, so there’s nothing much it can do in terms of changing its regulations. It’s a different story for the Philippines, because it still has a lot of reforms to make,” said Hans Shrader, IFC senior program manager, at yesterday’s launch of the publication.

The 2012 report focused on 10 areas of business regulation covering the four stages of the business life cycle: start-up, expansion, operations and insolvency. Specifically, the 10 indicators covered starting a business, registering property, getting credit, protecting investors, enforcing contracts, dealing with construction permits, getting electricity, paying taxes, trading across borders and resolving insolvency. An 11th measure, employing workers, was included as an annex.

The Philippines’ rankings were said to have worsened in seven indicators. Among others, the country was ranked 158th in terms of starting a business, down three places, while the getting credit standing fell ten notches to 126th.

Other drops were recorded for registering property (117th, down eight places), protecting investors (133rd, down two), paying taxes (136th, down nine), construction permits (102nd, down four), and resolving insolvency (163rd, down two).

The latter indicator, however, was where the country was cited as having conducted a reform that made it easier to do business. This was identified as the Financial Rehabilitation and Insolvency Act (Republic Act 10142), which became law last year.

“The Philippines was recognized for one reform on insolvency but it does not contribute to a change in ranking because the effects have not been absorbed by the population yet,” Mr. Shrader explained.

In the Doing Business 2011 report, the Philippines was praised for setting up a one-stop shop at the municipal level (starting a business) and improving its electronic customs systems (trading across borders).

Improved 2012 placings, meanwhile, were noted in terms of enforcing contracts (112th, up two places), cross-border trading (51st, up three) and getting electricity (54th, also up three places using data applicable to the 2011 report).

Overall, the country is still considered to have weak institutions and more expensive regulatory processes. Of the nine ASEAN members included, the Philippines outscored only one, Cambodia, which was ranked a close 138th. The only ASEAN member that was not part of the report was Myanmar.

Guillermo M. Luz, National Competitiveness Council (NCC) co-chairman and private sector representative, said at the press conference: “The consensus is for us to work on the simplicity of our business processes and strengthen our institutions to improve our rankings, but we cannot deal with a single factor at a time.”

“This requires applying reforms in a sustained fashion over time and a holistic approach to our problems, which require coordinated efforts with different agencies and the local government,” he added.

Trade Secretary Gregory L. Domingo, in a text message, said: “This (the latest report) indicates that we have to redouble our efforts throughout government to address areas of concern. The NCC is tasked to orchestrate the improvement of our rankings and NCC has been working hard on specific courses of action to address these deficiencies.”

“I have no doubt our scores will significantly improve in the next survey,” he added.

The NCC, which tracks the IFC Doing Business and the World Economic Forum Global Competitiveness reports, has aimed to put the Philippines in the top 30 or 50 by 2016. — E. J. Diaz

Article location : slips in Doing Business rankings&id=40326

AUS-PH relations 65 years old and growing strong

P-Noy meets Kevin during the 65th year of Australian-Philippine bilateral relations. This article from the Philippine Star (22 October 2011) which mentions this meeting being responsible for P-Noy in being late in his next meeting.

P-Noy, visiting Aussie official discuss Spratlys


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President Aquino exchanges pleasantries with Australian Foreign Minister Kevin Rudd during a courtesy call at Malacañang yesterday.
| Zoom

MANILA, Philippines – President Aquino candidly admitted yesterday that his discussion with a “Chinese-speaking” Australian foreign minister made him 30 minutes late for his next appointment, because they talked extensively about the disputed Spratly Islands.

Aquino apologized at the launching of the diagnostic center of the National Kidney and Transplant Institute (NKTI) on East Avenue, Quezon City, saying that the courtesy call of Kevin Rudd in Malacañang took longer than expected.

Rudd used to be prime minister of Australia. He arrived in Manila on Thursday for a two-day official visit.

It was Rudd’s first official visit to the Philippines since he was sworn into office on Sept. 14, 2010.

“We also have a varied relationship with them (Australian government) especially in diplomacy, issues on the West Philippine Sea, etc.,” the President said, adding he took the opportunity to take up the Spratlys issue to strengthen the cooperation between the two countries.

The Philippines and Australia cooperate in such fields as trade, defense, disaster risk management and education. Aquino revealed that Australia has promised to help build 5,000 classrooms next year.

The visit of the Australian official is one of the highlights of the 65th anniversary of the establishment of bilateral relations between the Philippines and Australia, which is being commemorated this year.

