SONA 2014

Deceptive PPP claims in SONA

Contrary to President Aquino's SONA claims, government continues to provide incentives for investors to build our infrastructure needs. (Photo from here)

Contrary to President Aquino’s SONA claims, government continues to provide incentives for investors to build our infrastructure needs. (Photo from here)

Infrastructure development through public-private partnership (PPP) was among the highlights of President Aquino’s fifth State of the Nation Address (SONA). Thanks to good governance, we no longer need to offer perks for investors to build our infrastructure needs, said the President. Thanks to good governance, the days of state-guaranteed private profits to entice PPP bidders are gone.

If the private sector wants to build our airport or highways, they must be willing to pay a premium, Aquino pointed out. The winning bidder in the Mactan-Cebu International Airport Passenger Terminal Building paid government P14 billion. The private contractor in the NAIA Expressway Project Phase 2 shelled out P11 billion.

But contrary to the SONA claims of Aquino, government continues to provide incentives to PPP investors. Some of these perks are even more generous than those offered by previous administrations. In addition, Aquino’s supposed “good governance” has nothing to do with investors paying a premium to bag PPP contracts. Their bidding decisions are always determined by how profitable or strategic the projects are.

Let us take a look again, for instance, at the P64.9-billion LRT Line 1 Extension and Operation and Maintenance project. This PPP contract will be awarded soon to Metro Pacific Investments Corp. (MPIC) and Ayala Corp. It is a sweetheart deal. Aquino would not just guarantee the debts of MPIC-Ayala; government is directly borrowing P34.9 billion or 54% of the project cost for right of way acquisition, additional coaches, etc. Government also agreed to shoulder the payment of real property taxes estimated at P64 billion throughout the life of the contract. These are on top of the P5-billion startup subsidy that government will provide. All in all, the direct cost to the government is almost P104 billion and just P30 billion to MPIC-Ayala. It becomes even more outrageous when you factor in the guaranteed profits that MPIC and Ayala will reap through automatic and periodic fare increases throughout the 32-year contract (which can be extended to up to 50 years). When MPIC-Ayala could not collect the agreed fares, government will again shell out public funds to cover the difference. Aquino called this regulatory risk guarantee, a government guarantee never before seen in the more than three-decade history of PPP and privatization in the Philippines. All these make the P9.5-billion premium that MPIC-Ayala promised to pay to clinch the concession meaningless.

Similarly, the Henry Sy-affiliated Megawide and its Indian partner GMR are building and operating the P17.52-billion Mactan-Cebu airport expansion because of its huge profit potential. The P14 billion that the consortium paid is peanuts compared to the windfall that the airport would make, which the Aquino administration guaranteed. Among the sweeteners of this PPP project is a 25-year government ban on the construction of other airports and related businesses in the Mactan and Cebu islands. There will also be a 25-year moratorium on the construction of any competing car park facility or any competing hotel facilities within the project’s 500-meter radius. Megawide-GMR will operate the country’s second busiest airport for 25 years, enjoying absolute monopoly over air passenger terminal and related services guaranteed throughout the concession agreement.

Meanwhile, in the case of the P15.52-billion NAIA expressway project, San Miguel Corp. (SMC) is charging P35-45 in toll rates. With traffic expected at 150,000 to 160,000 cars a day, that’s P1.92 to 2.63 billion in annual revenues. Its concession agreement with government is 30 years. This means that SMC is guaranteed to recover the project cost and premium in as short as 10 years, and then enjoy 20 years of raking profits. The recovery period could even be shortened by toll hikes and increased traffic volume. Note also that for SMC, the NAIA expressway has a more strategic value. The project will provide access to the NAIA terminals, which will benefit SMC’s air transport interests. The giant conglomerate of presidential uncle Danding Cojuangco controls 49% of the Philippine Airlines (PAL). It will also build a seamless link between SLEX/Skyway and the Manila-Cavite Toll Expressway. SMC, with Indonesian partner Citra, already controls SLEX/Skyway and the NAIA project will further consolidate its position in road transport in the area.

Local oligarchs and representatives of foreign interests in the country like the Ayala family, Henry Sy, Danding Cojuangco and his right-hand man Ramon Ang, or Manny V. Pangilinan (MVP) of MPIC participate in PPP not merely because they want to solve our infrastructure needs. As Jaime Augusto Zobel de Ayala put it: finding a private sector solution to the social problems of the country… must be oriented around a profit-centered solution. He was talking about private sector participation in mass housing for informal settlers. So, you see, there is a reason why these people are among the wealthiest in the world. In the 2014 Forbes’ list of richest Filipinos, Henry Sy and family recorded a net worth of $12 billion while Jaime Zobel de Ayala and family posted $3.1 billion; Danding, $825 million; Ramon Ang, $260 million; and MVP, $105 million.

PPP will continue to be the centerpiece program of Aquino in the remaining two years of his term. In his penultimate SONA, Aquino enumerated the top infrastructure priorities of his administration, most of which are controversial because of their social costs and impact. The P150-billion Laguna Lakeshore Expressway Dike, the P18.72-billion Kaliwa Dam, and Clark Green City, for example, are all feared to cause the massive displacement of local communities and the destruction of environment.

The same elite families and groups that have been bagging Aquino’s PPP contracts are positioning themselves to corner these deals. Despite public opposition, Aquino is determined to implement them, which could only further aggravate social tension and delegitimize his presidency even more.

