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, 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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Fiscal issues, Global issues, SONA 2017

SONA 2017: What’s in it for China in Duterte’s ‘Build, Build, Build’?

President Rodrigo Duterte with President Xi Jinping of China (Photo from Etienne Oliveau/Reuters, Aljazeera)

In his second State of the Nation Address (SONA), President Duterte as expected mentioned his grand infrastructure plan. There was special mention of China that Duterte said generously offered money for his “Build, Build, Build” program.

“If your Congress has no money, we will give you money” was what the Chinese supposedly told him, the President said in his speech.

Duterte in his SONA made the Chinese offer look like simple altruism and generosity. But in reality, on top of making Chinese imperialism appear benign, using soft power by bankrolling the country’s hard infrastructure profits China’s economy in various ways.

No debt crisis?

The concerns that Duterte’s infrastructure plan would result in a heavy debt burden are valid. After all, the price tag of what economic managers call as the “boldest infrastructure development program” in recent history is a whopping Php8 to 9 trillion.

Economic managers, however, assure the public that they have everything figured out. The plan is that government appropriations, not debt, will mainly fund the so-called “golden age of infrastructure”. The Finance department’s tax reform package aims to raise Php157 billion in additional revenues a year; the version passed by the House could generate Php130 billion.

At Php8 to 9 trillion, the annual cost of building infrastructure from 2017 to 2022 would be Php1.6 to 1.8 trillion. Clearly, the additional revenues from the tax package will not be enough even as it bleeds the poor dry.

In reality, the infrastructure program would be mostly debt-funded. But again, the public is being told that a debt crisis will not rear its ugly head. In fact, the Budget department expects that by the end of President Duterte’s term, the debt-to-GDP ratio would even fall to 38.1% from 40.6% in 2016.

Such optimism hinges on the economy not only sustaining its expansion but posting even more rapid growth. To outpace debt, the gross domestic product (GDP) must grow by 6.5 to 7.5% this year and 7-8% between 2018 and 2022.

It is tough to be as upbeat as administration officials given the structural weaknesses of the economy and amid a global crisis. For this year, debt watchers and creditors put Philippine GDP growth at 6.4 to 6.8% – below the range being hoped for by the economic managers. That’s the most bullish the projections could get.

Whatever rate the GDP grows by, the budget deficit is sure to increase as government ramps up infrastructure spending. The plan is to let the budget shortfall climb to 3% of GDP as infrastructure spending reaches as high as 7.4% of GDP.

While a bigger deficit means greater borrowing, there is supposedly no need to be anxious as the Budget department claims they will borrow in a fiscally sustainable way. Eighty percent of the deficit would be funded by domestic debt and only 20% foreign. Such borrowing mix lessens foreign exchange risks that could cause public debt to balloon.

Chinese and Japanese loans

But a review of what the Duterte administration has identified as its flagship infrastructure projects tells a different story. To be sure, the flagships – numbering 75 as of June – are just a fraction of the more than 4,000 infrastructure projects that government plans to do. They nonetheless represent the largest ones in terms of cost and are the top priorities for implementation.

Of the 75 flagship projects listed by the National Economic and Development Authority (NEDA), 48 will be funded by foreign debt or official development assistance (ODA). Only 14 will be bankrolled through the national budget or General Appropriations Act (GAA). Just two projects are planned to be implemented via public-private partnership (PPP) while 11 have yet to be identified which mode to use.

As of June, only 53 out of the 75 flagships have estimated costs totaling PhpPhp1.58 trillion. Of the 53, 41 are ODA-funded projects worth Php1.40 trillion. The remaining Php181 billion would be funded through the GAA. In other words, almost 89% of the total cost of projects with already determined amounts will be paid for by foreign debt. (See Tables below)

Flagship infra summary

Notes: ODA – Official Development Assistance; GAA – General Appropriations Act; PPP – public-private partnership; TBD – to be determined (Based on data from NEDA) 

Just nine of the 41 ODA-funded flagship projects have identified donors/creditors, based on NEDA’s June list. These are Japan with three projects worth Php226.89 billion; China, three projects (Php164.55 billion); South Korea, two projects (Php14.06 billion); and World Bank, one project (Php4.79 billion).

