Birdtalk Yearend 2013 Final

Birdtalk
YEAREND 2013:
Economic and Political Briefing
Deepening Crisis and Disillusionment
January 15, 2014 Balay Internasyonal, UP Diliman, Quezon City
114 Timog Avenue Quezon City 1103 Philippines Tel. Nos: +63 2 927-7060 to 61 Fax: +63 2 929-2496 www.ibon.org
he first three years of the Aquino administration gave the perception of stability and economic progress. A confluence of favorable factors made this possible: coming from political crises during the previous Arroyo government, steady publicity about good governance and a popular president, cheap capital from unprecedented loose monetary policy in developed countries, improving domestic macroeconomic indicators, and business enthusiasm in some sectors of the economy. There was shallow optimism caused by a break from the dark past. Yet it was perhaps only a matter of time before the economys unsound fundamentals and unreformed politics asserted themselves. Major issues emerged in 2013 to dissolve the illusion that profound social, economic and political change was happening in the Philippines: mounting joblessness, growing poverty, rising prices, human rights violations, continuing patronage and pork barrel politics, bureaucrat capitalism, and foreign policy defined by United States (US) interests. These happened amid steadily increasing profits for big corporations and accumulating wealth by the countrys richest families. The defining feature of the Aquino presidency is turning out to be exclusionary growth and elite-biased governance. This growth is moreover narrow and shallow as well as artificial and unsustainable. The countrys pro-market economic policies are failing to deliver development, there are scant political reforms and patronage has even been defended, human rights are violated, and foreign policy is becoming more neocolonial. The political leadership is facing mounting disillusionment which is fuelling increasing demands for political change. Growing rapidly The economy has been growing more and more rapidly in the last three years. The administration, in its yearend report, played up the stellar performance of the Philippine economy in 2013 headlined by some of the highest growth numbers in Asia. Official figures show five consecutive quarters of at least 7% growth in gross domestic product (GDP) including an average of 7.4% in the first three quarters of 2013. (See Table 1) This growth is above the Philippine annual average of 4.2% over the long period 1956-2012 and among the fastest in Asia and emerging markets worldwide. Net foreign direct investment (FDI) also grew significantly with inflows rising 35.3% to US$3.4 billion in the first 10 months of 2013 from US$2.5 billion posted in the same period the year before. (See Table 2) The National Statistical Coordination Board (NSCB) reported foreign investment approvals likewise growing substantially and more than doubling (growing 114.8%) to Php126.5 billion in the first nine months of 2013 from Php58.9 billion in the same period in 2012; local approved investments only grew 6.6 percent. Over half (56.8%) of these total approved investments were in the power sector followed by almost one-fifth (19.5%) in real estate activities. The World Banks Doing Business Report ranked the country 108th in 2013 or a jump of 30 notches from 2012. There was a similar improvement in the World Economic Forums Global Competitiveness Report with the country going up to 87th in 2013/14 from 114th in 2010/11. The three major credit ratings agencies Fitch, Standard & Poor and Moodys also each gave the Philippines its first ever investment grade ratings last year. The Philippine Stock Exchange Index (PSEi) reached its all-time high. The Aquino administration played these up as signs of progress due to its good governance.
IBON Economic and Political Briefing
15 January 2014
Table 1. National Accounts of the Philippines By Industry Group and By Type of Expenditure, 2010-2012 and 2013 1st-3rd Quarter (growth rates; at constant 2000 prices; in %) Industry Group / Expenditure Share By Industry Group 1. Agriculture, Hunting, Forestry and Fishing a. Agriculture, Hunting, Forestry b. Fishing 2. Industry Sector a. Mining and Quarrying b. Manufacturing c. Construction d. Electricity, Gas and Water Supply 3. Service Sector a. Transportation, Storage, and Communication b. Trade and Repair of Motor Vehicles, Motorcycles, Personal and Household Goods c. Financial Intermediation d. Real Estate, Renting and Business Activities e. Public Administration and Defense: Compulsory Social Security f. Other Services By Expenditure Share 1. Household Final Consumption Expenditure 2. Government Final Consumption Expenditure 3. Capital Formation a. Fixed Capital i. Construction ii. Durable Equipment iii. Breeding Stock and Orchard Development iv. Intellectual Property Products 4. Exports of Goods and Services a. Export of Goods b. Export of Services 5. Less: Imports of Goods and Non-Factor Services a. Import of Goods b. Import of Services Gross Domestic Product Gross National Income 3.4 4.0 31.6 19.1 17.5 25.5 0.3 2.9 21.0 24.7 6.5 22.5 23.4 18.9 7.6 8.2 6.3 1.0 8.1 0.2 (6.2) 5.2 (0.3) 11.8 (4.2) (6.0) 4.0 0.2 0.4 (0.7) 3.9 3.2 6.6 12.2 (3.2) 10.4 15.1 8.0 1.4 18.0 8.9 10.3 3.5 5.3 (18.3) 15.9 6.6 5.8 5.6 12.3 24.4 14.0 15.9 14.8 (0.5) 13.3 (1.4) (2.2) 1.7 4.4 3.7 7.1 7.4 7.3 (0.2) 11.6 11.4 11.2 14.3 9.9 7.2 1.0 8.4 10.1 7.5 5.8 8.4 2.7 4.5 (4.1) 2.3 7.0 4.7 (7.3) 0.6 5.1 4.3 3.3 5.2 9.3 0.3 6.6 2.7 3.5 (0.7) 6.5 (3.7) 5.4 14.4 5.1 7.4 9.1 7.5 7.8 7.9 3.3 7.2 1.1 0.6 3.3 9.8 (2.0) 9.8 16.3 4.4 7.3 5.3 6.0 13.3 9.3 5.1 5.7 2010 2011 2012 2013 1st-3rd Quarter
Source: National Statistical Coordination Board (NSCB) National Accounts of the Philippines
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Table 2. Total Net Foreign Direct Investments and Net Portfolio Investments, 2010-2012 and 2012-2013 January-October (in million US$) Indicator Total Net Foreign Direct Investments Total Net Portfolio Investments Source: Bangko Sentral ng Pilipinas (BSP) 2010 1,298.0 4,610.4 2011 1,852.0 4,077.6 2012 2,033.0 3,911.3 2012 Jan-Oct 2,485.0 2,689.2 2013 Jan-Oct 3,361.5 3,659.8
The economic growth is reflected in the growing corporate profits and personal wealth of a few. The total net income of the countrys Top 1000 corporations almost doubled from Php599 billion in 2006 to Php1.08 trillion in 2012 amid the growing poverty and unemployment over that time. The Php212.8 billion increase in their net income in 2012 was 24.5% growth from the year before a rate that was three times faster than the growth in nominal GDP.(See Table 3) The highest growth in net income was posted by information and communication (115.5%), real estate (51.6% change from the year before) and construction (56.4%); in terms of gross revenues though real estate and construction companies had the highest growth rates at 36.6% and 42.2%, respectively.
Table 3. Net Income of PSE-Listed Firms and Top 1,000 Firms in the Philippines and Net Worth of 40 Richest Filipinos, 2009-2013 (net income in billion Php; net worth in billion US$) Indicator 2009 2010 2011 2012 2013 Net income of PSE-listed firms (billion Php) 360.6 438.1 430.0 501.3 275.5 Net income of Top 1,000 firms (billion Php) 756.0 804.1 868.1 1,080.9 nda Net worth of 40 richest Filipinos (billion US$) 16.4 27.8 34.0 47.4 64.2 PSE - Philippine Stock Exchange nda - no data available a - data for January-June only Sources: Philippine Stock Exchange website (www.pse.com.ph), Business World Top 1000 Corporations in the Philippines and Forbes website (www.forbes.com)
The cumulative net worth of the 40 richest Filipinos from the Sy, Tan, Razon, Gokongwei, Ayala, Aboitiz,Consunji, Ty, Cojuangco, Zobel, Yuchengco, Lopez, Araneta and other families meanwhile grew almost four-fold from US$16.4 billion in 2009 to US$64.2 billion in 2013. (See Table 3) These are also the families who own and control the handful of conglomerates that cut across the major sectors of the economy and are the dominant players in Philippine business. The US$16.8 billion increase in the net worth of 40 Filipinos in 2013 will likely be equivalent to over 70% of the incremental increase in nominal GDP for the year. Growing inequitably The growth however has been inequitable with conditions even worsening for the poor majority. Recent economic growth has been useful for bolstering hype about progress, but those who need improvements in their conditions the most are apparently gaining the least. The headline aggregate figures have been used to downplay or even conceal the economys distortions and deep structural problems. There are well-founded criticisms that the supposed economic gains are at the expense of national economic development and the welfare of most Filipinos.
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There is a severe disconnect between economic growth and foreign investment, on one hand, and job generation on the other. While the latest data for 2013 showed GDP growing by 7.4%, FDI inflows by 35.3% and FDI approvals by 114%, employment in turn only increased by 317,000 or 0.8% in 2013 from the year before. (See Table 4)
Table 4. Labor Force Population, 2010-2013 (levels in '000; rate in%) Indicator Population (in thousands) Total 15 years old and over Labor Force Employed Underemployed Unemployed Not in the Labor Force Rates (in %) Participation Rate Employment Rate Underemployment Rate Unemployment Rate
p
Officially Reported 2010 60,717 38,893 36,035 6,762 2,859 21,824 64.1 92.7 18.8 7.4 2011 61,882 40,006 37,192 7,163 2,814 21,876 64.6 93.0 19.3 7.0 2012 62,985 40,426 37,600 7,514 2,826 22,559 64.2 93.0 20.0 7.0 2013
p
IBON Estimates a 2010 60,717 40,440 36,035 6,762 4,385 20,277 66.6 89.1 18.8 10.8 2011 61,882 41,555 37,192 7,163 4,374 20,326 67.2 89.5 19.3 10.5 2012 62,985 42,003 37,600 7,514 4,404 20,982 66.7 89.5 20.0 10.5 2013 63,847 42,412 37,917 7,325 4,491 21,435 66.4 89.4 19.3 10.6
63,847 40,813 37,917 7,325 2,896 23,034 63.9 92.9 19.3 7.1
- preliminary a - IBON computes estimates on the labor force according to the old LFS unemployment definition for the purposes of comparison. This is done by computing substitute labor force participation rates (LFPR) where changes in official reported annual average LFPR are applied to the LFPR in 2007 that was still computed using the old labor force (and correspondingly unemployment) definition. Source: National Statistics Office (NSO) Labor Force Survey
Job generation has been falling steeply in each of the last three years of the Aquino administration with 1.2 million jobs generated in 2011, down to 408,000 in 2012 and falling further to the 317,000 in 2013 according to the Labor Force Survey (LFS) of the National Statistics Office (NSO). Job generation in 2013 is the lowest since 2000 during the Estrada administration. It is also less than half the annual average of 640,000 jobs created over the long 37-year period 1976-2013 which spanned many severe external shocks and domestic economic and political turmoil. The number of unemployed Filipinos increased by 87,000 in 2013 to reach an all-time high of 4.5 million Filipinos, using IBON estimates correcting for government underestimation; the conclusion is unchanged even using the lower official estimate of the unemployed at 2.9 million. (See Table 4) The 7.3 million underemployed is a slight decrease from the year before but it still means that there were 11.8 million Filipinos either jobless or looking for additional work in 2013. The Aquino administration is seeing the most unemployed and underemployed Filipinos in the countrys history. The real unemployment rate was 10.6% in 2013, again correcting for the change in unemployment definition in 2005 that reduces the official count, while the LFS officially reports 7.1 percent. By either measure though the unemployment rate has been increasing since 2011, is the worst unemployment rate in Asia, and among the worst in the world. Some of the latest officially reported quarterly figures from the region for instance are 0.7%
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(Thailand), 2.1% (Singapore), 2.8% (Korea), 3.1% (Malaysia), 3.6% (Vietnam), 4.0% (China), 4.2% (Taiwan), and 6.3% (Indonesia). Unemployment has a particularly youthful character with the LFS noting that almost half (48.5%) of unemployed in 2013 are between 15-24 years old. The difficulty of employment even among the educated further highlights the poor jobs prospects in the country. One out of five(20.3%) of the unemployed have a college degree, two out of five (39.1%) have graduated high school or post-secondary school, and almost one out of five (15.5%) have at least additional post-secondary/college education. This implies that well over seven out of 10 (74.9%) unemployed cannot find jobs despite having a reasonably high educational attainment. The release of the latest poverty statistics in 2013 further confirmed the economys duality. The latest official estimates of poverty are 25.2% population poverty incidence with 23.7 million poor Filipinos and 19.7% family poverty incidence with 4.2 million poor families in 2012. (See Table 5) The economy grew by an average of 5% annually between 2006 and 2012 and expanded by 33.8% in real terms over the entire period. Real GDP per capita in turn increased by 21.5% from Php54,226 in 2006 to Php65,904 in 2012. And yet despite these, the official number of poor families increased by 10.6% or 405,638 families between 2006 and 2012; the number of poor Filipinos increased by 4.9% or 1.1 million over the same period. The poverty situation worsened despite economic growth and also even after Php76.1 billion was spent on Pantawid Pamilyang Pilipino Program (4Ps) conditional cash transfers (CCT) between 2006 and 2012.
Table 5. Poverty Incidence and Magnitude of Poor, 1985-2012 (incidence in %; magnitude in million) Indicator Poverty incidence (in %) Family 1992 Methodology 2003 Methodology 44.2 40.2 39.9 29.2 28.3 29.7 49.2 45.4 45.2 34.1 33.1 34.4 40.6 36.9 39.5 33.0 30.0 24.9 32.9 26.4 26.6 32.6 26.5 26.3 25.2 35.5 31.8 33.7 27.5 24.4 20.0 26.9 21.1 21.0 26.3 20.9 20.5 19.7 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
2011 Methodology (CPI, 2000=100)

