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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COVID-19, Global issues, Human rights

PH prisons: Ticking COVID-19 time bombs

The Philippines has the world’s most overcrowded prisons, according to the World Prison Brief (WPB). In Asia, a region where jammed detention facilities are ticking #COVID19 time bombs, Philippine prison overcrowding is twice as worse as Bangladesh, the distant second in the region in terms of prison overcrowding.

At the Quezon City jail, which is almost 5x overfilled, nine inmates and nine staff members are COVID-19 positive. In a Mandaluyong jail, 19 inmates and a staff are COVID-19 positive. In Cebu City, two inmates are infected. To be sure, there could be more.

Worse, Duterte’s Martial Law-like implementation of anti-COVID-19 measures is further overcrowding prison facilities unnecessarily. In the 35 days of enhanced community quarantine (ECQ), the Philippine National Police (PNP) has arrested 31,363 people for violating government’s draconian lockdown rules.

Those arrested include urban poor who were demanding government aid; people who were forced to eke out a living despite the ECQ due to lack of government support; and even more outrageously, relief volunteers who were assisting poor communities cope with the crisis amid absence of government assistance.

The militarist mindset and approach of the Duterte regime are further exposing the public to greater danger. ###

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Governance, Human rights

The people are not afraid of you, Mr. President

 

COVID-19 protest

“WE’RE STARVING”. Residents of an urban poor community in Sitio San Roque in Quezon City trooped to EDSA on Apr. 1 amid strict lockdown rules due to COVID-19 to demand relief from government. (Photo: Yahoo! News)

President Duterte’s militarist response to the COVID-19 crisis took a turn for the worse on Tuesday, Apr. 1. In a televised address to the nation, he warned people seeking government relief amid the pandemic that he will “shoot them dead”. His unscheduled speech was apparently triggered by the protest of an urban poor community in Sitio San Roque demanding the government assistance promised to them when the capital region was put on enhanced community quarantine (ECQ).

The police arrested 21 of the protesting urban poor, adding to the more than 17,000 mostly poor people arrested nationwide for violating government’s lockdown policies. Compare the number of people arrested by the Philippine National Police (PNP) to the number of persons tested by the Department of Health (DOH) to combat COVID-19, which stood at just 3,938.

Filipinos have been enduring Duterte’s mindless and violent rants for four years now. But his latest incendiary rhetoric of ordering his police and soldiers to kill without hesitation those who violate his authoritarian ECQ hits differently for most. Locked down, deprived of mobility and productive work, starved and grappling with fear and uncertainty so much as with the unfamiliar virus as with government’s overall response to contain it, the people are enraged.

Duterte, as he is wont to do every time the legitimacy of his leadership is challenged, framed his virulent tirade as a warning to the Left, whose only desire according to the long ailing Chief Executive is to destabilize his government. He thought that this would justify his violent diatribe because the Left is supposedly an enemy of the state.

But the public felt it was not just addressed to the Left; or more likely they have already identified with the legitimate demands of the Left from this regime. Whichever is the case, Duterte is picking a fight not just against the politically organized sections of society, but all the people harshly impacted by the COVID-19 pandemic and government’s tyrannical response to a public health crisis.

The erstwhile apolitical, be they public personalities or one’s family and friends, are speaking up over Twitter or dinner against Duterte’s heartless verbal onslaught and its real implications to people’s welfare, especially those who are vulnerable to more hunger and poverty. The ECQ may have prevented public gatherings, but it also gave people more time online to discuss, share and process their collective thoughts and sentiments against the regime. It gave families and neighborhoods more time together to agree as a group how insufferable and contemptible the President and his men have become.

The ECQ meant to isolate the people from each other because of COVID-19 is ironically bringing more and more together in the conviction that the current state of the nation is no longer acceptable and tolerable. The people are not afraid of you, Mr. President. They are increasingly finding strength and courage from each other.

Duterte and his Defense and military people who are behind and in charge of the lockdown wrongly thought that their dastardly agenda of repressing dissent and democratic rights under the pretext of political stability has been made easier by the COVID-19 pandemic. On the contrary, the crisis and the government measures to supposedly address it in fact have heightened the conditions for greater social unrest and conflict, and for people to organize and take collective political actions.

