Deceit of Good Economics and Good Governance by IBON Research

January 10-11, 2013U.P. School of Labor and Industrial Relations (UP SOLAIR)

UP Diliman, Quezon City

YEAREND 2012: The Deceit of Good Economics

and Good Governance

Economic andPolitical BriefingBirdtalk

2 IBON Economic and Political Briefing 10-11 January 2013

IBON Foundation114 Timog AvenueQuezon City 1103 PhilippinesTel. Nos: +63 2 927-7060 to 62Fax: +63 2 929-2496www.ibon.org

IBON Economic and Political Briefing 10-11 January 2013 3

The year 2012 ended with the Philippines seemingly moving forward on many counts. There was rapid economic growth, record highs in the stock market and gross international reserves (GIR), looming investment grade credit ratings, higher foreign

investment and increasing corporate profits. The political scene was also relatively steady especially compared to the decade of turbulence during the previous Arroyo administration. In particular the traditional political opposition was restrained and as yet unwilling to test the administration’s perceived core of public support. There were also apparent advances in some controversial pieces of legislation and, notably, even in the Moro armed conflict in Mindanao.

Yet many things which were arguably more meaningful remained unchanged. Despite supposed economic good news and a degree of political stability the majority of Filipinos still faced record joblessness, stagnant earnings, rising prices and growing poverty. Domestic manufacturing and agriculture continued their long-term decline. Corruption did not measurably decrease and old disagreeable political ways continued such as in the run-up to the 2013 mid-term election and even on the part of the administration. State-sponsored human rights violations go on as does the militarist approach to the conflict with Maoist rebels. If anything, there has been a marked regression in foreign policy with the Philippines increasingly subordinated to the United States (US) agenda in the region.

The administration and its supporters have played up the onset of ‘good governance’ in the country and supposed economic progress. However the two-and-a-half years so far of profits without prosperity, persistence of undemocratic politics, and dearth of fundamental pro-people reforms has affirmed the country’s duality: a Philippines for the rich and another for the poor. There is still no development and economic gains are shallow or merely financial and speculative. There has also not yet been anything approaching the major changes needed to improve the country’s political system.

The signs instead are of an elite-dominated ruling system that is consolidating after the weakening of its political institutions by another successful ouster movement in 2001 and by nearly constant destabilization over the succeeding decade. Alarmingly for the status quo, these created opportunities for progressive and even revolutionary forces in the country to steadily advance. But the conditions for dissatisfaction and dissent remain and any intensification in 2013, whether in the real economy or the political landscape, would easily disrupt the current fragile stability.


Aquino’s Faulty Economics

The Aquino administration touted the 3rd quarter growth of the gross domestic product (GDP) as a sign of a strong economy and called the Philippines the roaring lion of Asia. According to the Aquino

administration, the “spectacular” 7.1% growth along with the upgraded credit outlook and a booming stock market reflect the success of its economic policies in leading the country to development.

In so far as development is concerned however, a high GDP growth is at least taken with a grain of salt. Is this growth indeed a foundation for development? More importantly, is the majority of the people benefiting from this growth by seeing improvement in their living condition and welfare? Close examination reveals that the high economic growth in this period did not result in benefits to the average Filipino. Instead, this was accomplished at the expense of smaller establishments and the Filipino working class.

Further, 2012 saw the Aquino administration going implementing policies that are deemed necessary to facilitate big business interests in the Philippine economy and heedless of the welfare of the poor majority. The advancement of big business interests in utilities, social services, mining, land and oil and ensuring developments in free trade deals is the key aspect of Aquino’s economic agenda for 2012.

Spectacular growth?

The Aquino government brandishes the 7.1% economic growth posted in the 3rd quarter of 2012, the highest in Southeast Asia in that period, as a major accomplishment of its economic policies. However, closures and retrenchments of small establishments, displacement of workers, and worsening unemployment characterize the economy even as the profits of big corporations continue to increase.

From the expenditure side, growth was largely driven by government consumption which grew 12% in the 3rd quarter 2012 from 8.9% in the same period the previous year. Another expenditure which drove up growth was construction as part of capital formation which grew by 24.8%, from a contraction the previous year. Exports grew by 6.9% from a contraction of 11.9%, but this was offset by the growth in imports at 8.3 percent. (See Table 1)

Household consumption slowed down to 6.2% in 3rd quarter 2012 from 7.4% in the same period in 2011. It slowed down for the first nine months from 6.3% in 2011 to 5.7% in 2012. Food expenditures including non-alcoholic beverages decelerated and other areas of consumption had lower growth rates. On the other hand, growth in spending for transport, housing, water, electricity, gas and other fuels, furnishing, and household maintenance posted higher growth rates.

Investment in durable equipment contracted by 2.4% in 3rd quarter 2012 from 9.3% growth in the same period in 2011. The declines in investment were noted in air transport, other miscellaneous durable equipment, telecommunications and sound recording/reproducing equipment, other general and industrial machines, and pumps and compressors.

Based on industrial origin, the GDP growth was mainly driven by construction, posting a growth of 24.3% in the 3rd quarter of 2012 from plunging 8.8% in the same period the previous year. (See Table 2) Gross value added (GVA) in both public and private construction grew double-digit in the 3rd quarter 2012. But from 1st to 3rd quarter (Q1-Q3) 2012, it was public construction that drove the growth in construction, recovering by 45.5% from 46.2% plunge in the same period the previous year. Private construction on the other hand even slowed down from growing 8% in the first three quarters of 2011 to only 4.9% in the same period in 2012.


It may be recalled that the government allocated in 2012 an infrastructure budget worth Php142 billion, 25.6% higher than the infrastructure budget in 2011. (See Table 3) Still, government investment in construction was not enough to attract foreign direct investment (FDI) in construction, which substantially slowed down to 29% growth in January-September 2012 from 329% growth in the same period in 2011. (See Table 4)

Aside from construction, the GDP growth was also driven by transportation, storage and communication (TSC) which grew by 9%; trade and repair by 7%; financial intermediation by 8.3%; and real estate, renting and business activities by 7.8 percent. On a year-on-year basis, TSC grew by 9.3% in Q1-Q3 2012, faster than 4.3% growth in the same period the previous year. Trade posted 7.5% growth in Q1-Q3 2012, up from 3.3% in the same period in 2011. Financial intermediation grew by 7.9 percent.

Overall, growth remains shallow, since the sectors credited for the growth are not domestically-grounded production using domestic resources, thus gains go to foreign corporations. There is no broad-based local learning of technological development. High growth sectors are also not maximized for employment generation and despite being the highest growth in Southeast Asia it is not happening in the context of an economy-wide capitalist production.