2011 Methodology (CPI, 2006=100) 1992 Methodology 2003 Methodology 2011 Methodology (CPI, 2000=100) 2011 Methodology (CPI, 2006=100) Magnitude of poor (in million) Family 1992 Methodology 2003 Methodology 2011 Methodology (CPI, 2000=100) 2011 Methodology (CPI, 2006=100) Population 1992 Methodology 2003 Methodology 2011 Methodology (CPI, 2000=100) 2011 Methodology (CPI, 2006=100) Source: National Statistical Coordination Board (NSCB) 26.7 25.4 4.4 4.2 Population
4.8
4.5
4.5
5.1 4.1 4.0 3.3 4.7 3.7 3.8 4.9 3.9 4.0 4.2
3.6 28.6 27.4 26.8 30.9 25.5 21.7 23.8 19.8
27.6 22.2 22.6
28.5 23.1 23.3 23.7
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Official poverty estimates use an extremely low poverty line of Php52 per person per day on average nationwide. This is officially estimated as sufficient to meet all a persons basic food and non-food needs. IBON on the other hand approximates around 56 million Filipinos or 60% of the population struggling to survive and meet all their basic needs on some Php100 or much less daily; another 10 million have around Php125 daily. Philippine poverty estimates started to be generated in 1987 and the methodology of counting the poor has undergone three major changes since then in 1992, 2003 and 2010/11. These refinements were said to be made so as not to overestimate poverty, to be able to come up with provincial poverty statistics, and to improve comparability across space and time. Each refinement has consistently had the effect of reducing the number of those counted as poor. The change in 1992 reduced the number counted as poor by 9.6 million, the change in 2003 by 4.0 million, and the change in 2010 by 5.3 million more or at least some 19.0 million in total removed from official poverty estimates. In any case and according to whatever methodology is used, the trend over the last decade including in the last three years of the Aquino administration is for poverty incidence to be statistically unchanged while the absolute number of poor is steadily increasing. The inadequacy of official national, regional and provincial poverty lines is also demonstrated by how government estimates declare negligible poverty in the National Capital Region (NCR) official estimates are of only 2.6% poverty incidence among families (76,530 poor families) and 3.9% among population (460,831 poor people) in NCR. This is because a poverty threshold of just Php58 was used. Unemployment and poverty has generally increased more outside NCR and its few neighboring provinces, adding to already serious socioeconomic troubles in the countrys backward regions. The devastation from typhoons and the earthquake in the Visayas could only have pushed more families into deeper poverty in 2013. Narrow and shallow The growth is exclusionary because it has been narrow and shallow. The main sources of growth are real estate and construction which account for a relatively small percentage of employment and which are weakly integrated to the rest of the economy. They have a limited multiplier effect whether sectorally, geographically or across time. Their development impact is also very limited. Economic growth in 2013 has been driven mainly by the real estate and construction boom with some spillover effects in a few related manufacturing subsectors. Manufacturing sectors associated with the boom include chemicals and chemical products, basic steel, non-metallic mineral products, and furniture and fixtures. Growth in the chemicals subsector has been primarily due to demand for chemical-based products such as paint, wood and cement additives, insulation and other similar items used in building homes, offices and infrastructure. Similarly, the basic steel subsector includes steel products used as structural materials in construction while the non-metallic mineral products include concrete, cement, plaster, glass and other like materials. The centrality of the boom to the Philippine growth story is exemplified in the growth figures for the first three quarters of 2013. (See Table 1) The fastest growing sectors were real estate, renting and business activities (9.3% growth), construction (16.3%), manufacturing (9.8%), and financial intermediation (13.3%). Nearly four-fifths of manufacturing sector growth in gross value-added however came from just the four real estate- and constructionrelated subsectors: chemical and chemical products (growing 84.8%), basic metal industries (64.0%), furniture and fixtures (25.0%) and non-metallic mineral products (14.0%). This rapid growth offset negative growth or contractions in 13 other manufacturing subsectors. These resulted in the biggest percentage point contributions to growth in the first nine months of 2013 being due to the real estate and construction boom. There was much slower growth in agriculture, fisheries and forestry (1.1% growth), electricity, gas and water (4.4%), wholesale and retail trade (6.0%), transport, storage and communication (5.3%), public administration and defense (5.1%), and other services (5.7%); the mining and quarrying sector actually contracted (negative 2.0%). (See Table 1)
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Those leading growth sectors constitute a significant share of the economy which is also why their performance has such an impact on the headline growth figures. According to NSCB data the real estate, renting and other business activities which also includes business process outsourcing (BPO) accounted for 12.0% of GDP in the first three quarters of 2013, construction for 5.3%, and the four real estate- and construction-related manufacturing subsectors for 4.4%, or a total of 21.7 percent. The benefits from rapid growth in these sectors are however limited by how they cumulatively account for just some 8.0% of total employment. The real estate subsector only employs 172,000 which is just 0.5% of total employment; construction employs much more at 2.4 million accounting for 6.2% of total employment. (See Table 6) Estimated using establishment data from the NSO rather than the household-based LFS, employment in the relevant manufacturing subsectors sums to perhaps around 1.0-1.3% of total employment at best, for a total of 8.0 percent for all the sectors at hand.
Table 6. Employed Persons By Industry Group, 2012-2013 (in '000) Industry Group Total Employed Persons Agriculture Agriculture, Hunting and Forestry Fishing Industry Mining and Quarrying Manufacturing Electricity, Gas, Steam and Air Conditioning Supply Water Supply; Sewerage, Waste Management and Remediation Activities Construction Services Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles Transportation and Storage Accommodation and Food Service Activities Information and Communication Financial and Insurance Activities Real Estate Activities Professional, Scientific and Technical Activities Administrative and Support Service Activities Public Administration and Defense; Compulsory Social Security Education Human Health and Social Work Activities Arts, Entertainment and Recreation Other Service Activities Activities of Households as Employers; Undifferentiated Goods and Services Producing Activities of Households for Own Use Activities of Extraterritorial Organizations and Bodies
p
2012 37,600 12,093 10,660 1,432 5,743 250 3,112 89 59 2,232 19,765 6,864 2,617 1,571 338 437 170 189 937 1,958 1,200 438 328 2,149 566 2
2013 p 37,917 11,759 10,361 1,398 5,917 251 3,150 94 60 2,363 20,241 7,073 2,721 1,598 341 447 172 194 1,013 1,950 1,221 464 344 2,179 521 3
- preliminary
Source: National Statistics Office (NSO) Labor Force Survey
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Inclusiveness is also affected by how the job generation capacity of the booming sectors is apparently quite weak and well below all of their respective rates of growth. (See Table 6) Employment in real estate only increased by 2,000 (or 1.2% growth, which is probably statistically insignificant), in construction by 131,000 (5.9% growth) and in manufacturing as a whole by 38,000 (or 1.2%). These sectors are moreover heavily concentrated in the NCR, Central Luzon and Calabarzon regions. The latest available regional GDP data from the NSCB is for 2012 and shows that a huge 73.4% of the value of real estate, renting and business activities in GDP and 48.3% of construction are found in just these three regions. The NCR alone accounts for 53.5% of real estate, renting and business activities and 23.1% of construction. The weak linkages of the growth sectors are very relevant. Among the economys major sectors, according to the latest 2000 input-output accounts for the Philippines of the NSCB, the real estate and ownership of dwellings sector has the lowest backward linkage and third lowest forward linkage while construction has the second lowest forward linkage (and the third highest backwardlinkage). The backward linkage measures the relative importance of the sector as a purchaser of raw material inputs from the system of production sectors while the forward linkage indicates its importance as a supplier of raw materials. These explain why the increase in the outputs of these sectors as has been happening in recent years and in 2013 has had a low degree of stimulative and cyclical effects on the entire system of industries. The real estate sector is not much of a purchaser or supplier to the production process in the country so its expansion has the least inducement to productive activities, whether in terms of inducing more raw material inputs or itself providing inputs to other industries outputs. Construction is similarly also not much of a supplier to the production process, although as a purchaser it has stimulated activities in the short-term where it has obtained inputs. The manufacturing sector as a whole has the highest backward and forward linkages and corresponding effects. Although a more detailed disaggregation of its subsectors is not yet available, it can be presumed that the local benefits from thefastest-growing chemical and basic steel subsectors are also limited because these are both very import-intensive. There is likewise no disaggregation for the BPO sector but refuting its contributions to economic development is straightforward. The sector employs some 426,401 (according to Philippine Economic Zone Authority or PEZA data) to 777,000 (according to Information Technology and Business Process Association of the Philippines or IBPAP) but it is by nature a low value-added operation that does not contribute to the domestic economy in terms of inducing production, developing local productive capacity, or increasing its capital stock. By mainly generating salaries for its workers it is merely virtual cheap labor export similar to overseas work. Recent growth has also been exclusionary because it has not translated into higher wages for the working classes whose real earnings have been falling as a whole. Wages and salaries adjusted for inflation continued to stagnate or fall in 2013 especially upon policy statements by the president and economic planning secretary against wage increases. Table 7. Nominal Wage, Estimated Family Living Wage and Wage Gap, The NCR has the highest mandated minimum November 2012 and 2013 (in Php) wages in the country and stood at Php466 as of November 2013 or Php10 higher than the year Indicator Nov 2012 Nov 2013 before. (See Table 7) However an estimated family living wage (FLW) of Php1,054 means Nominal Wage 456 466 that the minimum wage falls short by Php588 Estimated Family Living Wage 1,034 1,054 and is not even half (44.2%) of the FLW. The wage gap has remained wide under the Aquino Wage Gap 578 588 administration and the shortfall is even larger than Sources: National Wages and Productivity Commission (NWPC) a decade ago in 2003 when the minimum wage and National Statistics Office (NSO) was exactly half (50%) of the FLW.
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Periodic hikes in the mandated minimum wage give the impression of rising wages. The real value of the wage however has actually been flat for the past decade and the Aquino administration continues a trend that started during Pres. Arroyos term. The real value of the minimum wage increased slightly over the long period from Chart 1. NCRflat Daily 1986 to 2002 but it has been virtually since Non-Agricultural then. (See Chart 1) Minimum Wage, Jan 2000-Dec 2013 (in Php; 2006=100)
500.00
Chart 1. NCR Daily Non-Agricultural Minimum Wage, Jan 2000-Dec 2013 (in Php; 2006=100)
466.00
Nominal Wage Real Wage
400.00 302.44 300.00 223.50 200.00 362.36
100.00
2000 2001 Jan-03 2002 2003 2004 2005 2006 Jan-09 2007 2008 2009 2010 2011 2012 2013 Jan-00 Jan-01 Jan-02 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-10 Jan-11 Jan-12 Jan-13
Sources: National Wages and Productivity Commission (NWPC) and National Statistics Office (NSO)
If the mandated minimum wage has remained flat, the actual wage received has been falling. The average daily basic pay nationwide of wage and salary workers in sectors accounting for 79% of employment agriculture, manufacturing, trade, construction, finance, mining and quarrying, electricity, gas and water, and other services was unchanged or even dropping between 2010 and April 2013. (See Tables 6 and 8) The direction of declining real wages in the important productive sectors of agriculture and industry in particular does not indicate that earnings prospects for workers in these sectors will improve as further growth takes place. Artificial and unsustainable Apart from having limited development impact, the recent growth is artificial and unsustainable. The real estate and construction boom is debt-driven and underpinned by record low interest rates, which have made financing for production and for consumption artificially cheap. This in turn is artificially increasing economic activity and demand. But this situation of cheap financing is only momentary. Interest rates are at an all-time low. This is a result of the global financial and economic crisis that erupted in 2007/08 and which keeps the world economy in a protracted depression. Global demand collapsed and the advanced capitalist countries responded with unprecedented loose monetary policy to lower interest rates in an effort to stimulate sluggish real economies. The policy of quantitative easing (QE) was implemented particularly in the US, Europe and Japan and has injected at least US$3.5 trillion into banks, financial institutions and the global economy since 2008. If this amount were an economy, it would be equivalent to the fourth largest in the world after the US, China and Japan and larger than Germany, France and the United Kingdom.
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Table 8. Average Daily Basic Pay, 2012 and April 2013 (in Php) At current prices Industry Group 2012 333.82 166.74 165.27 191.68 328.46 317.21 330.03 553.79 310.65 383.48 282.05 280.86
d
At 2006 prices 2012 256.59 128.16 127.03 147.33 252.47 243.82 253.67 425.66 238.78 294.76 216.79 215.88 345.80 445.24 401.62 410.19 520.85 372.58 212.08 87.94 911.31 2013 April 260.75 126.33 126.15 129.67 246.11 195.74 250.99 350.42 237.46 301.17 219.49 228.61 345.82 435.55 406.28 408.03 530.22 399.48 204.25 89.28 304.93 Change, 2012Apr 2013 4.16 (1.84) (0.88) (17.66) (6.36) (48.08) (2.69) (75.24) (1.32) 6.42 2.69 12.73 0.03 (9.69) 4.66 (2.17) 9.37 26.90 (7.82) 1.34 (606.37)
2013 April 346.27 167.76 167.53 172.20 326.83 259.94 333.31 465.36 315.35 399.96 291.48 303.59 459.25 578.41 539.53 541.86 704.13 530.51 271.25 118.57 404.95
Change, 2012Apr 2013 12.45 1.02 2.26 (19.48) (1.63) (57.27) 3.28 (88.43) 4.70 16.48 9.43 22.73 9.37 (0.85) 17.03 8.20 26.51 45.78 (4.66) 4.16 (780.66)
All Industries Agricultural Agriculture, Hunting and Forestry Fishing Industry Mining and Quarrying Manufacturing Electricity, Gas and Water Supply a Construction Services Wholesale and Retail Trade, Repair of Motor Vehicles, Motorcycles and Personal and Household Goods b Hotels and Restaurants c Transport, Storage and Communications Financial Intermediation e Real Estate, Renting and Business Activities f Public Administration and Defense, Compulsory Social Security Education Health and Social Work
g h
449.88 579.26 522.50 533.66 677.62 484.73 275.91 114.41 1,185.61
Other Community, Social and Personal Activities Private Households with Employe Persons i Extra-Territorial Organizations and Bodies
j
Notes: 1. Excludes those paid on commission basis, honorarium and boundary as in the case of jeepney/bus/tricycle drivers. 2. Industry grouping is in accordance with the 1994 Philippine Standard Industrial Classification (PSIC) for 2001-2011 and 2009 PSIC for 2012 and 2013. a - Electricity, Gas and Water Supply = "Electricity, Gas, Steam and Air Conditioning Supply" and "Water Supply; Sewerage, Waste Management and Remediation Activities" b - Wholesale and Retail Trade, Repair of Motor Vehicles, Motorcycles and Personal and Household Goods = "Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles" c - Hotels and Restaurants = "Accommodation and Food Service Activities" d - Transport, Storage and Communications = "Transportation and Storage" and "Information and Communication" e - Financial Intermediation = "Financial and Insurance Activities" f - Real Estate, Renting and Business Activities = "Real Estate Activities", "Professional, Scientific and Technical Activities" and "Administrative and Support Service Activities" g - Health and Social Work = "Human Health and Social Work Activities" h - Other Community, Social and Personal Activities = "Arts, Entertainment and Recreation" and "Other Service Activites" i - Private Households with Employed Persons = "Activities of Households as Employers; Undifferentiated Goods and Servicesproducing Activities of Households for Own Use" j - Extra-Territorial Organizations and Bodies = "Activities of Extraterritorial Organizations and Bodies" 3. Annual data are averages of the four survey rounds of the Labor Force Survey. Sources: National Statistics Office (NSO) Labor Force Survey as cited in Bureau of Labor and Employment Statistics (BLES) 2013 Yearbook of Labor Statistics and December 2013 Current Labor Statistics
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The QE stimulus efforts combined with the lack of effective demand caused global interest rates to fall drastically. The key 3-month London Interbank Offer Rate (LIBOR) in US dollars for instance has fallen steeply from the annual average of 5.2% over the period 1986-2006 and 5.3% in 2007 to just 0.27% in 2013; this is far below the peak of 9.3% in 1989. Bangko Sentral ng Pilipinas (BSP) data show domestic interest rates correspondingly dropping to all-time recorded lows. (See Chart 2) The bank average lending rate (8.7% in 2007), reverse repo rate or RRP (6.8%) and interbank call loan rate (6.9%) have fallen to 5.8%, 3.5% and 2.4% respectively in 2013. These interest rates are far below their respective historical annual average rates of 12.9%, 10.1% and 10.2% over the period 1986-2013.
30.0 25.0 20.0 15.0 10.0 5.0 -
Chart 2. Selected Domestic Interest Rates, Chart 2. Selected Domestic Interest Rates, 1986-November 2013 1986-November 2013 (in %) (in%)
1986
1990
1995 Year
2000
2005
2010
Nov 2013
Bank Average Lending Rates
RRP Rates (Overnight)
Interbank Call Loan Rates
RRP - reverse repurchase rate Source: Bangko Sentral ng Pilipinas (BSP)
The unprecedented low interest rates drove the real estate and construction boom in two inter-related ways: on the supply side, the low-cost financing facilitated investment and production by real estate and construction firms while, on the demand side, property became cheaper for buyers or leasers. These supply and demand tendencies alsomutually-reinforced each other in a virtuous cycle. The demand surge for real estate is reported to be mainly coming from overseas Filipinos and BPO firms. Demand for real estate has also been boosted further by how developers have reportedly innovated with very loose payment schemes for potential homeowners. The surge in construction in 2012 and 2013 has been driven, aside from the private sector component, by increased government spending on national roads, bridges, flood control projects and other infrastructure. Public construction accounts for about a quarter of gross value in construction and grew 32.4% in 2012 and 31.8% in the first nine months of 2013 compared to private construction which grew slower at 13.7% and 11.5% over the same periods.
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The expanding debt in the economy due to low interest rates is reflected in how Philippine bank loans have been rising rapidly since 2008 and through 2013. (See Chart 3) BSP data shows that total bank loans outstanding grew by an annual average of 0.9% in 2002, of 6.0% in the period 2003-2007, of 10.6% in 2008-2012 and accelerating further to 15.0% in the first nine months of 2013 to reach Php3,922.5 billion in September 2013. Growth in the total universal and commercial bank (UKB) loans, which is the biggest category of bank loans, increased even more rapidly: from 2.4% in 2002, an annual average of 5.4% 2003-2007, of 13.5% in 2008-2012 and then by 13.8% in the first 11 months of 2013 to reach Php3,856.3 billion in November.
Chart 3. Philippine Loans, 1986-2013* (in million Php)
4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000
Chart 3. Philippine Loans, 1986-2013* (in million)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year
Total Bank Loans Total UKB Loans Outstanding Of Which for Production Of Which to Real Estate
* - 2013 data as of November, except for Total Bank Loans that are as of September UKB - Universal and Commercial Bank Source: Bangko Sentral ng Pilipinas (BSP)
The most dramatic increases in loan growth has been to real estate which accounts for the biggest share of loans outstanding. The insignificant 0.2% growth in 2002 increased to an annual average of 1.5% in the period 20032007 and then expanded exponentially to an annual average of 21.9% in 2008-2012, and growing still by 21.8% in the first 11 months of 2013 to Php665 billion in November. The rate of growth of debt has far outpaced economic growth, government revenues and spending. Consumption by more affluent consumers has also likely been boosted by negative real interest rates. The BSP reports that domestic savings deposit rates dropped from 2.2% in 2007 to just 0.9% in 2013 which is much lower than the inflation rate meaning that money unspent and kept as saving are actually losing value due to inflation. Although such credit/debt-driven consumption is probably restricted to the minority middle- and higher-income slice of the population with access to the formal financial system. The majority of the population of up to 70% with low or otherwise uncertain incomes are not likely to be involved despite increasingly loose credit standards. This low interest rate- and debt-driven growth in real estate and construction is however only a short-term stimulus. Demand for new real property and infrastructure is cyclical because these are relatively big ticket items for both consumers and producers. It is not likely that demand by overseas Filipinos or by BPOs will continue to increase at the rates in past years nor that there will be new sources of property demand especially once interest rates start to rise. Property buying in any case is concentrated in the small part of the population, the middle- and high-income classes, with sufficient disposable income for this.
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The contribution to long-term production and productivity of the booming real estate and construction sectors is weak not only because of their generally weak backward and forward linkages but also because of the nature of their activities. Their growth has not contributed to developing the two mutually necessary elements for growth to be sustained over the medium- to long-term: a wide base of stable domestic demand (such as through widescale job generation) or the production capacity to meet this demand (such as developed agriculture or Filipino industry). The Philippines is strictly speaking not yet a bubble economy where this appears conclusively only when it actually pops. Yet the economy is certainly heading in that direction in how record low interest rates and cheap credit are artificially driving consumption of real estate, autos and consumer goods as well as fuelling enterprises particularly in real estate and construction. Non-performing loans still remain very low, but this is understandable given low interest rates and do not necessarily indicate solid and sustainable repayment capacity. The main concern is what will happen when interest rates eventually begin to rise and when more consumer and producer debt becomes unpaid. The Aquino administration and its economic policy choices and directions are generally supported by international organizations and agencies that represent the interests of foreign transnational capital, and by domestic big business. These are reflected in the favorable assessments by international organizations and agencies. Yet while the Philippines is currently popular in this way, it is useful to consider that the so-called BRICS (i.e. Brazil, Russia, India, China and South Africa) were the same before their unsound fundamentals reasserted themselves and started to limit the opportunities for foreign capital to profit. Continued burdens The economic hype has partially diverted from the increasing socioeconomic burdens on the people. Prices of privatized and deregulated utilities, basic services and social security rose rapidly in 2013. Last year the effects of privatization continued to be felt with expensive water and electricity rates. Although further increases in rates were thwarted by public outcry, the absence of any real moves to reverse privatization, curb private sector profiteering, and build efficient public services could mean that these are only momentary. Amid claims of attaining rice self-sufficiency the price of rice has increased through 2013. According to the Bureau of Agricultural Statistics (BAS) the price of regular milled rice in NCR increased from Php30 per kilo at the end of 2012 to Php36 in December 2013, with prices in other regions increasing from a range of Php30-36 to Php32-40 per kilo over the same period. The prices of ampalaya, cabbage, carrots, eggplant, tomatoes, potatoes, other vegetables and cooking oil similarly also increased by anywhere from some 10-35% in December from the year before. Last year also saw more or bigger hikes, less or smaller rollbacks, and hence generally rising prices of petroleum products. The biggest increase was in the price of liquefied petroleum gas (LPG) whose price rose substantially from a range of Php670-814 per 11-kilogram tank in 2012 to Php842-965 in 2013 despite fewer hikes and more rollbacks. Gasoline prices were hiked 26 times and rolled back 14 times, raising the price from a range of Php39.50-42.45 per liter to Php49.15-55.30 in 2013. The price of diesel, which the influential militant transport sector is particularly sensitive to, fell slightly from a range of Php47.60-53.95 to Php41.3545.75. The year ended with Meralco, the countrys largest power distributor and biggest corporation by gross revenue, announcing in December the highest increase in billing in the countrys history. The Energy Regulatory Commission (ERC)-approved hike of Php4.15-per-kilowatt-hour increase to be implemented in three monthly tranches was reportedly to cover for higher generation charges due to momentarily tighter electricity supply due to scheduled maintenance on the Malampaya natural gas platform, the single biggest source of energy in Luzon, and high prices paid for power sourced from the Wholesale Electricity Spot Market (WESM).
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The rate hike was immediately criticized as baseless and the result of collusion by the handful of power firms, of prominent oligarchs and business families, monopolizing the industry. The controversy has drawn attention to the impact of the Electricity Power Industry Reform Act (EPIRA) and the state policy of power privatization on electricity costs, consumer welfare, industrial development and the overall economy and by extension to the underlying contradiction between private profits and the public welfare. The Supreme Court issued a temporary restraining order and scheduled oral arguments in the latter part of January. The Aquino government also revived moves to implement the long-stalled scheme to increase Metro Rail Transit (MRT) and Light Rail Transit (LRT) fares as part of its privatization plans. Amid public opposition, the government is geared to hike the train systems fares in 2014. Metro Manila water consumers meanwhile are still awaiting lower water rates after regulators of the Metropolitan Waterworks and Sewerage System (MWSS) denied the water firms proposal for rates increase and instead adjusted these downwards. There is even a possibility that the lower rates could be reversed with the ongoing arbitration. Last year, the two private water concessionaires, Manila Water Corp and Maynilad, filed separate notices of dispute before the International Chamber of Commerces International Court of Arbitration. Failed policies Growth is becoming more exclusionary with every year of the Aquino administration.This is the result of the market-based elite-biased socioeconomic policies implemented by consecutive administrations for decades and continued by the current Aquino government. Implemented more aggressively since the 1980s, these are biased against domestic production and make prices of basic goods and services unaffordable. There is a one-sided emphasis on creating profitable opportunities for foreign investors and domestic oligarchs even at the expense of the national economy, incomes of workers, livelihoods of farmers, and opportunities for the poor majority. The country is in essentially the same situation that had actually already happened under previous administrations. The economy for instance grew above its long-term average annual rate at various points during the Arroyo (in 2003-2008), Estrada (in 2000), Ramos (in 1994-1997) and even Corazon Aquino (in 1987-1989) administrations. There were also other supposedly positive economic indicators but also persistent joblessness and poverty. Then as now the government appealed for patience from the public for benefits that never trickled down. The boom is happening amid continued agricultural and industrial backwardness and unsound economic fundamentals. The shares of manufacturing and agriculture in the economy have been falling steadily for at least four decades. (See Chart 4) Agricultural production is low and chronically volatile unduly affected by the weather while the largest part of the manufacturing sector has low value-added and is even foreigndominated. As it is, for instance, some two-thirds (65%) of gross revenue of the manufacturing firms in the top 1,000 corporations of the country is accounted for by transnational corporations. More than having taken active measures to bring about growth, the Aquino administration has benefited from a favorable confluence of factors: coming from political crises during the previous Arroyo government, steady hype about good governance and a popular president, global liquidity with unprecedented loose monetary policy in developed countries, improving domestic macroeconomic indicators, and business enthusiasm in some sectors of the economy. Among these the biggest contribution of the administration has been to avoid political controversy of the scale during the previous Arroyo administration and, in doing so, contributed to a sense of stability that stimulated Keynesian animal spirits and business confidence. However, this is a contribution mainly by omission while the more basic policy choices and conditions for national development and social progress remain absent. But that confluence of factors is fleeting and the economy remains vulnerable especially with the recent growth period not creating the sound fundamentals for sustained and long-term growth.
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Chart 4. Gross Domestic Product By Industry Share, 1946-2013* (at constant 2000 prices; in %) (at constant 2000 prices; in %)
60 50
Chart 4. Gross Domestic Product By Industry Share, 1946-2013*
Industry Share (in %)
40 30 20 10 -
19461950
1960
1970
1980
1990
2000
2010 -13
* - 2013 data based on 1st-3rd quarters only Source: National Statistical Coordination Board (NSCB) National Accounts of the Philippines
Continuing failure The Aquino governments policy directions in its final three years are unreformed and compromise national economic development.The administrations macroeconomic, fiscal, financial, trade, investment and sectoral policies are identical to those under the previous Arroyo government i.e. liberalization, privatization, deregulation, fiscal tightening, inflation-targeting, higher and more regressive taxes, encouraging hot money inflows, bias for foreign investors over small domestic capital, wage repression and so on. The administration will announce an updated economic development plan and industrial roadmaps at the start of 2014. But there are strong reasons to believe that these will not sustain growth, even in the short-term, nor result in long-term socioeconomic development. The updated Philippine Development Plan (PDP) acknowledges that growth has not reduced poverty. It is called a roadmap to inclusivity, and presents target benefits of job generation and poverty reduction in a more refined, elaborated and systematic manner. The spatial and sectoral dimensions of exclusion and poverty in particular are raised as requiring due attention. The supposedly updated plan however still relies on the same failed policy thrusts of the past and their onesided emphasis on creating the conditions for profit-making and business while avoiding the more far-reaching and developmental-inducing measures of income, wealth and asset redistribution. Although such redistribution is given lip service, they are more frequently decried as disruptive to business and to growth and hence set aside. Yet these are necessary measures to create the conditions for the poor majority to be productive and benefit from the national economy. The updated plans bias for foreign investors and local big business is evident in the declared strategy of reducing regulatory burdens and policy consistency echoing capitals demands for removing regulations on foreign investment, reducing state intervention in the public interest even in public utilities and social services, and ensuring legal protections for profit and profit-seeking.
IBON Economic and Political Briefing 15 January 2014