The existing and emerging material conditions for these are unmistakable. Duterte’s own economic managers are forecasting an economic contraction of as much as 0.6% and job losses of as high as 1.8 million (one million in Luzon alone) this year due to the pandemic. Total economic losses could reach as much as PHP 1.36 trillion, with Luzon accounting for more than one trillion These estimates assume that the ECQ will only last for a month.

As the crisis is global, the economy could not rely on foreign exchange, including remittances from overseas Filipinos and foreign trade, to boost domestic consumption. The world economy may already be in a recession that some economists say is comparable in severity to the 2008-2009 Great Recession. Or it can even be worse. The International Labor Organization (ILO), for instance, estimates that the COVID-19 pandemic could wipe out up to 24.7 million jobs worldwide. For comparison, the global financial and economic crisis 10 years ago claimed 22 million jobs.

The National Economic and Development Authority (NEDA) expects remittances to drop by as much as PHP 8.5 billion this year due to the crisis. Many Filipino families will face hardship in the coming months, even long after the lockdown has been lifted. They include not just the urban and rural poor, who are the most exposed to the impacts of pandemics and economic declines, but even those who used to have the means to spend more. The pressure will further increase for government to provide social and economic services, something that the COVID-19 crisis has shown the regime is incapable of.

There is a disease spreading in government that is plunging the nation into chaos and death. It is not caused by the novel coronavirus, but by the old, familiar virus of authoritarianism. To get rid of this virus and heal as one, the country truly needs a bayanihan – to determinedly and strongly work together as a people in building a government and a nation that is truly theirs. In this battle, all the oppressed are frontliners.

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Economy, Governance

How People Economics can solve the transport crisis

✅ Develop the countryside, to ease the heavy congestion in urban centers like Metro Manila with the creation of longterm economic opportunities in the regions

✅ Build Filipino industries, to supply the needs of building and maintaining the country’s transport infrastructure as well as the needs of transport rehabilitation and modernization programs

✅ Protect the environment, by utilizing domestic renewable energy resources to power mass transport especially rail systems and funding the rehabilitation and modernization of current modes of public transport like jeepneys

✅ Uphold people’s rights and welfare, by ensuring the reliability, accessibility, efficiency, safety and affordability of public and mass transport at all times, which entails, among others, reversing the privatization of the county’s rail systems, toll roads, etc. and discarding the neoliberal user pays principle in mass transport

✅ Finance development, and ensure the mobilization of sufficient public resources to fund national, regional and local transport infrastructure development, including subsidizing their operation and maintenance

✅ Strive for sovereignty and independence, because those mentioned above will not be possible if Philippine policy making and determination of national development agenda will continue to be shaped by foreign interests with ties to local oligarchs and bureaucrats who run the transport system and build transport infrastructure for private profit

#MayMagagawa

(People Economics is a campaign led by research group IBON Foundation to articulate and enrich the people’s alternatives to the failed policies and programs of neoliberalism in the national economy.)

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Consumer issues, Governance, infrastructure

LRT-2’s decline amid funds misuse and dubious deals

LRTA misused LRT-2 rehab funds

Presidential mouthpiece Salvador Panelo called the challenge to commute. The dare arose from his callous remark about the state of the metro’s transport system. There’s no crisis he said, since people are still able to go wherever they need to. Enduring the daily torment of long queues and endless waits, overcrowding and hellish traffic, the commuting public are of course outraged.

But Panelo’s four-hour, four-jeepney commute circus should not distract us from the fundamental issues. The ordinary working class and students who bear the torture of commuting do not need him to validate what they suffer every day.

Recurrent mishaps

The crisis in the mass transport system is not only real. It is chronic and structural. It did not start when the LRT-2 suspended its operations as the usual glitches hampered the LRT-1 and MRT-3. For as long as we can remember, one or two of Metro Manila’s rail lines break down on an almost weekly basis.

To be sure, the Duterte administration is not solely to blame for the recurrent glitches, passenger offloading and shutdowns of Metro Manila’s rail system. Such decrepit state of the rail system was spawned by decades of accumulated wrong government policies, neglect and corruption. Technical glitches number to thousands per year, according to transport officials.

These train malfunctions started to occur with increasing frequency under the previous administrations of Arroyo and Aquino, and the crisis continues its cumulative deterioration under Duterte. Prior to these recent incidents, LRT-2 is not as notorious as LRT-1 and more especially MRT-3 in terms of service interruptions.