The construction sector which grew by 14.1% in Q1-Q3 2012 from a contraction of 11.9% in the same period in 2011 was buoyed by increased business process outsourcing (BPO) activities and real estate activities. Construction builds infrastructures that support economic development. It is of even more

2011 2012 2011 2012

1. Household Final Consumption Expenditure 7.4 6.2 6.3 5.7

2. Government Consumption 8.9 12.0 (0.7) 12.6

3. Capital Formation 21.8 4.3 14.3 (6.0)

A. Fixed Capital 1.0 8.7 1.1 7.9

1. Construction (8.6) 24.8 (9.4) 12.6

2. Durable Equipment 9.3 (2.4) 10.2 5.0

3. Breeding Stock & Orchard Development (0.3) 2.8 0.6 2.1

4. Intellectual Property Products 9.1 6.0 11.8 15.2

4. Exports (11.9) 6.9 (3.1) 8.6

A. Exports of Goods (14.8) 6.7 (4.2) 8.1

B. Exports of Services 5.3 7.6 1.5 11.2

5. Less : Imports (1.8) 8.3 2.4 5.2

A. Imports of Goods (2.2) 8.0 4.0 3.7

B. Imports of Services (0.3) 9.6 (4.3) 12.2

Gross Domestic Product 3.2 7.1 3.9 6.5

Gross National Income 2.2 6.6 2.7 5.8

Source: National Statistical Coordination Board National Accounts of the Philippines

Table 1. Gross National Income and Gross Domestic Product By Expenditure

Shares, Growth Rates, 1st

-3rd

Quarter 2011 and 2012 (at constant

2000 prices; in %)

Type of Expenditure3rd Quarter 1st-3rd Quarter


2011 2012 2011 2012

1. Agriculture, Hunting, Forestry and Fishing 2.2 4.1 4.9 1.8

a. Agriculture and Forestry 4.3 5.1 7.3 2.8

b. Fishing (6.6) (0.6) (3.9) (2.4)

2. Industry Sector 0.1 8.1 1.8 6.3

a. Mining & Quarrying 4.1 (2.2) 13.8 (6.7)

b. Manufacturing 2.0 5.7 5.3 5.3

c. Construction (8.8) 24.3 (11.9) 14.1

d. Electricity, Gas and Water Supply 1.7 2.7 (0.1) 5.6

3. Service Sector 5.2 7.0 4.8 7.5

a. Transportation, Storage, and Communication 4.6 9.0 4.3 9.3

b. Trade and Repair of Motor Vehicles, Motorcycles,

Personal and Household Goods4.5 7.0 3.3 7.5

c. Financial Intermediation 1.4 8.3 6.6 7.9

d. Real Estate, Renting & Business Activities 8.7 7.8 7.8 7.9

e. Public Administration & Defense:

Compulsory Social Security0.7 4.3 (1.2) 2.5

f. Other Services 7.8 5.3 6.2 7.5

Gross Domestic Product 3.2 7.1 3.9 6.5

Gross National Income 2.2 6.6 2.7 5.8

Table 2. Gross National Income and Gross Domestic Product By Industry,

Growth Rates, 1st

-3rd

Quarter 2011 and 2012 (at constant 2000 prices;

in %)

3rd Quarter 1st-3rd QuarterIndustry

Source: National Statistical Coordination Board National Accounts of the Philippines

Agency Budget (Php)

Department of Public Works and Highways 91.6 billion

Department of Agriculture 24.5 billion

Department of Agrarian Reform 3.3 billion

Department of Interior and Local Government 770.0 million

Department of Education 14.0 billion

Department of Transportation and Communication 7.2 billion

Pasig River Rehabilitation Commission 108.0 million

Autonomous Region of Muslim Mindanao 356.9 million

Total 141.8 billion

Table 3. Budget of Infrastructure Projects Allotted by

the Aquino Government in 2012 By

Implementing Agency

Source: Department of Budget and Management


importance, especially in the context of the Philippine economy, if construction builds national industries e.g. chemicals, textile, and steel. But its current growth is not because of supporting industrialization but only based on the boom in construction of facilities for the foreign capital-intensive and export-oriented BPO sector, in particular, the building of more office spaces, and to a certain extent, residential units.

According to the survey conducted by the National Statistics Office (NS0), the value of construction in the 3rd quarter of 2012 was mainly driven by a 100% increase in the value of non-residential building construction, from Php14.2 billion in 3rd quarter 2011 to Php28.2 billion in 3rd quarter 2012. Construction of commercial buildings accounted for 71.2% of the total value of non-residential construction. Only 8.5% of total value of construction is accounted for by industrial construction.

Also, industry players attribute the boom in real estate, renting and business activities to increased BPO activities and remittances of overseas Filipino workers (OFWs). BPO activities are largely driven by FDI in information and communication which increased by 411.8% in the first nine months of 2012 compared to an increase of 59.5% in the same period the previous year. (See Table 4) The BPO industry is being supported by the Aquino government with various subsidies and programs. The Aquino government is also placing emphasis on the information communication technology (ICT) development of BPO instead of research and development (R&D) to develop domestic industries.

As mentioned, industry players are also citing the spending of OFWs as one of the key factors in the real estate boom as indicated by an increase of 61% in international sales in 2012. But OFW remittances have been slowing down in recent years. Growth rate peaked in 2005 at 25% but is now only at 5.83% as of October 2012. (See Chart 1)

The real estate boom is also significantly debt-driven. Bank exposure to real estate loans grew by 18.9% in the first semester of 2012 compared to the same period in 2011. The exposure consisting of loans to and securities from real estate players reached Php561.6 billion or the highest value recorded so far. The increased real estate loans even prompted the Bangko Sentral ng Pilipinas (BSP) to be more stringent in the reports of banks of the extent of their exposure to real estate loans vis-a-vis their loan portfolio.


2011 p 2012 p 2011 2012

Total Equity 150.0 1,200.0 122.9 700.0

Agriculture, Forestry and Fishing 3.7 0.7 114.7 (81.3)

Mining and Quarrying (244.6) 29.5 (628.7) 112.1

Manufacturing 74.6 1,000.1 109.0 1,239.9

Electricity, Gas, Steam and Airconditioning Supply 1.2 (38.9) 107.0 (3,437.3)

Water Supply; Sewerage, Waste Management and

Remediation Activities0.0 1.2 0.0 0.0

Construction 4.4 5.7 328.7 29.4

Wholesale and Retail Trade; Repair of Motor

Vehicles and Motorcycles16.1 83.4 (3.0) 417.7

Transportation and Storage 0.4 (10.0) (95.2) (2,772.0)

Accommodation and Food Service Activities 1.5 1.4 (68.7) (6.7)

Information and Communication 3.7 18.9 59.5 411.8

Financial and Insurance Activities 179.9 (1.4) 523.1 (100.8)

