Governance

Revisiting the legacy of Noynoy Aquino

The late President Aquino is now being remembered as the Philippine leader who stood up to China; but let us also not forget that he was the President who signed the Enhanced Defense Cooperation Agreement (EDCA) with the US, further deepening the neocolonial ties between the two countries and all the atrocities it brings to the Filipino people.

A Radical’s Nut has produced 62 blog posts tagged as “Noynoy Aquino” during his term as president from 2010 to 2016. As people revisit his legacy as the country’s 15th president, let me share here 15 of these notes on the Philippine economy and politics under Aquino, which I think could help remind the public of his true legacy as a leader.

Not included in the list below are two articles that summed up his legacy in relation to his centerpiece economic program – the public-private partnership or PPP, and the state of the Filipino people at the end of his term.

Now, the list –

1. Kung walang corrupt, walang mahirap: How Noynoy obscured the link between Hacienda Luisita and poverty

“The basic premise of Noynoy’s advocacy conceals the structural roots of poverty. It hides the universal truth that the working people are poor because a very small minority monopolizes ownership over production means and the wealth society produces.”

2. Noynoy’s Cabinet of recycled bureaucrats

“Instead of surrounding himself with new people who have fresh ideas (or even old names but with unblemished and worthy track record), he may end up with people from the administrations of his late mother Cory, Fidel V. Ramos, and even Arroyo. Not only are these bureaucrats recycled, but they also played major roles in crafting and implementing policies that hurt the poor and the economy.”

3. Walang wang-wang: Noynoy’s economic vision

“Abused with impunity by an arrogant Arroyo administration for more than nine years, many were predictably thrilled by this strong statement from the new President. But beyond the walang wang-wang rhetoric, did President Benigno “Noynoy” Aquino III offer anything fresh in substance, as his vision of long-term economic development, in his much-hyped inaugural speech?”

4. Noynoy to continue Cory’s privatization legacy

“Aquino’s promotion of PPPs and privatization in his SONA has further reinforced the view that his administration is incapable of introducing new policies that will reverse the old pro-business, pro-market neoliberal policies of the past administrations, including the Arroyo administration.”

5. Noynoy’s US visit: RP to get more counterinsurgency aid

“It is true that the greater the poverty of the people, the more that they will embrace revolution to achieve social justice such as the four-decade civil war being waged by the NPA. But using supposed poverty reduction and development projects as part of a military campaign to end the insurgency shortcuts the process of achieving genuine and lasting peace, and thus could never truly address the root causes of the conflict.”

6. The Philippines for sale (Part 1 and Part 2)

“After 100 days, it has now become unmistakably clear that the Aquino administration is far from being a reform-oriented government that it has depicted itself to be, especially in the realm of economic management and policies. The good news is that the public saw this reality as early as now and thus could immediately start exerting pressure on the Aquino administration to shift its course towards the genuine “straight path”, the one that puts people’s interests above all.”

7. Aquino could not hide the worsening economic crisis and poverty behind Corona impeachment trial

“As much as the people long to make Arroyo and her minions accountable for their many crimes, the Aquino administration could not hope that the public would be forever distracted by the ongoing impeachment trial. Unless real reforms are implemented soon, even the conviction of Corona and Arroyo could not bail out the weakening popularity and legitimacy of the Aquino administration.”

8. Mindanao power is more expensive than Asia’s major cities

“Aquino must apologize to the people of Mindanao for blaming them for the power crisis and accusing them of being spoiled by “cheap” power rates. Aquino must apologize for being shamelessly insensitive to the plight of Mindanao where 36% of the country’s poorest families live.”

9. How the rich are getting (scandalously) richer under Aquino

Aquino’s apathy to the working class is matched only by his concern for big business. In fact, among the major commitments he made in his so-called Social Contract, creating favorable conditions for private business is the only promise that Aquino has been fulfilling.

10. Noynoy relatives funded Akbayan’s poll expenditures

“The simple fact that a significant amount of their 2010 electoral spending was directly bankrolled by the Aquino family further bolsters the argument that they do not represent the under-represented and marginalized. How can they claim to represent the farmers when Akbayan is being funded by one of the country’s richest and most powerful landlord families? How can Akbayan claim to fiscalize Aquino on the issue of land reform when the president’s family bankrolled their electoral campaign?”

11. Sabah crisis: Is Aquino siding with Malaysia to protect relatives’ business interests?

“It is also notable that since taking over in 2010, Aquino’s relatives who bankrolled his presidential bid have inked business deals with Malaysia. Could these business interests be another possible explanation for the administration’s handling of the Sabah crisis?”