Aussie’s helping hand

On the side, Rudd promised Australia would contribute $31.5 million to the BRACE Program (Building the Resilience and Awareness of Metro Manila Communities to Natural Disasters and Climate Change Impacts) to help provide around 9,000 people with safe housing and access to water, sanitation and community disaster-preparedness training.

Rudd visited Taguig City yesterday where Australia will help provide around 9,000 people with safe housing and access to water, sanitation, roads and electricity, while also assisting with broader land-use planning and community disaster-preparedness training.

BRACE and Australia will also work with local organizations, such as the internationally renowned Gawad Kalinga, which provide cost-effective, safe housing for the poor.

“In genuine partnership with Taguig City and organizations such as Gawad Kalinga, we are investing in practical measures to ensure Filipino communities are safer and more disaster-resilient. It is hoped Taguig will serve as a model for other cities in Metro Manila,” Rudd said.

The BRACE Program is being piloted in Taguig City and will assist city planning with state-of-the-art digital elevation maps to model risks and vulnerability from flooding, earthquakes and high wind.

BRACE will also assist with the rehabilitation of major drainage canals and waterways that will potentially benefit tens of thousands of the poor in Taguig.

“The Philippines is the third most vulnerable country to natural disasters in the world, with an average of 20 typhoons making landfall annually, five to seven of which are destructive,” Rudd added.

“Recent disasters, such as typhoons ‘Quiel’ and ‘Pedring’ which have killed 101 people, affected 4.2 million, and left an initial damage bill of $333 million, reinforce the terrible cost of natural disasters in the Philippines. While we cannot stop earthquakes, typhoons or flooding rains, we can act to limit the loss of life, hardship and economic damage they regularly cause,” he said. – Pia Lee-Brago

Financing for home solar panels in the Philippines

Wow. What a unique idea. I have to congratulate Teddy Casino on his bill. Now let’s see whether the rest of Congress passing this into law. Please read the following article from

1-M solar-powered homes eyed to cut power costs

Posted By Michelle Del Gallego On October 11, 2011 @ 1:46 pm In Energy,News | No Comments

With the Philippines’ electricity rates now ranked as the fifth highest in the world, Bayan Muna Representative Teddy Casiño on Tuesday filed a measure that would help reduce electricity rates “by putting it in the hands of the people”.

Dubbed the “One Million Solar Rooftops Act”, House Bill 5405 mandates the government to encourage the use of small solar power systems in homes and business establishments through various financing packages and fiscal incentives.

Under Casiño’s proposed legislation, Pag-Ibig, GSIS and SSS will be mandated to offer soft loans for members who want to install solar power rooftops in their homes and businesses. The measure covers solar power systems with a capacity of 10 kilowatts (kW) and below for residential, and 500 kW and below for business establishments.

Pag-Ibig, also known as the Home Development Mutual Fund (HDMF), helps its members buy their houses. The Government Service Insurance System (GSIS) and the Social Security System (SSS) are pension funds of public and private employees, respectively.

The bill also requires electricity distributors like Meralco to allow small solar power users to feed excess power into the system and get paid for it through a net-metering arrangement, resulting in savings in their monthly bills.

“This measure will make ordinary electric consumers producers of electricity as well, thereby empowering them and opening up various options for reducing their electricity bill,” the party-list lawmaker said.

“If government is serious in implementing the RE (Renewable Energy) Law, it has to accelerate its permitting process, start awarding solar service contracts, and allow homeowners and commercial establishments to produce their own power needs by using their rooftops,” he added.

“It is hoped that through this, the demand for clean solar energy, as well as the opportunities for local manufacturing and related solar energy products and services, will increase,” the author stated.

The Trade Union Congress of the Philippines (TUCP) revealed early this week that the Philippines has the highest electricity in Asia and the fifth highest in the world. Other countries who belong in the top five are Denmark, Germany, Italy, and Austria.

Renegotiate IPP contracts

In a related development, the House committee on energy approved a motion to draft a resolution urging the Power Sector Assets and Liabilities Management (Psalm) to renegotiate the 19 contracts with independent power producers (IPP) sealed in the last 10 years.

“The country overpaid the IPPs by $10 billion dollars based on normal costing. The $10 billion would translate to 10 power plants. It is enough to take care of our power needs in 10 to 20 years,” Parañaque Representative Roilo Golez, a member of the House energy committee, said in a news conference.