Real Estate Activities 77.8 96.5 (47.9) 24.1

Professional, Scientific and Technical Activities 20.8 0.5 0.0 (97.8)

Administrative and Support Service Activities 4.0 0.2 2,016.3 (94.7)

Public Administration and Defense; Compulsory

Social Security0.0 0.0 0.0 0.0

Education 0.9 0.2 116.2 (73.9)

Human Health and Social Work Activities 0.0 (13.2) 0.0 (36,625.3)

Arts, Entertainment and Recreation 3.4 1.1 (24.7) (69.0)

Other Service Activities 0.9 0.0 (83.6) (100.0)

Activities of Households as Employers;

Undifferentiated Goods-and-Services-Producing

Activities of Households for Own Use

0.0 0.0 0.0 0.0

Activities of Extraterritorial Organizations and Bodies 0.0 0.0 0.0 0.0

Others N. E. C. 1 1.4 24.1 (45.6) 1,656.1

Reinvested Earnings 277.0 121.0 95.1 (56.3)

Other Capital 355.0 (228.0) (71.7) (164.2)

Total 782.0 1,093.0 5.7 39.8

Totals may not add up due to rounding.

Note: The DES-BSP shifted to using as basis the 2009 Philippine Standard Industrial Classification (PSIC) instead of

the old 1994 PSIC starting with the January 2011 report.

Source: Bangko Sentral ng Pilipinas

Table 4. Net Foreign Direct Investment (BOP Concept*) By Industry/Sector, January-

September 2011 and 2012

Sector

Levels (million US$) Growth Rate (%)

Jan-Sept Jan-Sept

* - BOP Net FDI flows refer to non-residents' equity capital placements less non-resident withdrawals + reinvested

earnings + net other capital.

p - preliminary1 - Covers non-residents investments in non-banks sourced from the Cross-Border Transactions Survey and in local

banks; sectoral/industry breakdown statistics are not available.


Most of the growing economic sectors are also driven by foreign capital and debt while the more significant sectors of manufacturing and agriculture remain sluggish. Manufacturing grew 5.7% in 3rd quarter 2012. From Q1 to Q3, its growth rate stayed at 5.3% in 2012 as it was in 2011. Agriculture continued its slowdown in Q1-Q3 to only 1.8% growth from 4.9% in the same period in 2011.

Manufacturing and agriculture are already in their lowest contribution to the economy. Agriculture accounted for only 10.7% of the GDP in the first three quarters of 2012, which is already its smallest contribution in history. Manufacturing’s share today, on the other hand, is already as low as its share in the 1950s, registered at 21.8% of the GDP as of the first three quarters of 2012.

The benefits from the growth in manufacturing also end up mostly to foreign corporations. Of the total gross revenues of transnational corporations (TNCs) in 2011, 68% was accounted for by manufacturing TNCs. The share of TNCs in manufacturing increased from 60% in 2010 to 62% in 2011. (See Table 5) Overall, 36.3% of combined gross revenues of top 1,000 corporations are accounted for by TNCs.

Growth is also not translating to job creation, which is one indicator if growth is indeed deep and broad-based. There is weak job generation in construction, real estate, TSC, and financial intermediation – the sectors that are supposed to be driving the hyped economic growth. Jobs in construction are short-term while job generation in real estate has a weak multiplier effect. There is also threat of slowdown in this sector because of slowing OFW remittances.

Growth in the so-called bright sectors including accommodation and food, public administration, and arts, entertainment and recreation failed to offset the job losses in all the other sectors in the economy especially in agriculture, manufacturing, wholesale and retail trade, activities of households as employers, and other community, social and personal services. (See Table 6)

Indicator 2010 2011Growth Rate

(%)

Amount (Php)

Total TNCs 2,496.8 2,989.5 19.7

Of which --

Manufacturing 1,721.1 2,027.2 17.8

Total Top 1,000 6,924.6 8,245.2 19.1

Of which --

Manufacturing 2,869.6 3,283.6 14.4

As percentage of (%)

Total TNCs

as % of Total Top 1,00036.1 36.3 0.6

Manufacturing TNCs

as % of Total Manufacturing60.0 61.7 2.9

Manufacturing TNCs

as % of Total TNCs68.9 67.8 (1.6)

Table 5. Gross Revenues of TNCs Among the Top 1,000

Corporations in the Philippines, 2010-2011

Source: Business World Top 1000 Corporations in the Philippines (Vols. 25-26)


Growing sectors are also ironically having high numbers of jobs lost. For example, wholesale and retail trade grew by 7% in 3rd quarter 2012 but job losses in October 2012 reached 728,000. Manufacturing also despite growing faster in the 3rd quarter recorded 45,000 job losses in the same period. Real estate also recorded 59,300 job losses; financial and insurance activities recorded 15,000 job losses and agriculture recorded 694,200 job losses. (See Table 6)

Oct 2011 Oct 2012 a

Total Employed 38,550 37,668 (882)

Agriculture 12,861 12,167 (694)

Agriculture and Forestry 11,373 10,735 (638)

Fishing 1,488 1,394 (94)

Industry 5,608 5,726 118

Mining and Quarrying 226 264 38

Manufacturing 3,171 3,126 (45)

Electricity, Gas and Water 1 143 151 8

Construction 2,068 2,185 117

Services 20,082 19,813 (269)

Wholesale and Retail; Repair of Motor Vehicles and

Motorcycles 7,772 7,044 (728)

Transport, Storage and Communication 2 2,799 3,013 214

Hotels and Restaurants 3 1,206 1,356 150

Financial Intermediation 4 467 452 (15)

Real Estate, Renting and Business Activities 5 1,340 1,281 (59)

Public Administration and Defense Compulsory Social

Security 1,840 1,959 119

Education 1,190 1,205 15

Health and Social Work 6 460 414 (46)

Other Community, Social and Personal Service Activities;

and Private Households with Employed Persons 73,006 3,013 7

Activities of Extraterritorial Organizations and Bodies 2 - (2)

7 - "Arts, Entertainment and Recreation", "Other Service Activities" and "Activities of Households as

Employers; Undifferentiated Goods and Service-producing Activities of Households for Own Use"

Table 6. Employed Persons by Major Industry Group, October 2011 and 2012

(in thousands)

Source: National Statistics Office October 2012 Labor Force Survey

Increase/

(Decrease)

Employed PersonsMajor Industry Group b

a - October 2012 Labor Force Survey (LFS) only supplied for the percentage share by industry. The

calculations for absolute numbers was done by IBON.b - Beginning January 2012, the LFS uses the 2009 Philippine Standard Industrial Classification (PSIC) for

the estimates of employed persons by industry group. For the purpose of comparison, the 2012

preliminary LFS estimates are grouped as closely to industry groups according to the 1994 PSIC which

is used for the 2011 LFS estimates. Below are the said industry groups used and grouped:1 - "Electricity, Gas, Steam and Airconditioning Supply" and "Water Supply, Sewerage, Waste