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Consumer issues, Privatization

Water arbitration: issues and implications

It's not enough that there are well-meaning regulators who will monitor the water companies. The long-term solution is to reverse MWSS privatization. (Photo from the Water for the People Network)

Arbitration shows that it’s not enough that there are well-meaning regulators who will monitor the water companies. The long-term solution is to reverse MWSS privatization. (Photo from the Water for the People Network)

Updated, first published as IBON Features

Last 24 September, Manila Water Co. Inc. officially filed a dispute notice before the International Chamber of Commerce (ICC) questioning the decision of the Metropolitan Waterworks and Sewerage System (MWSS) – Regulatory Office (RO) to reduce water rates. Maynilad Water Services Inc., meanwhile, will also file soon its own dispute notice that shall set off arbitration proceedings.

(Download a PowerPoint presentation on the arbitration process here)

What does this mean and what are the implications?

One is that aside from paying the costs of arbitration, consumers may have to wait as much as three months (90 days) or possibly even longer to enjoy the lower water rates ordered by regulators. That, of course, optimistically assumes that the lower rates will be implemented at all. There is the possibility that the lower rates could even be reversed after arbitration.

Another is that even when the lower rates are finally upheld, there is no guarantee that the money amassed by the water firms during the delay in its implementation and charging more than what they should have will still be returned to the consumers. The new rates are supposed to have taken effect beginning January 1, 2013 but there is still no mechanism for how to treat the overcharging at current higher rates by water firms since the start of the year.

Consider further that arbitration of a Rate Rebasing dispute should be decided by not later than September 30 of the year in which the dispute is referred to the panel per the Concession Agreements (CA) between the private concessionaires and the MWSS. A decision in so short a time is unlikely to happen though.

(Download a copy of the Concession Agreement and related documents here)

Already greatly exposed as being contrary to public interest, the privatization of Metro Manila’s water system is further being bared as exceedingly anti-people with the concessionaires’ push for arbitration.

It also belies claims that privatization can benefit the public if only strict regulation is applied. In contrast, the current controversy shows that there can be no effective regulation under privatization. In the case of MWSS, the privatization contract or CA was designed to undermine government regulation as decisions are ultimately made by an Appeals Panel where the concessionaire and a representative of foreign business interests have a say.

Appeals Panel

Arbitration is a dispute resolution mechanism provided under Section 12.2 of the CA. It is the last resort for concessionaires and the MWSS to settle disagreements, which could no longer be resolved through negotiation, on the interpretation and implementation of the CA. Arbitration proceedings under the CA are in accordance with the United Nations (UN) Commission on International Trade Law.

An Appeals Panel handles the arbitration proceedings. According to Section 12.3 of the CA, its members include one representative each designated by the concessionaire and the MWSS-RO. A third member acts as the Chairman of the Appeals Panel and his or her appointment depends on the nature of the dispute.

For major disputes such as the ongoing controversy arising from the Rate Rebasing exercise, the President of the ICC will appoint the Chairman. For minor disputes, the representative of the concessionaire and the RO in the Appeals Panel will designate the Chairman. Foreigners can be appointed as members of the Appeals Panel, including as Chairman.

Among those being eyed to represent the RO in the Appeals Panel are former Supreme Court (SC) Chief Justice Reynato Puno, former SC Associate Justice Jose Vitug, and University of the Philippines (UP) College of Law Dean Danilo Concepcion.

But the RO representative is easily outnumbered by the two representatives from the private sector, i.e. the concessionaire and the Chairman appointed by the ICC. Being from the business sector, the ICC representative could be presumed to be more partial to the interest of the concessionaires than of the public. Decisions by the Appeals Panel need not be through consensus but by a simple majority vote.

Moreover, consumers are not represented in the Appeals Panel. They also do not have access to the proceedings which are done behind closed doors.

Also, under Section 12.5 of the CA, government regulators and the concessionaires agreed to waive their right to appeal the decision of the Appeals Panel through any court, judicial or regulatory body. This illustrates how, under MWSS privatization, government has abdicated its sovereign power to regulate and set policies to protect the public interest.

RO resolution

To recall, the RO denied the rate hike applications of Maynilad (Php8.58 per cubic meter) and Manila Water (Php5.83 per cu. m.). Instead, the regulators ordered the concessionaires to reduce their basic charge by Php0.29 (Maynilad) to Php1.45 (Manila Water) per cu. m. every year until 2017.

(Download a copy of the RO resolutions: Maynilad, Manila Water)

The concessionaires’ rate hike proposals and the subsequent RO decision form part of Rate Rebasing. It is an exercise to determine water rates that will allow the concessionaires to recover their expenses and assures them of a profit rate. Rate Rebasing is done every five years throughout the 40-year lifespan of the CA.

While still falling short of correcting and reversing the 16 years of abuse and oppression of consumers under MWSS privatization, the RO’s decision is still a welcome development and would not have been possible without strong public pressure. It affirmed many of the issues long being raised by anti-MWSS privatization advocates. Aside from the highly controversial income taxes (additional data and discussion here), the RO resolution also covered other questionable items being charged to consumers such as the cost of unimplemented projects, donations and advertising, and bloated costs of projects, among others.

On top of these disallowed items, the RO also ordered the concessionaires to stop charging the Php1 per cu. m. Currency Exchange Rate Adjustment (CERA). Thus, the immediate impact of the RO resolution on water bills by October should be a reduction of Php1.29 per cu. m. for Maynilad customers and Php2.45 for Manila Water’s.

Derailing the rate cuts

But such rate cuts will only become effective if the RO resolutions are not derailed by the arbitration proceedings. The concessionaires argue that arbitration means that the lower rates will not be implemented yet. And worse, it may even be reversed in case the Appeals Panel decides in favor of Maynilad and Manila Water.