12. PNoy and the Big Water monopolies

“Aquino indeed has deep ties with the Big Water monopolies. The Ayala family, which controls Manila Water, has a long history of close association with the Aquino family, dating back to the time of Aquino’s late mother Cory as Philippine President. Manny V. Pangilinan, who controls Maynilad, has done a number of mega business deals with presidential cousin and officially declared top Aquino funder in the 2010 polls, Tonyboy Cojuangco such as the PLDT and TV5 deals. MVP and the Ayalas are seen as among the major backers of Aquino in his presidential bid. So don’t be surprised that the chief executives of their business interests landed strategic Cabinet positions.”

13. How Aquino betrayed public interest in LRT 1 privatization

“In forging the Concession Agreement with the MVP-Ayala group, President Aquino has betrayed the public interest and welfare and has put the government in a patently disadvantageous position. While DOTC officials claim that the MVP-Ayala group submitted a negative bid of P9.5 billion – meaning they will pay the government such an amount to do the project – it is the commuters who will ultimately bear the burden as the concessionaire will recover the money from the riding public through higher fares.”

14. Presidential pork, election budget, and Aquino cronies

“These planned expenditures show how public funds, raised mainly through taxes of ordinary wage earners and consumers, are being wasted and drained not only through corruption and political patronage but also through questionable economic policies that only benefit a favored few such as big business groups involved in PPP projects.”

15. More than meets the eye: People’s fact-finding on Mamasapano

“While the media coverage has so far mainly focused on the death of the 44 police commandos after the botched operation on January 25, little has been publicly said about the Moro communities in Mamasapano, Maguindanao. But on the ground, reports of human rights abuses, violations of the International Humanitarian Law during combat, and involvement of US military personnel were persistent.” – (Initial Report of the People’s Fact-Finding Mission on the Mamasapano incident, February 9-11, 2015) ###

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COVID-19, Labor & employment, Poverty

Among ASEAN countries, income woes most severe, economic aid most lacking in PH

Photo: George Calvelo, ABS-CBN News

Among all members of the Association of Southeast Asian Nations (ASEAN), the impact of the pandemic on incomes is worst in the Philippines. The even more dreadful news is that the Duterte administration is providing the least resources for economic aid to support affected workers and other vulnerable sectors.

Based on a recent survey by the Asian Development Bank Institute (ADBI), 67% of Filipino households saw their income drop by more than 25% due to the pandemic. Indonesia ranked second with 64% of households and Malaysia, the lowest, with 40 percent. The ADBI study was published in March 2021.

Further breaking down the data, more Filipino households also suffered the steepest declines in income during the pandemic than any of our ASEAN neighbors. About 21% of Filipino households had their income fall by more than 75 percent. Three countries (Cambodia, Indonesia and Thailand) had 11% of their households experience such decline in incomes during the pandemic; Vietnam posted the lowest with four percent. Similarly, an income decline of more than 50% was felt by 41% of Filipino households; Indonesia is a far second with 27% of households while Vietnam recorded the lowest with 15 percent.

The ADBI survey also noted that in the ASEAN overall, the income class of household on average is not related to the likelihood of experiencing a decline in income. This suggests that the pandemic affects the income of all households regardless of their economic status before the pandemic. But the trend is different in the Philippines where households in the lower-income classes are more likely to have income declines than those in the upper-income classes. This means that the fall in income in the Philippines described above was a phenomenon mainly felt by the poorer households.

Consequently, the Philippines also ranked first in the region in terms of households that experience financial difficulty during the pandemic. About 85% of Filipino households indicated in the ADBI survey that they were having financial difficulty; Indonesia followed with 84% while Myanmar ranked the lowest at 27 percent. 

Obviously, the poorer the household, the greater the likelihood of financial difficulty during the pandemic. This however is more felt in the Philippines than in any other countries in the region. In ASEAN overall, the average difference in the likelihood to get into financial difficulty between the richest group and the poorest group is 20 percentage points. But in the Philippines, the difference is a huge 40 percentage points, the worst in the region. 

More than half of Filipino households or 51.8% said that if they lose all of their income sources, their resources to cover daily needs could only last up to two weeks. It is the second worst to Indonesia which had a staggering 86.6% of households saying that their resources will not last for more than two weeks. About 73.2% of households in the Philippines will not last beyond a month; 87.3% will not last beyond three months.

These numbers summarize the economic hardship experienced by millions of households when lockdowns are implemented. The ADBI study illustrates how such suffering is more severe for poor households in the Philippines compared to other ASEAN countries. 

According to government data, 9.1 million workers lost their job between March 2020 and February 2021. Of this number, 2.2 million remain jobless up to this day, adding to the current number of unemployed which stands at 4.2 million based on official data. 

The actual extent of unemployment could be much widespread than what government numbers show. For instance, based on surveys of the Social Weather Stations (SWS), the number of jobless adults averaged 21.2 million in 2020. In 2019, the average was 9.3 million which indicates that the number of jobless swelled by 11.9 million during the pandemic. 