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The situation is the same with the proposed industrial roadmaps being packaged as a Comprehensive National Industrial Strategy. These acknowledge the countrys industrial backwardness and present target benefits of industrial development in a more refined, elaborated and systematic manner. However they merely repackage long-standing demands by foreign transnational corporations and their junior partners to expand their opportunities for profit-making. The roadmaps were generated through a perverse bottom-up process of starting from what individual corporations and industries, including foreign businesses, desired to expand their production and increase their profits. In particular they flesh out the priority sectors of the economy that the Joint Foreign Chambers of the Philippines (JFC) pushed as Seven Big Winners in 2009, again in 2010 and which in 2011 finally found its way into the Aquino administrations original PDP 2011-2016. These are the [globally] competitive industries and services of foreign tourism, cheap labor BPO, low value-added electronics for export, extractive mining, export-oriented agribusiness and forestry, and foreign-dominated ship-building; only the seventh, so-called creative industries, is absent. Individual enterprises and to some degree even foreign investment can play an important role in national development. But the more sensible approach is to start from and give greater priority to a strategic vision of national industrial development. The roadmaps on the other hand start with the wrong notion that national development can spontaneously emerge from individual profit-seeking which is a recycling of the discredited invisible hand argument of neoliberalism and neoclassical economics. If implemented, they will in effect amount to government support for foreign investors and their local partners rather than for national development. The updated PDP and industrial roadmaps will only reinforce the anti-development bias for foreign capital and foreign markets. It is evident that foreign investment will operate to create the greatest profits for itself, with only incidental benefits for the domestic economy and the welfare of the people. Transnational Corporations (TNCs) are intrinsically limited in their contributions to Philippine development by their overriding compulsion for immediate and long-term profits. This results in the universal tendency to repress wages, to lower domestic value-added or pay low prices for inputs because local segments of production are structured according to global value chains, and to prevent the development of local science and technology and any Filipino competitors to retain their monopolistic advantages. Genuinely domestic or Filipino production in contrast means paying higher wages, steadily increasing the use of local inputs and hires, improving local scientific and technological capacity, and reinvesting in local enterprises.Industrial policy should be aimed at expanding Filipino production and increasing domestic valueadded over the long-term. The leaders of the Senate and House of Representatives in December also declared their intent to push for amendments to the economic provisions of the 1987 Constitution towards greater liberalization, effectively removing the last and so far most intractable legal barriers to the profit-seeking operations of foreign investors in the country. The president has publicly distanced himself from the charter change initiative although this has been interpreted more as a calculated move to insulate him from controversy rather than actual resistance and it is possible that Malacaangis reserving visible support until a minimum of political consensus is reached. Averting development failure Decades of free-market open-economy policies have burdened the Philippines and the majority of poor Filipinos with an exclusionary, imbalanced and unstable pattern of growth. These have stifled the development of local agriculture and industry, caused record joblessness and increased poverty. Episodes of relatively rapid growth including the current one are fundamentally unsustainable, unstable and dependent on fleeting or otherwise external sources of growth.
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Continuing development failure can be averted. An inclusive, balanced and stable pattern of growth requires a package of social and economic policies that interact and work together. Domestic demand needs to be boosted through a more aggressive and decisive agrarian reform program and by real and substantial wage increases. These will in addition immediately improve the welfare of the majority of Filipinos. Rural development in particular remains hindered by a clunky agrarian reform program that does not give land to the peasantry nor provide them with the means to make the land productive. However increased domestic demand needs to stimulate domestic production for there to be a virtuous circle of improved livelihoods, increased consumption, higher investment, better productivity, greater employment, and improved wages and rural earnings. Domestic production then needs to be expanded concurrently through greater and more responsible State intervention, support and protection. Filipino firms and farms need government support in terms of financing, technology, training, marketing, tax breaks, procurement, infrastructure and protection against foreign competition. Abuses and inefficiency can be prevented by putting democratic controls in place. Government economic policy needs to be biased for Filipino producers rather than, at present, for foreigndominated or -dependent economic activity in every major modern production sector of the economy. Filipino producers need to be prioritized over foreign capital that merely locates in the Philippines to profit from the countrys labor, natural resources and markets. The private sector and even foreign capital can continue to operate but in ways that contribute to broad-based and sustainable national development, such as by the use of performance requirements. The greatest number of Filipinos needs to be given opportunities and a larger share of the national product in the most far-reaching ways possible. The most immediately effective measures for this are the free distribution of land to tens of millions of farmers and meaningful wage increases for millions of workers and employees. The economy as a whole needs to be systematically geared towards improving the welfare of the people. Social services such as education and health should be publicly-provided rather than turned into commodities sold for private profit that are affordable only for a few while being unnecessarily expensive for the large majority of poor in the country. Likewise with vital public utilities and services such as power, water and transportation. Public resources can be generated for these through a more progressive tax system, while public capacity can only improve or start to be developed upon more active state engagement in these utilities and services. The countrys relations with other countries and integration into the world economy need to be made supportive of national socioeconomic development. Unfortunately the government in 2013 pursued international trade and investment agreements favouring the advanced capitalist countries at the expense of Philippine economic development and the needs of Filipinos. In December the administration supported the deal reached by the World Trade Organization (WTO) at the conclusion of its 9th ministerial meeting in Bali, Indonesia. This included an agreement on Trade Facilitation (TF) that simplifies customs and other bureaucratic procedures to make imports from developed countries easier while, in practice, not really creating export opportunities for the Philippines. This will worsen the countrys rising merchandise trade deficit and make it even more difficult to create the domestic conditions for local agriculture and industry to develop. The Aquino government also took steps towards more disadvantageous free trade deals. The Department of Trade and Industry (DTI) actively pursued meetings with the European Union (EU) commissioner to start negotiations on an EU-Philippines free trade agreement (FTA) and reportedly sent a delegation to Brussels in November for technical discussions to prepare for this. The government also advanced in its efforts to join the US-dominated Trans-Pacific Partnership (TPP) Agreement and scheduled the sending of a team to the US in January 2014 for technical consultations on this.
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The looming next stage in Association of Southeast Asian Nations (ASEAN) economic integration in 2015 meanwhile cannot be accepted as it is in merely aiming to make Southeast Asia more conveniently integrated for the global value chains of big foreign transnational corporations. The onset of the ASEAN Economic Community even threatens a rush of imports especially of agricultural products but also of low-tech manufactured goods that will compete with local production and further undermine domestic livelihoods. The beneficiaries will be mainly US, Japanese and European capital and their junior partners in ASEAN. Regional integration has potential benefits but ASEAN integration needs to be reinvented on a more sovereign basis as being attempted by many Latin American countries with such initiatives as the Bolivarian Alliance for the Peoples of our America (ALBA), Union of South American Nations (UNASUR), and the Community of Latin American and Caribbean States (CELAC). This however presumes progressive governments in the countries of ASEAN. There is actually a period of opportunity with the world economy uncertain, old imperialist powers grappling with their crises, and alternative centers stirring. Reforming one-sided policies to support Filipino producers, asserting national economic sovereignty, tackling social inequity and making public institutions more democratic are necessary to improve the conditions of majority Filipinos. Entering uncertainty: Economic crisis The country is entering a period of uncertainty as the economy winds down from a lack of internal dynamism and as repressed political pressures slowly emerge in the run-up to the 2016 elections and transition from the current Aquino administration to a new one. The economic risk is the winding down of the economy from a combination of less favorable external conditions in the global economy amid unresolved internal problems of low and inhibited domestic demand. The short-term real estate and construction stimulus has diverted from how the economy still lacks sustainable domestic sources of growth. The limits of the countrys most recent episode of high growth will become more apparent as the debt-driven expansion winds down with easing demand for goods and services, including real estate, and more expensive financing for production. There are already indications that the extended period of historic low interest rates, yields and borrowing costs is coming to an end particularly with the US Federal Reserve cutting back on its finance-driven economic stimulus efforts. The investment in real estate, construction, malls and department stores did not lay the foundations of domestic productive capacity which can only be found in robust local agriculture and Filipino industry. Overseas remittances also appear to be reaching their limits in contributing to domestic demand. While remittances are still increasing in absolute terms their growth is slowing. (See Chart 5) BSP data show remittances growing 6.0% in the first 10 months of 2013 from the year before, but which rate is slower than the 6.3% growth in 2012, 7.2% in 2011 and 8.2% in 2010. The equivalent share of remittances to GDP is also steadily dropping to 8.4% of GDP in the first three quarters of 2013, steadily and markedly down from the peak of 10.4% in 2005/2006. This means that remittances have already started to diminish as a source of domestic demand relative to the size of the economy and the growing population. National accounts data from the NSCB are also consistent with these trends where the compensation inflow component of net primary income from the rest of the world representing mainly the earnings of Filipinos overseas slowed to 5.1% growth in the first nine months of 2013 from 7.5% in the same period in 2012. This is possibly because overseas Filipinos are starting to be paid less, and possibly because of slowing recorded deployments. Data from the Philippine Overseas Employment Agency (POEA) show that the average number of overseas workers deployed daily has been increasing since the start of the current administration: 4,030 leaving the
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Chart5. 5. Overseas OverseasRemittances RemittancesGrowth Growthand and Equivalent Share Chart Equivalent Share inin Gross 1991-2013* (in %) GrossDomestic DomesticProduct, Product, 1991-2013* (in %)
45 40 35 30 25 20 15 10 5 (5) 1991 (10) (15) (20) 15
Overseas Remittances Equivalent Share in GDP (in %)
Overseas Remittances, Growth Rate (in %)
10
5 1993 1995 1997 1999 2001 2003 Year 2005 2007 2009 2011 2013 -
Overseas Remittances, Growth Rate (in %)
Overseas Remittances Equivalent Share in GDP (in %)
* - 2013 data based on 1st-3rd quarters only Source: Bangko Sentral ng Pilipinas
country daily in 2010 (1.47 million deployed for the year), 4,624 in 2011 (1.69 million), and 4,924 in 2012 (1.80 million). However it is possible that deployments in 2013 will be lower than the year before with deployments in January-September 2013 averaging just 4,295 daily compared to 5,194 over the same period in 2012, or a marked 17.3% less. If so this would be the first decline in deployments in a decade where the last time this happened was in 2003 which saw a marginal 2.7% dip in deployments. But it is also possible for the drop in recorded deployments to be offset by increasing number of undocumented workers. On the other hand, the continued backwardness of local agriculture and Filipino industry interacts with persistently high unemployment and poverty to prevent sustained and growing domestic demand over the medium- to long-term. Entering uncertainty: Poverty and pork There are political issues against the Aquino administration from 2013 which will gain momentum in the year to come. The administration has been able to sustain itself through the shallow but politically effective stratagem of Pres. Aquino perceived as distinct from his traditional political allies and opportunistic family members not yet being personally embroiled in any corruption scandals. However, the year also saw the unraveling of Pres. Aquino as a supposed reformist. His defense of the pork barrel system, a long-time symbol of the countrys rotten politics, has further exposed the hollowness of the administrations anti-corruption rhetoric. Various surveys show a consistent trend of increasing public dissatisfaction. Various issues in 2014 will continue to put the Aquino presidencys reformist image and correspondingly its political legitimacy under increasing stress. The most important political failure of the Aquino administration is its consistent use of the vast powers of the state to promote private profits of foreign corporations and domestic oligarchs while equally
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consistently avoiding the redistribution and reforms so vital to promote the public welfare especially of the poor majority. This causes the unrelenting poverty and worsening condition of tens of millions of Filipinos. Pres. Aquino and his economic policies are visibly supported by international financial institutions, global financial players, foreign capital, large sections of the domestic oligarchy, and even the US and other big power governments. There is corresponding support from the middle-classes and intellectuals which in turn has influenced a measure of wider popular support. Deep socioeconomic problems however have always been volatile conditions for social unrest in the country. The administration is aware of this and is undertaking a massive multi-year multi-billion cash transfer program for the poor in an effort to pre-empt turmoil from below. The so-called social protection 4Ps program has grown substantially over the course of the Aquino administration and increased six-fold from Php10 billion in 2010 to Php62.6 billion in 2014, with the number of household beneficiaries covered also growing from 1.0 million to 4.3 million. (See Table 9) The program is strategically implemented and targets the poorest of the poor in towns and villages nationwide including, conspicuously, in areas of armed conflict.
Table 9. Pantawid Pamilyang Pilipino Program Annual Target Beneficiaries and Budget, 2007-2014 (amount in Php) Household Year Beneficiaries 2007 2008 2009 2010 2011 2012 2013 4,600 320,411 734,691 1.0 million 2.3 million 3.0 million 3.7 million Budget (in Php) 50.0 million 299.0 million 5.0 billion 10.0 billion 21.2 billion 39.5 billion 44.3 billion
2014 4.3 million 62.6 billion Source: Department of Social Welfare and Development (DSWD)
The 4Ps intervention is played up as pro-poor even as it takes place in the noticeable absence of more basic and far-reaching pro-poor reforms. For instance administrative data on land distribution conceals how agrarian reform is subverted by continuing landlord claims over millions of hectares of agricultural land and continuing landlord control over millions of peasants and their produce due to resistance, reversals and land reconcentration. After decades of agrarian reform programs, barely a tenth of supposed beneficiaries have fully paid for land they till that is being sold to them under the programs, and rural poverty remains widespread and far above the national average. The government also continues to avoid meaningful wage hikes and, on the contrary, has shifted to a two-tier wage scheme to lower the mandated minimum wage. Measures to make the labor force more flexible according to the priorities of employers and foreign investors are even being considered. Meanwhile, anomalies continue to hound the program. Just recently, the Commission on Audit (COA) reported that 7,782 CCT beneficiaries who received Php50.15 million could not be located. Also, some Php18 billion disbursed under the program from 2008 to 2012 have remained undocumented. The Department of Social Welfare and Development (DSWD) explained the issue as a simple technical glitch in their recording system. The administrations unwillingness and inability to take the difficult steps for real reform is underscored by how the majority is asked for patience and momentarily distracted with minimal, though steady, cash transfers while the profits and wealth of a few immediately and significantly rise. The government meanwhile remains
