Monthly Archives: September 2014

The Philippine President wants more (solar) power

With a pending power crisis looming in the horizon, the President now comes out openly supporting investments in solar power. Let’s see how we can support the investment needed in this area.

From The Philippine Star
Noy wants more investments in renewable energy
By Aurea Calica (The Philippine Star) | Updated October 1, 2014

MANILA, Philippines – Invest in renewable energy to ensure adequate power supply that would not be harmful to the environment, President Aquino urged the energy sector yesterday.

The President also gave assurance that his call for Congress to grant him emergency powers to enable the government to contract additional generating capacity was only meant to address the shortage in the summer of 2015. He said the initiative would make sure the economy would not lose momentum.

“It is of absolute importance that we continue exploring and investing in clean and renewable energy sources,” Aquino said in his speech at Energy Smart Philippines 2014, which was organized by the European Chamber of Commerce in the Philippines and the World Bank’s International Finance Corporation.

“As we pursue such projects, we remain fully aware of our obligations to future generations of Filipinos. This is why, despite our status as a developing country, despite the need to industrialize further and despite our historically low carbon emissions, we are still doing everything in our power to maintain and improve our low-emission development strategy,” he added.

He said investors should consider the long-term effects of their ventures on the environment, as the government’s goal for the energy sector has always been for reliable power that is “preferably clean” and “reasonably priced.”

Aquino noted that during his speech before the United Nations headquarters in New York last week, the country’s voice was added to what had become a universal call against climate change.

“I spoke of our country’s experience with the new normal caused by climate change, about how countries like ours, despite being less industrialized, bear a disproportionate amount of the burden. I emphasized the necessity of unity: how we must end the era of debating each country’s individual obligations, and instead embark on a concerted global effort to address the issue, with each of us doing everything we can,” Aquino said.

The President said his administration remains committed to the National Renewable Energy Program, which is aimed at adding 9,931 megawatts of renewable energy-based capacity by 2030.

He said the country was making early strides, citing the inauguration of Phase 1 of the San Carlos Solar Energy Facility, which would produce 22 MWs of solar power.

Aquino said they were also looking to incentivize the entry of around 450 more MWs of solar power, with the Department of Energy endorsing to the Energy Regulatory Commission the expansion of the installation target for solar power under the Feed-in-Tariff System.

Saying diversifying energy sources is not the only way to minimize carbon footprint, the President said the Department of Energy (DOE) has undertaken large-scale projects that would reduce consumption.

He cited the Philippine Energy Efficiency Program (PEEP), which involved the distribution of 8.6 million compact fluorescent lamps.

“It has reduced power demand, I’m told, by as much as 240 megawatts in the evenings, and annual consumption by 306 gigawatt (GW) hours,” he said.

Through the PEEP, he said the DOE replaced the lighting systems of national and local government offices, and retrofitted a number of public lighting systems, reducing annual power consumption by 11.05 GW hours and 4.42 GW hours, respectively.

With the help of the Asian Development Bank, Aquino said the government was looking forward to the first delivery of e-tricycles for the e-vehicles project. He said the DOE is in the process of procuring 3,000 e-tricycles, which is expected to be completed by next year.

“This will be the first step towards our goal of replacing 100,000 gas-fueled tricycles with electric ones, which will reduce our carbon footprint further, as well as our dependence on oil,” Aquino said.

The President said the country’s growing power needs should be met, citing the potential 300-megawatt shortfall of energy in 2015, which some project to be as large as 1,000 MW.

“Such a situation necessitates steps to ensure energy supply if a shortfall does arise, which is why we have asked Congress for a joint resolution authorizing the national government to contract additional generating capacity,” he said.

Energy saving measures

Meanwhile, Energy Secretary Jericho Petilla said the government is eyeing mandatory energy saving measures as Congress decided not to immediately grant emergency powers to the President to address a looming power crisis.

He cited the need for the public to consider using their air-conditioning unit at 25 degrees during summer, adding that an inspection could be done to ensure compliance.

The energy chief said those who could not self-generate electricity but are big consumers would have to be inspected as well.

“One of the things that we are also trying to exempt are those with solar, certain capacity, because they don’t get from the grid so we will exempt you. But these are just some suggestions that we’ll give to lawmakers,” Petilla said.

“We will get from Meralco (Manila Electric Co.) and from all ECs (electric cooperatives) the (list of) heavy users and see if we can ask them to reduce their consumption even just for summer,” Petilla said.

He said possible penalties could be discussed with the lawmakers in case mandatory energy saving measures would be implemented.

However, he admitted it might be difficult to enforce on all households so they would just have to appeal to families to conserve energy.

He also cited the Interruptible Load Program (ILP) to generate additional power requirements next year, which would no longer pass through the Energy Regulatory Commission. Under the program, big establishments will be asked to operate their own generator sets if the grid operator projects a need to augment generation capacity.

“We still have to deal with the intricacies of ILP but it’s still an option,” Petilla said. – With Iris Gonzales

All Government help should have a term limit

In the Philippines the lack of public services is a given. So government is always pressed to introduce new ones to answer this reality. However the danger of offering new services or benefits even if it is for the poor is whether it has the capacity to sustain it. Or whether it is the right one in the first place. Still, my Keynesian Liberal mindset would rather prefer help is available than no help at all. But I think once the help given gives them a sense of entitlement than its time to end it. Maybe all government help has to have a term limit. In that way, everybody knows its only available for a limited time.