LRT-2 had several mishaps prior to the October 4 fire that brought its entire line to a halt for several days. Last May 18, two of its trains collided and injured 34 people. It was perhaps the second worst accident involving metro rails, just behind the wayward MRT-3 train that rammed through a station and hurt 38 people back in 2014.

The LRT-2 collision happened two days after a lightning hit the train line’s overhead power connection. Unable to operate, the incident stranded thousands of LRT-2 commuters in the middle of a thunderstorm. On June 7, LRT-2 also suspended its operations due to a technical malfunction.

Declining performance

It seemed that the recent major breakdown of the LRT-2, which will take a possible six to nine months to be fully restored, was bound to happen. This noticeable increased frequency in its system’s malfunctions is affirmed by the rail line’s declining performance indicators. From an average of 11 trainsets running during peak hours in 2014 and 2015, the number fell to 10 in 2016 and 2017, and further to just 8 in 2018 and 7 trainsets in 2019.

Passenger traffic has also substantially decreased – from 72.85 million in 2014, the number fell to 62.21 million in 2015. After recovering to 67 million in 2016, passenger traffic in LRT-2 progressively declined to 65.96 million in 2017 and 64.70 million in 2018. Its passenger traffic in the first five months of 2019 is also the lowest in the last six years.

LRT-2’s farebox ratio – or the proportion of fare revenues to total operation and maintenance (O&M) costs – is falling as well. A farebox ratio of 1.00 means that fare revenues cover 100% of O&M cost.  From an upward trend of 1.00, 1.44 and 1.53 in 2014, 2015 and 2016, respectively, the farebox ratio of LRT-2 has gone down continuously to 1.06, 0.93 and 0.81 in 2017, 2018 and 2019 (first five months), respectively.

Actual gross revenues collected from LRT-2, after increasing from Php973.36 million in 2014 to Php1.25 billion in 2015 (the year when fares were substantially hiked) and further to Php1.31 billion in 2016, declined to Php1.27 billion in 2017 and Php1.24 billion in 2018. Comparing similar periods, collected gross revenues in the first five months of 2019 (Php485.59 million) are also the lowest since 2014.

Falling farebox ratio is the result of declining passenger traffic which results to lower fare revenues, and higher O&M costs due to, among others, poor service maintenance of the system. Poor maintenance leads to less trainsets running and less revenues earned. It is a cycle that could be ended through efficiency in management and maintenance of the system.

Misusing rehab funds

Alas, the train line operated by the Light Rail Transport Authority (LRTA) has been obviously poorly managed and maintained.

One reason is that already limited public resources allocated for the system’s improvement are not properly being used. In its 2018 audit report on the LRTA, the Commission on Audit (COA) said that a portion of state subsidy for the rehabilitation of LRT-2 as well as for general administration and support “was not utilized in accordance with its intended purpose”.

Through a Special Allotment Release Order (SARO) on June 17, 2016, the LRTA received Php743.56 million from the national government. However, state auditors found out almost half of that amount – Php360 million – was transferred to LRTA accounts not related to the purpose of the SARO (i.e., LRT-2 rehabilitation and administration and support).

“Questionable and doubtful”, according to COA, was the transfer of Php210 million in rehabilitation and restoration funds of LRT-2 to fill the liabilities of the LRTA in a bank account held in trust for bid documents, bonds and retention.

Likewise, state auditors noted the transfer of Php150 million in LRT-2 rehabilitation and restoration funds to a savings account that holds LRTA’s revenues from magnetic ticket sales. It was used as partial payment, interest charges and taxes for an outstanding loan arising from the services rendered by a private contractor with LRT-1.

In its report, released just last June 2019, COA asked the LRTA management to “discontinue using the subsidy funds earmarked for specific purposes and strictly comply with EO (Executive Order) 292 on the use of subsidy fund”. EO 292 refers to the Administrative Code of 1987.

COA also told the government rail agency to “replace the amount taken from the subsidy fund of Rehabilitation of LRT Line 2 System and General Administration and Support”. Further, state auditors asked the LRTA management to submit an explanation on the questionable transfer of Php210 million to bank accounts not meant for LRT-2 rehabilitation.

Dubious deals

Not only is the LRTA mismanaging the funds intended to improve the condition of and services provided by the LRT-2 system. It also continues to make deals with long-time LRTA private contractors that have a questionable track record.

