BUSINESS HEADLINES THIS PAST WEEK...

PH BUSINESS RANKING DROPS; TRUCK BAN CITED 

OCT 29 --PHOTO: Makati skyline ---The Philippines’ ranking dropped nine spots from 86 in 2014 to 95 in the “Doing Business 2015″ report of the World Bank, released Wednesday. In the full report, the Philippines’ “trading across borders” system was cited as making it more difficult to do business in the country “because of a new city ordinance restricting truck traffic in Manila.” 

The truck ban implemented in Manila last February has since aggravated traffic and port congestion in the metropolis. Although the Philippines ranked 108 in last year’s report, the World Bank adjusted its rankings based on 10 topics and data corrections. The country’s ranking declined or remained the same under all the 10 topics, especially trading across borders, which dropped to 65 from 53. Substantial drops were also seen in protecting minority investors (154 in the 2015 report, from 143), starting a business (161, from 54), paying taxes (127, from 121) and getting credit (104, from 99). Singapore remained the most business-friendly country. THIS IS THE FULL REPORT. (SCREENGRAB GRAPH)

ALSO: RP investments status falls 9 pts in WB poll  

OCT 30 --The Philippines slipped nine spots from last year to place 95th in the latest World Bank ranking of the most business friendly nations called Doing Business 2015: Going Beyond Efficiency which was released yesterday and which was the result of uncoordinated government regulations highlighted by the imposition of a truck ban in Manila which the World Bank called “restrictive.” The Manila city government had imposed the truck ban since last February in response to public clamor to ease the daily traffic jams in the city which had resulted in huge losses for the economy.

Business groups, however, said restricting the travel of cargo trucks in the city impeded the flow of goods which has been rising as a result of a growing economy. Manila lifted the ban recently on the behest of the national government but business groups said the government should do more in improving the road system to keep up with the growing economy. A major cause in the drop of the country’s ranking from last year’s 86th place was the 12 points slide in the trading across borders category and an 11 points drop in the ability of the country to protect minority investors. The World Bank said starting a business in the country also requires 16 procedures and takes an average 34 days and costs 16.6 percent of income per capita and requires paid-in minimum capital of 3.6 percent of income per capita. Globally, the World Bank said the Philippines stands at 161st in the ranking of 189 economies on the ease of starting a business. .* READ MORE...

ALSO: Doing business in Phl moves up in ranking based on a revised methodology adopted by the WB. 

OCT 30 --The Philippines has become an easier place to do business, according to a World Bank report ranking 189 countries based on ease of doing business. In its Doing Business (DB) 2015 report, the World Bank Group ranked the Philippines 95th from the previous 86th. The ranking was an improvement based on a revised methodology adopted by the WB. The World Bank Group, which includes the International Finance Corp. (IFC), releases the much-anticipated report annually. WB Global Indicators Group director Augusto Lopez Claros explained that the new ranking methodology includes new accounting and computing standards. Claros said that even under the new ranking methodology, the Philippines still reflected growth.

“There is no ambiguity, the Philippines has improved its ranking, it is closer to the frontier,” he said in a teleconference press briefing yesterday. The “frontier” he was referring to means “perfection and translated to 100 as the highest score.” The study covers 189 countries, and based on the old methodology, the Philippines was ranked 108th in 2014 from 133rd in 2013. In the old methodology, the lower ranking or number means better performance. Based on the new methodology, Singapore emerged as the best performer. The “Distance to the Frontier (DTF)” methodology puts emphasis on how each country performed as against how countries performed against their neighbors. In Southeast Asia, Singapore ranked number one, followed by Malaysia, Thailand, Vietnam, the Philippines, Brunei, Indonesia, Cambodia and Laos. Out of the 10 indicators set by the World Bank, the Philippines got negative marks for five. Indicators with negative marks were: protecting investors, dealing with construction permits, getting credit, trading across borders and enforcing contracts. *READ MORE...

ALSO: P2.6t nat’l budget OK’d amid protest  

NOV 2 ---Redefined ‘savings’ give Aquino power to divert funds mid-year ---THE House on Wednesday approved without cuts the P2.606-trillion national budget on third and final reading, including P4.7 billion in errata and special provisions that would allow President Benigno Aquino III to impound funds and declare these as savings by mid-year, and use them for other projects. The final vote count was 198-18 without abstentions, but opposition lawmakers protested the huge allocations for local government units under Interior and Local Governments Secretary Manuel Roxas II, the presumptive standard bearer of the ruling Liberal Party. Pointing to some P423 billion allocated for Assistance to Local Government Units, the lawmakers declared that the national spending plan for 2015 was an election budget.

At the plenary Wednesday, the House leadership could not explain fully as to where the P423 billion was taken from, House Senior Deputy Minority Leader and Bayan Muna Rep. Neri Colmenares said. To end the debate, the majority moved to vote on the budget. “The House small panel of the mother committee House committee on appropriations may have rejected the errata-proposed allocations but these were as good as restored because of the redefinition of savings,” said ACT Teachers Rep. Antonio Tinio. Tinio said special provisions were inserted in the General Appropriations Act that would allow the President to “reprioritize” projects mid-year. The previous GAAs allowed the President to impound the budgets only by year-end when projects had been implemented and completed. Panel chairman Davao City Rep. Isidro Ungab said the entire errata that contained several amendments only totaled P4.7 billion, and that any claim otherwise was “completely erroneous and completely false.” But Tinio said this did not matter because the President now had the power to divert funds from approved projects by the middle of the year. “While the panel, led by LP officials, rejected the deduction [of P13.4 billion from the pension and gratuity fund], we are worried that this would be as good as restored if the President uses his powers granted by the redefinition of savings,” Tinio said. * READ MORE...

ALSO: Palace accused of cornering P393b as savings; ‘Sand bagging’ bloats budget 

NOV 1 --THE Palace has sandbagged P393 billion in funds that it can declare as savings by the middle of 2015 by inserting bloated items in the national budget, opposition lawmakers charged Friday. Abakada Rep. Jonathan dela Cruz and ACT Teachers Rep. Antonio Tinio said the 269 pages of errata that were inserted into the budget, and the redefinition of the term “savings” gave President Benigno Aquino III a blank check “to play around with the P2.606 trillion national budget.”  “The redefinition of savings is a clear defiance of the Supreme Court rulings on the Disbursement Acceleration Program, parts of which were declared unconstitutional by the high court, contrary to the House leadership’s claims that it was in conformity to the SC rulings,” Dela Cruz said. “The errata opened a can of worms because showed how the sandbagging was being done by bloating the budget without any explanation as to how the allocations would be used,” Tinio said. “Is this what they call transparency in the Aquino administration’s straight path?”

The lawmakers said their suspicion of the sandbagging was confirmed when the House leadership “railroaded” the approval of the budget on third and final reading. This stopped the opposition from questioning the errata and the redefinition of savings. Some 198 administration lawmakers, led by members of the ruling Liberal Party and President Aquino’s allies, voted in favor of the passage, 18 voted against, with no abstentions. “In the game of Poker, sandbagging is to deceive (one or more opponents) into remaining in the pot by refraining from betting on a strong hand, then raising the bet in a later round,” Dela Cruz said. “In short, the Palace bloated the budget that the President can impound by mid-year in defiance of the Supreme Court’s ruling and the definition of savings as funds that can only be realigned by yearend when the agencies have supposedly completed the projects or the agencies have failed to use the amount allocated for such projects,” Dela Cruz said.

Dela Cruz said by redefining the definition of savings, the Palace could get around the Supreme Court ruling that augmentation of funds that did not pass through congressional scrutiny is unconstitutional. He said the Constitution also clearly prohibits the “cross-border transactions” but that these illegal acts were “legitimized” by the redefinition of savings. “The Palace is trying to sandbag us by bloating the budget that would be impounded and realigned next year and declare these funds as ‘savings’ that would be under the complete control of President Aquino following Congress’ redefinition of savings,” Dela Cruz said. * READ MORE...

ALSO: Port congestion is a disease  

OCT 20 ---A serious problem affecting the nation’s economy today is the ever-working congestion in the ports of Manila. To understand the congestion problem, one has to use the analogy of an infectious disease like Ebola. One has to first study how the problem began (Ebola patient 1) and from there, trace how it affected the other parts of the problem, leading to its full epidemic proportion that may lead to a pandemic, leaving this government with staggering inflation issues and prices of prime commodities soaring through the roof and finally leading to an energy crisis. The Philippines is vulnerable because the majority of prime commodities here are imported via sea freight through its ports, which are based in Manila. Costly delays Because of a series of events, these containers were not released on time, leading to congestion in the ports that has led to delays in unloading international vessels, many of which bypassed Manila in the last few weeks.

The reasons why initially there were some 78,000 containers trapped in the ports of Manila: 1) The primary cause of the port congestion problem (Ebola patient 1) was the daylight truck ban imposed by the City of Manila. Trucks that regularly picked up containers from the port for delivery to end-users in and around Metro Manila and returned empty containers were suddenly stopped from their regular routine. Thus began the accumulation of containers at the port, as turnaround time was hindered with operations only happening at night. The factories of exporters and importers as well as the custom brokers and truckers were stunned by the situation and took a long time to react, leading to the slowing down of the logistics chain in and out of the port. * READ MORE...

ALSO: Home, car loans surged in 2nd quarter  

OCT 29 ---Strong home and car sales fueled a healthy surge in consumer loans in the second quarter of the year despite reports by banks that credit standards have been tightened to avoid excess risks. Documents released by the Bangko Sentral ng Pilipinas (BSP) showed that consumer loans rose by nearly a fifth. As a proportion to the total loan portfolio of universal, commercial and thrift banks, credits to households still remained one of the lowest in the region. “As part of efforts to promote high credit standards, the BSP monitors the quality of consumer and other types of bank lending,” the BSP said in a statement. Consumer loans by universal, commercial and thrift banks reached P803.3 billion at the end of the second quarter this year, an increase of 18.1 percent from P680.4 billion during the same period last year.

Quarter on quarter, loans were up 9.3 percent from the P735.1 billion posted in the previous quarter. The increase was a result of the continued growth in investments of households in residential real estate and auto loans. Credit card loans also rose, although at a slower pace during the period. Real estate loans made up the biggest portion of consumer credits, reaching a total of P348.16 billion at the end of June, rising 18.34 percent year on year. Auto loans were the second-largest chunk, reaching P206.74 billion. This represented a growth of 17.34 percent from June of last year. Credit card loans, the third-largest component, rose by just 4.53 percent to P157.22 billion. While consumer lending expanded, the ratio of the banks’ non-performing consumer loans to total loans to this sector slightly decreased to 5 percent in end-June from 5.2 percent a quarter earlier. Commercial banks and thrift banks also set aside loan-loss reserves of 67 percent of their non-performing consumer loans as a safety net against consumer credit risks. As a percentage of total lending, the 16.5-percent consumer loan exposure of Philippine banks remained low compared to its peers in Southeast Asia. In end-June this year, the consumer credit exposure in Malaysia stood at 62.2 percent, 28.4 percent in Indonesia, 27.5 percent in Thailand and 25.5 percent in Singapore.THIS IS THE FULL REPORT

ALSO: Largest pork barrel ever: P21B in 2015  

I find two things in our country getting more and more amazing: (1) the skill of this Administration in hiding its nefarious schemes; and (2) the gullibility of the media, and therefore the public, in believing such government lies. Consider the pork-barrel issue that has engulfed our nation starting mid-2013. It resulted in a Supreme Court decision last November declaring it illegal. Based on allegations that they have pocketed pork-barrel funds, three senators have been arrested and jailed. Last week, the Congress passed its most important legislation for the year, the 2015 budget of P2.6-trillion. It won an overwhelming 197 votes, against only 27 against it—naturally, as this column explains below. There was hardly a protest against it – despite its huge pork-barrel allocation. President Benigno Aquino 3rd and his officials have been saying in the Goebbels-style of big-lie-repeated-again-and-again: There is no more pork barrel in the budget.

Next to his ‘we-are-fighting-graft’ canard, that is Mr. Aquino’s biggest deception right now. In fact, the pork barrel in the 2015 budget is the biggest we’ve seen so far, at P21 billion. It was P16 billion for each of 2011 and 2012, and P20 billion in 2014. (The pork-barrel releases were drastically reduced to P10 billion in 2013 because of the Supreme Court’s order in September that year to stop such releases pending the case on its constitutionality.) Different names for different rackets --Imagine that: The high court, and the entire nation I would think, scolded Aquino and ordered him to stop having pork barrel in the budget. Yet, he has continued to do so, and even made it bigger.Pork-barrel releases in the past four administrations had never gone beyond P10 billion per year. The huge amount of taxpayer’s money Aquino has been giving local congressmen explains why the Congress has been the most servile ever to a president.

The pork barrel in the 2015 budget certainly fits one of the Supreme Court’s definitions of it: “An appropriation of government spending meant for localized projects and secured solely or primarily to bring money to a representative’s district.” Its worst aspect has been the siphoning of its proceeds into congressmen’s pockets, through fictitious projects and NGOs. There are no systems in place preventing such type of graft for the 2015 pork barrel. Through the pork-barrel fund in the 2015 budget, the country’s 1,629 municipalities and cities are allocated P12 to P15 million each. It’s a powerful carrot-and-stick scheme for ensuring district congressmen’s support for the Administration, since actual releases can be delayed for any reason Aquino may concoct if a particular House Representative doesn’t toe his line. A new provision in the 2015 even specifies that if the allocation isn’t used in the year, it will be reverted to the national treasury, and can be used only if authorized by another legislation. Now you understand why 197 congressmen voted for the 2015 budget, don’t you? * READ MORE...

ALSO GMA NEWS OPINION: Savings, errata and postmodern politics 

OCT 29 --I don’t know if I am going to get away with this, or if my colleagues in political science will agree, but I am going to reiterate a bold claim I have been making a long time ago, but now given more proof by recent developments. I believe that the kind of politics that we have right now is postmodern. I mean, we have been seeing a government, whose very existence is supposed to rest on the stability of laws, particularly the Constitution, and of institutions, such as the Supreme Court, yet its President and Congress are at the forefront of undermining both. In theory, the rubric we use to measure the stability of constitutional democracies lie on how they endure the turbulence of politics. Modern states rely on the certainty of laws and the predictability of institutional rules and norms. This is precisely why the discipline of political science has imported methodologies from the natural sciences in its inquiry into the rather stochastic, random, chaotic and probabilistic nature of politics. This is to increase the predictability of politics, which in turn will heighten its controllability.

But as we all know, politics remain as unpredictable and unstable. This is why political communities have rested on the majestic discourse of laws that are encoded and encapsulated in written edicts. This is also why the volatility of Congress and the whims and caprices of the Executive have to be checked by a steady, detached and dispassionate domain that is found in the halls of the Supreme Court. The Supreme Court is the branch of government whose role is to check the adventurism and unpredictability of politics, brought about by the exigencies and pragmatic consideration of legislative partisanships and executive prerogatives. The Court has always been treated as one where the grand narrative of modern statecraft lies. It is a place where this narrative takes shape and emerges to impose its final determination of what would make our political community safe and secure from the risks and uncertainties brought about by the excesses and failures of executives and legislatures. It has been referred to as the last bulwark of democracy. * CONTINUE READING...


READ FULL REPORTS HERE:

PH business ranking drops; truck ban cited


MAKATI SKYLINE

MANILA, NOVEMBER 3, 2014 (INQUIRER) POSTED OCTOBER 29, 2014 Kristine Angeli Sabillo @KSabilloINQ INQUIRER.net –The Philippines’ ranking dropped nine spots from 86 in 2014 to 95 in the “Doing Business 2015″ report of the World Bank, released Wednesday.

In the full report, the Philippines’ “trading across borders” system was cited as making it more difficult to do business in the country “because of a new city ordinance restricting truck traffic in Manila.”

The truck ban implemented in Manila last February has since aggravated traffic and port congestion in the metropolis.

Although the Philippines ranked 108 in last year’s report, the World Bank adjusted its rankings based on 10 topics and data corrections.

The country’s ranking declined or remained the same under all the 10 topics, especially trading across borders, which dropped to 65 from 53.

Substantial drops were also seen in protecting minority investors (154 in the 2015 report, from 143), starting a business (161, from 54), paying taxes (127, from 121) and getting credit (104, from 99).

Singapore remained the most business-friendly country.

PH economy overview and business rankings


Screengrab from http://www.doingbusiness.org

FROM THE TRIBUNE

RP investments status falls 9 pts in WB poll Written by Tribune Wires Thursday, 30 October 2014 00:00


The 12th annual report finds that the 10 economies with the most business-friendly regulatory environments are Singapore; New Zealand; Hong Kong SAR, China;Denmark; the Republic of Korea; Norway; the United States; the United Kingdom;Finland; and Australia. The report measures the ease of doing business in 189 economies based on 11 business-related regulations, including business start-up, getting credit, getting electricity, and trading across borders. The report does not cover the full breadth of business concerns, such as security, macroeconomic stability, or corruption. This year’s report, “Doing Business 2015: Going Beyond Efficiency,” uses new data and methodology in three areas: resolving insolvency, protecting minority investors, and getting credit. SOURCE: http://www.doingbusiness.org/

The Philippines slipped nine spots from last year to place 95th in the latest World Bank ranking of the most business friendly nations called Doing Business 2015: Going Beyond Efficiency which was released yesterday and which was the result of uncoordinated government regulations highlighted by the imposition of a truck ban in Manila which the World Bank called “restrictive.”

The Manila city government had imposed the truck ban since last February in response to public clamor to ease the daily traffic jams in the city which had resulted in huge losses for the economy.

Business groups, however, said restricting the travel of cargo trucks in the city impeded the flow of goods which has been rising as a result of a growing economy.

Manila lifted the ban recently on the behest of the national government but business groups said the government should do more in improving the road system to keep up with the growing economy.

A major cause in the drop of the country’s ranking from last year’s 86th place was the 12 points slide in the trading across borders category and an 11 points drop in the ability of the country to protect minority investors.

The World Bank said starting a business in the country also requires 16 procedures and takes an average 34 days and costs 16.6 percent of income per capita and requires paid-in minimum capital of 3.6 percent of income per capita.

Globally, the World Bank said the Philippines stands at 161st in the ranking of 189 economies on the ease of starting a business.

*
The Philippines was fifth economy in the Southeast Asian Region on the ease of doing business which is even below Vietnam which is ranked 78th and below the average score of 63.19 for the region as it garnered a 62.08 percent average across all indicators.

World Bank Philippines Senior Program Manager Hans Shrader said the Philippines moved up its rank in the Asean by one notch — leaving behind Brunei Darussalam with global ranking of 101st; Indonesia at 114th; Cambodia at 138th; Lao PDR at 148th; and Myanmar at 177th.

Surpassing the Philippines in the regional level are: Singapore, which got the highest rank in the global ranking; followed by Malaysia at rank 18th; Thailand at 26th; and Vietnam at 78th.

The ease of doing business measures regulations in the local economy through 10 indicators affecting the cycle of a business include: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

It was noted that the Philippines improved its ranking in five areas of doing business and slipped its ranking in other five areas.

The country’s top three global rankings are in the areas of getting electricity at 16th place; resolving insolvency at 50th place; and trading across borders at 65th place.

Despite the trading across borders indicator is among the country’s top ranking, the World Bank and IFC report specified that the truck ban has affected the ease of doing business in the country.

“In the Philippines, trading across borders became more difficult because of a new city ordinance restricting truck traffic in Manila,” the Report noted.

On the other hand, the country’s bottom three rankings include paying taxes at rank 127; protecting investors at rank 154; and starting a business at rank 161.

To further improve the country’s ranking in the next Doing Business Report, Shrader mentioned opportunities for the Philippines to improve such as reducing procedures in business registration and expanding reforms in construction permits, getting credit, protecting minority investors, and enforcing contracts.

Meanwhile, National Competitiveness Council (NCC) co-chairman for private sector Guillermo Luz still said the Philippines is on-track in achieving its goal of improving its ease of doing business ranking up to the upper third of the report, as well as enhancing the business climate in the country.

Luz noted that the country started at the bottom third in 2011 Report placing at rank 148 among 183 countries.
The Philippines further moved up to rank 136 in the 2012 Report; it slightly slipped to 138th place in the 2013 Report; and leaping by 30 notches in 2014 report to 108, the biggest improvement in the world.

“The Philippines is closer to the frontier this year… And compared to the ranking last year, there is no ambiguity, the Philippines has improved,” said Washington-based World Bank Development Economics-Global Indicators Group Director Augusto Lopez Carlos in a video conference with the Southeast Asian countries also Wednesday.

The World Bank, on the other hand, annually revised the previous report in which the Philippines ranked 86th in the Doing Business Report 2014.

FROM PHILSTAR

Doing business in Phl moves up in ranking based on a revised methodology adopted by the WB.  By Ted Torres (The Philippine Star) | Updated October 30, 2014 - 12:00am 0 1 googleplus0 0


MAKATI BUSINESS DISTRICT

MANILA, Philippines - The Philippines has become an easier place to do business, according to a World Bank report ranking 189 countries based on ease of doing business.

In its Doing Business (DB) 2015 report, the World Bank Group ranked the Philippines 95th from the previous 86th. The ranking was an improvement based on a revised methodology adopted by the WB.

The World Bank Group, which includes the International Finance Corp. (IFC), releases the much-anticipated report annually.

WB Global Indicators Group director Augusto Lopez Claros explained that the new ranking methodology includes new accounting and computing standards.

Claros said that even under the new ranking methodology, the Philippines still reflected growth.

“There is no ambiguity, the Philippines has improved its ranking, it is closer to the frontier,” he said in a teleconference press briefing yesterday. The “frontier” he was referring to means “perfection and translated to 100 as the highest score.”

The study covers 189 countries, and based on the old methodology, the Philippines was ranked 108th in 2014 from 133rd in 2013. In the old methodology, the lower ranking or number means better performance.

Based on the new methodology, Singapore emerged as the best performer.

The “Distance to the Frontier (DTF)” methodology puts emphasis on how each country performed as against how countries performed against their neighbors.

In Southeast Asia, Singapore ranked number one, followed by Malaysia, Thailand, Vietnam, the Philippines, Brunei, Indonesia, Cambodia and Laos.

Out of the 10 indicators set by the World Bank, the Philippines got negative marks for five. Indicators with negative marks were: protecting investors, dealing with construction permits, getting credit, trading across borders and enforcing contracts.

* Positive marks were: starting a business, getting electricity, registering property, paying taxes and resolving insolvency.

In the “starting a business” indicator, the Philippines ranked worst with 16 procedures versus Singapore with only three procedures.

Claros said that improvements in resolving insolvency, getting electricity, registering property and paying taxes have enhanced the Philippines’ ranking from 108 in 2014 to 95 in 2015.