In a paid ad (see image below), Maynilad cited Section 7.1 of the CA. This section pertains to MWSS’s obligation to “cooperate with the concessionaire” on, among others, the implementation of changes to standard rates as instructed by the RO or by the Appeals Panel. According to Maynilad, the said provision means that the Appeals Panel will have the final say on the new rate in case the RO-determined rate is brought to arbitration. Thus, current rates will continue to apply until the Appeals Panel has made a decision.

maynilad paid ad - 16 sep

Regulators are questioning such interpretation of the CA. But if the concessionaires were right, consumers will continue to pay water bills bloated by the income taxes of and other onerous charges imposed by the water firms. Section 12.4 (vi) of the CA says that unless stated otherwise the Appeals Panel has 90 days to make a decision from receipt of a dispute notice. But it can also opt to extend the proceedings if mutually agreed by the disputing parties although a decision should be made not later than September 30 of the year in which the rebasing dispute is referred to.

On top of all these is the issue of arbitration costs which under Section 12.6 of the CA shall be all shouldered by the public sector – i.e. government through the MWSS and the consumers through the pass-on charges that can be imposed by the concessionaires. Arbitration costs include the fees and expenses of panel members and legal, economic or technical consultants retained by the Appeals Panel. In its 16-year history, arbitration proceedings have been conducted thrice with the total cost reaching P140.04 million.

Clearly, it is not enough that there are well-meaning regulators who will monitor the water companies. By design, MWSS privatization was meant to protect the interests of the private investors, making effective regulation practically impossible. As water advocacy groups like the Water for the People Network (WPN) assert, lower water rates can only be realized through effective state control. IBON Features

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Fiscal issues, Privatization

LRT 1 privatization: public to bear costs of guaranteed private profits

Photo from Bulatlat.com

Photo from Bulatlat.com

It’s the same old story. We have seen it before in the privatization of the National Power Corp. (Napocor) where consumers are now being forced to pay more to shoulder stranded costs arising from sweetheart deals with private power generators. We have seen it in the privatization of the MRT where government has been insisting to hike fares to pay for financial obligations arising from guaranteed profits and debt payments. Both punish the public with exorbitant fees and drain the already scant resources of government.

The same fate awaits the Filipino people if the P60-billion privatization and line extension of LRT 1, the largest public-private partnership (PPP) project of President Benigno Aquino III to date, will not be stopped.

Those who are interested to look into the details of the LRT 1 privatization may download a copy of the draft 32-year concession agreement here. Scrutinizing the draft contract, we will see that despite the repeated denial by its officials, the Aquino administration will continue the usual practice of providing state guarantees to peddle its privatization program. And as you might expect, such guarantees will come at the great expense of the public.

Top-up provision

If the private operators of the MRT were granted with a guaranteed 15% return on investment (ROI) annually, the winning bidder for the LRT 1 privatization will enjoy a so-called top-up subsidy. The Department of Transportation and Communications (DOTC), the agency in charge of LRT 1 privatization, explained that the top-up provision will entail the government to shoulder the difference between the pre-approved fares contained in the concession deal and the actual fares that authorities will be able to actually implement.

This is essentially a profit guarantee for the private operator and can be found in Section 20 (on Concessionaire Revenues) of the draft concession agreement for LRT 1 privatization. Under the draft contract, the concessionaire will be entitled to a notional fare (Section 20.3.a) that shall be agreed upon by the government and the winning bidder to ensure the commercial profitability of the system. The notional fare would be periodically adjusted (read: increased) during the entire 32-year concession period. Section 20.4.a of the draft contract, meanwhile, states that: “In any period, where the Approved Fare is lower than the Notional Fare, the Grantors shall pay to the Concessionaire a Deficit Payment (“DP”), to reflect the difference between the Notional Fare (NF) and the Approved Fare (AF).” The Grantors refer to the DOTC and the Light Rail Transit Authority (LRTA).

Concretely, this means that if the DOTC or LRTA could not implement a certain fare level for LRT 1 as committed in the concession agreement due to strong public opposition and/or regulatory, legislative or judicial intervention, government is obliged to pay the private operator its expected revenues from such fare level. Government, of course, will be using public money. In other words, the public will not escape the greed of the private operator – whether as LRT 1 commuters (who will shoulder the fare hike) or as taxpayers (who will bear the top-up subsidy). Needless to say, prospective LRT 1 operators that include San Miguel Corp. Infra Resources, Inc.; Light Rail Manila Consortium of Manny V. Pangilinan and the Ayala group; DMCI Holdings, Inc. of the Consunji group; and the foreign consortium MTD-Samsung of Malaysia and South Korea are pleased with the deal that they will be competing to secure from the Aquino administration.

Regulatory risk guarantee

The top-up subsidy in LRT 1 privatization is a form of regulatory risk guarantee that the administration’s economic managers first disclosed in September 2010. The announcement was made ahead of the President’s working visit to the US where he promoted his PPP program to American investors. Two months later, Aquino officially declared the scheme as policy during the PPP Summit, which the government organized to jumpstart its privatization initiatives. In his speech, the Chief Executive said:

“The government will provide investors with protection against regulatory risk. Infrastructure can only be paid for from user fees or taxes. When government commits to allow investors to earn their return from user fees, it is important that that commitment be reliable and enforceable. And if private investors are impeded from collecting contractually agreed fees – by regulators, courts, or the legislature – then our government will use its own resources to ensure that they are kept whole.”

While providing profit guarantees is standard practice in privatization, the regulatory risk guarantee is unique to the Aquino administration. His economic managers designed the scheme so as to avoid criticisms that he is repeating the same disadvantageous perks given to PPP investors in the past that caused the financial bleeding of government such as in the case of Napocor and MRT. But the top-up subsidy or regulatory risk guarantee is essentially the same as the take-or-pay provisions in previous PPP deals. Government and the end-users will still assume all the risks associated with operating the infrastructure while the profits of the private operator are secured.

More public debts

Where will government get the funds for the LRT 1’s top-up subsidy? To be sure, it will not come from disposable funds or public savings as the national budget deficit is still huge at P127.3 billion while the national government remains heavily indebted with more than P5.38 trillion in outstanding debt as of November 2012.

Like his predecessors, Aquino will borrow more to finance his PPP program including the profit guarantee for participating private corporations.  The National Economic and Development Authority (Neda) had earlier announced that government will tap multilateral institutions to provide for the guarantees so that when PPP investors face risk, they can still “be paid fast and immediately”. One of the multilateral lenders that made a pledge to fund the government guarantees on PPP projects was the World Bank which issued the commitment during the 2010 PPP Summit. Incidentally, the World Bank through its investment arm International Finance Corp. (IFC) is the transaction advisor of the DOTC and LRTA in the LRT 1 privatization.

Undermining check and balance

Aside from the direct financial burden that will hit the people, the regulatory risk guarantee will also further undermine the already weak system of supposed check and balance through the use of regulatory authorities, courts or Congress as a venue to protect public interest. For example, to prevent the implementation of an LRT fare hike, the people may seek relief from the Supreme Court (SC) through a temporary restraining order (TRO). The DOTC and LRTA would then be prevented from implementing the fare increase. However, the private LRT 1 operator could still collect the revenues from the fare hike through government-guaranteed Deficit Payments thus effectively negating the intervention of the High Court.

The regulatory risk guarantee was designed precisely to protect the commercial interests of the private business undertaking PPP projects from such outside intervention. Economic managers behind the regulatory risk guarantee have cited the case of the South Luzon Tollway Corp. (SLTC), the private operator of the South Luzon Expressway (Slex), which the SC stopped in August 2010 from implementing a more than 250% toll hike already approved by the Toll Regulatory Board (TRB).  Bayan Muna party-list congressman Teddy Casiño also filed a House resolution seeking for a suspension of the toll increase pending a legislative inquiry.

In reality, while DOTC officials try to differentiate the LRT 1 privatization’s top-up subsidy from the controversial guaranteed ROI present in earlier PPP projects, it appears that the former is even more favorable to the private concessionaire (and therefore more disadvantageous to the public) than the latter. The 250% Slex toll hike, for instance, arose from the guaranteed 17% ROI for SLTC contained in its 2006 Supplemental Toll Operation Agreement (STOA) with the TRB. But such guaranteed ROI became meaningless when the SC issued its TRO (although eventually lifted after more than two months). With the top-up subsidy, such risk of fewer profits due to an SC TRO or any outside intervention is eliminated.

More profits through commercial development

On top of its revenues and profits from fares and guaranteed periodic fare hikes, the winning LRT 1 bidder will also enjoy additional cash flows from project land and commercial development as contained in the draft agreement’s Section 11.4. In Section 20.7.a on Commercial Revenue, the deal further stipulates that “The Concessionaire shall be entitled to make arrangements for and charge for and collect the Commercial Revenue generated from the Project subject to Relevant Rules and Procedures.”

The development and lease of commercial spaces on LRT 1 stations and depot as well as revenues from advertising could be a potential source of income for government that could be maximized instead of resorting to steep fare hikes and/or privatization. The country’s LRT and MRT system has very low non-rail revenues which include earnings from commercial development and advertising. According to a 2007 study by the Japan Bank for International Cooperation (JBIC) cited by Senator Francis Escudero, the non-rail revenues of the LRT is equivalent to a paltry 2.6% of total revenues while neighboring countries get more than 20% from advertising and commercial leases. Clearly, there is much room to generate more revenues from commercial development for government if it will retain the LRT 1. Unfortunately, such potential source of income will also be transferred to a private business under privatization.

No need for privatization

The Philippines is among the first Third World countries to implement massive privatization of infrastructure development and operation. Early efforts were set off by conditionalities attached to loans from the World Bank, International Monetary Fund (IMF) and the Asian Development Bank (ADB) in the 1980s and 1990s. Among the big-ticket items already privatized are the Napocor assets, the Metropolitan Waterworks and Sewerage System (MWSS), the MRT, super highways like Slex, etc. Through the years, the people have been subjected to soaring and exorbitant user fees charged by the private concessionaires. Meanwhile government debt and deficit continued to balloon ironically due to, among others, privatization deals that were pursued supposedly to ease the fiscal pressure on public coffers.

Unfortunately, the Aquino administration’s PPP program will continue the long discredited and proven flawed policy of privatization such as its ongoing efforts to privatize LRT 1. Government could not even find a compelling justification to push for LRT 1 privatization. Unlike the heavily indebted Napocor and MWSS, for example, the LRTA – government operator of the LRT system – is at least generating enough revenues to finance its operation and maintenance (O&M) requirements. In 2012, the LRT 1’s gross revenues even increased by almost 10% while its farebox ratio – the proportion of fare revenues to total O&M expenses – improved from 1.10 in 2011 to 1.31 last year.  A farebox ratio of 1.0 means that fare revenues can cover 100% of O&M costs. Certainly, improving, modernizing and extending the system to Bacoor, Cavite would require additional investments and this is where the national government should step in by generating the needed funds.