Nonetheless, latest available official unemployment data again show the Philippines as the most impacted by the pandemic. As of February 2021, the unemployment rate among Filipino workers is pegged at 8.8% and was at 8.7% in January. In Indonesia, unemployment rate is at 7.1% (August 2020); Malaysia, 4.8% (December); Vietnam, 2.5% (December); and Thailand, 1.9% (December).

With the reimposition of lockdowns, Filipino households face more miseries. The National Economic Development Authority (NEDA) said that lockdowns cost PHP 700 million to PHP 2.1 billion in lost wages every day. Government economic managers also expect unemployment rate to remain at almost twice the pre-pandemic levels up to 2022. 

Sadly, the Philippine government also allocates the scantiest resources for economic support to those impacted by the pandemic. Based on the COVID-19 policy tracker of the International Monetary Fund (IMF), the Duterte administration’s fiscal package for vulnerable individuals and groups is equivalent to 3.1% of the gross domestic product (GDP). The package includes cash aid program for low-income households and social protection measures for vulnerable workers, including displaced and overseas Filipino workers (OFWs).

In contrast, Thailand’s package of support for its workers, farmers, and other vulnerable sectors, including subsidies for daily household needs like water and electricity is about 9.6% of its GDP. Indonesia allotted an equivalent of 4.4% of its GDP for assistance schemes to its low-income households, for unemployment benefits and tax relief. Malaysia’s stimulus package is around 4.3% of its GDP, intended for cash transfers to low-income households, wage subsidies, electricity subsidies, etc. Even Vietnam allocated a higher 3.6% of its GDP for cash transfers, deferred tax payments, etc.

Duterte, in a leaked memo, instructed all government media platforms “to carry regular updates about the world data on COVID-19, specifically to convey to the public that the Philippines is faring better than many countries in addressing the pandemic”. The order is an attempt to counter the widespread criticism on government’s inadequate response to the crisis, but it merely further exposed Duterte’s incompetence. 

Because no matter how government spins the data, the deteriorating situation on the ground confirms what the numbers show – that the Philippines has among the worst levels and suffers the gravest impacts of the pandemic; and that government response is among the most inadequate and failed. ###

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Oil deregulation

Duterte backers, other oil firms rake in millions from overpricing amid pandemic

Amid the misery and deaths caused by COVID-19, oil companies, including those controlled by prominent Duterte backers, have been raking in millions of pesos in extra profits from overpricing. This is beyond unconscionable and appalling as the socioeconomic fallout of the pandemic – i.e., record joblessness, hunger and poverty – continues to burden the people.

How oil firms manipulate prices

With the pandemic raging last year, the oil firms imposed a net overpricing of about PHP 4.96 per liter for gasoline and around PHP 2.86 per liter for diesel. The overpricing continued in the first three months of 2021, as the country suffers an even worse surge in COVID-19 cases. For gasoline, the overpricing is estimated at around PHP 0.71 per liter as of end-March this year; for diesel, it is pegged at PHP 0.88 per liter.

These estimates were computed by comparing the supposed adjustments in prices based on the weekly fluctuations in international oil prices and the foreign exchange rate, and the actual adjustments in local pump prices implemented by the oil companies.

Last year, oil prices saw a sharp decline as the global economy came to a standstill with countries enforcing months of lockdowns to contain the spread of the novel coronavirus. Based on the International Monetary Fund’s (IMF) monitoring of primary commodity prices, the price of Dubai crude oil fell from USD 63.73 per barrel in January 2020 to as low as USD 23.38 per barrel in April. It finished the year with a monthly average of USD 49.32 per barrel in December.

Consequently, local pump prices in the Philippines, one of the world’s most oil import-dependent economies, also declined. According to the monitoring of the Department of Energy (DOE), oil companies implemented a net price rollback of PHP 1.97 per liter for gasoline and an even bigger PHP 5.96 per liter reduction in the price of diesel. 

But these price rollbacks are much smaller than what the oil firms should have implemented if they were simply reflecting movements in global prices, as they and the DOE are wont to say. Based on the Mean of Platts Singapore (MOPS), the international benchmark used by the Philippines in pricing petroleum products, and the fluctuations in the peso exchange rate to the US dollar, the price of gasoline should have gone down by about PHP 6.93 per liter. Similarly, the price of diesel should have been rolled back by PHP 8.82 per liter.

Comparing these to the actual adjustments per liter in pump prices that the oil firms implemented and the DOE allowed (i.e., rollbacks of just PHP 1.97 for gasoline and PHP 5.96 for diesel), the overpricing estimates of PHP 4.96 per liter for gasoline and PHP 2.86 per liter for diesel were calculated.

