2016 elections, Cronyism & patronage, Privatization

#BeyondElections2016: PPP investors bet on presidential bets


Infographic from IBON Foundation

All presidential bets vow that they will continue and improve the public-private partnership program (PPP) of the Aquino administration. This, of course, is not a surprise. Oligarchs who bag these contracts and profit from infrastructure development are also the biggest backers of leading presidential bets.

Take San Miguel Corporation, for example. The diversified conglomerate admitted that it has been lending its private jets to some 2016 bets for their campaigning. SMC has already cornered four PPP contracts worth more than Php49 billion.

These include the Php24.4-billion Bulacan Bulk Water Supply Project and Php17.93-billion NAIA Expressway Phase 2 Project under the Aquino administration; and the Php69.3-billion MRT Line 7 Project and Php37.43-billion Metro Manila Skyway Stage 3 Project under the previous Arroyo administration.

San Miguel is eyeing another Php489.58 billion worth of PPP projects, which may be auctioned in the remaining months of the Aquino presidency or early on in the administration of the next President.

It’s how bureaucrat capitalism works. Oligarchs back presidential bids as “investment” and rake profits later through government contracts such as PPPs.

This reality is prominent in the upcoming polls as candidates assure investors, including foreign interests behind privatized infrastructure development, of PPP continuity. The only competition now is who among the presidential contenders will implement most efficiently the incumbent’s centerpiece economic program.

PPP delays

Opposition bets use the horrendous traffic in Metro Manila amid delayed transportation projects to stress the failures of the Aquino administration. Vice President Jejomar Binay, for instance, calls Aquino’s PPP program as “epicenter of failure”. For the aspirant who poll surveys say is the man to beat, the main issue is the “inexplicable delays” in the PPP program.

So far, Aquino has already awarded 12 PPP projects with a combined cost of Php196.53 billion. The amount is based on the PPP Center’s report as of 1 April 2016.

But out of the 12 awarded contracts, government has completed just two projects. These are the Php2.01-billion Daang Hari – SLEX Link Road Project and the Php16.43-billion PPP for School Infrastructure Project (PSIP) Phase I. One of the awarded contracts – the Php8.69-billion Modernization of the Philippine Orthopedic Center – even got derailed. This after the investor backed out citing delays in the release of certificate of possession for the project site.

Presidential bets promise to fast track the implementation of the PPP program. One is Senator Grace Poe who is neck and neck with Binay in the surveys. Poe claimed that when elected, she would finish seven airports through PPP in the first half of her term. These airport projects are in various stages of bidding under Aquino’s PPP program.

Poll uncertainties

Candidates are pressed to have greater clarity in their economic plans especially on PPP to assure interest groups like banks and investors. The Institute of International Finance (IIF), for example, said that compared to Poe and administration bet Mar Roxas, Binay is more populist. Thus, Binay could undermine the PPP program.

Responding to the US-based lobby group, the Vice President’s camp asserted they would, in fact, enhance the PPP program. A Binay presidency, they said, will revise the Build-Operate-Transfer (BOT) Law, pass a Right-of-Way bill, and address bureaucratic inefficiencies to hasten PPP implementation.

Indeed, the PPP program’s fate is one of the main concerns of the business community as the country transitions from the current administration to the next. For instance, the Philippine Chamber of Commerce and Industry (PCCI) asked Aquino to accelerate the implementation of PPP projects in the remainder of his term. PCCI said this will ensure that the next President can “hit the ground running” in terms of infrastructure development.

But the business community is also wary of political risks. Historically, pet infrastructure projects of the incumbent administration, when replaced by the opposing camp, are either delayed or totally scrapped. This early, the American Chamber of Commerce of the Philippines is urging the succeeding regime to continue “all properly awarded” PPP projects.

Contracts are often reviewed supposedly to protect public interest. In reality, however, the intention is to favor other business interests that have closer ties to the newly installed political camp.

The LRT-MRT common station controversy is illustrative of this. The common station was originally located near Henry Sy’s SM City – North EDSA in a deal forged during the Arroyo administration. It was part of the Php69.3-billion MRT Line 7 Project. But when Aquino took over, the station was moved to the TriNoma mall of the Ayala group, bundled with the LRT 1 project.

Assuring investors

Nonetheless, investors are practically assured of the PPP program’s continuity even with Aquino bet Roxas lagging behind in surveys. For one, PPP projects are exempted from the poll ban on public works, said the Commission on Elections (Comelec). This means that scheduled bidding of some projects will proceed as planned. The PPP Center targets to award at least three more contracts before Aquino steps down.

Further, top presidential runners have already said they would not just continue the program but also improve its execution. All candidates have committed as well to increase infrastructure spending from 4% to 5% of gross domestic product (GDP). This includes the budget to protect PPP investors from political and economic risks.

The administration is also moving to guarantee investors the program will not be easily reversed by whoever will come into power. Aquino already certified as urgent the proposed PPP Law to expedite it in Congress before the polls. The bill would consolidate, institutionalize and expand the PPP reforms started by Aquino, which are feared to undercut public interest. Among them is further weakening public institutions that regulate private investments.

Indeed, the coming election is crucial for PPP investors. The next administration will oversee the implementation of awarded contracts and steering rest of the projects lined up under the program. These include mega-projects such as the Php122.8-billion Laguna Lakeshore Expressway Dike Project and the Php170.7-billion North-South Railway Project (South Line).

Contracts of such magnitude require a government that is able to address regulatory and commercial risks, noted the International Finance Corporation (IFC). The World Bank investment arm also said that greater foreign participation must be encouraged. Thus, foreign and local business groups and creditors are closely watching how contenders will handle PPP issues like regulatory risk guarantees and more liberalization of infrastructure development.

Candidates court ordinary people for votes. However, no one talks about how they will continue to bear an increasing burden to promote the commercial viability of PPP projects. No one is confronting the flawed policy that has raised user fees in water services, power rates, transportation fares, toll fees, telecommunication rates, etc. No one is raising the issue of how privatized infrastructure and services remain dismal amid skyrocketing profits of a handful business groups. ###

(This post is an updated version of the article “Presidential bets vow PPP continuity amid business, foreign lobby” that was first published as IBON Features)

Cronyism & patronage

Presidential pork, election budget and Aquino cronies

Image from the DBM website

Image from the DBM website

Massive presidential lump sums and discretionary funds in the 2015 National Expenditure Program (NEP), along with a redefined savings, expose the proposed P2.6-trillion budget to abuse by the Aquino administration. It is vulnerable, in particular, to patronage and electioneering by the ruling Liberal Party (LP). The LP is desperate to bolster the low popularity of its president-on-leave and perceived 2016 presidential bet – Department of Interior and Local Government (DILG) Secretary Mar Roxas. Local government units (LGUs), including the barangays, play a key role in ensuring the electoral victory of a presidential candidate. With enormous pork barrel-like funds at Aquino’s disposal, the LP and Roxas have the resources to buy the political loyalty of governors, mayors and barangay captains for the 2016 presidential race. Vice President Jojo Binay may be the most popular choice right now as the next Chief Executive according to various polls, but Roxas boasts of a bottomless election war chest.

