Year: 2016

Asian Tigers grew because of nationalism–which is vanishing in our country

FORMER US Ambassador Philip Goldberg—based on his alleged oust-Duterte plan reported by this paper—unsurprisingly described the President’s alleged frame of mind as “old-fashioned nationalism”. It’s a term economists like Bernardo Villegas blindly espousing that we open our doors totally even to foreign monopoly capitalists, and just trust that the market, would embrace.

Yet it is historical fact that the so-called Asian Tigers—the now highly developed economies of Hong Kong, Singapore, South Korea and Taiwan—grew starting in the 1960s because their leaders were economic nationalists, pragmatists without dogmas, or illusions, that free markets alone would magically lead to the most efficient allocation of resources, and thus, result in the prosperity of their peoples.

In contrast, economic nationalism in our country has been inanely caricatured as involving solely what were alleged to be disastrous “import-substitution” policies that were in place in the 1960s, protecting local industrialists—the elite—from foreign competition.

However, all the Asian Tigers did employ such protectionist policies, and in fact, so did almost all industrialized countries before their economic takeoffs in the 19thcentury. What they did, which we failed to do, was to shift to export-oriented industrialization when the local market could no longer absorb the products of the import-substitution industries.

gdp20161230
In Japan, there was such close cooperation between the designated “champion firms” and government, particularly the Ministry of Trade and Industry, that the system was dubbed Japan, Inc. This was how the country miraculously achieved economic growth after its devastation in World War II. The engine of Japan’s growth was its keiretsus, and for South Korea, its chaebols—both of which were conglomerates assisted by their governments on the condition that they focused on certain industries regarded by state planners as vital to stimulating economic growth.

The governments of the Asian tigers nurtured their export-oriented industries—and key industries such as telecoms—through such means as preferential credit, subsidies hidden or overt, and lower tariffs for their inputs, to enhance their competitiveness in the world markets. (A very detailed account of this, using the case studies of Taiwan and the Philippines’ textile, semiconductor, and plywood export industries, is in Kuo, Cheng-Tian and Kuo Cheng-Tian’s Global Competitiveness and Industrial Growth in Taiwan and the Philippines, University of Pittsburgh, 1995.)

We have had no such keiretsus and chaebols, although the strongman Marcos in the late 1970s thought he could develop firms controlled by his cronies as such.

Our conglomerates operate as though there was no state at all, except perhaps in terms of bribing bureaucrats when needed, or betting on certain candidates during national elections. State officials operate as though there were no conglomerates at all, except to get bribes or campaign funds from them.

Framework for growth
Without such a framework for growth that the national economy should be directed through state intervention—as Japan, South Korea, Taiwan and China did—the ownership, whether foreign or local, of public utilities, especially telecoms, becomes unimportant. That has been one of our biggest weaknesses, one that has hobbled us since the era when the American GTE was the telecom monopoly. Today what we have is a monopoly of the industry owned overwhelmingly by foreigners.

“The developmental history of a nation is in its government’s hands,” * pointed out a very lucid and readable book on how the Asian tigers developed and why other Southeast Asian countries, including the Philippines, failed to follow the same path. That idea, really, is the essence of economic nationalism, in contrast to neoliberalism.

Neoclassical economics ideologue Bernardo Villegas and lobby groups such as the Foundation for Economic Freedom lobbying for the lifting of restrictions on foreign capital in public utilities have been claiming that we should emulate industrialized countries in adopting current liberal policy on foreign capital.

What they do not mention, though, is that in the period when these countries were still developing, they put restrictions on foreign capital in their strategic industries. They lifted these only when their state firms or those owned by their nationals were strong enough to withstand the impact of new competition amid the entry of foreign corporations. **

Nearly all industrialized countries, when they were still struggling during the development stage, had state-owned firms operating their power systems to have better control at ensuring the most efficient supply, not only to their citizens but also to their nascent industries. The power industry was too important to turn over to private companies, which, no matter how efficient they were, had profit generation—and distribution to their stockholders—as their prime directive.

It was only when they had achieved industrial status and their companies had become among the world’s strongest and biggest, that they privatized their power sectors and opened them up to foreign competition.

Why the restrictions? Such sectors involve limited national, and natural resources; in the case of telecoms, the radio spectrum for cellular telephony and a captive market that is the nation’s population. These sectors possess natural-monopoly features that must be reserved for citizens since these involve rent profits, part of which the state must appropriate for the welfare of its own people. These are public utility firms, which by definition must serve public welfare as their paramount objective, rather than the generation of dividends.

The country certainly needs foreign investment, why not? But not in public utility firms, and the framers of our Constitution must have realized this that they decided to put the 40 percent cap on foreign investment in public utilities, as well as land ownership—laws which have not been followed because of our weak legal and regulatory systems.

Nationalism fading
Nationalism is fading in our country, despite its resurgence in both the academe and policymakers in the rest of the world. The growth of the Asian Tigers and the emergence of China as an economic superpower constitute incontrovertible evidence that economic nationalism, rather than laissez-faire economics, will result in nations’ economic growth.

The nation’s youth have also been brainwashed into seeing themselves as “citizens of the world,” a cockamamie belief that in today’s world there are no more nations, that economic nationalism is the evil that generates poverty in the country. This erroneous thinking has even gained ground in the country in recent decades, what with economists such as Dr. Villegas propounding it, exemplified in his July 25, 2015 column with the preposterous title “Nationalist industrialization hurts the poor.”

Hasn’t he heard at all of industrialized countries like Japan, South Korea and Taiwan, which became rich through nationalist industrialization policies? (A recent, popular account of the economic growth of these countries on the basis of nationalist industrialization was done by Joe Studwell, How Asia Works: Success and Failure in the World’s Most Dynamic Region, Grove Press: 2013.)

Cronyism, corruption, and regulatory capture—in various forms, levels of government, and degrees—have been pervasive in our country, weakening the state so much that its efficiency and efficacy in serving not just a class but the entire nation and in redistributing assets have been drastically diminished.

The saddest phenomenon in our country is that the elite have lost the sense that they belong to a nation, which is not just a market. This has trickled down to the rest of this society so that many Filipinos have also lost their sense of nationalism, so that few care that our telecom industry is under foreigners’ control and that our government regulatory bodies have allowed them to trample upon our Constitution.

Economic nationalism is the worldview that we are not just consumers or producers in an each-to-his-own market but members of a nation—in this age the most important community a human can be a member of—organized for the welfare of all its members, and that the state has the duty, and all the resources and tools to do so.

The decline of nationalism since the 1990s, so obvious in our country today, is actually rooted in the fact that we have jettisoned economic nationalism as a plan of action, as the spell of neoliberalism and globalization descended on the country.

We have remained poor despite EDSA I and II, and through four Presidents, because we have not embraced the kind of economic nationalism that made the Asian Tigers the highly developed countries they are now.

Should we wonder why the GDP per capita growth rate of Vietnam—one of the most nationalistic countries in the world—averaged 5 percent from 2000 to 2015, significantly higher than our 3 percent?

Real change will not come under President Duterte,unless he breaks from his predecessors’ economic mindset.

* Studwell, Joe. How Asia Works: Success and Failure in the World’s Most Dynamic Region. New York: Grove Press, 2013.

** Chang, Ha-Joon. Kicking Away the Ladder: Development Strategy in Historical Perspective. 1st ed. Anthem Press, 2002.

This column is largely based on Chapter 13 of my book Colossal Deception: How Foreigners Control Our Telecom Sector — A Case Study of Corruption, Cronyism and Regulatory Capture in the Philippines,available at National, Popular and La Solidaridad bookstores.

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Why we’ve let foreigners dominate our telecom sector

Second of a three-part series on reviving nationalism
THERE has been very little press coverage—except for two columns in this paper and a reply to those in a column by a notoriously mercenary hack in the Philippine Star —of the fact that Smart Communications is racing against time to get a law passed before Congress adjourns March 21 that would extend for 25 years its franchise (permit) to operate. Smart’s current franchise, acquired in 1992 when it was still 100 percent Filipino-owned, expires March 27.

The Liberal Party last May had made a last-minute attempt to get Congress to enact a franchise law for Smart days before it adjourned and before a new administration assumed power. The plot was patriotically blocked in the Senate by Senators Alan Cayetano and Vicente Sotto.

 I suspect Smart’s media plan has been precisely that: Little if at all should be reported on the deliberations on the franchise. Indeed, if the hearings by the committee on legislative franchises had received just half the media coverage as, for instance, those on alleged extra-judicial killings, there would be public outrage over the following, among others:

(1) That Smart (through PLDT of which it is a 100 percent subsidiary) is effectively 76 percent owned by foreigners, the biggest stockholder being the Indonesian tycoon Anthoni Salim, despite the Constitution’s 40 percent limit on aliens’ ownership of a public utility;

(2) That 24 years after it got its existing franchise in 1992, Smart hasn’t complied with that law’s requirement that it list 30 percent of its shares in the stock market;

(3) That despite, or because of, the telecom duopoly, our mobile phone and internet services are among the worst in the region, which may be explained by the fact that PLDT has been making huge investments in other sectors, even abroad, such as its P22 billion investment in the German firm Rocket Internet, and distributing profits to its foreign owners that amounted to $7 billion from 2000 to 2015;

(4) How—if it is true—former President Estrada helped the Indonesian tycoon Anthoni Salim to acquire PLDT in 1998, for a P3 billion “commission”, according to now Foreign Affairs Secretary Perfecto Yasay, Jr. and other accounts, to the extent of threatening to jail on trumped-up illegal drug charges stockholder Alfonso Yuchengco’s son if he didn’t sell his shares, as the tycoon himself alleged; and

(5) Why we are letting foreigners dominate such a strategic industry as telecom, which is vital to the growth of the economy and to our national security.