For 2021, even as global oil prices continued to pick up, the price of gasoline should not have gone beyond PHP 5.44 per liter in total increases based on MOPS price movements from January to March; but the oil companies hiked their gasoline prices by a total of PHP 6.15 per liter during the period, resulting to an overpricing of PHP 0.71 per liter.

Similarly, the price of diesel based on MOPS should have not increased by more than PHP 3.72 per liter. However, oil firms have already jacked up their diesel prices by P4.60 per liter, resulting to an overpricing of PHP 0.88 per liter.

Duterte regime, allies gain from overpricing 

Deregulated oil prices under Republic Act 8479 or the “Downstream Oil Industry Deregulation Act of 1998” allows oil firms to adjust pump prices – supposedly as dictated by global market forces (e.g., international prices and exchange rates) – without the benefit of public consultation. Such neoliberal policy in oil price setting has only enabled the oil companies to abuse the consumers with impunity. 

It must be emphasized that the overpricing estimates based on so-called global market forces do not illustrate the magnitude by which foreign oil monopolies such as Shell, Chevron, etc. artificially inflate prices. Such estimates merely show how oil firms under a deregulated regime can easily further manipulate oil prices through implementing adjustments that are above (in case of price hikes) or below (in case of rollbacks) the supposedly justified amounts based on international price benchmarks.

A crisis as grave as the COVID-19 pandemic should have been an opportunity to review and reverse this flawed policy. Unfortunately, it is clear that President Duterte, his political clique, and the neoliberal champions in his economic team will not entertain such policy turnaround to protect the public. 

For one, with its obsession to collect taxes to appease creditors for its debt-driven infrastructure projects, oil overpricing provides additional revenues for the Duterte regime. Based on a rough approximation of petroleum demand in 2020 of about 14.69 million liters per day for gasoline and 24.32 million liters per day for diesel (reflecting the overall decline in demand of 23% in the first half of 2020 due to the pandemic, as reported by the DOE), it can be guesstimated that the total additional profits generated by the oil firms from overpricing gasoline and diesel is about PHP 142.50 million a day. Of this amount, PHP 17.10 million went to government in the form of the 12% value-added tax (VAT).

For another, Duterte’s political backers and their foreign partners with interests in the oil industry benefit hugely from oil overpricing. Due to overpricing, it is estimated that Petron Corp. earned PHP 23.19 million daily in 2020 on top of its regular profits based on market share. The largest oil refining and marketing company in the Philippines, Petron is majority owned by Ramon Ang’s San Miguel Corp. (SMC). Ang is among the tycoons who financed the presidential campaign of Duterte in 2016 and appears to be one of the most favored oligarchs by the administration, cornering big-ticket infrastructure contracts such as the controversial PHP735.6-billion Bulacan aerotropolis.

Dennis Uy, the Davao-based businessman and longtime ally of Duterte, also continues to make a fortune in the oil industry through Phoenix Petroleum, which in terms of market share (7% in 2019) ranks as the fourth largest oil retailer in the Philippines behind the old Big Three of Petron (25%), Shell (18%) and Chevron (8%). Uy and Phoenix Petroleum had a declared campaign contribution of PHP 36 million to Duterte’s presidential campaign in 2016. Based on market share, it is estimated that Phoenix raked in PHP 8.85 million daily in extra profits last year from overpricing.  

Uy has seen his wealth grow tremendously under Duterte, including in the Philippine oil and gas industry where he has been expanding and consolidating his interests. Last year, Uy’s Udenna Corporation bought the 45% stake of Chevron in the Malampaya natural gas field and plans to partner with government through the Philippine National Oil Company (PNOC) to acquire as well the 45% stake of Shell. ###

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COVID-19, Governance

#DutertePalpak: PH worst in Southeast Asia in COVID-19 response amid surge in new cases

For two straight days, the Philippines posted record highs in daily new COVID-19 cases. The DOH reported Mar 20 that the country registered 7,999 cases, breaking the previous all-time high of 7,103 monitored just a day before.

The surge in new COVID-19 cases in the Philippines is the second worst in Southeast Asia. Based on data compiled by the Economist, the Philippines registered 78 confirmed new cases per 100,000 people in the past 28 days as of Mar 20. That puts the country behind Malaysia which had 166 new cases per 100,000. Indonesia ranked third with 70 confirmed cases.

But what is even more alarming for Filipinos is that amid the surge in new COVID-19 cases, the response of the Duterte government to the pandemic more than a year into the crisis remains grossly inadequate and incompetent. While implementing the strictest and longest lockdown in the region, the Philippines continues to lag behind our neighbors in Southeast Asia in actually responding to the pandemic.