Thus, we see in the 2015 NEP mammoth increases in the administration’s planned spending for LGUs, many of which will be directly handled by Roxas as DILG head. A glaring example is the huge 80% increase in lump sum allocations for LGUs – from the current P17.3 billion to P31.1 billion next year. The amount includes P27.9 billion in LGUs’ Special Shares in Proceeds of National Taxes and P3 billion in Local Government Support Fund (LGSF), including P2.8 billion under the controversial Grassroots Participatory Budgeting (GPB) scheme and P200 million for “financial assistance to support various priority programs and projects”. The balance is comprised of a “death benefit fund” for barangay officials worth P50 million and shares in proceeds of fire code fees pegged at P200 million. The P31.1-billion LGU allocation is part of the P48.1 billion that Department of Budget and Management (DBM) Sec. Butch Abad has admitted as lump sum in the 2015 NEP. The remaining P17 billion is composed of P14 billion in disaster fund, P1 billion in rehabilitation fund, and P2 billion as presidential “contingent” fund. These amounts pertain to DBM-admitted lump sums; to be sure, much larger discretionary lump sums are tucked in various items of the NEP.

But another feature of the NEP seldom discussed is how the proposed spending plan, including presidential lump sums, will be used to support rich families and business groups with close ties to the Aquino administration. Through budgetary support for the Public-Private Partnership (PPP) program, these elite families and groups, and their foreign partners and patrons, will continue to receive presidential favors under the pretext of infrastructure development. Indeed, the proposed 2015 budget will be used not only to promote the political interests of LP’s presidential wannabe; it will also be used to promote the economic interests of presidential cronies.

Some P57.2 billion in public funds have been allocated in the 2015 NEP to guarantee the profits of investors participating in Aquino’s PPP program, pay for an onerous PPP contract, and facilitate the implementation of more PPP projects. The amount includes: (a) P30 billion for the Risk Management Program (RMP); (b) P10.9 billion for the Department of Public Works and Highways’ (DPWH) PPP for Infrastructure Projects; (c) P7.4 billion to support the LRT 1 and LRT 2 extension projects of the Light Rail Transit Authority (LRTA); (d) P4.7 billion to pay for government obligations under its Build-Lease-Transfer (BLT) deal with the Metro Rail Transit Corp. (MRTC); (e) P2.7 billion for the Department of Transportation and Communications’ (DOTC) PPP for Transport Projects; and (f) P1.6 billion for the Department of Education’s (DepEd) PPP for School Building Projects.

The P30-billion RMP, according to the NEP, is meant to “manage the National Government’s fiscal risks and enhance the country’s credibility among potential PPP proponents”. Executive agencies and departments as well as government-owned and -controlled corporations (GOCCs) can avail of the RMP fund to “cover commitments made by, and obligations of, the National Government, in the concession agreements relative to PPP projects”. The amount shall also be tapped to pay for all the obligations of a GOCC in concession agreement covered by a performance undertaking or any similar instrument issued by the National Government. A performance undertaking usually involves government assuming debt or other financial obligations related to a PPP project. One of the projects covered by the Aquino administration’s performance undertaking is the P62.7-billion MRT 7 of presidential uncle Danding Cojuangco and his right hand man Ramon S. Ang.

Aside from performance undertaking, RMP will also cover “contingent liabilities arising from regulatory risks assumed by the National Government”. One project that enjoys Aquino’s regulatory risk guarantee is the P64.9-billion LRT 1 extension and privatization of the Ayala family, a longtime ally of the Aquinos, and the group of presidential supporter Manny V. Pangilinan (MVP) and his Indonesian patron, the Salim family. Under the concession agreement that will be signed with the Ayala-MVP group, if the notional LRT 1 fares stipulated in the contract are lower than actual or approved fares, government will pay the difference through a so-called Deficit Payment Scheme. Notional fares refer to the adjusted fares as scheduled in the concession agreement. Such situation may arise, when, for example, a regulatory body or local court intervened and prevented the collection of the notional fare. To fulfill its deficit payment obligation with the Ayala-MVP group, which is essentially a profit guarantee, government will disburse from the RMP fund paid for by the people’s taxes. The RMP is actually just one of the many favors that Aquino is giving the Ayala-MVP group in relation to the LRT 1 project. As part of the contract, the common station that will link the LRT 1, MRT 3 and the soon-to-be-built MRT 7 was taken away from Henry Sy’s SM North and moved to the Ayala’s Trinoma Mall. (The SM group questioned this before the Supreme Court and got a temporary restraining order or TRO. In response, the DOTC said they might just build two common stations to accommodate Henry Sy and the Ayalas.) The Ayala-MVP group is also exempted from paying real property taxes, which government agreed to shoulder and could reach P64 billion throughout the 32-year concession agreement. These are on top of the P5-billion startup subsidy and P34.9 billion in loans that government will borrow for the project.

Meanwhile, the P10.9 billion allocated for DPWH’s PPP for Infrastructure Projects will be used to cover the costs of right of way (ROW) acquisition and relocation of affected communities. The projects identified in the NEP where this fund will be used include those controlled by the same groups with close presidential ties such as San Miguel’s P15.52-billion NAIA Expressway Project and P18.1-billion Tarlac-Pangasinan-La Union Toll Expressway Project, and the Ayalas’ P2.01-billion Daang Hari SLEX Link Road Project. Similarly, the DOTC’s P2.7-billion PPP Transportation Infrastructure Project fund will be used for ROW costs particularly for the P2.5-billion Integrated Transport System, which San Miguel, Ayala, MVP and Henry Sy, among others, are also eyeing. Meanwhile, DepEd’s P1.6-billion PPP for School Building Projects 2015 fund will be used for the amortization or lease payment of the total project costs of school buildings constructed by Henry Sy-affiliated Megawide Corp. and other firms.