Management and Remediation Activities" 2 - "Transportation and Storage" and "Information and Communication"3 - "Accommodation and Food Service Activities"4 - "Financial and Insurance Activities"5 - "Real Estate Activities", "Professional, Scientific and Technical Studies" and "Administrative and

Support Services"6 - "Human Health and Social Work Activities"


So, what is spectacular about the growth? The Aquino government is also hyping the recent credit upgrades, strong peso, record-high stock market index, record-high gross international reserves (GIR), and increased investments. These are signs of good economics, according to the Aquino government, and of strengthened macroeconomic fundamentals and good governance. The Aquino government equates these to development. The indicators that matter – unemployment, poverty, and real incomes – however, are not mentioned. Credit upgrades simply measure the country’s ability to pay and do not have anything to do with development. The GIR meanwhile indicates that the economy has the currency to pay for imports and other transactions involving foreign currency. A strong stock market and strong peso are reflective of hot money inflows due to foreign capital’s search for profitable short-term opportunities amid sluggish US, European and Japanese economies. Moreover, in stock market trading, gains only accrue to the listed, usually big, corporations and stockholders. Lastly, foreign investments are not actually bullish; the US$1.1 billion foreign investment in January-September 2012 was much lower than the annual average of US$2.2 billion in 2005-2009 or the annual average of US$1.6 billion in 2000-2009. Most of all, even historically these indicators have never been relevant to the county’s real development in terms of developing agriculture, national industry, job generation, and poverty reduction. These are meaningless indicators to the average Filipino, as they do not translate to an improvement in livelihood and welfare. The possibility of lower interest rates on foreign loans for instance has never been seen as an indicator that the government would spend more money for social services. During former President Arroyo’s time, credit rating agencies also gave the Philippines a stable outlook after she signed the new rates for the value-added tax and in the midst of record-high unemployment, poverty incidence, and social unrest.

Displacement

Workers’ retrenchments belie the alleged spectacular growth. There were 19,162 workers displaced in the first nine months of 2012 in establishments reporting to have closed down or laid off workers due to economic reasons. Of these, 74.4% were in the services sector, ironically mostly in the growth sectors. Four out of 10 were in wholesale and retail trade and manufacturing while three out of 10 were in real estate, renting and business. (See Table 7)

Joblessness

Despite the record-high growth, unemployment rate and the absolute number of jobless people increased. Officially reported unemployment rate was 6.8% in October 2012, higher than the 6.4% recorded in the same period the previous year. There was an additional 120,000 for a total of 2.76 million jobless Filipinos in October 2012. (See Table 8) The annual average number of unemployed also to 2.833 million in 2012 even as the unemployment rate stayed the same as in 2011. IBON estimates, accounting for presumed discouraged workers as part of the labor force (instead of removing them, as the official methodology goes) pegs the number of unemployed at 4.422 million in 2012 or an additional 1.59 million from official figures. This means an unemployment rate of 10.5%, which bolsters the longest sustained record-high unemployment in the country’s history.

For the first time since January 2008, according to the Department of Labor and Employment (DOLE), the labor force has contracted, with the labor force participation rate going down from 66.3% in October 2011 to 63.9% in October 2012 despite increase in the potential labor force (population 15 years and over) from 62.2 million to 63.3 million. The biggest decrease in participation rate, from 50.1% in October 2011 to only 45.8% in October 2012, came from the youngest age group (15-24 years old). But there is no


significant increase in the net enrolment ratio in secondary education for example that may explain this phenomenon.

Youth unemployment is also high at 15.4%, higher than previous year’s 14% and more than twice the national average. The biggest percentage of the unemployed are high-school educated individuals at 45.4% of total unemployed, which increased from 44.7% in October 2011.

Underemployment improved slightly but remained high at 19%, claiming 7.16 million people in October 2012, from 19.1% in October 2011. Among the employed, on the other hand, five out of 10, or 16.85 million people, are in poor quality work (self-employed, working in private household, and work without pay in farm or family-owned business).

Total

Percent

Distribution

(%)

Total 19,162 100.0 2,321 16,841

Agriculture, Fishery and Forestry 64 0.3 7 57

Agriculture, Hunting and Forestry 64 0.3 7 57

Fishing - - - -

Industry 4,847 25.3 895 3,952

Mining and Quarrying 244 1.3 92 152

Manufacturing 4,107 21.4 538 3,569

Electricity, Gas and Water 109 0.6 - 109

Construction 387 2.0 265 122

Services 14,251 74.4 1,419 12,832

Wholesale and Retail Trade 3,930 20.5 396 3,534

Hotels and Restaurants 1,040 5.4 312 728

Transport, Storage and Communications 1,449 7.6 36 1,413

Financial Intermediation 574 3.0 76 498

Real Estate, Renting and Business

Activities6,599 34.4 552 6,047

Public Administration and Defense - - - -

Education 345 1.8 - 345

Health and Social Work 113 0.6 43 70

Other Community, Social and Personal

Services201 1.0 4 197

Table 7. Number of Displaced Workers by Establishments Resorting to Permanent

Closure and Retrenchment Due To Economic Reasons By Industry,

January-September 2012 p

Source: Bureau of Labor and Employment Statistics

p - preliminary

Total Number of

Displaced Workers

IndustryDue to

Closure

Due to

Reduction of

Workforce


Bankruptcy of small businesses

Amid the 7.1% growth, small establishments have been reporting more closures and retrenchment. In January to September 2012, there were 829 establishments with 99 and below employees and 623 establishments with 100 and above employees, which reported closures and/or retrenchment. Of 102 establishments reporting closures, 97 were establishments with 99 and below employees. (See Table 9)

High profits for big business

Amid higher unemployment and bankruptcy for smaller establishments, big business posted increase in profits. Data from the Philippine Stock Exchange (PSE) shows that the combined net incomes of listed firms grew 18% to Php377.12 billion in January to September 2012 from Php319.97 billion in the same period the previous year.

Sectoral incomes of companies listed in the PSE from January to September 2012 posted increase in all sectors except mining and oil. For example, property sector’s consolidated income increased by 9.5% in the first half because of increased real estate sales and improved rent revenues from newly opened malls. The 36.6% jump of the net profit of financial sector on the other hand was due to securities trading. Holdings firms saw an increase of net profit by 25.9 percent.