To illustrate, Malaysia, which has the worst surge in new cases over the past month, has been providing more than 97 vaccinations per day per 100,000 people. The Philippines, on the contrary, is providing only 23 per day per 100,000 people. Indonesia, which has a comparable intensity of surge in new cases with the Philippines, is way ahead in terms of vaccination as it administers 139 vaccinations per day per 100,000 people.

We are lagging behind even the poorest countries in Southeast Asia. The Philippine economy is about 14 times the size of the Cambodian economy but the latter is providing six times the number of vaccinations per 100,000 people than the Philippines.

As of today, only 0.3% of the Philippine adult population has at least one dose of COVID-19 vaccine – the worst among Southeast Asian countries with high levels of cases. Poorer neighbors like Cambodia, Myanmar and Laos have even much better vaccination numbers.  ###

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Governance, Human rights

A weaponized justice system brings the worst injustices

On Mar 7, yet another wave of coordinated arrests and alleged extrajudicial killings struck the activist and cause-oriented groups in the country. According to media reports, nine were killed and six were arrested in simultaneous operations carried out by the Philippine National Police (PNP) in Southern Tagalog. The victims are activists from organizations of workers, urban poor, farmers and fishers, as well as from human rights groups based in Batangas, Cavite, Laguna and Rizal provinces.

This latest spate of attacks against activists came a mere nine weeks since the PNP launched a similar operation in Panay island. Nine people were killed and 17 were arrested by the police in several indigenous Tumandok communities on Dec 30, 2020. 

Common to both cases is the PNP claim that they were enforcing search warrants against the targeted activists for supposed illegal possession of firearms and explosives. Even more strikingly similar is that in both police operations, apparently the same judge issued the search warrants – Judge Jose Lorenzo R. Dela Rosa of Branch 4 of the Manila Regional Trial Court (RTC). (Note: in the Tumanduk case, another Manila RTC judge, Judge Carolina Icasiano Sison, was also named as behind the warrants.)

Less than two weeks prior to the Tumandok operations, the PNP also searched the houses of activists in Metro Manila and nabbed seven people on Dec 10, 2020. Again, the police secured search warrants for firearms and explosives to legitimize their operations. Providing the warrant was Judge Cecilyn Burgos-Villavert of the Quezon City RTC Branch 89. Villavert first gained notoriety for issuing the search warrants that led to the arrest of 57 individuals (including 15 minors aged 12 to 17) in Negros Occidental on Oct 31, 2019. 

Activists and communities in the island of Negros have been repeatedly targeted by joint police and military operations using court-issued search warrants as a cover. On Mar 30, 2019, state forces, in the process of enforcing 36 search warrants, killed 14 people and arrested 16 more in Negros Oriental. Just three months earlier, on Dec 27, 2018, six people were killed and 31 were arrested in simultaneous police operations in the same province. This time, the PNP was armed with more than 80 search warrants, according to reports. One judge sanctioned both Negros operations – Judge Soliver Peras of Branch 10 of the Cebu City RTC. 

The Duterte administration has blatantly weaponized the regional trial courts and included the legal system in its arsenal against activists and the marginalized communities and sectors they serve. When the justice system itself is weaponized to repress the people, the injustices committed become doubly abhorrent. Where else are people supposed to go to correct the wrongs made against them when those who are supposed to dispense justice are perceived as hoodlums themselves? 

The police and military template of taking in activists based on concocted lies and justified by dubious warrants has naturally led to ludicrous cases of arrests. In several instances, the arrested victims involve elderly women whom state forces laughably insist are in possession of explosives and firearms in her home, a household that usually includes young grandchildren. Even the United Nations Human Rights Office in a June 2020 report raised the alarm (in the context of Duterte’s equally vicious drug war) on how the Philippine police would “repeatedly recover guns bearing the same serial numbers from different victims in different locations” during their operations. 

For those killed during bloodstained police operations, even Duterte’s Justice department could no longer fully rationalize the “nanlaban”narrative (i.e., the victims resisted arrest and were killed by the police in the process). In a report to the UN Human Rights Council (UNHRC), the Justice department admitted that in more than half of the nanlaban cases they reviewed in the drug war, law enforcement agents did not follow protocol and no full examination of the recovered weapon was conducted. 

While the victims are involved in legitimate advocacies on the issues of land, labor, human rights, etc., they have been set up for state-perpetrated assaults through the non-stop red-tagging (labelling activists and their organizations as communists terrorists) by the regime. All these – the red-tagging, the use of courts to legitimize the raids on the houses and offices of activists, and the consequent killings and arrests, are part of the counterinsurgency campaign of Duterte. The made-up narrative is that the activists belong to the armed communist rebellion, thus the search warrants for firearms and explosives.

The UN Human Rights Office pointed out that that “the vilification of dissent and attacks against perceived critics are being increasingly institutionalized and normalized” in the country, as it noted how red-tagging “has posed a serious threat to civil society and freedom of expression”. It correctly argued that activists have become the targets of verbal and physical attacks, threats and legal harassment as “human rights advocacy is routinely equated with insurgency and the focus diverted to discrediting the messengers rather than examining the substance of the message.” 