P4.7 billion under the proposed 2015 PPP budget will go to the servicing of onerous contractual obligations with the MRTC, which is 48% controlled by the MVP group. The BLT contract, a PPP deal signed during the Ramos administration, tied the national government to paying Equity Rental Payments (ERP) to MRTC for its guaranteed 15% return on investment (ROI). Instead of rescinding, or at least renegotiating, the patently unfavorable contract with MRTC to build and operate the MRT 3, the Aquino administration continued to honor it because doing otherwise would undermine its PPP program. To supposedly correct the situation, Aquino has set aside P53.9 billion in the 2015 NEP’s unprogrammed appropriations to buy out the MRTC and scrap the BLT. But this approach means government will shell out more people’s money while legitimizing the illegitimate financial obligations with the MVP group.

Lastly, the P7.4 billion allocated for LRT 1 and LRT 2 extension projects will be used to support the privatization of both lines. The Ayala-MVP group will take over LRT 1, as already mentioned, soon. On the other hand, the LRT 2 operation and maintenance project, estimated to cost P14.3 billion, is scheduled for bidding within the year or in early 2015.

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.

Consumer issues, Cronyism & patronage, Privatization, SONA 2013

PNoy and the Big Water monopolies

big water and pnoy

Daang matuwid pa ba when big business is practically running the government and profiting immensely at the expense of the people?

By July, the 14.2 million consumers of Maynilad Water Services Inc. and Manila Water Co. Inc. will have to shell out more for their water bill. If your household is consuming 30 cubic meters (cu. m.) a month, be ready to pay an additional P234 (if your service provider is Manila Water) to P342 (Maynilad). That’s how huge the looming rate hikes are. Apparently, the 42% annual increase in the profits of Maynilad and 18% for Manila Water in the past five years are not enough for the Big Water monopolies. They want more, at our expense, of course.

The increases are due to the so-called “rate rebasing”. It’s a rate adjustment process mandated by the 1997 privatization contract or the Concession Agreement between the MWSS and its private concessionaires – Maynilad and Manila Water. Under the Concession Agreement, the concessionaires are entitled to adjust their basic rates every five years throughout the 40-year contract to achieve a guaranteed rate of return. During the rate rebasing exercise, the concessionaires submit their previous five-year performance, their new five-year business plans and their proposed tariffs to implement it, which the MWSS-Regulatory Office (MWSS-RO) reviews and approves. Since the last rate rebasing exercise in 2007, Maynilad has been posting annual profits of P3.92 billion and Manila Water, P3.68 billion. During the public consultations, Manila Water said they expect to earn P5 billion annually in the next five years after the rate rebasing; Maynilad refused to disclose its anticipated profits.

Planned increases

According to regulators, Manila Water wants a rate hike of P5.83 per cu. m. and Maynilad, P8.58 (revised from the P10.30 reported earlier). But these refer to the basic charge only. If you look at your water bill, there are other items in it that will also increase when the basic charge is raised. The environmental charge, for example, is 20% of the basic charge. Then, there’s the foreign currency differential adjustment (FCDA), which accounts for the quarterly fluctuations in the foreign exchange (forex). The FCDA is negative when the peso gains against the dollar and is positive when the peso weakens. The FCDA is currently at negative 0.37% of the basic charge for Manila Water and negative 0.98% for Maynilad. The FCDA is expected to be positive as the dollar is gaining strength in recent months. Then, there’s also the value-added tax (VAT), which is 12% of the basic charge plus the environmental charge. Factoring in these other charges, the rate hike of Manila Water could reach P7.81 per cu. m. and Maynilad, P11.41 per cu. m. Thus, the estimated P234 to P342 increase for households consuming 30 cu. m.

The table below compares our estimated monthly bills today and after the rate hikes are implemented. (Note: The table has been revised to adjust the estimated monthly water bill for Maynilad customers using 10 cu. m.)

water rates current vs hiked revised

Unreasonable rate hikes

The rate increases being sought by Maynilad and Manila Water are unreasonable for two major reasons. First, the rate hikes cover not just the cost of past projects (which consumers also finance through water tariffs) but also include future expansion and improvement plans. This means that the private concessionaires want to charge consumers the cost of projects that are yet to be implemented. This is clearly anti-consumer and allows the abuses of Maynilad and Manila Water. In their previous rate rebasing exercises, the private concessionaires charged the costs of unimplemented projects to their consumers such as the Laiban Dam Project and the 15 CMS Water Source Replacement Project, among others. According to the MWSS-RO, the costs of unimplemented projects are recovered through succeeding rate rebasing exercises. If that is the case, then water rates should have been reduced during the 2007 rate rebasing. But this did not happen because the cost of new future projects as well as new assumptions in the business plans (population growth, demand, etc.) of the concessionaires negate the supposed cost recovery of unimplemented projects in favor of the consumers. The same scenario is expected in the ongoing rate rebasing exercise.

Second, the private concessionaires are earning profits at unreasonably rapid pace. Using the return on rate base (RORB), for instance, it appears that Maynilad and Manila Water are earning beyond the 12% limit imposed on public utilities. Estimates peg the RORB of the concessionaires at more than 14 percent. The rate base is computed by adding up the value of all the assets used in the operation of the public utility and from it, the allowed rate of return is calculated. Thus, the RORB of Maynilad and Manila Water could further go up beyond the estimated 14% if the total value of the old MWSS assets already built prior to privatization is excluded. Meanwhile, using the return on equity (ROE) as standard, it also appears that Maynilad and Manila Water are profiting tremendously from their operations. It is estimated, for instance, that Manila Water has an ROE of around 19% while Maynilad has about 45 percent. These are way higher than the ROE of those in other public utilities such as telecommunications (16%) and electricity (15%). The ROE is a measure of profitability wherein the net income is computed as a proportion of the equity or the investments poured in by the investors. Maynilad and Manila Water has a very high ROE because of the very high tariffs they set while a very large chunk of the cost of MWSS privatization is financed by loans (which are fully passed on to consumers) and not by their actual investments.

Big Water running the government

Alas, despite this really onerous burden awaiting us, we should not expect the Aquino government to step in and restrain the greed of Big Water. Maynilad and Manila Water managed to put their top officials in strategic Cabinet positions, advising the President on key government policies. Secretary Rogelio Singson used to be the president and chief executive officer (CEO) of Maynilad. He now heads the Department of Public Works and Highways (DPWH), where the Metropolitan Waterworks and Sewerage System (MWSS) is an attached agency. Secretary Rene Almendras used to be the president of Manila Water. He is now the so-called “Little President” of the Philippines, after a stint as chief of the Department of Energy (DOE). Almendras is reportedly one of the closest to Aquino, being in the innermost of the inner circle of the President.

Singson has the notoriety of generating the first political controversy faced by the Aquino administration. Just a week after taking over as DPWH Secretary, Singson appointed himself as ex-officio chairman of the Board of Trustees of the MWSS. While the move was obviously sanctioned by Malacañang through Executive Secretary Paquito Ochoa, Singson was forced to backtrack after his self-appointment as MWSS head was widely criticized due to conflict of interest. Prior to his appointment as DPWH Secretary, Singson, as Maynilad CEO, tried to seal a midnight deal with Efraim Genuino, Gloria Arroyo’s appointed chairman of the Philippine Amusement and Gaming Corp. (PAGCOR). It involved a water concession deal for the Bagong Nayong Pilipino Entertainment City in Parañaque City that would have reportedly deprived government of an estimated P3.6 billion in water fees. Days before Aquino’s inauguration, Genuino and Singson allegedly teamed up to lobby the MWSS Board to approve the deal because Maynilad was concerned that the new PAGCOR leadership under Aquino might not be as accommodating as Genuino. President Aquino, however, defended Singson, saying that he was satisfied with the Cabinet official’s, as well as PAGCOR’s, explanation that there was no contract yet.

Almendras, meanwhile, enjoys a close friendship with Aquino, which dates back to their Ateneo days. His current office, Cabinet Secretary, was created by the President to accommodate Almendras, whom Aquino had to remove from the DOE after a dismal performance underlined by the Mindanao power crisis. The office of the Cabinet Secretary used to be the office of the Cabinet Secretariat which simply facilitates information in Malacañang, according to a Philippine Daily Inquirer report. But Aquino transformed the office through Executive Order (EO) No. 99 and gave Almendras the mandate to among others, determine priorities in the Philippine Development Plan (PDP) and sit in the National Economic and Development Authority (NEDA) board executive committee and subcommittees on infrastructure, social development and investment. NEDA approves public-private partnership (PPP) projects such as MWSS’s Concession Agreements with Manila Water and Maynilad. Changes in the contract between the MWSS and the private concessionaires, including those that concern water rates, also require NEDA sanction.

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.

Don’t be surprised as well that Aquino made PPP or privatization his centerpiece economic program. PPP creates more opportunities for MVP and the Ayalas to further expand their business empires. In fact, Pangilinan’s group and the Ayala family are among the most aggressive in cornering PPP contracts being offered by administration. The Ayalas, for instance, clinched the very first PPP project of Aquino – the P1.96-billion Daang Hari-SLEX Link Road Project. Meanwhile, MVP and the Ayalas have teamed up to bid for the P60-billion extension and privatization of LRT 1, the largest PPP project of the Aquino administration. Incidentally, Malacañang is even using the privatization of MWSS as a showcase in promoting PPP. MWSS privatization is truly a showcase of how PPP can be so profitable for big business. But it’s also a showcase of how privatization can be so oppressive and onerous.

MVP’s Metro Pacific Investments Corp. (MPIC) holds 43% of Maynilad. The Consunji family, which also has close ties with Aquino, controls 25% through DMCI Holdings. Big foreign companies have a substantial share in Maynilad as well with MCNK JV Corp., a unit of Japanese giant Marubeni Corp., and Lyonnaise Asia Water Limited, a unit of French firm Suez, one of the world’s largest water companies, each holding a 16% stake. The Ayala Corporation, on the other hand, has a direct 43%-stake aside from the share being held by Philwater Holdings Co. Inc., which is 60% owned by Ayala and 40% by UK-based United Utilities. Other investors in Manila Water include another Japanese giant, Mitsubishi Corp. (8%) and the World Bank’s IFC (6%) as well as First State Investments of the UK (10%), Singapore-based global fund manager Aberdeen Asset Management plc (5%) and US-based equity mutual fund Smallcap World Fund Inc. (5%).

Daang matuwid pa ba when big business is practically running the government and profiting immensely at the expense of the people? Water rates today are about 585% to 1,119% higher than the initial rates when MWSS was privatized. Our water bill is now among the most expensive in Asia. Still, we face more increases that the Aquino administration will allow despite the harsh impact on the people and despite rising poverty and joblessness.

The Aquino administration, Maynilad and Manila Water must be held accountable for exploiting and oppressing the consumers. We have to end the greed of the Big Water monopolies of Ayala and Pangilinan and their foreign partners, and reverse the anti-people policy of MWSS privatization. (END)

Consumer issues, Cronyism & patronage, Privatization, SONA 2012

Sona and high prices

Issues that matter to ordinary folks such as how Meralco and other big companies owned by Aquino’s super-rich relatives and friends are oppressing the people with skyrocketing fees were left unarticulated in the Sona (Photo from Pinoy Weekly)

The third State of the Nation Address (Sona) of President Benigno “Noynoy” Aquino III lasted 1 hour and 39 minutes. It was his longest Sona so far. But the 8,890-word speech never made reference to the perennial problem of consumers – the ever rising costs of electricity, petroleum, water and other basic goods and services. In fact, the issue of high prices and what his administration plans to do to address it has never been a topic in Aquino’s annual Sona.

Read the full transcript of Sona here and the English translation here

The non-mention of the problem of high prices was made more conspicuous by the almost simultaneous increases in electricity rates, water rates and oil prices just days before the Sona. The Manila Electric Co. (Meralco), the country’s largest power distributor, hiked its distribution charge by 29.1 centavos per kilowatt-hour (kWh) and its generation charge by 32 centavos; private water concessionaires Manila Water Co. and Maynilad Water Services Inc. increased their rates by 39 centavos and 89 centavos per cubic meter, respectively. Oil companies, meanwhile, have increased the pump price of unleaded gasoline by ₱4.35 per liter and diesel by ₱3.10 after three straight weeks of price hikes this month, including the latest round hours after Sona.

Costs have been unjustly increasing since long ago due to programs initiated by Aquino’s predecessors, namely the deregulation of the oil industry in 1996-1998 and the privatization of the Metropolitan Waterworks and Sewerage System (MWSS) in 1997 under former Pres. Fidel Ramos, and the privatization of the National Power Corp. (Napocor) in 2001 under Mrs. Gloria Arroyo.

However, Aquino is still accountable for continuing these programs and not even bothering to at least review them despite their harmful impact on consumers. In fact, the President even made these programs the centerpiece of his development plan such as the public-private partnership (PPP) scheme.

And if you were wondering why the triple whammy of power, water and oil price hikes did not merit even a single sentence in Aquino’s Sona, or why addressing the issue of high prices has never been an agenda of the President, for that matter, this previous post might help enlighten you.

Indeed, the families running the country’s largest utilities and burdening the consumers with exorbitant prices are among the closest allies and long-time cronies of the Aquino clan. Petron, the biggest oil firm in the Philippines, is majority-owned by San Miguel Corp. (SMC) of Aquino’s maternal uncle Eduardo “Danding” Cojuangco Jr. while the Ayalas are connected with Pilipinas Shell; Meralco is controlled by SMC, the Lopezes and Manny V. Pangilinan’s group; and Manila Water is controlled by the Ayalas while Maynilad is co-owned by Pangilinan and the Consunjis.

Aquino’s longest Sona yet mentioned many indicators to highlight the supposedly improving economy such as credit rating upgrade, stock exchange performance, and growth in the gross domestic product (GDP), among others. But these indicators are not only abstract for the ordinary folks; they also do not mean increased economic opportunities. They are, however, indicators of how big business is enjoying a favorable environment under Aquino, reaping whatever little wealth is being squeezed from the pre-industrial economy.

Meanwhile, the issues that matter to us such as how Meralco, Petron, Shell Maynilad, Manila Water and other big companies owned by Aquino’s super-rich relatives and friends are oppressing us with skyrocketing prices and rates were left unarticulated by the landlord President.

Agrarian reform, Cronyism & patronage, Economy, Privatization, SONA 2012

Sona 2012: How the rich is getting (scandalously) richer under Aquino

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 (Photo from The Philippine Star)

Part II: Reviewing Aquino’s “Social Contract” and performance

Read Part I: On job creation here

In 2009, the Forbes magazine reported that the 40 richest Filipinos had a combined wealth of $22.4 billion. Last year, the amount more than doubled to $47.43 billion, amid deteriorating poverty and joblessness. What explains such rapid accumulation of wealth? The short and simple answer is that government, including the incumbent Aquino administration, has been creating the most favorable policy environment for big business.

Indeed, 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.

In particular, the administration is creating a conducive environment and providing more profit-making opportunities for big business through further privatization of infrastructure, utilities, social services and other vital sectors, or what is called public-private partnership (PPP). Aquino has also aggressively promoted extractive industries including foreign-dominated, export-oriented mining and oil and gas exploration that create social, development and ecological issues.

Privatization and plunder

He has been calling it “daang matuwid” but Aquino’s good governance campaign is more about instituting reforms to reduce business costs and risks than going after big-time plunderers like Mrs. Gloria Macapagal-Arroyo. His campaign to oust Renato Corona as Chief Justice of the Supreme Court (SC) was less about his supposed reform agenda but more about consolidating his control over the entire bureaucracy.

Executive hegemony over government branches that make policies (Congress) and review the legality of such policies (Judiciary) creates an even more favorable political environment to push for retrogressive economic programs that favor certain big local businesses and their foreign partners. They include those who are closely associated with the Cojuangco-Aquino clan and are taking advantage of government’s centerpiece program, the PPP, as well as new contracts in mining and oil and gas exploration, among others.

These big business interests are the same companies that have been expanding their economic empire by taking over, through PPP deals, infrastructure development in energy, telecommunications, transport, and water and storage in the past almost three decades. They include the Ayala family ($10.2 billion in investment commitments from 1984 to 2009); Lopez ($7.1 billion); Pangilinan ($5.3 billion); Razon ($3.2 billion); Aboitiz ($2.8 billion); Ang/Cojuangco of SMC ($2.6 billion); and Consunji ($1.1 billion).

Expectedly, they are the same families that are bagging PPP contracts under the current regime. The Ayalas and its Spanish partner, for instance, cornered the ₱1.9-billion Daang Hari – SLEx link road project. Meanwhile, the Ayala family is also competing with the Ang/Cojuangco group, Pangilinan and Consunji and their respective foreign partners for the ₱60-billion LRT Line 1 extension project. PPP projects oppress the poor not only through higher user fees. To give way to PPP projects, tens of thousands of urban poor families are also being displaced from their communities. (More on this in the next article)

Aside from infrastructure and utilities, another major source of massive profits for the local elite and foreign corporations is the wanton extraction and exploitation of the country’s natural wealth; in particular the vast domestic reserves of mineral and energy resources. Three of Aquino’s closest businessmen-allies are already dominating the energy sector with power firms associated with Cojuangco, Aboitiz and Lopez controlling more than half of the national generating capacity.

For sure, these families were able to increase their power portfolio even before Aquino became President. But under Aquino, they are enjoying even more opportunities for expansion as government implements the Electric Power Industry Reform Act (Epira) of 2001 even more aggressively. Aquino has made a strong pitch to fully implement the Epira in Mindanao, where Cojuangco and Aboitiz have pending coal-fired power plant projects and where private power operators are eyeing the privatization of the Agus-Pulangi hydropower complex.

Meanwhile, it is estimated that some 24% of approved mining applications have been clinched in the first two years of the Aquino administration. As such, it’s not a coincidence that Cojuangco’s SMC has been on a buying spree of mining firms in the past two years.

In 2011, it bought 10.1% stake in Australian firm Indophil Resources NL which owns 37.5% of Sagittarius Mines Inc. (the rest owned by Swiss firm Xstrata Copper), the operator of the estimated $5.9-billion Tampakan copper-gold project in South Cotabato – one of the world’s largest undeveloped sites. In 2010, SMC bought three coal mines in South Cotabato and Sultan Kudarat previously owned by Daguma Agro Minerals, Inc., Bonanza Energy Resources, Inc. and Sultan Energy Mining and Development Corp.

But mining, while profitable, is also contentious and invites strong opposition from various sectors. Consistent with the deception of daang matuwid, Aquino recently issued Executive Order (EO) No. 79, which supposedly attends to concerns on environmental degradation and negligible economic benefits from mining.

While the EO imposes a mining ban on 78 areas designated as ecotourism sites (including Palawan, apparently to appease Gina Lopez and co.) and a moratorium on new mining deals until Congress passes a new law that will increase government’s mining revenues, it will not stop controversial and greatly destructive mining projects such as SMC’s Tampakan. More significantly, Aquino does not intend to reorient the industry and reverse its liberalization the Mining Act of 1995.

Land (un)reform

In his Social Contract, Aquino also promised to recognize farms and rural enterprises as vital to achieving food security and more equitable economic growth. In his PDP, he identified food security and increased rural incomes as among the major goals of government. Also, for agriculture to fulfill its role in reducing rural poverty and achieve food security in the long term, increased incomes, productivity and production shall be enhanced, according to the PDP.

While government boasts of improving rice and food production, even claiming that the country may become self-sufficient in rice by next year, agriculture officials also admit that domestic agriculture remains very dependent favorable weather. But what make domestic food production especially vulnerable to adverse weather events are the accumulated effects of decades of neoliberal restructuring such as trade liberalization, land use conversion, promotion of export crops, etc. which aggravate the basic problems of backward agricultural system (one report said Philippine agriculture is among the least mechanized in Southeast Asia) and landlessness among the direct food producers.

Alas, Aquino is not reversing these neoliberal policies much less implement genuine land reform. The dismantling of large haciendas for land distribution is not in Aquino’s agenda, which of course is not unexpected for someone who comes from one of the wealthiest and most influential landlord clans in the country. Last year, the Department of Agrarian Reform (DAR) was able to distribute just 113,196 hectares out of the already small target of 200,000 hectares, or an accomplishment rate of below 57 percent.

DAR data also show that since taking over as President in July 2010, Aquino’s land acquisition and distribution (LAD) has averaged below 18,000 hectares a month – the second lowest among all post-Edsa administrations. As of yearend 2011, government still needs to acquire and distribute almost 962,000 hectares of land, which at its current LAD rate will be accomplished two to three years after the 2014 deadline set by the Comprehensive Agrarian Reform Program Extension with Reforms (Carper).

Such lackluster performance in LAD is indicative of how the landlord President is indifferent to the plight of landless farmers. The Aquino family’s Hacienda Luisita remains a contentious target for land distribution despite the Supreme Court (SC) ruling, which revoked the stock distribution option (SDO) and ordered the transfer of the sprawling sugar estate to the direct control of farmers and farmworkers.

Taking advantage of the basic flaws of Carper, the President himself is pushing for so-called “just compensation” that his family calculates at a staggering ₱10 billion – a further insult to the poor farmers who are the real owners of the hacienda.

Instead of land reform and consistent with its bias for big corporations, the Aquino administration has been promoting projects that result in further displacement of farmers such as the case of almost 700,000 hectares of agricultural lands that foreign firms from the US, Europe, Middle East and others control (or will control) through agribusiness deals. And as mentioned, the PPP and mining projects that also grab lands away from tillers.

Genuine land reform is indispensable if Aquino truly wants to increase rural income and reduce rural poverty like he stated in his Social Contract and PDP. As shown in previous studies, dismantling the land monopoly will generate an enormous amount of income and free up huge resources, in the process reducing poverty in the countryside where two out of three poor Filipinos live.

Part III: Aquino’s failure to ease poverty and provide social services

Cronyism & patronage

Razon and Catanduanes coal mining: Arroyo’s cronyism rears its ugly head again

Mrs. Arroyo with crony Enrique Razon (photo from inquirer.net)

Mrs. Arroyo with crony Enrique Razon (photo from inquirer.net)

Businessman Enrique Razon, widely perceived as among the richest and most influential cronies of Mrs. Gloria Arroyo, is again in the news after his company – Monte Oro Resources and Energy Inc. – reportedly clinched a huge P6.2-billion contract to mine coal in 7,000 hectares of land in Catanduanes. It is bad enough that the coal project itself will have serious, irreversible damage to the environment and cause the physical and economic displacements of Catandunganons. It is worse that that the project smacks of patronage politics and cronyism.

This is not the first time that Razon figured in a controversial business deal that has been sealed because of his ties with Arroyo. Below is an article I wrote in December 2007 about Razon and his business empire that has expanded rapidly since Arroyo became president in 2001.


(Two-Part Series)

From human rights abuses and authoritarianism to corruption and cronyism, the uncanny similarity of Arroyo’s brand of political rule to that of the late strongman Ferdinand Marcos keeps growing by the day. Independent human rights groups have already declared Arroyo’s human rights record as worse than Marcos’s while a recent Pulse Asia survey found out that Filipinos believe that Arroyo is more corrupt than Marcos.

Now, Arroyo seems vying to outdo Marcos’s cronyism, with certain tycoons rapidly accumulating wealth under the current regime and cornering anomalous mega-million dollar contracts from the government.

Part 1 of this series details how Arroyo’s cronies have been using the Electric Power Industry Reform Act (Epira) of 2001 to expand their business empire. Part 2 deals with Enrique K. Razon, who is widely acknowledged as the closest crony to Malacañang.


(Part 1 of a Two-Part Series)

The Electric Power Industry Reform Act (Epira) has been peddled by the Arroyo regime as the program to bring down the cost of electricity in the country, with the ordinary consumers reaping the benefits of cheaper electricity bills. But Epira, which has been beleaguered by graft and corruption issues in the past, suffered another setback with the controversy spawned by the recent $3.95-billion sale of the National Transmission Corp. (TransCo).

At the center of the latest Epira debacle is Enrique K. Razon, a known crony of President Gloria Macapagal-Arroyo, and who has also figured in the anomalous National Broadband Network (NBN) project. A deeper probe of the issue shows that a Transco franchise would only consolidate the control that Razon and his close business colleagues have already established in the Arroyo regime’s power sector reform.

Tip of the Iceberg

That Razon is one of the seven directors of the winning TransCo bidder, Monte Oro, is just the tip of the iceberg. It appears that a certain group of businessmen – which has bankrolled the administration’s previous electoral bids marred by allegations of massive cheating – have been cashing in on the Epira, with great help from their patron, Arroyo.

The appointment by Arroyo of Jose C. Ibazeta last February 21, 2007 as president of the Power Sector Assets and Liabilities Management Corp. (PSALM), the body created under Epira to handle the privatization of the National Power Corporation’s (Napocor) assets, is most illustrative. PSALM needs a “business-minded” president, Arroyo declared, and Ibazeta perfectly fits the position. Ibazeta is a member of the Board of Directors of the International Container Terminal Services Inc. (ICTSI), where Razon is Chairman and President.

Like Razon, Ibazeta is also a Director in several companies of the Soriano family, among them the Phelps Dodge Philippine Energy Products Corp. (PDE). Phelps Dodge Philippines (PDP) was formed by Andres Soriano, father of Andres Soriano III, also a Director of ICTSI and other Razon firms, in 1955 through a merger with Phelps Dodge International Corporation (PDIC), a US-based company and the world’s second largest copper mining company and the world’s biggest producer of continuous cast copper rods. In 1997, PDP established the PDE to consolidate all the manufacturing operations of various entities under the PDP.

PDE supplies aluminum wires and cables to the Napocor and independent power producers (IPPs) for their transmission lines and the National Electrification Administration (NEA) and electric cooperatives for their rural electrification program. PDE also manufactures high voltage power cables up to 35 KV, which are used extensively by the Manila Electric Co. (Meralco) and the NAPOCOR to deliver electric power to residential and commercial areas throughout the country.

The Epira created the Joint Congressional Power Commission (JCPC) to oversee Epira’s implementation. Among its tasks is to “ensure transparency, require the submission of reports from government agencies on the conduct of public bidding procedures regarding (the) privatization of Napocor’s generation and transmission assets”. The JCPC is currently co-chaired by Senator Miriam Defensor-Santiago, a fierce Arroyo ally, and presidential son Rep. Juan Miguel “Mikey” Macapagal-Arroyo (Pampanga, 2nd district).

When Mikey, with the help of Malacañang-backed majority coalition in the House of Representatives, took the post as House energy committee chair last July 2007, many questioned his expertise on energy reforms. Now their questions have been answered. Santiago and Mikey have acquitted Ibazeta on charges of “conflict of interest” in the TransCo sale because “there is no conflict between terminal services and power sector”, ignoring Ibazeta’s deep interests in the power business that make his position as PSALM chief highly dubious.

Monopoly Control

Meanwhile, Razon’s connection to the energy business is not limited to his “less than 2 percent share” in Monte Oro as well as his business association with Ibazeta. According to Senator Maria Ana Consuelo “Jamby” Madrigal, Razon also has close relations with the Aboitiz Group, which has been aggressively expanding its energy empire under the Epira. Razon is a brother-in-law of Stephen Aboitiz Paradis. Paradis serves as the senior vice president, chief financial officer, and corporate information officer of the Aboitiz Equity Ventures (AEV) and senior vice president for finance of Aboitiz & Co., Inc. He also sits on the board of ICTSI.

The Aboitiz Group controls power distributors Davao Light and Power Company, Inc., the third largest power distribution utility in the Philippines; Cotabato Light and Power Co., Inc.; Visayan Electric Company, the second largest power distribution utility in the country; San Fernando Electric Light and Power Company; and the Subic Enerzone Corporation. In addition, the Aboitiz has also been on a buying spree of Napocor generation assets such as the Philippine Hydropower Corp., Hedcor Inc., Luzon Hydro Corporation, Southern Philippine Power Corporation, and the Western Mindanao Power Corporation. The Philippine Hydropower Corporation is the holding company of the Aboitiz Group for its various hydroelectric power investments such as the Hydroelectric Development Corporation, Benguet Hydropower Corporation, Luzon Hydro Corporation, Northern Mini Hydro Corporation, and Bukidnon Hydro Corporation.

A TransCo franchise completes the Aboitiz Group’s stranglehold of the national power industry – from generation to transmission and to distribution.

Furthermore, Razon is also a Director of the CLSA Exchange Capital, which serves as the financial advisor, underwriter, and global coordinator of the Philippine National Oil Company (PNOC) – Energy Development Corp. (EDC) and the PNOC – Exploration Corp. (EC). PNOC-EDC was recently privatized for P58.5 billion and sold to Red Vulcan. Incidentally, CLSA Exchange Capital is also the financial advisor in the privatization of television networks RPN 9 and IBC 13.


(Part Two of a Two-Part Series)

Establishing a foothold in the country’s power industry is just part of the aggressive expansion in Razon’s business empire, which has been growing dramatically under the term of Arroyo. Razon, who served as treasurer and major financier of Arroyo’s Team Unity ticket in the 2007 senatorial elections, is the eight richest Filipino with a net worth of around $820 million as of 2007, according to the Forbes.com. His net worth has increased by at least $100 million from 2006, highlighting his rapid accumulation of wealth in recent years.

Dramatic Expansion

Two of his companies are among the top 500 corporations in the Philippines in 2006. ICTSI ranked 129th in terms of profits with P955 million and 157th in gross revenues with P6.72 billion. On the other hand, ICTSI Warehousing, Inc. ranked 181st in terms of profits and 424th in gross revenues with P2.44 billion. ICTSI Warehousing, Inc., in fact, posted remarkable increases in gross revenues (3,411 percent) and profits (796 percent) between 2005 and 2006.

ICTSI is the crown jewel of Razon’s business empire. Established in December 1987, it holds a virtual monopoly control of the country’s ports. It has 25 subsidiaries (11 port management companies; eight holding companies; three software developers; one company each involved in warehousing, manpower recruitment, and port equipment rental) in the Philippines, Cayman Islands, Bermuda, Brazil, Poland, Madagascar, Japan, Indonesia, China, the Netherlands, British Virgin Islands, Australia, and Singapore. In the Philippines, ICTSI controls some of the biggest and most important ports such as those in Manila, Batangas, Subic, Davao, and Cebu.

Interestingly, 12 of ICTSI’s 25 subsidiaries were either acquired or established only between 2005 and 2007. The Naha International Container Inc., a port management firm in Japan, was acquired only in January 2005; the Madagascar International Container Terminal Services, Ltd., a port management firm in Madagascar, was established only in June 2005; the Australian International Container Terminal Limited, a port management firm in Australia, was established only in September 2005; the ICTSI Far East Pte. Ltd., a holding company in Singapore, was established only in March 2006; the PT Makassar Terminal Services, Inc., a port management firm in Indonesia, was acquired only in May 2006; the ICTSI Capital BV, a holding company in the Netherlands, was established only in August 2006; the Pentland International Holdings, Ltd., a holding company in the British Virgin Island, and the Abbotsford Holdings, Ltd., a Philippine-based holding company, were both established only in December 2006; the Davao Integrated Port and Stevedoring Services Corp., a port management firm, was acquired only in December 2006; the Yantai Rising Dragon International Container Terminals, a port management firm in China, was clinched in January 2007; while the Cebu International Container Terminal Inc., a port management firm, and the Prime Staffing and Selection Bureau, Inc., a manpower recruitment firm in the Philippines, have both not yet started commercial operations. In March 2007, ICTSI announced that it bagged another contract on port management in Ecuador.

Special Place

Is it merely a coincidence that such rapid expansion in Razon’s business empire is happening under the Arroyo regime? It does not seem so. Apparently, Razon enjoys a special place in Arroyo’s scheme of things. In fact, it is widely believed that Razon was behind the sudden transfer of Romulo Neri from the National Economic and Development Authority (NEDA) to the Commission on Higher Education (CHED) last July 2007 after Neri earned “Razon’s ire” over the issue of ports liberalization that threatens ICTSI’s monopoly.

Razon’s name was also mentioned by businessman Joey de Venecia in one of his testimonies in the Senate’s inquiry on the NBN. According to de Venecia, Razon, along with Soriano and Ibazeta, bought his shares at Multimedia Telephony in 2003, the company which subsequently signed a vendor and financing deal with Chinese firm ZTE Corp. Razon, according to de Venecia, filled in the shoes of First Gentleman Mike Arroyo, who got sick early this year, in brokering the NBN deal and ensuring that ZTE seal the contract with the Department of Transportation and Communication (DOTC).

In 2003, Razon was one of the only four private sector representatives appointed by Arroyo in the Public-Private Sector Task Force to coordinate Philippine Participation in the post-war reconstruction and development of Iraq.

Membership in this task force meant huge business opportunities. As stated in Arroyo’s Executive Order (EO) No. 194 issued in April 14, 2003, the task force was in charge of, among others, “assisting the participation of Philippine companies in the rehabilitation and development of the Iraqi infrastructure – public works, highways, transportation, information and communications, energy, agriculture – and public services such as education, sanitation, civil administration and other service industries; developing procedures to expedite deployment of Philippine manpower and other services in the fulfillment of contracts; and such other actions relevant to Philippine private sector participation in the reconstruction and development of Iraq”.

Razon also enjoys advantage over his competitors as he has “easy” access to infrastructure projects funded by Arroyo’s foreign loans. A case in point is the $215-million Subic Port Modernization Project, which is being bankrolled by the Japan Bank for International Cooperation (JBIC) and a flagship infrastructure project of the national government. The Subic Bay International Terminal Corp., an ICTSI subsidiary, was chosen by the Subic Bay Metropolitan Authority (SBMA) Board of Directors to operate the modernization project’s New Container Terminal 1, which was completed in July 2007.

Undermining Development and Democracy

Cronyism, or the act of giving concessions to favored businessmen, friends, relatives, and allies by political leaders, is inherent in any government that governs over a society divided between those who have money and power, and those who have not. In this kind of society, government is just an extension of those who have money and power and they use the control of government to further advance certain economic interests. Thus, cronyism undermines development because its definition is further narrowed to mean development only for a favored few. The Epira, for instance, is already a bad program for the poor but it is even worse that Razon, Aboitiz, and company are cashing in on the program to enrich themselves at the poor’s expense.

Cronyism undermines democratic governance as well because it further stunts the country’s political maturity and reinforces patronage politics. It robs the people the sovereign will to determine government policies and ensure that these policies truly benefit the general public and not only several cronies. For the Arroyo regime, its cronyism only further exposed its lack of accountability to the people and that it owes its survival and legitimacy not to the public but to a handful of rich and powerful.

Cronyism & patronage

Ang pagmasaker ni Carlo J. Caparas at ng Malacañang sa gawad National Artist

Basahin ang artikulong ito para sa mga sirkunstansya ng kontrobersya.

Carlo J. Caparas with her patron, Mrs. Gloria Arroyo (photo from the pep.ph)

Carlo J. Caparas with his patron, Mrs. Gloria Arroyo (photo from the pep.ph)

Hindi naman daw sa pagbubuhat ng sariling bangko, pero ani Carlo J. Caparas, “napag-uusapan” lamang ngayon ang gawad Pambansang Alagad ng Sining (National Artist) dahil sa kanya. “I just want to point out the truth. The past winners are not well known. Di nila mapalutang ang award na ito,” ayon kay Caparas.

Kinalimutan niyang ang tinaguriang Hari ng kanyang daigdig ng sining – ang namayapang si Fernando Poe Jr. – ay isang National Artist. Pinag-usapan din ito noong 2006 pero kabaligtaran ng kontrobersya ngayon. Bilang protesta sa pandaraya ni Gng. Gloria Arroyo sa halalang 2004 laban kay FPJ, hindi personal na tinanggap ng pamilyang Poe ang parangal sa Malacañang. Ngayon, hindi makapaghintay si Caparas na tanggapin ang parangal mula sa kanyang padron sa Palasyo sa kabila ng mga batikos ng “dagdag-bawas”.

Sa kanyang pagkalango sa parangal, naibulalas ni Caparas na marahil “people are making a big fuss about this… because it’s the first time for a National Artist to have such a long title”. Itinanghal ni Gng. Arroyo si Caparas bilang National Artist for Film and Visual Arts.

Mahabang titulo nga, katulad ng titulo ng kanyang mga pelikulang tungkol sa krimen: “The Untold Story – Vizconde Massacre – God Have Mercy on Us”; “The Marita Gonzaga Rape-Slay: In God We Trust”; “Kuratong Baleleng (Wilson Sorronda: Leader Kuratong Baleleng Solid Group)”; at iba pa.

Hindi kaya ang kanyang titulo bilang National Artist for Film and Visual Arts ay tungkol din sa krimen laban sa sining?

Nabulag sa kanyang kapalaluan si Caparas at pumalyang makita ang isyu kung bakit tinutuligsa ang pagkakapili sa kanya, gayundin kay Cecile Guidote Alvarez, bilang mga National Artists. Ani Caparas, hindi katulad ng ibang tinataguriang National Artists, nakapagbigay sya ng trabaho sa daan-daang Pilipino sa pamamagitan ng kanyang mga gawa sa telebisyon, pelikula, at komiks. Sikat din daw ang kanyang mga obra, katulad ng Maggie dela Riva Story na pinanood diumano ng 40% ng populasyon ng Metro Manila nang ipalabas ito noong 1994. Samantalang ang kanyang mga kritiko ay hindi man lamang kilala ng masa.

Kung ganito ang pamantayan upang maging National Artist, dapat bang maging pambansang alagad ng sining si John Loyd Cruz o si Sarah Geronimo bilang mga bida sa pelikulang “You Changed My Life”? Kung tumpak ang mga tala, ito diumano ang highest grossing Filipino film of all-time matapos tumabo sa takilya ng P230.44 milyon. Dapat din bang parangalan bilang pambansang alagad ng sining si Mother Lily Monteverde na hindi lamang daan-daan kundi libu-libo ang nabigyan ng trabaho lalo na noong panahon ng kanyang mga pelikulang “pito-pito” sa ilalim ng Regal Films at sa gitna ng rumaragasang krisis pampinansya sa Asya noong huling bahagi ng 1990s?

Sapat bang tinangkilik ng masa ang isang pelikula upang maging tunay na pambansang alagad ng sining ang lumikha nito? Hindi ba’t ang sining ay dapat nagmumula at nagsisilbi sa masa, katulad ng mga pelikula ni Lino Brocka o ng mga malikhaing sulatin nina Amado V. Hernandez at Bienvenido Lumbera?

Habang abala si Caparas sa pagtatanggol sa maanomalya niyang pagkakahirang bilang National Artist at pagdidirehe ng bagong pelikula ni Manny Pacquiao, isang “necrological service for the National Artist award” ang pinangunahan ngayong araw (Agosto 7) ng komunidad ng mga alagad ng sining at manggagawang pang-kultura na may malalim na pagpapahalaga sa sining at katarungan.