The listed corporations in these sectors are dominated by just a few families: Sy (SM Prime Holdings, SM Development Corp., SM Investments Corp., Banco de Oro Unibank); Aboitiz (Aboitiz Equity Ventures);

Oct 2011 Oct 2012 p 2011 2012 p 2011 2012

Levels (thousands)

Total 15 years old and over 62,164 63,253 61,882 62,976 61,882 62,976

Labor Force 41,194 40,431 40,006 40,455 41,554 42,007

Employed 38,550 37,668 37,192 37,622 37,192 37,622

Underemployed 7,381 7,158 7,163 7,512 7,163 7,512

Unemployed 2,644 2,763 2,814 2,833 4,374 4,422

Not in the Labor Force 20,970 22,822 21,876 22,521 20,328 20,969

Rates (%)

Participation Rate 66.3 63.9 64.6 64.2 67.2 66.7

Employment Rate 93.6 93.2 93.0 93.0 89.5 89.5

Underemployment Rate 19.1 19.0 19.3 20.0 19.3 20.0

Unemployment Rate 6.4 6.8 7.0 7.0 10.5 10.5

b - Figures according to the old LFS unemployment definition since 2008 are unavailable even from the National Statistics Office so

IBON makes rough estimates for the purposes of comparison. This is done by computing substitute labor force participation

rates (LFPR) where changes in official reported annual average LFPR are applied to the LFPR in 2007 that was still computed

using the old labor force (and correspondingly unemployment) definition.p - preliminary

Source: National Statistics Office Labor Force Survey

Table 8. Key Labor Force Indicators, October 2011 and 2012, and Average 2011 and 2012

IndicatorOfficially Reported a IBON Estimates b

Note: Totals may not add due to rounding.

a - Based on revised LFS definitions in used since April 2005 (official data based on old definition unavailable).


Gokongwei (Robinsons Land Corp., JG Summit Holdings); and Ayala (Ayala Land, Ayala Corp., Bank of the Philippine Islands).

The biggest corporations in the Philippines also saw their income and profitability grew more than it did during the previous administration. From 2010-2011, the top 1,000 corporations gained an average annual income of Php780.02 billion compared to an average of Php421 billion annually during the previous administration. The profitability of big business under the Aquino administration is also higher at an average of 11.1% annually. (See Table 10)

Total

Percent

Distribution

(%)

Total 1,452 100.0 102 1,351

99 Workers or Less 829 57.1 97 732

Less than 20 workers 336 23.1 78 258

20-49 255 17.6 13 242

50-99 238 16.4 6 232

100 Workers or More 623 42.9 5 619

100-199 200 13.8 2 198

200-299 97 6.7 2 95

300-399 46 3.2 1 45

400-499 31 2.1 0 31

500-599 24 1.7 0 25

600 or more workers 225 15.5 0 225

p - preliminary

Source: Bureau of Labor and Employment Statistics

Table 9. Establishments Resorting to Permanent Closure and

Retrenchment Due To Economic Reasons By

Employment Size, January-September 2012 p

a - Details may not add up to total due to multiple reporting.

Employment Size

Total Number of

EstablishmentsResorted

to

Closure

Resorted to

Reduction of

Workforce

a

Period

Gross

Revenues

(billion Php)

Net Income

(billion Php)

Profitability

(%)

2001-2009 5,041.5 421.0 7.8

2010-2011 7,584.9 780.0 11.1

Table 10. Average Annual Corporate Earnings and

Profitability of Top 1,000 Corporations in

the Philippines, 2001-2009 and 2010-2011

Source: Business World Top 1000 Corporations in the Philippines

(Vols. 15-26)


2010 (Php) 2011 (Php) Change (%) 2010 (Php) 2011 (Php) Change (%)

Agriculture, Hunting and Forestry, and Fishing 152.01 158.20 4.1 735,890.4 6,775,342.5 820.7

Mining and Quarrying 252.78 262.36 3.8 89,030,137.0 208,663,013.7 134.4

Manufacturing 310.57 316.49 1.9 456,446,575.3 450,643,835.6 (1.3)

Electricity, Gas and Water Supply 1 491.10 542.45 10.5 300,315,068.5 459,772,602.7 53.1

Construction 285.08 296.93 4.2 14,978,082.2 13,252,054.8 (11.5)

Wholesale and Retail Trade, Repair of Motor

Vehicles and Personal and Household Goods274.54 275.81 0.5 60,800,000.0 67,534,246.6 11.1

Transport, Storage and Communication 2 385.83 396.90 2.9 368,597,260.3 147,309,589.0 (60.0)

Hotels and Restaurants 3 280.76 280.08 (0.2) 18,358,904.1 29,509,589.0 60.7

Financial Intermediation 4 529.99 528.57 (0.3) 675,495,890.4 646,416,438.4 (4.3)

Real Estate, Renting and Business Activities 5 456.61 475.41 4.1 122,257,534.2 149,671,232.9 22.4

Public Administration and Defense; Compulsory

Social Security449.68 498.10 10.8 23,945,205.5 102,164,383.6 326.7

Education 566.97 618.53 9.1 4,578,082.2 5,416,438.4 18.3

Health and Social Work 6 464.53 470.50 1.3 3,339,726.0 4,139,726.0 24.0

Table 11. Average Daily Basic Pay and Estimated Daily Net Income of Top 1,000 Corporations in the Philippines of

Selected Industry Groups By Industry Group, 2010-2011

a - Average daily basic pay data excludes those paid on commission basis, honorarium and boundary as in the case of jeepney/bus/tricycle. Basic pay - pay for normal

time prior to deduction of social security contributions, witholding taxes etc. It excludes allowances, bonuses, commissions, overtime pay, benefits in kind etc.

Sources: Bureau of Labor and Employment Statistics Current Labor Statistics (January 2013) for the average daily basic pay and Business World Top 1000

Corporations in the Philippines (Vols. 25-26) for the net income of top 1,000 corporations

b - For the purpose of comparison, the industry groups of the top 1,000 corporations were grouped according to the industry groups used for the average daily basic

pay of wage and salary workers. Below are the said industry groups used and grouped:1 - "Electricity, Gas, Steam and Air Conditioning Supply" and "Water Supply; Sewerage, Waste Management and Remediation Activities"2 - "Transport and Storage" and "Information and Communication"3 - "Accomodation and Food Service"4 - "Financial and Insurance Activities"5 - "Real Estate", "Professional, Scientific and Technical Activities" and "Administrative and Support Service Activities"6 - "Human Health and Social Work Activities"

c - Figures for the estimated daily net income are based on the annual net income figures of the top 1,000 corporations divided by 261 days or the total number of

working days in a year based on a standard 5-day workweek.

Industry GroupAverage Daily Basic Pay a Estimated Daily Net Income of Top 1,000 Corporations b, c

The growth in corporate profits also far outpaced the growth in workers’ wages. The average daily basic pay in agriculture for example increased by only 4% in 2010-2011, but the estimated daily net income of top 1,000 corporations in agriculture went up by 821 percent. Such was also the case with the so-called growth sectors (except TCS): electricity, gas and water; wholesale and retail trade; and real estate, renting and business activities. (See Table 11)

Note also that in May 2012, the International Labor Organization (ILO) ranked the average monthly wages in the Philippines as the third lowest among 72 countries in the world, at US$279 (or some Php11,700). Philippine wages only surpassed average wages received in Tajikistan and Pakistan.