The current maintenance provider for LRT-2 is the AMSCO joint venture composed of APT Global Inc., MultiScan Corporation, and Opus Land, Inc., with the LRTA awarding a Php1.81-billion contract last December 2018.

APT Global has figured in several cases of problematic contracts involving Metro Manila’s rail systems. As the MRT-3 maintenance provider, APT Global was ordered by the COA in 2015 to pay Php211 million for failing to deliver its contractual obligations. Among others, they included failure to deliver trains, defective escalators and elevators and half line operations.

APT Global was also part of the TSPA joint venture (along with Telefonika, STIV and Pacific) that maintained LRT-2 from June 2007 to June 2012. In its 2016 Special Audit Report on the LRTA, COA said that TSPA committed a minimum of 16 trainsets running on LRT-2 but only delivered 13 trainsets. Despite this, LRTA still paid its contract with TSPA in full, worth almost Php1.06 billion, instead of making the necessary cost reduction.

With such an undesirable track record, it is perplexing how APT Global was still able to be part of a joint venture that currently maintains the LRT-2. Apparently, it is one of the favored contractors by those in the LRTA.

The bidding conducted by the LRTA for the procurement for maintenance of the LRT-2 system won by APT Global’s joint venture AMSCO was allegedly fraught with irregularities. Commuter groups RILES Network and United Filipino Consumers and Commuters filed a case before the Ombdusman against LRTA officials last April 2019.

They alleged, among others, that the LRTA designed the bidding process in a way that ensures only AMSCO will bag the contract. It included requiring the use of spare parts that AMSCO’s MultiScan is the exclusive distributor of in the Philippines. Like APT Global, MultiScan is a longtime contractor of LRTA as a supplier of spare parts and consumables of the LRT-2 system in the past two decades.

The real challenge

In other words, the hundreds of thousands of LRT-2 commuters affected by the shutdown are at the mercy of, to the say the least, an inefficient government agency and its inept private contractors that profit millions of pesos in taxpayers’ and commuters’ money.

With the kind of track record that those handling the LRT-2 have, no wonder that the rail system broke down the way it did. It is also not surprising that the damages caused by the fire could supposedly take months to repair, aggravating the already unbearable state of public commute in Metro Manila.

The public sector should continue to operate the LRT-2 as a provider of a vital public service. The transportation department’s plan to privatize its operation and maintenance will only worsen the woes of commuters and further drain public resources as evidenced by our experience in LRT-1 and MRT-3.

But obviously, the current LRTA has been mismanaging the LRT-2 system. Reforms must be put in place to address this, including structural changes that would allow greater public scrutiny of and participation in the rail agency’s operations. Private contractors that have repeatedly failed to deliver should be banned and held to account. Using the crisis to justify the failed and flawed privatization must be opposed.

These are actually small reforms compared to the massive extent of Metro Manila’s transport crisis, but necessary reforms nonetheless to ensure that the LRT-2 becomes a truly publicly run rail system meant to serve the commuters’ interests and welfare.

Is the Duterte administration capable of instituting these reforms to start addressing the crisis? That’s the real challenge to Panelo and his boss. ###

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Governance, Human rights, Military & war

Rising national insecurity amid Duterte’s soaring security budget

 

Duterte with gun

Photo from Interaksyon

With Martial Law in Mindanao, a brutal drug war and an even more vicious counterinsurgency campaign, the Duterte regime vowed to make the country peaceful and safe. However, as once again highlighted by the recent twin bombings in Mindanao, it appears that instead of peace and quiet, the Duterte administration’s heavy-handed approach to national security is not only failing. Duterte’s policies are actually creating more conflict and insecurity for the people.

This even as Malacañang siphons off an ever-growing portion of public resources to its national security efforts, including for the controversial intelligence and confidential funds of the President and his security forces. In its 2020 budget proposal, the Duterte administration is seeking an all-time high of Php8.28 billion in total intel and confidential funds, on top of the hundreds of billions of pesos for the police and military establishments to acquire more arms and hire additional personnel.

Questionable, unjustifiable budget

Such big allocation for intel and confidential funds is questionable and unjustifiable for various reasons. One is that the funds are apparently not achieving their objectives. Aside from the bombings in Mindanao, the illegal drug trade has worsened even, as admitted by no less than Duterte himself. By abandoning the peace talks with the communist rebels and relying more on often bloody military and police operations in the countryside, Duterte is making the same mistakes of his predecessors of further feeding the 50-year old insurgency.