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aggressive in seeking to create profitable opportunities for foreign and domestic big business which are packaged as indispensable for the countrys development. The priorities are distorted. Last year for instance the government approved Php30 billion in the 2014 national budget as a Risk Management Program to assure corporations of their profits when entering into Public-Private Partnership (PPP) projects. The new contingency fund in the budget materializes the regulatory risk guarantee promised by Pres. Aquino in his first state of the nation address in 2010. The size of the fund depends on the number and size of PPP projects and attendant assurances required by investors so the initial Php30billion fund will only become larger as more PPPs come on line. The PPP program is for now criticized mainly for its slow progress with contracts awarded so far only to five out of some 50 targeted. More than this however the main issue as the water and power privatization controversies in 2013 showed is of terms in the private profit-oriented PPP deals that are disadvantageous to the public interest. This will become more evident as the negotiations, contracts and terms are subjected to greater public scrutiny. After three years, the Aquino administration will also have to deal with being assessed on its declarations of political reforms. The last year however gave strong indications of the persistence of traditional practices of elite and undemocratic politics notwithstanding the sustained good governance publicity. The administration coalitions seemingly decisive victory in the May 2013 midterm elections happened amid questions surrounding the integrity of automated elections which were systematically downplayed and remain unresolved. The same equipment, software and electoral infrastructure will be used in the 2016 elections. The Php10 billion pork barrel scam that emerged mid-year has grown far beyond itself and brought the practice of patronage politics and even the use of public powers for private gain to greater public attention. The scam initially involved the Priority Development Assistance Fund (PDAF) of several members of the Senate senators Juan Ponce Enrile, Jinggoy Estrada, Gregorio Honasan, Ferdinand Marcos, Jr. and Bong Revilla and of the House of Representatives (HOR) and implicated mainly political opposition including ranking officials believed to be running for high public office in 2016. A subsequent report by the Commission on Audit (COA) pointed to 12 senators, 180 representatives, other national and local government officials, and 10 government agencies. The political opposition countered by exposing Pres. Aquinos alleged use of presidential pork barrel specifically a portion under its novel Disbursement Acceleration Program (DAP) in the campaign to impeach and unseat former chief justice Renato Corona. It has been estimated that anywhere from Php34.4 billion was given to senators and representatives towards getting a conviction in May 2012. The Supreme Court (SC) declared the PDAF unconstitutional in November and this was formally removed from the 2014 budget. However senators and congressmen, aside from a few who declined, in effect still individually decided on the allocation of lump sum pork barrel funds by realigning these through amendments in the 2014 budget to government agencies and even local government units of allied officials. This highlights how the SC decision is a welcome though still very partial victory against the pork barrel system. The Makabayan coalition in particular drew attention to some Php1.1 trillion in presidential pork barrel funds from a variety of sources of which the controversial PDAF is only a small part. (See Chart 6) Pres. Aquino has actively defended the DAP and by extension the wide range of presidential pork barrel variously arguing that the DAP is a driver of the countrys economic boom, that he and his administration can be trusted to spend discretionary funds wisely, and that these funds are used for the benefit of the people. In this context the SC abolition of PDAF also possibly creates the conditions for legislators to become more compliant with the president to be able to access pork barrel funds.
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Chart 6. Indicative Pork Barrel Estimates (in billion Php)
Savings 280.8
Regular agency budgets 235.3 Unprogrammed funds 139.9 Malampaya Fund 137.3
Special Purpose Funds 294.0
CHED Higher Education Devt Fund 1.5 Presidents Social Motor Vehicle Users Fund/PAGCOR Presidents Charity Charge 2.0 10.7 Fund/PCSO 8.1
Priority Development Assistance Fund 25.2
National government budget items
Off-budget items
Sources: Makabayan House Resolution No. 298, Commission on Audit (COA) and Department of Budget and Management (DBM) Budget of Expenditures and Sources of Financing (BESF) 2014
Public indignation against the pork barrel system drove a resurgent of protests including from among a wide section of the middle classes. This outrage also underpins a potentially historic Peoples Initiative where, instead of the usual legislative process, a law for the complete abolition of the pork barrel is enacted through a signature campaign from 10% of all registered voters in the country including at least 3% in each legislative district. The effort is most of all compelled by public distrust of the legislature and of the executive branch that is so influential on it. It is being pushed by an increasingly politically-aware public that is testing the possibility of using the most directly democratic means of law-making in the country. Rights violations and neocolonial relations The countrys social and mass movements are the strongest force pushing for more democratic governance in the country. Their struggles for economic, social and cultural rights are the most concrete and effective counterforce against structural mechanisms of underdevelopment exemplified by the continuing assertions for land by the organized peasants of Hacienda Luisita despite violent attacks on them, the trade union struggles for higher wages and benefits and against illegal dismissals, the urban poor community opposition to demolitions, and many others across sectors and across the country. The Aquino administration engages a significant portion of civil society in various initiatives most prominently in such as the 4Ps cash transfer program and bottom-up-budgeting in a few local government units. This has allowed it to bolster its participatory and good governance credentials as well as, perhaps not inadvertently, neutralize possible criticism and opposition. At a broader level however the essential continuity in flawed economic and social policies, unreformed political practices, and poor socioeconomic outcomes raises questions as to the effectiveness of this engagement and of who the government and the elite interests it protects or civil society and the people they presumably uphold gains more from it.
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It is evident though that grassroots movements are being subjected to sustained repression which continues a phenomenon that intensified under the previous Arroyo administration. The independent human rights group Karapatan has continued to monitor civil and political rights violations particularly against organized forces of the social and mass movements launching protest actions and waging local struggles. Grave violations monitored last year as of August 2013 include 15 extrajudicial killings, 14 more frustrated attempts, four enforced disappearances, four cases of torture and 89 cases of illegal arrest and detention, among others. These have brought the total monitored such violations under the Aquino administration to 152 extrajudicial killings, 168 more frustrated attempts, 18 enforced disappearances, 80 cases of torture and 250 cases of illegal arrest and detention. (See Table 10) There are tens of thousands more victims of military abuse of communities, forced eviction, demolitions and other rights violations.
Table 10. Violation of Civil and Political Rights Under the Aquino Admnistration, July 2010-August 2013 Violations Extrajudicial Killing Enforced Disappearance Torture Rape
a
No. of Victims 152 18 80 3 168 250 358 214 238 12,843 397 11,711 282 31,779
Frustrated Extrajudicial Killing Illegal Arrest without Detention Illegal Arrest and Detention Illegal Search and Seizure
Physical Assault and Injury Demolition Violation of Domicile Destruction of Property Divestment of Property Forced Evacuation Threat/Harassment/Intimidation Indiscriminate Firing Forced/Fake Surrender Forced Labor/Involuntary Servitude Use of Civilians in Police and/or Military Operations as Guides and/or Shield Use of Schools, Medical, Religious and Other Public Places for Military Purpose Restriction or Violent Dispersal of Mass Actions, Public Assemblies and Gatherings - all victims are minors b - mostly communities in militarized areas
a b
34,901 7,015 54 172 297 29,423 3,231
Source: KARAPATAN Alliance for the Advancement for People's Rights
The Center for Trade Union and Human Rights (CTUHR) for its part monitored 8,139 violations of labor, housing rights and civil liberties of which 3,928 wereof labor and civil liberties. The 41 incidents of civil and political rights violations with 892 victims mainly attacks on picket lines and other dispersals of organized workers actions in 2013 is an increase from the year before. Similarly, the 7,788 monitored victims of economic, social and cultural rights is more than the 7,342 year from the year before; the biggest part of this were violations of the right to freedom of association followed by demolitions of urban poor communities. (See Table 11)
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Table 11. Trade Union-Related Human Rights Violations, 2013 Case Title Civil and Political Rights Violations Extrajudicial Killing Physical Assault/ Injury (includes mauling) Arbitrary Arrest/ Detention Fabrication of Criminal Charges due to political acts/belief or labor dispute Assault on the Picket Line Breaking up/ Violent Dispersals of workers' concerted actions Economic, Social and Cultural Rights (ESCR) Violations a Violation of the right to security of tenure Illegal dismissal Retrenchment / Closure Dismissal due to labor dispute Unsafe working condition Death due to unsafe working condition Violation of the right to receive fair/just wages Underpayment of minimum wage Violation of the right to freedom of association (FOA) and collectively bargain Union-busting Harassment of unionists inside the workplace Intervention on trade union affairs Anti-union discrimination Prohibition of the right to strike Collective Bargaining Agreement (CBA) violations and issues Non-implementation of CBA Bargaining in bad faith / Refusal to bargain Total ESCR-FOA Violations on Workers Other ESCR Violations Demolition of urban poor communities Total Trade Union-Related Human Rights Violations (Labor and Civil Liberties) Total Human Rights Violations (Labor, Housing Rights and Civil Liberties) Note: Number of victims will not add up to total due to multiple reporting. a - labor and housing rights; victims are affected workers unless stated 8 86 106 3,928 8,139 1 6 57 64 1,680 3,912 10 4 2 3 2 1,034 470 938 133 629 4 850 9 21 10 6 1,347 242 No. of Cases 41 2 10 5 8 2 2 65 No. of Victims 892 2 48 28 33 129 429 7,788
Source: Center for Trade Union and Human Rights
Neocolonial relations with the US are visibly worsening under the Aquino administration with these ties deepening last year in both political and economic terms. Politically, the much greater dependence on the US is most evident in the administrations reliance on US military might and diplomatic clout in its handling of the territorial dispute with China in the West Philippine Sea/South China Sea. There is however also the US-driven international offensive in multilateral organizations, by US agencies, among the business community, and media to build up the Aquino government as a model of good governance and of reforming towards greater market policies.
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The governments compliance with the USs hegemonic agenda in the region meanwhile is expressed in the increasing presence of US military forces in the country. The number of American soldiers participating in so-called exercises has risen to record highs under the Aquino administration, at 7,000 in 2012 and then 8,000 in 2013 both during the Balikatan exercises; this is aside from the over 5,000 troops that came in the wake of supertyphoon Yolanda. The number of reported ship visits by the US Navy to various ports and harbors has likewise been growing substantially. The Aquino administration is also negotiating a more formal and greater rotational presence of US troops in the country which appears stalled less by the government disagreeing than by the government anxious about the inevitable public backlash. Before the year ended foreign secretary Albert del Rosario even took the lead in arguing for a larger and more permanent US military presence with a public statement that the US military assistance in Yolanda-related relief efforts proves the need for their presence in the country. The increasing role that the Philippines is playing in the USs hegemonic and imperialist agenda in the region are dangerously creating the conditions for even greater US interference in domestic affairs and the US will become even more involved to ensure that this role is not disrupted. Among others this means ensuring friendly political leadership at the highest levels of government. The greater US effort to consolidate its influence over the Philippines is reflected in markedly increased US military and economic aid to the country this has been steadily increasing throughout the Aquino administration to a proposed US$188.0 million in 2014 (See Table 12); this is aside from the US$434 million provided through the Millennium Challenge Corporation (MCC). Regionally, the Philippines also serves as reliable proxy of the US in ASEAN to bolster the USs increasing engagement there.
Table 12. US Assistance to the Philippines, FY2010-FY2014 (in thousand US$) Account Global Health Programs Development Assistance Economic Support Fund Foreign Military Financing International Military Education and Training International Narcotics Control and Law Enforcement Non-Proliferation, Anti-Terrorism and De-mining Total 2010 33,220 40,310 30,000 29,000 1,850 1,365 5,625 141,370 2011 32,437 79,055 11,970 1,971 2,065 9,525 137,023 2012 33,800 81,055 27,000 1,954 2,450 9,525 155,784 2013 a 32,810 85,755 28,483 1,614 2,996 8,945 160,603 2014 b 31,500 87,682 50,000 1,700 8,000 9,100 187,982
Note: Does not include food aid and Millenium Challenge Corporation funding. The FY 2014 request includes US$9.5 million (Development Assistance) for programs in the South Pacific administered by the Philippines mission. FY - fiscal year a - estimate b - request Source: Department of State Congressional Budget Justification for Foreign Operations
The Philippines is already assisting the US in its efforts to isolate and contain Chinese influence in the region. The Aquino administration for instance, on the flimsy perception of being backed by US military force, is pushing back against China even as ASEAN as a whole is not collectively able to do so. Relations with China will come even under more stress with the increased and more sustained presence of US military forces in the country.
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Trends in 2014 The Aquino administration faces the prospect of greater uncertainty and growing instability. Initial dissatisfaction had already been developing steadily but this greatly accelerated in 2013 with the emergence of major economic and political issues that tested the capacity even of the administrations formidable propaganda machinery inside and outside of government. The image of wide popular support cultivated since 2010 has started to be seriously challenged. The countrys poor majority has long grasped their worsening situation. But Pres. Aquinos competence, decisiveness and sincerity has also come to be questioned even by erstwhile supporters among the middle- and upper-classes It is possible for conditions to be favorable such that the Aquino administration is able to extend the relative stability that it has achieved in the last three years. A steady deterioration in the national situation is more likely however even as any sudden internal or external shocks would only accelerate the decline. Underdevelopment. The lack of meaningful development in the country over halfway through its term will weigh heavily on the administration in its closing years. Of greatest concern to the people is the rising joblessness and poverty and how there will not be any real measures to arrest the decline of domestic agriculture and Filipino manufacturing, create jobs and raise incomes. Indeed the opposite is happening with government efforts to give greater support to foreign investors, enter into new free trade agreements, and amend the economic provisions of the charter. Growth. The economy will continue growing in 2014 although no longer at previous rates. The tendency to slowdown has already started with unsustainable growth sources playing themselves out. The real estate and construction boom is likely to start winding down as rising interest rates and slowing overseas remittance growth start pulling down consumption, investment and production. The process however could still drastically accelerate such as upon some sudden adverse external shock in the global economy. Growth in GDP a major propaganda peg to claim good economic performance has already started to show signs of slowing in the latter part of 2013. The main countervailing factor will be stimulus from post-Yolanda efforts and increased public infrastructure spending. The estimated Php361 billion over three years proposed for post-Yolanda reconstruction and rehabilitation that mobilizes public, private and foreign sources will provide a short-term stimulus to the economy. This includes some Php135 billion for the last two months of 2013 and the rest of 2014. The sheer scale of the effort however will test the government bureaucracys efficiency and integrity. Various problems have already surfaced which may indicate further and larger controversies in the months to come. It is also possible for the world economy and the advanced capitalist countries in particular to momentarily overcome the inertia of the protracted global depression and register a slight uptick in their growth and imports including from the Philippines. A year of subdued growth is more likely though with fragile progress in the US, Europe and Japan. In any case the many underdeveloped countries and even the few large emerging economies will be competing for the limited export demand from the handful of big capitalist economies. And growth will in any case still not mean development as the radical reforms for real inclusivity remain unaddressed. 2016. The second half of 2013 had Pres. Aquino criticized for selectivity in the handling of pork barrel abuses, defending presidential pork and patronage, mishandling disaster response, persistent joblessness and poverty amid prosperity for a few, declaring helplessness against rising power rates, and defending rising social security and health insurance premiums. The administration will be seeking to regain political momentum in 2014 and the closing years of its term. It could make a display of repudiating presidential pork and patronage. It could also show meaningful progress in the corruption cases filed against former president Arroyo and the pork barrel scam legislators and officials.
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The possible consequences would have to be managed though such as being seen to lose key levers of political control in the critical run-up to the 2016 elections and the heightening of intra-elite factional conflict to the point of unmanageability. The administration quickly built on results of May 2013 elections to prepare for 2016. It attacked the political opposition in the Senate to undermine their capability to push viable alternative presidential candidates in 2016 and possibly improve the viability of presumptive Liberal Party (LP) bet Mar Roxas as part of work on a succession scenario that keeps them dominant. The selection of a specific candidate is still fluid but the administration is already attending to getting support for its eventual anointed successor such as through delivering opportunities and deals for big business, pro-foreign investor policy changes, arranging for an increased US troop presence and others. Reinforcing personality-focused politics, the administration and opposition will start to position their respective priority and back-up presidential candidates. The political opposition meanwhile is likely just waiting for the opportunity for a more aggressive counterattack. Political alliances in the Philippines are loose even within the administration coalition in the Senate and HOR, and are most subject to stress and breakups as presidential elections approach. Political in-fighting may still be moderated in 2014 barring some sudden unexpected major political issue. The administration will seek to pre-empt or at least delay the tendency for the LP-led coalition to dissolve and weaken the presidents influence as 2016 nears. Charter change. Foreign big business and their local partners are looking forward to greater opportunities for profit and expansion in particular coming from the further relaxing of foreign ownership limits and opening up of currently Constitutionally-protected sectors. While economic amendments to the charter would confirm the determined liberalization thrust of the government and encourage additional investment interest, any actual increases would if ever only materialize in later years. The effort could trigger protests from smaller Filipino producers discerning how they are disadvantaged as well as from the general public discerning that term limits on public officials, restrictions on the abuse of state power, and prohibitions on foreign military forces are also at stake. Unrest. Accumulating socioeconomic problems are the most explosive conditions for social unrest. A continuing upsurge of protests is likely in 2014 on various socioeconomic issues. There will be growing calls for more jobs, higher wages, lower prices for basic goods and services, real poverty alleviation, and more equitable distribution of national income. The decisions on the rate increases of Meralco, Maynilad and Manila Water, and the MRT-LRT fares are anticipated and will likely fuel peoples dissatisfaction if approved. The extended comprehensive agrarian reform program in particular is due to end in mid-2014 with years worth of unmet targets and persistent landlessness in the countryside. These protests will build up and can eventually lead to a demand for more radical political changes in the country. The administration will seek to stem worsening instability with selective dole-out and welfare measures and heightened propaganda to convince the public that their economic conditions will soon improve. In any case another popular uprising by the people would be another step in the protracted struggle towards greater democracy in the country. Wide and deep rural poverty will continue to be conditions for the strengthening of armed revolutionary movements challenging the state. The number of monitored encounters between the New Peoples Army (NPA) of the Maoist Communist Party of the Philippines (CPP) and government forces increased to 372 in 2013 from 323 the year before, indicating growing armed conflict; government casualties increased while those on the part of the NPA fell. (See Annex). The CPP at yearend announced its intent to expand the NPA forces to 25,000. The peace talks with the National Democratic Front of the Philippines (NDFP), whose next agenda involves national socioeconomic reforms, will likely remain opposed by the US and stalled by the administration. Progress in the peace deal with the Moro Islamic Liberation Front (MILF), meanwhile, will not necessarily reduce fighting