PPPs and privatization

Intensified privatization is the cornerstone of the Aquino government’s economic program, and this is being done through public-private partnerships (PPP). The country saw in the past year how the government focused its efforts to advance PPP and its requisites by allocating the resources for it and instituting necessary mechanisms and laws that would facilitate it. International financial institutions (IFIs) such as the Asian Development Bank (ADB) have also been proactive in groundbreaking PPP. The sectors prioritized for privatization and PPP projects this year however are crucial for the people who on the other hand are still reeling from the negative effects of privatization efforts by past administrations.


Water

The Aquino government is set to make the corporate takeover of water more extensive and complete by privatizing the water resource itself through PPP projects and by privatizing the water districts.

The public has borne the price of water privatization in the Philippines since the Metropolitan Waterworks and Sewerage System (MWSS) was privatized in 1997 to the tune of US$7 billion, one of the first and biggest privatization deals at that time. The privatization of the MWSS was the result of a World Bank proposal in order for the water agency to pay its debts and also its involvement in the whole privatization process. The water supply for Metro Manila was sold to big corporations and their partners, which were global giant water and energy transnational corporations: Ayala Corp. and the British United Utilities/Bechtel and Benpres Holdings and the French Suez Lyonnaise des Eaux (Ondeo). The privatization deal allowed the two concessionaires to run a vital service like a commercial operation through a pricing mechanism.

Water privatization has allowed water supply provision in Metro Manila to be run for profit. Since water privatization, water rates soared by as much as 1,000 percent. (See Chart 2) The average tariff of Maynilad Water Services Inc. (MWSI) has jumped from Php4.96 per cubic meter when it first took over the MWSS’s west zone service area to Php32.92 in 2012. During the same period, Manila Water Company (MWCI) which services the east zone hiked its average tariff from Php2.32 per cubic meter to Php27.44. Metro Manila’s water rates are among the highest in the region, just behind Singapore, Jakarta and Cebu according to a 2011 survey of the Japan External Trade Organization.


Both MWSI and MWCI have announced another water rate hike starting January 2013. It will affect 13 million people in Metro Manila and nearby provinces. The MWSS-Regulatory Office allowed the two water concessionaires to reflect a 3.2% adjustment in Consumer Price Index (CPI) on their basic charge. For the common Maynilad and Manila water consumers or those with a monthly consumption of 30 cubic meters, their monthly bill will increase by Php22.52 and Php6, respectively.

Still, Metro Manila has a lot of families with no access to safe water. According to the latest survey of the government, there were 204,036 families in the National Capital Region (NCR) who did not have access to safe water in 2008, an increase of 2,919 from 1997 or 15 years after MWSS was privatized.

Bidding for the Angat Hydroelectric Power Plant (HEPP) and other water supply resource projects across the country has also been approved under the Aquino administration, which signals its long-term direction in privatization. Because of public disapproval regarding its planned sale, the Aquino government placed the Angat HEPP as a priority PPP project. Under PPP, the private partner will be rehabilitating, operating and maintaining two turbines. Angat Dam, aside from its power generation component, has the strategic role of supplying Metro Manila’s water and irrigation in nearby provinces. If the power generation component is operated for profit, this will compromise the supply and access to water of residents of Metro Manila and nearby provinces.

The development of new water supply sources is also being placed under PPP. Planned PPP water resource projects water include the New Centennial Water Supply Source Project, which will develop a new source of water supply for Metro Manila, and the Bulacan Bulk Water Supply Project for the nearby province of Bulacan.

The proposed Senate Bill (SB) 2997 creates new agencies to govern, administer and supervise water allocation, distribution and rationalization. The proponents deny that SB 2997 is indeed privatization of the water districts, but it is designed to allow and encourage the Local Water Utilities Administration (LWUA) and local government units (LGUs) to open up to private sector through joint ventures.

IFIs are very much involved in providing technical assistance and loans to implement PPP in the Philippines. A financial fund under the PPP Center to support PPP projects has been set up in 2012. The Project Development Monitoring Fund has an initial allocation of Php550 million from the national government and three IFIs, namely Canadian International Development Agency (CIDA), ADB and Australian Aid (AusAid).

Power

The average Filipino consumer continues to bear the effects of the privatization of the electric power sector. After the previous administration had virtually privatized the entire energy sector and integrated the cost of privatization in electric power rates, the Aquino government is continuing to pass on the costs of stranded debts (SD) and stranded contract costs (SCC) to the consumers. The Power Sector Assets and Liabilities Management (PSALM), which is in charge of privatizing government-owned power plants, is now pushing to collect its share of the universal charge (UC) to pay for the cost of SD and SCC the government incurred when it entered into privatization deals with private power producers.

On June 28, 2011, PSALM filed a petition with the Energy Regulatory Commission (ERC) to collect a UC-SD of Php0.0313 per kilowatt-hour (kWh) and UC-SCC of Php0.3666 per kWh to pay off the SD and SCC amounting to Php65.02 billion and Php74.3 billion, respectively. PSALM wants an immediate final decision to its petition to start collecting the UC-SD/SCC in 2013.


Customers saw more power rate hikes in 2012. Meralco, the biggest electric power distributor in the Philippines, hiked its distribution (by Php0.17 per kWh), supply (by Php0.05 per kWh), and metering charges (Php1.57 per customer and Php0.03 per kWh) in July, or an increase of Php48 per month for Meralco charges alone. The system loss charge, which increased almost monthly in 2012, is still to be passed on to consumers.

In addition, Meralco is increasing its rates almost every month supposedly to reflect higher generation and transmission costs. Meralco increased generation charges seven times in 2012, with an increase of as much as 9% in May. In the latest rate hike in October, Meralco increased its power rates supposedly because of higher generation, transmission and other pass-through costs. It increased its generation charge by Php0.10 in October, hiking it to Php5.50 per kWh or an increase of up to Php24 for customers consuming up to 200 kWh per month.

Mass Transport

The impending fare increase in the rail transport system in Metro Manila is another example of how the government guarantees the profits of private investors over public welfare.

The Aquino administration has laid down the integration and expansion plans for the Light Rail Transit (LRT) and Metro Rail Transit (MRT) lines under flagship PPP projects. The government is bidding out the operation and maintenance of the LRT and MRT. It is planning to extend the LRT 1 North extension to complete the LRT-MRT loop, the MRT-7 line, the MRT-8 line (East Rail), the Line 2-East Extension, and the LRT Line 1-South Extension. The completion of the MRT-LRT loop including additional stations is being contracted by DM Consunji (DMCI) and the Lopez-owned First Balfour. The MRT 7 on the other hand is being undertaken by the Japanese corporation Marubeni-DMCI consortium with an engineering, procurement and construction contract with San Miguel Corporation’s Universal LRT.