From BusinessWorld Philippines

September 25, 2014

We need better thinking on poverty and development

THE PHILIPPINES TODAY is a country of contradictions: it proclaims economic growth with rising unemployment, good governance with deteriorating infrastructure and broken transportations systems, progress with worsening traffic, and pleas for tolerance and gender equality with increased incidents of rape, teenage pregnancies and marriage annulments. But then, this is what happens when one wants all for nothing.

Unfortunately, this government’s vision (if it has one) does not seem to work for the simple reason that it cannot align with reality and common sense.

Consider that even though Filipinos are taxed the highest in ASEAN but with the lowest of wages (P5,500 a month will get you classified as middle class), it also has the highest unemployment rate. But what’s really disturbing is that almost 80% of our unemployed are from below 35 years old, the age considered most productive and yet formative. And 20% of the unemployed are college graduates.

The foregoing is within the context of the Filipino working among the longest hours. And those work hours do not include the two- to four-hour commute to and from work that many Filipinos go through every day, commuting hours that could get longer (according to the government itself).

Our people pay one of the most expensive rice in Asia, we have water scarcity among floods, and constant threats of power shortage.

The government’s solution, which is to throw money at the poor (via the Conditional Cash Transfer, or CCT), has not worked. And it doesn’t apply to our unemployed but educated population. Not only is there work scarcity, the disincentive to work is even greater.

I’ve long railed at the government’s progressive policy mind-set that, as David Brooks puts it, “aims to place individuals in unmediated dependency on a government” and encourages an entitlement culture. The President’s characterization of himself as the “father of the country” is indicative of that. But this has reached the level of ridiculousness: why make people dependent on the government when it can’t be depended on?

Because from the beginning, it can’t. Our society was constructed along the lines of self-governance and personal accountability, not “progressivism.”

But, in words that are applicable here, Paul Ryan (in a Wall Street Journal opinion piece) aptly describes the pitfalls of such thinking: “Over the years, we’ve slowly been adding to the number of benefits that government provides to an increasing number of our citizens. Some of those benefits are worthy, laudable commitments, but others aren’t really the responsibility of government or the kind of thing we can afford. If we keep on this way, we’ll reach a tipping point where there are too many people receiving government benefits and not enough people to pay for those benefits. That’s an untenable problem.”

There are severe limits to what the government can do, despite its propensity to think otherwise: “the tipping point we’re approaching is the result of a liberal progressive mind-set that seeks a larger, more active government and lets bureaucrats decide what’s best for everyone instead of allowing citizens to govern themselves. Its response to every social problem is more government, more bureaucracy and more taxpayer money.”

This column has warned repeatedly about the dangers of such an entitlement culture. But now, scientific data may even show that welfare entitlements like the CCT, no matter how huge the allotment, are futile at best.

The Economist reported a study published in the British Journal of Psychiatry that found that “families which had started poor and got richer, the younger children — those born into relative affluence — were just as likely to misbehave when they were teenagers as their elder siblings had been. Family income was not, per se, the determining factor.

“That suggests two, not mutually exclusive, possibilities. One is that a family’s culture, once established, is ‘sticky’ — that you can, to put it crudely, take the kid out of the neighborhood, but not the neighborhood out of the kid. Given, for example, children’s propensity to emulate elder siblings whom they admire, that sounds perfectly plausible. The other possibility is that genes which predispose to criminal behavior (several studies suggest such genes exist) are more common at the bottom of society than at the top, perhaps because the lack of impulse-control they engender also tends to reduce someone’s earning capacity.

“Neither of these conclusions is likely to be welcome to social reformers. The first suggests that merely topping up people’s incomes, though it may well be a good idea for other reasons, will not by itself address questions of bad behavior. The second raises the possibility that the problem of intergenerational poverty may be self-reinforcing.”

Our constitutional system espouses the principles of subsidiarity, solidarity, virtue, strong traditional families, self-responsibility, and the common good. All of these have specific meanings that have centuries of thought and experience behind them. Perhaps the government would like to acquaint itself with these before tinkering around with progressive social programs that do nothing but throw away huge amounts of the people’s money.

Jemy Gatdula specializes in international economic law (WTO and ASEAN), and teaches international law and legal philosophy at the UA&P School of Law and Governance.

Mr Gatdula is also on Facebook and Twitter

Article location : need better thinking on poverty and development&id=95075

One way to promoting Filipino cuisine

Having lived outside the Philippines the past 20 years and in a country where Filipino cuisine is yet to become mainstream like Chinese, Thai, Vietnamese or Malaysian cuisine, I had always wondered how to further promote its flavours. To locals, they will find a lot of the dishes tend to be sweet unlike the other Asian cuisine which tend to be spicy which they would be the typical Asian flavour. And I thought maybe one approach is to promote in way where locals can be comfortable to try it and hopefully develop a taste for it. Like feature the many barbecue dishes Aussies are fond of cooking. However, may be there another way which this writer suggests.