What exactly is the substance of the message?

Some of those who were killed and arrested in the latest attacks in Southern Tagalog are workers and labor rights advocates. The minimum wage in the Calabarzon region (Cavite, Laguna, Batangas, Rizal and Quezon) is between PHP 317 and PHP 400, barely 20% of the estimated cost of living. Southern Tagalog workers and their supporters, as elsewhere in the country, have every reason to organize and struggle for their interests and rights, including on decent living. This is especially so under Duterte whose presidency is the worst in terms of addressing the issue of low wages.

Some of those who were killed and arrested are farmers, fishers and peasant rights advocates. With chronic landlessness and lack of government support, farmers suffer the worst poverty in the country. Based on data from the Philippine Statistics Authority (PSA), the poverty incidence among farmers is at 31.6% – the highest among all sectors, followed by fishers with 26.2 percent. Meanwhile, based on the official Census of Agriculture, as high as 62% of farmlands in Calabarzon in terms of area are not fully owned or controlled by the tillers. Farmers and peasant rights advocates in Southern Tagalog have every reason to organize and struggle for their right to land and life; especially so under Duterte who has openly instructed the police and military to shoot and kill farmers who are asserting such rights.

Like all the oppressed, the workers, farmers and people of Southern Tagalog do not only have the reasons to fight their oppression – they also have the legitimate right to do so. Indeed, no court warrant can arrest or kill the people’s collective right to resist injustice. ###

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COVID-19, Economy, SONA 2020

GDP falls 16.5% as COVID-19 hastens PH economic decay under Duterte

The Philippine Statistics Authority (PSA) reported today that the second quarter gross domestic product (GDP) declined by a huge 16.5 percent. The contraction – the largest quarterly decline since the country started recording quarterly GDP figures in 1981 – put the Philippines officially into a technical recession after the economy fell by 0.7% in the first quarter of the year.

In his last State of the Nation Address (SONA), Pres. Duterte confidently proclaimed that under his leadership, the country is “in a better position to weather the crisis caused by the COVID-19 global pandemic”. Nothing could be be farther from the truth. With the COVID-19 crisis, the stage is set for what could be the worst period so far in the country’s state of permanent economic decay. Compared to its neighbors in the region, the Philippines is in fact most vulnerable to the economic impact of the pandemic.

This as the traditional and illusory growth drivers such as labor export earnings that for so long used to conceal the deterioration of the Philippine economic crisis teeter on the edge of collapse. Multilateral lenders, credit rating agencies, and the economic managers all project that the gross domestic product (GDP) will contract this year as the pandemic ravages production, consumption and trade, and wipes out millions of jobs and livelihoods.

Even before COVID-19, GDP growth under Duterte was already on a decelerating trend as the domestic economy remained dependent on an increasingly uncertain global economy wrecked by and still reeling from a series of crises. From a 7.1% expansion in 2016, GDP growth steadily slowed down to 6.9% in 2017; 6.3% in 2018; and 6.0% in 2019. There are several factors behind the deceleration. One is the slower growth in domestic consumption, which historically comprises about three-fourths of the GDP and thus closely mirrors GDP growth trends. From a 7.1% growth in 2016, household final consumption expenditure (HFCE) slowed down to 6.0% in 2017 then further to 5.8% in 2018 before barely recovering to 5.9% last year. In the latest PSA report, HFCE fell by 15.5 percent.

What has been driving domestic consumption in the country for decades are the remittances from Filipinos earning abroad. Based on World Bank data, the Philippines ranked fourth worldwide in terms of migrant remittances inflows in 2019. But relative to its economy, the Philippines is the most dependent on such inflows with remittances accounting for 9.9% of its 2019 GDP. The three countries ahead of the Philippines in the list of global top earners of migrant remittances last year have a far smaller GDP ratio. World’s number one India has a remittances-to-GDP ratio of just 2.8%; China has 0.5% while Mexico, 3.0 percent. In Southeast Asia, the Philippines has the largest remittances-to-GDP ratio where the average ratio of its neighbors is just 3.3 percent.

To be sure, Duterte inherited the defective four-decade old labor export strategy. But contrary to his campaign rhetoric of bringing home the Filipino diaspora, he did not only perpetuate the defective policy, he is also further institutionalizing the strategy in lieu of sustainable domestic job creation. Since taking over, his administration has been working hard to secure more overseas employment visas; has created a bank specifically intended for overseas Filipino workers (OFWs); and has been pushing for a Cabinet-level OFW department

But as the world crisis deepens with every flare-up of economic recession and destruction of productive forces in the centers of global capitalism and their neo-colonies, the labor export strategy has been standing on more and more shaky ground. Migrant remittance inflows this decade have been growing annually by an average of just 5.8%, twice slower than its pace in the 2000s (11.7% yearly growth) and thrice slower than in the 1990s (19.8%). Under Duterte (2016-2019), remittances are flowing at a much slower pace with an annual expansion of 4.2 percent.