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with armed Moro forces already declaring their opposition to this. The fighting that broke out in Zamboanga in 2013 could easily repeat itself. Upheavals. To be sure, the countrys long-standing problems cannot be solved in three years nor even the six years of a full presidential term. Persisting with failed and discredited policies however no matter how repackaged or embellished will only continue the problem and cause more damage. It is reasonable to expect every administration to take as big steps as possible away from old policies so that the country is making strides towards real change for the better. The current Aquino presidency in 2013 affirmed its defense of an undemocratic economy and elite politics. There is moreover every indication that it will use the remainder of its term to keep the country on this long-standing trajectory. This risks inciting broader peoples struggles and intensifying waves of democratic upheavals in the closing years of the current administration. The conditions for this are developing rapidly.
Yolanda, A Microcosm
he countrys poor adaptive capacity to extreme weather events came to fore at the height of Typhoon Yolanda (international name: Haiyan). This was manifested clearly by the Aquino governments lack of preparations to reduce the risks and its post-calamity negligence as well as opportunism. The disaster brought out deep-seated faults in economics and governance, and since it also occurred at the height of the peoples outrage over unresolved scandals of corruption and poverty. It did not take long for ordinary citizens, some members of the local and international media, and even international sympathizers to realize that the tragedy wrought by Typhoon Yolanda was after all just a microcosm of the chronic Philippine crisis. Failure to think It is not as though the Philippine government is unaware of the countrys exposure to natural hazards and extreme climate conditions. The Philippine archipelago iscomposed of 7,100 islands, mostly low-lying areas, making it susceptible to sea level rise. It has the longestcoastline in the world, making it susceptible to storm surges. Itsmountainous topography and steep slopes, on the other hand, sits on a complex fault system that runs all throughout the archipelago, making it prone tolandslides and mudslides. The country is greatly influenced by monsoons,which bring significant rainfall in the case of the Southwest monsoon or cooler and drier weather in the case of the Northeast monsoon. It is also prone tothe El Nio-Southern Oscillation (ENSO), the irregularcycle of warming and cooling of the sea surface temperatures of the Pacific Ocean along Ecuador, Peru and Chile, which contributes to periodic drought and extreme sea levels and subsequent flooding across the southwest Pacific, including the Philippine archipelago. Lastly, around 19 typhoons enter the Philippine area of responsibility in a typical year, usually six to nine of which make landfall. These typhoons are usually associated with high winds, storm surges and extreme rainfall. These challenges are permanent features of the Philippines and its geographic region. An Australian broadsheet dated January 12, 1898 already reported of a typhoon and tidal wave in the Philippines that claimed 7,000 lives, occurring on October 12, 1897 and particularly reaching Leyte, and striking Tacloban, the capital, with terrific force.
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The American newspaper, Washington Herald, reported another typhoon in the Visayas on November 30, 1912, practically destroying Tacloban and wreaking enormous damage and loss of life in Capiz, Capiz. 1 These climate challenges are not new to the Philippines, and the present Philippine government is also not unaware how anthropogenic climate change has significantly altered these climate challenges to result in climate extremes and surprises.The country has experienced the worst catastrophes due to the increasing frequency of super-typhoons in the last four decades, which scientists are tracing to climate change. Super-typhoons, according to the US Joint Typhoon Warning Center, reach maximum sustained 1-minute surface winds of at least 65 meter per second (130 knots, 150 miles per hour) and are equivalent to the Saffir-Simpson category 4 or 5 hurricane in the Atlantic basin or category 5 severe tropical cyclone in the Australian basin. A 2005 study by Peter Webster published in Science Magazine concluded that the number of category 4 or 5 hurricanes particularly in the West Pacific Basin (thus called super-typhoons) - the most active area as it contains a wide expanse of warm ocean water and where the Philippines is located - increased from 85 in 1975-1989 to 116 in 1990-2004.2 Five of the 10 typhoons in the Philippines on record to have maximum sustained winds of 240 and higher kilometers per hour (equivalent of 150 mph) occurred in the 2000s; four of these (Juan, Pedring, Pablo and Yolanda) during the term of President Noynoy Aquino. Typhoon Yolanda is the worlds fourth strongest tropical cyclone in recorded history, but it is the worlds strongest tropical cyclone at landfall with speed of 152 kph and gusts of up to 376 kph. It was also one peculiar typhoon that made six landfalls. (See Table 13) Yolanda is the deadliest. The latest tally by the National Disaster Risk Reduction and Management Council (NDRRMC) places the death toll at 6,166; the injured at 28,626; and the missing at 1,785.Meanwhile, body retrieval has continued in the far-flung areas on the outskirts of Tacloban City almost two months after Yolanda, yielding an average of 10 bodies per day. Yolanda has surpassed the death toll of Typhoon Uring in 1991, which only had 95 kph maximum Table 13. Strongest Typhoons in the Philippines (maximum sustained winds but caused rivers to swell and landslides in sustained winds in kph) the denuded Leyte province and drowned the entire city of Ormoc. The third deadliest, Typhoon Pablo, took place only in Maximum 2012, with official tally of 1,901 deaths. (See Table 14) Sustained
Name
Typhoon Pablo is the most destructive, measured in terms of cost of damages (Php37 billion), and taking into account its death toll (1,901 people) makes it one of the countrys worst typhoons. Yolanda comes next while damage accounting is still ongoing, with latest tally at Php36.7 billion. Two other typhoons happening under Pres. Aquinos watch, Juan in 2010 and Pedring in 2011, are also in the 10 most destructive, with damages reaching Php8.3 billion and Php15 billion, respectively. (See Table 15) Just the year before Pres. Aquino took office, the country had two devastating typhoons on record, Pepeng with damages costing Php27.3 billion and Ondoy claiming Php11 billion. Pres. Aquino therefore had enough experience with worst typhoons from which he could draw lessons but still went on to record the worlds worst climate-related disaster. The basic crisis A countrys exposure to natural hazards does not alone make it vulnerable to disasters, according to the United Nations (UN). It is when the hazard is combined with human
Winds (in kph) 320 315 306 280 275 260 250 240 240 240
Year
Reming Yolanda Juan Pablo Sening Rosing Loleng Amy Sisang Pedring kph - kilometers per hour
2006 2013 2010 2012 1970 1995 1998 1951 1987 2011
Sources: National Disaster Risk Reduction and Management Council (NDRRMC), Typhoon2000.com, Wikipedia (www.wikipedia.org), GMA News (www.gmanetwork.com/news/) and Philippine Daily Inquirer (www.inquirer.net)
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vulnerability or sensitivity, the lack of preventive measures and human activities that have harmed the natural environment that disaster takes place. The Philippines ranks 3rd in disaster risks in the list of 173 countries, next only to small countries such as Vanuatu and Tonga.3 The Philippines high disaster vulnerability is clearly a function of chronic poverty and economic underdevelopment as well as policies that cater to elite and foreign plunder of natural resources and reduce government responsibilities. Typhoon Yolanda has also highlighted the role of systemic corruption, patronage politics and subservience to foreign powers in reducing the countrys overall adaptive capacity. The countrys official poverty incidence has not improved from 2003 to 2012, from 20% of families being poor in 2003 to 19.7% in 2012. Population poverty incidence is statistically unchanged from 25% in 2003 to 25.2% in 2012. The magnitude of poor Filipinos increased by about 3.9 million to total 23.7 million in 2012, which however staggering is still underestimated since poverty threshold is pegged at only Php52 a day per person. Consistent with the unchanging poverty rate, the real unemployment rate has hovered around 11% in 20062012.The combined number of unemployed and underemployed reached 11.9 million in 2013, based on the figure corrected by IBON. Almost 4.5 million Filipinos were jobless in 2013, which is the highest number in history. The economy continued to lose 549,000 jobs for farmers, fisherfolk and workers and more than 16,000 for professionals in spite of the Aquino administrations report of a stellar economic performance. Majority of the population depend on the natural resources for livelihood and survival, which is the main reason for the Filipinos high sensitivity to natural hazards. Floods, droughts, fires, earthquakes, typhoons, and destructive activities such as corporate mining and building of megadams can easily inflict profound changes in the lives of communities. Almost 55% of the population resides in the rural areas where the agrarian economy is dominant.4 Around 32% of the total employed are in agriculture, hunting, fishing and forestry.5 The 2009 poverty data, which is the latest available data on sectoral poverty, shows that fisherfolk, farmers and the self-employed that include the unpaid family workers are the poorest sectors. There is also high poverty incidence among women and children who are often the most disadvantaged during calamities. (See Table 16)
Table 14. Deadliest Typhoons in the Philippines Name Yolanda Uring Pablo Winnie Nitang Frank Reming Death Toll 6,111 5,101 1,901 1,593 1,492 1,410 1,399 Year 2013 1991 2012 2004 1984 2008 2006
Note: Typhoons in 1881 (no data), 1867 (1,800 deaths), and 1897 (1,500 deaths) were removed from the list. Sources: National Disaster Risk Reduction and Management Council (NDRRMC), Typhoon2000.com, Wikipedia (www.wikipedia.org), GMA News (www.gmanetwork.com/news/) and Philippine Daily Inquirer (www.inquirer.net)
Table 15. Most Destructive Typhoons in the Philippines (Damage Cost in billion Php) Name Pablo Yolanda Pepeng Pedring Frank Ondoy Ruping Rosing Kadiang Juan Damage Cost (in billion Php) 42.2 35.5 27.3 15.0 13.5 11.0 10.8 10.8 8.8 8.3 Year 2012 2013 2009 2011 2008 2009 1990 1995 1993 2010
Sources: National Disaster Risk Reduction and Management Council (NDRRMC), Typhoon2000.com, Wikipedia (www.wikipedia.org), GMA News (www.gmanetwork.com/news/) and Philippine Daily Inquirer (www.inquirer.net)
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Typhoon Yolanda devastated 44 provinces of Regions 4-A, 4-B, 5, 6, 7, 8, 9, 11 and Caraga, affecting 3.4 million families or 16.1 million people. According to the NDRRMC, more than 4 million people (890,895 families) of the 16.1 million affected were physically displaced. The number of those who have been economically displaced is not being monitored by the agency, although it estimates that agriculture accounts for half of the damage cost. The Eastern Visayas region (Region 8), particularly Leyte and Samar, was worst hit. The region is the countrys second poorestnext to the Autonomous Region of Muslim Mindanao (ARMM),based onthe 2012 official poverty survey. Moreover, of the affected regions, Regions 5, 7, 9 and Caraga have poverty rates that are higher than the national average. (See Table 17) The 2012 official poverty survey also shows that 26.49% of the countrys total poor are in multi-hazard provinces (defined as having high poverty incidence and vulnerability to hazards), with Leyte and Iloilo topping the list, next to Zamboanga del Sur. (See Table 18) It is thus beyond surveys to imagine how else the affected provinces and barangays would manage to go back to normal and what exactly is normal. Chronic poverty is rooted out in standing economic monopolies that continue to prevent the peoples democratic access to land and resources. The country has the longest-running land distribution program. The latest, called Comprehensive Agrarian Reform Program (CARP), recorded an even questionable 57% accomplishment rate when it was due to expire and had to be extended twice. The latest extension, called Comprehensive Agrarian Reform Program Extension with Reforms (CARPER), which is due in July 2014, has a dismal accomplishment rate of 48% of its 1.3 million hectares target. Of the private agricultural lands that comprise 95% of CARPERs balance, mostly plantation and hacienda-type farms in 25 provinces across the archipelago, only 30% have been reportedly distributed. Even lands that have already been awarded are still being claimed by the big landlords, such as the 1,644 hectares in Montalban, Rizal awarded to 1,000 farmer-beneficiaries that is being claimed still by the Aranetas. The Ayalas are also claiming ownership of 2,000 hectares of public land in Calatagan, Batangas. One does not have to look far for cases, as the iconic Hacienda Luisita is still being claimed and re-concentrated by President Aquinos family. Land grabbing and reconcentration has intensified under the Aquino administration, and even the tragedy of Tacloban City has been seized by big landlords, corporations and bureaucrats as an opportunity to grab lands. Pres. Aquino has appointed former senator Panfilo Lacson as the rehabilitation czar whose announced priority is to consolidate land titles to establish land ownership. Lacson also immediately announced his preference for private sector initiative, practically ignoring the role of the local government and the community in rehabilitation. Like on cue, the countrys landed conglomerates have already expressed their intentions to have a bigger role in land reclassification and property development projects, including
Table 16. Poverty Incidence for Basic Sectors, 2009 Sector Philippines Fishermen Farmers Children Self-employed and Unpaid Family Workers Women Youth Migrant and Formal Sector Senior Citizens Individuals residing in urban areas
a
Poverty Incidence (in %) 26.5 41.4 36.7 35.1 29.0 25.1 21.8 16.7 15.8 12.8
Notes: 1. Basic sectors are not mutually exclusive, i.e., there are overlaps for sectors (women may also be counted as senior citizens, farmers, etc.) 2. Poverty estimates for five other basic sectors, i.e, indigenous people, persons with disabilities, victims of calamities and disasters, nongovernment organization, and cooperatives were not generated as information on these were not available in the merged Family Income and Expenditure Survey and Labor Force Survey, the major data sources for the estimation of poverty statistics for the basic sectors. a - Self-employed and Unpaid Family Workers is an additional sector, which serves as a proxy indicator for informal sector workers, considering data available in the Philippine Statistical System (PSS) Source: National Statistical Coordination Board (NSCB)
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Table 17. Annual Per Capita Poverty Threshold, Poverty Incidence and Magnitude of Poor Families, by Region and Province, 2012 (amount in Php; poverty incidence in %)
Annual Per Capita Poverty Threshold (in Php) Philipines National Capital Region 1st District b 2nd District b 3rd District b 4th District b Cordillera Administrative Region Abra b Apayao c Benguet b Ifugao Kalinga b Mt. Province b Region I Ilocos Norte b Ilocos Sur b La Union Pangasinan Region II Batanes c Cagayan Isabela Nueva Vizcaya b Quirino b Region III Aurora b, c Bataan b Bulacan b Nueva Ecija Pampanga b Tarlac Zambales b Region IV-A Batangas Cavite b Laguna Quezon Rizal b Region IV-B Marinduque Occidental Mindoro b Oriental Mindoro Palawan b Romblon Region V Albay Camarines Norte b Camarines Sur Catanduanes Masbate Sorsogon
b
Poverty Incidence (in %) 19.7 2.6 3.6 1.9 2.8 3.0 17.5 27.2 54.7 2.8 36.0 20.9 27.9 14.0 8.4 13.7 15.3 14.9 17.0 18.2 15.2 19.0 15.1 15.5 10.1 27.1 4.5 5.4 19.6 5.4 13.5 12.1 8.3 14.7 2.6 4.6 20.3 5.0 23.6 23.9 29.8 21.5 20.5 30.4 32.3 33.9 21.7 31.7 27.1 40.6 31.3
Magnitude of Poor Families a 4,214,921 76,530 14,343 19,782 18,266 24,138 65,516 13,914 13,462 5,121 14,950 8,482 9,586 154,712 11,211 20,886 26,506 96,109 130,965 810 40,237 68,106 15,297 6,514 240,079 12,789 7,116 38,103 91,168 28,483 40,174 22,246 256,839 80,551 19,983 31,409 94,123 30,773 150,486 12,743 31,070 39,272 47,730 19,671 375,974 90,551 26,663 121,614 13,919 72,903 50,324
Region / Province Region VI Aklan b Antique b Capiz b Guimaras b, c Iloilo Negros Occidental Region VI Bohol Cebu Negros Oriental Siquijor b, c Region VIII Biliran Eastern Samar Leyte Northern Samar Southern Leyte Western Samar Region IX Zamboanga del Norte Zamboanga del Sur Zamboanga Sibugay Isabela City c Region X Bukidnon Camiguin c Lanao del Norte Misamis Occidental Misamis Oriental Region XI Davao del Norte b Davao del Sur Davao Oriental Compostela Valley b Region XII North Cotabato Saranggani South Cotabato Sultan Kudarat Cotabato City b, c Caraga Agusan del Norte Agusan del Sur Surigao Del Norte Surigao Del Sur Autonomous Region of Muslim Mindanao Basilan
b
Annual Per Capita Poverty Threshold (in Php) 18,029 17,707 17,160 20,144 18,926 18,827 17,243 18,767 18,847 18,855 18,589 18,420 18,076 17,393 20,237 17,561 19,197 19,431 15,891 18,054 18,483 17,961 17,338 19,670 19,335 20,115 21,521 18,907 18,127 18,938 19,967 20,841 19,311 19,323 20,932 18,737 18,340 18,640 19,847 17,597 20,568 19,629 18,905 19,634 20,566 19,287 20,517 19,368 22,665 18,873 20,477 17,406
Poverty Incidence (in %) 22.8 20.4 23.6 22.3 16.9 20.8 24.9 25.7 30.6 18.9 43.9 24.0 37.4 20.9 55.4 31.4 43.5 34.0 43.5 33.7 48.0 25.9 37.0 15.5 32.8 41.5 41.0 41.4 33.8 19.1 25.0 26.7 20.0 37.8 30.7 37.1 44.8 46.0 25.8 40.4 34.5 31.9 27.7 37.3 33.8 28.3 48.7 32.1 67.3 54.5 40.2 21.9
Magnitude of Poor Families a 365,040 25,204 28,598 37,143 6,345 102,924 164,827 405,694 83,455 185,603 131,317 5,319 337,221 7,468 52,189 128,273 51,663 31,890 65,737 259,749 104,138 104,133 48,050 3,429 320,113 120,760 7,796 83,640 44,405 63,513 268,957 60,652 113,948 45,429 48,928 366,169 131,744 52,982 85,814 74,075 21,555 169,522 39,125 52,809 43,620 33,968 271,355 16,832 100,946 87,800 51,278 14,499
18,935 20,344 20,344 20,344 20,344 20,344 19,483 19,775 18,623 19,140 20,253 17,342 21,138 18,373 18,953 20,885 18,006 17,949 19,125 24,693 18,741 19,400 18,709 19,014 20,071 18,466 19,383 19,910 20,847 19,163 18,810 21,885 19,137 19,437 19,948 19,857 18,081 20,306 17,292 17,180 17,412 17,415 16,696 18,464 18,257 18,610 18,390 18,717 18,303 17,487 17,535
Lanao del Sur Maguindanao Sulu Tawi-tawi b
Notes: a - estimates b - Coefficient of variation of 2012 poverty incidence among families is greater than 20%. c - Province with sample size less than 100.
Source: National Statistical Coordination Board (NSCB)