Casiño, for his part, said that the review and renegotiation of 19 IPP contracts will reduce or totally do away with P74 billion worth of stranded contract costs that is being planned to pass on to electricity consumers via a monthly P0.36/kWh universal charge.

The House energy committee will also ask the Energy Regulatory Commission (ERC) to suspend ongoing hearings on Psalm’s petition to impose the said universal charge while the renegotiations are pending.

The universal charge is a pass-through charge imposed by Meralco for the recovery of stranded debt and contract costs of the National Power Corporation (Napocor).

Stranded debts are obligations left over after proceeds from power plant sales have been used to pay for debt originally meant for the construction of these facilities. Stranded costs are charges resulting from the rise of foreign exchange and fuel prices as guaranteed in the power purchase agreements between Napocor and IPPs.

Over the weekend, Meralco said it will increase its electricity rates to an average 14.19centavos per kilowatt hour


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An Urgency to Address Inequalities

The Philippines has been known for a lot of things good and bad. One unpleasant one is the very obvious economic inequalities present in society. The recent current events happening in other countries is only now exposing the reality that inequalities are also present elsewhere. This article (BusinessWorld 19 October 2011) written by the famous economist known to have predicted the GFC comes with the advice that there is an urgency required to address them. In the case of the Philippines, it is the hope the current administration addresses the problem with similar if not greater urgency if only to finally change this unpleasant image.


The instability of inequality

NEW YORK — This year has witnessed a global wave of social and political turmoil and instability, with masses of people pouring into the real and virtual streets: the Arab Spring; riots in London; Israel’s middle-class protests against high housing prices and an inflationary squeeze on living standards; protesting Chilean students; the destruction in Germany of the expensive cars of “fat cats”; India’s movement against corruption; mounting unhappiness with corruption and inequality in China; and now the “Occupy Wall Street” movement in New York and across the United States.

While these protests have no unified theme, they express in different ways the serious concerns of the world’s working and middle classes about their prospects in the face of the growing concentration of power among economic, financial, and political elites. The causes of their concern are clear enough: high unemployment and underemployment in advanced and emerging economies; inadequate skills and education for young people and workers to compete in a globalized world; resentment against corruption, including legalized forms like lobbying; and a sharp rise in income and wealth inequality in advanced and fast-growing emerging-market economies.

Of course, the malaise that so many people feel cannot be reduced to one factor. For example, the rise in inequality has many causes: the addition of 2.3 billion Chinese and Indians to the global labor force, which is reducing the jobs and wages of unskilled blue-collar and off-shorable white-collar workers in advanced economies; skill-biased technological change; winner-take-all effects; early emergence of income and wealth disparities in rapidly growing, previously low-income economies; and less progressive taxation.

The increase in private- and public-sector leverage and the related asset and credit bubbles are partly the result of inequality. Mediocre income growth for everyone but the rich in the last few decades opened a gap between incomes and spending aspirations. In Anglo-Saxon countries, the response was to democratize credit — via financial liberalization — thereby fueling a rise in private debt as households borrowed to make up the difference. In Europe, the gap was filled by public services — free education, health care, etc. — that were not fully financed by taxes, fueling public deficits and debt. In both cases, debt levels eventually became unsustainable.

Firms in advanced economies are now cutting jobs, owing to inadequate final demand, which has led to excess capacity, and to uncertainty about future demand. But cutting jobs weakens final demand further, because it reduces labor income and increases inequality. Because a firm’s labor costs are someone else’s labor income and demand, what is individually rational for one firm is destructive in the aggregate.

The result is that free markets don’t generate enough final demand. In the US, for example, slashing labor costs has sharply reduced the share of labor income in GDP. With credit exhausted, the effects on aggregate demand of decades of redistribution of income and wealth — from labor to capital, from wages to profits, from poor to rich, and from households to corporate firms — have become severe, owing to the lower marginal propensity of firms/capital owners/rich households to spend.

The problem is not new. Karl Marx oversold socialism, but he was right in claiming that globalization, unfettered financial capitalism, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct. As he argued, unregulated capitalism can lead to regular bouts of over-capacity, under-consumption, and the recurrence of destructive financial crises, fueled by credit bubbles and asset-price booms and busts.