Aquino could not argue that the government does not have the finances to make such investment thus the need for privatization. But if government is willing to incur more debts and guarantee the profits of whoever will win the LRT 1 project, why can’t it make the necessary investments such as through bilateral loans under concessional terms? When Malacañang was insisting on increasing the fares for LRT and MRT, its core argument was that government could no longer supposedly subsidize the system. Yet it is willing to subsidize the profits of the LRT 1 operator?

LRT 1 as a mode of mass transportation is a public investment imbued with public interest. It was never designed and intended to squeeze profits from commuters but to provide a reliable, efficient and affordable system of transportation for workers and employees, students, the self-employed, etc. Its true measure of viability is the social gains it creates for the people and the economy and not the private profits for the Ayalas and the Pangilinans, the Angs and the Cojuangcos, and their foreign partners. There’s no need to privatize it. (End)

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Economy, Privatization

“Growth” for big business, at the people’s expense

growth under aquino - ayala-pangilinan-ppp.gov.ph

The Ayala and Pangilinan groups team up in a bid to bag the ₱60-billion LRT 1 privatization project, so far the biggest PPP initiative of the Aquino administration. San Miguel Corp. of presidential uncle Danding Cojuangco is also bidding for the contract. These groups, which enjoy close ties with Aquino, have made a fortune by cornering privatization deals that burden the people with high user fees. (Photo from www.ppp.gov.ph)

Read first part

Structural issues

With the rapid and steady decline of the domestic labor market, labor export has further intensified under Aquino who deploys an average of 1.58 million OFWs a year, a significant jump from the 1 million during Arroyo’s term. If you stretch the comparison to the 1980s, the country is exporting about 3-4 times more OFWs today. In addition, OFW deployment relative to the number of domestically employed workers has steadily increased through the years – from just 2.9% in 2001 to 4.5% in 2011 – indicating the deepening reliance on labor export of the Philippines.

Their remittances (which for the first time breached the $20-billion mark in 2011 and as of September 2012 is reported at $15.57 billion but expected by the World Bank to reach a new record high of $24 billion for the full year) have been keeping the economy afloat in the past three decades by providing means for domestic consumption and payments for our import-dependent production (trade deficit stood at $6.8 billion as of October) and massive foreign debt (pegged at $61.72 billion as of September, which is also the quick and straight answer to one of the favorite 2012 highlights of the administration – the Philippines supposedly being a creditor nation).

In fact, while exports and FDI inflows have increased this year, OFW remittances, the third largest in the world behind remittances from Chinese and Mexican migrant workers, remained the single largest source of dollars for the economy. In the past 10 years, annual OFW remittances are almost 90 times the size of net FDI while the trade balance, as in previous decades, remained perennially in the red, meaning that the neocolonial import-export sector continues to take out invaluable resources from the country, while others in the region like Indonesia, Malaysia, South Korea and Singapore are posting trade surplus of between $25 to $43 billion. Like neocolonial trade, labor export actually takes away more from the economy than the remittances it brings as highly-skilled and trained Filipino workers render their productivity to foreign economies instead of ours. The social costs of labor export such as disintegrating families, issues left unmeasured by statistics, should not be ignored as well.

While actually symptomatic of the permanent and structural crisis that forever besets the Philippines, labor export and remittances drive “growth” as measured by the GDP. This is perhaps one of the biggest anomalies of our maldevelopment. The surprising third quarter expansion, for instance, was mainly driven among others by the 24.3% growth in construction gross value-added (GVA) and 24.8% growth in construction expenditure as record-breaking inflows of remittances fuel demand for residential property. The so-called real estate boom is also being pushed by the BPO sector that according to industry insiders has been driving up demand for new office space which is expected to hit a record 400,000 to half a million square meters this year, or an increase of as much as 25% from 2011.

Like labor export, growth stimulated by BPO is an aberration because its predominance in economic production is actually indicative of the country’s continuing failure to develop and industrialize. Both are the results of the domestic economy’s longstanding structural inability to generate sustainable and productive jobs from vibrant local industries including the manufacture of consumer and industrial goods and modernized agriculture. Without a national industrialization plan, we are forced to rely on what the US and other rich countries require us to do for their advanced economies, whether as production workers in their global assembly lines and factories or as call center agents to service the various needs of their clients. Certainly, they do create some (low-paying, insecure) jobs but just enough to meet their needs while the jobs generated are totally detached from our own development needs.

Furthermore, the so-called resilience amid the global crisis is not because the economy is internally-driven by sustainable, job-generating domestic industries but because our main drivers of growth – BPO and labor export – are precisely useful cost-cutting schemes for the crisis-hit economies of the First World to cope with the economic crunch. In other words, we may continue to “grow” amid the global crisis, but at the great expense of our workers who will be forced to accept further exploitative arrangements in the form of more depressed wages and lack of social protection whether as an irregular call center agent here or an undocumented migrant worker in the US.

At our expense

“Growth” indeed has been at our expense. Not only is the supposed growth not creating enough jobs, it is also being pushed by skyrocketing costs of basic needs and vital economic services. At current prices, electricity, gas and water grew the second fastest in the third quarter among all major industries, just behind construction as the year as usual saw the regular rate increases in privatized electricity and water. While this meant additional burden for the public, it meant more profits for the private corporations that control them.