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Table 18. Multi-Hazard Provinces in the Philippines, As of 2013 Region Region 1 CAR Multi-Hazard Provinces Ilocos Norte Ilocos Sur Abra Benguet Cagayan Region 2 Quirino Isabela Nueva Vizcaya Zambales Region 3 Pampanga Aurora Cavite Region 4-A Region 5 Region 6 Region 7 Laguna Rizal Catanduanes Antique Iloilo Bohol Eastern Samar Region 8 Leyte Northern Samar Southern Samar Region 9 Zamboanga del Sur Zamboanga Sibugay Dingat Islands Caraga Agusan del Sur Surigao del Norte Surigao del Sur Total Total Poor Source: National Economic and Development Authority (NEDA) based on the 2012 Official Poverty Estimates Number of Poor Households 24,890 34,213 17,544 17,947 38,270 8,492 54,678 16,500 23,804 55,328 9,333 58,536 55,417 48,360 16,743 38,157 122,770 70,028 38,487 132,377 59,262 23,185 170,181 74,643 12,869 65,473 45,343 59,179 1,392,009 5,255,118
infrastructure, housing, tourism, and clearing of coastal towns. Land and resource monopoly has entrenched exploitative structures such as rent; usury and monopoly pricing that have rendered the countrys acute poverty situation. In a lot of cases, what farmers lose with ravaged crops is mostly the income with which to repay their loans and to pay for rents for resources such as land and irrigation. Without access to capital and any form of social insurance, the natural resourcedependent population is only driven deeper into indebtedness and poverty from one calamity to another. Economic liberalization to allow foreign and private sector control over trade and investments has further weakened the agrarian economy to create surplus for domestic reinvestment. It has also been mainly responsible for shrinking the shares of agriculture and manufacturing in the domestic economy. Rapid economic growth therefore has not automatically translated to job creation. Jobs for resource-based occupation groups, mostly farmers, agriculture and forestry workers and fisherfolk, have consistently disappeared since 2001. Net job losses totaled almost one million in a decade, with the largest number - 418,000 jobs - occurring in 2012. (See Table 19) The phenomenon clearlydefines the exclusionary nature of the countrys economic growth, where the exclusion of resource-based producers from resources intensifies as economic policies prioritize corporate profits.
Meanwhile, much of whatever work available is vulnerable and of poor quality. Vulnerable employment is defined as thesum of own-account workers and unpaid family workers and often characterized by low pay and difficult working conditions. A high incidence of vulnerable employment is often associated with a large share of waged workers in agriculture.In the Philippines, vulnerable employment as of 2010 is at 41.7% of the employed.A survey done by the UN in 2009 on the Philippine agricultural employment also reveals that 99.2% of agricultural employment was informal.Lastly, being employed does not guarantee living wages.In the Philippines, the latest (2006) working poverty
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Table 19. Job Losses Among Farmers, Forestry Workers and Fishermen Occupation Group, 2001-2012 (in thousands) Year 2001 2002 2003 Annual Employed 6,353 6,240 6,220 (113) (20) Gain / (Loss)
rate, or the share of the working poor in total employment, is pegged at 28.2% and at 50.1% in agriculture.The poor and marginalized people often flock to the hinterlands, coastal areas or urban centers where jobs remain uncertain, social services are absent, and the environment can be hazardous. Disaster economics
Global climate and environment activists have already pointed out that one of the ironies of climate change is 2004 5,921 (299) that while the rich and industrialized countries are largely responsible for the increased emission of greenhouse 2005 6,161 240 gases leading to global warming, it is the poor and 2006 6,127 (34) backward countries such as the Philippines, particularly 2007 6,069 (58) their poor population, which are most vulnerable to 2008 5,999 (70) climate disasters. It is even more ironic that the Aquino administration, like its predecessors, has maintained 2009 5,851 (148) the globalization policies of privatization and economic 2010 5,747 (104) liberalization that continue to marginalize the majority, 2011 5,715 (32) promote the same unsustainable patterns of production 2012 5,297 (418) and consumption of the global capitalist system, ravage the environment, and ignore climate change. What is even Source: National Statistics Office Labor Force Survey more remarkable under Pres. Aquino is there is particular emphasis on the exploitation of natural resources that may be gleaned from the priorities for privatization and lifting of social and environmental regulation. Priority projects for public-private partnership (PPP) are mostly infrastructure for transportation, ports and highways and exploitation of water and energy resources. These projects shall run over communities, agricultural lands and natural resources that are peoples sources of livelihood. Some projects are already embroiled in controversies such as landgrabbing, demolitions as well as trampling upon the rights and control of communities over natural resources. The Aquino administration has endeavored to realize the unencumbered acquisition of land and natural resources by the private investors in order for its centerpiece program to take off. This is why it has maintained the spirit of CARPER despite its failure, pushed for a national land use policy, and has not deterred moves to change the Constitution to allow foreign ownership of lands, among others. The Philippine Development Plan (PDP) 2011-2016, with PPP as centerpiece, continues to rely on foreign investment that is hoped to be channeled to infrastructure, social services and natural resources exploitation. It continues to gear the economy towards free trade and export production, and its priorities in this regard are business outsourcing, agribusiness, mining, and tourism all requiring to utilize real estate, vast tracts of productive lands, beachfronts, landscapes and seascapes. The controversial facets of the PPP as a form of privatization are the risk guarantees and generous incentives that the Aquino government has provided to the private corporations, including cheap resource rents and token royalties for resource extraction. Aquinos mining policy, Executive Order (EO) 79, is not meant to put an end to the unbridled foreign and large-scale plunder of the countrys mineral resources. It simply ensures governments revenue share from allowing the countrys mineral resources to be exploited by the private sector and foreign corporations. But mining remains liberalized and export-oriented, which also means that enforcement of social and environmental standards remains weak and to the advantage of the investors. The country thus remains host to ecologically destructive mining practices that have been long banned in other countries.
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Even the empty rhetoric of its energy plan on clean and alternative fuels has been exposed as theAquino government has allowed the private sector to initiate numerous coal-fired power plants in Luzon, Visayas and Mindanao. In reality, the Aquino government is forbidden by the EPIRA, the energy privatization and deregulation law, to pursue its own power generation. Private power corporations, on the other hand, would rather use the cheapest albeit dirtiest methods. Forestry and fishery policies follow the same economic principle of liberalized, export- and profit-oriented utilization. Pres. Aquinos forestry policy, EO 23, which declares an indefinite log ban in the unclassified category of natural and residual forests, isnarrow if not token as the countrys forest cover is down to only 24.27% of total land area. The figure is based on 2003 data, which is the latest available one, which the government cannot even update due to lack of funds. EO 23 even exempts road clearing by the Department of Public Works and Highways (DPWH). The Aquino governments economic plan continues to promote land conversion, crop conversion, land reclamation and coastal development, which have irrevocably altered the countrys ecosystem balance. Even the Philippines rich biodiversity has been put on the worlds hotspot list because of unsustainable economic programs. The countrys mangrove forest cover, for instance, which is a quite useful guard against storm surges, is down to only 247,362 hectares, 38% of which is even in alienable and disposable land thus in danger of being cleared anytime. The Aquino administration has simply picked up the agricultural modernization program of previous administrations, which focuses on foreign investment and high-yielding and export crops that rely on inorganic chemicals. The thrust to cluster so-called agrarian reform communities in order to produce for agribusiness and the global economy is intensifying corporate-type of agriculture that has been proven in the past to have threatened the countrys food security and poisoned the soil, water resources and the farmers. Pres. Aquino is also not lifting a finger to reverse former president Arroyos decision to allow the planting of genetically modified crops in the country, to the detriment of ecology, the farmers and the consumers. The problem with embracing globalization and having investment-led strategy is that the host government shouldallow the relocation of the more labor-intensive production stages of the foreign corporations, which use more carbonintensive techniques and less efficient technologies in order to lower production costs for the foreign corporations. Aside from being detrimental to the climate and the environment, by embracing globalization the Aquino government has deprived the country the chance to industrialize, which could have been the base of a comprehensive adaptation system. A disaster-prone budget The Philippine government has also reduced its social responsibilities as a policy of globalization, including shielding the population from social crises and disasters. The Philippine government has been on perennial budget deficit over the last three decades despite modest economic growth. This is also why real household incomes have not increased, poverty has gone down only slowly, and inequality remains high. Government revenues have been limited due to economic liberalization, while government has also been restrained to spend for social services. Deficits have been financed by borrowings, and interest payments in turn have crowded out spending for social services. One of the visible vulnerabilities of the population during typhoons, for instance, is that most of the Filipinos whether in urban or rural areas live in houses with weak construction and roofing materials as well as in shanties. More than half (53%) of the houses nationwide are made of wood, half-concrete/half-wood, bamboo or nipa, and makeshift materials; 69% in Region 8. Only 1.28% of the houses nationwide have tile or concrete roofing materials while an overwhelming 78% of the housing units have galvanized iron or aluminum for roof.6 Like other social services, housing is a casualty of decades of globalization, where the Philippine government has been dictated by its foreign creditors to pass on provision to the private sector. Housing has historically gotten only about 1% of the national budget in the past three decades, which is even reduced to 0.73% in 2014.7
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Tracking the allocation for disaster risk reduction (or DRR in the funders parlance) in the national budget can be a challenging exercise. Amounts are simply inserted in the budgets of line agencies, which betray the lack of a systematic national program. The only lump sum amounts are allocated to the NDRRMC, an agency under theOffice of Civil Defense, andto a yearly Calamity Fund (now renamed by Pres. Aquino, NDRRM Fund), which is disbursed at the sole discretion of the President. A study commissioned by the Asian Development Bank (ADB) in 2012, using an aid-system tracking method, showed that the Philippine government allocated an annual average of Php20.3 billion from 2009-2011 for DRR, or a yearly 1.63% of the national budget. DRR has three elements, according to the study: understanding hazards, minimizing exposure, and lessening vulnerability. The study showed that an enormous 62% of the DRR budget in 2011 went to minimizing exposure, in particular infrastructure projects such as construction of flood control, seawall, etc. under the DPWH, which single-handedly garnered more than 41% of the DRR budget. Lessening vulnerability and building resilience got 34%; in particular disaster preparedness comprised only 0.47% of the DRR budget.8 The Aquino administration has further increased the DPWH budget because of the PPP. In particular, flood control increased by 165% from Php11.32 billion in 2011 to Php30 billion in 2014, reflecting Aquinos plan to clear waterways of settlers, which has excited construction corporations. Meanwhile, the budget for Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), the main agency for understanding hazards, increased by 36% from Php828 million in 2011 to Php1.13 billion in 2014, reflecting too the purchase of new devices, although around 83% of PAGASAs projects from 2011-2013 were foreign-assisted.9 Meanwhile, it was only in 2012 that the Aquino government allocated for the NDRRMC despite having passed the Disaster Reduction Risk Management Act (Republic Act 10121) in 2010, which provided the basis for the creation of the agency and an NDRRM plan. The NDRRMC budget reached Php1.175 billion in 2012, but has gone down since then to Php594 million in 2013 and Php670 million in 2014. The budget is even biased for relief and rehabilitation, which takes up 79% in 2014 while disaster risk reduction, is allotted only 21% or Php77 million.10 It is another matter that the NDRRMC is oriented towards civil defense instead of community adaptation and resilience. During Yolanda, the response was visibly to protect private property, call the victims looters and go after them, and finally put the blame on the communist insurgents. Aquino increased the Calamity Fund (renamed NDRRM Fund) from the usual Php7.5 billion to Php13 billion in 2014.Thirty percent (30%) of the amount is allocated as quick response fund for the offices of the department secretaries of social welfare, national defense, education, agriculture, health, and transportation and communications. Aquino also created a rehabilitation and reconstruction program with a budget of Php20 billion for all recent calamities, again to be released to the departments concerned upon the approval of the President. Finally, hechanneled Php80 billion toward reconstruction projects from the so-called Unprogrammed Fund, which again is disbursed at the sole discretion of the President. Pres. Aquino lauded the passage of the pork-less 2014 national budget because of the removal of the controversial Priority Development Assistance Fund (PDAF). But he has retained and even increased presidential discretionary funds, which aggravates the lack of transparency and reinforces systemic corruption.The 2013 Calamity Fund for instance was reportedly already spent before Typhoon Yolanda struck, but victims of Typhoon Pablo have not yet received full relief and recovery. The bigger problemwith a presidential pork barrel in this regard is that decisionmaking powers over what could be programmed beforehand like disasters if only the Aquino government had scientific planning are now ever more centralized in the President. Pres. Aquinos budget does not only manifest the lack of orientation towards disaster risk reduction specifically having disaster preparedness. It is also clearly marked with patronage and continues with the system that facilitates PPP projects of big local and foreign corporations and the commissioning politicians. Adding all the above-mentioned amounts to allocations for hazard monitoring, flood control and forest managementtotals Php158.4 billion. It appears that the Aquino government has allotted 7% of the Php2.265-trillion budget for 2014 to addressing disasters, which however is 69% for rehabilitation, and a larger percentage including pre-disaster structures (approximately 88%) is for the lucrative infrastructure and construction sector.
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Criminal negligence Pres. Aquino assured the public at a press briefing two days before Typhoon Haiyan struck that the government already made all preparations and that he projected a zero casualty rate. Planes, ships and food packs were already positioned to provide relief and rescue, he said. The defense and local government secretaries, Voltaire Gazmin and Mar Roxas, were already dispatched to ensure preparations and response. Five days after the typhoon, no search and rescue operations and food and relief distribution were being done, and the corpses were not being collected. Many preparations, which did not require too much intelligence or technical knowhow, were not done, such as ensuring traditional communication devices, mass evacuation considering the topography of the regions, and real evacuation centers, i.e. structures of strong materials and are elevated. Japan for instance, which has the same natural hazards as the Philippines, has simple ways to prepare the average citizen for a disaster. These include having evacuation centers and signs that direct the people to their designated evacuation centers. The Japanese government also sends phone alerts to people who sign up for the service and encourages citizens to have survival kits and to sleep with flashlights and water reserves. Information is also distributed in multiple languages.The Philippines of course is not comparable economically with Japan the latter protected its economy on its way to industrialization while the Philippines has just pursued an open-based system thus remains backward. But during Yolanda, it was not only the countrys backwardness that was brought to fore. It became apparent that the Aquino government did not simply lack preparations and common sense, but that its governance did not prioritize the safety and welfare of the population. Peoples organizations and concerned citizens have accused Pres. Aquino of criminal negligence as the natural hazard has resulted in an unnecessarily huge disaster. His yellow army on the other hand has appealed the public to move on. By any standard, Aquino and his administration have demonstrated negligence that is so gross that even the international community including the UN has expressed dismay. By the number of deaths and irreparable damage to life and livelihood, the Aquino regime must answer for such negligence, which ran from pre to post-calamity. A day before the typhoon, the Manila Observatory warned that massive evacuation of those within 8 to 16 kilometers from the shoreline may be required, but the Aquino government did not carry out such evacuation. The government of Vietnam on the contrary evacuated 600,000 peopleat least two days before Typhoon Haiyan reached Vietnams shores, while the population of Tacloban City is only around 200,000. National government was absent for more than 48 hours after the typhoon struck, and when chaos erupted due to lack of food and water, the Aquino government sent armed troops to go after looters. After five days, the Aquino government had not yet transported emergency supplies as it failed to mobilize shipping vessels for the purpose, considering the close proximity of the Visayan islands. The Aquino government also failed to transport en masse survivors, especially those from areas rendered uninhabitable by the disaster, to provide basic needs including temporary shelter and livelihood. To this day, two months after the disaster, the Aquino government has yet to provide these to those who have no options but to stay behind. Disaster governance The disaster indeed defined Pres. Aquinos brand of leadership. First of all, because of privatization the Aquino government could not mobilize its own transportation and communication facilities to deliver emergency assistance and had to rely on the altruism of the private sector. Despite its fixation on infrastructure projects, the Aquino government turned out to be sorely lacking food and water relief mechanisms as well as sturdy evacuation shelters. It had to rely on privatized water and food aid as well as its own dilapidated schools. The Aquino government was even incapable of retrieving and burying the dead; the health department even downplayed the health risks posed by corpses left lying around. Pres. Aquino himself walked out of an NDRRMC meeting in Tacloban when he did not like what was being reported to him. In short, the Aquino government failed to take the lead in disaster response while Aquino proved to be professionally incapable of handling crisis situations. Second, the disaster highlighted that Pres. Aquino had remained deep into the countrys decadent politics.Pres. Aquino resorted to blame game during Yolanda, passing the buck to local officials, picking on Tacloban City
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Mayor Alfred Romuladez, for being unprepared. Later it became obvious that Pres. Aquino and his family and allies, particularly Mar Roxas, were engaging in nothing but political dynasty feud and not at all taking stock from the emergency situation. They also overly focused on Tacloban City where one of their political opponents, the Romualdezes, are based, in the process neglectingother ravaged towns including the outskirts of Tacloban City. The Aquino administration also did not waste the occasion to assert its power and control over revenues, clarifying thatdonations not going through the government would be taxed, especially after it became obvious that much of the aid coming in was being coursed through humanitarian organizations, civic groups and private institutions instead of the government.Official aid, on the other hand, was mainly delivered to the government and bulk of it was non-cash donations that were stored in government warehouses. But officialrelief goods were reportedly not reaching disaster areas, not only because government response was focused on Tacloban City but also due to patronage politics where provinces of the administrations allies were being prioritized. Third, the disaster did not deter the commissioning officials and politicians from engagingin corruption another reason for the official relief goods not going where they were intended. Concerned peoples organizations doing their own relief operations reported that they reached numerous communities in Samar, Leyte, Cebu and Iloilo still bereft of any kind of official assistance even a month after Typhoon Yolanda. Some relief goods from the Department of Social Welfare and Development (DSWD) and distributed to local government units were even reportedly seen ending up in grocery and sari-sari stores. Even the US militaryMeals-Ready-to-Eat (MREs), which are clearly stamped with warnings that selling them is illegal, were reportedly seen being sold at a mall in Makati.Official aid was abundant and could have brought immediate and substantial relief to the communities. But it was observed that most of the relief goods, including food and medical assistance, that first reached the communities were from peoples and private organizations. Ostensibly to have transparency, the Aquino government has set up an online portal of the total foreign aid it is receiving which has already reached Php23.8 billion - Php2.8 billion cash and Php21 billion non-cash, according to the website.This, however is only half the issue of transparency and misses the whole point of systemic corruption. How the aid is being distributed and spent still shows bad governance. For instance, bunkhouses being built by the DPWH in Leyte and Eastern Samar for Yolanda survivors are reportedly substandard and overpriced, which is such an embarrassment to the donor community. But survivors of Typhoon Pablo are saying that the issue is not new bunkhouses built in Compostela Valley are also evidently substandard and overpriced. Fourth, Pres. Aquino continued to mobilize the yellow media machinery, first to make the death toll look small and later to show that the Aquino government and other local media personalities including the Presidents sister were actively involved in relief operations. Unfortunately, however, the more the yellow media tried, the more Aquino looked lame in front of international media, especially when Pres. Aquino was painting a rosy update from a cozy distance while CNN reporter Anderson Cooper was giving a grim factual report from the ground. Aquino was also criticized by international media and observers for insensitive quibbling over the likely death toll when gruesome images were already coming out of the disaster places.Ten days after the typhoon and after being practically invisible, Aquino asserted himself to media as the disaster manager-in-chief, flying to Tacloban and being filmed going around devastated areas and distributing bottled water, etc. Clearly, what Pres. Aquino tried to rescue was his sagging popularity, quite belatedly however as Typhoon Yolanda simply brought out the real nature of his presidency. In the end, the spin was changed to show that no decent president could do anything anyway with natures wrath of that magnitude. Fifth, Pres. Aquino revealed his militarist orientation when he sent armed troops to deal with hungry and disoriented survivors who were reported to be looting food and groceries. The Armed Forces of the Philippines (AFP) took the opportunity to penetrate and militarize areas, turning these into virtual military garrisons, by spreading rumors that the New Peoples Army (NPA) was involved in looting, launching offensives and sabotaging relief operations. By November 16,the AFP reported that it had deployed 12,000 troops on the ground under the Central Command aside from 3,400 external troops and follow-on forces in Eastern Visayas.Yet, the AFP has barely made a difference in providing relief and rehabilitation to the communities. It has even refused to reciprocate the ceasefire declared by the National Democratic Front (NDF) in Eastern Visayas to facilitate aid to the victims
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Subservience to US disaster intervention Lastly, in full view of the distressed public and the international community, the Aquino government demonstrated its extreme subservience to the US when it allowed the US to send its military troops, instead of civilian agencies, to do humanitarian relief missions. It is not unknown to many, including neighboring countries, that the US defense strategy features a pivot toward Asia-Pacific through increased military presence in the region, in which the Philippines plays a crucial role. It may be recalled that the Aquino government, despite peoples protests, agreed to a more expansive and permanent US military presence (rotational basing) after a series of US-Philippines visits in 2012. The US and the Aquino government during Yolanda were simply sending that clear message - that the US is serious about its defense strategy. The nuclear-carrying warship USS George Washington that carried 90 fighter jets, helicopters and 6,250 naval soldiers was accompanied by four guided missile cruisers and one supply ship and sailed to the Gulf of Leyte and docked in various parts of Leyte and Samar. The message was not toosubliminal and was almost theatrical that reminiscent of the Second World War, the Americans have come back as saviors. In reality, however, the US has increasingly used a militarized disaster response to justify prolonged US military intervention, like what it did in Haiti during the earthquake in 2010. Only days after Typhoon Yolanda,the US troops started an open-ended mission in Central Visayas with some 13,000 troops involved in the US military-directed Oplan Damayan. They took over Tacloban airport and gained access to Mactan airport and seaport, which has long been negotiated by the US for its increased rotational presence in the country. By airlifting people and delivering relief goods, US troops were able to fly in and out the areas and operate in far-flung places. The Aquino government through its foreign affairs secretary Albert del Rosario blatantly cited this to justify the Philippines framework agreement with the US for increased rotational presence to amend the Visiting Forces Agreement (VFA). The US troops pulled out of the devastated areas in December but only to prepare for the 2014 joint PH-US Balikatan military exercises. USs disaster response is obviously being carried out to condition the minds of the people on the acceptability of US military presence. For the US troops, disasters are also an opportunity to gain realistic training that is more valuable in waging and winning wars. Disaster response is one of the significant efforts we plan for, in the words of Rear Admiral Mark Montgomery of the USS George Washington. The USs disaster response has also been an occasion to exercise the principle of inter-operationability of its defense strategy in order to assert hegemony in the region. Weeks after Yolanda, military forces from Australia, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan, Brunei, Thailand and New Zealand joined the disaster response, making it the worlds most militarized disaster response. Finally the point was made clearer when US Secretary of State John Kerry announced during his visit to the country in December and a day before going to Tacloban City the allocation of US$40 million under theGlobal Security Contingency Fund (GSCF) toimprove the Philippines maritime security and maritime domain awareness. How the US has ensured its vested interests in disaster response has been too flagrant that some people cannot dispel the weather warfare conspiracy stating that the US might have used geoengineering to will Typhoon Yolanda to render the Philippines helpless and get all the air and sea ports it has always coveted. The point, however, is that with or without weather manipulation, with or without disasters, the Aquino regime has been all too willing to surrender Philippine sovereignty to globalization and the US economic and military hegemonic agenda. That is by far the worst disaster for the Filipino people. Staying on the same disastrous path To rebuild devastated Visayas, theNational Economic and Development Authority (NEDA)formulated the investorand funder-driven Reconstruction Assistance on Yolanda (RAY), which was unveiled before so-called development partners by none other than the International Monetary Fund (IMF).RAY will run up to 2017 and will cost Php361 billion, an amount too much for what has been estimated as Yolandas damage cost.Around Php18.3 billion is needed
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each for infrastructure and agriculture, according to NDRRMC. RAY allocates Php18.7 billion for agriculture indeed, but infuses Php249.1 billion for infrastructure that includes housing and resettlement areas. There are allocations for industry and services (Php70.6 billion), social protection (Php18.4 billion) and local government (Php4 billion).The idea is to push for an investment-led development which, based on Pres. Aquinos economics and governance, will be beneficial to the private investors and bureaucrats while there is token social protection to show for.This early, in relation to the DPWH bunkhouses, questions about the integrity of Pres. Aquinos rehabilitation program are already being raised. The other disaster about the RAY, however, is the fact that in order to make it happen, the Aquino government will have to guarantee the private investments, and it shall do this by relying on foreign loans. The ADB and the World Bank have already extended assistance of US$1 billion in the form of loans. In reality, the Aquino government does not have a plan to build the countrys adaptive capacity. There is no strategic direction to institute structural changes that would make the system adjust to climate variability, mitigate the potential impact, take advantage of opportunities, and cope with consequences. For instance, there is no agricultural plan that looks at the potentials of indigenous seeds to adjust to climate disasters and no plan at all for seed-saving. In fact, this aspect of agriculture has long been corporatized.Instead of instituting meaningful structural changes for genuine sustainable development, the Aquino government continues to pursue an ideology of rapid exploitation of economy and ecology. The Aquino government is currently revising its PDP, according to the NEDA to improve its inclusivity, in particular to have spatial and sectoral dimensions to growth. The strategies, however, are not so new the plan continues to rely on infrastructure-driven growth and the tag lines of good governance and social protection. It is in fact dangerously harsher on social sectors,particularly the already-marginalized peasants and workers, since the revision is placing emphasis on labor flexibility and the continued implementation of asset reform through CARPER. Its governance strategy on the other hand is consistent with the direction of further trade and investment liberalization of reducing regulations. It maintains its rhetoric on universal access to social services, investment in human capital, social protection, and adding this time, resilience to natural disasters. The Aquino government is presenting the same growth drivers from the beginning: manufacturing, agro-industry, tourism, information technology, logistics, and construction. It is in the process of coming up with roadmaps, the current development buzzword of the Aquino administration, which is being formulated nonetheless in cooperation with the private sector. Three of targeted 30 industry roadmaps are already out for scrutiny (manufacturing, chemical and copper), apart from the coconut industry roadmap for approval. It is apparent from the roadmaps that the Aquino government has basically stayed on the same disastrous path of relying too much on export winners and pushing for greater PPP. In the end, the so-called revised PDP emphasizes the same, that in order to achieve rapid growth, the Aquino government must accelerate its infrastructure PPP projects. The Aquino government has also stayed within the convenient frame to address climate change - to depend on foreign loans mostly for rehabilitation rather than adaptation mechanisms. It has a National Climate Change Action Plan, which has mainly research and development, education, and legislation components, but basically in the framework of private infrastructure projects. One of governments climate change commissioners, Naderev Sao, made a strong statement during the UN climate change conference in Warsaw in November. He went on hunger strike and eventually walked out of the negotiations after the developed countries refused to agree to a mechanism that would commit them to fund and provide technology and capability-building for poor countries to address climate change. Free climate financing is an issue of social justice that poor countries have been demanding capitalist countries. Unfortunately, however, Commissioner Saos government is not as progressive as his stand. The Aquino government is too quick to accept ADB and World Bank loans for rehabilitation, which are additional tax burdens on the people, including the survivors, and carry attached conditionalities for further neoliberal globalization policies. The Aquino government has continued with economically destructive policies, making its climate action plan empty, and posing the greatest ecologically devastating consequences.
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The surviving peoples movement Typhoon Yolanda is a microcosm likewise of how the Filipino people can achieve meaningful social change.In several ways, affected communities are doing their own rehabilitation efforts and building their own adaptation systems until the next hazard, without any government assistance and relying only on their own organizations. In fact some areas are even being harassed by increased militarization and hoarding by traders and politicians of relief goods and other materials. Some farmers in Eastern and Central Visayas are already planting whatever food crops they can start with to bring immediate relief, while othersare studying the biodiversity and plant variety in their areas to know which to prioritize.Several communities are rebuilding their huts and makeshift silos, schools and other facilities, looking for groundwater, and improvising energy sources, using only whatever materials they can rummage.They are helping each other rebuild their community life, while fellow farmers and workers and concerned citizens from other regions are sending support. For instance, farmers in Central Luzon and Southern Tagalog, organized under the national federation, Kilusang Magbubukid ng Pilipinas (KMP), have been saving their seeds for calamities such as this, and are sending their saved seeds now to fellow organized farmers in Eastern Visayas. Meaningful social change indeed is in peoples hands and achieved only through organized struggles - one disaster after another has been teaching the Filipino people this valuable lesson. Immediately after the typhoon struck, peoples organizations that are all over the archipelago put into gear their relief and rehabilitation machineries that they have installed long before the super-typhoons.Bayanihan Alay sa Sambayanan (Balsa) of the Bagong Alyansang Makabayan (Bayan) and the regional and mass organizations under it have been active for more than a decade. Farmers groups have Sagip Kanayunan; the workers have organized Task Force Obrero, among other sectors that have their dedicated forces. These are apart from the church and community organizations that have also organized their quick response. The yellow media was chiding the activists for not being visible in times of national emergencies such as Yolanda. But what was not hyped to the mainstream was that the activists had actually gone ahead of the otherwise bureaucratic government response or the media attention-seeking relief efforts. Peoples organizations in their modest means have organized resource-raising, packing of relief goods, caravans to deliver to the communities, and medical missions to care for the sick and the injured. Their rehabilitation efforts have continued even after Typhoon Yolanda (including even rehabilitation for Typhoon Pablo survivors), to include providing seeds, production support, social services, community infrastructure, or even psychosocial debriefing. Relief and rehabilitation efforts are second nature to the activists whose main perennial task is to serve the people. The communities also more warmly welcome them because they genuinely know the needs of the people. Typhoon Yolanda is further teaching the people that such principled response does not need any fanfare. Admittedly, it will take a long, long time for communities to bounce back and start being genuinely sustainable. They will need access to land and natural and genetic resources, production tools and inputs, transportation and communication means, and social services facilities and supplies - things that they have been demanding long before. They will need access to capital, production and price support, meaningful jobs, and decent incomes.They will need to build a resilient economy that is based on genuine agrarian reform and national industrialization and a democratic system where they can genuinely participate. Indeed it is a long, arduous road to the right path, but with the struggles that people wage everyday, no disaster is insurmountable.
Soures: 1 A history of storms: 1890s newspaper reveals devastating Leyte typhoon, GMA News Online, November 16, 2013 2 Typhoon Haiyan: How does it compare with other tropical cyclones? Datablog, The Guardian, November 8, 2013 3 World Risks Report 2012, United Nations University Institute for Environment and Human Security, 2012 4 Census of Population and Housing 2010, National Statistics Office 5 Employed Persons by Occupation Group Annual 2012, Labor Force Survey, National Statistics Office 6 Census of Population and Housing 2010, National Statistics Office 7 General Appropriations Act, various years, Department of Budget and Management 8 Jose, Susan Rachel G. Preliminary examination of existing methodologies for allocating and tracking national budget for disaster risk reduction (DRR) in the Philippines, December 2012 9 General Appropriations Act, various years, Department of Budget and Management 10 Ibid.
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Annex
Armed Confrontations between the NPA and Government Forces Under the Aquino Administration, July 2010-December 2013 Date 2010 Jul-Dec 2011 Jan-Jun 2011 Jul-Dec 2012 Jan-Jun 2012 Jul-Dec 2013 Jan-Jun 2013 Jul-Dec Total
a
Number of Incidents 142 171 176 197 126 207 165 1,184
Dead a NPA 43 47 61 98 45 31 50 375 AFP/ PNP/ CAFGU 171 194 179 179 145 241 200 1,309 Civilian b 21 9 5 18 2 11 66 NPA 7 22 39 24 25 16 10 143
Wounded a AFP/PNP/ CAFGU 127 145 187 188 121 226 181 1,175 Civilian b 13 6 15 14 45 31 4 128 NPA 25 24 16 34 15 39 27 180
Captured AFP/PNP/ CAFGU 4 6 6 1 28 7 52 Civilian 25 13 12 21 36 5 24 136
- These figures do not include an additional undetermined number due to incomplete reports. b - These include civilians merely alleged or accused by the AFP as NPA members and supporters but still killed or illegally detained. Details can be provided upon request. AFP - Armed Forces of the Philippines CAFGU - Citizens Armed Forces Geographical Unit NPA - New People's Army PNP - Philippine National Police Source: Various publications monitored by IBON
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15 January 2014
15 January 2014
45