Another is that by their nature, intel and confidential funds are difficult to audit and are thus prone to corruption as has already happened many times in the past. Perhaps even more wicked than corruption is how these funds can be used to bankroll illegal and murderous operations against groups and people it considers as enemies of or threats to the regime.

It is indeed ironic that under a regime that has made anti-criminality and peace and order as its centerpiece program, the safety and security of the public are increasingly at risk. And this insecurity is coming not just from the unabated terrorist attacks and criminal activities that Duterte promised but failed to address, but from the very same policies of the regime that are supposedly meant to protect the people. Martial Law in Mindanao, rights advocates and even parliamentarians from the country’s ASEAN neighbors point out, has been a factor behind the terrible state of human rights under Duterte. Extrajudicial killings that mar Duterte’s drug war and counterinsurgency campaign are so prevalent that 8 out of 10 Filipinos fear that they or someone they know can be a victim anytime.

Mindanao bombings

The incidence of terrorist bombings in Mindanao has increased and has become more frequent under Duterte’s Martial Law. Just recently, two more incidents of bombing happened in the restive region. Last September 8, reportedly another suicide bomber staged an attack in a military camp in Indanan town in Sulu. A day before, at least seven people were hurt in an explosion in a public market in Isulan town in Sultan Kudarat.

This was the second time in four months that Indanan suffered an alleged suicide bombing. Just last June 28, an attack killed eight people (including the two suicide bombers) and wounded 12 more. The attack in Isulan was the second time in five months since a blast rocked a restaurant in the town on April 3, hurting 18 people. There are now five bombing incidents this year, with the deadliest occurring at a cathedral in Jolo, another town in Sulu, when a twin explosion killed 22 people and wounded at least 100 last January 27.

Counting the incidents since last year, there are now nine cases of reported terrorist bombings and explosions in Mindanao, killing 47 people and wounding more than 200. All these have happened under Martial Law, first imposed in May 2017, raising the question of whether or not military rule is really effective in curbing terrorism. (See Table)

Tab 1 Mindanao bombings

Still, Duterte officials continue to defend Martial Law in Mindanao despite the increased incidence of terrorist attacks. While crime incidents and proliferation of firearms in Mindanao have supposedly gone down because of Martial Law, authorities argue that “terrorism is really a different kind of thing”, leaving one to wonder what option more extreme is the regime contemplating to address terrorism. One answer could be the amendment to the Human Security Act (HSA), a priority legislation of Duterte that will make Martial Law nationwide and permanent.

Drugs and homicides

With increased incidence of terrorist bombings in Mindanao, claims by the regime of an improving peace and order environment become ever more doubtful. Widespread and systematic killings under the Duterte administration’s drug war and counterinsurgency campaign paint a picture of a deteriorating rule of law and of deepening impunity even as the Philippine National Police (PNP) maintains that the crime situation is getting better.

According to the PNP, for the entire 2018, there was a 9% decline in crime volume compared to 2017. From July 2016 to June 2018, the crime rate fell by 21.5% compared to July 2014 to June 2016, based on the police’s data. For the PNP leadership, there is an unmistakable correlation between crime and drug abuse. The reported trend of plunging crime volume continues in 2019, with Duterte officials congratulating the PNP for “making our streets safer and making our people feel secure.”

Sadly, many ordinary folk – in particular the victims of alleged extrajudicial killings (EJKs) and their families – do not feel the supposedly improved safety and security under the current regime. Official PNP figures show that the anti-drug operations have killed about 6,600 alleged drug pushers (mostly small-time street peddlers) and drug users from July 2016 to May 2019 (although even official figures are confusing – the latest PNP data being cited is 5,793 drug war killings between July 2016 and July 2019). Moreover, out of these thousands of deaths, a mere 253 police officers involved in the drug war killings have been criminally charged or faced an inquest proceedings. Majority of PNP operatives involved in these killings – 341 police officers – are facing only administrative charges.

Official data on the drug war are not just confusing; they are also not credible as they tend to understate the true extent of the killings. Counting the so-called homicides under investigation or suspected drug personalities killed by unidentified gunmen, there are now reportedly almost 23,000 deaths related to Duterte’s drug war, based on some estimates.

Activist killings

Meanwhile, bodies also continue to pile up under the equally notorious and ruthless counterinsurgency campaign of the Duterte administration. Based on the monitoring of human rights advocacy group Karapatan, there were 250 killed activists, leaders and members of cause-oriented groups from July 2016 to March 2019. Of the total, more than half – 134 killings – happened in Mindanao. (See Chart)

Tab 2 EJK victims by region

Most were from the peasant sector, indigenous people, and Moro as well as from the trade union and youth and student movements. Some were human rights lawyers, supportive local government officials, journalists, teachers and even priests. Perpetrators were usually unidentified gunmen, including those from declared anti-communist paramilitary groups. The aggressive and well-orchestrated propaganda campaign by the Armed Forces of the Philippines (AFP) and the PNP that the groups the victims belonged to are communist fronts is seen as justifying these violent attacks against unarmed civilians and critics of the regime.

Of particular concern recently is Negros Island, which is fast becoming a killing field for anti-communist hit squads and police operatives. Disguising as anti-criminality and anti-drugs operations, coordinated and systematic killings of civilians tagged as communist supporters have been gripping the island and have already claimed 116 victims between July 2016 and August 2019.

Thus, far from feeling secure, an overwhelming portion of the population are becoming more and more concerned about their personal safety amid the unabated EJKs. According to the latest survey (December 2018) of the Social Weather Stations (SWS), 78% of Filipinos are worried that they or anyone they know will be a victim of EJK. The results are even worse than the already high 73% recorded in June 2017.

Even foreigners see the Philippines under Duterte as one of the most dangerous places to live in the world. A 2019 survey of more than 20,000 expats ranked the Philippines as 14th out of 64 countries as most dangerous in terms of peacefulness, personal safety and political stability. In the same survey conducted in 2018, the Philippines ranked 11th out of 68 countries.

Intel funds for what?

In his 2020 budget proposal, Duterte is asking Congress to allocate a massive Php8.28 billion in intelligence and confidential funds for the executive branch, more than half of which (i.e. Php4.5 billion) will go directly to the Office of the President. The AFP and the Department of National Defense (DND) will have Php1.7 billion in intel funds while the PNP and the Department of Interior and Local Government (DILG) will get Php806 million.

Duterte’s (i.e., Office of the President and other executive agencies) 2020 intel and confidential budget is 49% higher than its level in the first Duterte proposed budget in 2017. From just Php5.57 billion in 2017, the intel and confidential funds of the Executive branch have jumped to an average of more than Php7.82 billion in the national budget from 2018 to the proposed 2020 budget.

Intel and confidential funds directly under the Office of the President are averaging Php3 billion per year (2017 to 2020) under Duterte, more than six times the annual average of his immediate predecessor Benigno Aquino III (2011 to 2016). (See Chart)

Tab 3 Average intel funds by president

But the increased intel and confidential funds of the President and of the police and military establishments does not guarantee that the rising terrorist bombings in Mindanao will be quelled. On the contrary, as Duterte’s surveillance funds increased, so has the frequency of terrorist attacks in Mindanao. Among other factors, this is the result of poor military and police intelligence and assessment, despite a huge boost in public funding.

Meanwhile, the illegal drug trade remains robust amid the bloody drug war of the administration and the campaign’s ballooning intel and confidential funds. Billions of pesos of illegal drugs continue to be smuggled into the country such as the Php11-billion worth of shabu that slipped past the customs and then mysteriously disappeared. Subsequent probes established that those who were in charge of customs intelligence, along with police officials, were involved in the smuggling of the enormous shabu shipment. Note that the estimated Php11-billion worth of missing shabu is already equivalent to almost half of the total worth of shabu that Duterte’s drug war has seized from July 2016 to March 2019; and it is just one shipment.

What’s even more disturbing is the very real possibility that intel and confidential funds are being used to bankroll not just shadowy but outright illegal activities that spell the death of thousands on the pretext of promoting national security and peace and order. The vigilante killings that target perceived enemies of the state, for instance, are so systematic that – coupled with Duterte’s notorious past as a longtime city mayor of endorsing, if not using, death squads to shortcut due process – it is not hard to believe that they are state-sponsored operations.

It is clear that Duterte is using the deteriorating situation on terrorism in Mindanao and illegal drugs and the resilient communist insurgency to justify an ever-growing unaccountable budget in the name of national security. In fact, it is using its own failures to sufficiently deal with the country’s national security issues not only to justify greater intel and confidential budget but to push for even more repressive measures. ###

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