Archive for the ‘business’ Category

$45M lost to bribes for ‘cartel’ backed by govt officials

February 14, 2009

By Malou Mangahas, Philippine Center for Investigative Journalism

Corrupted to the core—and entirely—by a “cartel” of kickback-takers with support from the highest levels of the Philippine government.

In gist, this is the damning conclusion of the World Bank’s anti-corruption unit, the powerful and dreaded Department of Institutional Integrity (INT) regarding the bank-funded National Road Improvement and Management Project-1 (NRIMP-1).

According to the department, “the entire NRIMP-1 Project has been corrupted,” and had put “at least $30 [million to] $45 million of the entire $150-million loan at risk,” or lost to “a cartel” of contractors, bureaucrats, politicians. Two witnesses said bribes were also “shared” with “relevant local media and non-government organizations . . . to avoid bad publicity.”

The cartel has been “institutionalized and has operated with impunity for at least a decade, possibly longer,” on account of the “systemic corruption and bid rigging” in the Philippine public works sector.

Even worse, “evidence suggests [that] the cartel may enjoy support at the highest levels of the Government of the Philippines, including several officials of the DPWH [Department of Public Works and Highways] and even reaching the husband of the President [Gloria Arroyo] herself.”

“Ultimately,” said the Department of Institutional Integrity, “the cartel harmed development itself—NRIMP funds were not disbursed because of the fraud and corruption, and the roads were not rehabilitated with the development funds allocated to this purpose.”

60 witnesses, piles of docs

The Department of Institutional Integrity said its investigation—which eventually implicated 16 individuals and had the unit’s acting director Johannes Zutt recommending sanctions against 17 companies—involved 60 separate witness interviews and the evaluation of hundreds of documents.

“Despite fears that they risked their physical and economic well-being,” the department said, “over a dozen witnesses confirmed the existence of the cartel and provided details on its practices.”

By the department’s reckoning, “a syndicate made up of contractors and corrupt officials in the DPWH had organized and had been operating a cartel to control road projects at least as early as 1998.”

But “Filipino politicians later took a managing role in the organization,” while public works officials “arranged for contracts to be awarded to particular contractors in exchange for bribes and kickbacks,” said the Department of Institutional Integrity.

With the cartel’s operation, it continued, “the entire system operated [and may continue to operate, with respect to other contracts . . .] under ‘a gentlemen’s agreement,’ with implicit understanding that those who violate the agreement will be denied the prospect of winning future contracts.”

The cartel provided “the illusion of competition—the appearance of a free market [that] was entirely simulated,” the Department of Institutional Integrity said.

According to the department report signed by Zutt, “The evidence is sufficient for a determination that it is more likely than not that the respondents, with the active cooperation of numerous officials of the Government of the Philippines, participated in an institutionalized cartel replete with collusive tendering, bid rigging, price fixing, and the routine payment of bribes and kickbacks.”

In the 260-page report on the findings dated March 20, 2008, Zutt also recommended sanctions against a Filipino contractor and 17 construction companies that joined the three rounds of project biddings.

(A separate 230-page Part II of the Department of Institutional Integrity report enrols the “Record of Interviews” that the investigators conducted with 54 named witnesses from April 2003 to November 2006, in the Philippines, Japan and South Korea.)

‘Affirmative deception’

Thirteen of the 17 firms were put under the category of respondents who “either refused to cooperate with the Bank’s investigation or affirmatively misled the INT.”

Such “affirmative deception” of the Bank and “obstruction of its investigative mission should be an a priori disqualifying circumstance from doing future business with the Bank.”

These 13 companies are:

Cavite Ideal International Construction and Development Corp., based in Pasay City;

China Road & Bridge Corp, a state-owned firm based in Hong Kong;

China State Construction Engineering Corp., a state-owned firm based in Beijing;

China Wu Yi Co. Ltd., a state-owned firm based in Fuzhou City;

CM Pancho Construction Inc. in Quezon City;

Daewoo Engineering & Construction Co. Ltd., based in Seoul, South Korea;

Dongsung Construction Co. Ltd., based in Gyeongham, South Korea;

EC de Luna Construction Corp. and Eduardo de Luna, San Juan City;

EEI Corp., Quezon City;

Hanjin Heavy Industries & Construction Corp., based in Seoul, South Korea;

Italian-Thai Development Public Co. Inc., based in Bangkok, Thailand;

Sammi Construction Co. Ltd., based in Busan, South Korea; and

Shinsung Corporation General Contractors and Engineers, based in Kangnam-Gu, South Korea

Five of the 17 respondents were judged to be “affiliated with the organizers of the cartel also [and] should receive enhanced sanctions as they are the perpetrators of fraudulent and corrupt practices.” These five respondents, the department asserted, “had the greatest extent of corrupt relationships with government officials, directed the submission of fraudulent bids, and controlled the fraudulent distribution of contract awards.” The five are:

China Geo-Engineering Corp. based in Beijing;

China Road & Bridge Corp.;

China State Construction Engineering Corp.;

China Wu Yi Co. Ltd.;

EC de Luna Construction Corp. and Eduardo de Luna.

Open secret

The witnesses who spoke with the Department of Institutional Integrity, including “multiple cartel participants and government officials,” described the “collusive and corrupt practices surrounding these contracts as an ‘open secret’ and said the bribery the cartel managed was known in the Philippines as ‘standard operating procedure.’”

The report exposed the modus operandi of the cartel:

“The cartel was aided by officials within the Project Implementation Unit, the Philippine DPWH, which disqualified uncooperative bidders without basis before formal bids could be placed.”

“Cartel managers would anoint contract winners in advance of bid submission and would designate losing bidders, who were compensated to cover their costs in bidding.”

“Cartel managers told bribers what to bid, days before the bid submission date, down ‘to the last peso.’”

“Cartel backers thereafter redrafted their unit bid prices to comport with cartel-mandated total bid amounts, frequently 20 [percent to] 30 percent in excess of estimates.”

“The prearranged bidding was made all the more evident when, to the final round of bidding in 2006, an anonymous informant provided investigators with advance notice of the correct outcome of the third round of bidding before the bid opening had occurred.”

Besides interviewing 60 witnesses, the Department of Institutional Integrity said it conducted “in-depth analysis of the three rounds of bidding” and established that “bids in all rounds showed abnormally high and unexplained unit and total costs.”

This bids analysis yielded, the department said, the following findings:

“Bids bore lockstep relations to engineer’s estimates [i.e., one round’s bids were 31 percent, 32 percent, 33 percent and 34 percent above the estimate].”

“Bids contained numerous, large calculation errors suggesting last-minute revisions pursuant to cartel instructions—one bid contained an error in excess of US$3.6 million.”

“Two bids on a US$26 million total contract, with widely disparate subtotals, totalled to values only US$31 apart.”

The lowest bids investigated, the report continued, “were routinely 20 [percent to] 30 percent above cost estimates, threatening the Bank’s borrower with tens of millions of wasted dollars had the cartel not been exposed.”

Sanctions vs. 7 firms

The World Bank’s Evaluation and Suspension Officer, who evaluated the evidence gathered by the Department of Institutional Integrity, later issued in May 2008 a Notice of Sanctions Proceedings to the respondent bidders.

But on January 12, 2009, the World Bank sanctions board decided to impose penalties on only seven companies:

EC de Luna and Eduardo de Luna, debarred indefinitely from participating in World Bank-funded projects.

China Road, debarred for five years. China State and China Wu Yi, debarred for four years. Cavite Ideal and CM Pancho, debarred for four years.

In August 2008, the Korean firm Dongsung was separately debarred for four years, “for fraudulent and corrupt practices in relation to the NRIMP-1 case.”

According to the Bank’s sanctions board, the Department of Institutional Integrity had not presented sufficient evidence that the respondents may have engaged in “fraudulent practices separate from collusion.”

In its report, however, the department said it had “direct evidence of fraudulent or corrupt practices such as the submission of fraudulent documents or the payment of bribes derived from admissions of participants or the direct testimony of witnesses,” and “circumstantial proof of collusion detected through an analysis of the fraudulent bids the cartel submitted.”

“At a minimum, the totality of the evidence reflects that each of the bidders on the contract packages at issue had knowledge of the cartel’s practices and willingly participated in the systemic fraud and corruption,” the department said.

The “evidence accumulated in this case,” it said, “is sufficient for a determination that the respondents violated Bank procurement guidelines.”

Still, it admitted that the evidence collected “does not reveal any exculpatory factors” or “any further mitigating factors” to be considered in the case, in favor of any of the respondents.

The department said, it determined that “among the aggravating factors to be considered are: the egregiousness of the misconduct, including multiple instances of misconduct; the degree of involvement of the respondents in the misconduct; damage caused by the respondents to the credibility of the procurement process; and harm caused to the borrowers.”

Thus, it said, “without exception, it is the INT’s contention that all of the respondents . . . acted in a manner that permits the charge of engaging in corrupt practice to be levelled against them as a principle or, in the alternative, as a secondary party.”(ManilaTimes)

Asbestos dump hit anew as Lepanto fails to haul out its waste

December 20, 2008

BAGUIO CITY—Residents of Sapid, Mankayan, Benguet filed a second petition that pushed town officials to act on the asbestos wastes earlier dumped by the Lepanto Consolidated Mining Company (LCMCo), after the company failed to fulfill its promise to haul out the toxic materials.

Acting on an earlier petition, town officials contemplated on filing charges against the company. This prompted the said mining firm to haul out said wastes, which turned out to have come from its Makati office.

Community vigilance

Some 115 residents of the said barangay in a petition, asked Mankayan Mayor Manalo B. Galuten and the town council to look into the asbestos wastes left by LCMCo despite the mining company’s commitment to haul out all the said wastes. The petition was dated October 29.

In a report, Sapid barangay council quoted witnesses as saying the wastes were dumped by Shipside Trucking, an LCMCo subsidiary, on April 10 and in 2007 in Sitio Tagumbao, Upper Tram in Barangay Sapid.

Alleging then that the wastes were asbestos materials illegally dumped by the mining company, the Sapid council through Barangay Resolution No. 34-2008 dated April 12, requested LCMCo to “cease unloading or dumping of the waste (asbestos)” in their barangay and to relocate the said wastes to other sites.

Informed about the alleged dumping of asbestos wastes, the Sanguniang Bayan (SB) of Mankayan led by Vice-mayor Paterno Dacanay invited representatives of the mining company to its regular session to shed light on the concern.


Based on the minutes of the Mankayan SB session on May 6, LCMCo environmentalist Rolando C. Reyes, denied that the wastes dumped were asbestos but materials used for acidic pads and cushions. Reyes assured the members of the SB the wastes are not hazardous in nature. He appeared with Vice-president and resident Manager Magellan G. Bagayao and a certain Edgar Ebiong at the council session.

The pads and cushions came from the company’s Makati City office that was renovated, according to Reyes.

Company representatives also assured the council they complied with policies set by the Department of Environment and Natural Resources (DENR), adding these are properly covered , thus making it safe for the environment.

In a May 7 letter submitted to the SB, the company committed not to repeat the said dumping and should an area be considered as future waste dump, LCMCo would coordinate with town officials concerned before it would begin operating.


Meanwhile, samples taken from the dumpsite were tested by the Environmental and Urban Planning Laboratory of the Saint Louis University Engineering and Architecture department, which later found out that the wastes had an asbestos content of 50.385%.

Asbestos is a fibrous mineral usually used for fire proofing and insulation in buildings, pipes, walls, ceilings, floors and others. It is a serious health hazard if inhaled that could cause asbestosis, lung cancer and mesothelioma, which is a rare type of cancer that most often occur in the thin membrane lining of the lungs, chest, abdomen and heart, according to Dr. Ana Leung of the Community Health Education Services and Training in the Cordillera Region (Chestcore).

Asbestos has been internationally banned because of its toxicity.


Upon learning of the result of the tests, the Mankayan SB through Resolution No. 289-2008, authorized Galuten to file appropriate charges against the mining firm for illegally dumping toxic waste materials in Upper Tram.

Through a series of meetings with the barangay officials and residents, town officials and representatives from the Environmental Management Bureau of the DENR, LCMCo volunteered to haul out the asbestos waste materials and to relocate outside the municipality. # Cye Reyes(NorDis)

Electronics companies slow on climate change – Greenpeace

December 17, 2008

Electronics manufacturers are finally taking climate change seriously but have been slow on the uptake, environmentalists said Tuesday.

Companies have been going green by reducing power consumption and the toxic substances in their products but have been “slow to get serious about climate change,” Greenpeace campaigner Beau Baconguis said.

Her comments followed the launch of the group’s Guide to Greener Electronics, now in its 10th edition.

“While there have been some improvements on toxic and e-waste issues only a small number of companies are really leading on the response to energy and climate change issues,” she said.

According to the guide, mobile phone manufacturer Nokia leads the pack by sourcing 25 percent of its electricity from renewable energy sources and has committed to raising the figure to 50 percent by 2010.

Other companies that have committed to renewable energy use include Fujitsu Siemens Computers (FSC), software giant Microsoft, Toshiba, Motorola and Philips.

Company reviews

Greenpeace assessed the 18 biggest consumer electronics firms in the Philippines and gave half five out of a possible 10 points.

But only three of the nine companies with five points or better— FSC, Philips and Sharp—support the level of cuts in greenhouse gases needed to stave off man-made climate change.

Philips and Hewlett-Packard “got top marks for committing to making absolute reductions in their own greenhouse gas emissions from the product manufacture and supply chain,” Baconguis said.

She noted that some firms that gained points for being energy-conscious “are still shirking their responsibilities on toxics.”

Leading the pack

Those who scored well on the toxic chemical criteria set by Greenpeace for its guide and have products that are free of the worst substances include Nokia, Sony Ericsson, To­shiba, FSC and Sharp.

Baconguis said Sony Ericsson “outranks Toshiba and Samsung” now that it has “prioritized its commitment to elimination of toxic chemicals in its manufacturing process.”

Overall, Motorola, Microsoft, Dell, Apple, Samsung, Nintendo and LG Electronics were still underperfor­ming on climate change.

Baconguis noted that these firms have “no plans to cut absolute emissions from their own operations and [provide] no support for the targets and timelines needed to avoid catastrophic climate change.”

She added that gaming console manufacturers like Ninten­do and Microsoft had not improved their environmental practices and thus remained at the bottom of the pile.
— AFP(ManilaTimes)

US pyramid scheme hits European banks

December 17, 2008

WASHINGTON, D.C.: Europe’s biggest bank, HSBC, joined a list of top names in world finance admitting huge potential losses in a suspected pyramid fraud scam run by ex-Wall Street heavyweight Bernard Madoff, whose brokerage was to be sold off.

The Securities Investor Protection Corp. (SIPC), which helps investors at failed brokerage firms, said Monday (Tuesday in Manila) it was liquidating Bernard Madoff Investment Securities LLC.

“It is clear that the customers of the Madoff firm need the protections available under federal law,” said SIPC President and CEO Stephen Harbeck in a statement.

But, he warned, “It is unlikely that SIPC and the trustee will be able to transfer the customer accounts of the firm to a solvent brokerage firm” because of the state of the firm’s records.

Shares in Santander, the biggest bank in Spain and the second largest in Europe after HSBC, plunged after the lender said it had exposed more than $3 billion to Madoff Investment Securities in New York.

Fortis Bank Netherlands said it stood to lose up to $1.37 billion in the suspected scam, despite lacking direct exposure to the Madoff firm.

“If, as a result of the alleged fraud, the value of the assets of these funds is nil and the respective clients cannot meet their obligations, Fortis Bank Nederland [Holding] N.V.’s loss could amount to around 850 million euros to one billion euros [$1.17 billion to $1.37 billion],” the bank said in a statement.

Billions lost

British, French, Japanese and Spanish banks and funds said investments totaling billions of dollars could be wiped off their balance sheets in a scandal set to affect some of the world’s richest people.

“The potential exposure under these financing transactions is in the region of one billion US dollars,” the London-based HSBC said.

Royal Bank of Scotland said it could lose about $612 million.

France’s Natixis investment bank, already brought low by subprime losses, put its maximum exposure at $616 million. Retail banking giant BNP Paribas revealed potential losses of $480 million.

Japanese financial giant Nomura said it could lose up to $303 million and officials in South Korea said financial institutions there had a total exposure of some $95 million.

Madoff arrested

Madoff, a 70-year-old Wall Street veteran, was arrested on Thursday, and allegedly confessed to defrauding investors of $50 billion in a scam that collapsed after clients asked for their money back because of the global financial crisis.

International Monetary Fund chief Dominique Strauss-Kahn said he was shocked that US regulators had failed to identify and prevent the fraud.

“The surprise is not that there are some thieves in the system. The question is where were the police? It’s very surprising to find you’re living in a system where a failure of the regulatory system was so big,” he told a news conference in Madrid.

Banks have rushed to disclose potential losses in an apparent bid to avert any deepening of the suspicion that has frozen credit markets.

US authorities alleged that Madoff delivered consistently strong returns to clients by secretly using the principal investment from new investors to pay out other investors in what is known as a “pyramid fraud.”

US Vice President Dick Cheney said in a radio interview that the alleged scam by the former Nasdaq chairman was “very disturbing” but blamed a few “bad apples.”

The unraveling

The scheme apparently worked as long as Madoff could attract new investors but seems to have unraveled when some of his clients asked to withdraw their investment – only to discover that his seemingly brimming coffers were empty.

British investment fund Bramdean Alternatives Limited, which revealed it had invested about $31.2 million in Madoff’s company, said the scandal raised “fundamental questions” about the US financial regulatory system.

“It is astonishing that this apparent fraud seems to have been continuing for so long, possibly for decades, while investors have continued to invest more money into the Madoff funds in good faith,” the firm said in a statement.

More European banks

Spain’s El Pais newspaper reported the country’s second-biggest bank, BBVA, could lose around $686 million in the scam.

Italy’s biggest bank, UniCredit, said its exposure was around $103 million and one of its investment units may also have been indirectly affected.

Geneva’s private banks could lose up to $5 billion, Swiss newspaper Le Temps reported.
— AFP(ManilaTimes)

Unemployment up, at 6.8% in October

December 17, 2008

By Darwin G. Amojelar, Reporter

The number of unemployed Filipinos rose slightly in October to 6.8 percent, dragged by the weak performance of the economy, particularly the services and industry sectors, the government reported Tuesday.

The government earlier reported that the economy, as measured by gross domestic product (GDP) slowed to 4.6 percent in the first three quarters of this year compared with 7.1 percent in the same period last year. GDP is the total value of all final goods and services produced in a country within a year.

The economy in the third quarter has been damaged but not quite ravaged by the global financial turmoil and high oil prices, the National Statistical Coordination Board (NSCB) earlier said.

The National Statistics Office (NSO) said the unemployment rate rose to 6.8 percent, or 2.53 million, in October from 6.3 percent, or 2.25 million, in the same month last year.

But the unemployment rate in October was lower than the 7.4 percent registered in July.

Socioeconomic Planning Secretary Ralph Recto said the global financial crisis and high oil and food prices restrained the country from gaining more employment in 2008.

“The higher unemployment rate signals that the government needs to take immediate actions in creating and safeguarding employment and livelihood for the Filipinos,” he added. “As two-thirds of the world economy is now entering recession and the global financial crisis has already afflicted the real sector of the country’s economy, it is imperative that the government pays utmost attention to the objective of creating and saving as many jobs as possible. This will help minimize the adverse impact of the crisis to the most vulnerable sectors of the economy.”

Statistics breakdown

The statistics agency reported that the highest unemployment rate was recorded in Metro Manila at 12.8 percent, followed by Calabarzon (the provinces of Cavite, Laguna, Batangas, Rizal and Quezon), 10 percent and Central Luzon, 8.1 percent.

The National Statistics Office said 32.9 percent of the unemployed Filipinos were high-school graduates; 22.1 percent, college undergraduates comprised about one-fifth, while the college graduates, 18.9 percent.

Out of about 58.2 million population 15 years old and over in October, 37.1 million persons were in the labor force or 63.7 percent. Last year’s labor force participation rate was 63.2 percent.

The number of employed persons in October was estimated at 34.5 million or an employment rate at 93.2 percent, lower from last year’s 93.7 percent.

The statistics office said the National Capital Region posted the lowest employment rate at 87.2 percent. Besides that region, Central Luzon with 91.9 percent and Calabarzon, 90 percent had employment rates below the national value of 93.2 percent.

Of the total employed Filipinos, the agency reported that 49.6 percent were in the services sector—down by 1.6 percent from last year’s 51.2 percent.

Employment in industry sector also decline to 14.7 percent from 15.2 percent last year, and agriculture to 35.7 percent from 36.1 percent.

In terms of occupation, laborers and unskilled workers constituted the largest group at 32.6 percent of the total employed persons in October 2008. Farmers, forestry workers and fishermen were the second-largest group, accounting for 17.7 percent of the total employed population.

Underemployment rate

The country’s underemployment rate in October was estimated at 17.5 percent or about 6 million people.

Around 3.7 million or 61.8 percent of the total underemployed persons were reported as visibly underemployed or working fewer than 40 hours during the reference week.

“Most of the underemployed were working in the agriculture sector [48.8 percent] and services sector [36 percent]. The underemployed in the industry sector accounted for 15.2 percent,” according to the National Statistics Office.

Recto, also the director general of the National Economic and Development Authority (NEDA), said the government would speed up the creation of employment by ensuring that the allocated budget is fully and efficiently spent.

“Resources will be shifted from slow to fast-moving and uncomplicated projects with visible employment results,” he added.

Recto said another step to be taken is to encourage firms and households to make the recent income tax measures like lower corporate income tax rate, exemption of minimum wage earners from paying income taxes, increase in personal exemption of non-minimum wage earners an opportunity for business expansions and entrepreneurial activities.

Common action plan

He also said the tripartite (government, business, and labor) common action plan would be continued through “decisive dialogue on coping mechanisms to preserve as much employment as possible, while making industries cost-effective and productive.”

Another measure for employment generation is to intervene for the young labor force by offering more training vouchers and scholarships, Recto said, adding that this initiative would “help create a better human resource that is ready for the economic upturn.”

Recto said the allocated budget would also be maximized by increasing and fast-tracking the employment of educators, health workers and law enforcers commensurate to the needs of the sectors.

But he warned that while “this could help safeguard the nation from the social fallouts of the global slump, it should be done efficiently by ensuring that problems of misallocation of government employees are addressed.”

Helping SMEs

The authority official likewise said government would intensify support to small and medium enterprises and entrepreneurs by facilitating the provision of credit, technology and marketing assistance.

Recto outlined these initiatives as part of the economic sustainability plan in the light of the global slowdown, which he said must be “multi-pronged in creating and safeguarding Filipino employment and livelihood.”(ManilaTimes)

Macroasia lodges complaints in Ombudsman vs Brooke’s Pt. barangay officials

November 20, 2008

By Celeste Anna R. Formoso

MACROASIA CORPORATION (MC) has recently filed administrative charges in the Office of the Ombudsman for the preventive suspension of Brooke’s Point barangay Ipilan chairman Jonathan Lagrada and three others for allegedly causing “undue injury to the government and grave abuse of authority.”

A statement obtained by the Palawan Times said MacroAsia filed administrative cases against Lagrada, Jane Araullo, Wilfredo Rodriguez and Cresencio Ura – all officials of barangay Ipilan on grounds that they are “stopping a mining firm from pursuing its legal exploration activities, as covered by a Minerals Production Sharing Agreement (MPSA) granted by the national government, and which was duly concurred by the municipal government.”

The cases were filed at the office of the Deputy Ombudsman for Luzon in Manila by MacroAsia Corporation representative and complainant Marivic T. Moya, the statement said.

The MC beseeched the Ombudsman to preventively suspend the respondents for vehemently violating Republic Act 3019, or the Anti-Graft and Corrupt Practices Act; and appealed that it be allowed to pursue its legitimate mining activities pursuant to the MPSA.

Moya’s complaint cited that in September 2008, upon orders by Lagrada, the barangay chairman of Ipilan, blocked scheduled survey activities of the company that were supposedly carried out by its contractor JCP Geo-Ex Services, Inc.

“The firm was accredited by the Mines Geosciences Bureau (MGB) to provide exploration services for mining companies,” the statement said.

MacroAsia believes that the move of Lagrada and the others was a “wanton disregard of barangay resolutions no. 05 and no. 27, dated April 2 and November 19, 2007 respectively, which authorized and endorsed the company to pursue its mining activities.”

Both resolutions, which were approved before his term, are being questioned by Lagrada, a staunch supporter of the “no to mining” fight of non-government organizations (NGOs) and some religious sects.

“The continuous refusal of the respondent Jonathan Lagrada to allow the conduct of survey by MacroAsia, without valid and justifiable reason or court order, and obviously attended with evident bad faith, and with grave abuse of authority, causes undue injury to the operation of MacroAsia which is now suffering financial and capital losses due to the unjust actions of the respondents preventing the enforcement of a legitimate contract signed by the MacroAsia and the Republic of the Philippines, as well as of the barangay resolutions created by duly constituted authorities,” Moya said.

“We have long kept silent and tried to endure all these unfair acts against us, hoping our detractors will eventually become reasonable enough to appreciate our company’s legitimate goals. But it has already reached a point where the sense and logic of our purpose is fast becoming unworthy to pursue, if we do not assert our legal and legitimate rights now,” she added.

Lagrada, in a phone interview with the Palawan Times, shrugged off the administrative cases filed against them as “pure harassment’ by MacroAsia.

“It’s pure harassment because MacroAsia will really do everything to make us stop our fight against mining,” he said, adding that he has not received any copy of the filed cases, neither has he received any other document as of press time.

“I am ready to face them,” Lagrada said firmly.

Brooke’s Point has become a favorite hub of anti and pro-responsible mining rallies and other campaign efforts due to the impending operation of three large-scale mining companies in the town, namely Ipilan Nickel Corporation (INC), Leebach and MacroAsia Corporation.

MacroAsia, a publicly-listed corporation, is part of the Lucio Tran group of companies which is the lead organization for the group’s mining activities, apart from its core aviation industry services business.

MacroAsia was granted with a MPSA by the government on December 2005 to pursue its mining activities in Brooke’s Point after the Palawan Council for Sustainable Development (PCSD) issued the firm, on June 2005, with a clearance that its target of operations conform to the Strategic Environmental Plan (SEP) of the province.(ThePalawanTimes)

Davao Gov’t, Farmers Push Ban on Aerial Pesticide Spraying

October 20, 2008

By Yasmin D. Arquiza
VERA Files

(First of two parts)

DAVAO CITY — Once a week, the drone of airplanes shatters the early morning calm in Calinan, a cluster of small farmlands in the hilly terrain around Mount Apo. It is the signal for farmers to rush indoors or take cover and stop feeding livestock, for women to pull down clothes hanging out to dry, and for everyone to stay indoors, windows shuttered.

The small fixed-wing planes, known as crop dusters, are owned by the huge banana plantations nearby, spraying fungicide — a kind of pesticide that destroys fungus — on the banana plants. Residents say anyone caught outdoors during an aerial spray is likely to experience skin itching, eye irritation and nausea. Water exposed to fungicide turns milky white, and vegetables like malunggay curl up or retain a sticky residue.

Because of their rapid expansion, Davao’s big banana plantations are encroaching into the city’s built-up areas and farmlands like Calinan, where small farmers grow crops and fruits such as durian and lanzones that are sold in Davao City markets. Communities around these plantations have been complaining of health problems every time toxic pesticides would drift their way.

Convinced of its ill effects on health and environment, the city government of Davao passed an ordinance in February last year banning the aerial spraying of pesticides. City officials and small farmers have since been locked in a legal battle with the banana companies over the ban.

When powerful banana growers questioned the constitutionality of the ordinance, the lower court upheld the ban, as did the Office of the Solicitor General. It was only in the Court of Appeals where banana companies scored a victory: The CA issued an injunction to stop the ban, allowing them to continue aerial spraying.

Last July, the Davao City government, in alliance with farmers, asked the Supreme Court to break the impasse in what is now considered a landmark case that will test the power of the local government to protect public welfare.

A child protests aerial spraying in Davao. (Photo by Vera Files)

Aerial spraying is done on 1,800 hectares, about one-third the total area of banana plantations in Davao City, said a fact-finding report headed by City Planning and Development coordinator Mario Luis Jacinto. Pilots guided by Global Positioning System devices spray 30 liters of solution per hectare using automated nozzles.

Although the Philippines has no specific law on aerial spraying, government regulations require pilots to observe buffer zones “20 to 30 meters away” from plantations, according to regional officer Estrella Laquinta of the Fertilizer and Pesticide Authority. The rule is meant to spare humans, animals and plants from the ill effects of the spraying. But it is a rule only on paper.

Rosita Bacalso, whose farm is just three meters away from the Cavendish banana plantation of Davao Fruits Corp. (DFC), said she saw white insects swarming toward her coconut trees from the corporate farm when aerial spraying began in 2004. The coconut fronds turned black and began falling off, while the young fruits failed to mature fully. As a result, her usual income of P12,000 from coconuts fell to P3,000 every quarter.

On one occasion, Bacalso recalled, she looked in horror at a glass of water from the tap after heavy rains washed off pesticide residues from the gutter into their water tank. “Murag gatas. Mao ni ang among ginainom (It was milky. Is this what we’ve been drinking)?” she wondered. Since then, the family has been fetching water from the community tank 200 meters away.

Another farmer, Virginia Cata-ag, said members of her family experienced eye irritation, nausea and skin diseases after getting directly hit by pesticide spray. Her house in barangay Sirib is surrounded by a DFC banana plantation, the nearest border just 10 meters away, and the company does not notify them when aerial spraying would be done.

In barangay Dacudao, longtime resident Cecilia Moran said her family had to sell their cows that started getting sick from grazing on pasture land hit by pesticide spray. Leafy vegetables such as malunggay and camote tops curled up or had sticky residue that could not be washed off, forcing them to buy from the market what had once been a daily supply of fresh produce from their own farm.

THE legal battle over the ban on aerial spraying of poisonous pesticides in Davao City, which has reached the Supreme Court, is not the first case in which farmers square off against big agribusinesses over the issue of public health.

But it is the first time that farmers have the city government on their side. The city government in fact went as far as imposing a ban on aerial spraying of pesticides, through an ordinance banana companies say is unconstitutional and which is now the subject of the legal tussle.
“This is a landmark case on health and environment, which highlights the obligation of local government units to protect the public welfare,” said Lia Esquillo, executive director of the Interface Development Interventions (IDIS). The environmental group is assisting local communities in their protest against aerial spraying.

The joint committees on environment, agriculture and health of the city council, in their report, aptly described the controversy as a case of “public health and environment vs. local economy.”

RP banana exprtsBananas provide more than 75 percent of export revenues in the region, making it Davao’s No. 1 dollar earner. The Philippines is the fourth largest exporter of bananas in the world and, together with leading exporter Ecuador, has posted the highest growth rates in the industry in recent years, according to the Food and Agriculture Organization.

The case is not the first one involving controversial pesticide use in banana plantations in Davao. In 1993, banana workers in Davao del Norte were among 16,000 banana plantation workers who filed a class suit in Texas, USA against chemical companies that manufactured the pesticide DBCP, or dibromochloropropane.

A $41.5-million settlement was paid in 1997 by the companies, although refusing to admit fault or liability. They claimed DBCP pesticide, which was found to cause sterility in men, was not used properly.

Aggrieved parties

In the current case, both the farmers and banana companies feel they are the aggrieved party. The companies were the ones who initiated court action to stop enforcement of an ordinance banning aerial spraying of pesticide. They filed a case against the city government with the Regional Trial Court for “violating the equal protection clause of the Constitution” after the local legislation took effect in March last year.

The Pilipino Banana Growers and Exporters Association (PBGEA), Davao Fruits Corp. (DFC) and Lapanday Agricultural and Development Corp. (LADC) said the city ordinance constitutes “unreasonable exercise of police power” because banning aerial spraying would be “tantamount to confiscation of property without due process of law.”

An immediate shift to ground spraying would cost banana companies P882 million in potential losses, the petitioners said. They also questioned the requirement of a 30-meter buffer zone to protect neighboring farms and residents from pesticide drift, saying this would greatly reduce the area of banana plantations.

In September last year, the lower court upheld the validity of the city ordinance. It said the experts presented by the banana growers merely gave “unsupported allegations” and “theoretical analysis” on the health and environmental risks of aerial spraying.

Judge Renato Fuentes gave weight to farmers’ testimonies of “simple lives, gravely affected by a concerted problem, confronting them in their everyday existence.”

The banana companies elevated the petition to the Court of Appeals, which granted in November a temporary restraining order allowing the banana companies to resume aerial spraying.

In January, the court issued a preliminary injunction, citing the “apparent unconstitutionality of the ordinance, albeit inconclusive.” It further stated that the ordinance “seriously invades the appellants’ right that will cause them irreparable injury if not protected.”

Under the new Rules of Court, the CA should have decided the case by July this year, or six months after it granted the preliminary injunction, according to lawyer Raymond Salas of the legal advocacy group Saligan, which is assisting the farmers.

When the CA failed to do so, the city government and the farmers elevated the case to the Supreme Court last July 25, questioning the injunction order, which had effectively prevented the enforcement of the ordinance.

“Mere allegations of unconstitutionality cannot be enough for the Court of Appeals to issue a preliminary injunction,” Salas said.

The farmers, in their appeal, argued that “the conduct of aerial spraying, being a mere method to release toxic substances over an area, is not a right under the law. By concluding otherwise, the Honorable Court of Appeals commits clear and grave abuse of discretion.”

Even the Office of the Solicitor General upheld the action of the city government. In response to the appellate court’s request, Assistant Solicitors General Magtanggol Castro and Charina Soria issued a legal opinion last June 20 that the banana companies had failed to show the ordinance was unconstitutional, and that the city had simply followed the general welfare clause of the Local Government Code.

On the other hand, banana companies found support from the Department of Trade and Industry in Region 11.

DTI Regional Director Merly Cruz said in a position paper submitted to the city council that Davao’s leading banana industry directly employs 12,000 workers in the plantations. Support services such as stevedoring, trucking, packaging and security indirectly link up 100,000 more workers to the industry.

Public nuisance

RP banana industry mapBefore coming out with the ordinance, the city council had created a Technical Working Group, which included representatives from NGOs, affected communities and PBGEA. The city government also created a fact-finding team headed by City Planning and Development Coordinator Mario Luis Jacinto to look into the issue.

After collating all the data, the joint committees on environment, agriculture and health of the city council issued their report, which said in part: “We have heard both sides of the issue: Public health and environment vs. local economy. The two are of great importance to any civilization. But when both factors collide, the policy of the State comes in to shed light and to remind us of the basic framework in which the government is created.”

“Pesticides are poisonous, aerially spraying it is a nuisance, banning its aerial application is a justified response,” the joint committee asserted. “Can anyone imagine an urban area being aerially sprayed with pesticides? What makes the life and safety of the inhabitants of a community in nearby agricultural entities less? To remain indifferent to the plight of those being aerially sprayed with pesticides is inhuman.”

Davao City has the biggest population in the region: 1.3 million people compared to less than one million each for the three Davao provinces and Compostela Valley, according to the latest National Statistics Office figures. Its population density and status as a major urban center have made it a flashpoint in the aerial spraying controversy.

However, the city is not the first to enact legislation against aerial spraying. In 2001, the provincial board of Bukidnon passed its own ordinance against the practice, saying “unstable wind direction” while applying pesticide could pose danger to people, animals and crops. The ordinance noted that “poultries, piggeries, cattle ranches and other agri-based businesses and residential areas abut farm boundaries” of banana plantations.

The city ordinance has sent ripples in the neighboring province of Davao del Sur. During the Earth Day celebration last April, Gov. Douglas Cagas publicly criticized aerial spraying, citing the results of a health study in a village beside a banana plantation.

“Traces of pesticides that are being aerially sprayed were detected in their blood samples and water resources. If this practice continues, I am not providing my constituents a healthy body and environment that they inherently deserve,” he said.

Provincial board member Merlin Bello, who chairs the committee on health and agriculture, said he has attended many community meetings where residents have complained about aerial spraying in banana plantations. He has expressed support for the passage of a similar ordinance in Davao del Sur.

Alan Sanggayan, president of a local association called Lambigit, said their group has submitted a petition to the provincial government calling for a ban on aerial spraying due to health concerns and environmental pollution.

Sanggayan is a member of the Kalagan indigenous community in sitio Budoy in Barangay Guihing, Hagonoy town, where vast areas are devoted to bananas. Successive expansion of the plantations since the 1970s has hemmed in the 700 families living inside the ancestral land claim on all sides, which have to contend with pesticide spray.

Near the market of Hagonoy, a bulletin board indicating the supposed date of spraying is blank, despite regular aerial spraying in the area. Elders of the Kalagan people said they are rarely notified about the schedules. They are also complaining about the more potent nematicide applied on the ground, and the stench of boom spray in other areas.

Organic bananas

Even before the city ordinance was proposed, environmentalists have reported cases of pesticide poisoning from various application methods, expansion into watershed areas, and conversion of rice and fruit farms into banana plantations.

“The aerial spraying issue epitomizes the ills of corporate agriculture,” Esquillo of IDIS said. “Corporate-led plantations and mono-cropping are the real problems.”

She said farmers’ cooperatives in Mindanao are already producing organic bananas, and many have gone into diversified plantations or intercropping to control diseases.

In the farming district of Calinan, farmer Cecilia Moran said most of her neighbors have leased their coconut farms to banana and pineapple growers that practice mono-cropping. Only farmers in the village of Malagos grow bananas under their coconut trees.

Davao businessman Jesus V. Ayala, a longtime industry player, has ventured into the production of upland Cavendish bananas using organic methods through his Tristar group. The company has toured city officials in its plantations, presenting the farm as an environment-friendly model of corporate farms near watershed areas.

The move is in line with the city government’s Jacinto report, which recommended that “long-term use of organic pesticides should be adopted” in banana plantations to eliminate health and environmental risks to surrounding communities.  (

Davids vs Goliaths: Face off in Mindanao mines

October 3, 2008

By Edwin G. Espejo


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FILIPINO partners of foreign mining firms are slowly beginning to realize that inviting prospective offshore investors is proving to be more than they could handle than all shades of activists opposed to mining operations in the country.

These differences are taking deep roots in the boardrooms where giants in the global mining industry are slowly building up their interests and investments in Philippine mining companies.

What’s your take on the Mindanao crisis? Discuss views with other readers

Asiaticus Management Corporation (Amcor) president Vicente Jayme Jr. said the difference goes beyond clashes over management style and cultural sensitivities.

“We have altogether different objectives which resulted into the delay of our exploration activities,” Jayme said, referring to Australian mining giant BHP Billiton with which he and his Filipino group have a joint venture agreement to explore ore deposits at the Pujada Nickel Project in Davao Oriental.

Trouble began when Filipino partners of Amcor questioned the priorities of BHP Billiton, which owns 40 per cent of the company.

“We have been waiting for them (BHP Billiton) over the last seven years to make good of their commitment to pour in investment for the project exploration,” he said in an interview at the break of the first Mindanao Mining Forum held at the Waterfront Insular Hotel in Davao City two days ago.

His fellow company official, Amcor Vice President Lauriano Barrios, said he is getting the impression that big foreign mining companies are only engaged in “mine banking.”

By claiming stakes in Philippine mining projects, he said these mining giants are already amassing huge profits in the stock markets. “They are building up their capital at our expense,” Barrios said.

While acknowledging that their case is mere microcosm of clashing interests between Filipino and foreign investors, Jayme said each and every mining corporation has its own peculiarities.

He has a point.

At the Sagittarius Mines Incorporated (SMI) in Tampakan, South Cotabato, an internecine corporate war is also brewing.

Xstrata Copper, a subsidiary of Xstrata Plc, is engaged in a bitter and costly war to hold off a bid of investors from taking control over the 34 per cent stake held by its partner, another Australian mining firm Indophil Resources Ltd., after it foiled an attempt by Hongkong-based Stanhill Consortium to get into the corporate picture.

Filipino corporate conglomerate Alsons Group is now trying to buy Indophil’s stake at Tampakan Copper and Gold Project.

With ore deposits of over 12.8 million tons of 0.6 per cent copper and 15.2 million ounces of 0.2 grams per ton of gold, The Tampakan Copper and Gold Project is reportedly the biggest of its kind in Asia. This potential find has sent the share prices of Indophil Resources Ltd., at the Australian Stock Exchange from AUS$0.35 per share to 1.32 per share at the time Stanhill made its offer in June this year.

The corporate war in SMI has spilled over to the corporation itself. The ensuing corporate shakedown following the takeover of Xstrata people in the management of SMI has heightened the opposition to the mining operations of the company.

A former consultant of SMI said, since Xstrata gained control over the project, nothing good has come out for the company in the local media.

Filipino partners of Philex Gold in Surigao are likewise moving to buy out the 50 per cent interest of Anglo American Plc following divergent views with the foreign mining firm “on a number of assumption and conclusions made in (its) feasibility studies such as metal prices, treatment and refining charges, engineering and owner’s costs and capital contingency.”

Jayme, whose father is former public works and finance secretary Vicente Jayme Sr. during the Aquino administration, said some global mining companies are using their “proprietary rights” over mining technologies and stacks off cash to hold Filipino mining interest hostage.

He said they finally decided to rescind their contract with BHP Billiton “because of our commitment to the communities.”

If need be, they will do it on their own sans BHP Billiton, he pointed out.
Technologies, he revealed, are no longer the private domains of these foreign mining firms.

“We have made several consultations with Chinese and Japanese mining firms and they are willing to help us out,” Jayme said.

BHP Billiton is the world’s biggest diversified mining company and holds varying amount of stakes over scores of mining claims all over the world. Xstrata Plc, on the other hand, is the world’s fourth largest mining firm while Anglo American Plc is among the world’s leading mining giants.

Barrios said with BHP Billiton having so much and so many interests in mining all over the world, exploring nickel at the Pujada project has become the least of its priorities.

“What about us? We cannot wait for them forever. Ginugutom nila ang mga (They are starving the Filipino) investors,” he rued.

Jayme refused to characterize the ongoing boardroom wars in many local mining firms with foreign partners as a product of birthing pains following the passage of Republic Act (RA) 7942 or the Philippine Mining Act of 1995.

RA 7942 was crafted to ostensibly resuscitate the mining industry in the country which, during the pre Martial Law era, was Asia’s biggest and most developed.

Until recently, Mindanao has been largely untapped as past mining operations were heavily concentrated in Luzon and Visayas. Since the passage of the law, there are already over 64 mining applications from 26 mining firms in the South Cotabato-Cotabato-Sultan Kudarat-Saragani-General Santos City (Soccsksargen or Central Mindanao Region) area alone.

With the Supreme Court (SC) in 2004 upholding the constitutionality of the RA 7942, which allows foreign corporations to wholly own mining firms and claims in the country, there is no telling where these intra-corporate wars are headed to.

Jayme is not straightforwardly asking the government to intervene and review its policy on the development of the mining industry in the country. But he has these parting words: “Support what is Filipino that belongs to the Filipinos.” (SunStar)

3 oil minnows face Customs audit

September 25, 2008

The Bureau of Customs will start reviewing the oil importation and shipment records of three small oil companies as part of a drive to boost revenue collection.

The bureau’s Post-Entry Audit Group, headed by Customs Assistant Commissioner Rolando Ligon Jr., will notify Eastern, Flying V and Unioil about the audit.

“We have prepared notices of audit, and we will inform these oil firms that we will conduct a review of their importations for the last year,” Ligon told reporters Wednesday.

He said the audit would also cover the oil importations made by the three oil companies for 2004, 2005 and 2006.

“It does not mean that if you are placed on audit, you are guilty. Let us wait until the audit ends before making any judgment,” Ligon said.

Up next for audit, he added, are oil giants Caltex, Petron and Shell, subjects of the first round of review.

“So far, there has been no evidence of smuggling [against the oil giants], just discrepancy issues,” Ligon said.

Ligon’s team, which Customs Commissioner Napoleon Morales formed to boost revenue collection, was able to collect more than P80 million in additional revenue for the post-entry audit for the last six months.

As of July, the group got P33.5 million (steel), P14.472 million (paper products), P8.631 million (hardware), P3.965 million (motor industry), P3.460 million (electronics), P2.2 million (liquor), P2.7 million (plastic), P1.046 million (general merchandise) and P2.9 million from other classifications.
–Anthony Vargas


My Take:

Hmmm… Could the giants had a hand on this?  Is this a way of suppressing one rival’s growth and maintaining the tri-grip to the oil monopoly in the country?

Just asking…

RP Exposure To US Financial Crisis To Result In Business Slowdown

September 21, 2008

The exposure of Philippine banks to the global financial crisis, whether significant or not, will result in the contraction of local businesses and job losses because economic liberalization has made the local banking system vulnerable to external factors.
According to research group IBON Foundation, Philippine banks are merely a conduit of foreign capital, and being in a liberalized and deregulated environment, are vulnerable to the current volatility of global finance.

Even as the Bangko Sentral ng Pilipinas has assured the public that only a few local banks have exposure to cash-strapped US investment banks, the impact on local businesses will be felt since majority of investments in the country are dominated by foreign capital, accounting to around 54% of total flows in the country. Thus though not exposed to the bankrupt Lehman Brothers, investments in the country are affected by the jitters of foreign capital.

The local banking system, dominated by foreign banks, will likely be prudent in lending to small local businesses and would instead opt to protect large businesses with foreign capital. Unavailable access to lending would result in business slowdown and possibly lead to more establishment closures. As it is, financial losses have led to a significant number of closures among establishments in the past years.

Business slowdown will worsen the country’s unemployment, which is already at its record high, as business owners will be forced to cut down on their labor force or close shop. Job losses will be first felt in all trade and investment enclaves in the country, both manufacturing and business process outsourcing (BPOs), and then by the few Filipino firms exporting to the US and related markets.

The global crisis will further worsen the Philippines’ own economic crisis as neoliberal reforms have further deepened its links to the US and the global economy. However, the economy would have been less vulnerable if the domestic economy were not overly dependent on trade, foreign loans and capital, and if nationalist economic policies were in place. (end)

IBON will hold an Usapang IBON to discuss the US financial crisis on 24 September, 1-5 pm at the IBON Center 114 Timog Ave.,QC. Speakers are Dr. Ed Villegas (IBON chairperson) and Ms. Rosario Bella Guzman (IBON executive editor). You are cordially invited to the forum.

Pump Prices Still Above Normal Levels

September 17, 2008

Even as world crude prices have gone down to approximately their January 2008 levels, current pump prices are still above the averages for the period January-March 2008.

Vol. VIII, No. 32, September 14-20, 2008

Press Sec. Jesus Dureza said, in a press conference Sept. 12, that the recent rollback in oil prices by P2 to P3 is a “big argument against those who are shouting deregulation;” although the Press Secretary might have meant “regulation” as militant groups are calling for the scrapping of the Downstream Oil Industry Deregulation Act and for the regulation of oil prices.

Demands for the repeal of the 12 percent value-added tax (VAT) on petroleum products and the scrapping of the Downstream Oil Industry Deregulation Act have intensified during the first half of the year amid a series of oil price hikes starting last January. Oil price hikes severely affected the prices of commodities, as petroleum products are used in the production and transportation of goods.

Oil firms have claimed that the frequent spikes in the prices of their products are offshoots of their supposed need to recover losses from the jumps in world oil prices. World crude prices increased at a seeming uncontrollable pace with projections that it would hit $200 per barrel. But they peaked at $147 per barrel before they went down steadily. Mainstream analysts claimed that diminishing oil reserves, weather disturbances, and geopolitical factors such as the impending war between the US and Iran caused prices to rise; although some attribute it to a speculation frenzy in the oil futures market, especially after the sub-prime mortgage crisis in the US when hedge fund managers lost millions of dollars.

In the Philippines, oil companies have implemented a total of seven rollbacks since last August. These rollbacks have brought down prices by P8.50 ($0.18 at the Sept. 12 exchange rate of $1:P46.86) a liter for gasoline and P6.50 ($0.14) for diesel.

But according to Arnold Padilla of Bagong Alyansang Makabayan’s (Bayan or New Patriotic Alliance) Public Information Department, oil companies should have implemented bigger rollbacks in the prices of their products, considering that crude oil prices in the world market have gone back to the level they were at during the first quarter of 2008.

The following table, based on data from the Department of Energy (DoE), show the monthly average retail prices of diesel and gasoline from December last year to August this year:

Monthly Average Retail Prices of Unleaded Gasoline and Diesel
(December 2007-August 2008)

Average retail price

as of





23 Aug 2008



30 Jul 2008



30 Jun 2008



27 May 2008



30 Apr 2008



31 Mar 2008



26 Feb 2008



29 Jan 2008



26 Dec 2007



Source: Department of Energy

World crude prices in the oil futures market first hit the $100/barrel mark in January this year, while its spot price was around $92.93. The local pump price of unleaded gasoline in January was at P44.45 ($0.948) per liter and diesel at P38.45 ($0.82). World crude prices in the futures market hit $103/barrel in February and $110/barrel in March, with spot prices reaching $93.51 in February and $99.32 in March. Local pump prices in February and March ranged from P43.96 to P46.46 ($0.938 to $0.99) for unleaded gasoline and from P36.94 to P39.44 ($0.788 to $0.84) for diesel.

Brent crude oil for October delivery last traded at $99.43 and light, sweet crude at New York Mercantile Exchange at $101.74. Spot prices range between $93.06, for oil from the Urals, to $104.04 for Louisiana sweet oil. Local pump prices now range from P51.25-52.85 ($1.09-1.13)/liter for unleaded gasoline, and P48.95-51.09 ($1.04-1.09)/liter for diesel.

The current range of pump prices for unleaded gasoline and diesel is visibly still above the monthly averages for the period January-March 2008, bolstering the claims of drivers and militant organizations that the current oil price rollbacks are not enough.

“Clearly, oil price slides in the world market do not automatically translate into proportionate rollbacks in the local market,” Padilla said in an interview.

“This happens because the oil industry is deregulated,” Padilla pointed out.

The downstream oil industry was deregulated in April 1996, upon the passage of Republic Act No. 8180. Two years later, RA 8180 would be replaced with RA 8479, which eliminated the first law’s provisions on tariff differential, stocking of inventories, and predatory pricing.

Mrs. Gloria Macapagal-Arroyo, who was a senator in 1995-1998, authored RA 8479 among other laws paving the way for the Philippines’ entry into the World Trade Organization (WTO) framework.

Arguments for regulation

Under deregulation, the Philippines has been suffering from more frequent oil price hikes than during the pre-deregulation period. The increased frequency of oil price hikes under the deregulated environment contributed greatly to bringing prices of petroleum products to their present exorbitant levels.

Padilla also said that the deregulation of the oil industry has made the Philippines more vulnerable to the effects of speculation in the world market.

Last June, four market analysts testified at a US Senate hearing, that speculation accounted for 30 percent of world oil prices.

Michael Masters of Masters Capital Management said that if the US Congress passed a law limiting speculation, the price of oil would drop closer to marginal price of $65/75/barrel. Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis, and Roger Diwan of PFC Energy Consultants agreed with Masters.

“Record oil prices are inflated by speculation and not justified by market fundamentals,” Gheit said. “Based on supply and demand fundamentals, crude-oil prices should not be above $60 per barrel.”

The $60 to $65 per barrel range was the average price of crude oil from 2005-2007.

Padilla said that regulation would protect the people both from the effects of speculation in the world market and local oil companies’ profiteering because any increase would have to be approved by the government. Another proposal being put forward by militant groups is centralized procurement of oil.

“With centralized procurement, it is the government that is in charge of importing our oil requirements,” Padilla said. “The government thus can enter into bilateral agreements in which both parties agree not to be affected by speculation,” he explained.

“Also, with centralized procurement, the government would have a sense of the actual costs of oil, unlike the situation right now in which we cannot tell the real costs,” he added. “The government can therefore call the oil companies to task if they peg their prices way above the costs of importing oil.” Bulatlat

Groups barricade SM Baguio condotel site

September 15, 2008

BAGUIO CITY – More than 1000 cause-oriented groups, students and church members protested plans for the construction of four condominium buildings in the mini-forest in front of the UP campus by barricading the area last week.

The project is spearheaded by the SM Investments Corp. and Government Service Insurance System.

Protesters included UP Baguio officials, administrative staff and workers, youth groups Anakbayan and League of Filipino Students, UP and high school students, church members led by Bishop Cenzon, and representatives of the Cordillera People’s Alliance and Tongtongan ti Umili.

A short program headed by the UPB community was held during the human barricade and culminated in a march to SM through the Session Road entrance But the group was met with policemen from the police outpost near SM, said John Silverio F. Saligbon, UPB students council chairman.

He said a meeting between the police and UPB Chancellor Priscilla Supnet-Macansantos along with other UPB administrators was held.

The group peacefully returned to the campus to end the protest with a closing program wherein the UPB community mebrs said they would continue the fight against the condominium construction and cutting of trees.

The mini-forest is believed to be a property of the UPB that was managed by the GSIS after the Marcos presidency.

Protesters said while the issue of ownership remains disputed, the area is clearly an institutional zone and should not be used for commercialized purposes such as the construction of condominiums.

The UPB students said construction of the condominiujm buildings was a move towards the commercialization of education, since the land is purportedly a property of the University.(NorthernPhilippineTimes)

TESDA shuts down 12 English schools

September 5, 2008

ILOILO City – The Technical Education and Skills Development Authority (TESDA) ordered the closure of 12 schools offering English language proficiency courses to Korean students.

These schools have failed to have themselves accredited with TESDA, said Provincial Director Lorena Yunque. These are:

• A+ English Academy
• Educ Language School
• Dream Language Center
• Metro Korea
• GLS in Iloilo
• Darroca Training Center
• Eliteline Learning Center
• Educommunication
• Athena English Language Center
• Paran English Learning Center
• EME International Language Center; and
• Hello World Learning Services.

According to Yunque, in October 5, 2004 TESDA entered into a Memorandum of Agreement (MOA) with the Bureau of Immigration, Department of Tourism (DOT) and Department of Foreign Affairs (DFA) on the ESL Tour Program – a program for intensive English language training.

The MOA requires mandatory Unified TVET (Technical, Vocational, Educational and Training) Program Registration and Accreditation System (UTPRAS) with TESDA for ESL programs and language training centers.

The MOA seeks to regulate the increasing number of English language centers, schools, camps, or academies operating in Iloilo and the country in general./PN – Iloilo

Camp John Hay lawyers face disbarment raps

August 27, 2008

BAGUIO CITY — When it rains, it pours.

Camp John Hay lawyers Georgina Alvarez and Hilario Belmes are facing disbarment raps before the Integrated Bar of the Philippines (IBP).

This after being sued last month for robbery, malicious mischief, grave threats and coercion before the City Prosecutor’s Office together with other key officials of the privately run-Camp John Hay Development Corporation (CJHDevCo) in connection to complaints by business concessionaire Corazon Aniceto who claimed her restaurant inside the John Hay Special Economic Zone was illegally demolished upon their orders.

Aniceto, through her lawyer Emiliano Gayo, claimed before the IBP’s Commission on Bar Discipline that Alvarez, also CJHDevCo’s Senior Vice President and Belmes, the firm’s legal officer, “took the law into their hands and abetted their co-officers and co-employees of CJH to take the law into their hands in clear grave abuse of rights.”

The disbarment complaint against Alvarez and Belmes also emanates from Aniceto’s July 9 complaint before Assistant City Prosecutor Rolando Vergara on the demolition of her restaurant El Rancho by CJHDevCo on the wee hours of the morning on April 30, 2008 despite an injunctive relief already filed in court.

“Without any court order or any notice to me, (they) demolished the structures of the restaurant and forcibly took away all the things there,” Aniceto claimed.

Aniceto accordingly lost at least P5 million of her hard-earned money from her sheer entrepreneurial efforts for the past decades.

Lawyer Gayo insisted “although there was notice to vacate, there was no notice of demolition,” though Alvarez had insisted that the concessionaire’s contract had lapsed and the firm needs the area for the Ayala development plan, thus their notice for her to walk away from John Hay.

Gayo had suspected Aniceto was singled out citing why other structures beside the former El Rancho restaurant have not been demolished until now.

Including Alvarez and Belmes, Aniceto had sued CJHEDevCo Officer-in-charge Frederico Alquiros, Project development officer Engr. Saldy Masarate, Chief security officer Albert Escalderon, Supply Officer Austin Tiongan, Security supervisor Renato Reyes and several others John Does for the same criminal and civil suit.

Lawyer’s Code breach

As lawyers, Alvarez and Belmes breached the Code of Professional responsibility and their Oath of Office when they allegedly ordered the demolition despite a case still pending in court Aniceto claimed before the IBP’s Commission on Bar Discipline,.

The complainant also claimed that the demolition at early dawn “was to surprise (me) and render (me) unable to seek injunctive reliefs.” Alvarez and Belmes “not only disrespected and disregarded the law and legal process, but engaged in unlawful conduct and abetted activities aimed at defiance of the law and at lessing confidence in the legal system in violation of their oath as lawyers and of Canon 1, rules 1.01 and 1.02 of the Code of Professional responsibility,” she added.

Canon 1 states that a lawyer shall uphold the Constitution, obey the laws of the land and promote respect for law and for legal processes. Its Rule 1.01 stipulates that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct, while Rule 1.02 says that a lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system.

“These tenets underscore the role of a lawyer as the vanguard of our legal system, which both Alvarez and Belmes defied and violated,” Gayo explained .

By taking the law into their hands, Gayo further claimed, Alvarez and Belmes, have caused Aniceto to lose her sole source of livelihood, in violation of her Constitutional right not to be deprived of property, without due process of law.

Aniceto was earlier allowed by the courts to litigate as a “pauper litigant” because she had nothing to pay for the filing fees at the prosecutor’s office here.

Harassment suit?

Still, Alvarez claimed the disbarment case is still part of Aniceto’s harassment against them. “It is unfortunate that aside from harassing our officers with criminal cases, comes this,” she said

The CJHDevCo senior vice-president also claimed that these were already “part of desperate moves (of Aniceto) to unfairly attack counsels.”

Alvarez vowed they would face the suits squarely.

Aniceto’s earlier criminal complaint was also tagged by Alvarez as “totally without basis”.

Alvarez had said that Aniceto’s axe to grind comes from her “losing the injunctive relief she earlier sought but was denied.”

Aniceto earlier petitioned Executive Judge Edilberto Claravall for a Temporary Restraining Order and was granted.  When the TRO lapsed, again Aniceto asked for a Preliminary Injunction but was denied.

Gayo filed for a motion for reconsideration which is still pending in court. “It is not resolved yet because the civil case and other reliefs we sought in the civil case have not gone to trial,” he said contrary to Alvarez’s insistence. # Contributed by Ace Alegre(NorthernDispatch)

Meralco execs charged with P889M syndicated estafa

August 23, 2008

CHARGES of syndicated estafa were filed yesterday by the Department of Justice against corporate officers of the Manila Electric Co (Meralco) for converting as income the interest earned by meter and bill deposits of subscribers in the amount of P889 million.

The charges were filed before the Pasig regional trial court after Meralco officials failed to file a counter-affidavit on the allegations of complainant National Association of Electricity Consumers (Nasecore).

Syndicated estafa is a non-bailable offense.

In a 31-page resolution, the DOJ panel of prosecutors found probable cause to indict Meralco chairman Manuel Lopez, and the 2006 board of directors composed of Arthur Defensor Jr., Gregory Domingo, Octavio Victor Espiritu, Christian Monsod, Federico Puno, Washington Sycip, Emilio Vicens, Francisco Viray, and Cesar Virata.

Also impleaded were Daniel Tagaza, executive vice president and chief financial officer of Meralco; Rafael Andrada, first vice president and treasurer; Helen de Guzman, vice president and corporate auditor and compliance officer; Antonio Valera, vice president and assistant comptroller; and Manolo Fernando, senior assistant vice president and assistant treasurer.

The DOJ said there is strong evidence sufficient to support a finding of probable cause for the commission of estafa, and that respondents committed “felonious acts.”

Meralco had acknowledged 10 percent interest on deposits made by its subscribers pursuant to Energy Regulatory Board (ERB) Resolution No. 95-21.

In anticipation of a favorable approval of its request for reduction of the 10 percent rate to 6 percent per year, Meralco had provisionally divided the 10 percent into 6 percent as “customer deposits” account and 4 percent as operating reserves account.

Its request was denied by the Energy Regulation Commission (ERC) in 2004. Meralco then reclassified the 4 percent portion by transferring the same to its “customers deposits” account which clearly indicated that the amounts are being maintained and held for purposes of complying with its obligations as mandated under ERB Resolution 95-21.

The ERC resolution as well as Electric Power Industry Reform Act of 2001 (EPIRA), mandates Meralco to return the principal and fruits of the money submitted by its subscribers for meter and bill deposits.

Instead of maintaining the money under its “customers deposits” accounts, Meralco again reclassified on Dec. 31, 2006 the 4 percent portion of the interest which accrued from September 1995 to May 2003 by transferring the said amount to its interest and other income.

Nasecore president Petronilo Ilagan said that the conversion was illegal because the money was in the nature of a fund that should have been held in trust by Meralco for its consumers because it must be paid back to them. – Evangeline de Vera(Malaya)

War in the Caucasus: Toward a Broader Russia-US Military Confrontation?

August 21, 2008

Global Research, August 10, 2008
Posted by Bulatlat
Vol. VIII, No. 28, August 17-23, 2008

During the night of August 7, coinciding with the opening ceremony of the Beijing Olympics, Georgia’s president Saakashvili ordered an all-out military attack on Tskhinvali, the capital of South Ossetia.

The aerial bombardments and ground attacks were largely directed against civilian targets including residential areas, hospitals and the university. The provincial capital Tskhinvali was destroyed. The attacks resulted in some 1500 civilian deaths, according to both Russian and Western sources. “The air and artillery bombardment left the provincial capital without water, food, electricity and gas. Horrified civilians crawled out of the basements into the streets as fighting eased, looking for supplies.” (AP, August 9, 2008). According to reports, some 34,000 people from South Ossetia have fled to Russia. (Deseret Morning News, Salt Lake City, August 10, 2008)

The importance and timing of this military operation must be carefully analyzed. It has far-reaching implications.

Georgia is an outpost of US and NATO forces, on the immediate border of the Russian Federation and within proximity of the Middle East Central Asian war theater. South Ossetia is also at the crossroads of strategic oil and gas pipeline routes.

Georgia does not act militarily without the assent of Washington. The Georgian head of State is a US proxy and Georgia is a de facto US protectorate.

Who is behind this military agenda? What interests are being served? What is the purpose of the military operation.

There is evidence that the attacks were carefully coordinated by the US military and NATO.

Moscow has accused NATO of “encouraging Georgia”. Russia’s Foreign Minister Sergey Lavrov underscored the destabilizing impacts of “foreign” military aid to Georgia: .

“It all confirms our numerous warnings addressed to the international community that it is necessary to pay attention to massive arms purchasing by Georgia during several years. Now we see how these arms and Georgian special troops who had been trained by foreign specialists are used,” he said.(Moscow accuses NATO of having “encouraged Georgia” to attack South Ossetia,, Russia Today, August 9, 2008)

Moscow’s envoy to NATO, Dmitry Rogozin, sent an official note to the representatives of all NATO member countries:

“Russia has already begun consultations with the ambassadors of the NATO countries and consultations with NATO military representatives will be held tomorrow,” Rogozin said. “We will caution them against continuing to further support of Saakashvili.”

“It is an undisguised aggression accompanied by a mass propaganda war,” he said.

(See Moscow accuses NATO of having “encouraged Georgia” to attack South Ossetia, , Russia Today, August 9, 2008)

According to Rogozin, Georgia had initially planned to:

“start military action against Abkhazia, however, ‘the Abkhaz fortified region turned out to be unassailable for Georgian armed formations, therefore a different tactic was chosen aimed against South Ossetia’, which is more accessible territorially. The envoy has no doubts that Mikheil Saakashvili had agreed his actions with “sponsors”, “those with whom he is negotiating Georgia’s accession to NATO “. (RIA Novosti, August 8, 2008)

Contrary to what was conveyed by Western media reports, the attacks were anticipated by Moscow. The attacks were timed to coincide with the opening of the Olympics, largely with a view to avoiding frontpage media coverage of the Georgian military operation.

On August 7, Russian forces were in an advanced state readiness. The counterattack was swiftly carried out.

Russian paratroopers were sent in from Russia’s Ivanovo, Moscow and Pskov airborne divisions. Tanks, armored vehicles and several thousand ground troops have been deployed. Russian air strikes have largely targeted military facilities inside Georgia including the Gori military base.

The Georgian military attack was repelled with a massive show of strength on the part of the Russian military.

Act of Provocation?

US-NATO military and intelligence planners invariably examine various “scenarios” of a proposed military operation– i.e. in this case, a limited Georgian attack largely directed against civilian targets, with a view to inflicting civilian casualties.

The examination of scenarios is a routine practice. With limited military capabilities, a Georgian victory and occupation of Tskhinvali, was an impossibility from the outset. And this was known and understood to US-NATO military planners.

A humanitarian disaster rather than a military victory was an integral part of the scenario. The objective was to destroy the provincial capital, while also inflicting a significant loss of human life.

If the objective was to restore Georgian political control over the provincial government, the operation would have been undertaken in a very different fashion, with Special Forces occupying key public buildings, communications networks and provincial institutions, rather than waging an all out bombing raid on residential areas, hospitals, not to mention Tskhinvali’s University.

The Russian response was entirely predictable.

Georgia was “encouraged” by NATO and the US. Both Washington and NATO headquarters in Brussels were acutely aware of what would happen in the case of a Russian counterattack.

The question is: was this a deliberate provocation intended to trigger a Russian military response and suck the Russians into a broader military confrontation with Georgia (and allied forces) which could potentially escalate into an all out war?

Georgia has the third largest contingent of coalition forces in Iraq after the US and the UK, with some 2000 troops.  According to reports, Georgian troops in Iraq are now being repatriated in US military planes, to fight Russian forces. (See, August 10, 2008))

This US decision to repatriate Georgian servicemen suggests that Washington is intent upon an escalation of the conflict, where Georgian troops are to be used as cannon fodder against a massive deployment of Russian forces.

US-NATO and Israel Involved in the Planning of the Attacks

In mid-July, Georgian and U.S. troops held a joint military exercise entitled “Immediate Response” involving respectively 1,200 US and 800 Georgian troops.

The announcement by the Georgian Ministry of Defense on July 12 stated that they US and Georgian troops were to “train for three weeks at the Vaziani military base” near the Georgian capital, Tbilisi. (AP, July 15, 2008). These exercises, which were completed barely a week before the August 7 attacks, were an obvious dress rehearsal of a military operation, which, in all likelihood, had been planned in close cooperation with the Pentagon.

The war on Southern Ossetia was not meant to be won, leading to the restoration of Georgian sovereignty over South Ossetia. It was intended to destabilize the region while also triggering a US-NATO confrontation with Russia.

On July 12, coinciding with the outset of the Georgia-US war games, the Russian Defense Ministry started its own military maneuvers in the North Caucasus region. The usual disclaimer by both Tblisi and Moscow: the military exercises have “nothing to do” with the situation in South Ossetia. (Ibid)

Let us be under no illusions. This is not a civil war. The attacks are an integral part of the broader Middle East Central Asian war, including US-NATO-Israeli war preparations in relation to Iran.

The Role of Israeli Military Advisers

While NATO and US military advisers did not partake in the military operation per se, they were actively involved in the planning and logistics of the attacks. According to Israeli sources (, August 8, 2008), the ground assault on August 7-8, using tanks and artillery was “aided by Israeli military advisers”. Israel also supplied Georgia with Hermes-450 and Skylark unmanned aerial vehicles, which were used in the weeks leading up to the August 7 attacks.

Georgia has also acquired, according to a report in Rezonansi (August 6, in Georgian, BBC translation) “some powerful weapons through the upgrade of Su-25 planes and artillery systems in Israel”. According to Haaretz (August 10, 2008), Israelis are active in military manufacturing and security consulting in Georgia.

Russian forces are now directly fighting a NATO-US trained Georgian army integrated by US and Israeli advisers. And Russian warplanes have attacked the military jet factory on the outskirts of Tbilisi, which produces the upgraded Su-25 fighter jet, with technical support from Israel. (, August 10, 2008)

When viewed in the broader context of the Middle East war, the crisis in Southern Ossetia could lead to escalation, including a direct confrontation between Russian and NATO forces. If this were to occur, we would be facing the most serious crisis in US-Russian relations since the Cuban Missile crisis in October 1962.

Georgia: NATO-US Outpost

Georgia is part of a NATO military alliance (GUUAM) signed in April 1999 at the very outset of the war on Yugoslavia. It also has a bilateral military cooperation agreement with the US. These underlying military agreements have served to protect Anglo-American oil interests in the Caspian sea basin as well as pipeline routes.

Both the US and NATO have a military presence in Georgia and are working closely with the Georgian Armed Forces. Since the signing of the 1999 GUUAM agreement, Georgia has been the recipient of extensive US military aid.

Barely a few months ago, in early May, the Russian Ministry of Defense accused Washington, “claiming that [US as well as NATO and Israeli] military assistance to Georgia is destabilizing the region.” (Russia Claims Georgia in Arms Buildup, Wired News, May 19, 2008). According to the Russian Defense Ministry

“Georgia has received 206 tanks, of which 175 units were supplied by NATO states, 186 armored vehicles (126 – from NATO) , 79 guns (67 – from NATO) , 25 helicopters (12 – from NATO) , 70 mortars, ten surface-to-air missile systems, eight Israeli-made unmanned aircraft, and other weapons. In addition, NATO countries have supplied four combat aircraft to Georgia. The Russian Defense Ministry said there were plans to deliver to Georgia 145 armored vehicles, 262 guns and mortars, 14 combat aircraft including four Mirazh-2000 destroyers, 25 combat helicopters, 15 American Black Hawk aircraft, six surface-to-air missile systems and other arms.” (Interfax News Agency, Moscow, in Russian, Aug 7, 2008)

NATO-US-Israeli assistance under formal military cooperation agreements involves a steady flow of advanced military equipment as well as training and consulting services.

According to US military sources (spokesman for US European Command), the US has more than 100 “military trainers” in Georgia. A Pentagon spokesman Bryan Whitman “said there were no plans to redeploy the estimated 130 US troops and civilian contractors, who he said were stationed in the area around Tblisi” (AFP, 9 August 2008). In fact, US-NATO military presence in Georgia is on a larger scale to that acknowledged in official statements. The number of NATO personnel in Georgia acting as trainers and military advisers has not been confirmed.

Although not officially a member of NATO, Georgia’s military is full integrated into NATO procedures.  In 2005, Georgian president proudly announced the inauguration of the first military base, which “fully meets NATO standards”. Immediately following the inauguration of the Senakskaya base in west Georgia, Tblisi announced the opening of a second military base at Gori which would  also “comply with NATO regulations in terms of military requirements as well as social conditions.” (Ria Novosti, 26 May 2006).

The Gori base has been used to train Georgian troops dispatched to fight under US command in the Iraq war theater.

It is worth noting that under a March 31, 2006, agreement between Tblisi and Moscow, Russia’s two Soviet-era military bases in Georgia – Akhalkalaki and Batumi have been closed down. (Ibid)  The pullout at Batumi commenced in May of last year, 2007. The last remaining Russian troops left the Batumi military facility in early July 2008, barely a week before the commencement of the US-Georgia war games and barely a month prior to the attacks on South Ossetia.

The Israel Connection

Israel is now part of the Anglo-American military axis, which serves the interests of the Western oil giants in the Middle East and Central Asia.

Israel is a partner in the Baku-Tblisi- Ceyhan pipeline which brings oil and gas to the Eastern Mediterranean. More than 20 percent of Israeli oil is imported from Azerbaijan, of which a large share transits through the BTC pipeline. Controlled by British Petroleum, the BTC pipeline has dramatically changed the geopolitics of the Eastern Mediterranean and the Caucusus:

“[The BTC pipeline] considerably changes the status of the region’s countries and cements a new pro-West alliance. Having taken the pipeline to the Mediterranean, Washington has practically set up a new bloc with Azerbaijan, Georgia, Turkey and Israel, ” (Komerzant, Moscow, 14 July 2006)

While the official reports state that the BTC pipeline will “channel oil to Western markets”, what is rarely acknowledged is that part of the oil from the Caspian sea would be directly channeled towards Israel, via Georgia. In this regard, a Israeli-Turkish pipeline project has also been envisaged which would link Ceyhan to the Israeli port of Ashkelon and from there through Israel’s main pipeline system, to the Red Sea.

The objective of Israel is not only to acquire Caspian sea oil for its own consumption needs but also to play a key role in re-exporting Caspian sea oil back to the Asian markets through the Red Sea port of Eilat. The strategic implications of this re-routing of Caspian sea oil are far-reaching. (For further details see Michel Chossudovsky, , The War on Lebanon and the Battle for Oil, Global Research, July 2006)

What is envisaged is to link the BTC pipeline to the Trans-Israel Eilat-Ashkelon pipeline, also known as Israel’s Tipline, from Ceyhan to the Israeli port of Ashkelon.

“Turkey and Israel are negotiating the construction of a multi-million-dollar energy and water project that will transport water, electricity, natural gas and oil by pipelines to Israel, with the oil to be sent onward from Israel to the Far East,

The new Turkish-Israeli proposal under discussion would see the transfer of water, electricity, natural gas and oil to Israel via four underwater pipelines.

Baku oil can be transported to Ashkelon via this new pipeline and to India and the Far East.[via the Red sea]”

“Ceyhan and the Mediterranean port of Ashkelon are situated only 400 km apart. Oil can be transported to the city in tankers or via specially constructed under-water pipeline. From Ashkelon the oil can be pumped through already existing pipeline to the port of Eilat at the Red Sea; and from there it can be transported to India and other Asian countries in tankers. (REGNUM)

In this regard, Israel is slated to play a major strategic role in “protecting” the Eastern Mediterranean transport and pipeline corridors out of Ceyhan. Concurrently, it also involved in channeling military aid and training to both Georgia and Azerbaijan.

A far-reaching 1999 bilateral military cooperation agreement between Tblisi and Tel Aviv was reached barely a month before the NATO sponsored GUUAM agreement. It was signed in Tbilisi by President Shevardnadze and Israel’s Prime Minister Binyamin Netanyu. These various military cooperation arrangements are ultimately intended to undermine Russia’s presence and influence in the Caucasus and Central Asia.

In a pro forma declaration, Tel Aviv committed itself, following bilateral discussions with Moscow, on August 5, 2008, to cut back military assistance to Georgia.

Russia’s Response

In response to the attacks, Russian forces intervened with conventional ground troops. Tanks and armored vehicles were sent in. The Russian air force was also involved in aerial counter-attacks on Georgian military positions including the military base of Gori.

The Western media has portrayed the Russian as solely responsible for the deaths of civilians, yet at the same time the Western media has acknowledged (confirmed by the BBC) that most of the civilian casualties at the outset were the result of the Georgian ground and air attacks.

Based on Russian and Western sources, the initial death toll in South Ossetia was at least 1,400 (BBC) mostly civilians.  “Georgian casualty figures ranged from 82 dead, including 37 civilians, to a figure of around 130 dead…. A Russian air strike on Gori, a Georgian town near South Ossetia, left 60 people dead, many of them civilians, Georgia says.” (BBC, August 9, 2008). Russian sources place the number of civilian deaths on South Ossetia at 2000.

A process of escalation and confrontation between Russia and America is unfolding, reminiscent of the Cold War era.

Are we dealing with an act of provocation, with a view to triggering a broader conflict?  Supported by media propaganda, the Western military alliance is intent on using this incident to confront Russia, as evidenced by recent NATO statements. Posted by Bulatlat

Michel Chossudovsky is the author of the international bestseller America’s “War on Terrorism” ”  Global Research, 2005.

GlobalUSAtion: Lawyers, Human Rights and the Contradictions of the Legal Order

August 21, 2008

Division of Humanities, Macquarie University
Sydney, Australia
Contributed to Bulatlat
Vol. VIII, No. 28, August 17-23, 2008

“First thing we do, let’s kill all the lawyers”
Shakespeare, Henry VI, Part II [Act 4, Sc.2]

“First they came for the lawyers…”
News commentator, re Musharraf’s sacking of Pakistan judges, 2007

“If they remove the fountain of justice, where will the people go?”
Judge of the Lahore High Court, Pakistan, 2008

“Rules established by men who have control of organized power and which are enforced against the recalcitrant by the lash, prison, and even murder”
Tolstoy-a definition of law

“Laissez faire economics is anarchy plus a constable”
Thomas Carlyle


In this paper I want to highlight the contradictory nature of law and human rights. As historically and socially constructed concepts and practices they are necessarily contradictory, and therefore must be examined critically to pierce the ideological veil which makes them seem forces solely for good. It is that “common sense” view that needs to be challenged.

The quotations above reflect this contradictory nature. Killing (or removing) all the lawyers is what many would wish to do! Be they dictators/autocrats out of fear of the principled opposition of legal advocates, as in the cases of Musharraf and Arroyo; or those who, as in Shakespeare (on one reading), had seen lawyers consistently and often corruptly oppose the needs, desires and rights of ordinary people. The ideological faith in the capacity of “the law” to protect the common people is typically reflected in the views of the Judge from Pakistan-law as the “fountain of justice”. But Count Tolstoy reminds us of the dark side of law-an instrument of repression used by the powerful against those seen not as humans, rather simply as problems to be “resolved”. Importantly in this age of “free trade”, Carlysle, speaking across the centuries, reveals an historic truth: the freedom of the trader is backed by the sanction of the state.

I start with a brief discussion of the role of the USA in relation to human rights. This is important because of the power of the country but also because of what many scholars have called USA “exceptionalism”. Whatever we might think, the crucially important ideological self-understanding of the American people has been that it is not, nor has it ever been, an “empire”; and that whatever it has done in dealing with other countries and peoples has been done to bring them freedom, civilization, democracy and, in the language of recent times, human rights. Here I want to make the point that what the USA has been doing in the past four decades is not just a few wrong policy choices and/or badly managed wars etc, but part of a historical pattern. It is systemic and structural, not just a recent “failing” to be corrected in the next-kinder, gentler- installment. Change there will be after the disaster of Iraq and Afghanistan, but change ain’t always what we want or need!

Having discussed the role of lawyers in resistance to oppressive regimes, using both traditional court-orientated as well as a variety of non-curial tactics, much of it based on human rights concepts and some of it integrated with social movements’ struggles, I move on to consider some of the problems with “human rights” for a long term revolutionary strategy.

In the last section I look at some of the ways in which it might be possible to move beyond “human rights”, while recognizing that in the contemporary period, the critical struggle for human rights will remain of fundamental importance. Importantly, the struggle for human rights- in the sense of dignity, the absence of inequality and unnecessary suffering caused by oppression and exploitation- cannot be divorced from the revolutionary re-constitution of societies from the bottom up: the constitution of new democratic peoples’ republics around the globe. Speed the day!

GlobalUSAtion , AmeriKa and “human rights” in perspective

Why GloabalUSAtion? Because language is important in anti-hegemonic work, and the USA (which I will refer to as AmeriKa) needs to be singled out for particular obloquy. It is the global hegemon, despite its current domestic and foreign problems. It is the driving force behind much of the oppressive and exploitative activity in the world today. Yet the nation maintains a certain positive aura as a protector of freedom, democracy and “human rights”, while the Bush regime attracts the opprobrium for the nefarious global adventures of the AmeriKan corporate-state axis of evil. It is important that AmeriKa is recognized for the imperialist power that it is and that, unlike in the post-Viet Nam Carter years, it is not able to rehabilitate its international reputation under a new and more charismatic President. Under Carter the country largely regained its stature through a comprehensive “human rights” initiative despite the appalling loss of life and social-economic devastation it had wrought in South East Asia only a few years before.

AmeriKa has been for a long time a major cause of the loss of human rights around the world. Indeed, it commenced its rise to international super-power status, and major “human rights” moral entrepreneur, with
its imperial adventures in Cuba and the Philippines in 1898 and the years following. In both cases, while bringing “freedom” it intervened to block the autonomous development of peoples who were on the verge of throwing off the Spanish yoke in order to grasp their own destiny. It was early “regime change”. (In fact, it followed the “regime change” AmeriKa had engineered in Hawai’i a few years previously.) In the Philippines, as in Iraq and many countries in the intervening years, AmeriKan imperialism was the cause of enormous loss of life. Again as in Iraq with the infamous “Mission Accomplished”, though the President of the USA announced the Filipino “insurgency” was over in 1902, the guerrilla war lasted for many years beyond that with great loss of civilian life, including several massacres in Mindanao, one as late as 1913. And as in Iraq and Viet Nam before it, AmeriKa used a panoply of techniques for “pacification” among which were: torture of many kinds, including the “water cure”; free-fire zones and the correlative forced concentration or “hamletting” of civilians; food, crop, animal and village destruction; wanton killings and massacres of civilians; reprisals against civilians for revenge and/or deterrence; executions of guerrillas, in particular leaders such as Sakay (in 1906) after surrender on promise of amnesty; denial of combatant status and re-labeling as ladrones or bandits; use of military commissions and kangaroo courts. And it should be noted that one of the two most famous “pacification” campaigns, the “battle for Batangas” in Southern Luzon, in which most of the tactics indicated above were used, is today the subject of study in US military institutions.

GlobalUSAtion and lawyers resistance

I am using the concept of globalization in a particular and limited way. Here it refers to the processes-political, military, and economic-whereby countries around the world have been brought under the domination of the USA and its “allies”, using the alphabet soup of international institutions (UN, WTO, IMF, etc) and the World Bank. A major effect of this has been to dramatically increase and deepen poverty while increasing disparities in living conditions significantly, at the same time placing the human rights of hundreds of millions people under grave threat.

In a recent paper Stuart Russell and I have discussed the role that lawyers in four different countries- Pakistan, Philippines, Malaysia, and France- have played in resisting state policies which were, directly or indirectly, responses to GlobalUSAtion. While the well known phrase from Shakespeare “First thing we do, Let’s kill all the lawyers” might find widespread support from those who have experienced the calumny of traditional lawyers weaving their magic on behalf of the state or corporate power, and historically from many on the Left, today the image of lawyers is more clearly contradictory. Lawyers are also playing an important, often courageous role, in resisting oppression and exploitation across a wide range of issues. The argument made in that paper is that as the process of globalization proceeds apace, the state, to maintain the crucial façade of democracy, is increasingly required to act under color of law to maintain the conditions of existence whereby multi-national (and national) capital can continue to exploit the masses and their natural resources. Even authoritarian states try to maintain the conditions of their own existence under color of law in order to try to minimize the perception of illegitimacy and possible efforts for regime change from internal or external forces. In part this is because of the current strength of the discourse of human rights.

It is the dependence by states, and capital, on the legal order which has put lawyers in a strategic position of great importance. It has called forth lawyer- resistance in the courts and, latterly, outside the courts, usually integrated with other social movements but occasionally as a separate body of lawyers. In each of the four countries, lawyers have played a significant, even a leading part, in public resistance-outside the courts- to state attacks on human rights. In three countries lawyers went on strike and demonstrated vigorously against specific actions and policies of repressive regimes. In Pakistan the lawyers- resistance movement was an important factor in the electoral victory of Musharraf’s opponents. And the lawyers’ movement in that country, under the leadership-at least symbolic- of the Chief Justice, continues to play an important role in the politics of constituting the new government and the heralded reform program.

In the Philippines, progressive lawyers have played an important role in opposing the corrupt and vicious Arroyo regime. While there have not been lawyer strikes, as far as I know, lawyers have been comprehensively engaged in resistance activity both in and outside the courts, as well as in anti-regime activities of a densely organized and courageous civil society. Tragically, but perhaps not surprisingly, a number of lawyers have been assassinated by agents of the state during Arroyo’s governance.

Much of the lawyer-resistance activity has been based in struggles for human rights. It is clear, then, that the concept of human rights, institutionalized at the international level in the Universal Declaration of Human Rights, and the two Covenants-on civil and political rights, and on social, economic and cultural rights- provides an important ideological basis for challenging state and, perhaps to a lesser extent, corporate activity in denial of those rights. It is fair to say that around the world, the appeal to human rights has been a strong weapon in struggles for democracy, justice, equality, and the protection of our environment.

Michel Foucault has written:
“It seems to me that the real political task in a society such as ours is to criticize the working of the institutions which appear to be both neutral and independent; to criticize them in such a way that the political violence which has always exercised itself obscurely through them will be unmasked, so that we can fight them.”

While the extent to which law appears “neutral and independent” varies from country to country-perhaps from North to South- and surely from class to class, I think we can agree with the general thrust of Foucault’s message, and here apply it to the concept, and practice, of human rights which carries with it such ideological power.

Human Rights and “Humanitarian Intervention” in a Globalising World

In this and the following section I want to look briefly at some problems and limitations of human rights. Perhaps the most problematic issue in contemporary human rights discourse is that of “humanitarian intervention”. It is a broad and historically laden concept which I will briefly introduce. What we are faced with is the reality that many countries have used the moral and emotional appeal of human rights to justify intervention in other countries. Sometimes such intervention is based on a combination of reasons, including, eg, security (Tanzania’s invasion of Uganda which led to the destruction of the repressive Amin (Regime); restoring to power an unlawfully deposed government which had previously been democratically elected (the USA in Haiti, at that time backing President Aristide). Sometimes there are fundamental strategic reasons, as we have seen in Iraq where the USA justified the invasion in 2003, particularly ex post facto (no WMD having been found), as being in the interests of the Iraqi people and their human rights. Some of these interventions are unilateral, some multilateral, and often with some degree of involvement/commitment of the United Nations. An interesting current debate has arisen about Burma, the problem for the Left presented by the catastrophe there and the attempts to force solutions on the regime of the Generals.

I have mentioned only a few “human rights” or “humanitarian interventions”. There have been many more, especially in recent times. (In earlier times, colonial interventions were often justified as bringing “civilization” to savages or bringing “Christianity” to pagans etc). If it is a universal concept such that there ought to be interventions whenever there are substantial human rights under threat, then given the appalling and widespread violations of human rights in the world today, we could expect to see a world of continuous conflict. But, of course, we do not. Such interventions tend to be highly selective regarding those who are to be protected and those who will be left unprotected. We are well aware of the shameful history AmeriKa has in supporting, and installing, brutal regimes around the globe. Surely it is not being cynical to suggest that strategic rationales-not least what is good for capital- play a fundamental part in determining who gets to “benefit” from “humanitarian interventions”, some of which, perhaps most, are certainly “imperialist interventions”. That they are overwhelmingly North v South is surely strong evidence of that proposition, particularly in view of the historic and systemic exploitation of the latter by the former.

In the period of AmeriKa’s overseas imperialism commencing with Hawai’I in the 1890s, I believe the USA has been the leading intervenor in the world. ( and I am bracketing the “Indian Wars”, the “Mexican Wars” and the ideological “Manifest Destiny”-not to mention the hypocritical Monroe Doctrine-plus Japan and China in the latter half of the 19th century and early 20th). It has also been the leading purveyor of “humanitarian intervention”. Its massive power to do so remains, despite the morass it has jumped into in Iraq and Afghanistan. In this “post-Westphalian” context where national sovereignty and the (theoretical) strict limits on the use of inter-state force appear to be subordinated to the market imperatives of global capitalism, the use of “human rights” as a major ideological justification for future interventions seems certain.

Of course the use of “human rights” as an ideological weapon does not mean that we need turn our backs on the idea of resisting their violation. Nor does it necessarily mean that all state/multi-state/UN interventions to solve human rights abuse should be condemned, although that could be seen to be a reasonable principle given the historical record. Nevertheless, I would be reluctant to adopt what was after all a principle established to ensure peace and stability-as it suited the protagonists-in the interest of protecting emerging nation-states and capital accumulation. There may be positive examples (eg Cuba in Southern Africa-if that had been the USA we would surely have seen it in less positive terms!) which demonstrate that this is a matter to be decided on perceived consequential grounds: will it work for the masses, and is it really about human rights? In discussing means and ends generally, Trotsky, in debate with the American philosopher, John Dewey, argued that not all means are justified but the means would be justified if the action really has the tendency to liberate mankind. A major practical problem with that approach is, of course: who gets to decide? Given the record, one would have to assume it would normally be those with the most power (Iraq demonstrates this well. Around the world the masses opposed the invasion while the UN was suckered by a deceitful AmeriKa). But again, life is full of contradictions, and one of the opportunities presented by aspects of globalization is the capacity for progressive forces to join together in constituting an international standard regarding the use of force to intervene for humanitarian purposes.

Another way to look at the issue is to ask: what is the alternative to state(s) or international intervention? What should we look to in the longer term? I would argue that we need to look toward the strengthening of the political power of the masses to act both nationally and internationally so that they eliminate the need for external intervention by anti-liberatory institutions such as the capitalist state(s) or even international
institutions such as the UN which are largely under their control.

Contradictions of Legal Order: against and for positivism

In this section I will raise and very briefly discuss some of the issues which are now being widely discussed in the debate over rights in a globalized world. In some respects, these are issues which have been discussed for more than a century on the Left, going back to Marx and Engels, and even further in the long history of the emergence of what we call today human rights.

First, law is a cultural artifact which is socially constructed within a particular social formation and therefore takes a particular form. In its contemporary form, and in the form most of us experience it first-hand, it is, generally speaking, “posited” by the state. It is what provides -or denies- us our rights. It is called “positive” law. In a capitalist society, even in a democracy, the law will largely reflect the interests of the wealthy and powerful. It could not be otherwise. Yet by its very nature, it is a site of struggle over legislation (Marx provides us, in Capital vol. 1, with a discussion of struggle over the Factory Acts); the interpretation of both the letter and spirit of the law but also the “facts” of the case; the policies and consequences to be considered-perhaps even including a discussion of the history of the emergence of the law; implementation of the law, or not; sanctions under the law; and reform of the law, or not. Then, especially today, there are struggles in various related sites, about whether other institutions should be created- Boards,Tribunals, Special Courts,etc-for determining, in different ways, the ‘rights” of persons or entities. In all of this, there is room for the assertion of rights against the state and against the wealthy and powerful. Thus I would argue-and there would be those who write off the argument- that we can ill afford to take an ultra-Left line and ignore the possibilities of positive law in contemporary societies. I will say more about our Filipino lawyer comrades (not that they need me to say it for them!) but they have demonstrated over the years how important contesting state and corporate capital in the courts really is. I suspect Prof. Sison may have a strong view on the contradictory nature of positive law after his recent experiences.

While human rights can be protected in the struggles within positive law, they are certainly limited by the nature of bourgeois law. It is state law, and the state, in general, disfavors the poor, marginalized, and Others in society. Further, the rights that are generally given protection, however weak, are individual rights not collective rights; further, the rights which are protected do not tend to be economic, social and cultural rights. Thus, while we can be for positive law, we also need to be against positive law in the sense of seeking more and different protection. I am here referring to what has been called law-from-below in contrast to the concept of positive law. Now there is a more radical view emerging, specifically focused on law and globalization, which I will refer to as subaltern counter-hegemonic legal struggle (SCHLS). A leading writer in this movement, De Sousa Santos, uses the phrase “subaltern cosmopolitan legality” which he sees as the legal counterpart to “counter-hegemonic globalisation”; there are other versions, but we speak the same language in general! What is being referenced is the movement amongst progressive lawyers and their allies to contest traditional philosophical and political frameworks, concepts, methods, practices of “top-down law”. It is in that sense against-positivism, state law and the traditional understanding of law from above ie that it should protect the wealthy and powerful and operate to exclude, exploit and oppress the masses. As De Sousa Santos puts it

“(S)ubaltern cosmopolitan legality follows the path of counter-hegemonic struggles first theorized by Gramsci…counter-hegemonic politics and legality aim to erode the ideology and coercive institutions that sustain and naturalize the hegemony of dominant classes and groups….Counter-hegemonic politics and subaltern cosmopolitan legality, however, go beyond this deconstructive phase. Indeed, they ultimately seek to offer new understandings and practices capable of replacing the dominant ones and thus of offering a new common sense.” It is a project which he argues “is both a critique of dominant conceptions of low-intensity, representative democracy and an ambitious proposal for the radicalization of political and economic democracy”.

Not surprisingly, the methods of SCHLS are different from those of traditional lawyering and, to some extent, go beyond those of radical lawyers involved in more traditional, litigation or law reform focused, human or civil rights struggles. SCHLS can be imagined as “all-in-wrestling” with the state. All progressive forces are tapped, in networks and alliances, to radically re-configure the “legal field”. The strategy of SCHILS is the mobilization of these forces, in all manner of activities- legal, illegal and non-legal- at all levels-local, provincial, national, regional and international- using not only courts but any other institutions which can be harnessed to the struggle. The immediate goal is to seek variation in the patterns of positive law concepts and practices which create exclusions, inequalities, abuses, but also to support the masses as they insert themselves further and more effectively in counter-hegemonic struggles around the globe. While much of this thinking is just emerging in the North, there are numerous examples of SCHLS across the South and some in what has been referred to as “the inner North” (or what used to be known as the “internal colonies”). In the following section I will exemplify SCHLS in a case study which I have been working on and which others here know at first hand-the struggle in the Philippines against the Arroyo regime.

SCHLS in the Philippines

Filipino lawyers have played an important role in the resistance to the neo-liberal regime of Arroyo which has an appalling record of repression, corruption and devastation of the environment in concert with the TNCs which have been pillaging the country for years. The policies of the regime-and previous regimes it must be remembered-have resulted in a chaotic economy which has typically seen the rich enriched, the poor further immiserated, and the country turned into the largest importer of rice in the world. Resistance to the regime has taken many forms, at a great price: nearly 1000 have been killed (including lawyers and judges), hundreds disappeared and/or tortured. Harassment/intimidation is widespread, not least at election time when even corrupt actions (vote fraud) by the President were not deemed to be sufficient to ensure electoral success for reaction.

What has impressed me is the density and sophistication of Philippine civil society, and the strength and determination of the progressive sector. Across the country there is active resistance to various programs of the state and activities of the TNCs. A comprehensive system of networks and alliances involving traditional and new social movements, NGOs and sympathetic institutions including some sectors of the religious community. Links with progressive political parties are also strong. All of these provide the manpower, resources and communications which are pro-active, as well as reactive, in the constant counter-hegemonic work eg regarding trade union and other labor struggles, peasant struggles for land and the protection of the environment which also draws in fisherfolk, and a host of other areas of resistance. As in other sectors, there is a national force-the National Union of Peoples’ Lawyers, as well as a loose federation of local and regional lawyers groups. In the entire gamut of counter-hegemonic resistance, progressive lawyers have been in the thick of struggles. They have often acted, with rapidity and acuity in defence of the civil and human rights of those being attacked by the state. They have also counter-attacked by challenging “terrorist legislation”, the ironically named Human Security Act of 2007; and they have carried a large part of the burden-with other sector support- in the national and international exposure of the atrocities committed by agents of the state, ie human rights violations in the form of Extrajudicial Killings and Disappearances. It is not an exaggeration to say that the regime has felt the “heat” from the constant “shadowing” of state activity by the lawyers using a variety of techniques. One of the results of the combined pressure upon the state was the extraordinary national Summit on Extrajudicial Killings and Disappearances called by the Chief Justice in 2007. From this came a number of positive recommendations. Several have been implemented, including new legal weapons (writs) to be used by lawyers against the state in protection of security rights of the people.

This political intervention by the Supreme Court judges is a good example of the contradictions of legal order, given the historic understanding of the neutrality of the judiciary. Another somewhat unusual example is the 2007 French lawyers’ strike against Sarkozy neo-liberal reforms of the legal system: to close many local and regional courts and to reduce the availability of legal aid (while decriminalizing certain white-collar activity, and imposing longer/indeterminate custodial terms on some sex offenders). It was nation-wide, creative and militant, involving senior lawyers, judges, bar associations etc. However, some of the judges involved in the strike were also amongst those who applied severe sanctions to “rioting” migrant youth in the banlieu of Paris, some of the very people who would be disadvantaged by the closure of the local courts.

In the end, the reforms were largely pushed through. But other lawyer resistance actions we have studied have been more successful, eg Malaysian lawyers’ demonstrations against abuses in the long-drawn out Anwar matter, and in solidarity with Hindus being discriminated against; and of course, most dramatic-the Pakistan lawyers’ demonstrations which were crucial in the developing resistance to Musharraf.

Budgeting” for social justice and human rights

In recent years a number of techniques have been used by lawyers and their allies in the struggle to demonstrate the culpability of repressive states. These would include Popular Courts/Tribunals such as the Permanent Peoples’ Tribunal. Another important contribution is the monitoring and recording state activity and publishing it widely, as Karapatan has so successfully done. In recent years the notion of “budgeting” has developed in many countries, two of which, Tanzania and Brazil, are useful to note here.

In Porto Allegre, Brazil “participatory budgeting” brought direct in-put from the grassroots into decisions on budgetary allocation and policy. In brief, this was possible because of the strength of the labor movement and the Left generally. Although it was extra-legal, the strength of the workers and the Left made it possible. Institutions were created outside the formal legal political structure, and the political situation was such that they had to be recognized as a legitimate part of the budgeting process.

In Tanzania, “gender budgeting” developed as a response to the negative effects on women, especially poor women, of the neo-liberal policies of the Tanzanian government, particularly after it was forced to capitulate to the IMF and undergo a “Structural Readjustment Program” in the 1980s. It was basically the mobilization of a coalition of progressive forces to 1) analyze state resource allocation and a range of policies to evaluate the effect on women,( later broadened to include poor and excluded groups generally because of the reality of interdependence); 2) to examine the role of TNCs and imperial links; and 3) to develop a democratic , informal extra-parliamentary “opposition”. Having done this, over a period of years, they were capable of bringing a transformative agenda to the public, and to bring pressure on the local, then higher levels of government-using national and international links- lobbying, demonstrations etc to try to achieve a re-distribution of resources which would be consistent with the agenda they had developed at grass-roots level.


I have only seen reports on these processes. Obviously there are potential problems, such as cooption and providing legitimacy for the state, as there are in any counter-hegemonic program. There are advantages as well, in developing capacity and consciousness of those involved. I suggest that a similar program for social justice and human rights might be worth considering as a part of SCHLS. In summary, building a coalition of forces which would have the kind of focus indicated in the Tanzania experience: analysis of government policies specifically dealing with law in order to assess the effect which legislation and court decisions have had, or will have, on the people i.e. is there, or is there likely to be, a negative result in terms of social justice and human rights?; putting the analysis in the framework of a progressive agenda to be fought for; and organizing grassroots “opposition” behind counter-hegemonic understandings and practices of law to try to de-mystify the legal framework in which the state and TNCs operate.

As a first step, as a legal academic, I recognize it will be necessary to challenge the traditional teaching of positive law in our Universities, a process of which I have some, mixed, experience! Contributed to Bulatlat


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Making a Killing

August 21, 2008

The Military and the Monetary, they get together whenever they think its necessary, they’ve turned our brothers and sisters into mercenaries, they are turning the planet, into a cemetery (Gil Scott-Heron)

GATT Watchdog
Contributed to Bulatlat
Vol. VIII, No. 28, August 17-23, 2008

In the late 1990s, well before Bush’s ‘war on terror’, New Zealand TV screened a particularly awful US action drama called ‘Soldier of Fortune Inc.’, about an elite team (composed of former US Marines, Delta Force, CIA, British SAS personnel) who performed ‘unofficial’ covert missions for the US Government. They would get a briefcase full of money from a shadowy military liaison and head to the Middle East, Latin America, Haiti, or the Balkans, or smoke out foreign agents and assorted enemies within the USA, missions for which Washington could claim plausible deniability because none were active duty soldiers. It was a dirty job, but someone had to do it to keep ‘US democracy’ safe, for a price. Sounds familiar? Truth is indeed sometimes stranger than fiction, and the onscreen adventures of this squad of special operations and intelligence experts pale into insignificance when held up against reality.

We live and struggle in an era of blatantly militarized capitalism and the violence of capital. War, occupation, national security ideologies and repression of dissent –at home and abroad – make for booming business opportunities the world over. As pro-free market US journalist Thomas Friedman succinctly put it: “The hidden hand of the market will never work without a hidden fist – McDonald’s cannot flourish without McDonnell Douglas, the builder of the F-15. And the hidden fist that keeps the world safe for Silicon Valley’s technologies is called the United States Army, Air Force and Marine Corps.”

Militarized capitalism: The military-industrial complex in 2008

What is the military-industrial complex in 2008? Where is it? What does it look like? I am not even sure if the phrase, used so famously by former US president Dwight Eisenhower in 1961 is the best descriptor to encompass the many tentacles and facets of the war and security industry and the links and connections between capital and its political allies. Do terms like ‘defence industry’ and ‘arms trade’ adequately encompass the face of today’s war profiteers, whose devastating impacts can equally be found in the high-tech apartheid wall being built by Israel to seal off the West Bank and Gaza, and its Western Hemispheric counterpart on the US-Mexico border, in the computer flight simulation programs provided to US and British military by Canada’s CAE, in private corporate mercenary armies like Blackwater, DynCorp and Aegis in Iraq, Afghanistan, and elsewhere, in the outsourced intelligence, IT, interrogation and translation services of L-3/Titan, in the massive military aid budgets which the US gives to the governments of Israel, Pakistan, Egypt and Colombia, among others, and in the ‘hearts and minds’ operations of US Special Operations Forces based in the Philippines doing ‘humanitarian work’ – medical, dental and other social services, including infrastructure projects in many remote communities in Mindanao- services which should be the function of a government, as much as it is in weapons production and arms exports.

Like all transnational corporations, these companies enjoy both patronage and revolving door relationships with the highest echelons of governments and their armed forces, tax breaks, support for exports, and all kinds of other incentives which help them to focus firmly on their bottom line – profit. US administrations, regardless of their party allegiance, brim with politicians with investments and business interests in the defence industry and war profiteers, perhaps most vividly symbolized by Dick Cheney’s ties to Halliburton and its multi-billion-dollar contracts to provide construction, hospitality, and other services to the US military after the invasion of Iraq in 2003. But it is business as usual for US militarized capitalism. An April 2008 Centre for Responsive Politics report states that US Congress members invested US $196 million of their own money in companies that receive hundreds of millions of dollars a day from Pentagon contracts to provide goods and services to US armed forces, ranging from aircraft and weapons manufacturers to producers of medical supplies and soft drinks. To cite a couple of typical revolving door examples, the General Dynamics board of directors includes an ex-Vice Chief of US Army staff, a former US Air Force General, a former Chief of Naval Operations in the US Navy, and a former Chief of Defence Procurement at the British Ministry of Defence, while Canada’s CAE’s current and former executives include a former Canadian deputy minister for international trade and foreign affairs, and former PM Brian Mulroney’s head of staff.

Hired Guns, Big Bucks, No Rules

Private armies hired by governments and companies are not new. The British East India company hired private mercenaries to fight proxy wars and gain control over India. But the exponential growth, sophistication and globalization of private security industry contractors like Blackwater and DynCorp, both of which derive well over 90% of their business from US government contracts, is striking. If regular soldiers often literally get away with murder, how much more so for private mercenaries given the lack of any oversight of their activities, under no effective regulatory regimes, although they are contracted by governments and paid out of public funds? They operate with impunity and immunity. They recruit and deploy former military and police from around the world, some of them veterans of the most repressive military forces in the world. On their website, Blackwater, whose contract with the US State Department was recently renewed despite outrage at one of many incidents in which their guards shot and killed 17 Iraqi civilians in Nisour Square, Baghdad, last September, claim: “We treat others with the highest degree of dignity, equal opportunity and trust. We respect the cultures and beliefs of people around the world”. On the ground, “Blackwater has no respect for the Iraqi people,” an Iraqi Interior Ministry official told a Washington Post reporter in 2007. “They consider Iraqis like animals, although actually I think they may have more respect for animals. We have seen what they do in the streets. When they’re not shooting, they’re throwing water bottles at people and calling them names. If you are terrifying a child or an elderly woman, or you are killing an innocent civilian who is riding in his car, isn’t that terrorism?”

All dollars, no sense

A February 2008 Center for Arms Control and Non-proliferation report notes that, adjusted for inflation, the Pentagon budget for fiscal year (FY) 2009 is the largest since World War II – US $ 515.4 billion: more even than during the Vietnam and Korean wars, or the peak of Reagan’s Cold War spending. The US spends more than the next 45 highest spending countries in the world combined, accounts for 48% of the world’s total military spending, 5.8 times more than China, 10.2 times more than Russia, and 98.6 times more than Iran. The same report cites US Office of Management and Budget estimates that total annual funding for the Defense Department alone will grow to $546 billion by FY 2013 – a conservative estimate. Total Pentagon spending, not including funding for the Department of Energy or for actual combat operations for the period FY’09 through FY’13 will reach $2.6 trillion. Last year, the Stockholm International Peace Research Institute (SIPRI) estimated that world military expenditure in 2006 reached US $1204 billion – a 3.5 % increase in real terms since 2005, and a 37% increase over the 10-year period since 1997. In 2006, the 15 countries with the highest spending accounted for 83% of the world total.

While the US military-industrial complex and military spending dwarfs the rest of the world, it has had a multiplier effect on other countries, coupled with its military aid packages and global ‘security’ hysteria. Japan’s government recently announced major military upgrades while South Korea, China, and Russia have all increased military spending. 2008 is a record year for Israeli defence spending. By 2006, four of the world’s 100 top arms production firms were Israeli: Israel Aircraft Industries, Israel Military Industries, Elbit Systems and Rafael. An October 2007 CBC report, based on customs data only on exports specifically for military use, found that between 2000 and 2006, Canada’s arms exports rose 3.5 times, during which time Canada, the world’s sixth-biggest supplier, exported CDN $3.6 billion in military goods. But there is little transparency on arms control, and the true picture of Canadian military exports is hard to track since the federal government has not released annual reports providing detailed information covering the years since 2002 to Parliament. A former subsidiary of Montreal-based SNC Lavalin, SNC Tec, for example, manufactures small arms ammunition for US military (SNC Tec was sold in 2006 to General Dynamics, after antiwar activists highlighted the Canadian corporate connection to bullets fired from US guns in Iraq).

A license to kill: The façade of arms control

Identifying and tracking the many tentacles of the weapons and agents of mass destruction is frustratingly difficult. For all of the criticisms of Third World governments’ secrecy and lack of transparency in terms of defence spending and military operations, so many loopholes exist in so-called First World countries with regard to arms control. For example, most military shipments from Canada to the US go untracked, since they do not require government permits because of a defence agreement signed between Ottawa and Washington in the 1940s. Some critics have noted that the export licencing requirements are so minimal that it is possible that some of that equipment moves to third parties.

Some EU governments have undermined, bypassed or ignored national export criteria and the EU code of conduct on arms exports. Spain and other countries (including Britain, and of course the US) have authorized transfers of equipment and other assistance to Colombia into the hands of state security forces and paramilitaries who have committed major human rights abuses. Italian-made small arms have also been shipped to countries in conflict or where violations of human rights occur, including Algeria, Colombia, Eritrea, Indonesia, India, Israel, Kazakhstan, Nigeria, Pakistan and Sierra Leone. British activist and writer Mark Thomas illustrates how British high-tech company Radstone does not require a licence to export supplies, the computer components comprising the “brains” of the Predator drone, an unmanned Aerial vehicle produced by General Atomics Aeronautical Systems, which was used by the CIA to fire missile strikes at Yemen against Al-Qaeda suspects in 2002, in the Federally Administered Tribal Areas of Pakistan in 2006, in an attack killing possibly up to 25 people including 5 women and 5 children, and more recently in the same region of Pakistan. British researcher Anna Stavrianakis argues that “[r]ather than acting to restrict arms exports, the guidelines against which arms export licence applications are assessed are vague and interpreted in such a way as to facilitate exports”. She continues, “the pro-export stance of successive UK governments, the close relationship they have with the arms industry, and the emphasis on military power as an indicator of prestige on the world stage, must all be challenged, as they form the parameters within which licensing occurs”.

According to a 2006 Amnesty International report, over 200 Chinese military trucks – normally running on US Cummins diesel engines – were shipped to Sudan in August 2005, despite a US arms embargo on both countries and the involvement of similar vehicles in killing and abducting civilians in Darfur. Chinese military hardware is shipped regularly to Burma, including the 2005 supply of 400 military trucks to Myanmar’s army. Chinese military exports went to Nepal in 2005 and early 2006, including a supply of Chinese-made rifles and grenades to Nepalese security forces, who were brutally repressing people’s movements. China is also implicated in the growing illicit trade in Chinese-made Norinco pistols in Australia, Malaysia, Thailand and particularly South Africa, often used for crimes like robbery and rape.

Militarized repression of dissent and imperialist globalization

Many governments, from the Philippines to India to Colombia, are waging overt or covert wars against resistance movements and government opponents, fostering a climate of fear in which arms and equipment are used for containing domestic dissent and security crackdowns against ‘enemies within’ – resistance movements of the poor, mobilizations of women, Indigenous Peoples, the landless, peasants, and workers, movements against free trade agreements and neoliberal reforms. Conflicts over land and inequitable access to resources are fuelled and exacerbated by the militarization of corporate activities such as mining, oil, gas, industrial farming and forestry industries. For example, a US District court judge has agreed that there is evidence showing that Chevron paid and equipped Nigerian military and police to shoot and torture protesters opposing the oil company’s activities in the Niger Delta region. Freeport McMoran paid Indonesian military, police and private security forces who attacked local communities around its Grasberg gold and copper mine in West Papua. And let’s not forget how the founder and chief executive of Aegis, former British Army Lt. Col. Tim Spicer was also founder of Sandline, another mercenary company contracted by the Papua New Guinea government over a decade ago for US $36 million for an ill-fated attempt to put down an indigenous independence movement in Bougainville, which had shut down the huge copper mine at Panguna, owned by a subsidiary of Rio Tinto. The military and the monetary, indeed.

As Uruguayan analyst/journalist Raul Zibechi notes, urban peripheries in Third World countries have also become war zones where states attempt to maintain order based on the establishment of a sort of ‘sanitary cordon’ to keep the poor isolated from ‘normal’ society. Such militarized containment of the poor reflects political and economic elites’ fear of challenges to state power from poor urban movements. The systematic undermining of states’ capacities to provide for the welfare of their populations, coupled with the disproportionate percentage of national budgets spent on the military militarization has fuelled poverty and conflict.

Kollsman, Inc. a New Hampshire-based subsidiary of Elbit, an Israeli firm involved with building the apartheid wall in occupied Palestine, was contracted by the Department of Homeland Security as part of a consortium that also includes Boeing subsidiary Boeing Integrated Defense Systems Unit to develop SBInet, a high-tech security system for the U.S.-Mexico (and US-Canada) borders, part of the Secure Border Initiative. As New York-based activist groups Ad Hoc Coalition for Justice in the Middle East and Desis Rising Up & Moving (DRUM) put it, “Elbit will import Israeli military technology, tested on Palestinians, for use against poor immigrants here.”
Militarization and enforceable free-market disciplines are tools to make countries ‘safe’ for foreign investors, at the expense of local communities’ rights to determine their own futures. World Trade Organization (WTO) agreements undermine social and environmental policies, but protect the war industry through a ‘security exception’ in the General Agreement on Tariffs and Trade (GATT) (Article XXI). The security exception states that a country cannot be stopped from taking any action it considers necessary to protect its essential security interests; actions ‘relating to the traffic in arms, ammunition and implements of war and such traffic in other goods and materials as is carried on directly for the purpose of supplying a military establishment (or) taken in time of war or other emergency in international relations’. While structural adjustment and trade and investment liberalization are being imposed throughout the Asia-Pacific region and beyond, health, education, and social budgets slashed, and support for most local industries or agriculture dismantled, corporate welfare and subsidies to the defence industry, and high levels of military spending remains alive and well.

Capitalist killing machines get gender-sensitive makeover: Women resist

The burden of war, conflict, violence and militarized capitalism falls disproportionately on women. The impacts on women can be seen not only in conflict zones but through the proliferation of small arms and the creeping militarization of communities and societies at large, leading to more violence against women in domestic and community contexts, rapes, sexual violence, displacement and the exaltation of warrior masculinities. Women are more likely to become war refugees. Unsurprisingly then, it has also been women who have led resistance against militarization, war and violence, US military bases and the accompanying masculinization of broader society and social behaviour. It is usually women who pick up the pieces in communities ripped apart by war, violence and state repression. Cynthia Enloe notes that social workers who address issues of domestic violence “agree that military service is probably more conducive to violence at home than at any other occupation”. Meanwhile, we are subjected to constant claims that a primary goal of the US-led invasion and occupation of Afghanistan is to liberate Afghani women. Commenting on this, Sunera Thobani notes, “one battle in the ideological war was to be waged on the terrain of gender relations, … rallying western populations around fantasies of saving Muslim women would be more effective than rallying them around the overtly imperialist policies of securing US control over oil and natural gas supplies.”

Just as purported humanitarian concerns are wheeled out as justifications for thinly-veiled imperialist wars over resources, military contractors and war profiteering corporations portray themselves as inclusive, socially progressive and gender-sensitive. On their corporate websites, these corporations’ core business is painted over with a cosmetic veneer that could cause us to forget that it is for war and killing people. For example, Pentagon contractors like Northrop Grumman boast of their “workforce diversity” and showcase their women executives. The Canadian and US defence industries have set up organizations like Women in Defence and Security (WiDS), signed memorandums of understanding with Canada’s Department of National Defence, and are affiliated with the Canadian Association of Defence and Security Industries (CADSI), an industry-led association of more than 550 member firms in the defence and security industries in Canada to “promote the advancement of women leaders in defence and security professions across Canada”. Raytheon, the maker of “Bunker Buster” bombs, Tomahawk and Patriot missiles, lobbed at Afghanistan and Iraq, causing many deaths, proclaims: “Diversity at Raytheon is about inclusiveness — providing an atmosphere where everyone feels valued and empowered to perform at a peak level, regardless of the many ways people are different”. Virginia-based Booz Allen Hamilton, one of the biggest suppliers of technology and personnel to US government spy agencies like the CIA, NSA, Defence Intelligence Agency (DIA), as well as the US Department of Defence and Department of Homeland Security (former CIA director R. James Woolsey is now a senior vice president of Booz Allen), also boasts how it is committed to diversity in the workforce “because we believe that diversity of backgrounds contributes to different ideas, which in turn drives better results for clients. To us, diversity means all the ways individuals differ from one another—race, gender, ethnicity, physical abilities, educational background, country of origin, age, sexual orientation, skills, income, marital status, parental status, religion, work experience, and military service”. Then there is Aegis Defence Services whose employees were caught on video randomly shooting automatic weapons at civilian cars in Baghdad’s airport road, which claims “Our equal-opportunity policy emphasizes our aim to create a work environment that is inclusive and non-discriminatory, where all employees are empowered by their individuality and encouraged to use it in order to achieve success”. Greenwashing environmentally destructive corporations is despicable enough. Yet there is something particularly obscene about the ways in which these corporations hide behind such mission and values statements and commitments to “diversity”, complementing the claims of the militaries in Afghanistan to be liberating Afghani women.


Many NGOs campaign for instruments like a Global Arms Trade Treaty. But when we see the spectrum of industries and political actors which benefit from militarized capitalism, and the way in which the US, Israel, and other leading producers and users of cluster munitions refused to attend last month’s Dublin Diplomatic Conference on Cluster Munitions which adopted an international treaty banning cluster munitions that cause unacceptable harm to civilians, it should be clear that we must go beyond these strategies to confront the system that underpins obscene profits for a few, at the expense of the many, through military contracting and war profiteering. That system is capitalism. Those of us who research must continue to expose and oppose militarization and the violence of capitalism in all its forms, in our communities, nationally and internationally. In doing so we need to support, build and sustain mass movements that understand the interconnectedness of war, neoliberal globalization, corporate profits, the repression of dissent, “peacekeeping”, “reconstruction”, the criminalization and militarization of immigration, violence against women, and colonialism.

[1] Gil Scott-Heron. Work For Peace. Taken from the album Spirits, TVT Records, 1994.

[2] Thomas Friedman, 28 March 1999, New York Times Magazine, Manifesto for the fast world


[4] See

[5] BBC News. US-Mexico ‘virtual fence’ ready. 23 February 2008.


[7] Jackie Northam. U.K. Firm awarded largest Iraq security contract.

[8] For example, DynCorp’s employees in Colombia contracting to the US State Department in its so-called War on Drugs, have engaged as combatants in counterinsurgency operations against rebels (see A number of DynCorp employees and supervisors contracted to UN peacekeeping operations in the Balkans were involved with forced prostitution rings, including children. (see Kelly Patricia O’Meara. US: DynCorp Disgrace. Insight Magazine. 14 January 2002,

[9] Pratap Chatterjee. Outsourcing Intelligence in Iraq: A report on L-3/Titan. CorpWatch. 29 April 2008.; Titan, one of the civilian contractors employed by the Pentagon and whose employees were involved in the abuse of Iraqi prisoners at Abu Ghraib. See, for example, Peter Beaumont, Abu Ghraib abuse firms are rewarded. The Observer, 16 January 2005.

[10] Center for Public Integrity.

[11] Roland Simbulan. U.S. Military Forces: Negotiated Subservience by an Illegitimate Government. Bulatlat. Vol. VIII, No. 5, March 2-8, 2008.




[15] Richard Sanders. We Didn’t Really Say “No” to Missile Defence.

[16] Tim Spicer, Founder and CEO of Aegis, (which holds the largest single security contract in Iraq), who prefers the term ‘private military company’ to ‘mercenary’, approvingly cites this as historical model as a precedent for soldiers of fortune today. See Tim Spicer. (1999). An Unorthodox Soldier: Peace and War and the Sandline Affair. Edinburgh: Mainstream Publishing.

[17] These include former Chilean, South African, Bosnian, Filipino, Salvadoran and Colombian soldiers and police. Bill Berkowitz. Mercenaries ‘R’ Us. AlterNet. 24 March 2004.; Danna Harman. Firms tap Latin Americans for Iraq. Christian Science Monitor, 3 March 2005.

[18] James Risen. Iraq Contractor in Shooting Case makes comeback. New York Times.

[19] CNN. Blackwater incident witness: “It was hell”.

[20] Blackwater Worldwide. Company Core Values.

[21] Steve Fainaru. Where Military Rules Don’t Apply. Washington Post. 20 September 2007.

[22] Christopher Hellman and Travis Sharp. Center for Arms Control and Non-proliferation. Fiscal Year 2009 Pentagon Spending Request Briefing Book


[24] John Feffer. Asia’s Hidden Arms Race. 16 February 2008.

[25] Another record year for defence spending in 2008. Haaretz, 28 December 2007.


[1] SNC Unloads its ammunition unit. Montreal Gazette. 24 February 2006.

[27] SNC Unloads its ammunition unit. Montreal Gazette. 24 February 2006.

[28] Canadian Broadcasting Corporation (CBC). News In Depth: Arming The World.

[29] Helen Hughes. Europe’s Deadly Business. Le Monde Diplomatique, 11 June 2006.

[30] Mark Thomas (2006). As used on the famous Nelson Mandela. Reading: Ebury Press.

[31] Anna Stavrianakis (2008).The façade of arms control

[32] Amnesty International. China: Sustaining conflict and human rights abuses. June 2006.

[33] Constance Ikokwu. Chevron to Face Trial in U.S. Over Nigeria Killings. This Day (Lagos). 16 August 2007.

[34] Down To Earth. (May 2003). Military protection funds exposed.


[36] Roger Moody. The Mercenary Miner. Multinational Monitor. June 1997

[37] The Militarization of the World’s Urban Peripheries, Americas Policy Program Special Report (Washington, DC: Center for International Policy,

[38] Kollsman, Inc. Kollsman to Participate in Homeland Security’s SBInet Program Boeing Team Member to Show Technologies at Border Management Summit,
Oct. 23-25. Press release, 31 October 2006



[41] Aziz Choudry. (2003). War, Globalization and the WTO: Forever New Frontiers. Third World Network.

[42] General Agreement on Tariffs and Trade, art. XXI, Oct. 30, 1947, 61 Stat. A-ll, 55 U.N.T.S. 194

[43] Cynthia Enloe. (1983). Does Khaki Become You? London: Pluto, p.87.

[44] Sunera Thobani. (2007). Exalted subjects: Studies in the making of race and nation in Canada. Toronto: University of Toronto Press, p.218.

[45] See, for example, Jean Bricmont. (2006). Humanitarian Imperialism: Using human rights to sell war. New York: Monthly Review Press, and Sherene Razack (2004). Dark Threats and White Knights: The Somalia Affair, peacekeeping and the new imperialism. Toronto: University of Toronto Press.








[53] War On Want. Corporate mercenaries.

[54] Christian Science Monitor, 30 May 2008. Global cluster-bomb ban draws moral line in the sand.

* The article is from a talk delivered by Mr. Aziz Choudry at a workshop on women and war organized by the Asia-Pacific Research Network titled “The Military-Industrial Complex and Impacts on the Third World”, 17 June 2008. Aziz Choudry is an activist and writer based in Aotearoa (New Zealand). An organiser with the GATT Watchdog group, he is also a committee member of the Philippines Solidarity Network of Aotearoa.

Kibungan sayote now branded

August 19, 2008

LA TRINIDAD, Benguet — Trying to meet market demand for quality vegetables, Kibungan farmers now pack sayote in a specially printed plastic bag to protect both farmers and traders with the Aug. 5 launching of the “branded sayote.”

The new packaging system will ensure quality, guarantee exact weight and product classification, according to Kibungan Mayor Benito Siadto during the launching ceremonies at the National Training Center of the Benguet State University (BSU) here.

Green gold

According to Siadto 70% of the total sayote production in the Cordillera comes from Kibungan. The town’s daily harvest is around 20 tons of sayote, often tagged as green gold. Packed in 25-kilo bags, the sayote commands as much as P14 per kilo or P350 per bag.

“There are times when the product could go as high as P18 per kilo or P450 per bag at the La Trinidad trading post,” said Felix Tiwtiwa, the local government focal person for sayote production.

According Tiwtiwa, roughly 300 hectares of the town’s 900-hectare agricultural lands are planted with sayote with an average harvest of 1,000 kilos per hectare per harvest. He said farmers harvest at least once a week. Peak of harvest is during May, June and July.

Grown abundantly in barangays Sagpat, Poblacion, Lubo, Palina and some parts of Madaymen, sayote made Kibungan among major producers in Benguet. Siadto said, almost all of the seven barangays produce sayote, with only Madaymen producing a variety of temperate vegetables.

Other Benguet towns Atok, Kapangan, La Trinidad, Mankayan, Tuba, Tublay and Sablan also produce commercial quantities of sayote.

Increasing demand

Benito Hipolito, president of Benguet Truckers and Traders Association, said since the classification and repackaging of the Kibungan sayote two weeks ago, orders increased from 50 bags per day to 150 bags per day.

“Pag nagtagumpay ang proyektong ito sa sayote, susunod na rin ang ibang produkto,” (If this project with sayote succeeds, other products will follow suit) Hipolito said, referring to vegetable produce as cabbages, potatoes and other temperate vegetables which Benguet produces.

According to Jonathan Tercero of the La Trinidad trading post Bagsakan Association, some consumers, especially big supermarkets and food chains demand quality products. “They are quite strict with sizes and physical appearance of vegetables,” he told Kibungan producers. He encouraged them to adhere to quality standards to continue to meet market demands.

Government support

The packaging project is funded by the local government unit of Kibungan, which released an initial P300,000 for the purchase and distribution of specially marked plastic bags and weighing scales to 70 clustered communities of sayote growers. Seminars for farmers were also conducted as part of the post-harvest product development.

Earlier, Siadto created the local Sayote Task Force.

The ceremonial signing of the Memorandum of Agreement between local officials of both La Trinidad and Kibungan, the farmer’s group and the traders is among the highlights of the launch.

Municipal Agriculture Officer Rennete Mayamnes said the agriculture profiling project of the town is presently being collated to determine baseline data for all types of crops, including sayote. # Lyn V. Ramo(NorthernDispatch)

Sa ngalan ng komersiyo sa Quezon City

August 10, 2008

Ilang-Ilang D. Quijano & Noel Sales Barcelona

Protesta ng mga empleyado ng Department of Agriculture laban sa paglilipat ng tanggapan sa probinsya. (Ilang-Ilang Quijano)

Protesta ng mga empleyado ng Department of Agriculture laban sa paglipat ng tanggapan ng kanilang opisina mula Quezon City patungong Iligan City, Isabela. (Ilang-Ilang Quijano)

TUWING alas-dose ng tanghali sa nakaraang tatlong linggo, sabay-sabay na lumalabas sa kani-kanilang opisina ang mga empleyado ng DA (Department of Agriculture). Nakasuot sila ng pula’t nagbibitbit ng mga bandera. Umaasa silang madidiskaril pa ang isang gumugulong na planong sasagasa sa kanilang mga kabuhayan.

Noong Hunyo 12, Araw ng Kalayaan, pinasinayaan ng mga opisyal ng DA at lokal na opisyal ng gobyerno ang bagong DA Central Office sa Capitol Building, Iligan City, Isabela. Samantala, sa kasalukuyang sentrong tanggapan ng DA sa Elliptical Road, Quezon City, may 370 kilometro ang layo, walang kamalay-malay ang mga empleyado.

Nalaman na lamang nilang may bago silang opisina nang mabasa ang memorandum ni Silvestre Bello, kalihim ng Office of the Presidential Adviser for New Government Centers, kay Kal. Arthur Yap ng DA noong Hulyo 19. Ayon sa memorandum, dapat makalipat na sa bagong DA Central Office “sa lalong madaling panahon…alinsunod sa kagustuhan ni Pangulong Arroyo.”

“Nagulat na lang kami. Ni wala man lang konsultasyon sa amin,” ayon kay Lilibeth de Leon, 49, siyam na taon nang nagtatrabaho na legal assistant at miyembro ng DA-EA (Department of Agriculture Employees Association).

Sa piket ng mga empleyado ng DA sa harap ng kanilang tanggapan noong Agosto 1, sumama sa kanila ang mga empleyado ng mga kakabit na ahensiya ng DA, DAR (Department of Agrarian Reform), at DENR (Department of Environment ang Natural Resources).

Umanib na rin sa arawang protesta ang mga miyembro ng grupong Courage (Confederation for Unity, Recognition and Advancement of Government Employees), Kalipunan ng Damayang Mahihirap o Kadamay, Kilusang Mayo Uno o KMU, at Anakpawis Party-list.

Hindi kasi ito simpleng usapin ng paglilipat ng isang opisina.

QC-CBD, tunay na dahilan

Sinabi ng gobyernong Arroyo na ililipat ang DA sa probinsya ng Isabela “upang mailapit ito sa mga magsasaka.” Ito rin umano ang magpapasimuno ng programa ng gobyerno sa produksiyon ng palay sa rehiyon ng Cagayan Valley.

Pero higit pa rito ang dahilan, ayon sa DA-EA. Saklaw ang lupaing kinatitirikan ng DA ng grandiyosong proyekto ng pambansang pamahalaan, ng Pamahalaang Lungsod ng Quezon at ng malalaking negosyante—ang Quezon City Central Business District o QC-CBD.

Noong Mayo 4, 2007, nilagdaan ni Pang. Gloria Macapagal-Arroyo ang grandiyosong plano ng QC-CBD na layong gawin ang lungsod na sentro-ng-grabidad sa komersiyo, pamumuhunan at pananahanan sa Metro Manila. Inamyendahan pa ito sa pamamagitan ng EO 670-A noong Setyembre 11, 2007.

Saklaw ng naturang proyekto ang 96.4 ektarya sa North Triangle, 99.2 ektarya sa East Triangle, at 55 ektarya sa lugar ng Veterans Memorial Hospital. Bagaman hindi saklaw ng naunang plano, idinamay na maging ang 90 ektaryang pag-aari ng Unibersidad ng Pilipinas-Diliman.

Tatayuan ang nasabing mga lugar ng mga pabahay at mga sentro ng pamumuhunan, komersiyo, kalusugan, pagpapaganda, at paglilibang. Ginagarantiyahan ang proyekto ng P3-Bilyon mula sa World Bank at hiwalay na pondo mula sa Asian Development Bank.

“Dahil prime lot o magandang paglagyan ng mga gusali at establisimyento ang lugar na kinatitirikan ngayon ng DA, gustong ipagbili ito ng gobyerno kahit pa na nangangahulugan ito nang malawakang tanggalan sa trabaho,” paliwanag ni Joven Gaculada, pangulo ng DA-EA.

Hindi lamang tanggapan ng DA ang apektado sa QC-CBD. Ayon kay Ferdinand Gaite, pambasang tagapangulo ng Courage, nakatakda na ring ilipat sa Davao City ang tanggapan ng DAR sa Elliptical Road. Ipagbibili na rin umano ang ilang bahagi ng Ninoy Aquino Parks and Wildlife (matatagpuan sa Agham Road), na pinamamahalaan ng DENR.

Himutok ni Gaculada, “Isasakripisyo nila ang trabaho at kapanakan ng mga empleyado, maging ng mga mamamayang pinaglilingkuran ng mga ahensiyang apektado ng paglilipat, para mapagbigyan ang mga kapitalistang gaya nina Jaime Zobel de Ayala, Henry Sy Sr., magkapatid na Andrew at Lucio Tan, at si John Gokongwei Jr.”

Epekto sa empleyado

Ayon sa Courage, walang tiyak na programa ang gobyerno hinggil sa mga empleyado ng nabanggit na mga ahensiya. Wala rin umanong malinaw na pondong nakalaan para sa isiguro ang maalwang paglilipat. “Sa halip, naniniwala kami na mas magagastusan pa nga ang gobyerno dahil kailangang magtayo ng bagong mga gusali para sa mga tanggapan at ilipat ang lahat ng mga kagamitan,” ani Gaite.

Lalong hindi kakayanin ng karaniwang mga empleyado gaya ni de Leon ang gastos ng pagpasok sa malayong opisina. “Kapag nasa Isabela na ang DA, magkano ang pamasaheng kailangan namin? Mas malaki pa ata kaysa sa isang buwang sweldo,” aniya.

Ngayon pa lamang, hindi na niya halos maipagkasya sa pagpapakain at pagpapa-aral ng dalawang anak ang buwanang sweldo na P15,000. “Balewala na rin nga yung 10% umento sa suweldo dahil ilang beses na ba nagtaas ang presyo ng mga bilihin, ng langis?” ani de Leon.

Samantala, pangamba ng mga empleyado ng kakabit na mga ahensiya ng DA, isusunod na rin ang paglilipat sa kanilang mga tanggapan sa probinsiya.

“Kung nasaan ang inahin, tiyak doon din ilalagay ang mga inakay, ‘di ba? Hindi naman puwedeng nandoroon sila (DA Central Office) sa Isabela at nandirito naman kami sa QC,” ayon kay Lori Bangalisan, pangulo ng Bureau of Animal Industry Employees Association o BAI-EA.

Kuwento ni Bangalisan, hirap na ngang umagapay sa tumataas na pamasahe ang mga empleyado. Ang ilan sa kanila, ibinabahay na ng unyon sa loob ng opisina ng BAI. Baon din umano sa utang ang karaniwang mga empleyado na tumatanggap lamang ng P200 hanggang P300 take-home pay kada araw.

Lalo umanong lalala ang kanilang mga problema kapag naglipat ng opisina. “Maganda kung sa maganda yung QC-CBD. Pero para sa aming mga empleyado, malawakang layoff ang mangyayari. At mayayaman lang talaga ang makikinabang diyan sa proyekto. Paano ang mahihirap, na can’t afford pumunta sa QC para mag-shopping?” ani Bangalisan.

Nag-aalala rin siya sa epekto ng pagtatayo ng QC-CBD sa komunidad ng mga maralitang pamilya sa likuran ng tanggapan ng BAI sa Visayas Avenue.

Sanhi ng korupsiyon?

Kinukuwestiyon din ng Courage ang posibleng maanomalyang paggamit ng gobyernong Arroyo sa pondong kikitain mula sa pagbebenta ng mga lupain sa Quezon City. Tinatayang aabot ito ng bilyun-bilyong piso.

“Alam naman natin na sa usapin ng pagbibili ng mga pag-aari ng gobyerno, naririyan ang mga padulas o mga lagayan para mapadali ang mga transaksiyon. Hindi lamang inaalisan ng gobyerno ng karapatan ang publiko sa mahahalagang serbisyo dahil sa paglipat ng mga tanggapan nito at ng trabaho ang mga empleyado sa loob ng mga opisinang ito. Nanakawan pa nila ang taumbayan,” sabi ni Gaite.

Kamakailan, binuo ng Courage, kasama nang iba pang mga organisasyon gaya nang Aksiyon Central at Alliance of Health Workers, ang alyansang tinatawag na Contra-CBD o Concerned Organizations opposed to Transfer, Layoff and Privatization for the Central Business District.

Magsisilbi umano itong kalasag ng mga mamamayan laban sa demolisyon ng mga maralitang komunidad, pagsasapribado ng mga ahensiya ng gobyerno, at tanggalan sa hanay ng mga empleyado ng gobyerno.

Anila, lalabanan at bibiguin nila ang grandiyosong proyektong QC-CBD na isasakripisyo ang karapatan sa kabuhayan, pamamahay, at serbisyo sosyal ng libu-libong mamamayan—sa ngalan ng komersiyo at sa kaabikat nitong korupsiyon sa gobyerno.

Hindi nga lang simpleng usapin ng paglilipat ng opisina ang ipinoprotesta ng mga empleyado ng DA araw-araw sa nakaraang tatlong linggo.(PinoyWeekly)

Groups Slam Upholding of Secrecy on JPEPA

July 21, 2008

In its decision, the Supreme Court (SC) recently upheld the secrecy of the negotiations on the controversial Japan-Philippines Economic Partnership Agreement (JPEPA).

An anti-JPEPA coalition and an environmental group said the decision sets a dangerous precedent on future economic agreements entered into by the Philippine government.

Volume VIII, No. 24, July 20-26, 2008

In its decision, the Supreme Court (SC) recently upheld the secrecy of the negotiations on the controversial Japan-Philippines Economic Partnership Agreement (JPEPA).

Penned by Justice Conchita Carpio-Morales, the decision said that the respondents’ claim of executive privilege is valid. It states, “Diplomatic negotiations have been recognized as privileged…the reasons proffered by the petitioners against the application of this ruling has not persuaded the Court.”

Chief Justice Reynato S. Puno dissented with the majority, arguing that the public’s right to information is more important amid controversies surrounding the JPEPA. Associate Justices Consuelo Ynares-Santiago, Alicia Austria-Martinez and Adolfo S. Azcuna agreed with the chief justice.

Dangerous precedent

In a statement, the NO DEAL! Movement said that the SC ruling sets a dangerous precedent on future economic pacts that the Philippines will enter into.

The NO DEAL! said, “This will embolden the executive branch to enter into more trade and investment agreements and make commitments without due regard to their harsh effects on various sectors, especially the poor and marginalized.”

The Philippines has pending negotiations with the European Union (EU), the United States, China for economic pacts.

It added, “In effect, the SC is legitimizing the marginalization of ordinary Filipinos from having access to pertinent information on economic treaties such as the JPEPA that will have a deep impact on their interest and livelihood, said the anti-JPEPA coalition.”

The group maintained that diplomatic concerns should be secondary only to the ‘paramount concerns of the people about their interest and livelihood and of the country’s national patrimony and sovereignty.’

Right to know

The NO DEAL! also deemed that SC ruling undermined the fundamental right of the people to know the “compromises” that the executive department is making on their behalf.  “Many of the questionable and controversial provisions of the JPEPA stemmed precisely from the lack of transparency and prior consultation with the concerned sectors,” the coalition noted.

In a statement, the Kalikasan People’s Network for the Environment (KPNE), also a member of the NO DEAL!, branded the ruling as a sheer mockery of Philippine democracy, patrimony and sovereignty.

The group was among the first to oppose the JPEPA.

Bautista said, “If the bilateral trade is as good as its proponents claim it is, why the secrecy and lack of transparency? And why would the people believe and trust the very institutions and people who have a notorious record for selling the country’s patrimony and sovereignty.”

Déjà vu

The KPNE said that the recent ruling is reminiscent of the SC decision upholding the constitutionality of the Mining Act of 1995.

On December 1, 2004, the High Court reversed its earlier decision and declared all provisions o the Philippine Mining Act of 1995 as constitutional.

Bautista lashed out at the government’s reasons for pushing for the ratification of the JPEPA. He said the government also said that mining is the answer to the country’s economic crisis.

Clemente Bautista, national coordinator of KPNE, said, “More than a decade has passed but the act has yet to deliver its promise of sustainable mining and huge economic gains.  What we have witnessed are countless tragedies and human rights violations in mining areas like Marinduque, Rapu Rapu Island and Nueva Vizcaya basically because of the ‘executive privilege’ that is supposedly exercised on behalf of the Filipino people.”

KPNE said that in spite of increase in mining production and income, its contribution to national economy remains insignificant. The mining sector’s contribution to country’s gross domestic product in 2007 is $1.77 or just 1.2 percent.

Bautista said, “The SC ruling is close to asking the Filipinos to trust that the current administration will act with the interest of the Filipinos at heart. Not only is this ironic, it is downright insulting.” Bulatlat

Survey Shows Online Advertising Is Less Effective Than TV Advertising in Asia

June 22, 2008

Singapore & Hong Kong, June 18, 2008 –IDC announced today the results of a regional survey exploring the use and impact of online advertising in Asia, which showed that Internet ads are seen as informative but often relatively weak in prompting consumers to make a buying decision. The survey, which included both Asian consumers and Asian enterprises, is the second round of a series of surveys that IDC is conducting in 2008 to examine the impact of Web 2.0 on Asian enterprises and consumers.

On average, more than 60% of the consumer respondents said they perceived Internet ads as “informative” – considerably higher than what was seen with TV and print ads. But on the downside, the survey showed that consumers tend to find TV ads more enjoyable and more likely to make them want to buy the product that was being advertised.

“Online advertising has become one of the most important revenue models for many Internet sites in Asia”, said Claus Mortensen, Principal, IDC Asia/Pacific Emerging Technologies Research. “But while the Internet offers a huge potential for marketers to target and engage audiences, it is still seen as a very fragmented medium. And while online ads are seen as more informative than ads in other media they suffer from being perceived as more annoying and less enjoyable than TV or print-based ads”.

The survey suggested that online video advertising is a good medium to capture the interest of Asian consumers. Almost 70% of the respondents said they had watched video commercials on the Internet and more than 80% said they had watched movie trailers online. And humour is the way to go if companies want consumers to watch their online video commercials: almost 60% of respondents said they would be “highly interested” in watching a commercial if it was funny.

Among Asian enterprises that are advertising online, most respondents indicated that they were doing so because it is seen as more cost-effective and targeted than traditional advertising. But the relatively low impact on consumers’ buying decisions indicates that companies may be wasting much of their resources when going online. And while advertising agencies are often seen as necessary go-to-agents for offline advertising, less than 20% of the companies surveyed said they were going online on the advice of an agency.

“Our research indicates that companies will need to be very selective when they choose their online advertising approaches if they are to achieve the full potential of online campaigns – and perhaps agencies could do a better job of guiding them to choose this channel.” Mortensen said.

IDC conducted the survey among Asian consumers in March 2008, and among companies that had previously advertised online in April 2008. The enterprise component was done through phone-based interviews with 302 companies across six Asian markets (Australia, China, India, Korea and Singapore). The consumer component was web-based with 857 respondents across eight markets (Australia, China, India, Korea, the Philippines, Singapore, Thailand and Vietnam).

Notes to Editor
More details are published in Online Advertising Strategies of APEJ Companies, 2007, Doc # AP628202Q and Consumer Perceptions of Online Advertising in APEJ, Doc # AP628203Q

For more information about this research or to make a purchase, please contact Elizabeth Shunmugam at +603-2169-7536 or For press enquiries, please contact Sasithorn Sae-iao at +66-2651-5585-87 (Ext. 113) or

About IDC Asia/Pacific Web 2.0 Conference
IDC is organizing a conference on June 24 in Singapore to bring attention to the emerging Web 2.0 trends and technologies for enterprises. The conference will shed light on how web 2.0 is emerging as a strategic tool to shape new business applications, accelerate new business interaction and enhance market growth.

About IDC
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 100 countries. For more than 44 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. You can learn more about IDC by visiting

BSP says pessimism to run deep among consumers

June 13, 2008

By Maricel E. Burgonio, Reporter

AMID higher inflation and eroding incomes, pessimism will run deep among consumers for the rest of the year, according to the latest survey of the Bangko Sentral ng Pilipinas (BSP).

In its Consumer Expectation Survey, the BSP said the overall consumer confidence index dropped to -43.8 percent in the second quarter, easing to -26.9 percent in the third quarter and to -20.3 percent in the next 12 months.

Iluminada Sicat, BSP Department of Economic Statistics director, said Filipinos from the middle- and low-income groups will be more affected by unfavorable economic conditions. About 10 percent of the families are supported by overseas Filipino workers (OFWs).

“Current and near term outlook for consumers nationwide dipped in 2008. The negative perception in the economic condition pulled down the overall confidence,” Sicat said.

She said lower consumer demand in the second quarter indicates slower economic expansion for the period.

In the first quarter of the year, the country’s gross domestic product (GDP) grew 5.2 percent, or below market expectations due to higher oil, rice and other commodity prices.

The inflation rate in May hit a 9-year high of 9.6 percent and is expected to accelerate to 11 percent in June before easing in the second half of the year.

In the next 12 months, consumers expect the unemployment rate to increase, interest rates as well as prices of basic goods and services to climb. They however see a steady peso vis-à-vis the dollar.

Filipino consumers spend more on food, fuel, electricity, education, water, and personal and medical care, the survey showed. Consumers also indicated lower demand for consumer durables, motor vehicles and house and lot.

However, Filipinos indicated higher savings in the second quarter with the index at 31.3 percent from the first quarter’s 14 percent.

About 4,839 participated in the survey from the National Capital Region and areas outside NCR.

The bulk of the respondents at 58 percent came from the lower income group with less than P10,000 monthly earnings. Another 34 percent belonged to the middle income group with P10,000 to P20,000 in monthly earnings.(ManilaTimes)

EPIRA Cause of High Power Rates, Says Scientist, Consumer Group

June 11, 2008

“Government measures such as the subsidy and failed takeover of Meralco management will not result to lower power rates,” said Dr. Giovanni Tapang of AGHAM.

Vol. VIII, No. 18, June 8-14, 2008

The Arroyo government is locked in a corporate battle to wrest control of Meralco from the Lopez family purportedly to lower power rates.

Also, Mrs. Gloria Macapagal-Arroyo announced last week, the allocation of a P2-billion ($45,325,779 at an exchange rate of $1=P44.125) subsidy for small power users. An estimated four million lifeline users or those with a 100kwh or lower monthly electricity consumption will receive P500 ($11.33) for their electric bills.

In an interview with Bulatlat, Dr. Giovanni Tapang, chairperson of scientist group Agham and convenor of the People Opposed to Warrantless Electrity Rates (Power) said, “Government measures such as the subsidy and failed takeover of Meralco management will not result to lower power rates. Apparently, such populist posturing is meant to fend off reactions to increasing prices of basic commodities. Mrs. Arroyo seems to be preparing for her next state of the nation address (SONA) in July.”

Tapang described the subsidy announced by the Arroyo government as a “one-shot deal” that can never be sustained.

In a separate statement, Engineer Ramon Ramirez, spokesperson of POWER, said, “There’s some deception here since the electricity subsidy will be coming from the value-added tax (VAT) which is also paid for by consumers. It’s the consumer subsidizing the consumer. Government is desperately trying to justify the existence of the VAT by making it appear that it is helpful for the poor.” The group has called for the removal of VAT on power.

Tapang said that aside from the removal of VAT, their group is calling for the repeal of the Electric Power Industry Reform Act (EPIRA), which, according to him, has put the Filipino consumers at the losing end.


Signed into law by Mrs. Arroyo in June 2001, the EPIRA seeks to restructure the electricity industry and privatize the National Power Corporation (Napocor).

One of the purported objectives of the EPIRA is to ensure the reliability and affordability of supply of electric power. After almost seven years, however, what happened is the opposite; the cost of electricity has increased due to numerous charges considered legal under the law.

Sec. 36 of the EPIRA mandates the unbundling of rates. This is consistent with the privatization thrust of the EPIRA wherein the power sector is segregated into generation, transmission and distribution sectors.

Hence, the controversial Purchased Power Adjustment (PPA) has been deleted from the consumer’s monthly electricity bill. However, Tapang said that the unbundling of rates has not removed the PPA; it has merely hidden it.

The PPA stemmed from the onerous contracts between Napocor and independent power producers (IPPs). Even without producing a single watt of electricity, the ‘take or pay provisions’ stated in the contracts guarantee payment for installed capacity of generation plants.

In its paper titled ‘Ever increasing rates from the EPIRA: A closer look at the electric power industry in the Philippines,’ Agham said that the PPA remains to be a large part of electric power rates of end-users albeit under different names. It is distributed in the various line items in the new electric bill such as the generation charge, the transmission charge, system loss charges, subsidies and franchise taxes.

System loss charges include technical losses, pilferages, and company use or electricity used by distribution utilities such as the Meralco.

Moreover, Sec. 32 of the EPIRA paves the way for the national government to directly assume a portion of Napocor’s debt amounting to P200 billion ($4,532,577,903). The so-called stranded cost recovery is reflected as a separate item in the consumer’s billing statement.

Other stranded debts of Napocor in excess of the P200 billion ($4,532,577,903) as well as qualified debts of distribution utilities form part of the universal charge stated under Sec. 34 of the EPIRA.

Other components of the universal charge include missionary electrification, environmental charge, among others.

The missionary charge is a compulsory contribution to a fund to be used for electrifying remote barangays (villages). Agham asked, “But why are we charged for a job the government should be doing? This is also true of environmental charges. Why are we charged for the havoc that the generation plants of Napocor or these IPPs do to the environment?”

Sec. 25 of the EPIRA states as a policy the full recovery of “prudent and reasonable” economic costs of a distribution utility.

The same Agham paper said that this particular provision gives authority to distribution utilities to recover and pass on to consumers currency fluctuations, fuel cost fluctuations and contract obligations. The Generation Rate Adjustment Mechanism (GRAM) and the Incremental Currency Exchange Rate Adjustment (ICERA) are concrete examples of these charges.

Tapang blamed the EPIRA and the privatization of the power industry for soaring prices of electricity rates. He said, “We have lost control over the power industry because it is already controlled by local big business and foreign investors whose main interest is to accumulate huge profits.”

Foreign interests

According to the Agham paper, most IPPs are owned by transnational corporations (TNCs) in partnership with local business tycoons. At least 22 out of 41 IPPs are largely foreign-owned.

Last week, Inquirer reported that the Joint Foreign Chambers (JFC) of the Philippines wrote a letter to Mrs. Arroyo asking the latter not to alter EPIRA and not to ‘tinker with IPP contracts.’ Asked for a reaction, Tapang said that the JFC’s statement only shows that foreign investors and financial institutions benefit from the EPIRA at the expense of the Filipino people.

Sec. 68 of the EPIRA mandates the creation of an inter-agency committee tasked to review IPP contracts. According to Agham, the said committee found that only six out of 35 contracts were without any legal or financial issues. The rest were supposed to be renegotiated by the government.

The privatization of Napocor, along other power sector reforms, is a long-standing recommendation of the International Monetary Fund (IMF). This is part of the structural reform program (SAP) the country has to implement as a pre-condition to the granting of more loans.

Tapang challenged the Arroyo government to stand up against the interests of foreign investors by deleting the ‘take or pay’ provisions in the IPP contracts and to stop the privatization of Napocor. However, Tapang quickly added, “Based on Mrs. Arroyo’s track record, she can not risk foreign investments even as the Filipino people grow angry.”

As a long-term solution, scientist Tapang said, “Power is a strategic utility that should be run by government. We should nationalize the power industry and improve our capacity to produce electricity from indigenous sources of energy.”

He deplored the current thrust of the Arroyo government to sell out the country’s energy resources to foreign investors. “Our natural gas and other indigenous sources should be utilized to serve the Filipino people, not foreign interests.” Bulatlat

Growth seen to fall within gov’t range

June 9, 2008

MANILA, Philippines–The Bangko Sentral ng Pilipinas, the Philippine central bank, expects growth of the economy to range within the government’s revised forecast of between 5.7 and 6.5 percent, even after the regulator raised key interest rates to temper the sharp rise of consumer prices.

“I don’t think monetary action will [affect] economic growth,” BSP Deputy Governor Diwa Guinigundo told reporters on Friday. “Demand is broadly buoyant, therefore the economy can absorb measured tightening.”

The quarter-percentage monetary tightening announced last Thursday was meant to mop up excess liquidity. Too much cash in the system could push inflation over the 4.5-percent ceiling the government had set for next year.

The BSP has conceded that this year’s inflation target of 5 percent will be breached. The regulator sees consumer prices rising by 7 to 9 percent year-on-year this year, and by 4 to 6 percent next year.

Still, Guinigundo said, he remained upbeat that the domestic economy would perform “better than what we’re seeing today.”

The domestic economy expanded by only 5.2 percent in the first quarter, below market expectations.

“Overseas Filipino remittances will continue to support consumption expenditure,” Guinigundo said.

“BPOs [business process outsourcing] and mining will also continue to support the economy. I’m still bullish about the economy’s ability to outperform expectations.”

He added that the trade-off between growth and inflation would only be temporary and, over the long term, price stability would be supportive of economic expansion.

The BSP expects inflation to peak in the third quarter.

But while the recent wage increase in the country fell within the central bank’s expectations, Guinigundo said he hoped that further increases in the future would be moderate.

“We need to avoid triggering a wage spiral,” he said. “We should show some moderation in terms of wage demands and transport. We’re not saying don’t ask for wage increases, but there should be some moderation.”

On the part of the BSP, he said, policy-making would “ensure that inflation expectations don’t cause undue reaction in terms of the market’s pricing behavior.”

He added that the government’s additional spending on infrastructure, as well as other non-monetary measures, should boost farm output and, in turn, help stabilize food supply.

“DTI [Department of Trade and Industry] is implementing measures to ensure that there’s no hoarding, no predatory pricing in the markets,” Guinigundo said.

“We are in a very difficult time. But there are already good signs … the prospects now look better.”

On the domestic front, the La Niña phenomenon, which is said to spawn severe typhoons, already appears to be losing steam, he said.

“By the second half of 2008, we should be back to normal cycle,” he added.


Double-digit inflation looms in June, says BPI

June 9, 2008

MANILA, Philippines–Bank of the Philippine Islands sees inflation in June to break into the double-digit level for the first time since 1999.

This development would likely prompt the central bank to raise key interest rates by another quarter-percentage point during its next policy meeting in July.

In a commentary dated June 5 written by bank economists Emilio Neri Jr. and Michael de Castro, BPI projected a 10.2-percent year-on-year rise in consumer prices in June–assuming that crude oil would stay below $125 per barrel and that rice prices would be steady.

“Meanwhile, core inflation is expected to rise faster in June as the effect of the wage and fare rate hikes … start to kick in,” the report said. “This should force the monetary authorities to hike [key rates] by another 25 basis points during the [July 14] Monetary Board meeting.”

Core inflation refers to the increase in average prices of consumer goods excluding volatile items like food and energy.

Last week, the Bangko Sentral ng Pilipinas’ policy-making Monetary Board raised its overnight borrowing rate by 25 basis points to 5.25 percent, the first monetary tightening seen in three years.

On the other hand, the bank said that for the remaining part of 2008 through mid-2009, the BSP could hike the current 5.25-percent overnight RRP (reverse repurchase agreement) rate by another 50 basis points, “on the assumption that the headline inflation would no longer be anchored on a peso appreciation.”

Last year, the peso rose nearly 19 percent against the US dollar to become Asia’s best performing currency. The local currency has lost 6.6 percent so far this year, closing at 44.135:$1 on Friday.

The central bank’s quarter-percentage interest rate hike last week, was just what the doctor had ordered, BPI said.

“It was necessary for monetary authorities to step in to avoid demand-pull forces from snowballing as it could temper speculative activity,” the report said.

The bank agreed with the BSP’s assessment that supply constraints were the dominant source of inflationary pressures and a bigger move was not necessary.

“Nevertheless some form of policy tightening was necessary,” the report said. “It helped preserve the monetary authorities’ credibility. The move clearly demonstrated the MB’s determination to fulfill its key mandate of targeting inflation even if it means foregoing some areas of growth.

“Inaction would have been “unacceptable.”

Doris C. Dumlao

RP faces ‘perfect economic storm’ — analysts

June 9, 2008

MANILA, Philippines—The Philippine economy faces a “perfect economic storm” of inflation at 9-year highs as food and oil prices soar, rising interest rates and slowing growth, according to analysts.

They said inflation was unlikely to ebb soon after hitting an annual rate of 9.6 percent in May, leading the Bangko Sentral ng Pilipinas to hike borrowing costs last Thursday for the first time since 2005.

“Throw in rising unemployment and you have the recipe for a perfect economic storm,” former Budget Secretary Benjamin Diokno said.

Official data showed food prices rose 14 percent in May as rice, the national staple, rocketed 31.7 percent and corn 27.1 percent. Gasoline, kerosene and diesel prices have also surged. Inflation in 2007 was just 2.8 percent.

“If inflation pressures persist into next year and it feeds into further price increases, or leads to an economic slowdown and job losses, then we may start to see unrest,” warned political risk consultant Roberto Herrera-Lim.

Gov’t subsidies

“It is when you combine the two—job losses and inflation—then things become troublesome,” Lim, the Southeast Asian analyst for New York-based firm Eurasia Group, said in an interview published on the ABS-CBN television website.

The government has already announced measures to ease the pain on the country’s poor, such as a one-off P500 subsidy to help pay electricity bills. It has also announced a quarterly fuel subsidy for the public transport sector and loans to help convert buses and taxis to alternative fuels.

Farmers are to be given fertilizer subsidies and poor students scholarships, with the government going to the international debt market to raise $750 million to help pay for it all the subsidy programs.

But at the same time economic growth is slowing, falling to an annual rate of 5.2 percent for the first quarter compared with 7.2 percent for all of 2007.

“Giving away cash grants for food and electricity consumption, subsidies for farmers and the transport sector and borrowing from abroad to pay for them show desperation,” Diokno said. “It doesn’t help the situation in the long run.”

Rommel Macapagal, chair of Westlink Global Equities, said the government’s handouts were short-term solutions. “The problem is that it can do very little about rising fuel and food costs on its own because it is a worldwide problem.”

Double-digit inflation

Other experts warned inflation could rise into double digits, potentially heralding still higher interest rates.

Cayetano Paderanga, an economist at the University of the Philippines, said it was too late to stop inflation hitting double-digits.

“The inflation rate will still go up before it goes down and there is a very good chance that it will breach 10 percent,” he told the Inquirer, adding it would then be increasingly difficult to control.

“Ten percent is an important threshold. Beyond this level, the psychology of the people changes and it becomes more difficult to control their expectations of price increases,” Paderanga said.

It could create a situation like “stagflation,” he said, where economic growth slows but inflation stays high, posing a severe test for policymakers.

Agence France-Presse(PDI)

Editrial Cartoon: Conserving Power

June 8, 2008

Pinilipit na ang tao, pilipit pa ang dahilan.

GSIS hits back at MBC

June 7, 2008

By  Michael Punongbayan
Saturday, June 7, 2008


Page: 1


The Government Service Insurance System (GSIS) called on the Makati Business Club (MBC) yesterday to stop “parroting” the Lopez line that the government is out to take control of the Manila Electric Co. (Meralco).

Estrella Elamparo, GSIS chief legal counsel and spokeswoman, said the MBC should be objective and impartial in looking at allegations of mismanagement in the Lopez-controlled power firm.

“In fact, the MBC should be speaking against the excesses being committed by the Lopezes in Meralco,” she said.

“These excesses, like charging consumers Meralco’s own electric consumption and P30 billion of its income tax from 1994 to 2002, are what’s driving up the cost of power.”

Elamparo said while Meralco shareholders are not getting returns from their investment, other Lopez companies dealing with Meralco had been posting record-setting incomes.

“A case in point is the Lopez-owned IPP Sta. Rita, which Meralco paid P13 billion in a 12-month period from 2000 to 2001 for delivering just over P3-billion worth of electricity,” she said.

“The MBC should not be seen by the public as coddling the Lopezes, under which Meralco did not declare dividends for its shareholders from 1990 to 1997.”

Elamparo said the GSIS and other government financial institutions, which hold shareholdings of about 33 percent in Meralco, are campaigning to bring back good corporate governance and transparency to bring down power rates.

One reason why foreign investors think twice before putting money in the Philippines is that it has the second most expensive electricity rate in Asia, next only to Japan.

“The MBC knows fully well that their members’ cost of production increases due to the high cost of electricity, reducing the competitiveness of their products in the world market,” she said.

Elamparo said while consumers pay for power that Sta. Rita did not provide, the Lopez IPP was able to more than double its P8-billion capitalization in less than two years.

“Likewise, the global downward trend in stocks is also contributing to the downswing in the value of Meralco shares,” she said.

Elamparo said the GSIS is not out to take over Meralco, but only wants to have a professional team to run the company.

“Meralco will become attractive anew to investors when it is freed from the stranglehold of the Lopezes,” she said.

“This is because Meralco will be better managed and will be fully accountable based on international good corporate practices.”

Salonga defends Lopezes

Former Senate president Jovito Salonga defended yesterday the Lopezes from allegations that they were responsible for Meralco’s high electricity rates.

In a statement, Salonga said as legal adviser of President Diosdado Macapagal, he helped draft the congratulatory letter to Eugenio Lopez Sr. after his group acquired Meralco from its American owners, General Public Utilities in 1962.

“They are a family of nationalistic entrepreneurs, best known for their investments in public service companies such as power, telecommunications and tollways,” he said.

“But because these businesses are heavily regulated, the Lopezes are vulnerable to public scrutiny, and even severe criticism, from time to time. They have also been victims of repression.

“As a consumer of electricity myself, I would like to see lower electricity rates despite the global phenomenon of skyrocketing oil prices. This will be good for the economy. How to reduce it remains to be the bone of contention.”

Salonga said Meralco, being a publicly listed company, is regularly subjected to internal and external audits.

“I also understand the Lopez family is philanthropic and is very much into corporate social responsibility,” he said.

“It gives back to society part of what it earns from its public businesses, for example, in education, arts and culture, the environment, poor communities, disaster victims and even abused children.

“In light of these, I find it difficult to fathom the accusations leveled against Meralco and the Lopez family given the low credibility of some of its critics.”

Salonga said it was unfair for Meralco to receive the brunt of the blame for high electricity rates when the state-owned National Power Corp. had also been inefficient.

“I await government’s response to questions regarding Napocor’s buying practices and production inefficiency that, in sum, result in higher generation charges than Meralco’s independent power producers,” he said.

“Also, I want to hear from the government about the steps it has taken to address the issue concerning royalties and taxes it imposes on indigenous sources of energy like natural gas that renders such unnecessarily expensive.

“I believe Meralco is in no position to misrepresent its actuations because its books and operations are open to scrutiny.

“I understand that it is not only regulated by the ERC (Energy Regulatory Commission) but also by the BIR (Bureau of Internal Revenue), COA (Commission on Audit), SEC (Securities and Exchange Commission) and the PSE (Philippine Stock Exchange).” –With Iris Gonzales, Aurea Calica(PStar)

GMA signs Cheaper Medicine Law

June 7, 2008

By Marvin Sy
Saturday, June 7, 2008


Page: 1


The long wait is over.

Filipinos can now expect more low-cost medicine in the market with the signing into law of the Universally Accessible, Cheaper and Quality Medicine Act of 2008.

The signing ceremony for Republic Act 9052 was held yesterday at the Laguna Provincial Hospital in Sta. Cruz, Laguna with the principal authors of the bill in the House of Representatives and the Senate joining President Arroyo.

Mrs. Arroyo said the existing generics law is an important piece of legislation that aims to bring down the cost of medicine in the country but it is “incomplete.”

“Now with the cheaper and quality medicine law, we have completed, I believe, our legislative reforms in bringing
affordable medicine to the people,” the President said.

RA 9052 allows the conduct of parallel importation of patented medicine from other countries where the prices are significantly lower than the prevailing price in the Philippines.

The government, through the Philippine International Trading Corp. (PITC), has been conducting parallel importation of medicine from countries such as Pakistan and India, selling these at state-run pharmacies aimed at the poor communities.

However, the PITC has faced strong resistance from the multinational pharmaceutical firms.

Sen. Manuel Roxas II, principal author of the bill in the Senate, said the PITC can now continue with its parallel importation with the signing of the new law.

Roxas said the PITC can now include more brands and types of medicine in its list of imports and it can also import higher volumes.

Apart from the PITC, Roxas said that even private groups or organizations can now import medicine directly from other countries provided that they register themselves with the Bureau of Food and Drugs (BFAD).

Under the law, the BFAD plays an important role as it is the agency tasked to ensure that all of the imported medicine is of high quality.

The law strengthens the BFAD by allowing it to retain its revenues for the upgrading of its facilities, equipment and human resources.

Roxas explained that by directly importing the medicine, the private entities would be able to save more since they no longer have to go through any middlemen.

The new law also provides for the use of the “early working principle” which allows local generic medicine manufacturers to test, produce and register their generic versions of patented drugs so that these could be sold immediately upon the expiration of the patents.

In order to prevent the owners of patented drugs from extending the term of their patents by declaring newly discovered uses for the components of their medicine, the law now prohibits the grant of new patents using this provision.

The law also allows the government to use patented drugs when the interest of the public is at stake.

Upon the recommendation of the Secretary of Health, the President has the power to impose price ceilings on various drugs, including those that are used for chronic illnesses, for the prevention of diseases and those in the Philippine National Drug Formulary Essential Drug list.

Drug outlets or pharmacies are now required to carry a variety of brands, including those brought in through parallel importation, in order to provide consumers with more choices.

The Generics Act was amended so that all generic drugs would now carry a label that has the statement of the BFAD about the therapeutic efficacy of the drug.

The Pharmacy Law was also amended to allow supermarkets, convenience stores and other retail establishments to sell over-the-counter medicine.

A congressional oversight committee would be created to monitor the implementation of the new law.

The Department of Health has been tasked to formulate the implementing rules and regulations for the new law within 120 days of its signing.

“We will not allow anything, not even a comma in the IRR, that would dilute the efficacy of this law. We will continue the fight, we will continue to monitor the implementation of the law in order to ensure that our people would have access to quality affordable medicine,” Roxas said.

“This new law will bring about competition. The prices of medicine will go down because of the increase in competition in the country,” Roxas said.

Healthier Philippines

Health Secretary Francisco Duque III yesterday gave assurances of a “healthier” Philippines as more Filipinos could now afford treatment for both common and potentially fatal diseases.

Duque said the DOH is set to launch very affordable treatment packs for common diseases and put 15,000 Botika ng Barangay (BnB) nationwide by 2010.

“DOH would make available treatment packs for common diseases at maximum prices of P100 for a one- to two-week treatment course,” Duque said.

The health chief explained that the country spends a total of P200 billion for health, half of which is spent on drugs and medicine.

“Since the cost of medicine in the country has been consistently and continuously prohibitive, the poor have limited access to these essential goods, bringing a perpetual cycle of impoverishment, deaths and diseases,” he pointed out.

“This law breathes new hope and life to all of us and gives a chance to the government to prove that health comes first before business interests,” Duque said.

Even labor unions are getting ready to import and sell medicine directly to workers with the new law.

Leaders of the Trade Union Congress of the Philippines, Federation of Free Workers, Alliance of Progressive Labor and others met with the representative of the PITC and Roxas recently to discuss how their groups could distribute medicine to their members and ensure that they would benefit from the lowering of prices of medicine.

TUCP secretary-general and former senator Ernesto Herrera said they had been waiting for this kind of measure for the sake of the laborers.

He expressed appreciation for the preparatory meetings with the PITC so that they could start immediately the importation of cheap medicine.

Herrera said laborers need maintenance medicine that are costly at present.

‘Fight not yet over’

The principal sponsor of the Cheaper Medicine Bill in the House, meantime, said the fight for low-cost drugs is not yet over.

“Proper implementation is the key to the measure’s promise of bringing down the prices of medicine,” said Palawan Rep. Antonio Alvarez, trade and commerce committee chairman.

“The next battleground for the law is in the drafting of its implementing rules and regulations (IRRs), where interest groups are expected to lobby for an interpretation of the provisions that will serve them,” Alvarez said.

“But the law cannot be tweaked or twisted because a House-Senate oversight committee that the law created will be looking over the shoulders of the agencies that will issue the IRRs,” he said.

An inter-agency panel composed of the DOH, Department of Trade and Industry, Intellectual Property Office, and BFAD will issue the implementing rules.

Alvarez said in addition to the rules, administrative measures are needed, including the strengthening of BFAD’s technical and manpower capabilities so it can properly evaluate pharmaceutical preparations. – With Mayen Jaymalin, Aurea Calica, Jess Diaz(PStar)

Angelo Reyes gags oil firms on price hikes

June 5, 2008

By Euan Paulo C. Añonuevo, Reporter

Energy Secretary Angelo Reyes ordered oil companies to desist from disclosing to media future fuel and cooking-gas price hikes.

During a stakeholders’ meeting Wednesday organized by the Department of Energy, Reyes said the oil firms should stop making early announcements on price increases so as not to cause undue panic and anxiety on consumers.

“It will not serve anybody any good if they will make announcements based on their own projections,” he added.

Reyes’ order came about after media clarified whether his earlier remarks lambasting Arnel Ty, head of Liquefied Petroleum Gas Marketers Association, during the meeting meant a stop to early price-increase announcements.

The Energy chief had castigated Ty for being too open to media about the group’s future price adjustments—a practice not common among larger oil firms—such as the P3.50 per kilogram increase that the marketers association tagged on its liquefied petroleum gas products a week ago.

The cooking-gas retailers’ adjustment was announced much early on while big oil companies made their own public announcements only a few hours before implementing their own price hikes.

In front of media, transport groups and officials of the government and oil firms, Reyes told Ty that he “should not speak for everybody” and that his group should instead be “competing with each other [in the group].”

He said the marketers’ association is “increasing prices ahead of everybody” and is also in the forefront when cooking-gas prices go down just to look good in public.

But Ty said his group’s cooking-gas price for its 11-kilogram cylinders, which costs about P610 each, is not enough to influence prices as it is still the lowest in the industry.

Under the Downstream Oil Industry Deregulation Act of 1998, oil firms are allowed to automatically increase their pump prices but are not compelled to announce such move to the public.

But the Energy department requires oil companies to inform the department within one day, but not less than six hours, of any move to increase prices and any public announcements related to this.

Despite the public berating, Ty later told media that his group will comply with the Energy secretary’s order but stood by the legality of the group’s price adjustments, which he said can be attested to by their supplier, Liquigaz Philippines Corp.

“The [Energy department] knows best. We will just follow it first,” he said.

Ty added that the marketers association will also be attending future meetings organized by the department to come up with a system for making announcements on price adjustments.

Other oil company officials present during the industry meeting deferred to Reyes’ order, saying that making early disclosures on price adjustments may lead to hoarding of petroleum products.

Rate adjustments ‘reasonable’

Ironically, while Reyes questioned the Ty group’s price adjustments, a report released during the meeting by Peter Lee U, University of Asia and the Pacific School of Economics dean, found that price adjustments implemented by the oil firms are “reasonable.”

The study, which was commissioned by the Energy department for a pittance, however, focused only on Petron Corp. and Pilipinas Shell Petroleum Corp.’s price adjustments from December 2006 to November 2007. The two firms represent 70 percent of the total petroleum market in the country.

“Oil price increases have been reasonable. They were not out of line and are consistent with what they are saying that they have under-recoveries,” Lee U said.

He added that while many analysts are saying that oil prices may continue to stay at high levels abroad, the best protection government can offer to consumers is to have the petroleum industry be more open to new players to spur competition.

“The country needs a credible competition policy with an enforcement agency,” Lee U said.(ManilaTimes)

Tuding’s ‘Resident’ Winemaker Makes Wine from Fruit Peels

June 3, 2008

There is this little village somewhere in Itogon, Benguet, in a cramped mining community called Tuding where I found a perky lady who makes wine out of any edible fruit she could experiment with.

Northern Dispatch
Posted by Bulatlat
Vol. VIII, No. 17, June 1-7, 2008

Wine, wine, wine.

According to Shakespeare, “a good wine is a good familiar creature if it be used well,” which of course is right. Wine has been around for quite a long, long time, that is about the time of the ancient Egyptians, or even earlier than 2500 B.C.

In the Bible, wine is frequently mentioned, and it would be safe to assume, as it has been shown time and again, that wine-making started in the Middle East. Later in the centuries, the Romans introduced wine-making to much of the European states. Columbus carried it in his voyage to the other parts of the world and from there the industry and the knowledge passed on.

There is this little village somewhere in Itogon, Benguet, in a cramped mining community called Tuding where I found a perky lady who makes wine out of any edible fruits she could experiment with.

A friend took me to Monterazzas, Tuding one day and we found Francisca Ordas weeding the garden of a vacation house, cutting overgrown shrubs and pruning flowering plants. It is something she does once in a while when the neighbors need some gardening done, on top of caring for an elderly relative. She waved at us and left the chore for later.

Francisca led us down a line of well-maintained houses along a quiet residential complex where she lives. With a smile she left us to get some freshly made tapuey or rice wine, still with the mush, that is about three or four days old. Sampling the tapuey is like “eating” it like porridge, until I had my fill. It was good.

As we talked about wines, for which we came, Francisca brought out samples of her home-made wines in clear bottles. Today’s experiments were of pineapples and lemons. She started prattling about how she started with the hobby stating that she once worked at a home-based winery owned by a family in Sagada, where she learned the processing of fruits, mostly berries, into wine.

When she came to Tuding, she found spare time in between the chores and occasional jobs. She started making tapuey for family consumption but when friends tasted it, they kept asking her to make for them. She then went on to experiment with fruits to make more wines.

Francisca’s experience and knowledge during her brief stay at the Sagada winery gave her the courage to try the usual berries, guavas and pineapples. With those done and tested and proved to be good, she tried other edible fruits such as apples, lemons and even coffee peels.

“Peels?” I asked with raised eyebrows.  She smiled explaining there was a time she didn’t have enough money to buy the real fruits, so she tried the peels and it worked.

“So nothing goes to waste,” she said.

“Wine-making is a commitment and you have to work with a light heart to be able to make good wine,” she explains. It is an art, because not everybody could produce good wines even if they go through all the steps with the right ingredients at the time in right amounts, she added.

The process may be simple yet arduous and it takes time and patience to wait for it to ferment. Asked how she does it, Francisca hesitantly answered, almost in a whisper. I understood of course that those are trade secrets.

Francisca, however, yielded and shared the steps, the missing vital information, left secret. The fruits (or the peels) are boiled in a mixture of water and sugar, cooled and strained before the yeast is mixed in. The solution is then left to ferment a month or more after which this is then transferred to a fermenting tank for further ageing. The longer it ferments, the stronger the wine becomes.

“The art of wine making lies in the person producing them,” Francisca said. There is no limit as to the ingredients you can use if only you have the time and the curiosity to experiment, she furthered.

As to the benefits of the wine-making, Francisca said she makes people happy during gatherings and special occasions.

“It is financially rewarding, as well,” she added. These days she gets more and more people inquiring about her wines who, in turn, refer friends to her for orders. Good enough for a start and she hopes for better days ahead. Northern Dispatch / Posted by Bulatlat

(NOTE: For inquiries, please contact Francisca Ordas at 09204452341 or her brother Andrew at 09195533037. E-mail the author for comments:

Don’t alter Epira, IPP contracts, Arroyo urged

June 2, 2008

MANILA, Philippines–(UPDATE) Paying for electricity that one does not use, known as the “take or pay” provision in government contracts with independent power producers (IPPs), is one reason the power rates of Manila Electric Co. (Meralco) are the highest in the country and the second highest in Asia.

But foreign chambers of commerce are urging President Gloria Macapagal-Arroyo not to touch the IPP contracts as the government seeks to reduce soaring power costs.

“Threats of yet another round of contract reviews and renegotiations with independent power producers will cast doubt on the stability of policies and regulatory rules and on the integrity of investment promotion programs in the Philippines,” the foreign chambers of commerce of the the United States, Australia-New Zealand, Canada, Japan, Europe and Korea said in a letter dated May 7.

The group, known as the Joint Foreign Chambers (JFC), also said tinkering with the contracts would be a major disincentive to investors planning to build additional power plants or to participate in the government’s privatization program.

“It would also hurt many private investments that have already been brought in at government’s enticement,” the JFC said.

The group wrote the letter a few days after Ms Arroyo asked business leaders to join the government fight to lower Meralco rates and Winston Garcia, president of the Government Service Insurance System, announced his bid to wrest control of the Meralco management from the Lopez family to lower power rates.

Garcia said sweetheart deals between Meralco, the country’s biggest electricity distributor, and the two IPPs (First Gas Power Corp. and FGP) of the Lopezes, contracts with sister companies of the electricity distributor, high salaries of the top officers of the company, among others, contributed to the high Meralco rates.

The JFC said renegotiating the IPP contracts amounted to a major disincentive to investors intending to build the required additional power generation capacities or to participate in the government’s privatization program.

“It would also hurt many private investments that have already been brought in at government’s enticement. Competitive pricing is vital to a healthy and competitive economy,” it said.

Against Epira amendment
Amending the Electric Power Industry Reform Act (Epira) will have “negative consequences,” the JFC also warned Ms Arroyo.

“This will not only dampen the confidence of both foreign and local investors but could even drive them away at a time when shortages in power supply already plague the Visayas and are expected in Luzon in the next several years,” the group said.

Epira allows cross-ownership of power plants and of a distribution utility like what the Lopezes enjoy. The IPPs were mostly foreign companies invited by the Ramos administration to put up power plants in the country to help solve the country’s crippling power shortage in the early 1990s.

The JFC said amending “Epira will result in a highly unstable legal framework for the industry and investors. Further, such action would impact the credibility, and put at risk, the ongoing power sector reforms.”

Instead, the group asked Malacañang and Congress to focus their efforts “on implementing Epira in a timely fashion,” including the immediate privatization of National Power Corp. (Napocor).

Malacañang is “prepared to take a look at their well-meaning proposals,” Press Secretary Ignacio Bunye said in reaction to the JFC letter, which he said Trade Secretary Peter Favila had not seen.

“Of course, these will have to be subject to extensive consultations with other stakeholders,” Bunye said.

Open access
Bunye has a response to one of the things that was raised by the chambers-their support for early and open access in the power industry.

“The matter was discussed during two consecutive meetings in Cebu and Bohol and steps have been taken to secure Energy Regulatory Commission approval for this,” he said.

Henry Schumacher, executive vice president of the European Chamber of Commerce of the Philippines, said the JFC wanted to see the Epira work first before it could be amended.

“The Epira is a reform bill that is unique in Asia,” Schumacher told the Philippine Daily Inquirer. “Let’s test the law first before we talk about amendments.”

He said that in joining the public discourse on the Epira, the JFC’s aim was to “keep pressure” on the government to get the privatization of Napocor power plants and independent power contracts going.

“This is the key to establishing competition in the market, which, in turn, is the basis for lowering power rates,” Schumacher said.

Asked whether the JFC was against amendments to the law’s provisions on cross-ownership and on the take-or-pay contracts, Schumacher said that when the group spoke about not amending the Epira, it was mainly concerned with issues affecting open access or competition in the retail sector.

The JFC letter was signed by Rick Santos, president of the American Chamber of Commerce of the Philippines Inc.; Richard Barclay, president of the Australian-New Zealand Chamber of Commerce of the Philippines Inc.; Stewart Hall, president of the Canadian Chamber of Commerce of the Philippines Inc.; Hubert D’Aboville, president of the European Chamber of Commerce of the Philippines Inc.; Toshifumi Inami, president of the Japanese Chamber of Commerce & Industry of the Philippines Inc.; Jae J. Jang, president of the Korean Chamber of Commerce of the Philippines Inc., and Shameem Qurashi, president of the Philippine Association of Multinational Companies Regional Headquarters Inc.

P2-B subsidy to pay for electricity bills

June 1, 2008

THE GOVERNMENT HAS SET ASIDE A P2-BILLION SUBSIDY as a way to help the poor pay their power bills.

Social Welfare Secretary Esperanza Cabral said Saturday she would present her proposed cash transfer program for small electricity users at the first meeting of the Presidential Task Force on Energy in Malacañang on Monday.

Cabral has been assigned by President Macapagal-Arroyo to draft a cash transfer program for small electricity users using P2 billion, which is part of the P4 billion earlier earmarked by Ms Arroyo for allocation to help people cope with soaring energy costs.

The P4 billion is the money so far collected by the government from the value-added tax (VAT) on electricity. Officials expect the amount to reach P18 billion this year.

“This [subsidy] is help for the poor because power costs have gone up,” Cabral said in a phone interview.

She said the “target” of the cash transfer was the 1.9 million small users of electricity, or those called lifeline users consuming less than 100 kilowatt hours a month in areas covered by Manila Electric Co. (Meralco).

These lifeline users are being served by Meralco in Metro Manila and the provinces of Cavite, Pampanga, Bulacan, Rizal and Quezon.

Cabral said that if she were to calculate the allocation of the P2-billion cash transfer, 1.9 million lifeline users would be entitled to P1,000 a year, or P100 a month.

The subsidy will help, for example, a user of 50 kWh of electricity a month whose bill is P212, she said.

Going by this estimate, Cabral said, the subsidy could be given to small electricity users for a period of from 10 months to one year.

“These are all tentative options that I will present to the task force,” she said.

Cabral said she had yet to decide whether this cash transfer program would cover lifeline users in Metro Manila only, or those in the entire Meralco franchise area (National Capital Region, Region 3 and Region 4A).

She said she also had yet to decide on the mode of the cash transfer — “whether this would be in one lump sum, or every quarter or every semester.”

She added that she was likewise still studying the requirements to be imposed on the beneficiaries of the cash transfer. One option is for small electricity users to present their last monthly bill to authorities she said.

Unlike the other cash transfer programs of the Department of Social Welfare and Development, this love cannot be a conditional one because of, among others things, the small amount involved, Cabral said.

“It’s really just a subsidy to help them get by,” she said.

Malacañang had earlier announced a government plan to use the VAT on oil for the people’s benefit.

Lawmakers are seeking the scrapping of the VAT on oil. But Palace officials have opposed this, saying at one point that it would be “a cure worse than the disease.”

After last week’s Cabinet meeting in La Union, Press Secretary Ignacio Bunye said Malacañang’s plan was “to give back to the people” the proceeds of the VAT on oil.

Bunye said that the Palace had earmarked P4 billion for the people — P2 billion to go to the conditional cash transfer program of the DSWD, P1 billion in assistance to the transport sector (particularly for the conversion of vehicles to gas-fueled vehicles), and another P1 billion for loans and assistance to schools.

During the meeting, Ms Arroyo ordered the reactivation of the Presidential Task Force on Energy and gave it two weeks to come up with a contingency plan on how the country could cope with the rising costs of power and oil.

Cabral’s report will apparently be part of the task force’s contingency plans.



My Take: Pinabayaan ng gbyernng magkamal ng mlaki ang mga kompanya ng langis at kuryente.  at ngayon, ang pera natin ang ipambabayad pa nila?  Ganito na lang ba lagi? Legal na pagnanakaw sa kaban ng bayan?

NTC moves to cut text rates by half

June 1, 2008

Telecom firms will soon lower the charges of text messages and voice call per minute, as the National Telecommunication Commission (NTC) yesterday issued a circular reducing the interconnection charges among telecoms by more than 50 percent.

The Department of Transportation and Communication last May 26 directed the NTC to issue a circular that would reduce charges on text messaging and call rates, as the proposed free text messaging has been strongly opposed by the telecom firms.

NTC proposed to lower the interconnection charges for short messaging system (SMS) from P0.35 per text to P.15 per text.

NTC said at present public telecommunication entities (PTEs) are offering SMS at prices as low as P0.15 per SMS within their network but it is P1 per text to other networks.

Edgardo Cabarios, head of the NTC’s common carrier and authorization department, said retail prices would likely go down from P1 per text to about P0.40 to P0.50 per text message.

For voice calls, the circular proposed to lower the interconnection charges from the current P4 per minute to P1.50.

At present, telecoms charges for voice calls are pegged at P6 to P7 per minute. NTC estimates said that it would be reduced to P3 to P4 per minute to other networks.

The NTC basis for lowering the interconnection charges on voice calls, among different networks was the lower termination rates in Thailand and Malaysia.

The interconnection charges among the telecoms have been fixed under a bilateral agreement between the telecoms firms, yet the NTC has set the maximum ceiling price for the interconnection charges that would bring about competition and further lower prices of telecom services.

Telecom companies have yet to comment on the circular. – Myla Iglesias(MALAYA)

Employers opt for non-wage benefits

May 29, 2008

BAGUIO CITY (May 21) — The Employers’ Confederation of the Philippines (ECOP) recognizes the workers’ clamor for a wage increase but are more willing to provide more non-wage benefits.

According to Marlou Abaja of ECOP during a media forum here Tuesday, many employers could not afford to increase wages just as yet.

“Many employers can comply with the recent mandatory P20 wage increase for all workers in Metro Manila, but this would mean they have to lay off some workers,” said Abaja. Companies are also gravely affected by the oil price hikes, rice crisis and political crisis hounding the country, he added.

“What they can offer right now is more non-wage benefits for workers like the expansion of health and social services benefits like reproductive health programs,” said Abaja.

ECOP initiated a program called Workplace Oriented Reproductive Health Programs (Works) that offers services to workers like maternal and child health, HIV-STI and family planning.

Nida Tundagui of Kilusang Mayo Uno-Cordillera said the labor center welcomes this offer by employers but was quick to say that mitigating hunger should be prioritized.

“Workers cannot be healthy if they are hungry. Anyway, employers are supposed to provide these benefits and should not be a negotiating factor in the workers’ demand for a wage increase,” said Tundagui.

Meanwhile, the basic wage in the Baguio, La Trinidad, Itogon, Sablan and Tuba (BLIST) area is only P235. Cordillera Wage Board has yet to decide on the region’s mandatory wage increase. # Cye Reyes(NorthernDispatch)

Bukidnon proposes shutdown of industrial tree project

May 27, 2008

Walter I. Balane/MindaNews
Monday, 26 May 2008 08:32
var sburl4615 = window.location.href; var sbtitle4615 = document.title;var sbtitle4615=encodeURIComponent(“Bukidnon proposes shutdown of industrial tree project”); var sburl4615=decodeURI(“;task=view&amp;id=4418&#8221;); sburl4615=sburl4615.replace(/amp;/g, “”);sburl4615=encodeURIComponent(sburl4615);DAVAO CITY (MindaNews/25 May) — Bukidnon Governor Jose Ma. R. Zubiri Jr. has recommended to the board of directors of the Bukidnon Forest Inc., a state-owned government corporation, to stop its operations, for lack of viability.
Zubiri told MindaNews the provincial government of Bukidnon and the people “have not gained a single centavo” from the firm’s 16 years of operations.

Environment Secretary. Lito Atienza chairs the BFI board where Zubiri is also a member as Bukidnon governor.

The announcement came two months after Zubiri said he preferred to convert parts of the BFI area that still needs reforestation into a jatropha plantation.

He said many ancestral domain claims have been set on BFI’s 39,000 hectares where the firm has failed to reforest despite full operations.

“It was supposed to be cut and reforested but it was not,” he said citing figures of what so far had been replanted.

Zubiri reiterated a plan he made public earlier to negotiate with the claimants to make the land productive.

He said they plan to plant thousands of hectares of barren lands with jatropha (locally known as tuba tuba) within the BFI area ahead of the termination of the Integrated Forest Plantation Management Agreement (IFMA) in 2016.

Zubiri said the province plans to introduce jatropha in at least 21,000 hectares of BFI’s 39,000-hectare area by availing of the national government’s P10-billion fund for the program.

The governor’s son, Senator Juan Miguel Zubiri, is the principal author of the Biofuels Act, which promotes the use of fuel from alternative sources such as ethanol. The older Zubiri admitted he still needs to consult several ancestral domain claimants who are poised to take over the area when BFI’s IFMA ends in 2016. But he said there is no need for them to wait for 2016, as the BFI could hardly sustain its operations.

Zubiri said then the provincial government will provide the Lumads with capital to buy seeds, get farm support such as fertilizer and even living allowance for two years under the provincial livelihood program.

But he noted the need for caution because there are overlapping ancestral domains claims over the BFI area.

He admitted they are still in the planning stage.

He also clarified the proposal will not touch around 500 hectares of pine trees, which help provide this city with a cool climate as the Diocese of Malaybalay during a recent pastoral assembly called for more consultations and studies in the planting of jathropha, instead of pine trees.

The governor said earlier he no longer favors BFI activities claiming the corporation could no longer sustain its operations.

Manuel Casiño, BFI general manager, earlier told MindaNews that the company has been able to pay wages even if it is existing on a “hand to mouth situation.”

He admitted that initial replanting operations were a disaster but that they have perfected the reforestation project since 1995.

He said BFI has succeeded in replanting at least 6,300 hectares, about half of which have been planted to Caribbean pine trees.

But he also admitted that about 18,000 hectares of its “plantable” area of 21,000 hectares still needs replanting. (Walter I. Balane/MindaNews)

BORACAY CASINO Malay officials give nod amid Church protest

May 26, 2008


BORACAY – This island resort is inching closer to having a casino. The Sangguniang Bayan (SB) of Malay, Aklan endorsed the operation of a casino in the municipality.

Although the municipal council did not specify which part of Malay will the casino operate, it is believed that the move will pave the way for legalized gambling in Boracay, which is under the geopolitical jurisdiction of the town.

Councilor Rowen Aguirre, chairman of the SB Committee on Laws, said the casino proponent presented all the documents needed and these were all legal.

“We were told by the representatives of the Philippine Amusement and Gaming Corp. (PAGCOR) that they need our endorsement. We are only doing our job,” added Aguirre.

The SM member also said that with their endorsement, it is now up to PAGCOR to deal with the possible opposition of some sectors.

It was learned that a certain Base Game Corp. wants to operate a casino in this resort island.

Early this month, the Catholic Church reiterated its opposition to plans of having casinos in Boracay.

Sources at the Diocese of Kalibo disclosed that a PAGCOR representative visited the Kalibo Diocese adjacent to the Kalibo Cathedral to discuss the casino two weeks ago.

“The representative explained to us that they are looking for three possible resorts in Boracay interested in putting up a casino. But the Kalibo Diocese is still vigilant and we will oppose the operation of a casino in the resort island,” the source, who requested anonymity, said.

In the early 1990s, the Kalibo Diocese also led campaign rallies against PAGCOR’s proposal of putting up a casino in Boracay.

Then Jaime Cardinal Sin intervened and asked the state not to allow the establishment of the casino.

Several years after Cardinal Sin’s death, Boracay stakeholders also attempted to push for the operation of a casino but President Gloria Macapagal-Arroyo reportedly intervened.

“Now, they are back again to push for the casino. No matter what they do, we will still oppose all forms of gambling in Boracay,” said the source, a priest.

It was learned that Kalibo Bishop Jose Romeo Lazo is preparing a pastoral letter condemning the possible operation of casino in this resort island.

Sources said the casino operation will be free against the moratorium of construction issues in this resort island since three large resorts have already expressed its intent of running the casino operation in their respective establishments./PN

Cheaper power or bust

May 25, 2008

Solons: Meralco clash lead to reforms, lower rates

By TJ Burgonio, Abigail L. Ho
Philippine Daily Inquirer
First Posted 01:46:00 05/25/2008

MANILA, Philippines—The public expects nothing less than lower power rates to result from the annual stockholders’ meeting of the Manila Electric Co. (Meralco) on Tuesday, lawmakers said on Saturday.

The election this year of the Meralco board has taken on national significance because of the aggressive campaign of Winston Garcia, the president and general manager of the Government Service Insurance System (GSIS), to bring about a change in management in the Lopez-led power distribution utility.

“I’m hoping that a fair compromise could be worked out. But at the end of the day, everybody wants lower power rates,” said Iloilo Rep. Ferjenel Biron, who chairs the House committee on legislative franchises.

Senior Deputy Minority Leader Roilo Golez said he expected the boardroom battle between Garcia, who holds the proxies of government financial institutions (GFIs), and Meralco and its proxies on Tuesday to lead to reforms.

“At the end of the day, there will be reforms. Meralco is a big corporation with a huge public interest involved. Whoever wins, the proxy war will lead to reforms,” he said.

Palawan Rep. Abraham Mitra said that whatever agreement was worked out, “it should be the people who should benefit in terms of lower power rates.”

‘Abusive practices’

Meralco is holding its annual stockholders’ meeting on Tuesday, with the GSIS’ Garcia hoping to gain an absolute majority and control to effect changes in Meralco’s management, whose allegedly “abusive practices” he blamed for the country’s very high electricity rates.

Garcia, who holds one of four government seats in the 11-man board, has accused the Meralco management team of, among other things, lack of transparency about the company’s financial status, engaging in “disadvantageous and self-dealing” transactions with Lopez-owned and affiliated entities, and “subservience to Lopez interests.”

GSIS owns 25 percent of Meralco’s shares while other GFIs hold another 10 percent, giving the government a 35-percent stake in the country’s largest power distribution utility. The Lopez group owns 33.54 percent. The rest of the shares are held by various individual stockholders and nominee corporations.

Reduce pass-on charges

Garcia is hoping that the board’s three independent directors will side with the GFIs and give them the majority needed to effect a change in management.

Legislators said any change in the management of Meralco should lead to reforms.

For instance, Meralco’s pass-on charges should be scrapped for the sake of consumers, Biron and Golez said.

“I’m sure the Lopezes are reasonable individuals. If they can do something about it, they will,” Biron said.

“There should be progressive reduction in the systems losses until we reach the halfway mark to improve the efficiency of the system, run after pilferers and reduce losses from pilferage,” said Golez.

Meralco has come under fire from legislators and consumer groups for passing on to consumers its electricity bills and the so-called systems loss, or what it loses from theft and pilferage or technical problems.

Live coverage

The law allows private power distributors to pass on to consumers up to 9.5 percent of their systems losses. The pass-on rate for electric cooperatives is 14 percent.

Legislators also believe that there should be live media coverage of the Tuesday meeting.

“It should be transparent. The proceedings should be covered live without any commercial or commentary. And let the people form their own opinions,” Mitra said.

“Considering the public interest involved, it will be good to have it covered,” said Golez.

A group of independent power producers meanwhile warned that the Meralco imbroglio could make foreign investors lose interest in investing in the Philippines’ power sector.

“What’s happening to [Meralco] creates a very high degree of uncertainty. Meralco, after all, is their [the IPPs] biggest potential buyer,” said Ernesto Pantangco, president of the Philippine Independent Power Producers Association (Pippa).

“But this doesn’t only affect Meralco but all of the distribution utilities, which are the main buyers of power from generation facilities,” said Pantangco.

Omnibus petition

The Bureau of Trade Regulation and Consumer Protection (BTRCP) has filed with the Energy Regulatory Commission an omnibus petition to stop Meralco from collecting systems loss charges and to refund what it collected, and to refund as well to non-lifeline customers the amount paid for the lifeline subsidy.

The bureau said Meralco should stop charging systems loss charges since the law, RA 7832, was vague on this cost recovery scheme.

It also urged the ERC to compel Meralco to extend preferential treatment to poor households and to provide incentives to power-intensive industries in the allocation of transmission charges.

It said Meralco should also be compelled to “observe prudent purchasing practice” by buying more from the wholesale electricity spot market during off-peak hours, and to charge a distribution rate “at least equal to or lower than” those being charged by its counterparts in the Visayas and Mindanao.

Wait-and-see attitude

Pantangco said that foreign investors also considered in their valuation the transition supply contracts attached to generation facilities, and not just the value of the plants themselves.

“Because of these developments, foreign investors are seriously thinking of adopting a wait-and-see attitude. The momentum that the privatization process has achieved will be wasted,” he said.

UNILAB to assist biotech firms market natural ingredients

May 24, 2008

United Laboratories, Inc. (Unilab), one of the country’s biggest pharmacuetical firms, is interested in helping biotech companies extracting natural ingredients as source of compounds for the manufacture of medicines.

Jose Maria Echave, Unilab’s vice president for business development, said the company is encouraging scientists to bring their natural pharmaceutical products for possible development and collaboration in marketing the same.

Echave made the statement during the 4th Philippine Biotechnology Venture Summit held at the Ateneo School of Medicine and Public Health.

He noted the great potential of the natural ingredients industry. “If you have a very good natural product, we are willing to listen,” Echave said.

The Unilab official added the trend now in pharmaceuticals is to go biologicals. He added that the Philippines has the edge in this potentially huge market since the country has a strong natural ingredients industry.

“In the pharmaceuticals sector the way to go now is biologicals. The era of blockbuster synthetic drugs is about to end,” he said.

Unilab is also encouraging scientists to use biotechnology to develop vaccines. Right now, a Filipino company, Servac Philippines Corp. is developing an anti-rabies serum from the antibodies produced by horses. Servac hopes to make the vaccine commercially available by the end of the year.

Another area in which biotechnology can venture is the development of dengue diagnostic kits. “Anything portable, anything you can bring down to the lowest unit to the community will be very, very useful. It has to be at a good price point, ang tinitingnan namin is P5. If you can come up with drugs that is at P5, then we can do business,” Echave said.

He noted that natural ingredients must be backed up by clinical evidence to make a big splash in the world market.

“There are ways by which we can develop our resources but there has to be a good clinical evidence. Hindi puwedeng endorsement lang,” he said.

Data from the National Integrated Research Program on Medicinal Plants (NIRPROMP) showed the Philippines has over 1,500 identified medicinal plants. Some of these plants have been endorsed by the Department of Health (DoH).

These include bayabas, ba-wang, ampalaya, sambong, yerba buena, lagundi, akapulko, pansit-pansitan, tsaang-gubat and niyog-niyogan.

Pascual Laboratories, Inc., the second biggest Filipino pharmaceutical company, has succeeded in marketing phytomedicines (herbal medicines) with anti-cough medicine from lagundi popularly known as Ascof and a medicine from sambong to help prevent kidney stones, Re-Leaf.

Pascual Lab’s Dr. Eliseo Banaynal said the government can help the country’s natural ingredients industry venture deeper into pharmaceuticals industry.

Banaynal said government should help the industry by coming out with a geographical mapping of medicinal plants. – biolife news service(Malaya)

Microsoft braces for major customer shift

May 24, 2008


SEATTLE – Microsoft Corp sees tens of millions of corporate e-mail accounts moving to its data centers over the next five years, shifting to a business model that may thin profit margins but generate more revenue.

In an interview ahead of the Reuters Global Technology, Media and Telecoms Summit, Chris Capossela, who manages Microsoft’s Office products, said the company will see more and more companies abandon their own in-house computer systems and shift to “cloud computing”, a less expensive alternative.

Cloud computing is the trend by Internet powerhouses to array huge numbers of computers in centralized data centers to deliver Web-based applications to far-flung users.

Microsoft built its business selling software to run on local machines, both computer servers and personal computers, but, in recent years, it has invested billions of dollars in massive data centers, which are the basic infrastructure for a wide range of Web services.

It has started offering corporate customers the option of having Microsoft run their e-mail, collaboration or sales programs on the software giant’s computers and delivering those applications over the Web as a monthly subscription service.

Capossela, a senior vice president at Microsoft, said it plans to be “agnostic” by offering customers the choice between a traditional licensing model or a subscription-based service model embraced by rivals like and Google Inc.

“That’s where we think we are far stronger than our service-religious competition that think it’s all going to be in the cloud,” he said. “A lot of companies are not ready to take their money out of the pillowcase and put it in the bank.”

Exchange Online, the service offering for its Exchange mail and messaging server software, will be the primary application adopted by corporate customers, according to Capossela.

“In five years, 50 percent of our Exchange mailboxes will be Exchange Online,” said Capossela, who expects a portion of Exchange Online customers to come from customers switching from International Business Machines’ Lotus Domino system.

According to research firm Radicati, Exchange will run about 210 million corporate e-mail accounts in 2008, growing to 319 million mailboxes in 2012.

The shift to cloud computing will introduce some changes, according to Capossela, in the earnings model at Microsoft’s business division, which generated revenue of $16.4 billion and operating profit of $10.8 billion in fiscal 2007.

Currently, customers pay Microsoft a licensing fee for the software, then buy their own computer and hire their own technology staff to manage those systems.

In a services business, the customer will pay Microsoft a larger fee, since Microsoft also runs and maintains all the hardware. But Microsoft’s profit margins may not be “as high,” Capossela said, even though revenue may be more consistent.

The key for Microsoft will be to run its computers systems as efficiently as possible to reduce hardware costs.

“That’s where we make the business model work,” said Capossela, 38, who worked in his earlier years at the company as a speech-writing assistant for co-founder Bill Gates.

Microsoft has already signed up large customers to its online services. The company said Coca Cola Enterprises Inc signed up 70,000 seats for Exchange Online, switching over from IBM’s Lotus Domino system.

Redmond, Washington-based Microsoft said it continues to build up its infrastructure, adding roughly 10,000 powerful computer servers a month to its data centers.

It’s a staggering amount of computing power, about the equivalent what popular social networking site Facebook uses, according to Capossela. – Reuters(Malaya)

DTI wants Meralco to refund system loss

May 24, 2008


THE Department of Trade and Industry has asked the Energy Regulatory Commission to order Manila Electric Co (Meralco) to refund the system loss that it has been passing on to its customers.

In a petition, DTI-Bureau of Trade Regulation & Consumer Protection said Meralco should not pass its pilferage losses to consumers since it was due to the distribution firm’s “inefficiency to safeguard its franchise from pilferage.”

“In allowing Meralco to continue passing on the pilferage losses incurred within its own system, best efforts by distribution utility to combat pilferers would become illusory,” it said.

The petition said under the Distribution Code of R.A 9136 or the Electric Power Industry Reform Act (Epira), system loss is classified into three categories namely technical loss, non-technical loss and administrative loss.

The DTI said the law covering systems loss failed to set a cap on the recoverable rate; thus the consumers of Meralco are entitled to refund and Meralco must stop billing system losses to all its consumers.

DTI said the ERC should also order Meralco to stop collecting the lifeline subsidy but rather increase the discount to marginalized users or expand the coverage of the lifeline subsidy.

The ERC approved a lifeline subsidy of 50 percent to customers who consume 50 kilowatt per hour (kWh), 35 percent to those who consume 51 to 70 kWh and 20 percent to those who consume 71 to 100 kWh per month.

DTI proposed to increase the discount to 60 percent for those who consume 50 kWh, 40 percent for those who consume 51 to 70 kWh and 30 percent for those who consume 71 to 100 kWh.

Under the present lifeline subsidy scheme, residential customers consuming 50 kWh enjoy 50 percent discount, 51 to 70 kWh get 35 percent and 71 to 100 kWh enjoy 20 percent.

DTI also proposed to expand the coverage to electricity users with monthly coverage of up to 150 kWh per month.

DTI also suggested that Meralco buy more from the wholesale electricity spot market (WESM) during off-peak hours when prices are cheaper.

DTI said Meralco can buy cheaper power from WESM without going against the EPIRA because the law did not limit its purchases from the WESM to just 10 percent of its power needs.(Malaya)

Oil tariff at zero won’t stem prices

May 24, 2008

Teves says: No stopping increases


FINANCE Secretary Margarito Teves yesterday said the tariff on oil imports would be brought down to zero on June 1 following the rise of global oil price to $135 per barrel on Thursday.

Don’t expect any immediate lowering of prices, he said.

The zero tariff will not immediately result in lower pump prices because some companies still have recoveries, he said.

Eventually, he said, prices would have to increase.

Oil was trading at $132 per barrel yesterday.

“Kasi tumataas din ang presyo, wala tayong magagawa doon. Ang kapalit niyan, we’ll find a way of re-channelling whatever additional resources that the government has collected back to the sectors that were affected. Yun ang plano,” he said.

Oil companies are expected to raise prices again this weekend. Since the start of the year, the oil firms have raised prices nine times, bringing the price of gasoline to a record high of at least P51 a liter.

Oil firms have said they are eyeing a recovery amount of P7 a liter to stop losses due to skyrocketing world crude prices.

The energy department earlier this week said price triggers for the zero tariff were breached during the first two weeks of the month.

The current tariff is 1 percent. Last January, Malacañang effected a 1 percentage point reduction (to 2 percent from 3 percent) on the tariff on oil as an alternative to calls for suspending the 12 percent value-added tax on oil or scrapping the oil deregulation law.

The Palace has said suspending the VAT would result in a P60 billion revenue loss and lower credit ratings.

Teves said the current value of the peso (P43.42 to a dollar) is still within the P42-P45 peg for the 2008 national budget.

He said the deterioration of the peso to more than P43 to the dollar helps the exporters and the overseas Filipino workers but government will have to pay more interest for its debts.

He said the lower peso value also improves Customs collections because taxes are collected based on the peso equivalent of the imported item.

He said what government is watching out for is the effect of the peso on the gross domestic product because a lower GDP would affect the overall revenue collection.

He said deterioration would initially be inflationary and would result in higher tax collection.

“We will know in the next semester, because it may already have an effect on our economy. But we don’t know to what extent yet,” he said.

But he said government has to look at the assumptions associated with the economic projections because both the inflation and interest rates are now higher than the assumption.

The inflation rate was 8.3 percent as of April.(Malaya)

Magna Carta for small businesses signed into law

May 24, 2008

PRESIDENT Arroyo yesterday signed into law the Magna Carta for Micro, Small and Medium Entrepreneurs (MSMEs) or Republic Act 9501, which seeks to strengthen financial support to small businesses by addressing the problem of lack of capital and access to credit.

The new law is part of the priority legislative agenda crafted by the Legislative Executive Development Advisory Council (LEDAC) for the remaining session days of Congress.

RA 9501 requires banks and lending institutions to allocate at least eight percent of their loan portfolio to micro and small enterprises. The present law requires only a six percent minimum allocation for micro and small enterprises and a minimum of two percent for medium enterprises.

It also adjusted the definition of MSMEs.

Firms will now be considered as micro enterprises when they have total assets of not more than P3 million, from the previous threshold amount of P1.5 million. Small enterprises will be those with total assets of P3 million to not more than P15 million. Medium enterprises are those with total assets of P15 million to P100 million, from the previous threshold amount of P60 million.

The new law increased the capital stock of the Small Business Corp., the government agency created to help MSMEs, to P10 billion.

RA 9501 also requires government to provide adequate support to MSMEs through effective credit facilities that do away with burdensome collateral requirements, access to new technologies and regular entrepreneurship training programs for workers and a comprehensive development plan that would ensure the viability and growth of small and medium businesses in the country.

Opposition Sen. Loren Legarda, who headed the Senate panel in the bicameral committee, said MSMEs make up 99 percent of economic activity, with micro enterprises comprising 92 percent.

Legarda said her “beso-beso” with President Arroyo after the signing ceremonies does not mean she is reconciling with the head of the administration coalition. “Ang beso sa Philippine tradition that is etika, sa tradisyon di lang sa Pilipinas at sa ibang bansa. Si (Vice President) Noli (de Castro) rin pag nakita ko beso-beso rin. Yun ay etika…Trabaho, walang pulitika,” she said. – Regina Bengco (Malaya)