In order to push through with the privatization and to make the projects more financially viable and attractive to foreign investors and their local counterpart, the Aquino government has been pushing for a fare hike. The government also claimed that the LRT and MRT are not earning enough to cover its obligations. The Department of Transportation and Communication (DOTC) in 2012 floated an average increase of Php10 for both LRT and MRT.

It may be recalled that the government claims to be losing money over the MRT, but this is because of the 15% return on investment that it has to pay to Metro Rail Transit Corp. (Metro Rail), a consortium of Ayala Land Inc. and Fil-Estate Management under its build-operate-transfer (BOT) contract, an earlier form of PPP. The government pays equity rental payment, maintenance costs, guaranteed debt payments and other expenses to Metro Rail. The amount that the MRT does not earn is covered by subsidies under the annual budget. In 2010, for example, government’s MRT obligations was Php8.52 billion but 76% of the obligation was made up of guaranteed debts and debt payments. Without the onerous provisions of the deal e.g. guaranteed profits and debt payments, revenue from fares can cover the cost of maintenance and personnel expenses.

Health

One of the Aquino government’s banner privatization program is PPPs in the health sector. Last October, the ADB and the United National Economic Commission for Europe (UNECE) held a conference of government agencies, diplomats and business entities in order to study more investment opportunities to implement PPPs in the health sector. The ADB is also providing technical assistance, which is funded by the Japanese government to promote various models of PPPs in health, develop incentives for investors, and develop capacity for implementing PPPs both in the national and local levels.


In 2012, the Aquino government rolled out the PPP flagship projects in health and started the bidding process for the Philippine Orthopedic Center (POC) to be sold to investors and converted into a “premier” bone center. About 90% of patients in the POC are indigents who are treated for free.

Big businesses have already expressed interest in PPPs. For example Manuel Pangilinan, whose Metro Pacific Investments already owns majority of Makati Medical Center and has signed for the privatization of Rizal Medical Center, has already expressed interest to buy and operate POC.

Privatization of health under President Aquino takes various forms and levels: hospital corporatization; PPP projects in core services; PPP projects in non-core services (such as laboratory and nutrition for tertiary hospitals); PPP projects in peripheral operations (such as laundry); conversion of public health facilities for other purposes; and outright sale of hospitals, among others. The Aquino government in its 2020 Health Financing Strategy has made it clear that eventually the government will not anymore fund public hospitals, thus making the hospitals earn on their own in order to deliver ‘health services’.

During the 2013 health budget hearing, the Aquino government made clear that the corporatization of Department of Health (DOH) hospitals is “to facilitate fiscal autonomy” and as means for public hospitals to enter into PPP arrangements. There is a pending bill in the House of Representatives (HOR), House Bill (HB) 6069, which aims to corporatize 26 public hospitals. According to DOH data, 12 out of the 26 hospitals already have proposed or ongoing PPP projects.

Impacts of ongoing privatization are already manifesting in various ways: a) fewer charity beds, b) user-fees e.g. required deposit to avail of service, c) rate hikes etc. In the National Kidney and Transplant Institute-Hemodialysis Center Fresenius Medical Center, the rate for a dialysis session went up from Php3,000 per session in 2011 to Php3,500 at present. The “no pay, no hook policy” has also become the norm. At the Lung Center of the Philippines, health workers from the Alliance of Health Workers (AHW) report that a Php10,000 deposit is required before a patient can be admitted and rendered health care. Meanwhile, the POC already increased laboratory fees from 62.5% to 212.2 percent.

Subversion of land reform

Land distribution remained slow in 2012, including the resolution of the case of Hacienda Luisita (HLI) that is owned by President Aquino’s family, considering that 2013 is supposed to be the last year of the already extended Comprehensive Agrarian Reform Program (CARP).

Based on the monthly average of land distribution of the post-Marcos administrations, the Aquino government distributed land the least. From July 2010 to September 2012, it distributed only 14,942 hectares of land per month. Even at that rate, 65.5% of what was distributed under his administration was owned by the government (publicly-alienable and disposable) and not by big landlords. (See Table 12)

The CARP-Extension with Reforms (CARPER) is already way behind schedule, and President Aquino announced in June 2012 that he would complete land distribution in 2014. But as it is, by the end of 2012, the CARPER was still five years behind schedule. The Department of Budget and Management (DBM) even cut down a proposed Php30-billion budget for land distribution to Php18 billion and removed another Php4.9 billion in technical support and credits for 2013.


The HLI is a clear case of the deliberate pace of delivering social justice to the tillers. No land distribution has occurred yet since the Supreme Court (SC) finally decided in November 2011 to distribute the land. President Aquino, in behalf of the Aquino-Cojuangco clan even demanded just compensation for distributing HLI. The Department of Agrarian Reform (DAR) also refused to acknowledge the original list of 6,296 farmworker beneficiaries, which the SC acknowledged, including farmers who struggled against the stock distribution option or SDO. Instead, it came up with its own list of 8,550 “potential beneficiaries”, which included farmers not working inside HLI, and put on provisional status some of farmworker beneficiaries in the original list. The DAR also required the legitimate farmer beneficiaries to come up with additional papers. Included in the DAR list are the Aquino and Cojuangco families’ farm hands, golf-course employees, and household help.

Land grabbing cases have become rampant. In Hacienda Carmenchica, Pontevedra, Negros Occidental, farmers were prevented to occupy the land already awarded to them by the government - more or less 500 hectares of farmland, which is part of more than 800 hectares of sugar lands that are in the control of national politicians. In other parts of Negros Occidental, cases of non-distribution of land have not been resolved. Farmers of Hacienda Canticbil and Hacienda Angelita in the municipality of La Castellana are still kept from claiming 96 and 182 hectares of land, respectively. Moreover, there are 100 hectares undistributed in Hacienda Tilangkay-Dako, 300 hectares in Hacienda Socorro, Bacolod, and 191 hectares in Grande Arroyo. In Davao Oriental, 244 hectares of land covered by Hacienda Bitoon and 285 hectares covered by Hacienda Bitanagan are still being withheld from the farmers.