The Chinese and Japanese are backing the Duterte administration’s largest mega-projects, an indication of how the two economic behemoths see “development cooperation” as one of the key arenas of their competition in the region. Japan is funding the Php211.46-billion PNR North 2 (Malolos-Clark Airport-Clark Green City Rail); Php9.99-billion Cavite Industrial Area Flood Management Project; and the Php5.44-billion Malitubog-Maridagao Irrigation Project, Phase II.

Meanwhile, China is bankrolling the Php151-billion PNR Long-haul (Calamba-Bicol); Php10.86-billion New Centennial Water Source – Kaliwa Dam Project; and Php2.70-billion Chico River Pump Irrigation Project.

Although not yet identified in the latest NEDA list, various media reports also link Chinese and Japanese loans to other big-ticket rail projects. These include the Php134-billion PNR South Commuter Line (Tutuban-Los Baños); the Php230-billion Manila Metro Line 9 (Mega Manila Subway Project – Phase 1); as well as the Mindanao Rail Project, of which the first phase (Tagum-Davao-Digos) costing Php35.26 billion will be funded via the GAA. (See Table below)

ODA flagship 1

ODA flagship 2

ODA flagship 3.png

Source: NEDA

Download NEDA’s entire list here

Gains beyond interests

Over-reliance on debt is obviously problematic but by itself tapping concessional loans to build much needed infrastructure is not a wrong policy. Sadly, ODA is shaped not by genuine development cooperation but by the narrow agenda of lending governments and the corporate interests they represent. Thus, potential economic and social development gains for a borrowing country are greatly weighed down by bloated costs of ODA-funded infrastructure.

Big infrastructure lenders like China and Japan profit not only from the interests accruing from their loans to build rails and roads. The larger gains they make are from the conditionalities they tie to these loans such as requiring the Philippines to exclusively source from Chinese and Japanese firms the goods and services needed to build the rails and roads.

Lenders dictate the technology, design and construction of the infrastructure to accommodate their own suppliers and infrastructure firms. As such, Chinese and Japanese contractors are also favorably positioned to corner operation and maintenance contracts once the rail systems and other infrastructure are privatized under the Duterte administration’s hybrid PPP scheme.

Lastly, creditors also favor the development of infrastructure in areas where they have business interests. This explains the concentration of Japan-funded infrastructure in Central and Southern Luzon where export zones with Japanese investments are concentrated. China’s interest in building infrastructure in Mindanao is tied to its plantation and mining interests in the region.

All these make the cost of infrastructure development in the Philippines more expensive and the debt burden onerous. Tied loans for infrastructure development creates commercial opportunities for Japanese and Chinese companies that are otherwise not available to them. In China’s case, infrastructure lending in poor countries is even used to create employment for their own workforce at the expense of local labor.

At a time of prolonged global recession and slowdown in profit rates of the industrial economies, these opportunities become even more important. Alas, these opportunities only arise by undermining the debtor’s own development needs. ###

(This is a slightly revised version of an article first published as IBON Features)

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Global issues, Military & war

Trump builds ‘legitimacy’ thru bombs and war-making

trump_nuke_65478534

Photo from trofire.com

When Donald Trump surprisingly clinched the US presidency, the legitimacy of his regime has been challenged from the onset. Rival Democratic Party, with the apparent help of the Central Intelligence Agency (CIA), immediately launched a campaign to delegitimize Trump.

Even within his Republican Party, there seems to be mistrust on Trump to pursue traditional US foreign policy, which since 9/11 has been largely defined by the neoconservatives (i.e., advocates of preemptive wars, among others).

The reason? Trump’s stance on Russia and his overtures of normalizing relations with the US’s longtime adversary during the campaign. Trump’s position reflects the agenda of the monopoly capitalist clique he represents such as a faction of Big Oil that is willing to cooperate more with Russia for its vast oil and gas resources.

One of them is Exxon Mobil, which has a mammoth $500-billion oil deal with Russia. President Barack Obama blocked the deal as one of the sanctions against Russia for its role in Ukraine. Improved US relations with Russia would allow Exxon Mobil to exploit oil from almost 26 million hectares of Russian land, said to be five times the size of what America’s largest oil company has in the US.

But normalized US-Russia relations aren’t as simple, of course. It requires a shift as well in US foreign policy towards Russia’s biggest allies Iran and China, something that even Trump himself is unwilling to do. A policy shift in Iran would greatly compromise the US long held agenda to remain in control of Middle East oil while it will not give up Asia Pacific and its massive market, vast resources and strategic sea-lanes to China.

De-escalating a lucrative New Cold War amid a prolonged economic crisis also doesn’t sit well with the military-industrial and security complex, which profits out of war and the threat of war that is constantly driven by the endless competition among monopoly capitalists to divide the world.

The controversies and predicament that Trump faces simply show the deepened contradiction among the competing big interests in the US and imperialism’s increasingly convoluted geopolitical agenda.

Picking up the momentum of the Democratic Party’s propaganda that Moscow hacked the US elections to benefit Trump, the billionaire President has been depicted as a Kremlin stooge by the CIA-fed corporate mass media. A leaked wiretapped conversation with a Russian diplomat of Trump’s national security adviser Michael Flynn, who was since forced to resign, further fired up anti-Moscow hysteria as the Federal Bureau of Investigation (FBI) and several congressional bodies investigate the alleged Trump-Russia collusion. Trump knew that the campaign to destabilize his fledgling regime was real; that a domestic CIA “regime change” operation is likely already ongoing.

In this regard, Washington’s swift decision to drop 59 Tomahawk missiles on a Syrian airbase is more about Trump trying to preserve his presidency than retaliating (in the name of “small children and beautiful babies” killed) against a supposed chemical attack by the Russia-backed Assad regime. The message that the Trump retaliatory attack (which reportedly killed nine civilians, including four children) tried to convey was clear: explicitly, the “bromance” with Vladimir Putin is no more and implicitly, the happy days for the lucrative war making business are far from over.

Trump’s self-serving intention in directly bombing Syria only serves to amplify the brutal criminality of US military intervention and war of aggression in that country and region that has already claimed thousands of innocent lives. In March alone, there were reportedly 1,472 innocent civilians killed in Syria by US-made and delivered bombs.

Amid the corporate media hysterics, a more reasonable action by Trump – like supporting Moscow’s call for a prompt and serious probe even as it claims that Assad’s opponents were the ones in possession of the nerve gas – could be easily interpreted as further proof that a Kremlin puppet is in the White House. Instead, Secretary of State Rex Tillerson hints that a regime change in Syria is now back on the agenda even if it aggravates the tension with Russia.

Trump is on the offensive to reverse the campaign to undermine his presidency by rallying the entire monopoly capitalist state machinery behind a campaign to reassert US global power and dominance, including through reckless saber-rattling and military adventurism that court all-out nuclear war.

He followed up his action against Syria with the much publicized bombing of an ISIS cave and bunker complex in Afghanistan with the so-called “Mother of All Bombs”, the largest non-nuclear weapon in the US arsenal. It was a “shock and awe” display and ruthless projection of US firepower, which is meant to send the message that it is business as usual for US imperialism and that Syria, North Korea, China, Iran, even Russia and others that threaten US interests should take notice.

After bombing Syria and Afghanistan, Trump then deployed the nuclear-powered USS Carl Vinson aircraft carrier and its group of battle warships off the coast of the Korean peninsula in an attempt to bully North Korea to stop its recent missile tests.

It remains to be seen how Trump’s more aggressive military posturing abroad will favorably impact on his shaken legitimacy at home. What is clear is that this will increase the stake for the US to meddle more in countries that play a key role in promoting its interests and agenda in the region and the world.

How such greater foreign intervention would translate in the Philippines is something that must be closely watched as the Duterte administration tries to negotiate a peace pact with the revolutionary groups that pose the biggest threat to US imperialism in the country – the Communist Party of the Philippines (CPP), the New People’ Army (NPA) and the National Democratic Front of the Philippines (NDFP) –– and starts to forge closer bilateral ties with US rivals China and Russia.

Already, pro-US forces, including several of President Rodrigo Duterte’s own men, have been relentlessly undermining the peace talks with the Left while ensuring that US military presence in the country remains strong.

But the situation also presents a good opportunity for Duterte to show that his independent foreign policy is beyond mere rhetoric by asserting national sovereignty and interest over the US’s imperialist agenda. ###

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Economy, Global issues, Governance

Obama and the US Cha-cha lobby

Photo from here

Photo from here

Malacañang announced that defense and security would be on top of the agenda during US President Barack Obama and President Benigno Aquino III’s meeting on April 28. This, of course, is expected. In time for the visit, negotiators have rushed a new defense accord that will facilitate greater US access to and use of Philippine military facilities amid the country’s continuing territorial row with China. Obama and Aquino may sign the controversial Agreement on Enhanced Defense Cooperation next week as one of the concrete results of the highly anticipated meeting.

But another controversial topic may be discussed when the two presidents meet – Charter change (Cha-cha). Obama may discreetly push Aquino to give his open support to ongoing efforts to amend the 1987 Constitution.

Note that the US government and American corporations are among the long-time advocates of removing the constitutional restrictions on foreign investment. In fact, the Obama administration is more direct in its lobbying for Cha-cha compared to its predecessors.

Behind the cover of development assistance and promoting good governance, the Obama administration is quietly propping up the Cha-cha campaign through its so-called Partnership for Growth (PFG). The PFG is a signature inter-agency effort of Obama’s Presidential Policy Directive on Global Development, which claims to “elevate economic growth in countries committed to good governance as a core priority for US development efforts”. It supposedly aligns with policy reform areas outlined by the Aquino administration in its Philippine Development Plan (PDP).

The PFG is defined by the active participation and coordination of more than a dozen US government agencies led by the State Department, US Agency for International Development (USAID) and the Millennium Challenge Corporation (MCC), as well as multilateral donors like the World Bank, International Monetary Fund (IMF), United Nations (UN) agencies and even non-government organizations (NGOs) and private corporations.

In the Philippines, among the initiatives being supported by the PFG through the USAID is the Cha-cha lobby, which is being led by US companies under the American Chamber of Commerce (AmCham). In February 2013, AmCham and USAID launched The Arangkada Philippines Project (TAPP). This initiative pushes for the implementation of the policy proposals contained in the comprehensive advocacy paper “Arangkada Philippines 2010: A business perspective” prepared by the Joint Foreign Chambers of Commerce in the Philippines (JFC) where AmCham is a key member. Among the numerous policy proposals of the Arangkada initiative is addressing the 60-40 constitutional restrictions on foreign investments as well as other reforms for liberalization, deregulation, privatization and denationalization.

Meanwhile, even before the TAPP, the US government has been advocating Cha-cha through the Office of the US Trade Representative (USTR), which regularly brings attention to policy makers the restrictive economic provisions of the Constitution and the implicit message to remove them because they are barriers to US trade and investment. In March this year, the USTR released the 2014 edition of its National Trade Estimate Report on Foreign Trade Barriers covering 58 countries and trade partners of the US. The report is an inventory of the most important foreign barriers affecting US exports of goods and services, US foreign direct investments (FDI) and protection of intellectual property rights (IPR).

For the Philippines, the USTR identified the 30% constitutional limit on foreign ownership in advertising; 40% limit on foreign investment in the operation and management of public utilities (water and sewage treatment, electricity distribution and transmission, telecommunications and transportation); ban on foreigners to practice law, medicine, nursing, accountancy, engineering, architecture and customs brokerage; and restrictions on foreign ownership of land, aside from existing national laws, as among the barriers to trade being implemented by government.

Providing the backdrop to the US Cha-cha lobby is the Trans-Pacific Partnership (TPP), a potential free trade agreement (FTA) to create more profit opportunities for American businesses. The TPP is a key component of the so-called US pivot or rebalancing to Asia, which is the overarching agenda of the Asian tour of Obama that aside from the Philippines also includes Japan, Malaysia and South Korea. Obama’s former national security adviser called the TPP the centerpiece of US economic rebalancing to Asia and platform for regional economic integration. Aside from their territorial disputes with China, another common thread among the four Asian countries that Obama will visit is the TPP where Malaysia is already a negotiating party while Japan and South Korea are expected to join soon, and the Philippines pushing for its inclusion.

While the TPP and US-PH bilateral economic ties are not as controversial as the rushed and secretive new defense agreement between Manila and Washington, these items in Obama’s agenda during his meeting with Aquino do have far-reaching implications, such as Charter change and its impact on Philippine sovereignty and economic development. Several US officials have declared – and admitted by some of Aquino’s Cabinet secretaries – that Philippine membership to the TPP will require amending the Constitution given the highly ambitious liberalization that the US-led FTA is aspiring for.

Obama’s discussion with Aquino on TPP will further heighten persistent US pressure to implement Cha-cha. Last month, a top official of the USTR was in the Philippines and met with Trade, Agriculture and Tariff Commission officials to discuss the country’s possible participation in the TPP. In January last year, a “powerhouse” trade mission composed of executives from US giants Citigroup, Chevron, Coca Cola, General Electric, Procter & Gamble and JP Morgan Chase, among others, also met with Aquino to lobby for Cha-cha and the TPP. The US trade mission was facilitated by the US-Philippine Society (USPS), a business lobby group co-chaired by Manny Pangilinan, a perceived Cha-cha supporter whose businesses are bankrolled by substantial foreign capital (beyond constitutional restriction, such as PLDT).

Do not expect Obama’s Cha-cha lobby to land in official press statements after the visit because the US is not supposed to meddle in the Philippines’ internal affairs and violate its sovereignty. We may just notice, however, a Cha-cha campaign that is more energized than ever. ###

Read more on US-Philippine relations under the Obama and Aquino presidencies

US-PH Partnership for Growth: Greater economic intervention

Obama’s victory: the fallacy of lesser evil and illusion of choice

“2+2” equals more secret US bases in PH

Obama’s dreaded drone war arrives in PH

US agenda in Asia and the risks that Aquino is courting

Tubbataha grounding: expect more abuses as US pivots to Asia

IBON infographic: US military operations in PH, 2001-2011

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Charter change, Global issues, Governance

US-PH “Partnership for Growth”: Greater economic intervention

While much of the discussion about the pivot and renewed PH-US relations centers on the military aspect, there is also the equally crucial, if not even more far-reaching, economic dimension of the pivot (Photo from bulatlat.com)

While much of the discussion about the pivot and renewed PH-US relations centers on the military aspect, there is also the equally crucial, if not even more far-reaching, economic dimension of the pivot (Photo from bulatlat.com)

Despite US President Barack Obama’s absence, State Secretary John Kerry’s visit still underlines the increased bilateral engagement between the Philippines and the US. It comes at a time when US foreign policy is increasingly focused on the region under its so-called pivot to Asia Pacific. The visit, which follows a series of high-profile exchange of visits between top Filipino and American Executive and Defense officials since 2010, is controversial amid ongoing talks between Manila and Washington to increase rotational presence of American troops in the country or basing privileges and the still ongoing territorial spat with China.

While much of the discussion about the pivot and renewed PH-US relations centers on the military aspect, there is also the equally crucial, if not even more far-reaching, economic dimension of the pivot. Under the Obama and Aquino presidencies, mechanisms to facilitate further reforms in the economy that promotes US economic interests are steadily being set up through US foreign assistance programs such as the comprehensive, multi-donor Partnership for Growth (PFG) initiative. Silently, the PFG and other US efforts are setting the stage for an even more wide-ranging and systematic US intervention in the country’s internal policy making.

PH dependence on US economy

The US has been able to perpetuate Philippine dependence on the US economy. American investors remain the biggest source of net foreign direct investments (FDI) in the Philippines. From 1999 to 2012, net FDI from the US reached $4.52 billion, accounting for 19.8% of the total during the said period. Last year, US net FDI was pegged at $784.74 billion or 38.6% of the total, and 248.9% higher than the figure in 2011, at a time when investments from Japan, the European Union (EU), Asean and others have sharply declined.

Similarly, the US continues to be the number one buyer of Philippine exports and biggest supplier of its imports. Direct Philippine-US trade for the period 1999-2012 was $218.64 billion or 17.5% of the total. During the same period, the US accounted for 19.4% of Philippine exports and 15.8% of imports. Certainly, the figures are much higher when one considers that a portion of Philippine trade with Asean and East Asia actually ends up with the US.

Finally, the US also accounts for the largest source of remittances from overseas Filipinos (OFs), including overseas Filipino workers (OFWs). From 1989 to 2012, total OF remittances reached $205.71 billion, of which $108.30 billion or an overwhelming 52.6%, come from US-based migrant workers. Preliminary data for 2013 covering the months of January to July show that remittances from the US reached $5.54 billion or 43.9% of the total during the said period. Since the 1980s, OF remittances have become the largest source of foreign earnings for the Philippines and practically keeping the backward economy somehow afloat. The figures from the US are bloated a bit by the practice of remittance centers in various cities abroad to course remittances through correspondent banks that are mostly US-based. But consider also that based on the latest (2009) stock estimate of OFs, US-based OFs account for 2.88 million of the 8.58 million Filipinos abroad, or 33.6% of the total.

Through the decades, the US has spent substantial amounts to sustain and deepen its clout. Disbursements of bilateral official development assistance (ODA) from the US for the Philippines from 1999 to 2011 reached $1.12 billion, 20.9% of total disbursements during the said period and the second largest behind Japan. However, while ODA disbursements from Japan have been considerably falling since the 2008 global financial and economic crisis, bilateral US aid during the same period has steadily increased, growing by an annual 18.5% from 2009 to 2011. Under the Obama administration and its announced pivot to Asia Pacific, disbursements of bilateral US economic aid have substantially increased. From an annual average of $108.12 million and a yearly growth of 4.6% from 2001 to 2008, US bilateral economic aid to the Philippines jumped to an annual average of $152.23 million and a yearly expansion of more than 18% from 2009 to 2011.

More US intervention, neoliberal reforms

While already expanding, US assistance to the Philippines is anticipated to further increase with the introduction by the Obama administration of new initiatives that facilitate greater US intervention in the country. Requested US aid for the Philippines for fiscal year 2014 is pegged at $188 million, 17.1% higher than the base appropriation for fiscal year 2013.

One such new initiative is the Partnership for Growth (PFG), a signature inter-agency effort of Obama’s Presidential Policy Directive on Global Development, which claims to “elevate economic growth in countries committed to good governance as a core priority for US development efforts”. The PFG supposedly aligns with policy reform areas outlined by President Aquino in the Philippine Development Plan (PDP). The PFG is defined by the active participation and coordination of more than a dozen US government agencies led by the State Department, USAID and the MCC as well as multilateral donors like the World Bank, International Monetary Fund (IMF), United Nations (UN) agencies and even non-government organizations (NGOs) and private corporations.

A Statement of Principles was signed by both countries during the November 2011 Manila visit of then State Secretary Hillary Clinton. The document reflects the two governments’ supposed mutual goal to place the Philippines on a path to sustained, more inclusive economic growth, and elevate it to the ranks of high-performing emerging economies. For the US, the PFG will better position the Philippines in its objective of joining the TPP in the future.

Under the PFG, the US intends to deepen its role in national policy making such as through the five-year Joint Country Action Plan (JCAP) which identified priority areas for policy reforms in the Philippines, including trade and investment liberalization, deregulation, effective enforcement of contracts with private business (such as those engaging in PPP) as well as fiscal and judicial reforms. (See Box)

box - pfg action plan

An example of how US steers internal policy making is the PFG’s centerpiece program in the Philippines, which is the $433.91-million grant from the Millennium Challenge Corp. (MCC). The MCC is a highly conditional aid and requires the Philippines to, among others, maintain so-called “economic freedom” to continue receiving the grant. For instance, one of the indicators of economic freedom, as designed by the MCC, is the Trade Policy Indicator which measures the country’s openness to international trade based on average tariff rates and non-tariff barriers (e.g. trade quotas, production subsidies, government procurement procedures, anti-dumping, local content requirements, etc.) to trade. The “Compact” or agreement between the Philippine government and MCC is that the latter may suspend or terminate the grant if the country fails to reverse its policies that are inconsistent with the Trade Policy Indicator and other indicators designed by the MCC.

Also, the MCC grant does not only facilitate further liberalization of the economy but serves as a tool as well for US intervention in counterinsurgency. Aside from the the $214.4-million Samar Road project, which targets communities in Samar that are considered strongholds of the New People’s Army (NPA), the MCC grant also includes the $120-million Kapit-Bisig Laban sa Kahirapan – Comprehensive and Integrated Delivery of Social Services (Kalahi-CIDSS). Kalahi is essentially the “social development” component of the military’s counterinsurgency campaign in Mindanao and in areas considered as stronghold of the NPA. Another project funded by the MCC grant is the $54.3-million Revenue Administration Reform Project (RARP) which aims to raise tax revenues, reduce tax evasion and revenue agent-related corruption. The rest of the grant is allocated to program administration and oversight.

“Arangkada”

Early this year, USAID and the American Chamber of Commerce (AmCham) launched the The Arangkada Philippines Project (TAPP) as part of the implementation of the PFG. Through the USAID-funded TAPP, AmCham will push for the implementation of the policy proposals contained in the comprehensive advocacy paper “Arangkada Philippines 2010: A business perspective” prepared by the Joint Foreign Chambers of Commerce in the Philippines (JFC), of which AmCham is a key member.

The JFC paper listed 471 specific recommendations that promote the interest of foreign corporations in the country through greater liberalization, deregulation, privatization and denationalization while intensifying the attack to the rights and welfare of the people.

Among others, their proposals are to: amend the Labor Code to allow subcontracting and easier termination of employees; promote IT-BPO curriculum in colleges and education reform, adopt K+12 model; lift restrictions on foreign ownership in media and advertising; promote tie-ups with foreign firms; protect PPP investors from political (i.e. regulatory) risks including TROs from courts; scrap ‘unwarranted’ taxes on foreign carriers; lift restrictions on foreign equity in power projects; privatize Agus and Pulangi dams; build more transport infrastructure through PPP; review policy disallowing “take-or-pay” and sovereign guarantees; promote PPP in the water sector; establish an export development fund to promote exports and investment; allow manufacturing industry to operate with less government interference such as price controls; liberalize importation of capital equipment; liberalize shipping industry; fully implement Mining Act; allow foreign ownership of land and retail facilities; allow relief from minimum wages; review the Foreign Investment Negative List (FINL); apply ‘creative solutions’ to the 60-40 foreign ownership restriction pending Charter change (Cha-cha); privatize or close down government-owned and controlled corporations (GOCCs) to reduce fiscal burden, among others; use advisers (amicus curiae) when Supreme Court (SC) is ruling on issues that adversely affect the investment climate; promote labor flexibilization schemes; reduce corporate income tax and raise the value-added tax (VAT) and fuel excise taxes; and expand the conditional cash transfer (CCT) and Kalahi-CIDSS programs; encourage PPP in healthcare-related services.

With assistance from the TAPP, the JCF started producing Legislation Policy Brief, which identifies broad recommendations for Congress and the Executive. Among the many proposals of the JFC is the lifting of constitutional restrictions on foreign investments, which the AmCham has long been openly advocating. Thus, while Charter change (Cha-cha) is not explicitly identified in the PFG, its implementing components such as the TAPP provides pressure on the Philippine government to liberalize the Constitution.

Meanwhile, just recently, the USAID announced a $24-million Philippine-American (Phil-Am) Fund, another component of PFG implementation in the country, intended for civil society organizations (CSOs) working on projects in the areas of entrepreneurship and promotion of new businesses, governance, fighting human trafficking, technology-driven adult literacy and biodiversity conservation.

“Powerhouse” lobby group

Complementing and reinforcing the PFG is the establishment of lobby group US-Philippine Society (USPS), a private sector initiative which claims to broaden and expand interaction and understanding between the two countries in the areas of security, trade, investments, tourism, the environment, history, education and culture. The group intends to create a new and timely mechanism to elevate the Philippines’ profile in the US by bringing its longstanding historical ties fully into the 21st century when American policy interests are increasingly focused on East Asia. It was officially launched on 7 June 2012 during President Aquino’s official visit to Washington.

Its leadership includes John D. Negroponte, a former US Ambassador to the Philippines (1993-1996), first Director of National Intelligence (2005-2007) and former Deputy State Secretary (2007-2009), as co-chairman with Filipino business tycoon Manuel V. Pangilinan. Honorary chairmen are Maurice Greenberg, former chair and CEO of insurance and financial giant American International Group (AIG), and Washington Z. Sycip, founder of the Philippines’ largest multidisciplinary professional services firm SGV & Co. Current Ambassador to the US Jose L. Cuisia, Jr. is an ex-officio Board member.

Aside from them, the Board of Directors of USPS is also comprised of the top executives from some of the largest American corporations, namely: Citigroup, General Electric, Procter and Gamble, JP Morgan, Chevron and Coca Cola, among others. Prominent Filipino businessmen like Jaime Augusto Zobel de Ayala, Ramon del Rosario and Enrique Razon are also members of the Board. The group’s current president is John F. Maisto, a former Political Officer of the US Embassy in Manila (1978-1982) and Director of Philippine Affairs at the State Department (1982-1986). The executive director, meanwhile, is Hank Hendrickson, a retired US Navy officer and former Foreign Service Officer at the US Embassy in Manila. On 21 January 2013, Negroponte led a so-called “powerhouse” delegation of the USPS in visiting the country, bringing with him officials of the American corporations belonging to the lobby group and held discussions with Aquino and top economic and defense officials as well as SC Chief Justice Lourdes Sereno to update on key economic and judicial reforms, including those under the PFG.

Defending PH sovereignty

The US pivot and Aquino’s subservience to US interests are creating conditions for increased US intervention in the country not only militarily but also in terms of economic policy making and governance. A new era in the more than a century old colonial and neocolonial relations between the Philippines and the US is indeed being ushered in by the Aquino and Obama regimes.

The serious implications on national sovereignty, human rights, regional peace and stability and even on the environment of greater US military presence and intervention are well-documented and widely discussed. However, there is a big challenge for advocates of national sovereignty and patrimony to deepen and widen the public discourse on US intervention and the Asia Pacific pivot to equally underscore how the US, in its desperate efforts to abate its latest economic crisis, is increasingly and systematically laying the groundwork to further steer the national economy towards serving its monopoly capitalist interests.

There is a need to draw and highlight how Philippine-US colonial and neocolonial ties and decades of neoliberal restructuring and reforms have stunted national development and destroyed industries and livelihood, perpetuating chronic poverty and the permanent economic crisis in the country.

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