From BusinessWorld Philippines

September 10, 2014

Will Filipino cuisine find a global niche?

THERE IS REALLY no overall marketing effort to define and market Filipino cuisine abroad the way fashion, furniture, whale watching and beaches have been promoted. Usually, Filipino restaurants in Singapore, Vancouver or New York can be found in little nooks next to a “padala center” for parcels and money remittances and Filipino grocery stores. Bundling it with other for-Filipino-only services makes the food appetizing for expatriate natives only.

Why has Filipino cuisine not graduated from local home cooking, comfort food, and noisy restaurants with singing waiters to international status? Is it the brown sauce that seems to douse everything we eat that turns off even the adventurous foreign palate?

Without losing its native allure, standards like oxtail in peanut sauce or chicken and pork cutlets in vinegar and soy sauce, if so described, can be imbued with a certain familiarity to make it less forbidding. Let’s set aside the truly frightening viands like the innards of a pig cooked in its own blood or that partially formed duck fetus with feathers, swimming in its amniotic fluids accessed by breaking the shell and throwing the whole content down the gullet. The latter is a favorite test for survival reality programs. The shock approach is an obstacle in marketing our dishes globally. We promote this “balut challenge” with foreigners visiting us all the time.

The emergence of Filipino fusion (FF) takes native cuisine out of its family-style setting intended for diners around a table sharing common meals, with or without serving spoons, and gobbling of unknown parts with the hands. Gone with this nouvelle presentation is the 30-viand extravaganza showcased in stainless pans (reminiscent of hospital bed pans) behind a steamy glass or arrayed in a long buffet table with little candles burning under the chafing dish to prevent sauce from coagulating, until a bit later when the food makes its way to the arteries.

The traditional way of serving oneself from a buffet table results in a plate heaped with predominantly earth-colored odds and ends covering a mound of rice for later hunting and pairing, with the likelihood of flicked food stains on the diner’s shirt with the unfortunate color of something already through the digestive stage.

FF servings are tiny and intended for solo consumption, much like Western cuisine. These are artfully presented, with sauces merely daubed on the side, featuring designs associated with Rorschach tests. (“I see a bat trying to yawn.”)

Familiar dishes in smaller portions are deconstructions of grandma’s recipe, allowing substitution of ingredients, say caviar or anchovies for shrimp paste or corned beef (not the one out of a can) in the traditional sour soup. In keeping with this acquired stylishness, meats are tender and cut into bite-sized pieces to do away with the necessity of using hands to steady the meat for lupine tearing from the bone and lengthy mastication, later requiring generous use of dental floss.

It is perhaps the rise of culinary schools, themselves descended from Swiss or Californian counterparts, that has driven graduates to experiment with small restaurants and demonstrate such acquired skills as “plating” — or how to serve a meal aesthetically, even using different shaped dishes and flatware that is distinctly not identified with cafeterias or hospitals. Newly minted chefs introduce elements of edibility, freshness and new-age eating options, enshrined by those striving for wellness. Photogenic food that looks seductive in a menu is the ultimate goal.

This combination of new chefs (with even more coming out of the pipeline), new malls featuring smaller restaurants following the paradigm of cinemas with fewer seats and more options, and a growing new age consciousness of wellness have introduced fresh approaches to Filipino cuisine. Introduced too in this movement are less fatty food and a reduced intake of salt.

This nouvelle approach discards the implicit yardstick applied to Filipino restaurants which equates allure with quantity. A stuffed stomach is no longer the gauge for good food. The concept of “sulit” or getting one’s money’s worth in terms of a heaping plate or the number of viands on offer is giving way to subtle tastes and smaller servings.

Only when the aesthetics of gastronomy are honored can we join the ranks of international cuisines like Thai, Vietnamese and, dare we say it, Chinese and Japanese which even introduced new eating implements in the chopstick. Our food must look non-threatening even if the taste will be surprising (think ox tripe). While eating light is hardly a characteristic of our food culture, it is the only way our brand of cooking can travel.

Anyway, we can still go native and heap our plates full with sauces competing for attention in the plate and palate. This is an option we always have with home cooking. The only fusion that happens at home is between masticating molars.

A.R. Samson is chair and CEO of Touch DDB.

Article location : Filipino cuisine find a global niche?&id=94290

More power from the Philippine Sun

Its nice to know 300 MW of solar power is expected to be generated in the Philippines. Let’s hope there will more to come.

From BusinessWorld Philippines

September 09, 2014

Nine solar projects in pipeline with total capacity of 300 MW

NINE COMPANIES bagged contracts to develop solar-powered projects across the country with a combined potential capacity of over 300 megawatts (MW).

Data from the Energy department showed that Luzon will get the biggest share of the new projects totaling 175.2 MW.

Two projects will be developed in Bataan — Next Generation Power Tech Corp.’s 20-MW plant in Mariveles and BWST, Inc.’s 150-MW plant in Orani.

Solar Phil Commercial Rooftop Projects, Inc., on the other hand, will have a 700-kilowatt project in Biñan, Laguna and a 1.5-MW project in Quezon City.

A 3-MW plant is planned by Solar Pacific Energy Corp. to power parts of El Nido in Palawan.

In the Visayas, San Carlos Solar Energy, Inc. will build an 18-MW solar facility in La Carlota, Negros Occidental.

A 50-MW plant is also being planned by Sulu Electric Power & Light (Phils), Inc. for a site straddling the municipalities of Tacloban, Sta. Fe and Palo in Leyte province.

Meanwhile, three companies will build five solar facilities in Mindanao.

Enfinity Renewables, Inc. secured contracts for three 10-MW projects — two of which will be located in General Santos City, and one in Polomolok, South Cotabato.

A 12-MW plant will be built by Asian Greenergy Corp. in Kibawa, Bukidnon, while Cagayan Electric Power & Light Company, Inc. will have a 20-MW facility in Laguindingan, Misamis Oriental.

Latest data from the department showed that as of July 31, the government already awarded 78 service contracts for solar projects with an aggregate capacity of 1,287.20 MW.

Under evaluation are 13 more contracts with potential capacity of 128.50 MW.

The Energy department earlier granted four contracts for Sunwest Water and Electric Co.’s (SUWECO) wind farms.

SUWECO will develop the 10-MW Napsan project in Puerto Princesa City in Palawan and the 2-MW Odiongan project in Romblon.

Also in the pipeline are two projects in Albay: the 10-MW Dapdapan plant in Legazpi City and the 5-MW Misibis plant in Cagraray Island.

SUWECO’s projects brought the total awarded contracts for wind plants to 51, equivalent to an aggregate capacity of 2,084.50 MW as of end-July. — Claire-Ann Marie C. Feliciano

Article location : solar projects in pipeline with total capacity of 300 MW&id=94225

16 years of Trillion peso spending for easing Metro Manila congestion

Wow. According to this Japanese expert it will cost so much money and so long a time before we can get Metro Manila to enjoy being free of congestion. It this possible? Most likely not. But maybe we should try what we can in the two years left of this current administration and spend as much money in infrastructure. A real stimulus spending program. What do you think?

From BusinessWorld Philippines

September 24, 2014

NCR solution to need half of outlay for infrastructure

IT WILL TAKE about half the country’s infrastructure budget for 16 years to substantially ease congestion in the National Capital Region (NCR) and surrounding areas, a Japanese aid consultant and a socioeconomic planner said yesterday.

“The overall cost of ‘Dream Plan’ is P2.61 trillion, while P4.756 trillion is the so-called budget envelope. The budget envelope is not the actual budget but it includes totals fund that can be mobilized by both public and private sectors for infrastructure development in the country,” Shizuo Iwata, project manager of Japan International Cooperation Agency’s (JICA) “Dream Plan” to decongest Metro Manila by 2030, said in an e-mail.

Pablito M. Abellera, who heads the Transportation Division of the National Economic and Development Authority’s (NEDA) inter-agency Infrastructure Committee, confirmed that “[t]he P2.6-trillion overall cost of the ‘Dream Plan’ is part of the P4.756-trillion estimated overall infrastructure budget until 2030,” which in turn is equivalent to 5% of gross domestic product for the period.

The NEDA Board, led by President Benigno S.C. Aquino III as chairman, approved on June 19 JICA’s 16-year Road map for Transport Infrastructure Development for Metro Manila and its Surrounding Areas, known simply as the “Dream Plan.”

The road map study, conducted from March 2013 to last March, outlined a plan towards 2030 for sustainable development for Metro Manila, Central Luzon (Region III) and the Cavite-Laguna-Batangas-Rizal-Quezon (Calabarzon or Region IV-A) that will require P2.61 trillion ($65.3 billion) in investment and a budget of P4.756 trillion from 2014 to 2030.

It also outlined a P520.44-billion short-term program for 2014-2016 consisting of: P305.465 billion worth of expressways and roads; P178.823 billion worth of railways; P12.085 billion worth of sea ports; P11.368 billion worth of airports; P8.340 billion for bus systems; and P4.359 billion for traffic management projects.

NEDA’s Mr. Abellera explained that an estimated 52% of the short-term program will be financed by a mix of official development assistance (ODA) fund and government funding, while the balance will consist of private sector investments.

“[F]or medium- and long-term projects amounting to about P2 trillion, a third of it will come from the private sector and the remaining is through the combination of government and ODA,” he added.

The road map emphasizes the need to establish better north-south connectivity, a hierarchy of various transportation modes (i.e., roads, railways and mass transit systems), planned and guided urban expansion to adjoining provinces through integrated public transport, affordable housing for low-income groups; expand multi-modal public transport networks; and strengthen traffic management systems.

The “Dream Plan” includes construction of 504 kilometers (km) of intercity and urban expressways, 137 km of other roads, and 318 km of railways.

Maps provided in the summary of the JICA study showed that the bulk of Metro Manila’s roads would have traffic volume way beyond designed capacity “if nothing is done by 2030.”

If the road map is implemented, it is expected to yield economic savings of P1.2 trillion a year starting 2030, public transport fare savings of P18 per person per day, travel time reduction by 49 minutes per person per trip, and additional toll and fare revenues of P119 billion annually.

Sought for comment, Budget Secretary Florencio “Butch” B. Abad said in a text message yesterday: “I don’t think funding — while the requirements are huge and may not be readily available — is the real issue.”

Mr. Abad explained that key hurdles to the “Dream Plan” would be “first, the ability of government agencies and their counterparts in the private sector to absorb such a huge budget and, second, the ability of the present traffic situation to accommodate more congestion with the additional construction activities that will take place.”

He noted, for instance, that there is “money for the EDSA national road rehabilitation but we cannot implement the project because of… aggravation of the already-congested main artery.”

Michael Arthur C. Sagcal, spokesman of the Transportation department, said his agency’s part in the “Dream Plan” is to roll out and implement infrastructure deals aimed at decongesting Metro Manila.

“Our rail projects, for instance, will move more motorists and commuters off of the roads and on to rail systems,” he said via text.

The Transportation department, Mr. Sagcal said, should be able to complete by 2019 roughly P147 billion worth of rail projects, namely: the P64.9-billion Light Rail Transit (LRT) Line 1 Cavite Extension; the P62.7-billion Metro Rail Transit (MRT) Line 7; the P9.7-billion MRT Line 3 Capacity Expansion; and the P9.7-billion LRT Line 2 Masinag Extension.

“[Y]ou may note that we are able to bring down government cost, as in the case of LRT-1 Cavite Extension, where the P35-billion component for infrastructure was absorbed by the private sector partner, which even put in a… premium of P9.35 billion,” Mr. Sagcal said.

The LRT-1 extension deal was awarded on Sept. 13 to the group of Metro Pacific Investments Corp. and Ayala Corp. which offered the premium on top of project cost.

Article location : solution to need half of outlay for infrastructure&id=95013

A different kind of hypocrisy required

I would like to believe despite all the news available in the Philippines, majority of people working in the public service observe the high and moral road. Still, this everyday focus on corruption present in the country is not doing any good. Imagine the many potential foreign investors who are considering to invest in the country. It will take a lot more of thought and consideration will be required to disabuse their first thoughts of the country when they come across such news about it. Let’s hope they developed instead a different kind of hypocrisy where despite all the bad news reported they continue to believe good governance is alive and well in Asia’s funny country.

From BusinessWorld Philippines

September 23, 2014

The unending hypocrisy in government

ON MONDAY, the National Bureau of Investigation recommended the prosecution of National Food Authority (NFA) chief Arturo Juan for allegedly extorting P15 million from a rice trader to settle a profiteering charge. But the NFA boss has denied soliciting a bribe of P5 million each for him and Interior Secretary Mar Roxas and Presidential Assistant Kiko Pangilinan.

On the same day, a plunder and bribery complaint was filed against Philippine National Police (PNP) chief Alan Purisima, for accepting donations to renovate the “White House” in Camp Crame that serves as his official residence. In reply, the PNP claims the renovated residence in Camp Crame is worth only P12 million, and not P25 million as alleged.

Purisima also allegedly owns a multimillion-peso “rest house” in Nueva Ecija, resulting in insinuations that he owns assets that are beyond his means or far in excess of his salary. Under the government’s “net worth” method, a mismatch in income in relation to assets owned or used is sufficient cause to initiate investigation for illegal wealth and/or tax evasion.

Messrs Juan and Purisima are two senior government officials now in the limelight for alleged corruption. Just a couple of weeks ago, a group of policemen was also in the news for allegedly extorting P2 million from a Mindanao-based trader during a supposed drug bust on EDSA. Prior to this, on and off there were news reports of corruption allegations versus public officers. Likewise ongoing is the trial for plunder of three senators, for allegedly using private groups to pocket billions of pesos in pork barrel funds.

And of course, there is the ongoing Senate inquiry into allegations of corruption against Vice-President Jojo Binay, when he was still mayor of Makati City. The charge of overpricing local projects and taking a cut from them was brought forth by former Makati City Vice-Mayor Ernesto Mercado, who also admitted to taking bribes himself and being the Mayor’s “bagman.”

One can only wonder when such allegations against people in government will finally end. Frankly, over time such news reports become seemingly less scandalous and more matter-of-fact. Corruption allegations are becoming “old” news, as if corruption is becoming a way of life in government, despite efforts to push “daang matuwid.”

One radio commentator couldn’t help but quip that Interior Secretary Mar Roxas’s call for a lifestyle check on police officials is now for naught precisely because he “announced” it, as opposed to doing the checks discreetly and without the prior knowledge of people targeted for investigation. By announcing the initiative, it was as if Roxas gave the culprits a head start.

One tends to agree with the comment since there doesn’t seem to be any strategic or tactical value to publicly announcing the lifestyle check.

How can we expect the public to truly believe that corruption is waning when print, broadcast and online news continue to be peppered with allegations of malfeasance, corruption, and lack of accountability in government? Even social media has gotten into the fray, offering all sorts of information on government incompetence, inefficiency, and wasting or stealing of public funds.

Corruption reports have become a sort of bad joke, considering how this government trumpeted the impeachment of former Chief Justice Renato Corona for failing to disclose all his assets. Had legislators accepted Corona’s challenge to publicly disclose ALL their bank accounts, how many would have still passed the government’s “net worth” method?

Plainly and simply, the call to end corruption is just hypocrisy on the part of some elected and appointed government officials. For how can Purisima now call on his own troops to keep clean and honest when he himself is hard-pressed to explain his insistence on living in a P12-million “donated” residence and enjoying an expensive country “resthouse”?

Also, how can the Executive now call on appointed officials to live simple and honest lives when an agency chief like Juan, given the opportunity, allegedly extorts money in exchange for dropping charges against businessmen supposedly operating illegally and taking advantage of hapless consumers by selling them rice mixed with animal feed?

And how can President Aquino vow to pass an anti-dynasty bill as if passing legislation ending political dynasties is within his scope? All the while I was under the impression that making laws is the business of Congress. Isn’t it likewise hypocritical for the President to strike down political dynasties when his own first cousin now sits as senator? That he is a fourth-generation politician? That his parents, uncles and aunts, and grandparents have been politicians?

The 1987 Constitution has long banned political dynasties, but still they exist, primarily for lacking an implementing law in the last 27 years. And now the President vows to make the present Congress finally succeed where all other Congresses since 1986 had failed? And of course, this effort has nothing to do with the present political circumstances of the Binay and Estrada/Ejercito families, among others?

Monitoring national news is now an activity that I do regularly for enjoyment rather than for work. National news has become a joke of sorts to me. For why else will the government insist on reporting out how much the President has spent for his trip to Europe and the US? Who cares about this, really? And why is it a national concern that the President may ring the bell at the New York Stock Exchange? Again, who cares?

Talk about the government now and one is left with impressions of hypocrisy, pretensions, false virtue, posturing, lip service, sanctimoniousness, and fraud. The sad truth is that many local governments have banned the use of plastic bags for shopping in many localities, but they cannot seem to ban “plastics” in government.

Phonies in government have become a part of everyday life, and it doesn’t seem like there is a perceivable end to getting them elected, appointed, or hired. And while the crooks in public office laugh all the way to the bank, ordinary people are forced to grin and endure their corruption, inefficiency, incompetence and hypocrisy.

Marvin Tort is a former managing editor of BusinessWorld, and former chairman of the Philippine Press Council.

Article location : unending hypocrisy in government&id=94925

The different issues present to foster Strong Governance in Government

This article says it all that on the logic of corruption starts from the lack of strong governance that is shown by example by the head and allowed to develop down the organisation. I would like to add the strong governance is only possible if the leader has a strong morale ethic and discipline to resist the many temptations present in the role. He too should have the stamina to pursue the same values to be observed by everybody up, below and even across his organisation.

And unlike in a business where there may be a major shareholder/ owner who can be made accountable for any unethical practices made by management, in government the ultimate owner are the many voters whose ability to gauge his management performance is too difficult to measure given to the many public service needs they seek if not demand.

Another insight is the point raised here where the solution of having higher salaries is suppose to eliminate corruption needs further research and validation. We should solicit thesis and dissertation papers done in this area.

Finally, with barely two years left in the term of the current administration, the process of continuity for what has started in developing a culture of strong governance is another pressing matter as time goes by.

But hope springs eternal.

From BusinessWorld Philippines
September 07, 2014

Corruption in government vs corruption in business

PRESIDENT BENIGNO “PNoy” S. Aquino III has vowed that in his one-and-only, maximum-six-years term as President ending in 2016, he would decimate corruption in government under his policy of “Daang Matuwid” (Straight Path) of honesty and integrity. There remain barely two years in his single chance to do so. But the cheers for PNoy and his anti-corruption campaign are waning.

The Priority Development Assistance Fund (PDAF) pork barrel scam raised public fury last year, but even the anger against the supposed mastermind Janet Lim Napoles has mellowed. Perhaps the tempering of the media on this case has much to do with the dissipation of passion against this grand crime, even as the first three lawmakers allegedly involved, Juan Ponce Enrile, Jinggoy Estrada and Ramon Revilla III, have been detained and arraigned for plunder. In a strange twist of fate, PNoy himself, with Budget Secretary Butch Abad, is now suspected of the very same sin of diversion of public funds in the DAP (Disbursement Acceleration Program) — the presidential pork barrel, as they call it. Thanks to the sympathetic numbers in Congress who voted nay to three impeachment complaints, PNoy can still try to chant the mantra of Daang Matuwid, despite the political bruises from an ambiguous comment about Charter change and a careless declaration of “openness” to a term renewal.

There is now the queasy feeling of suspended animation in the campaign against graft and corruption in government. There is finger-pointing for so many possible anomalies and so many surprise whistle-blowers probably just as guilty as the supposed culprit. Exposés are now ordinary news. But doesn’t the see-saw of emotions that the people are subjected to induce blasé acceptance of graft and corruption in government?

Perhaps the reason for such licentious behavior in government is that there are no visible “owners” that a government official must worry about, unlike a business that would have exacting owners to answer to. In government, there are only the pixelated faces in a blurry photo-mosaic that PNoy calls his “bosses,” the Filipino people. And even PNoy must know that what the boss doesn’t know won’t hurt him. And that while the cat is away (or not looking), the mouse will play. Enter corruption. That is the way in business — as it is in government, as it is in life.

Government and business differ in their objectives. Business is driven by profitability, while government is (supposed to be) driven by altruistic service excellence. How can service excellence in government be measured? Is it in providing an 11-storey office-cum-parking building for the constituents, allegedly worth P1.56 billion, and allotting P111.9 million (in 2009) to 50,000 senior citizens of the city?

Government has no profit and loss statement, as a business would have a profit and loss (income statement), balance sheet (statement of assets and liabilities) and cashflow statement. If the owner of a business found that income had gone down, assets have been depleted, or there were no expected dividends, there would be screaming and likely chopping of heads in the organization. Thus, if there would be corruption in business, it would probably be found out at least at the end of the reporting year, when the financial statements are presented to the stockholders.

Monitoring government handling of people’s money would not be as clear and easy. Taxpayers would have to content themselves, often with two-year-old data, on the variances to the budget reflecting disbursement decisions made by government officials, as in PNoy’s DAP misstep, for example. Corruption in government could be undetected for many years, because of the lag in reporting and analysis in the Department of Budget Management (DBM) and/or the possible lapses and delays in the Commission on Audit (CoA) reports. It is easier for wrongdoers to cover tracks in government.

In business, there are the internal auditor who keeps management and operations honest and proper among themselves, and the contracted external auditor who clears the business to be compliant with the government regulatory agencies. Departments or units in a business check and balance each other to ensure proper control and conduct of operations, like Accounting/Controllership being separate from Treasury, or Sales from Marketing and Advertising, for example. Yet the internal control systems also nurture the cooperation and harmonization of efforts toward that common goal of profitability, and the individual goals of livelihood. Participants in that cooperative effort who do not follow the rules of engagement through deviant behavior such as dipping into the company coffers are immediately found out by the built-in system of checks and balances in a business.

Not so in the government bureaucracy. An article by Dr. Gerardo Sicat in the Philippine Star pointed out that “implementing officials, often lodged in agencies or in lower levels of government, exercise certain powers that seize or create more opportunities for personal gain,” citing both petty corruption and grand corruption. Of course, in government offices, it can be deduced that the lower employees will not dare do mischief if the higher bosses do not know, sanction and enjoy “a cut.” Bigger items such as the procurement of equipment, or big contract amounts would be in the airspace of the top guns.

The principles of honesty and integrity are fundamental, and the basis of transparency and accountability is universal work ethics, but the application of these can be different, perhaps because of the disparate cultures in government and business. A sense of responsibility to contribute one’s share of the organizational deliverables, and ultimately protect one’s survival and advancement in the business organization, shames the prevalent attitude of the civil servant for minimal compliance for minimal pay. And then there’s graft and corruption tempting to augment meager personal income.

The ready answer would be higher salaries and wages for government employees and officials, to hopefully discourage dishonesty — but the correlation between high salaries and low corruption has not been validated by enough empirical testimonials. Meantime, government must be firm in its resolve to change the culture by not letting errant civil servants get away with graft and corruption.

Let’s see what happens to the pork barrel scam and other pending government corruption issues. And we wish deep in our hearts for an honest and capable leader in the 2016 elections, who can continue and improve PNoy’s initiative of Daang Matuwid in government.

Amelia H.C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

Article location : in government vs corruption in business&id=94091

Foreign Investors can improve the Philippine security industry

One area which is still restricted to Filipino ownership is security agencies. I would like to believe if foreign investors were allowed to enter the industry, better employment conditions in addition to better training and logistics management will be introduced to the industry. Let’s see first whether the constitutional amendments required are made to allow this to happen.

From Businessworld Philippines

September 11, 2014

Security agencies upbeat thanks to police lack

PHILIPPINE companies that run security agencies remain upbeat about business prospects, citing the increased demand for their services owing to the country’s lack of police personnel.

More and more companies are hiring private security companies for protection, an official of the Philippine Association of Detective and Protective Agency Operators (PADPAO) told BusinessWorld in a phone interview yesterday.

“Tumataas ang need for security guards, and of course, the investments for that… Ang driving factor nito is that there is not enough police to provide private businesses with the necessary protection so they engage in contracts with security agencies. Parang ito ang nagiging force multiplier nila (The need for security guards are rising and this is being driven by the lack of police personnel that can provide necessary protection for private businesses. As a result, businesses enter into contracts with security agencies to multiply their forces), “PADPAO Executive Vice-President Manuel P. Espejo told BusinessWorld in a phone interview on Thursday.

The country’s police force, the Philippine National Police (PNP), recognizes its personnel shortage which is manifested not only in Metro Manila but throughout the country as well.

Only 148,000 police officers serve the Philippines’ 100 million population, or a ratio of one officer for every 675 persons, almost 200 personnel short of the ideal 1:500.

As a result, even the smallest security company can earn more than a million pesos a month, depending on their margins and the kind of equipment provided to its customers, Mr. Espejo said.

“Sa akin lang eh, with around 750 security guards I’m shelling out P12 million every month. Ganun kataas, ano. Tapos kung 10% or 20% ’yung aking markup, or kung ’yung sa iba higher, depende sa equipment na mga pino-provide, ayun ang babayaran ng client namin (My company shells out P12 million every month for 750 security guards. My markup is 10% to 20% and it could go higher depending on the service and equipment we provide),” Mr. Espejo explained.