“Measured against global best practice or distance to frontier in business regulations, the country’s performance (62.08) puts the Philippines in the same range as Vietnam (64.42) and Indonesia (59.15),” the World Bank official said.

National Competitive Council head Guillermo Luz said that they were quite happy with the DB 2015 results.

“We started from the bottom 30 countries few years back, the Philippines is now number five from number eight in the region,” Luz said in a press briefing.

FROM THE MANILA STANDARD

P2.6t nat’l budget OK’d amid protest By Christine F. Herrera, Maricel V. Cruz | Oct. 30, 2014 at 12:01am

Redefined ‘savings’ give Aquino power to divert funds mid-year

THE House on Wednesday approved without cuts the P2.606-trillion national budget on third and final reading, including P4.7 billion in errata and special provisions that would allow President Benigno Aquino III to impound funds and declare these as savings by mid-year, and use them for other projects.

The final vote count was 198-18 without abstentions, but opposition lawmakers protested the huge allocations for local government units under Interior and Local Governments Secretary Manuel Roxas II, the presumptive standard bearer of the ruling Liberal Party.

Pointing to some P423 billion allocated for Assistance to Local Government Units, the lawmakers declared that the national spending plan for 2015 was an election budget.

At the plenary Wednesday, the House leadership could not explain fully as to where the P423 billion was taken from, House Senior Deputy Minority Leader and Bayan Muna Rep. Neri Colmenares said.

To end the debate, the majority moved to vote on the budget.

“The House small panel of the mother committee House committee on appropriations may have rejected the errata-proposed allocations but these were as good as restored because of the redefinition of savings,” said ACT Teachers Rep. Antonio Tinio.

Tinio said special provisions were inserted in the General Appropriations Act that would allow the President to “reprioritize” projects mid-year.

The previous GAAs allowed the President to impound the budgets only by year-end when projects had been implemented and completed.

Panel chairman Davao City Rep. Isidro Ungab said the entire errata that contained several amendments only totaled P4.7 billion, and that any claim otherwise was “completely erroneous and completely false.”

But Tinio said this did not matter because the President now had the power to divert funds from approved projects by the middle of the year.

“While the panel, led by LP officials, rejected the deduction [of P13.4 billion from the pension and gratuity fund], we are worried that this would be as good as restored if the President uses his powers granted by the redefinition of savings,” Tinio said.

* Ungab confirmed that one item in the errata submitted by the Budget Department was the reduction in the pension and gratuity fund by P13.4 billion, but this was not approved.

Earlier, Budget Secretary Florencio Abad branded as “exaggerated” the Makabayan bloc’s claim that the errata would affect thousands of pensioners but did not say how much exactly was taken out from the pension fund.

Abad said the DBM made sure no pensioner or retiree will be adversely affected.

Ungab said it remains uncertain whether the appropriated amount for the pension fund will be fully used next year, since there was no list of retirees.

But Garbriela Rep. Luzviminda Ilagan disputed the claims of Abad and Ungab.

“It does not follow that if DBM has no list of 2015 retirees, nobody will retire in 2015. The bureaucracy is the biggest employer in the country. How lame their excuses are. Do they take us as fools? Look a the contradictory statements: ‘nobody will be adversely affected but we have no list.’ Hello?” she said.

Tinio said Ungab’s admission confirmed that the errata was padded by at least P13.4 billion, contrary to Abad’s claims.

Tinio said the DBM has bloated the budget for pension and gratuity by P13.4 billion so they knew there was a huge budget that could be diverted to Palace-preferred projects.

“In the errata submitted by the DBM, almost all of the agencies increased their budgets when compared with the National Expenditure Program while a total of P13.4 billion was deducted from the pension and gratuity fund,” Colmenares had said.

“We should subject these changes to discussion and approval of the whole House instead of merely approving it en toto on third reading,” he added.

“Why have they taken so much from the pensions? How many pensioners would suffer from this? It is as if the Aquino government has no concern for senior citizens and government workers,” he added.

Ungab said the small panel was careful in approving or disapproving amendments and realignments.

Aside from the pension and gratuity fund reduction, the panel also rejected the P8 billion allocation for the Bangsamoro contingent fund.

“The small committee did not recommend the increase of P8 billion for contingent fund precisely because it was never discussed and the Bangsamoro Basic Law law not yet passed,” Ungab said.

He said the House could not appropriate funds for something that is not there yet since the Bangsamoro Basic Law that will create the Bangsamoro political entity has yet to be approved by the chamber.

“Among the significant changes are the amounts allocated to be used for APEC (Asia Pacific Economic Cooperation) - P3.28 billion, Bureau of Customs- P998.8 million, Department of Tourism P296.9 million, Department of Trade and Industry - P93.7 million, Commission on Human Rights -P34 million, Commission on Elections - P3 million, Department of Enviroment and Natural Resources - P53.5 million, Partido State University -P5 million and Grassroots Participatory Budgeting Program -P1.790 million,” Ungab said.

“We made sure that the amendments we approved were within the budget submitted and were actually tackled not only during committee but also during plenary as well,” he said.

Colmenares, Tinio, Buhay party-list Rep. Lito Atienza, Abakada party-list Rep. Jonathan de la Cruz and others opposed the approval of the budget, saying the errata were illegal because they did not go through the committee and plenary delierations.

Colmenares said the 2015 national budget was “not a budget for the people,” adding that the more than P4 billion in lump sum funds included in the budget legalizes the Disbursement Acceleration Program, which was declared unconstitutional by the Supreme Court.

The following are the various departments and their respective allocations, Department of Education, P365 billion; Department of Public Works and Highways, P300.5 billion; Department of

National Defense, P144 billion; Department of the Interior and Local Government, P141.4 billion; Department of Social Welfare and Development, P109 billion; Department of Health, P102.2 billion; Department of Agriculture, P88.8 billion; Department of Transportation and Communication, P59.5 billion; Department of Environment and Natural Resources, P21.3 billion, and the judiciary led by the Supreme Court, P20.3 billion.

Palace accused of cornering P393B as savings; ‘Sand bagging’ bloats budget By Christine F. Herrera | Nov. 01, 2014 at 12:01am


Jonathan dela Cruz, Antonio Tinio

THE Palace has sandbagged P393 billion in funds that it can declare as savings by the middle of 2015 by inserting bloated items in the national budget, opposition lawmakers charged Friday.

Abakada Rep. Jonathan dela Cruz and ACT Teachers Rep. Antonio Tinio said the 269 pages of errata that were inserted into the budget, and the redefinition of the term “savings” gave President Benigno Aquino III a blank check “to play around with the P2.606 trillion national budget.”

“The redefinition of savings is a clear defiance of the Supreme Court rulings on the Disbursement Acceleration Program, parts of which were declared unconstitutional by the high court, contrary to the House leadership’s claims that it was in conformity to the SC rulings,” Dela Cruz said.

“The errata opened a can of worms because showed how the sandbagging was being done by bloating the budget without any explanation as to how the allocations would be used,” Tinio said. “Is this what they call transparency in the Aquino administration’s straight path?”

The lawmakers said their suspicion of the sandbagging was confirmed when the House leadership “railroaded” the approval of the budget on third and final reading.

This stopped the opposition from questioning the errata and the redefinition of savings.

Some 198 administration lawmakers, led by members of the ruling Liberal Party and President Aquino’s allies, voted in favor of the passage, 18 voted against, with no abstentions.

“In the game of Poker, sandbagging is to deceive (one or more opponents) into remaining in the pot by refraining from betting on a strong hand, then raising the bet in a later round,” Dela Cruz said.

“In short, the Palace bloated the budget that the President can impound by mid-year in defiance of the Supreme Court’s ruling and the definition of savings as funds that can only be realigned by yearend when the agencies have supposedly completed the projects or the agencies have failed to use the amount allocated for such projects,” Dela Cruz said.

Dela Cruz said by redefining the definition of savings, the Palace could get around the Supreme Court ruling that augmentation of funds that did not pass through congressional scrutiny is unconstitutional.

He said the Constitution also clearly prohibits the “cross-border transactions” but that these illegal acts were “legitimized” by the redefinition of savings.

“The Palace is trying to sandbag us by bloating the budget that would be impounded and realigned next year and declare these funds as ‘savings’ that would be under the complete control of President Aquino following Congress’ redefinition of savings,” Dela Cruz said.

* Davao City Rep. Isidro Ungab, chairman of the House committee on appropriations, admitted that the redefinition of savings would empower the President to impound budgets during the first semester of next year.

Ungab said the redefinition of savings was meant to conform to the recent rulings of the Supreme Court on the DAP and to make the government operations “effective and practical.”

Among the issues that Dela Cruz tried to raise before the plenary but was barred by the House leadership from doing so were the huge allocations for items that did not have details and were thus “sandbagged by the Palace.”

Of the P393.06 billion unitemized allocations, Dela Cruz said the biggest items were the P200 billion earmarked for unprogrammed funds and P118 billion in Miscellaneous Personnel Services Benefit Funds that did not have details.

Dela Cruz said the other questionable and sandbagged items were P2 billion allocation for tablets for 12 government agencies, including the Departments of Health, Social Welfare and Development, Agriculture, Labor, Transportation and Communications and the Office of the Presidential Adviser on the Peace Process.

The P2 billion, Dela Cruz said, was on top of the P1 billion allocated for the same agencies for e-commerce or upgrading of the IT systems.

“That’s P3 billion for tablets and IT systems that did not have a breakdown as to how many government officials and employees would be equipped with tablets and what these tablets are for. How did they arrive at the amount of P2 billion or P1 billion? How come our 600,000 teachers and non-teaching personnel were not included in being equipped with tablets?” Dela Cruz said.

“How come the DSWD will be allocated additional funds for tablets when it has not submitted audited reports on the previous billions in controversial Conditional Cash Transfer program? It even has P65-billion allocation for CCT next year. The Commission on Audit is really useless, because up to now, it hasn’t audited the CCT programs of the DSWD,” Dela Cruz said.

He said another questionable item was the earmarking of some P3.281 billion in International Commitment Fund for the Asia Pacific Economic Cooperation meetings next year.

“Why? How many more Iloilo Convention Centers do we need for APEC meetings? Where will the government use the P3.281 billion?” said Dela Cruz, referring to the P700-million ICC project, a pet project of Senate President Franklin Drilon, for which he was charged with plunder and graft and corruption before the Ombudsman allegedly due to overpricing.

The ICC was partly funded by Drilon’s Priority Development Assistance Fund.

Dela Cruz also questioned the allocation of close to P1 billion for “new positions” in the same 12 government agencies that did not carry any list of how many positions were to be created per agency.

“Under the General Appropriations bill, each agency was required to submit proposed budgets for Personnel Services and the new positions were supposed to have been embedded in the agencies but this had been centralized by the Department of Budget and Management that refuses to give us the listing,” Dela Cruz said.

The same goes with the unfilled position, which Tinio said would amount to P15 billion, again with no details on how man positions would be filled.

Dela Cruz said some P118 billion in MPSBF (miscellaneous personnel services benefit funds) was earmarked for pensions, gratuity and retirement benefits of military generals.

“How many military generals would be retiring next year? We have no idea because the DBM keeps us in the dark,” Dela Cruz said.

He said the MPSBF also included the separation benefits of employees that would be displaced under the government’s rationalization program or some non-performing agencies that needed to be abolished.

The other items that Dela Cruz found questionable were the P988 million for the Bureau of Customs; P428 million for NAIA repair; P1.765 billion for the completion of rehabilitation and capacity expansion of the Metro Rail Transit 3; P1.55 billion for overhauling, rehabilitation of the common station of Light Railway Transit 1 North Extension; P977 million for repair and rehabilitation of LRT 1 and LRT 2; and P54.3 billion for the equity buyout of the MRT 3.

“We vow to bring this sandbagging issue and redefinition of savings to the Supreme Court,” Dela Cruz said.

A member of the independent minority bloc on Friday criticized “the undue haste” in passing the 2015 national budget 2015, with billions of pesos in lump sum funds under the Office of the President left unscrutinized.

Buhay party-list Rep. Lito Atienza lambasted the House leadership for banking on the tyranny of numbers to force a vote to pass the budget.

“I fear for our democracy and our democratic processes. Last night, it was not democracy at work when the House leadership railroaded the passage of the 2015 national budget. Only the small committee created to go over the amendments know what these amendments were and the billions of pesos that were part of the errata submitted by the Department of Budget and Management,” Atienza said in a statement.

“All these should be reported to the body and re-discussed on the floor, scrutinized line by line, item by item so the people will know what we are tackling here. We ourselves don’t even know what we are approving here,” Atienza added.

On Wednesday, the House approved on third and final reading the 2015 national budget by a vote of 198-18 vote.

Atienza pointed out that since Monday, there was no quorum and the sessions were adjourned.

“Now, all of a sudden, on the last session day, almost all the congressmen were present and we were given merely one hour to go over three volumes of budget and expenditure programs. Why are they in such a rush to approve the budget? There are still two months before the end of the year, more than enough opportunities to inject transparency and clarity in its approval,” Atienza added.

“Until now, the DBM has not answered our queries as to where the Disbursement Acceleration Program (DAP) funds were allocated. This, even after the DAP was struck down by the Supreme Court! As it is, we have no way of checking if there was no double allocation done since we did not even see the small committee’s report,” Atienza said. With Maricel V. Cruz

Port congestion is a disease Fernando Martin “Fern" O. Peña @inquirerdotnet 12:45 AM | Monday, October 20th, 2014

The effects of the congestion at two Manila ports have been disastrous both to big business and the common folk. It had raised shipping costs, led to canceled orders, and idled about 20,000 workers in special economic zones, officials of the Philippine Economic Zone Authority (Peza) said in a Senate hearing Wednesday. And even before any mitigation effort could have an effect, the operators of the Port of Manila and the Manila International Container Port already face a fresh deluge of freight containers ahead of the holiday season, trade officials also told senators. The Senate inquiry was in response to mounting complaints from the business sector who had been blaming the backlog on the expanded daytime truck ban imposed by the Manila City government. INQUIRER FILE PHOTO

(First of two parts)

A serious problem affecting the nation’s economy today is the ever-working congestion in the ports of Manila.

To understand the congestion problem, one has to use the analogy of an infectious disease like Ebola. One has to first study how the problem began (Ebola patient 1) and from there, trace how it affected the other parts of the problem, leading to its full epidemic proportion that may lead to a pandemic, leaving this government with staggering inflation issues and prices of prime commodities soaring through the roof and finally leading to an energy crisis.

The Philippines is vulnerable because the majority of prime commodities here are imported via sea freight through its ports, which are based in Manila.

Costly delays

Because of a series of events, these containers were not released on time, leading to congestion in the ports that has led to delays in unloading international vessels, many of which bypassed Manila in the last few weeks.

The reasons why initially there were some 78,000 containers trapped in the ports of Manila:

1) The primary cause of the port congestion problem (Ebola patient 1) was the daylight truck ban imposed by the City of Manila.

Trucks that regularly picked up containers from the port for delivery to end-users in and around Metro Manila and returned empty containers were suddenly stopped from their regular routine. Thus began the accumulation of containers at the port, as turnaround time was hindered with operations only happening at night. The factories of exporters and importers as well as the custom brokers and truckers were stunned by the situation and took a long time to react, leading to the slowing down of the logistics chain in and out of the port.

2) The Land Transportation Franchising Regulatory Board (LTFRB) issues (Ebola patient 2):

At the same time that the truck ban was affecting the industry, the LTFRB issued an order against colorum trucks operating in the port.

* The new regulations of the LTFRB basically prevented all the trucks that do not have a franchise from carrying cargo and most importantly, picking up and delivering containers. A colorum truck refers to a truck with just a green plate, instead of the yellow used by public utility vehicles, which means it should not be hired to carry cargo of a third party.

The LTFRB did not stop there. It also issued regulations barring trucks at least 15 years old from securing a franchise. There are questions about the legal basis for this move.

It is safe to assume that today, even without the coming of the Asean Economic Community or free trade among the member-countries of the Association of Southeast Asian Nations, the Philippines does not have enough truck/trailers to handle its cargoes.

And now the government seeks to strictly impose the franchising requirements on all trucks and adds a proviso on the age of trucks, thus worsening the problems at the port. Note that there are only about 340,000 trucks in the Philippines and only some 27,000 have a franchise. Then there are only 12,000 to 14,000 truck/trailer units that carry containers, of which only 3,000 units have a franchise. These government initiatives knocked out 80 percent of the container trucking fleet Temporary franchise.

Recently, the LTFRB allowed the temporary franchising of trucks until Oct. 18 to alleviate port congestion. However, the government also said that the trucking firms have to sign a document stating their trucks are 15 years old and below before they can get the temporary franchise. As you can imagine, many firms have not tried to file for a franchise. Therefore, the new regulations have made the situation worse.

3) Programs of the Department of Public Works and Highways (DPWH) (Ebola patient 3)

While all these were happening, the DPHW chose this particular time to do road repairs and construction. Bad timing, to say the least. The worsening traffic situation is not due to the increase in trucks. It is probably because the country is growing by 7.3 percent a year and to feed and create development for a hundred million people, you will have more shipments, ergo more containers.

Moreover, the DPWH chooses now, of all times, to have multiple road constructions all at the same time. With the 30 percent increase in car sales and no new roads in Metro Manila, is it surprising that traffic will occur? The traffic is also causing congestion for the cargo as the containers take a long time to reach their destination. And let’s not forget the floods.

With such serious port congestion, trucking costs have increased. Port operators and shipping lines are also charging more because of delays. Market forces are coming into play.

Manpower and diesel costs have gone up to adjust to the delays in the delivery and now the truckers are raising the cost per container because of the high demand for the fewer trucks.

Trucking costs soar

The trucking price increase was followed by an increase in surcharges of the shipping lines due to port congestion and to top it off, the Philippine Port Authority (PPA) has imposed a premium charge for overstaying containers to force importers/ consignees to move out their shipments. The increase in the travel time and the costs related to traffic have brought about an increase in the trucking rates by as much as 40 percent.

A trip to Subic would usually cost you anywhere between P18,000 to P22,000. Today, you are looking at P35,000 to P50,000 a trip. The cost of port storage after an 11-day period dramatically went up to P10,000 a day for containers that stay for more than 10 days and that does not count the international shipping lines’ fee of over $600 extra per container.

A 15-container shipment will now cost the importer P650,000 per shipment, over and above an increased trucking rate and a more expensive storage charge. Thus, be ready for double-digit price increases this Christmas. Moreover, since all the prices have gone up, many regular importers have slowed down their releases from the port because their expenses have gone way over budget as they never expected the trucking rates to increase and then the outside costs of releasing goods will be so high, thereby slowing releases in Customs.

In the middle of this port crisis, the government – as part of its transparency and good governance program – has implemented a new level of regulatory documentation for all importers and customs brokers. In short, more red tape. This has seriously slowed down the customs releasing process, further aggravating the problem with the slow release of containers in the ports.

Extortion

Then once outside the ports, importers and corporations have to grapple with extortion.

Though the computerization of the Customs procedures for release of imported cargoes has indeed changed the atmosphere in the port terminals, there remains “extortion outside, extortion inside, extortion on the road … Extortion worsens port congestion”, as said by Secretary Rene Almendras.

Today, the importer is hard-pressed to find a franchised truck within his budget. And after he pays the increased fees of shipping lines and port operators, he must brave the hold orders or Customs in the port, wreckers towing trucks outside the port area, authorities charging for escort fees and others not helping the already worsening situation.

We are truly in the middle of a real nightmare.

(To be continued - see below)

(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is the president of MOF Company (Subic) Inc. Feedback at map@map.org.ph and mofsubml@mof-subic.com or jnvp@yahoo.com. For previous articles, please visit www.map.org.ph.)

Second of two parts)

The solution to the port congestion problem is to impose a moratorium on all measures that have been implemented. Though the actions taken by the government are laudable—and should under normal times be supported— we must at some point address the traffic situation.

We must at some point address the road worthiness of the trucks and trailers carrying our cargo. We must address at some point the integrity of the importer, who is he and make sure he is not a criminal element or a smuggler of illicit goods and more importantly that everyone pays taxes.

Not right now

But the question is, should we have done this all at the same time? The time to address these questions of transparency and others is not now.

Would it have not been better that we address each problem individually on a staggered basis before diving into two or three major issues, thereby creating an economic epidemic that may be much more difficult to solve?

All parties should return to the status quo before the first of a series of events that led to the port epidemic.

All the actions in reference to traffic, truck/trailer road worthiness, complete and correct registration of duly recognized importers for security and revenue issues, road widening and repair are very laudable and worthwhile projects, but they cannot be done all at the same time by a bureaucracy that does not have proper management and manpower support to upgrade these projects.

In the franchising of trucks that are 15 years or below or other modernization measures, a moratorium of at least five years must be undertaken because the trucking community cannot re-fleet a whole nation with the pending Asean integration in a year or two.

There is a need to implement a moratorium on all these changes of policies and road improvements until we can come up with a complete management plan with time tables and work milestones in a workable and detailed plan of action.

The problem today is not the increase in vehicular traffic as that has existed in Metro Manila for many decades.

The problem is the port congestion that will increase prices, stunt the nation’s growth and development, and lead to citizenry discontent due to the decrease in the buying power of the peso or the “shrinking pan de sal” phenomenon.

How do we solve the problem?

1) Return the truck ban to the normal hours, review the routes and improve the travel of the cargoes through the arteries of Metro Manila. This has been done in Manila.

2) Secure a moratorium on the franchising requirements. Implement a monthly quota so that the LTFRB is not faced with an administrative nightmare in working on 20,000 franchises in one month.

Moreover, give trucking firms enough time to be monetarily and physically capable of replacing their units with newer models.

It would also be best to improve the capability of the LTO to check the roadworthiness of truck units so that older trucks with valid safety records can perhaps continue operating.

3) Coordinate road repairs and others, like road closures and road widening projects. It would also be wise to have a greater perspective of the requirements of all stakeholders on the road.

Rising prices

4) Deal with the rising prices of trucking. Prices will probably not go down as that industry has long been suppressed or pushed down by the demands of the importers to lower costs.

With diesel prices where they are and the fact that each container truck costs around P1.5 million second-hand and a 10-wheeler unit needs P14,000 a tire times 10, the present costs of trucking have probably reached their realistic pricing range as the prices of this industry were rock bottom for many years and a realistic readjustment was forthcoming.

5) Reference the securing of the new Importer Clearance Certificate (ICC) and Account Management Office (AMO) with the Bureau of Customs (BOC), again, this must be done gradually either through a system like how we register motor vehicles on a monthly basis and not trying to register all the importers of a nation with a population of 100 million people and ask 18 to 20 people in a bureaucracy to take care of the paperwork and do so on time.

6) Continue to ask the shipping lines to consider using the Batangas Port and the Subic Bay Internal Port facility and focus major infrastructure projects to strengthen these areas of possible expansion.

Some good news is that Manila has returned the old truck ban hours, giving some sign to return to normalcy.

The ports are doing better by 30 percent on imports and 50 percent on exports and vessels are only 50 percent more than normal on anchorage before docking.

However, all these may change after Oct. 18, 2014 when many trucks lose their temporary franchise.

It would seem that LTFRB is amicable to a moratorium on the franchise measures if directed by DOTC.

As mandated, LTFRB claims it only follows the law and is not in a position to set policies.

BOC action

7) Strongly police the BOC and the authorities in and around the Ports of Manila to avoid any abuse of the powers vested in them in order for a smooth flow of goods in and around the metropolis.

The solutions are, in one word, a moratorium for a period of one to two years to work on recent government initiatives and already put forward a working management committee to check truck ban issues and road lanes, franchising issues (allow a five year re-fleeting program for trucking operators), a plan for road construction and the studying of BIR/BOC documentary policies and put forward a logistic masterplan for cargoes.

(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is the vice chair of the MAP National Security Committee and president of MOF Company (Subic) Inc. Feedback at <map@map.org.ph> and < mofsubml@mof-subic.com> or < jnvp@yahoo.com >.

Home, car loans surged in 2nd quarter
Paolo G. Montecillo @inquirerdotnet Philippine Daily Inquirer 5:12 AM | Wednesday, October 29th, 2014

MANILA, Philippines–Strong home and car sales fueled a healthy surge in consumer loans in the second quarter of the year despite reports by banks that credit standards have been tightened to avoid excess risks.

Documents released by the Bangko Sentral ng Pilipinas (BSP) showed that consumer loans rose by nearly a fifth. As a proportion to the total loan portfolio of universal, commercial and thrift banks, credits to households still remained one of the lowest in the region.

“As part of efforts to promote high credit standards, the BSP monitors the quality of consumer and other types of bank lending,” the BSP said in a statement.

Consumer loans by universal, commercial and thrift banks reached P803.3 billion at the end of the second quarter this year, an increase of 18.1 percent from P680.4 billion during the same period last year.

Quarter on quarter, loans were up 9.3 percent from the P735.1 billion posted in the previous quarter.

The increase was a result of the continued growth in investments of households in residential real estate and auto loans. Credit card loans also rose, although at a slower pace during the period.

Real estate loans made up the biggest portion of consumer credits, reaching a total of P348.16 billion at the end of June, rising 18.34 percent year on year. Auto loans were the second-largest chunk, reaching P206.74 billion. This represented a growth of 17.34 percent from June of last year.

Credit card loans, the third-largest component, rose by just 4.53 percent to P157.22 billion.

While consumer lending expanded, the ratio of the banks’ non-performing consumer loans to total loans to this sector slightly decreased to 5 percent in end-June from 5.2 percent a quarter earlier. Commercial banks and thrift banks also set aside loan-loss reserves of 67 percent of their non-performing consumer loans as a safety net against consumer credit risks.

As a percentage of total lending, the 16.5-percent consumer loan exposure of Philippine banks remained low compared to its peers in Southeast Asia. In end-June this year, the consumer credit exposure in Malaysia stood at 62.2 percent, 28.4 percent in Indonesia, 27.5 percent in Thailand and 25.5 percent in Singapore.

FROM THE MANILA TIMES

Largest pork barrel ever: P21B in 2015  by RIGOBERTO D. TIGLAO
November 2, 2014 9:35 pm


RIGOBERTO D. TIGLAO

I find two things in our country getting more and more amazing: (1) the skill of this Administration in hiding its nefarious schemes; and (2) the gullibility of the media, and therefore the public, in believing such government lies.

Consider the pork-barrel issue that has engulfed our nation starting mid-2013. It resulted in a Supreme Court decision last November declaring it illegal. Based on allegations that they have pocketed pork-barrel funds, three senators have been arrested and jailed.

Last week, the Congress passed its most important legislation for the year, the 2015 budget of P2.6-trillion. It won an overwhelming 197 votes, against only 27 against it—naturally, as this column explains below.

There was hardly a protest against it – despite its huge pork-barrel allocation. President Benigno Aquino 3rd and his officials have been saying in the Goebbels-style of big-lie-repeated-again-and-again: There is no more pork barrel in the budget.

Next to his ‘we-are-fighting-graft’ canard, that is Mr. Aquino’s biggest deception right now.

In fact, the pork barrel in the 2015 budget is the biggest we’ve seen so far, at P21 billion. It was P16 billion for each of 2011 and 2012, and P20 billion in 2014. (The pork-barrel releases were drastically reduced to P10 billion in 2013 because of the Supreme Court’s order in September that year to stop such releases pending the case on its constitutionality.)

Different names for different rackets


Different names for different rackets

Imagine that: The high court, and the entire nation I would think, scolded Aquino and ordered him to stop having pork barrel in the budget. Yet, he has continued to do so, and even made it bigger.

Pork-barrel releases in the past four administrations had never gone beyond P10 billion per year. The huge amount of taxpayer’s money Aquino has been giving local congressmen explains why the Congress has been the most servile ever to a president.

The pork barrel in the 2015 budget certainly fits one of the Supreme Court’s definitions of it: “An appropriation of government spending meant for localized projects and secured solely or primarily to bring money to a representative’s district.” Its worst aspect has been the siphoning of its proceeds into congressmen’s pockets, through fictitious projects and NGOs. There are no systems in place preventing such type of graft for the 2015 pork barrel.

Through the pork-barrel fund in the 2015 budget, the country’s 1,629 municipalities and cities are allocated P12 to P15 million each. It’s a powerful carrot-and-stick scheme for ensuring district congressmen’s support for the Administration, since actual releases can be delayed for any reason Aquino may concoct if a particular House Representative doesn’t toe his line. A new provision in the 2015 even specifies that if the allocation isn’t used in the year, it will be reverted to the national treasury, and can be used only if authorized by another legislation.
Now you understand why 197 congressmen voted for the 2015 budget, don’t you?

* Anybody who has lived in a municipality and watched the inner workings of a local government would know that there are endless ways for a local government chief executive to get a kickback from the projects in their jurisdiction funded by such pork barrel, which is why the fund is so important to local politicians’ power.

It’s a boon to sparsely populated provinces that have managed to be divided into several municipalities.
Budget Secretary Florencio Abad even increased the pork barrel of his home province Batanes – which his wife represents in the House – to P75 million from the P58 million annual average the province received from 2011-2013. The P75 million was distributed at P12.5 million to each of Batanes’ six towns.

With the hundreds of millions of pesos of government funds Abad has channeled to his Lilliputian province, it is even running out of projects to be funded by the 2015 pork barrel, so the use of a P5.5 million fund for the town of Mahatao could only be listed as for a “project to be determined.”

Would you believe that this quiet, small island would get a pork-barrel fund amounting to P2.5 million for the establishment of a “bahay pag-asa for CICL?” What’s CICL? Children-in-conflict-with-the-law. For a tiny place with only 10,000 residents to have a lot of juvenile delinquents needing a haven, Batanes must be the country’s Babylon.

To be sure, Aquino has camouflaged his 2015 pork barrel, and made some revisions to it, so it would not seem to be an act of defiance of the Supreme Court’s ruling that the pork-barrel fund is unconstitutional.

First, the 2015 pork barrel is now called the “Grassroots Participatory Budgeting Project List” (GPB). There is a section in each of the appropriations for 14 departments and entities specifying that a certain amount of their budget will be allocated to the GPB projects, listed in an annex. These departments are those that have always been conduits for pork barrel since 1986, the biggest of which are the departments of agriculture (P4 billion), interior and local government (P5.8 billion), social welfare and development (P2.7 billion), and the local government support fund (P2.8 billion).

Second, in order to go around the Supreme Court ruling that budget allocations cannot be “care of” the congressman who would direct its actual use, Aquino’s new pork merely distributed the amounts to each district under a congressman. In practice though, it is the congressman who will determine, based on his relationship with Malacanang, whether the funds are actually released or not.

And to go around the Court’s ruling that legislators can have no role in the implementation of the budget, Aquino’s new pork barrel specifies its particular use before the Appropriations Bill is enacted into law.

This is in practice just a bit more staff work for a congressman’s office, as he can very easily list a year in advance the projects he wants implemented in the district. For the most unscrupulous, these are the kinds of projects that can be undertaken by contractors with whom he is associated closely enough to turn over to him some kickbacks.

Thus, the list of more than 1,590 Priority Poverty Reduction Projects funded under the GPB is the same old list of projects funded by pork-barrel funds in the past several years such as “various road” projects, “post harvest facility,” and the ubiquitous “livelihood projects.” If these sound familiar, it is because these are the kinds of projects the infamous Janet Napoles allegedly used to siphon funds off into legislators’ projects.

It’s been the trademark of this Administration to cloak its immoral and unethical projects with noble intentions. Thus, the funds used to bribe senators to take out Chief Justice Renato Corona were raised through a “Disbursement Acceleration Program.”

The 2015 pork barrel is portrayed as the result of empowering the masses to determine the uses of the government budget, through the so-called Grassroots Participatory Budgeting. Under this scheme, civil society organizations in municipalities were supposed to determine the local projects financed by the P21-billion fund, not government officials.

C’mon guys, do you really want us to believe that municipalities from Batanes to Basilan now have such strong civil-society organizations so that it is no longer the local political bosses, no longer the congressmen, who determine the use of government funds at the local level? That’s just like telling us that Aquino is psychologically healthy. I can believe that’s what happening in Maguindanao towns if you classify the Moro Islamic Liberation Front as a civil society organization.

Such a situation is only in the mind of Social Welfare Secretary Dinky Soliman, who spent most of her working life coordinating – never really organizing or leading – NGOs. In fact, it is Soliman who spun lies for the country to get a dubious award for its “Grassroots Budgeting” last September, which the Administration has been using to claim that there is no more pork-barrel next year.

I’ll discuss that on Wednesday.

FROM GMA NEWS OPINION

Savings, errata and postmodern politics By ANTONIO P. CONTRERAS October 29, 2014 1:39pm 161 1 0 169


ANTONIO P. CONTRERAS

I don’t know if I am going to get away with this, or if my colleagues in political science will agree, but I am going to reiterate a bold claim I have been making a long time ago, but now given more proof by recent developments. I believe that the kind of politics that we have right now is postmodern.

I mean, we have been seeing a government, whose very existence is supposed to rest on the stability of laws, particularly the Constitution, and of institutions, such as the Supreme Court, yet its President and Congress are at the forefront of undermining both.

In theory, the rubric we use to measure the stability of constitutional democracies lie on how they endure the turbulence of politics. Modern states rely on the certainty of laws and the predictability of institutional rules and norms. This is precisely why the discipline of political science has imported methodologies from the natural sciences in its inquiry into the rather stochastic, random, chaotic and probabilistic nature of politics. This is to increase the predictability of politics, which in turn will heighten its controllability.

But as we all know, politics remain as unpredictable and unstable. This is why political communities have rested on the majestic discourse of laws that are encoded and encapsulated in written edicts. This is also why the volatility of Congress and the whims and caprices of the Executive have to be checked by a steady, detached and dispassionate domain that is found in the halls of the Supreme Court.

The Supreme Court is the branch of government whose role is to check the adventurism and unpredictability of politics, brought about by the exigencies and pragmatic consideration of legislative partisanships and executive prerogatives. The Court has always been treated as one where the grand narrative of modern statecraft lies. It is a place where this narrative takes shape and emerges to impose its final determination of what would make our political community safe and secure from the risks and uncertainties brought about by the excesses and failures of executives and legislatures. It has been referred to as the last bulwark of democracy.

* But recently, the political branches of government, i.e. the President aided by Congress, have been on a warpath with the Supreme Court. In the name of what it has presented as a reform agenda, it has practically deconstructed the grand narrative that ensures the stability of our polity. No less than the President himself declared in one interview that the reason why he wanted to amend the Constitution is to clip the wings of what he now considers as an overreaching Court.

Stung by the Court’s ruling that the Executive branch has abused the definition of savings when the former ruled that some of the provisions of the DAP violated the Constitution, the President, through the Department of Budget and Management, sent to the House of Representatives a budget for 2015 that effectively goes around the ruling of the Court. Contained in its provisions is the move to redefine “savings” contrary to any existing common sense, and academic accounting or public finance definition.

Budgets are enacted as laws, and hence have the power of a law. Congress is the branch of government that has the sole power to enact laws, and therefore has the sole prerogative to pass the budget. But there are certain principles that have already acquired their accepted definitions, either through the power of practice and common knowledge, or through the power of science and logic, and are beyond legislative tinkering. The concept of “savings” is one of these, where in theory no legislative fiat could theoretically change its meaning.

But through the sheer impetus of an executive tantrum, and accorded legitimacy by a pliant legislature, the legal meaning of the word “savings” has been destabilized. It is ironic that in this instance, the power of a law to fix the definition has been co-opted by the Executive, even as we now see the specter of a Congress that will actively participate in passing a budget that has provisions that are bound to effectively castrate its power over the purse.

And this is not even the end of it. Now, Congress and the President are poised to undermine the ideal constructs that my discipline of political ccience has been teaching our students on how laws are supposed to be crafted. They are now forcing us to accept a 269-page addition to the budget bill, already passed on second reading, as simply an “errata.”

Any student of legislative politics will tell you that all amendments to any bill, be they emanating from the relevant legislative committee or from individual legislators, are to be discussed and voted upon in plenary, and only when approved can such be integrated in the revised draft bill, which in turn will be subjected to a vote on second reading. Any addition after the second reading are allowed only if they are minor corrections in style and grammar or to correct typographical errors. This is precisely why it would be correct to call these as “errata.”

But it is clear that additional appropriations not approved on second reading, and corrections in amounts not duly debated and voted upon during the period of amendments, could not, in theory and in practice, be considered as mere “errata” but are in fact substantial amendments. To make us believe that these are in the character of minor corrections would be another example of a government whose legislative and executive branches have deconstructed the usual way of governing. It is now making us accept the negotiability of definitions, even as it effectively undermines the grand narratives found in the established logic behind the legislative process, as taught in Political Science and as practiced in many legislatures in the world.

On hindsight, I could even admit that our politics has always had the seeds of postmodernity, where negotiability is more the norm than the exception, and where grand narratives embodied in established theories and practices are not respected.

We have practically redefined political practices. We are perhaps the only country where minority senators are allowed to head committees. The way we conduct our Senate hearings has deviated from how hearings should be ideally conducted.

But now we are increasingly witnessing our Constitution being openly challenged and undermined, without even mounting a coup. We have a Visiting Forces Agreement that subordinates our sovereignty to another country, and our President welcomes it as essential to our survival. And we are willing to dilute the unitary nature of our country by deploying the word “asymmetrical” in proposing a parliamentary form of a sub-state in a territory where political parties, the textbook requisite of a parliamentary system, are at best weak, if not non-existent.

In short, everything is negotiable in Philippine politics. We deconstruct and destabilize well-established political concepts, constructs and processes.

In political theory, these are telltale signs of the post-modern.

The author is a former dean of De La Salle University. He is currently a full professor of political science at DLSU. The views expressed in this article are those of the author and do not necessarily reflect the position of this website.


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