Speaks volumes
The de facto ban on coverage of the hearings speaks volumes on how the mainstream press can be manipulated, how such a crucial issue—authorizing a firm that is 76 percent owned by foreigners to operate a public utility and take out of the country billions of dollars in profits—can be practically hidden from public awareness. (The Indonesian tycoon Anthoni Salim indirectly controls or has substantial shares in, through a unit of PLDT, a big part of Philippine media, among them the Philippine Star, the Philippine Daily Inquirer, TV 5 with its two dozen radio stations, and the news website interaksyon.com.)

However, the press could have acquiesced to such a media ban to a great extent because of the widespread ignorance in our country that the telecom industry in nearly all of Asia is considered such a crucial and strategic sector that it is dominated by state firms or by corporations of their nationals.

It had not occurred to a succession of Philippine governments that the telecom sector is such a crucial public utility that the industry cannot be left alone in the hands of the private sector. There is a history behind this view.

This dereliction of state responsibility is a direct consequence of our American rulers letting Philippine Long Distance Telephone Co. be set up in 1928 as a monopoly, owned by the biggest telephone firm in the world in that era, General Telephone and Electric (GTE, a grandparent of Verizon Communications), until 1974, when it was taken over by a group led by Ramon Cojuangco (the father of Antonio “Tony Boy” Cojuangco).

GTE could own PLDT because of the so-called Parity Amendment to the 1935 Constitution that allowed American businesses the same right as Filipino nationals to operate public utilities (and exploit the host country’s natural resources). It was because of the private ownership of the Philippine telecom monopoly since the American era that Filipino political leaders and economists had the mistaken presumption that this sector should be privately owned, and outside the purview of state economic development planning.

In contrast, all of our Asian neighbors (except for Hong Kong which had the British Cable and Wireless as its telecom monopoly) had no such experience of foreign or private firms operating their telephone systems. Rather, their governments set up telephone systems as part of the state’s delivery of service to its people, or as part of its infrastructure program, and later on organized state corporations to undertake such duties.

While state-owned monopolies in other Asian countries proved efficient, the privately owned and controlled PLDT failed to deliver the efficiency demanded of a national telecom service provider, as indicated by its almost unchanged fixed-line telephony density—at 1 per 100 people—in the 17 years to 1992.

Did foreigners do better?
There is a perception that these firms, under foreign control, have done well in providing telecom services, in contrast to the decades under the management of the elite Cojuangcos who could not meet the huge demand for telephones. That is another reason why many Filipinos seem to not mind the Constitution being trampled upon with Salim and Singtel’s control, respectively, of PLDT and Globe.

The reality is that foreigners got to control PLDT and Globe just when mobile phone technology and diffusion swept the world, creating the illusion that the two foreign-controlled firms delivered telecom facilities better than the old, Filipino-owned monopoly.

The fact is that PLDT and Globe under foreign control did not even meet the huge backlog for fixed-line phones in the country. The country’s fixed-line density has even declined from a peak of 4.5 in 2009 to 3 per 100 people in 2015. That is much lower than that of Thailand’s 8.5 percent, Indonesia’s 11.7, and even war-ravaged Vietnam’s 6.

The country’s mobile-phone density, on the other hand, zoomed from 0.7 per 100 in 1993 to 47 in 2005 and 111 by 2014, as it similarly expanded in nearly all countries.

Even without Salim and Singtel, the global wave of phone usage would have carried the Philippines toward mobile telephony. PLDT, in fact, before Salim captured it, was being positioned to take advantage of the worldwide boom in the mobile segment, having set up its Pilipino Telecommunications (Piltel) subsidiary in 1991, which by 1997 had attracted 400,000 subscribers. (see graph on the right)

Growth of the mobile phone industry in Southeast Asia
Technology was not an obstacle in the case of the Philippines since European, American, Japanese, South Korean and Chinese companies have been in fierce competition to sell their cellphone technology abroad without requiring an equity stake—especially since this would open up countries as markets for their cellphone manufacturers.

Mobile telephony has been one of the most important developments in communications worldwide since the invention of the telephone. Its diffusion was the result of computer technology that made prepaid, micro-subscriptions possible.

This opened up the huge mass market, which few cellular phone manufacturers had expected to be a lucrative business for them. The mammoth market for mobile phones that opened up in China as well as those in other populous countries (such as India and the Philippines) created manufacturing economies of scale that made mobile phone devices cheap enough to be afforded by the masses. Even the poorest nations in the world have been inundated with cheap devices due to the growing tide of cellphone usage. The sub-Saharan countries’ cellphone density, for instance, has surged to 80 per 100 inhabitants this year.
subscriptions20161228To claim that Filipinos could not have set up their cellphone industry—without the capital and management skills of an Indonesian tycoon and a Singaporean state firm, both of which don’t even have their own cellphone technology—would be an insult to our nation.

Mobile phone usage has spread even faster and wider outside the Philippines where the telecom operators were either state-controlled or controlled by their nationals. Vietnam’s and Indonesia’s mobile phone sectors are state-owned, while Malaysia’s is dominated by a domestic corporation. A Thai firm had dominated that of Thailand, until its owner sold it to Singtel in 2012, for political reasons.

Yet, the mobile-phone penetration rates of these countries are much higher than in the Philippines where foreign companies dominate the telecom industry. Those of Malaysia, Thailand, and even Vietnam, are all above 140 per 100 people, compared with our 111. Indonesia, which has a lower GDP per capita than the Philippines, overtook us in terms of mobile penetration rate in 2011.

Neoliberalism’s dominance
Another major reason why there is nonchalance over foreigners’ control of our telecom industry is the rise and dominance of neoliberal economics as embraced by our governments since the 1990s. That is still the prevailing view among our leaders, bureaucrats, and the intellectual elite.

This is the naive view that a global market has emerged and that national economies no longer exist or matter; therefore it is unimportant what nationality owns a country’s telecoms industry. According to this world view, the state’s role in developing the economy is limited to containing inflation and interest rates, raising sufficient revenues, building infrastructure and improving bureaucratic efficiency. In that framework, state intervention, especially in nurturing industries, deemed to be crucial in overall economic development, is frowned upon.

While this is still the dominant view in our country, numerous studies after the groundbreaking reports by the UN Conference on Trade and Development (UNCTAD) since 1994 and a slew of studies by distinguished economists, such as Nobel laureate economists Paul Krugman and Joseph Stiglitz, have debunked that paradigm.* This has been done not only theoretically but also, and even more importantly, through empirical and historical studies of how the Asian Tigers grew to developed-country status within a generation.

Stiglitz, former chief economist of the World Bank that had been a champion of the neoliberal framework, in a 1998 speech at an UNCTAD event, for instance, made statements which our Filipino economists would claim smack of economic nationalism and statist thinking:

“Many countries followed the dictums of liberalization, stabilization and privatization, the central premises of the so-called Washington consensus, and still did not grow… The East Asian miracle countries did not follow the standard prescriptions. In most cases, government played a large role. They followed some of the standard technical prescriptions, such as (by and large) stable macroeconomic policies, but ignored others. For example, rather than privatizing, government actually started some highly productive steel mills, and more generally pursued industrial policies to promote particular sectors. Governments intervened in trade, though more to promote exports than to inhibit particular imports.”

The gist of it is that the Asian Tigers grew because their leaders were economic nationalists, pragmatists without the dogma, or the illusion, that free markets alone would magically lead to the most efficient allocation of resources, and thus, result in the prosperity of their peoples.

How this was actually done will be discussed in the third, and last part of this series on reviving nationalism.

* For UNCTAD, see its annual Trade and Development Reports, particularly 1994, part 2, chapter 1; 1996, part two; 1997, part 2, chapters V and VI; and 1998, part 1, chapter 3. See also: Stiglitz, Joseph E. “An Agenda for the New Development Economics.” Draft paper prepared for the discussion at the UNRISD meeting on The Need to Rethink Development Economics, 2001: 7-8.

________. “Towards a New Paradigm for Development: Strategies, Policies and Processes.” Applied Econometrics and International Development 2, no. 1, 2002: 116-12. Krugman, Paul. “Dutch Tulips and Emerging Markets: Another Bubble Bursts.” Foreign Affairs 74, no. 4 (1995): 28-44.
 
Note: A big part of this column is from Chapter 13 of my book Colossal Deception: How Foreigners Control our Telecoms Sector—A Case Study of Corruption, Cronyism, and Regulatory Capture in the Philippines. Details on the bulleted points after the third paragraph is also in that book, well documented.

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Reviving nationalism: The only way for us to grow out of our Third-World status

(First of Two Parts)
The move to lift the restrictions on telecoms by amending the Constitution has been framed in the propaganda spin based on two false arguments repeated over and over again in the Hitlerian fashion of the “Big Lie.”

Essentially, these claims deny the historical fact that it was economic nationalism, not globalization nor foreign capital that helped bring most developed countries, including those in Asia, to their prosperous status today.

26The first argument is that the constitutional restrictions on foreign capital in public utilities are one of the main reasons why foreign direct investments (FDIs) in the country are smaller than those in many other Asean countries. The second is that a major reason for our economic quagmire is the lack of FDIs. Both claims are utter nonsense, and are based not on empirical evidence, but on ideological beliefs.

On the first claim, it is not the restrictions on foreign investment that explain why inflow has been low. Foreign capital are now the biggest shareholders in the telecom and power industries. How could that be if there were restrictions? The fact is that Indonesian and Singaporean capital, in collaboration with the local elite and government agencies, have de facto removed the constitutional restrictions.

Poor and inefficient business conditions the lack of physical and technological infrastructure; expensive electricity; a limited and run-down highway network; an inefficient port system, and corruption are the real principal factors that hamper the flow of investment into the country. (See among other numerous studies on this topic, the World Bank’s “Ease of Doing Business” annual reports.)

Our small FDI stock compared with that of our neighbors is also the result of a unique set of events in the 1980s.