The nine-month profits of the Manila Electric Co. (Meralco), for instance, increased by 7.9% to ₱12.89 billion, which the company expects to hit ₱16 billion for the full-year. Similarly, In the first nine months of 2012, Maynilad Water Services Inc. has amassed more than ₱5 billion in profits (13% higher than last year) while Manila Water Co. has raked in ₱3.9 billion in profits (26% higher than last year). Due to the never-ending surges in user fees, Manila already has the most expensive electricity rates and the fifth most expensive water rates among major Asian cities.

These utilities are controlled by the country’s richest clans and individuals who are closely associated with Aquino such as presidential uncle Danding Cojuangco and political supporters Manny Pangilinan and the Ayala family. Aside from electricity and water utilities, they also control other key infrastructure such as toll roads, telecoms and power generation. Together with other close Aquino allies like the Lopezes, Aboitizes and Consunjis, among others, these groups have positioned themselves to further expand their business empire through Aquino’s PPP scheme.

growth under aquino - table

The Ayalas have already bagged the ₱1.96-billion Daang Hari – Slex Link Road project earlier this year; Pangilinan/Ayalas, Cojuangco’s San Miguel Corp. and the Consunjis are all vying for the ₱60-billion LRT 1 extension and privatization project, which is also tied to government’s adamant plan to raise LRT/MRT fares by next year; even hospitals are not spared such as the ₱5.6-billion privatization of the Philippine Orthopedic Center which Pangilinan is eyeing to add to his growing list of hospitals.

The much ballyhooed credit rating upgrades are also being achieved at the people’s expense. Credit rating agencies cite the fiscal reforms being undertaken by Aquino that tame the national budget deficit. This includes, among others, raising government fees and imposing new charges through Administrative Order (AO) No. 31 and imposing more taxes like the newly-signed Sin Tax Law to generate additional revenues. Most of these revenues, however, will go to debt servicing as Aquino needs to gain favorable reviews from creditors and credit rating agencies.

Since Aquino took over up to September this year, government has already shelled out ₱1.59 trillion for debt servicing, equivalent to 70.2% of total revenues and 53.3% of total expenditures plus principal amortization. For comparison, debt servicing under Arroyo was equivalent to 65.8% of revenues and 41.5% of expenditures. These belie claims that the national budget under the Aquino administration is now being redirected towards social services to empower and benefit the poor. The expenditure program from 2011 to the recently signed ₱2-trillion 2013 national budget shows that the budget for debt servicing (including principal amortization) is equivalent to an average of 2.5 times that of the budget for education; 6.4 times, health; and 11.2 times, housing.

For elite interests

While the Aquino administration is harping on good governance as being behind the supposed drastic economic turnaround, much of the so-called reforms it is undertaking – with substantial backing from the US government and multilateral institutions like the World Bank – have been more about protecting elite and big business interests and less about curbing big-time systemic corruption or democratizing government. The reforms are all about creating a more conducive atmosphere for investors, i.e. stable and predictable policy environment, less business risks and reduced costs, etc. to reinforce liberalization, deregulation and privatization. The false assumption is that when business is thriving, the people will ultimately benefit through more jobs and income opportunities and improved living conditions. But clearly, this is not happening as the gains from a supposedly expanding economy have remained monopolized by a handful of big local businessmen and their foreign partners and funders.

On top of promoting the interests of big business, the good governance rhetoric is also being used to advance the agenda of the Aquino clique of the political elite. The successful ouster of Renato Corona as Supreme Court (SC) Chief Justice and the appointment of Ma. Lourdes Sereneo, for instance, were more about the consolidation of the political power of the ruling Liberal Party (LP) than making Mrs. Arroyo accountable. Executive hegemony over government branches that formulate policies (Congress) and review the legality of such policies (Judiciary) makes an even more ideal political setting to push for retrogressive economic programs that promote certain big business interests.

In the run-up to the 2013 midterm polls, the LP further heightened their political consolidation under the guise of daang matuwid. Aquino appointed Grace Padaca to the Commission on Elections (Comelec) while LP President and 2016 presidential wannabe Mar Roxas is leading the campaign to unseat non-LP governors in the vote-rich provinces of Cebu and Pangasinan through his powerful post as Secretary of the Department of Interior and Local Government (DILG). The LP is obviously laying the groundwork for their prolonged rule and continued imposition of their brand of elite governance and economics beyond the 2016 term of Aquino.

However, contradictions will surely heighten as the crisis gripping the great majority of Filipinos intensifies. The deception of good governance is good economics and the popularity of Aquino will certainly reach their threshold if joblessness, poverty and hunger continued to deteriorate. The significant 12-point drop in Aquino’s latest satisfaction rating despite the scorching speed of GDP growth could be a portent of things to come. ###

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Consumer issues, Privatization, Water crisis

PH water rates among Asia’s highest

Don’t be surprised if soon we will not just have the most expensive electricity rates in the region but the most exorbitant water rates as well (Photo from gmanetwork.com)

Because of privatization, don’t be surprised if soon the Philippines will have not just  the most expensive electricity rates in Asia but the most exorbitant water rates as well (Photo from gmanetwork.com)

We already know that power rates in the Philippines are the most expensive in Asia. What we do not know yet which will certainly make our collective blood pressure rise is that water rates in the country are also among the highest in the region. Using the same 2011 survey conducted by the Japan External Trade Organization (JETRO) on power rates in major Asian cities, I found out that the water rates in Cebu City and Manila rank fourth and fifth, respectively behind Sydney, Singapore and Jakarta. Yes, we are paying more expensive water than more developed cities like Hong Kong, New Delhi, Beijing, Seoul and others. (See Chart 1, click on image to enlarge) (Download the JETRO survey here)

ph water rates - chart 1

I bring this up after hearing the news that the private water concessionaires of the Metropolitan Waterworks and Sewerage System (MWSS) have been allowed again to jack up their rates next year. A report by the BusinessWorld said that by January 2013, the ordinary customers of Maynilad Water Services Inc. or those with a monthly consumption of 30 cubic meters will see their bill increase by ₱22.52. Meanwhile, the customers of Manila Water Co. Inc. with the same level of monthly consumption will bear a ₱6-spike in their water bill. What a way to greet the New Year for some 13.3 million people in Metro Manila and nearby provinces who get their water from Maynilad and Manila Water.

Prior to these latest increases, Maynilad has already increased its average tariff from ₱4.96 per cubic meter when it first took over the MWSS’s west zone service area in 1997 to ₱32.92 this year. During the same period, Manila Water which services the east zone has hiked its average tariff from ₱2.32 per cubic meter to ₱27.44. This means water rates have already ballooned by 564% to 1,083% since the MWSS was privatized 15 years ago. (See Chart 2, click on image to enlarge)

ph water rates - chart 2

Like in the case of the power sector, privatization and the numerous anomalous perks granted to corporations are behind the incessant rise in our water bills. The concession agreement between the MWSS and the private water concessionaires allows automatic adjustment to protect the profits the Manny V. Pangilinan group (Maynilad) and the Ayala group (Manila Water). In case you did not know, these big business groups with close ties to President Benigno Aquino III do not only control our cellphone networks, roads, electricity, hospitals and soon our LRT and MRT, but also our water.

Anyway, what are some of these automatic adjustments? Take the case of the most recent water rate hike. Maynilad and Manila Water are increasing their basic charge to reflect the movement in the inflation rate as provided under their respective concession agreements with the MWSS. The said agency’s Regulatory Office allowed a 3.2% adjustment in the consumer price index (CPI) to be applied to the private water concessionaires’ current basic charge. What does this mean? It’s a double whammy. Inflation rises because the costs of basic goods and services like food and utilities have gone up. And then water rates will further rise because of higher inflation. Another is the foreign currency differential adjustment (FCDA), which covers fluctuations in the exchange rate and affect the foreign-denominated loans of the concessionaires.

That’s what the water privatization contract stipulates. It doesn’t make sense to us poor consumers but it makes perfect sense for the Pangilinans and the Ayalas. Just look at their soaring profits to see why. In the first nine months of the 2012, Maynilad has amassed more than ₱5 billion in profits (13% higher than last year) while Manila Water has raked in ₱3.9 billion in profits (26% higher than last year).

Meanwhile, the water distribution system in Cebu City which has the fourth most costly rates in Asia is being managed by the Metro Cebu Water District (MCWD). Though not yet privatized, MCWD like the rest of the other 860 water districts nationwide has also been under constant threat of privatization. This was the intention of Senator Edgardo Angara’s Senate Bill (SB) 2997. Fortunately, the proposal has been effectively derailed by the strong campaigning of the Water System Employees’ Response (WATER), a national federation of water district employees. But the bill will certainly be revived after the midterm elections.

In the meantime, the water privateers continue to make inroads through other means. Earlier this year, the provincial government of Cebu has privatized its bulk water system through an agreement with guess who? Manila Water. Manny Pangilinan Manila Water has been on a buying spree of potable water systems around the country. Aside from the MWSS east zone and the Cebu bulk water project, his group it also controls the Boracay Island Water Co., the Laguna Water Co. (servicing the towns of Biñan, Cabuyao and Sta. Rosa) and the Clark Water Corp. in Pampanga.

The bad news is that the buying spree of our potable water systems and even water resources itself by the Pangilinans, the Ayalas, etc. and the consequent soaring user fees and marginalization of the poor will not end any time soon. In fact, the direction is the further expansion and consolidation of wealth and power of these big business groups through more privatization under the public-private partnership (PPP) of Mr. Aquino.

Just recently, the PPP Center announced that the administration’s first PPP water project – the New Centennial Water Source Project – is already in progress. This mega-project costs about ₱25 billion and is seen to provide an additional water source for Metro Manila. Needless to say, a project this big to be undertaken by a profit-oriented consortium will translate to even higher user fees for us under the privatization principle of full-cost recovery. Government has lined up a total of 14 PPP projects that could affect our access to water including four multi-purpose projects or the construction of dams for hydropower, irrigation and domestic water uses which cost some ₱50.75 billion; three hydropower projects, ₱39.24 billion; and three projects for potable water; ₱26.47 billion. The costs of the four other PPP projects have yet to be determined. (See Table at the end of this article)

These are big-ticket items that will surely provide a bottomless well of profits for those who will bag them, which are most likely the same elite families and their foreign funders and partners that have been taking advantage of past privatization projects and Aquino’s current PPP program. For us, it simply means even further exploitation and marginalization as most of us will find it increasingly harder to afford our basic human right to water for domestic use, for our livelihood and decent living.

Don’t be surprised if soon we will have not just the most expensive electricity rates in the region but the most exorbitant water rates as well. ###

Click on table to enlarge

ph water rates - table

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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

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Economy, Human rights, Poverty

Silverio Compound: A fight for the right to live

(Video by Tudla Productions)

The Silverio Compound demolition in Parañaque City was the most brutal in recent memory, leaving at least one dead and some 36 hurt, mostly by gunshot wounds. Some 33 residents and protesters were also arrested, including seven minors and two women. Twenty-nine of them were eventually charged with resistance and disobedience to a person in authority and disturbance of public order. While some of the wounded were brought to various hospitals, many others refused to seek proper medical attention out of fear of being arrested or simply due to lack of money.

Negotiations

On April 23, residents blocked certain portions of Silverio Compound as early as 5 a.m. The main barricade was set up at Purok 4, which fronts the SM Hypermart. By 7 AM, five 6×6 trucks each carrying 30 to 40 policemen from the Parañaque City Civil Disturbance Management Unit (CDMU) along with two fire trucks began arriving in the area. They were backed by several members of the police’s Special Weapons and Tactics unit (SWAT) who were armed with high-powered assault rifles. By around 7:30 AM, many residents had already occupied Sucat Road, which was meant to cause traffic and delay the demolition. A demolition team of some 50 men arrived at about 8 a.m.

Initial findings of the emergency fact-finding mission (FFM) conducted by the Bagong Alyansang Makabayan (Bayan) several hours after the bloody incident show that members of the CDMU provoked the violent confrontation. Prior to the hostility, leaders of the residents and local politicians Cong. Edwin Olivarez, former Cong. Ed Zialcita, and Councilor Eric Olivarez were negotiating with the police (talks began at around 9 a.m.) to suspend the demolition as the Silverio compound is the subject of a pending court case. The CDMU, on the other hand, was asking the protesters to free up a portion of the road to let vehicles pass.

Gun shots

Despite ongoing negotiations to suspend the demolition and willingness of residents to heed the police’s request to allow traffic flow, the CDMU prepared to turn toward the direction of the protesters at past 10 a.m. Witnesses also said they saw men secure the local politicians, which indicated that the police was getting ready to move. Thinking that the CDMU was about to disperse them, the residents started to hurl stones at the police. Eventually, the police responded by firing teargas toward the direction of the protesters. Accounts claimed that the police fired more than 10 teargas canisters.

The CDMU and SWAT members were forced to backtrack a bit but moments later, gun shots were heard, apparently fired by the police, sporadic at first and then in succession. The string of gun shots forced protesters to back down and run away while the CDMU and SWAT teams advanced and began arresting people. One person – later identified as 21-year old Arnel Leonor, a resident of Silverio Compound – was seen lying on the pavement, with what appeared to be a fatal gunshot wound in the head. He was brought to a hospital by the police many minutes later but was declared dead on arrival.

Violations galore

The atrocities committed by the police did not end in the indiscriminate shooting of the residents that killed Leonor and wounded others. Many of those who were already apprehended or subdued were still assaulted by the angry police. They were truncheoned, punched, kicked and slapped at whim by the arresting officers. These were captured by the media who were covering the incident. Worse, the arrests were arbitrary; the police picked up anyone they wanted. Some of those arrested and assaulted by the police were mere onlookers. They said they did not run away because they did not participate in the protest and thus thought will not be arrested, much less assaulted by members of the CDMU.

Arbitrary house-to-house searches were also carried out by the police to look for more people to pick up. Witnesses claimed that some police officers again fired their guns during these house searches. The demolition team, meanwhile, pushed through with the demolition of several stalls and houses.

Private profits over public housing

This bloody incident could have been prevented had Mayor Florencio Bernabe respected the original agreement between Silverio Compound residents and former Mayor Joey Marquez that the entire 9.7-hectare property will be used for socialized housing. This means that the 28,000 families occupying the property will just amortize the land to the Parañaque City government. It was Marquez who, in 2003, initiated the expropriation proceedings by virtue of an ordinance against Silverio Compound’s private owner Magdiwang Realty Corp. But Bernabe changed the plan, reduced the size for socialized housing to 3 hectares, and pushed for the construction of 32 medium-rise condos that can only accommodate some 1,900 families.

Bernabe is pushing for a public-private partnership (PPP) project for Silverio Compound, eyeing big developers including SM Development Corp. (SMDC) to build the medium-rise buildings and other infrastructures in the area. The remaining 6.7 hectares of the property will also be devoted for commercial development in a bid to entice private investors in the city. Clearly, this is a case of the local government prioritizing private profits over the people’s basic right to shelter.

Impunity

The blatant disregard for human rights displayed by the police involved in the incident speaks volume of how deep the culture of impunity has been ingrained among our law enforcers and security forces. To end this culture of impunity, those who are involved, directly and indirectly, and not only members of the SWAT and CDMU but even police and civilian officials, in the tragic Silverio Compound demolition must be held liable.

What is alarming is that recent developments point to the regrettable possibility of a whitewash. National officials, for instance, are now seemingly conditioning the public mind that Leonor could have died from a bullet fired by one of the protesters. Supposedly, one of those arrested tested positive for gunpowder. Only an independent probe of the incident, including a re-autopsy of Leonor’s body by an independent party, could provide a more credible finding.

There is no doubt that the police used excessive force in enforcing the demolition order. Their abuses have been well-documented by media outfits who covered the incident and their identities could be easily established. Bernabe, on the other hand, clearly abused his power in insisting to implement the demolition. There are more than enough grounds to immediately make these people accountable.

Call for support

While the residents of Silverio Compound remain undaunted by oppression and brutality, they need all the support that they can muster to ensure that justice will be served. At the same time, they also need assistance – medical, legal, etc. – to help them cope with the tragedy inflicted on them by institutions that are supposed to uphold their rights and promote their interests.

The people of Silverio Compound, like those in other urban poor communities who have been dislocated or threatened by PPP projects that only profit the few, are fighting not only for their homes but for their right to live as human beings. All those who value this very fundamental human right could not allow them to fail. (end)

Written for Paninindigan, Bayan’s official publication (click here)

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