With COVID-19 further sparking off labor protectionist policies that are already on the rise even before the pandemic, the backward Philippine economy faces greater difficulties in the coming months and years. The Labor department estimates that OFW remittances could drop by as much as 40% this year due to COVID-19. Some 345,000 OFWs have already been affected by the pandemic that would add to the already massive and burgeoning domestic joblessness.

Domestic consumption should be fueled by locally-created jobs and locally-generated incomes, both of which have always been problematic in the Philippines and now made drastically worse by the pandemic. The grossly understated official unemployment posted 7.3 million jobless workers in government’s April 2020 survey, an all-time high based on government records. Official unemployment rate more than tripled from 5.1% in April 2019 to 17.7% in April 2020, according to the Philippine Statistics Authority (PSA).

However, the actual unemployment situation could be way bleaker than what official data claim, which exclude from the labor force and do not count as jobless those workers who did not look for work in the last six months prior to the government survey or are unable to immediately take up work. Note that adult joblessness as measured by the polling firm Social Weather Stations (SWS) averaged 9.3 million workers or an unemployment rate of 19.9% in 2019, already much higher than the COVID-19 jobless data of government.

Indeed, a problematic technical definition of unemployment could not hide the reality of a chronic crisis in job generation that Duterte, like his predecessors, has failed to reverse by strengthening in a sustained manner domestic productive sectors such as industry and agriculture. Long-term trends show a worsening local unemployment situation. Based on SWS surveys, the annual average rate of joblessness more than doubled in the past three decades – from 9.8% in the 1990s to 18.7% in the 2000s and then further up to 23.1% in the 2010s. Under Duterte (2016-2019), the annual unemployment rate is averaging 21% using SWS figures.

Not only has Duterte failed to create enough and productive jobs to boost domestic consumption. His policies and programs even further eroded the capacity of ordinary Filipino households to consume. The minimum wage, for instance, has increased the slowest during his administration compared to other Presidents under the Wage Rationalization Act of 1989.

Since Duterte took over, the nominal minimum wage in NCR, for instance, has increased by only 9.8%, based on data from the National Wages and Productivity Commission (NWPC). At a similar or comparable point during their terms, the minimum wage has increased by 16.1% under B. Aquino III (2010-2014); 39.0% under Arroyo’s second term (2004-2008); 13.1% under Arroyo’s first term (2001-2004); 17.0% under Estrada (1998-2000); 39.8% under Ramos (1992-1996); and 32.6% under C. Aquino (1989-1990).

At the same time, Duterte pushed his highly contentious tax reform program (TRAIN Law), which imposed additional taxes on basic goods and services, while continuing neoliberal policies like deregulation and privatization that make the cost of living more unaffordable for most Filipinos.

Under Duterte, the pump price of gasoline has already jumped by about 31.3%; diesel, 40.3%; and LPG, 31.8% to 34.6 percent. Power rates (Meralco) have increased by around 3.5% for households consuming 70 kilowatt-hours (kWh) to 4.6% (200 kWh) while water rates have increased by about 7.0% (Maynilad basic charge) to 14.6% (Manila Water). The cost of public transport has likewise jumped by around 18.1% (ordinary bus) to 33.3% (taxi).

Basic food items like rice has increased its retail price by 2.7% (regular-milled) to 10.0% (well-milled); fish, 25.0% to 28.6%; and meat, 35.7% to 63.6 percent. According to a study, the cost of basic food items comprises 62.3% of the current average minimum wage in the Philippines, the fourth largest in its survey of 54 countries, and higher than neighboring Thailand (51.6%), Vietnam (50.2%) and Malaysia (32.4%).

COVID-19 is wreaking havoc on a Philippine economy that has long been ravaged by underdevelopment and flawed economic programs. Amid a raging global crisis that is obliterating whatever is left of the limited opportunities for Filipino families to earn a living, the Duterte administration’s severely lacking response to the pandemic including social amelioration, combined with an increasingly oppressive political environment, creates conditions for a perfect storm of social unrest. ###

(This article is an updated version of an article first published by Bulatlat.com)

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Governance, Human rights

Junk Duterte’s terror bill

Terorista lang daw ang target ng anti-terrorism bill ni Duterte?

The farmers, the lumad – they are the biggest victims of terrorism, by the state. Duterte made the Philippine countryside the deadliest place in the world for farmers, indigenous people and the advocates of their rights.