In Quezon province, the land reform cases involving coconut plantations of landlords in the province such as Hacienda Reyes in San Andres, San Francisco and Buenavista in Bondoc Peninsula covering 3,500

Aquino Ramos Estrada Arroyo AquinoJul 1987-Jun 1992 Jul 1992-Jun 1998 Jul 1998-Dec 2000 Jan 2001-Jun 2010 Jul 2010-Sept 2012

Department of Agrarian Reform 848,515 1,900,039 333,389 1,031,403 243,823

Privately-owned Land (PAL) 471,621 955,243 228,622 709,214 103,759

Operation Land Transfer (OLT) 358,915 142,847 18,708 40,079 8,597

Government Financial Institutions (GFI) 22,938 105,498 11,906 26,330 2,312

Voluntary Offer to Sell (VOS) 55,079 257,373 76,896 219,383 17,767

Compulsory Acquisition (CA) 13,952 120,828 47,767 105,080 19,256

Voluntary Land Transfer (VLT) 20,737 328,697 73,345 318,339 55,827

Non-PAL 376,894 944,796 104,767 322,190 140,064

Settlement Areas 208,792 356,763 35,276 104,749 39,646

Landed Estates 25,781 41,201 971 2,125 246

Government-owned Lands/

Kilusang Kabuhayan at Kaunlaran (GOL/KKK)142,321 546,832 68,520 215,318 100,172

Department of Environment and Natural

Resources874,139 862,461 447,572 942,024 159,604

Public Alienable & Disposable Lands 539,086 489,069 113,383 942,024 159,604

Integrated Social Forestry/Community Based

Forest Management (ISF/CBFM) Areas335,053 373,392 334,189 - -

Total 1,722,654 2,752,500 780,961 1,973,427 403,427

Land Distribution

Average Per Month28,711 38,229 26,032 17,311 14,942

Table 12. Total Land Distribution Accomplishment Per Administration, July 1987-September 2012 (in hectares)

Land Type and

Mode of Acquisition

Sources: Presidential Agrarian Reform Council and Department of Agrarian Reform


hectares are still unresolved. Other undistributed lands are those being held by James Murray with 6,000 hectares in San Francisco, and Eduardo Danding Cojuangco with 2,000 hectares under Southern Luzon Coconut Oil Mill in Mulanay which has been allegedly bought with the controversial coco levy funds.

The Aquino government has attracted foreign corporations to invest in agribusiness. In 2012, it offered some 44,000 hectares of land in Bukidnon to private companies for pineapple plantation and processing. Among those that expressed interest to acquire lands were Pan-American agribusiness transnational corporation (TNC) Del Monte Phils. and MD Davao Agri Ventures Inc., a subsidiary of Marsman-Drysdale Agribusiness Holding, one of the largest agribusiness TNCs in the Philippines. Small farmers in barangays Butong, Merangiran, San Jose, Salawagan, Mibantang, Sta. Cruz, Kiburiao, and Puntian – all in the municipality of Quezon, Bukidnon will be affected by the project.

The Aquino government is also pushing for the development of the Aurora Pacific Economic Zone and Freeport Authority (APECO) by allotting Php353.5 million in the 2013 national government budget, the sixth year that APECO received subsidies (totaling Php830.8 million) despite the unresolved land grabbing and displacement issues. Some 1,086 farming and fishing families including 5,430 individuals belonging to the Agta/Dumagat indigenous group will be displaced by further developing APECO.

In the midst of land grabbing, the HOR passed the National Land Use and Management Act of the Philippines, one of the priority bills of the Aquino administration since the first State of the Nation Address (SONA), which seeks to reclassify land into four uses in a comprehensive manner, both nationally and locally. It is silent however on pending land grabbing and land distribution cases but creates opportunities for opening up vast last frontier areas for foreign investment.

Finally, the nearly three-decade-long case of the coco levy fund seemed to have reached a conclusion in 2012. The SC decided with finality that the Php56.5 billion funds collected from coconut farmers from 1972 to 1981 (and in some parts of the country, even beyond the time when the levy was stopped legally), supposedly for the development of the coconut industry and the coconut farmers, but was used by Danding Cojuangco to acquire business assets, was the property of the State. However, instead of distributing the fund to the farmers, the Aquino administration has reactivated the Presidential Task Force on the Coconut Levy Fund (PTCLF) to finalize a program on how to manage the fund but without representation from small coconut farmers. The PTCLF plans to utilize part of the recovered coco levy, or Php11 billion of the fund for four programs, including: the development of agro-enterprise business endeavors; financing for land tenure improvement (LTI) under the CARPER; and partly financing the implementation of the social protection program Pantawid Pamilyang Pilipino Program (4Ps). But these programs have regular government allocations already.

Labor woes

President Aquino gave a Php20 increase in wages in May and a Php10 increase in November in the NCR. However, the minimum wage of Php456 has been eroded by inflation and its real value is only Php363.64 compared to 2006 prices. Real wage in the NCR has been flattening out. (See Chart 3)

The minimum wage, the minimal increases notwithstanding, is far from what is needed by a family of six in the NCR to live decently. According to IBON estimates, a family of six in the NCR needed Php1,033 every day in November to have decent shelter, food, clothing, and a small amount of savings and money for leisure. But the Php456 minimum wage only comprises 44% of decent living costs, and a family would still need an additional Php577 to cover decent standards. (See Chart 3)

Instead of granting a truly substantial wage increase, however, President Aquino is implementing a wage system that removes government hand in implementing minimum wages and places the power to


capitalists to determine how much workers are entitled to receive. The two-tier wage system mandates a floor wage which is lower than the already low minimum wages to be set by the regional wage boards and allows corporate management to determine the “productivity allowance” that workers may receive based on an “agreement” of the management and the employees.

The new wage system was first implemented through DOLE Wage Order 15 in May 2012 in Region IV-A (CALABARZON) which hosts many of the country’s export processing zones. It will be fully implemented in 2013. Since May, 16 companies have been implementing the productivity-based pay.

The Ecumenical Institute for Labor and Economic Reforms (EILER) reported that the Php337 minimum wage in CALABARZON has been cut by 25% and a floor wage to Php255 has been set. Workers can avail of the productivity-based allowance of Php12.50, subject to the decision of a firm-based productivity committee. According to EILER, the wage order in CALABARZON granted pay hikes from Php2 to Php90 but only for workers earning below Php255.

It may be observed that the two-tier wage system was implemented after the Joint Foreign Chambers of Commerce released a statement in May 2012 that wages in the Philippines were not competitive and that “relentless” wage hikes have led to actual and potential jobs lost including benefits and better working conditions for workers. In the joint report, Arangkada, by the DOLE and the Joint Foreign Chambers of Commerce in September 2012, they affirmed that through the two-tier wage system, corporations would be able to increase their profits, which however shall come at the expense of the workers.


Mining

The Aquino government finally released its mining policy, Executive Order (EO) 79, as one of its priorities in 2012. EO 79 ensures that the government gets a rationalized revenue-sharing scheme from allowing its mineral resources to be exploited by the private sector and foreign corporations. However, since EO 79 suspended the granting of mining permits (except exploration permits) pending the legislation of revenue-sharing scheme, the mining industry became lackluster. