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Philippines 2010: Distorted Development

Philippines 2010: Distorted Development. On the national economic situation IBON Foundation September 19, 2010. Rapid economic growth…. Arroyo: ave. 4.5%. Aquino: ave. 3.9%. Ramos: ave. 3.8%. Estrada: ave. 2.4%. … rising unemployment….

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Philippines 2010: Distorted Development

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  1. Philippines 2010:Distorted Development On the national economic situation IBON Foundation September 19, 2010

  2. Rapid economic growth… Arroyo:ave. 4.5% Aquino:ave. 3.9% Ramos:ave. 3.8% Estrada:ave. 2.4%

  3. … rising unemployment… Highest sustained unemployment, 11.2% (ave. 2001-09) Rising during period of “globalization”

  4. … during “globalization”… 1980s Tariff Reform Programs: TRP I, II at III • 1990-2004 Lower tariffs/removal of import restrictions • In agriculture, lowered by 85% down to 9% average • In industry, lowered by 92% down to 3% average 1991 Foreign Investments Act, 1993 Build-Operate-Transfer (BOT), 1993 Removal of forex controls, 1995National Water Crisis Act, 1998 Oil Industry Deregulation, 2001 EPIRA; 1992 Liberalization of water transport, 1993 telecommunications, 1994 banking and shipping, 1995 airlines, 2000 retail trade 1994 World Trade Organization (WTO), ASEAN Free Trade Area (AFTA), 2008 JPEPA, 2010 ATIGA

  5. … record joblessness… • Real unemployment rate* • 4.3 Munemployed (2009) • 28.1 M in poor quality work, of 35.1 M “employed” in 2009: • 4.2 M “unpaid family workers” • 12.2 M “own account workers” • 11.7 M “wage and salary workers” without written contracts (IBON estimate on NSO data) * adjusting for govt’s change in methodology in April 2005; 2009 labor force ~ 39.4 million (IBON estimates on NSO data)

  6. … record forced migration • 2008:8.2 M Pilipinoforced abroad for work (stock of “permanent” & “temporary” workers) • 2009: 3,900 leaving daily

  7. 2004-2009:Flattening share of GDP? 1990-2004:Rapidly growing share of GDP 1980-90:Slowly rising share of GDP

  8. 1 kilo rice, 1 egg 28 M poor?(NSCB, 2006) Official poverty line (2006) = P41 = = 33% Official poverty incidence

  9. 67%Self-rated poverty (April 2010) 66 M poor!(94 M population, 2010) Alternative poverty line (2006) = P86 = = 70% Poverty incidence

  10. Deep poverty among poorest

  11. Severe inequality • Net income of Top 1,000 corporations: • 2001: P116 billion 2002: P173 B 2003: P176 B 2004: P371 B 2005: P497 B 2006: P599 B 2007: P686 B • 2008: P416 billion • Ave. 2002-08: P417 billion

  12. US$15.6 billion(2006) Net worth of 20richest Filipinos Combined income in a year of poorest 10,400,000 families(52,000,000+ Filipinos)

  13. Manufacturing as small as in 1950s 21.8% 18.1% Agriculture smallest in history 2009p

  14. 1st semester 2010 trends • 7.9% GDP growth (NSCB) • Listed companies doubled 1st quarter profits (PSE) • 1Q-09 : P64.1 billion • 1Q-10 : P137.1 billion • Apr 2010 (NSO) • 4.7 million unemployed Filipinos • 11.6% unemployment

  15. Political economy of underdevelopment

  16. Political repression & human rights violations • 1,205 extrajudicial killings, 206 enforced disappearances, 371 political prisoners • Militarist approach to armed conflict • 2001 National Internal Security Plan (NISP), National Military Strategy (NMS), Oplan Bantay Laya 1 & 2 • Erratic peace talks with CPP-NPA-NDFP & MILF • US military aid (2001-11): US$427 million up to est. US$1.3 billion; helicopters, aircraft, ships, boats, trucks, rifles, helmets, vests…

  17. Declining unionism…

  18. … flattening wages Aquino:rose P82 Estrada:P22 Ramos:P16 Arroyo:P5

  19. … declining land ownership… • By farm area:63% (1971)  51% (2002) • By number of farms: 58% (1971)  48% (2002)

  20. Hacienda Luisita SDO, evasion of land reform…

  21. Oligarchic rule • Political dynasties, warlords & electoral violence • Ex. Aquino-Cojuangco, Marcoses • c/o CenPEG – 16 senators (67%), 130+ congressmen (60% of regular seats), 53 gov/26 vice gov from political families • Money/big biz-driven victories • Tens/hundreds of millions & billions of pesos to finance campaigns • c/o NEDA – P10 billion campaign spending by all candidates • c/o PCIJ – P4.3 billion in just ad spending by natl/partylist candidates • US influence in spirit of ‘democratization’

  22. Elite political power • New old senators • Revilla (Lakas-Kampi), Estrada (PMP), Defensor-Santiago (PRP), Drilon (LP), Enrile (PMP), Cayetano (NP), Marcos (NP), Recto (LP), Sotto, III (NPC), Osmena, III (LP), Lapid (Lakas-Kampi), Guingona, III (LP) • Millionnaire Congress (HOR) • 75% triple or double-digit millionnaires (P10.5 - 947.9M)

  23. The story so far… “Insanity: doing the same thing over and over again and expecting different results.”Albert Einstein 1879-1955

  24. Elite economics: Aquino administration policy thrusts • No asset/wealth redistribution – ex. real and speedy land reform • Increased foreign domination of economy • Free trade agreements – ex. “WTO+” with EU • Privatization through public-private partnerships (PPPs) • Reliance on overseas work as safety valve • Mining liberalization & plunder of national patrimony • Disguising poverty (in absence of basic reforms) – ex. conditional cash transfers (CCTs)

  25. Salamat po www.ibon.org IBON Foundation is on Facebook twitter.com/IbonFoundation

  26. Policy challenges 7 major tasks • Immediate social & economic relief • Avert fiscal crisis in a progressive manner • Address jobs crisis of record high unemployment, poor quality work and low earnings • Rectify severe inequalities in income, wealth and assets (including of land) • Promote real democracy & human rights • Curb pervasive corruption including electoral fraud • Restore country’s sovereignty in its international economic and political affairs

  27. Building economic momentum: Anti-globalization • Cancel Hacienda Luisita SDO and distribute land to the farmers; real accounting of land distribution • Immediate across-the-board nationwide Php125 wage hike • Repeal RVAT Law; place revenue burden on wealthy/big corporations • Repeal automatic debt appropriation law • Ensure social service budgets of at the very least P281 B for education, P39 B for health and P13 B for housing in 2011 • Deliberate national industrial policy • Suspend & review JPEPA & EU-RP PCA • Convene multi-stakeholder review of ASEAN negotiating strategy and deals • Convene multi-stakeholder review to identify local products for tariff protection

  28. Building political momentum: Pro-democracy & peace • Investigate/prosecute former Pres. Arroyo/allies for electoral fraud, corruption and serious human rights violations (HRVs) • Investigate/prosecute military & police officials for involvement in serious HRVs; transmit 1998 ICC Rome Treaty to Senate for ratification • Independent probe of May 10 elections • Suspend/review Visiting Forces Agreement (VFA) with US and, in meantime, expel US forces • Immediately resume formal peace talks with NDFP and MILF • Release all political prisoners as confidence-building and goodwill measure

  29. (+) (–) Inadequate & misdirecting framework Simplistic “Kung walang corrupt, walang mahirap”; no devt vision Rather, main problem: reckless ‘globalization’ policies So far… Traditional Cabinet economic team steeped in failed/obsolete economics unable to assert people’s rights & national sovereignty State of play:Possibilities & realities

  30. (+) (–) … Continued globalization offensive– Economic life under control of private profit-seeking interests Privatization– “Public-Private Partnerships” (ex. water/power rate hikes, LRT/MRT rate hikes, toll fees…) FTAs – DTA Sec. Domingo: “We’ll try to join as many trade agreements as possible…” … Continued anti-people fiscal policy To pay rising debt service… Higher taxes, fees & charges ?! Why not tax wealthy/high-income Decreased spending on social & economic services State of play:Possibilities & realities

  31. (+) (–) …Continued political violence 3 political killings, Mendiola peasant dispersal w/ 42 arrested … Continued militarism Strengthening military/rising spending 6-month OBL 2 extension Uncertain peace processes w/ MILF/NDFP … Continued neglect of human rights “Truth Commission” mainly corruption-focused, aside from having weak powers … Continuing neglect of agrarian reform Not admin priority, HLI scam compromise… State of play:Possibilities & realities

  32. Pagbabago? • Bangayan: Kamaganak Inc, Trapo LP, Hyatt 10, The Firm, Soc Dem/civil society… • Ochoa (Exec Sec), Abad (PMS), Lacierda (Spokesman), de Mesa (Legal counsel) • de Lima (DOJ), Romulo (DFA), Robredo (DILG) • Paderanga (NEDA), Purisima (DOF), Henares (BIR), Abad (DBM), Domingo (DTI) • Reyes (DAR), Alcala (DA), Paje (DENR), Baldoz (DOLE), de Jesus (DOTC), Singson (DPWH), Almendras (DOE), Lim (DOT), Montejo (DOST) • Soliman (DSWD), Deles (OPAPP), Luistro (DepED), Licuanan (CHED), Ona (DOH) • Gazmin (DND), David (AFP chief-of-staff), Verzosa (PNP chief)

  33. Pagbabago? • de Lima (DOJ) – most positive appointment; strong HR advocate • Romulo(DFA) – recycled, pro-VFA, favored Daniel Smoth transfer to US embassy, pro-JPEPA, ex-DFA/DOF • Paderanga(NEDA) – ex-NEDA, ex-ADB, Foundation for Economic Freedom, pro-neoliberal globalization, UPSE • Purisima(DOF) – Hyatt 10, pro-VAT, ex-SGV/Ernst & Young, Arthur Andersen • Domingo(DTI) – ex-SM Investments Corp, ex-Chase Manhattan/Chemical Bank, ex-DTI USec • Henares(BIR) – ex-World Bank, ex-BIR

  34. Pagbabago? • de Jesus (DOTC) – ex-president Meralco • Singson(DPWH) – ex-Maynilad CEO • Almendras(DOE) – ex-president Manila Water • Lim(DOT) – Makati Business Club • Soliman(DSWD)/Deles(OPAPP) – anti-Left • Luistro(DepED) – no public school experience • Ona(DOH) – pro-health privatization, pro-corporatization

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