In 2019, for instance, we ranked first in the list of countries with the highest number of monitored extrajudicial killings of farmers, farm workers, indigenous people, and land activists with 38 cases and 50 victims. That’s about one killing per week. Colombia, another country notorious for its political killings of rural people and activists, was a far second with 21 monitored cases and 27 victims.

Read the full report here: https://bit.ly/2MwguyF

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COVID-19, Global issues, Governance

Duterte: COVID-19 figures not so bad; Data say otherwise

As Metro Manila and other areas prepare to transition from modified ECQ to GCQ, Pres. Duterte said Thursday (May 28) that figures on COVID-19 in the Philippines are “all in all, not so bad”.

“The death toll is 921. So you would see that the Philippines has…ratio and proportion vis-a-vis with the population, we have a low rate of mortality here in this country,” Duterte claimed.

But latest available data (as of May 28) show otherwise.

In ASEAN, the Philippines actually has the worst record in terms of COVID-19 deaths in relation to the population. Eight Filipinos die of COVID-19 per 1 million people in the country. In comparison, the death rate in Brunei and Indonesia is five per million people. Malaysia and Singapore have four deaths per million; Thailand has one.

Overall, the Philippines is the 12th worst country in Asia in terms of COVID-19 deaths relative to population size (as of this posting). We’re the worst among all countries not just in Southeast Asia but also in South Asia and East Asia. (See data here)

Relative to the number of confirmed COVID-19 cases, the Philippines ranks next to Indonesia in terms of the worst mortality rate in ASEAN. Indonesia has 6.10 deaths per 100 cases of COVID-19 while the Philippines has 5.91. Thailand has 1.86; Malaysia, 1.51; Brunei, 1.42; and Singapore, just 0.07. ###

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COVID-19, Governance, Human rights

PH has strictest lockdown in Asia, but ineffective vs. COVID-19

COVID-19 Strictest Lockdowns

If you feel that the COVID-19 lockdown being imposed by the Duterte regime is very strict, data say you are right. In fact, Duterte’s lockdown is the strictest in the region, even more rigid than that of his fellow authoritarian ruler Narendra Modi of India.

Compiling Google’s data on six categories of public mobility (retail and recreation; grocery stores and pharmacies; parks; transit stations; workplaces; and residential areas), the Nikkei Asian Review reported that the Philippines posted the largest average decline at 50.83 percent. With severe restrictions, the Duterte administration brought down public mobility by 85% in transit stations; by 79% in retail and recreation; and by 71% in workplaces. India ranked second with an average decline in public mobility by 47.83 percent.

But data also say these repressive lockdowns are not effective in the fight against COVID-19. While the Philippines and India are imposing very tight rules to restrict public mobility, they are still failing to bring down the number of new COVID-19 cases, which continue their upward trajectory after almost two months of lockdown.

On the contrary, countries that implemented less severe measures to control public mobility like Taiwan (2.16% decline in public mobility); South Korea (11.0%); Japan (13.83%); Vietnam (29.5%); and Thailand (31.66%) are significantly doing better in terms of bringing down the number of their daily new cases, as shown in the charts. (From EndCoronavirus.org)

Lockdowns are meant to hide the sorry state of public health systems and a convenient cover for leaders like Duterte (and Modi) to consolidate their authoritarian rule. The effective way to contain the spread of the new coronavirus are not repressive measures but reliable health and medical interventions, including testing.

Not surprisingly, there is an inverse correlation between testing and severity of lockdowns. Countries that conduct less tests tend to implement more severe lockdowns. India only conducts 1,042 tests per 1 million people while the Philippines conducts 1,379. Compare these figures to those countries that restricted public mobility less severely: Taiwan (2,790 tests per 1 million people); South Korea (12,773); Japan (1,502); Vietnam (2,681); and Thailand (3,264). (From Worldometer)

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COVID-19, Global issues, Governance

COVID-19 charts: PH death rate, testing capacity among worst in ASEAN

You know the Philippines is in deep shit when it has the highest number of #COVID19 deaths relative to the population and one of the worst testing capacities in the region, and yet all President Duterte could talk about are Martial Law and the NPA.

As of Apr. 24, the Philippines is averaging four COVID-19 deaths per 1 million people, the highest in ASEAN. This is twice the rate of Singapore and Indonesia, the top 2 countries in the region with the most number of novel coronavirus infections in absolute terms. (See Chart 1)

COVID-19 Deaths ASEAN for FB

Meanwhile, COVID-19 tests in the Philippines are among the lowest in ASEAN, pegged at 660 per 1 million people. Brunei is conducting more than 28,400 tests per million; Singapore, more than 16,200. Even Thailand is conducting thrice the number of tests that the Philippines does relative to its population. (See Chart 2)

COVID-19 Tests ASEAN for FB

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