The Philippine security industry is worth around P4 billion every year, he said.

For her part, Teresita A. See, founding chairperson of anti-crime organization Movement for Restoration of Peace and Order, said that security agencies are capitalizing on the lack of police personnel.

“The police are engaged in many things right now — they help with traffic violations like apprehending colorum buses, enforcing the one-truck lane policy, manning checkpoints and so many others… Security agencies of course will capitalize on this and increase their business,” Ms. See told BusinessWorld in a phone interview.

“That’s why people are encouraged to get their own bodyguards instead of depending on the police if they can afford it. Even with politicians — tell me, how many bodyguards does [congressman] Pacquiao have? They rarely depend on the police for security at all,” she added.

Citing PADPAO figures, Mr. Espejo said there are currently 700,000 security guards in the country and 1,675 security agencies operating locally. Majority of these agencies, according to him, are operating in Metro Manila, the Southern Tagalog Region, and Cebu.

The PADPAO executive also said that salaries of security guards should be raised and that the national government should take initiative in correcting it in the next few years.

The PADPAO also serves as the self-regulatory and policing body of private security agencies in the country.

“We hope in the next three years, makaka-develop ang Department of Labor ng rates that would be commensurate to this industry. Ginagaya lang kasi sa janitorial [services] ang security guards. So mababa ang sweldo. But it’s not just the sweldo, it’s also the overhead expenses of the agencies. So ’pag affected ang overhead expenses affected din ang sweldo ng security agencies (We hope that the Department of Labor and Employment come up with rates that would be commensurate to this industry. Right now, salaries are just based on janitorial services. This is why salaries are low. But beyond that, it’s also the overhead expenses of agencies. If these expenses are affected so do the salaries of the security guards),” he said.

Article location : agencies upbeat thanks to police lack&id=94396

Tax reform needs an independent advocate to propose change

I feel this current discussion on reforming the tax system may create a need for a Philippine Tax Institute. An independent institution that can evaluate, analyse and advocate proposals for changes in the system without bias but for what is best for efficiency and effectiveness of the purpose of the tax applied.

From BusinessWorld Philippines

September 11, 2014

Tax overhaul must reform system, says industry group

THE TAX Management Association of the Philippines, Inc. (TMAP) has suggested the adoption of a three-pronged approach in reforming the country’s tax system, supporting pending measures in Congress as well as suggesting new ones to support its proposal.

TMAP President Rina-Lorena R. Manuel, in a position paper submitted to the ways and means committees of both houses of Congress, said proposals to amend the country’s tax system should address three “Rs”: rectifying the tax base, reducing the rates, and reforming the system.

Ms. Manuel said updating the country’s tax thresholds under the National Internal Revenue Code (NIRC) is needed as inflation has lowered individuals’ purchasing power.

“These outdated tax base and tax-exemption thresholds undoubtedly decrease the net home pay of Filipino taxpayers, most significantly those of low-income taxpayers, thereby depriving them of decent living standards,” Ms. Manuel said.

“The correction of personal income tax brackets is long overdue and TMAP believes that something needs to be done immediately,” she added.

Thus, TMAP has backed the proposal to raise the tax exemption cap for bonuses to P70,000 from P30,000.

The House of Representatives on Tuesday approved on second reading House Bill 4970 which raises the tax exemption cap for bonuses. A counterpart measure at the Senate, meanwhile, is pending at the committee level.

The P500,000 top tax bracket likewise needs updating and should take into account the increase in consumer prices since 1997, TMAP said. Income tax rates of individuals should also be reduced to 20-30% from the current 32%, it added.

“This will promote equity in the tax system and make the Philippine workforce competitive with its ASEAN (Association of Southeast Asian Nations) neighbors,” Ms. Manuel said.

“It will also help bridge the gap in the taxation of Overseas Filipino Workers (OFWs) who are tax exempt, vis-à-vis those who choose to stay and work in the country,” she added.

Senator Juan Edgardo “Sonny” M. Angara, in Senate Bill No. 2149, proposed to lower individual income tax rates over a three-year period. The measure has been pending at the chamber’s committee of ways and means since March.

Under Mr. Angara’s proposal, those earning over P1 million will have a reduced income tax rate of 25% by 2017 from the current 32% under the NIRC.

At least three bills have been filed at the House of Representatives seeking to slash individual income tax rates. These are likewise all pending with that chamber’s Ways and Means committee.

Finally, the Tax Code should be reviewed and simplified to ease the compliance of self-employed individuals and marginal income earners, the TMAP noted.

“In general, TMAP welcomes a comprehensive review of the NIRC, as amended, to clarify certain provisions therein which have given rise to taxpayer issues due to radical changes in interpretation,” TMAP said.

Finance Secretary Cesar V. Purisima last month said tax reviews should involve the entire law and not be “piecemeal” in order to make the tax system “more equitable, more progressive, more competitive, but with an impact that’s revenue positive”. — Mikhail Franz E. Flores

Article location : overhaul must reform system, says industry group&id=94398

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