The 1989-91 coup attempts against the Philippine government, together with the kidnapping of a Mitsui executive here in 1987 scared off foreign investors, at a crucial time when Japanese investment inundated Asia like a tsunami as part of Japan’s thrust to internationalize their manufacturing sectors. Those events took place after the so-called “Plaza Accord” led to a massive appreciation of the yen — as much as 46 percent — relative to the dollar and other world currencies. From an annual average of $3 billion from 1970-1980, Japanese investments abroad swelled 10 times to $31 billion from 1986 to 1992.

Coup attempts

Because the Philippines was perceived as unsafe due both to the many coup attempts and the kidnappings, Japanese investors skipped the country and, instead, went to Malaysia, Thailand, and Indonesia. Our FDI stock stood at $2.8 billion in 1986, bigger than Thailand’s $2.3 billion. By 1992, though, Thailand’s FDI level grew six times to $12.3 billion, mostly due to the massive inflow of Japanese investment while the Philippines recorded only $4 billion.

Malaysia (with its assembly operations for the electronics industry) and Indonesia (for its natural resources such as tin and oil) caught much of the wave of Japanese investment during that period, so that Malaysia’s FDI stock nearly tripled from $6 billion in 1986 to $17 billion in 1992, while FDI in Indonesia doubled from $6 billion to $12 billion, according to UNCTAD statistics. None of the FDI flows in that period found their way into telecoms and other public utilities in our neighboring countries because foreign investment in such industries were curtailed either through explicit regulations or bureaucratic hurdles. Instead FDIs in these countries were encouraged and supported into export-oriented and high-tech industries, and not into public-utility monopolies.

The second claim in the propaganda over FDIs is the belief that such capital inflows are necessary for the economic development of any capital-deficient country such as the Philippines.

However, a growing body of studies since the 1980s has debunked such a view. The fact is that FDI flows in the Asian Tiger economies, as well as in Japan and China, increased only when they started taking off on their high-growth path, not before, as transnational companies are quick to take advantage of low wage rates and expanding markets.

FDIs were not the fuel behind the Asian Tigers’ growth. Foreign investors simply piggy-backed on economic growth in the region in its early stages, achieved through a national pragmatic plan that disregarded laissez-faire dogmas.

In fact, Asian Tigers, at the start of their growth in the 1960s (except for Hong Kong and Singapore, which are anomalies since they are tiny entrepôts) also imposed strict restrictions on foreign investments, and shepherded those that came in into specific industries they calculated would stimulate economic growth. These were mainly heavy industries (especially in the cases of Japan and Korea) and export-oriented manufacturing enterprises (as those in Malaysia and Taiwan).

The Philippines, since after World War II up to the mid-1970s, absolutely had no restrictions on investments or on imports from the biggest economy and capital-exporter at that period, the United States. This was because we had that grossly misnamed “Parity Amendment” to the 1935 Constitution which gave US businesses until 1974 the same rights and privileges as local capitalists. Did such policy of free-flow of American capital result in huge US investments here? Did US foreign capital boost our economic growth?

Debatable

While it remains debatable whether FDIs may even have a negative impact on a country due to the massive profit remittances and crowding of the local credit market involved, what is not disputed is that FDIs should not get into “brownfield” projects (the acquisition of existing companies and facilities) but greenfield enterprises, specifically industries into which local capital has been hesitant to go. Salim’s control of PLDT, obviously, was simply an acquisition.

One of the main arguments for foreign investment is that the country does not have sufficient capital to fund its economic expansion. Several studies using data from different countries have disputed this, as foreign companies either tap the local credit markets, or use their assets in the host country as collateral for loans from the world financial markets.

This is false. The power-distribution monopoly Meralco for instance was acquired by the Indonesian magnate Anthoni Salim not through new money coming in from Hong Kong or from one of his many British Virgin Islands-registered companies but mainly through the fianances of the pension fund of Philippine Long Distance Telephone Co. (which he has controlled since 1998) that he deployed and capital raised through the stock market. Foreigners’ dominant shares in PLDT, Meralco, and Globe, have in fact contributed to substantial capital outflow from the country in the form of dividends. From 2000 to 2015 these profits have totaled $10 billion, the equivalent of the country’s historical net foreign investment inflows for seven years, except that in this case these went out of the country

A response posted so many times in the comments section of my columns on Salim’s control of our public utility firms goes as follows: “I don’t care who runs PDLT or Globe, as long as I get efficient, cheap service.”

That’s a certainly a valid view for an ordinary consumer. But it is a very short-term view, because down the road the consumer will suffer the consequences of a foreign-dominated telecom industry. Among these consequences are the foreign firms’ capital outflows that contribute to overall economic underdevelopment and the government’s giving up of this strategic industry as a tool for economic growth.

Foreigners’ monopoly of our telecom industry in fact has already made cellphone service one of the most expensive in Asia, and broadband speed here among the lowest.

That perspective would also be irresponsible for the country’s leaders to take, given their task of not only running an efficient government but laying down the groundwork, including the necessary infrastructure, for sustainable development for decades, even a century to come.

Telecom firms provide essential public services, and the state has the duty to assure its citizens that these are efficiently provided at the least cost — without the profit margins usually exacted by ordinary enterprises — and in the same way government provides such public services as police security, along with water and electricity supply.

Telecoms essential to growth

The telecommunications industry is essential to economic growth, as much as roads and bridges are, because the efficient transmittal of information makes markets and production more efficient, besides the fact it reduces transaction costs. Efficient transmission of information improves productivity. Thus, telecoms directly and indirectly contribute to a country’s economic growth.

The poor state of our telecoms industry, in fact, had contributed to the host of factors that explain our weak economic growth rates in the 1980s and 1990s. This is reflected in the marginal increase in the number of fixed-lines per 100 inhabitants in the Philippines from 0.7 in 1975 to 1.0 in 1992, according to World Bank data.

This does not compare with those of Malaysia and Thailand, which rose in the same period from 1.4 to 10.9, and from 0.5 to 3.1, respectively. That, undoubtedly, was a factor that discouraged foreign investments in our case.

Most other states in the world have realized, logically, that the telecom sector is too crucial to be left alone to private corporations, whose prime directive, after all, is not to deliver efficient services but to generate profit for their small group of stockholders. Most countries in the world and all Asian countries (as well as most Scandinavian countries), therefore, have state agencies or their citizens’ corporations, and not foreign entities, running their telecom sector.

Moreover, the Asian Tigers regarded telecoms not just as a sector that must provide efficient service to their people; they consciously developed the industry and its support sectors, nurturing the mostly state-owned telecom companies to make them global industry and technology leaders that they are now.

Take the case of Japan. The totally state-owned (until 1985) Nippon Telephone and Telegraph (NTT) is now the third largest telecom company in the world and a global technology leader. In South Korea, the state-owned Korean cellular phone firms have helped make Samsung and LG Electronics among the biggest cellphone manufacturers in the world.

It was only as recent as the 1980s that mature economies with developed, state-owned telecom operators started to inject competition into their telecom markets, partly by privatizing the sector, or opening up the state firms to minority private investors and operating them as independent corporations. Japan’s NTT, for instance, was privatized in 1985 but only to the extent that state ownership, by law, was not reduced to less than one-third of the company’s equity.

In contrast to almost all Asian countries, the Philippines never considered telecoms as a sector that needed to be nurtured and developed by the state as a sector crucial for economic growth. “The Philippines is an exception to the statist model of Asian telecommunications. Ownership and control of nationwide telecommunications have been in the private sector from the era of American colonialism to the present,” a comprehensive study of the Asian telecommunications industry said.

It had not occurred to Philippine governments that the telecom sector is such a crucial public utility that the industry cannot be left alone in the hands of the private sector.

* Among such studies: Carkovic, Maria V, and Ross Levine. “Does Foreign Direct Investment Accelerate Economic Growth?” University of Minnesota, Department of Finance, Working Paper, 2002; Eichengreen, Barry. “Capital Account Liberalization: What Do Cross Country Studies Tell Us?” The World Bank Economic Review 15, No. 3, 2001: 341-365; Pereira, Luiz Carlos Bresser, Globalization and Competition: Why Some Emergent Countries Succeed While Others Fall Behind,” Cambridge; New York: Cambridge University Press, 2010; Rui Moura and Rosa Forte, “The Effects of Foreign Direct Investment on the Host Country’s Economic Growth – Theory and Empirical Evidence”, FEP Working Papers, Nov. 2010; Action Aid, Where Does it Hurt? The Impact of the Financial Crisis on Developing Economies, 2009; and, Rodrik, D. & Subramaniam, A. “Why Did Financial Liberalization Disappoint?” IMF Staff Papers, International Monetary Fund, Washington, DC., 2008.

[With a few revisions, this is part of Chapter 13 of my book Colossal Deception: How Foreigners Control our Telecoms Sector — A Case Study of Corruption, Cronyism, and Regulatory Capture in the Philippines)

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Plot to lift Charter’s restrictions revivedr

THE plot by the once powerful Liberal Party in the last administration to remove the 40 percent limit on foreign capital in public utilities prescribed by the Constitution, has been so quickly revived under the new Duterte government. Little apparently has changed in the malleability of our Congress and politicians in the face of very rich foreign and local corporations.

Under Aquino, the speaker of the House of Representatives himself, Feliciano Belmonte, led this unsuccessful move in the House of Representatives. Belmonte’s family in 2015 sold its controlling shares in the Philippine Star newspaper for a reported P4 billion—an unexpectedly extremely high price, industry sources claimed—to an entity ultimately controlled by the Indonesian tycoon, Anthoni Salim, whose firms also control the Philippine Long Distance Telephone Co. (PLDT).

image002As I had exposed in past columns, and based on unimpeachable data, foreign firms own 76 percentof PLDT, 73 percent (mainly by Singapore Telecoms, or Singtel) of Globe Telecom, and 43 percent of Meralco, the power-distribution monopoly in the national capital region. The Indonesian magnate Salim is the controlling stockholder of PLDT and Meralco, and has more than 40 percent of the country’s biggest public utility-based infrastructure conglomerate, the Metro Pacific Investments Corp. (MPIC).

This is despite the Constitution’s clear 40 percent threshold on foreign equity in such public utilities. What restrictions are they talking about?

The move to lift the 40 percent limits in the Constitution has a hidden agenda: To legitimize Salim’s, Singtel’s, and foreign investors’ breach of the 40 percent constitutional limits on foreign capital of public utility firms, and to entrench them as the foreign duopoly dominating our telecom sector for as long as they wish.

The argument that lifting the restrictions will attract foreign investors is utter nonsense. Despite the constitutional restrictions, foreigners in fact dominate these public utilities. These industries have monopoly features that will block, as proven in most other countries, new entrants or reduce them to very minor players.

Even the giant San Miguel Corp., after several years of working to be the third player in telecoms with the Australian Telstra as its partner, had to give up, and instead sold its telecom assets, which includes its prized franchise over the 700-megahertz spectrum, for P69 billion to the PLDT-Globe duopoly. In a statement, San Miguel explained that it decided to sell its assets because the legal and commercial risks in the investment were far too large to take on alone.

Lock-in period

Just one example, how can a new player offering fast fiber-optics-based internet service manage to compete if PLDT right now is requiring that customers availing of the new PLDT Home Fibr have a lock-in period of two-and-a-half years? Even ordinary post-paid cellphone subscriptions have two-year lock-in periods.

Most countries in the world, in fact, impose such restrictions on these sectors—whether by law or by bureaucratic hurdles. Developed countries lifted their legal restrictions on foreign investments in their public utility sectors, only after their own locallyowned companies had already grown so large that foreign capital is largely unable to compete with them, as in the US, Japan and South Korea.

It is argued that such restrictions are better imposed through laws, and not through the Constitution.

But we are a weak state: If foreigners could violate even the Constitution, the basic law of the land, so can they either skirt laws and even block any move from Congress to pass laws inimical to them. The framers of the 1987 Constitution had the wisdom to see that our Congress and regulatory bodies would be so weak and malleable, that it was better to enshrine our nationalist ideals in the Constitution itself.

One argument for the lifting of the constitutional restrictions is that this would open up local companies to competitors, so that the PLDT and Globe duopoly would be dismantled. This is a very naive expectation, brought on by ignorance of the nature and history of public utilities.

Due to the huge capital investments required and because of the unique nature of the telecom business, such as its ability to lock in subscribers to its services, the industry is such that the first companies that entered have become a monopoly or a duopoly that bars new entrants, or limits them to a minority share of the market.

This in fact has already happened in our telecom industry, with a dozen telcos getting franchises to operate as cellphone firms when the Ramos administration liberalized the industry. All of them were absorbed by PLDT and Globe—-boosted by the huge finances foreign capital could tap at a moment’s notice, and apparently by their closeness to the incumbent political power.

The Delgado family and its partner German telco DeTeAsia thought they could make Islacom the third player in the industry, but bit the dust in 2000, with Globe buying it at fire-sale prices. Other well-financed elite groups such as the Lopezes with Australia’s Telstra as its partner,and the Ortigas and Puyat-Reyeses with Bell Telecom tried to challenge the duopoly but eventually ended up in bankruptcy.

Richest tycoons

John Gokongwei, one of the richest tycoons in the country, had been obsessed with becoming a major player in the industry since 1999, when he set up Sun Cellular (Digital Telecommunications). He positioned the newly formed subsidiary as an alternative to the expensive mobile phone services provided by Globe and PLDT, aiming to capture the low end of the market. The duopoly, however, retaliated and offered similar rates through its special “promos.”

After nearly a decade trying to carve out his own market in the cellphone sector, Gokongwei gave up and sold Sun Cellular to PLDT in 2011. The huge price, P74 billion ($2 billion, although much of it was paid in PLDT shares), is the biggest corporate takeover in the country’s history, indicating how big Sun was. Yet it buckled under the weight of the duopoly in the mobile phone industry. San Miguel Corp. was the last company to realize that the PLDT-Globe duopoly was really a monopoly that even a big firm like itself didn’t have a chance to compete against the two in this particular industry.

Would there be any Filipino or even a foreign firm willing to invest $2 billion, to start from scratch and challenge PLDT and Globe, which together already have 111 million subscribers, bigger than the country’s 102 million population?

Such strength of the Philippine telecom duopoly is not unique: It is the same pattern in the telecom industry everywhere else in the world.

A study of the structure of the telecommunications industry in both 24 OECD countries and 24 emerging markets all over the globe showed that the “general pattern in emerging markets, as in developed ones, is that the first two operators capture a very large share of the market—65 percent or more (often more than 80 percent).”
“Splitting the residual segment among two, three, or more operators does not always provide a sustainable base for increased competition on a full-fledged basis,” the study concluded.

Thus, if the constitutional restrictions on foreign ownership in telecoms are lifted, Salim and Singtel’s control of PLDT and Globe will only be legitimized. This strategic public utility exploiting our natural, national resource will, forever as it were, be beyond the Filipinos’ control for as long as these foreigners make profits from their firms, and will remain in the hands of an Indonesian magnate, a Japanese telco giant, and a Singaporean company.

In nearly all Asian countries, their nationals and state firms control the domestic telecom and power industries, with foreign players, in a few cases, having only minority stakes. These include China, the so-called Asian tigers (Hong Kong, Singapore, South Korea and Taiwan), which have achieved developed-country status, as well as Malaysia and Indonesia.

Shouldn’t this fact alone alert us that something is terribly wrong with our country, that we do things the more advanced economies in the region avoid doing because they aren’t smart moves—that is, letting foreigners take control of strategic public utilities?

But there is in fact a national consensus to reserve control of our public utilities to nationals, and this is enshrined in our Constitution. This national policy, however, has been subverted by powerful foreign powers that have even put regulatory bodies in their service. These have succeeded in hiding their control of the telecom industry.

(This column is an abridged version of Chapter 12 of my book Colossal Deception: How Foreigners Control Our Telecoms Sector – A Case Study of Corruption, Cronyism, and Regulatory Capture in the Philippines.)

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How the US saved Cory’s neck in 1989

As narrated by the strategist, Colin Powell
AS I explained on Monday, President Duterte’s break from the United States will ultimately lead to the dismantling of the Yellow Narrative, which would expose President Corazon Aquino—and her son Benigno 3rd as well—as creations of the superpower.

I had quoted the account of Republican Sen. Paul Laxalt, President Reagan’s personal envoy, on how US strategists forced President Marcos to call for a “snap elections” in February 1986 which led to the phenomenon of “People Power” coming to the succor of military rebels, the four-day stand-off which gave the US the excuse to shanghai the dictator to Hawaii.

But the US didn’t just put Aquino into power in 1986. It also prevented military rebels from forcing her out of office during their coup attempt in November 1989. This coup attempt was launched by the alliance of the anti-Marcos RAM rebels led by then Col. Gregorio Honasan and Marcos’ loyal generals, led by Generals Eduardo Abenina and then retired General Jose Ma. Zumel.

Perhaps these officers would have been worse than Cory or Marcos. But how can we be proud of our nation if the US had determined the course of our recent history, and we refuse to see this, and instead believe in the Yellow Myth?

What follows is the account of how the US saved Cory’s neck in the November 1989 coup, as told by US Gen. Colin Powell, chair of the US Joint Chiefs of Staff during President George H.W. Bush’s administration, in his book, My American Journey (I put fascinating or important details in bold type):

Powell’s account
“In late November 1989, we had to respond to a coup against President Corazon Aquino of the Philippines.

“Cheney and I had just returned from a conference in Brussels. Cheney, exhausted and ill with the flu, went home and stayed there. I went to work the next day, returned home, and gratefully hit the sack soon after dinner. An hour later, the phone rang, and I was informed by Tom Kelly that a coup was underway in the Philippines headed by a General Edgardo Abenina. I went immediately to the National Military Command Center in the Pentagon, arriving just after 11:00 p.m.

FIGHTER JET THAT DETERMINED OUR RECENT HISTORY. One of four US F-4 Phantom jets streaking over Manila in November 1989. Inset: F-4 details.
FIGHTER JET THAT DETERMINED OUR RECENT HISTORY. One of four US F-4 Phantom jets streaking over Manila in November 1989. Inset: F-4 details.

“I entered a room designed specifically for dealing with such situations. It was small, low-ceilinged; my steps were muffled by gray carpeting. The room was cold, kept that way to aid the performance of the supersensitive electronic gear. We were using a new teleconferencing system that allowed people from various agencies to confer without leaving their buildings.

“This was the first time the system would be used in an actual crisis. I sat at a table facing five television monitors. On one I could see the White House Situation Room, with Vice President Quayle at the center of the table… The face of (deputy secretary of state) Larry Eagleburger filled a second screen. On a third was Bill Webster, the CIA director, and on a fourth, Harry Rowen, assistant secretary of defense for international security affairs, who was upstairs in the Pentagon.

“I could see myself on the fifth screen…. Also, by pure chance, the Commander in Chief for all our forces in the Pacific, Admiral Huntington “Hunt” Hardisty, was there too, having come from Honolulu to the Pentagon for budget talks.

Aquino cries for help
“President Corazon Aquino, I was informed, had reported that the presidential palace in Manila was being bombed and strafed by rebel planes. She had requested US military intervention to stop the attacks.

“Eagleburger argued hard in favor of answering Aquino’s appeal. ‘We sponsored this democratic government,’ he said, ‘and we have to respond.’ Sporadic reports kept arriving; there was gunfire here and there, and a possible need to rescue Aquino from the palace. But we were hearing more confusion than hard information. Our ambassador in Manila, Nicholas Platt, reconfirmed an official request that we bomb an airfield under rebel control. Mostly old T-28s, World War II prop-driven trainers, based at this field, were the planes attacking the capital. Again, State was eager to respond.

“The Vice President said he needed to contact President Bush soon with a recommendation. I had taken a media beating for holding back on the Giroldi coup in Panama in October. If I wanted to overcome any impression of indecisiveness, I should have plunged ahead now. But I was not about to be stampeded.

“I started asking questions. We could bomb the airfield, but did we know who we would be bombing? Who would we hit, rebels or loyalists? The State Department probably pictured a neat, surgical strike. Instead, I envisioned anxious young pilots flying their first combat missions, not precision-tooled automatons. My concern was that if we started shooting up planes on the airfield, we were inevitably going to kill people, and I warned the other teleconferees, ‘I can guarantee you that the Filipinos are going to blast us at their funerals, no matter which side we hurt.’ We were still, in some quarters, viewed and resented as former colonial masters.

“Before we did anything rash, we needed more on-site information. I wanted to talk to Fidel Ramos, the Philippine defense minister, to get an eyeball account. It just happened that the American military attaché ordinarily posted to our embassy in Manila was also in the Pentagon this night, upstairs with Harry Rowen, (and he was asked to get in touch with Ramos.)

Powell’s Phantom idea
“In the meantime, I described to Quayle and the others a plan that Hardisty and I had devised: have our F-4 Phantom jets stationed at Clark Air Force Base buzz any T-28S daring to come onto the runway at the rebel-held airbase. In short, scare the hell out of them.

“If any of these planes started to take off, fire in front of them. And if any took off, shoot them down. I concocted a phrase to include in the order to convey the desired sense of menace. Our aircraft were to demonstrate ‘extreme hostile intent.’ I called Cheney, who agreed. He contacted Air Force One and called me back within ten minutes to tell me we had the President’s approval.

“In short, we had a clear line of authority for graduated military action, Commander in Chief to Secretary of Defense through me to the appropriate military units. ‘Go,’ Cheney said.

“I turned to Admiral Hardisty and gave him the go order… The F-4S were launched. They buzzed the airfield repeatedly, and no Filipino pilot took off to see what would happen next. …Within hours, the coup collapsed without our getting further involved and without the F-4S shooting up anybody or anything…

“A few days later, General Abenina, the coup leader, said, ‘We were about to take over the government. Then the US warplanes appeared. We simply cannot hope to win against the stronger power of the United States Air Force.’ The night the coup ended, I left the Pentagon feeling good.”

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How the US maneuvered to put Cory Aquino in power

As narrated by a participant, Reagan personal envoy Laxalt
PRESIDENT Duterte’s disdain for the United States, and his pronouncements that he will lead the country towards a “separation” from its colonial and post-colonial master, is undoubtedly fraught with real danger. Except for Fidel Castro who died aged 90 and Mao Zedong at 82, it’s difficult to think of any leader of any Third World country who defied the US and remained in power, or in life for so long.

I don’t think I’m caught up in some conspiracy theory to say that the US Central Intelligence Agency, with its very reliable partners, the Israeli Mossad and the Korean Central Intelligence Agency, is still the most powerful organization in the world with cross-border power.

Maybe I’ve watched too many Jason Bourne movies, but since August 21, 1983, I have been amazed at the precision of the gunman who fired the single bullet that killed Ninoy Aquino. And that was done in the five seconds after Aquino left the plane. Can any Filipino assassin be so good?

Aquino’s assassination in 1983 did fire up outrage against the Marcos dictatorship, with his funeral procession estimated to have been attended by at least a million people. However, it didn’t actually trigger the events that led to EDSA I in 1986. That it did is a myth.

It was the brilliant maneuverings by the US that toppled Marcos, which the Yellow Narrative, propagated by the two Aquino presidents and President Fidel V. Ramos, has cloaked.

Perhaps, if anything else, Duterte’s anti-US stance would bring America’s role in our sad plight as a nation without control of our destiny, how it brought the Yellow Cult to power, to light.

MAMA MARY OR MR. REAGAN? Statue of the Virgin Mary onstage with Enrile and Ramos during EDSA I.
MAMA MARY OR MR. REAGAN? Statue of the Virgin Mary onstage with Enrile and Ramos during EDSA I.

Marcos weathered the political storm of the Aquino assassination. The findings of the “Agrava Commission,” the independent body that was created to investigate it, cleared General Fabian Ver of complicity in the assassination. It had the effect of giving the elite an excuse to continue its support for Marcos, and “move on.”

More importantly, Marcos bought the Philippine elite’s support at that time by giving them the means not only to survive the severe 1984-1985 economic crisis, but to grow richer.

That economic conflagration was the worst ever in our history, part of the global debt crisis triggered by the Mexican default on its foreign loans in March 1982. With the ensuing rise of global interest rates, the Philippines also defaulted on its loans in October 1983, which in effect barred the country from receiving any foreign exchange for its exports of goods and services. The Philippines was effectively isolated from the world business community. As a result, the economy shrank by 20 percent from 1983 to 1985 percent, the deepest such contraction in the post-war period.

Elite richer
The Philippine elite though was protected from the economic meltdown, to a great extent through the Marcos’ regime’s so-called “Jobo bills,” named after the banker Jose B. Fernandez, Jr. who replaced Marcos and Imelda’s favorite official Jaime Laya as central bank governor in 1983. Jobo broke all monetary-policy precedents and had the central bank and the National Treasury issue these bills, which had unheard-of interest rates that steadily went up to as high as 60 percent in mid-1985.

The economic crisis from 1983 to 1985 reduced average Filipinos’ income (measured as per capita GNP) by a staggering 20 percent–which meant that it was only 21 years later, in 2003, that GDP per capita exceeded that of 1983.

In contrast, the Filipino elite in effect saw their funds grow 40 percent richer by investing in the Jobo bills.

The central bank economists, especially the two-term central bank governor Amando Tetangco who was at that time deputy director for economic research, justified the bills as necessary to contain inflation.

Which in fact it did. Reaching a high of, believe it or not, 80 percent in mid-1984, inflation fast receded, to end up only 10 percent by the end of 1985. The rich were happy as they were much richer, ordinary Filipinos even became relieved that prices of commodities which had rocketed in 1984 returned nearly back to normal.

Marcos seemed to have recovered from his kidney transplant by 1984, and succeeded in stabilizing the economy and the political situation. The International Monetary Fund in 1985 gave the country a financial parachute in the form of of a $300 million loan, called an extended facility, and got foreign bankers and governments not only to agree to a restructuring of the Philippines’ debt to them, but to extend a new $200 million loan so it could service its maturing debts.

Marcos’ plan for a transition from a formal dictatorship to a de facto one mimicking Lew Kuan Yew’s 31-year one-man rule in Singapore was making headway: the Parliament (Batasan Pambansa) which had 180 members, 55 of whom made up the opposition, convened in June 1984 and elected Marcos’ chief technocrat Cesar Virata Prime Minister.

By that move, Marcos sent a message to the world that there was a clear line of succession, Virata, and Imelda wouldn’t be his political heir.

By this time though, the US State and Defense Departments had decided that Marcos had to be toppled, despite President Reagan and his wife Nancy’s fondness and strong support for the Marcos couple.

Reagan, a fierce anti-communist, was said to have been convinced by mid-1985 to abandon Marcos when told by the CIA that the growth of the communist insurgency, which was based on its propaganda that it was fighting for democracy and against dictatorship, could only be stopped if the dictator was overthrown and “democracy restored”. If the communists with their allies captured power, the CIA had argued, the US military bases in Clark and Subic would be booted out, endangering Reagan’s crusade against “The Evil Empire,” the USSR. That of course made Reagan, obsessed with destroying the Soviet Union, change his mind instantly.

Marcos survived the 1983 Aquino assassination. He would fall though three years later because of events triggered by a brilliant US move, which Reagan saw through to the end.: It forced Marcos to call for a “snap” elections, which the Constitution didn’t require, the conduct of which triggered the events that led to his fall.

Here is how the US executed that move, as narrated by Reagan’s personal envoy Senator Paul Laxalt, in the Summer 1986 issue of the conservative magazine Policy Review. It wasn’t Mama Mary that created events that led to the dictator’s downfall, but Mr. Reagan.

In his article, Laxalt described in detail how he relayed to Marcos Reagan’s wish for Marcos to undertake “credible” elections to prove that he still had Filipinos’ support, an idea which was, to quote the senator, “previously broached to him by CIA director William Casey.” Laxalt even told Marcos in mid-1985 that the announcement for such an elections could be dramatically made in his scheduled interview in the popular TV talk show then, This Week with David Brinkley. Marcos did make the announcement, which surprised the country, on November 4, when interviewed by Sam Donaldson and George Will in that show.

I don’t think US officials weren’t aware of the consequences of that election.

Laxalt’s account
The rest is history, to use that cliché: it was the widespread perception of fraud in the elections, real or not, the RAM’s failed coup attempt, Marcos’ hesitation in wiping out militarily the Enrile-Ramos’ gang of 700 rebels in Camp Crame that led to the dictator’s fall.

It is spine-tingling though to read Laxalt’s account, how matter-of-factly he narrated how Marcos was made to step down from power:

“On Feb. 24, President Marcos phoned me at the Capital, where I was being briefed by Secretary of State George Schultz and Philip Habib, the President’s special emissary, about the latest events in the Philippines. Marcos asked me whether a message he had received from the White House calling for a “peaceful transition to a new government was genuinely from President Reagan. I told him it was…. President Marcos was terrified by reports that the US Marines were on the way to join the rebels…

After this phone call [from Marcos at 3 a.m. February 25], Secretary Shultz and I were driven to the White House, where we met with the President, Admiral Pointdexter, the national security adviser, and White House Chief of Staff Donald Regan. The President said it would be impractical and undignified for Mr. Marcos to share power with Mrs. Aquino…

I then called President Marcos from Admiral Pointdexter’s office in the White House. It was 5 a.m., Manila time…President Marcos asked me the gut question—what I thought he should do…I concluded that it was in the best interest of all that he leave. If he did not, I feared a civil war with a lot of bloodshed. I said, ‘Cut and cut cleanly. The time has come.’ x x x

We have talked a few times since he came to Hawaii…It’s important to understand too that (Marcos) didn’t believe he was going to have to leave the country when he agreed to leave the presidential palace. He thought he was going home to northern Luzon. Otherwise, he told me, ‘I would have never taken all that currency out of there. That was a violation of our law. I thought I was going home.’

Apparently, negotiations to permit the Marcoses to go home were still under way when their entourage was flown into Clark Air Field from the presidential palace…Mrs. Aquino and more particularly General Ramos feared he would be a very bad force if he stayed in the Philippines, and so the Marcoses were taken to Guam. “

The US made the crucial move that would lead to Aquino’s capture of power in 1986. EDSA I provided the dramatics with RAM, Enrile, Ramos, and Cardinal Sin the supporting characters of the drama. The US even helped Cory’s propaganda by deploying several PR firms to help her, among them, the Sawyer-Miller Group.* (That firm brainstormed the Yellow color as the Aquinos’ protest symbol, extracted from that very American “Tie a Yellow Ribbon Round the Ole Oak Tree” 1973 hit song, derived from a tale during the US Civil War.)

The US also saved Cory from being overthrown by military mutineers in November 1989. I’ll quote the account of then US Armed Forces Chief of Staff Collin Powell, who supervised that rescue, in my column Wednesday. To paraphrase Quezon, I would prefer a hell of a destiny made by Filipinos, rather than a heaven of a destiny made by the US government.

I wonder what role the US had in reinstalling another yellow regime in 2010.

* For a detailed, documented account, see my column November 29, 2015. “Smartmatic chairman: Cory’s close-in media adviser.”

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Smart’s operations could stop end-March 2017

WITH time running out for it to get a new franchise — its permit to operate — from Congress, with its current one ending March 27, 2017, Smart Communications faces the unthinkable: its shutdown, or at the very least a major disruption of its operations. Smart is the country’s biggest mobile phone operator, a 100 percent subsidiary of Philippine Long Distance Telephone Co., which is controlled by the Indonesian tycoon Anthoni Salim.

That likely scenario could be prevented only if President Duterte rams down Congress’ throat a new franchise for Smart to operate, and in just two months. Congress adjourns this week and resumes sessions only on January 16 next year, to adjourn again on March 17.

It is virtually impossible for Smart by March 27, 2017 to (1) list 30 percent of its shares in the stock market, which is necessary to prove it complied with its 1992 franchise ; and 2) to get a new franchise from Congress, passed by both the House of Representatives and the Senate. Unless it wants to trample on our laws, President Duterte’s government would have to order Smart to stop its operations as it no longer has the authority from Congress to do so by the end of March next year.

Smart very nearly in May this year got the last Congress controlled by the Liberal Party to extend its 1992 franchise by another 25 years, even without having to list its shares in the stock market, as required by law for a telecommunications company.

It was the Liberal Party, through then Senate President Franklin Drilon himself, who had pushed for the new franchise. It would have been one of the last laws enacted by the previous Liberal Party-dominated Congress, which adjourned June 6.

It was then Majority Leader Alan Cayetano who blocked the passage of the law on May 23— two weeks after the May 9 elections, and when Duterte already emerged as the president-elect—when it was scheduled for third and final reading that day. Only three other senators, including Senator Vicente Sotto III, raised objections to the granting of the franchise.

Smart’s biggest legal obstacle in getting a franchise has been its failure to list at least 30 percent of its shares in the stock market, as required by law, and by its 1992 franchise.

Will Congress or Duterte bow down to PLDT/Smart?
Will Congress or Duterte bow down to PLDT/Smart?

Section 21 of the Public Telecommunications Policy Act of 1995, or Republic Act 7925, requires telecommunications companies to offer to the public through the stock exchanges 30 percent of their shares by 2000. Section 13 of the 25-year franchise that Congress granted to Smart in 1992 (R.A. 7294) categorically required it, as a condition for its permit to operate, to list its shares by 1996.

The bill in the current Congress, House Bill 2617, to grant Smart another 25-year franchise was filed last August, with former Liberal Party stalwart Reynaldo Umali as its principal sponsor. The co-author is Rep. Giorgidi B. Aggabao, who was also the principal author of the bill for Smart in the previous Congress.

Law ignored
Significantly, and an indication of how compromised legislators ignore laws enacted by their own institution, the two bills filed in the previous and present Congress that would have given Smart another franchise simply ignored the Public Telecommunications Policy Act requiring telcos to list 30 percent of their shares in the stock market.

For the past 25 years, Smart has ignored the two laws and has made no move at all to publicly offer its shares. In contrast, its main competitor Globe Telecoms, through its precursor Globe-Mackay, has been listed in the stock market since 1975.

Instead of complying with the law, Smart ignored the two laws through two means.

First, it argued that its mother firm PLDT’s being listed in the stock market, means Smart was in compliance with the law. However, the Securities and Exchange Commission ruled that argument to be trash since under the Corporation Code, every “corporation has a ‘separate juridical personality,’ a doctrine affirmed by the Supreme Court. “

Invoking this doctrine, the SEC in its latest decision on the issue, communicated in a November 7, 2016, letter by its chair Teresita Herbosa to Rep. Franz E. Alvarez, chairman of the House committee on legislative franchises–pointed out:

“Although Smart is wholly owned by PLDT, the former has a separate and distinct personality from the latter. When PLDT listed its shares, the same is incompliance with its own franchise, i.e., Act. No. 3436, as amended by Republic Act No. 76082… Reading section 13 of Smart’s existing franchise, it is the grantee of the franchise (that is, Smart) which is required to list and make a public offering through the stock exchange of its shares.”

Second, Smart—or its ultimate owner, the Indonesian Anthoni Salim, or his top executive Manuel Pangilinan—lobbied in 2004 for a law that would have declared that a “telecommunications entity shall be deemed to have complied with the requirement of making a public offering of its shares if two-thirds of its outstanding voting stock are owned and controlled directly or indirectly, by a listed company.” That was of course tailor-made to exempt Smart from the Public Telecommunications Policy Act’s requirement that a telco must be publicly listed. Few supported the bill for its clear intention to serve an Indonesian-controlled company, and it was withdrawn without even being deliberated by a committee.

Ramon Isberto, Smart senior vice president for public affairs, as of press time had not replied at all to my queries on this franchise problem, which I had asked him Monday.

PLDT itself has been reporting to the US Securities and Exchange Commission its failure to list Smart’s shares as one of the “risk factors” for its profitability. In its most recent report (“Form 20-F”) covering the year 2015, it explained:

“The Philippine Congress may revoke, or the Solicitor General of the Philippines may file a case against Smart to revoke, the franchise of Smart and DMPI [Digital Mobile, which operates Sun cellular services under the “Sun” brand] for their failure to comply with RA 7925, which requires making a public offering of at least 30 percent of the aggregate common shares of a telecommunications entity with regulated types of services…

“If Smart and DMPI are found to be in violation of RA 7925, this could result in the revocation of the franchises of Smart and DMPI and in the filing of a quo warranto case against Smart and DMPI by the Office of the Solicitor General of the Philippines.., the occurrence of any of which could have a material adverse effect on our business, results of operations, financial condition and prospects.”
 
Disastrous for PLDT
Smart’s losing its franchise as a telco would be disastrous for PLDT: 68 percent of its revenues come from its subsidiary’s mobile phone operations. The timing couldn’t be much worse as next year PLDT would have to book another estimated P5 billion in losses because of the steep fall—and expected continued decline—in the share prices of the German firm Rocket, 10 percent of whose shares PLDT bought in 2014 at its listing price of 42 euros per share. Its share prices are about half now. Its main competitor Globe has also succeeded in getting significant market shares that contributed to the steep 35 percent drop in PLDT’s income in 2015.

Whoever in government who can solve PLDT/Smart’s problem would be in effect winning something like the US Poswerball lottery in January 2016, an analyst quipped. (Prize there was the record $1.6 billion).

Why did PLDT make such a horrendous strategic blunder of not listing Smart in the stock market, which would be grounds for it to lose its right to operate a telecom business?

“Sheer arrogance,” says a member of the House committee on legislative franchises. “This country has been that conglomerate’s oyster. PLDT’s owners and executives thought that it would be a cinch to get another 25-year franchise by hook or by crook. Or perhaps it miscalculated that this congress would still be dominated by the Liberal Party, with its president Manuel Roxas III, since they were just days short of getting a franchise in the last Congress.?”

“PLDT obviously thought that if it could go around the constitutional limit on foreign investments*, it’s a walk in the park to skirt the public-listing requirement,” he said.

Smart and PLDT though could still be saved by some executive action by President Duterte. But will he, given his declared disdain for oligarchs?

One stock market analyst though is still confident that Smart will be saved somehow: “PLDT and Smart are too big to fail. For Smart to stop operations, and for PLDT to crawl on the ground would disrupt business so much, even crash the stock market, and pull down our economy. Some 50 million Filipinos—Smart’s active cellphone subscribers—would overnight be deprived of communications service.”

“We just have to forget our laws, and let Smart operate,” he added, with a wink. “Accuse Manny V. Salim [sic]of anything else, but you can’t accuse him of stupidity. He’s got some secret solution, or a Plan B,” an investment analyst said however.

The problem is clearly one of the worst legacies of President Aquino: In the last six years, he could have threatened and prodded Smart to start efforts to list its shares, or face severe penalties and then ultimately, closure.

He didn’t, and now the nation is hostage to an Indonesian magnate’s firm, ignoring our laws. What kind of spineless country have we become?

Must read: Bobi Tiglao’s ‘Colossal Deception’
Cover: ‘Colossal Deception’

*For more on PLDT’s violation of constitutional limits on foreign investments in public utilities, refer to my book Colossal Deception: How Foreign Firms Control Our Telecom Industry — A Case Study on Corruption, Cronyism, and Regulatory Capture in the Philippines.

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Why police shoot to kill, not to wound

ONE of the ideas advanced by some people is that our policemen under President Duterte’s administration have become so ruthless that they shoot illegal drug suspects to kill, when they should just fire their guns to disable or wound them.

I am surprised that the idea seems to have gained some traction. In a recent conversation with former President Fidel Ramos, a soldier most of his life and the founder of the Army Special Forces, he said that he strongly suggested to Philippine National Police Chief Ronald dela Rosa that he issue an order to all policemen to aim their guns at criminals’ legs, and shoot only to disable.

That seems to be a logical suggestion. The problem is that reality doesn’t work that way.

Police do shoot accurately only at criminals’ hands (and even their guns) or at their legs—but only in the movies.

If you’ve ever fired a gun, you’d realize that it’s so different from the movies, that you can even miss a man just across the room.

When I had to train for security purposes how to use a gun when I was in government, the instructor in combat shooting would always shout at us never ever to fire only once, but to shoot three times in rapid succession.

The reason is obvious: Just a few millimeters’ deviation of the gun muzzle from the target, which almost always happens when you improperly pull (instead of squeeze) the trigger, and you miss your opponent, who of course would be defending himself to kill you, either with his own gun, or even just a knife. Your chances obviously of stopping your opponent increases when it’s second nature to fire the gun thrice, rather than just once.

So, training in combat shooting, which all policemen go through, never ever involves shooting at the arms or even the legs, which are almost always moving targets, compared to the torso, the center of which policemen are trained to aim at. Target-practice figures never include the legs but only the torso to just after the crotch, which is also a target.

SHOOTING TARGET: Why do you think legs aren’t included, and the bullseye is in the torso’s center?
SHOOTING TARGET: Why do you think legs aren’t included, and the bullseye is in the torso’s center?

This shoot-just-to-wound issue isn’t new, and had been widely debated in a few US cities, after an uproar over police fatally shooting a suspected criminal, who turned out to be unarmed. A bill was filed in New York in 2005, requiring police to “shoot-to-wound,” calleda “minimum force” bill. This would require officers to “shoot a suspect in the arm or the leg” and to use firearms “with the intent to stop, rather than kill.” The bill was withdrawn, after it was scientifically shown to be impossible to implement.

Force Science Institute
A key study by the Force Science Institute—a respected institute that scientifically studies combat situations— revealed some of the practical problems with a shoot-to-wound policy. Some of these:

• “Hands and arms can be the fastest-moving body parts. For example, an average suspect can move his hand and forearm across his body to a 90-degree angle in 12/100 of a second. He can move his hand from his hip to shoulder height in 18/100 of a second. The average officer pulling the trigger as fast as he can on a Glock, one of the fastest-cycling semi-autos, requires 1/4 second to discharge each round. There is no way an officer can react, track, shoot and reliably hit a threatening suspect’s forearm or a weapon in a suspect’s hand in the time spans involved.

• “Even if the suspect held his weapon arm steady for half a second or more, an accurate hit would be highly unlikely, and in police shootings the suspect and his weapon are seldom stationary. Plus, the officer himself may be moving as he shoots.

• “The upper arms move more slowly than the lower arms and hands. But shooting at the upper arms, there’s a greater chance you’re going to hit the suspect’s brachial artery or center mass, areas with a high probability of fatality. So where does shooting only to wound come in when even areas considered by some to be ‘safe’ from fatality risk could in fact carry the same level of risk as targeting center mass?

• “Legs tend initially to move slower than arms and to maintain more static positions. However, areas of the lower trunk and upper thigh are rich with vascularity. A suspect who’s hit there can bleed out in seconds if one of the major arteries is severed, so again shooting just to wound may not result in just wounding.

• “An officer’s survival instinct may exert an overpowering influence on target selection. If your life is threatened you’re going to go for the surer thing first and worry about your assailant’s life being saved second. If a guy is running at me with a blade, the last thing I’m going to be thinking is, ‘I’m going to shoot him in the arm’. Hence, shooting for center mass is the psychological default.

• “Poor shot placement is bound to increase. Even when officers are trying to shoot center mass, they often miss. Hitting an arm or a leg on a moving suspect with surgical precision will be virtually impossible.”

Of course, we’re barking at the wrong tree if the real problem is that our policemen actually have been executing unarmed suspected criminals, as in the case of Albuera Mayor Rolando Espinosa. The police fantastically claimed that Espinosa had a gun in his cell, which he fired against the Criminal Investigation and Detection Group officers serving a search warrant— on his jail cell run by the Department of Justice’s Bureau of Jail Management and Penology.

Instead of this fantasy of requiring police to shoot to wound only, we as a civilized nation have to come up with practical suggestions that could prevent police from undertaking summary executions of criminal suspects. Require every raiding party –-whose operations after all are planned days in advance — to have a non-policeman record through video such encounters? Require as much as they are available, media to cover such raids?

Perhaps I’m dreaming. But I don’t think Duterte will call back his dogs of war (vs drugs) during his term. We just have to come up, as a civilized nation, with the means to restrain them from slaughtering unarmed Filipinos, even if involved in illegal drugs.

Unethical
While the New York Times photo essay by Daniel Berehulak has drawn raves as an excellent piece of photo-journalism, it’s an example of how journalists often forget that they’re human beings.

If Berehulak was so aghast that the police have been slaughtering Filipinos “like animals,” as his piece was entitled, why didn’t he document exactly what police units—and what were the names of the policemen–were involved in the 57 homicide scenes he photographed? This could have helped the Commission on Human Rights or even the justice department in their investigation of these cases. Or at least just shame them.

“What I experienced in the Philippines felt like a new level of ruthlessness: police officers summarily shooting anyone suspected of dealing or even using drugs, vigilantes taking seriously Mr. Duterte’s call to ‘slaughter them all’,” he even wrote to caption his photo essay. But he didn’t even bother to try getting the names of those police officers.

Berehulak would likely win journalism awards with his photo essay. He has been plainly unethical though. He seems to think that his sole responsibility was to photograph the killing, not to protest them as a human being, which he could have done by identifying the police he claimed did the summary shootings. Professional photographers would even conclude that he used camera filters—obviously a red one in that haunting photo of a coffin with a child crying beside it—to make the scenes appear so horrible.

If Berehulak had covered the Maguindanao massacre that took the lives of 57 human beings, he would have come up with a gory photo essay, but without mentioning at all who were the suspected perpetrators and masterminds.

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Duterte should abandon Davao

BY that, I mean President Duterte, for the good of the country, should both stop making Davao City his main world—the comfort zone he hasn’t really moved out of—and, more importantly perhaps, to jettison his city-mayor mindset.

In fact, much of his failings in his nearly six months in office are most probably because his world hasn’t become the entire Philippines, but still Davao City. But he is not just President of Davao City, nor just of Mindanao. He is President of the entire country.

I had initially cheered the assumption to the presidency of a political leader whose world had been outside Manila, as this could jar our political and economic leadership’s Manila-centric worldview since the birth of our nation. This resulted in resources being focused mainly on the metropolis, with the poorest of the country, mostly outside the country, trapped in poverty.

But that is appearing to be more and more just wishful thinking, involving theory that doesn’t jibe with reality. Duterte’s “Davao-centrism” could even be his big handicap.

Take Duterte’s war against drugs, the images of which have horrified the world, what with vivid photos of corpses in streets and in morgues in the New York Times and the UK-based Daily Mail.

When he ordered the police, “Slaughter them all,” referring to those involved in the drug trade, I suspect that his mindset was that of his days in Davao City, ordering the 500-strong police force of the city, whose integrity and character—and limits—he would have known. With such a relatively small force, it was easy for him to monitor his order’s implementation, so that it doesn’t get out of control and end up in a bloodbath.

But as President of the Republic, his slaughter-them-all directive was issued to the 160,000 personnel of the entire Philippine National Police in 2,000 regional, provincial, city and municipal commands. To illustrate arithmetically, if only 10 percent of the Davao police were sadist killers, only 50 policemen would have gone on a spree of extra-judicial executions. In fact, Duterte had undertaken such a war against illegal drugs in the 1980s and 1990s, and it hardly merited reportage from the big foreign news outfits

The President commuting from office to home.

The President commuting from office to home.

But if 10 percent of the entire police force were such cold-blooded killers, you’d have a huge number of 16,000 policemen in the country on a killing spree. No wonder not a day has passed since July when tabloids and TV news do not have pictures and videos of poor people in slippers killed in some drug bust, and who apparently had such a surge of audacity to fight policemen that they had to be killed.

Davao Cabinet
About half of Duterte’s Cabinet members, and in crucial posts, are people from Davao or adjacent areas, which would reinforce his Davao-centric view. Other than Executive Secretary Salvador Medialdea, among them are: Finance Secretary Carlos Dominguez II; Labor Secretary Silvestre Bello III; Defense Secretary Delfin Lorenzana, another childhood friend; Interior and Local Government Secretary Ismael Sueno; DILG for Police Matters, Catalino Uy; Health Secretary Paulyn Jean Rosell-Ubial; Tourism Secretary Wanda Corazon Tulfo-Teo; Presidential Adviser on the Peace Process Jesus Dureza; Immigration and Deportation chief Jaime Hermo Morente, a former Davao City chief of police; National Bureau of Investigation Director Dane Gierran, for a long time NBI Davao head; Philippine Drug Enforcement Agency head Isidro Lapeña; Philippine National Police Director-General Ronaldo de la Rosa, a former Davao City police chief; Agriculture Secretary Emmanuel Piñol; Presidential Spokesperson Ernesto Abella; Cabinet Secretary Leoncio Evasco, Duterte’s city administrator; and of course, Duterte’s constant companion, Christopher Go, since 1998 the president’s aide who now heads the Presidential Management Staff .

(The next biggest bloc in Duterte’s Cabinet–the other four are the nominees of the National Democratic Front—are his classmates or room-mates in the dormitories where he lived when he took up law at San Beda in the 1970s. Among those in this group are Foreign Secretary Perfecto Yasay, Jr., Justice Secretary Vitaliano Aguirre, Transport Secretary Arthur Tugade, and information and communications technology chief Rodolfo Salalima.)

Take his style of leadership.

Mayors ever hardly have a real second-in-command, as it has often happened that such subordinates in the short span of the mayor’s term manage to get enough support in the relatively small political arena that they become the main challenger to the post in the next elections.

But because of the huge size of the national bureaucracy that needs to be managed, presidents have no choice but to have their second-in-command, or the “Little President,” i.e., the Executive Secretary whom every other official looks up to as the Cabinet’s primus inter pares. I certainly don’t think that Executive Secretary Salvador Medialdea, Duterte’s childhood buddy, has been a “Little President.”

Sources claim that Duterte always seems bored during Cabinet meetings when issues other than the war vs illegal drugs are discussed, that he fights off sleep by cracking jokes. Other than building new roads, most mayors’ concerns really have been almost solely with peace and order. Can this mayor of what was once a Wild West frontier town be really interested in trade and investment issues?

Duterte had justified the hiring of his Davao and San Beda officials by claiming that he had such a “small world” that these are the only people he really knows, whose integrity he can vouch for. But of the 11 presidents of the postwar Republic, it is only Duterte who is relying so much on people from one city.

Is there something in that city–its famous durian?—that produces the most intelligent and most honest Filipinos, the only ones worthy to serve in Duterte’s Cabinet?

Public pronouncements
Take his public pronouncements.

I don’t think any nationwide press would have ever reported on Duterte’s off-color jokes and shocking statements. As Davao mayor, he would have been covered only by a handful or so broadcasters or print journalists covering Davao City. As most mayors do, he would have made these journalists his friends, whom he even socializes with in restaurants and bars in the relatively small city, and most of whom would be extremely supportive of him, even translating his statements into more palatable ones for the public’s sensibilities.

After six months in office though, I don’t think he realizes that his statements are reported verbatim not only in the national press but by foreign news outfits, with even the Filipino correspondents having imbibed (or aped) their superiors’ tight-assed mindsets that cannot distinguish jokes from official policy statements.

And lastly, which may seem a minor matter but really isn’t. We can’t really monitor the President’s schedule, like where he is, because the Presidential Communications Operations Office, headed by Martin Andanar, the former newsreader that former senator Manuel Villar lobbied for him to be given the position, has been so incompetent in its job.

The government’s official website run by an undersecretary, Manuel Quezon, in the past administration, contained so much useful information about the presidency, and regularly had a section “President’s Day”. Now the website contains only the most minimum required of it as the Official Gazette, such as official copies of administrative orders and executive orders.

There’ s no “President’s Day” section now. So we don’t have information on where the President has been spending his time, which we citizens deserve to know.

But based on newspaper reports, Duterte it seems has been spending a lot of his days in Davao City, his comfort zone. Or is he one of those people who really can’t sleep anywhere else but in their own beds?

This of course would eat up a lot of the President’s valuable time, which he could be using to study the huge problems of the country or to consult with his officials. No wonder he often seems sleepy or has had dizzy episodes. To commute to Davao from Manila requires at least three hours, including the rest periods before and after a flight.

That would mean a President not really working full time, but spending hours commuting. From a President spending a lot of his time playing X-Box computer games to a President spending hours on a plane to and from Davao. What a country.

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Highest two officials of the land don’t respect the rule of law

WHAT kind of country have we become that the two highest officials of the Republic don’t respect the law, and even flaunt their disdain for it?

President Duterte the other day made his curses and rape jokes during the election campaign look like convent talk when he said: “I will not allow these police to go in prison. Kahit sabihin ng NBI na murder (Even if the NBI says it’s murder),”

The NBI (National Bureau of Investigation) had concluded that about two dozen policemen led by Chief Inspectors Marvin Marcos and Noel Matira and Chief Inspector Leo Laraga were indictable for the killing of Albuera mayor and alleged drug lord Rolando Espinosa and his fellow inmate Raul Yap—in what the victims had probably thought was the safest place on earth, a tightly guarded cell in Baybay City.

I couldn’t believe my eyes when I read that Duterte even said that he is willing to go to jail in place of those policemen, whose arrogant impunity (Marcos had nothing to do with Espinosa’s case) was matched only by their cowardice (their killing team numbered 21).

I suspect Duterte’s workload has become unbearable. How can he claim, as if he was just being rational: “Who would you believe, word of a criminal or of a police?”

But it wasn’t a criminal, presumably Espinosa, who claimed from his grave that he was killed by the policemen. Several senators—especially Senator Panfilo Lacson who was once national police chief and Senator Richard Gordon, whose father was assassinated— said that it was “clearly a rub-out” while veteran NBI investigators heroically did their job even if Duterte had announced his backing for the ruthless policemen.

The NBI was so meticulous in its investigation that its investigators even found that the witness, one Paul Olendan, who Marcos claimed had told them about the guns and illegal drugs in Espinosa’s Baybay City jail cell on Oct. 28—which became the basis for the search warrant they used to barge into the mayor’s cell—had made it all up. He was almost a hundred kilometers away on that day in Tacloban City, where he was assistant principal in one of the schools there.

How can a President forget that his main task, under the Constitution, is to enforce the law?

CASUALTIES OF WAR. One of the haunting photos in the New York Times photo essay on Duterte’s war vs drugs entitled “They are slaughtering us like animals.” There are more horrific photos there.
CASUALTIES OF WAR. One of the haunting photos in the New York Times photo essay on Duterte’s war vs drugs entitled “They are slaughtering us like animals.” There are more horrific photos there.

The rejection of the rule of law is really as worse as Vice President Leni Robredo’s labelling the Supreme Court ruling allowing the burial of former President Marcos’ remains at the Libingan ng mga Bayani “immoral”. She has joined the demonstrations against the ruling, in which protesters hurl invectives at the high court justices.

Doesn’t the vice-president, a lawyer, know that our rule of law is based not only on the body of laws Congress has passed, but on the Supreme Court, which is the last body to decide what is legal or not?

Robredo’s disdain for the rule of law is also evident in her statements that her rival Ferdinand (“Bongbong”) Marcos, Jr. will be “stealing” her post, the vice presidency.

Doesn’t the vice president know that the body which will decide if Marcos’ claims that he was cheated are vaild or not is the Presidential Electoral Tribunal consisting of all 15 members of the Supreme Court, and also chaired by its Chief Justice?

Rather than denigrating the integrity of the Supreme Court, aka the Presidential Electoral Tribunal, why doesn’t she just make sure, with the billions of funds her Liberal Party has, that the alleged evidence of cheating Marcos presents are proven false, rather than declaring again and again that her vice-presidential position will be stolen by her rival?

Pandora’s box
As I wrote here several months back, Duterte’s call to the police to “slaughter them all,” referring to those in the illegal drug trade, is like opening the Pandora’s Box. The term refers to the ancient Greek myth that all the evils of the world were contained inside a box, which the first woman on earth opened and released to the world—defying the chief god Zeus’ warning for her not to do so. Even the all-powerful Zeus was powerless to put back all these seven demons back into the box.

That term has come to mean an action taken in the expectation of some good, but turns out to have several unintended, detrimental and far-reaching negative consequences—which becomes nearly impossible to stop or reverse.

Duterte’s war against drugs, which he said would save generations of Filipinos from misery is indeed turning out to be a Pandora’s box that he has opened. To call on the police to dispense justice on their own has been to allow them to go on killing sprees of suspects, or just “bad characters,” in their areas of responsibility.

They justify such executions on the ground that they have all too often experienced arresting, at the risk of their lives, hardened criminals, only for the latter to get judges to set them loose. They simply post bail or get the charges dropped after witnesses don’t appear in court because of fear of reprisal, or out of mere aversion to the bother of going to hearings.

Such police killings have been going on but kept secret as far as I can remember, and I learned about them from joining other reporters in their police beats. Unlike in American movies, a suspect surviving a police chase, handcuffed, and read his rights is a very, very rare instance. Police almost always shoot dead suspected criminals they corner, after a chase.

However, these police killings have been at a low-level intensity, to use that term, as there is, after all, an announced rule of law. These were also significantly reduced after the establishment of the Commission on Human Rights under Section 18, Article XIII of the 1987 Constitution; the conviction of a number of police officers for human rights violations (mainly in cases of political activists);and the establishment of the Internal Affairs Directorate at the PNP.

Duterte simply told the police to forget this human rights thing since more important was his war against drugs, as this was necessary to liberate our nation from this scourge. He opened the Pandora’s box and released the extra-judicial executioners.

The irony is that out of the 3,500 killings in the streets (as reported by the police) since July when Duterte assumed power, probably 90 percent were killed in some slum area or dumped near there, and were all wearing slippers or cheap basketball shorts— sure signs that these were poor people, hardly drug lords, the lowest level of pushers, or mere addicts who take shabu to forget their utterly miserable lives.

Even alleged drug lord Espinosa was killed in shorts and slippers, indicating as in the case of those other mere users, his utter helplessness when he was killed. Many were reportedly killed by the corrupt police who wanted to clean up their involvement in the illegal drug trade.

An alternative narrative for the war vs drugs would be to read every day that the Philippine Drug Enforcement Agency, with a battalion of NBI investigators and police special action force troopers assigned to it, raiding a shabu laboratory or warehouse, and arresting—okay, even killing—drug lords wearing expensive shoes.

Enough is enough, and a recent New York Times photo essay entitled “They are slaughtering us like animals” shows the horror of what Duterte released from his Pandora’s box. If you’re not convinced, check out that essay (http://nyti.ms/2gCyBBl). Not just because of the horrific photos but the high quality of its journalism, it will become viral not only here but throughout the world, and shaming us as a nation.

What a country! From a do-nothing idiot to a slaughter-them-all president. There must be an alternative.

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