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Economic and Political Briefing

Deepening Crisis and Disillusionment

January 15, 2014 Balay Internasyonal, UP Diliman, Quezon City

IBON Economic and Political Briefing

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2011 Methodology (CPI, 2000=100)

3.6 28.6 27.4 26.8 30.9 25.5 21.7 23.8 19.8

27.6 22.2 22.6

28.5 23.1 23.3 23.7

IBON Economic and Political Briefing

IBON Economic and Political Briefing

Source: National Statistics Office (NSO) Labor Force Survey

IBON Economic and Political Briefing

IBON Economic and Political Briefing

Nominal Wage Real Wage

400.00 302.44 300.00 223.50 200.00 362.36

449.88 579.26 522.50 533.66 677.62 484.73 275.91 114.41 1,185.61

IBON Economic and Political Briefing

30.0 25.0 20.0 15.0 10.0 5.0 -

Bank Average Lending Rates

RRP Rates (Overnight)

Interbank Call Loan Rates

RRP - reverse repurchase rate Source: Bangko Sentral ng Pilipinas (BSP)

IBON Economic and Political Briefing

4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000

Chart 3. Philippine Loans, 1986-2013* (in million)

IBON Economic and Political Briefing

IBON Economic and Political Briefing

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Chart 4. Gross Domestic Product By Industry Share, 1946-2013*

Industry Share (in %)

IBON Economic and Political Briefing

IBON Economic and Political Briefing

Overseas Remittances, Growth Rate (in %)

Overseas Remittances, Growth Rate (in %)

Overseas Remittances Equivalent Share in GDP (in %)

IBON Economic and Political Briefing

IBON Economic and Political Briefing

IBON Economic and Political Briefing

Chart 6. Indicative Pork Barrel Estimates (in billion Php)

Special Purpose Funds 294.0

Priority Development Assistance Fund 25.2

National government budget items

IBON Economic and Political Briefing

34,901 7,015 54 172 297 29,423 3,231

Source: KARAPATAN Alliance for the Advancement for People's Rights

Source: Center for Trade Union and Human Rights

IBON Economic and Political Briefing

IBON Economic and Political Briefing

IBON Economic and Political Briefing

IBON Economic and Political Briefing

IBON Economic and Political Briefing

IBON Economic and Political Briefing

IBON Economic and Political Briefing

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Lanao del Sur Maguindanao Sulu Tawi-tawi b

Source: National Statistical Coordination Board (NSCB)

IBON Economic and Political Briefing

IBON Economic and Political Briefing

IBON Economic and Political Briefing

IBON Economic and Political Briefing