Even before the Great Depression, Europe’s enlightened “bourgeois” classes recognized that, to avoid revolution, workers’ rights needed to be protected, wage and labor conditions improved, and a welfare state created to redistribute wealth and finance public goods — education, health care, and a social safety net. The push toward a modern welfare state accelerated after the Great Depression, when the state took on the responsibility for macroeconomic stabilization — a role that required the maintenance of a large middle class by widening the provision of public goods through progressive taxation of incomes and wealth and fostering economic opportunity for all.

Thus, the rise of the social-welfare state was a response (often of market-oriented liberal democracies) to the threat of popular revolutions, socialism, and communism as the frequency and severity of economic and financial crises increased. Three decades of relative social and economic stability then ensued, from the late 1940s until the mid-1970s, a period when inequality fell sharply and median incomes grew rapidly.

Some of the lessons about the need for prudential regulation of the financial system were lost in the Reagan-Thatcher era, when the appetite for massive deregulation was created in part by the flaws in Europe’s social-welfare model. Those flaws were reflected in yawning fiscal deficits, regulatory overkill, and a lack of economic dynamism that led to sclerotic growth then and the eurozone’s sovereign-debt crisis now.

But the laissez-faire Anglo-Saxon model has also now failed miserably. To stabilize market-oriented economies requires a return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of unregulated markets and the continental European model of deficit-driven welfare states. Even an alternative “Asian” growth model — if there really is one — has not prevented a rise in inequality in China, India, and elsewhere.

Any economic model that does not properly address inequality will eventually face a crisis of legitimacy. Unless the relative economic roles of the market and the state are rebalanced, the protests of 2011 will become more severe, with social and political instability eventually harming long-term economic growth and welfare.

Nouriel Roubini is chairman of Roubini Global Economics, professor of Economics at the Stern School of Business, New York University, and co-author of the book Crisis Economics.

Project Syndicate

Article location : instability of inequality&id=40124

Hard working but least productive down under

Australians are the hardest working people in the world. And the least productive. See this article from the Sydney Morning Herald (17 October 2011) on why this is so.


A hard day’s work a great waste, say Australians

Mark Hawthorne
October 17, 2011 – 3:00AM

AUSTRALIAN employees are among the hardest-working in the developed world, notching an average 44-hour week, but rank among the least productive, with $109 billion of ”wasted” wages each year.

One in three employees plan to quit in the next year, more than half say poor management has most impact on their productivity, and 18 per cent of the average working day is spent on ”work that wasted time and effort”. These are among findings of a study of almost 2500 Australian workers and their bosses by the accounting firm Ernst & Young.

”What we found is a highly motivated Australian workforce,” the survey team leader and Ernst & Young partner Neil Plumridge said.

”We are not a nation of slackers. We work harder than other developed countries in terms of labour hours and we are highly motivated to work,” he said.

”More than 70 per cent of us come to work every day with the best of intentions, which is something to be proud of. The problem is the productivity of our workforce.

”The hours are good and the intentions are good, but we found an incredible amount of wastage once we all get to work.”

The total wages bill for Australian workers is estimated to be $606 billion a year. ”Given that 18 per cent of our time at work is wasteful, ineffective and not valued, that’s $109 billion waste in annual wages,” Mr Plumridge said.

”Even if we can get a 10 per cent improvement, that’s worth more than $10 billion a year to the national economy.”

The inaugural Australian Productivity Pulse survey found management issues (54 per cent), organisation structure (23 per cent), lack of innovation (15 per cent) and outdated technology (8 per cent) are cited by employees as the drains on productivity. Mr Plumridge said productivity had been on a 10-year decline. That view is supported by Graham Bradley, departing chief of the Business Council of Australia.

Mr Bradley said last week the nation had endured decades of ”mediocre growth and declining opportunity” due to a productivity slump. In a Sydney speech, he called on employers and workers to ”strike adult agreements with each other to embrace technology, improve productivity and share the benefits”.

Despite the backdrop of falling productivity, Australians are generally happy at work, with 68 per cent saying they were ”proud to work for their employer” and 68 per cent believing their work was valued.

The Ernst & Young survey also found that older workers are more motivated to perform – and are less interested in pay – than their younger counterparts. Salary tops the list for workers up to 35.

In contrast, less than 10 per cent of workers 45 and over cite pay as their key motivator for working. ”One of our key findings is that older workers are much more motivated by the satisfaction of simply doing a good job,” Mr Plumridge said.

The report found 32 per cent of workers plan to leave their employer in the next 12 months, including 44 per cent in retail.

with Clancy Yeates

This story was found at:

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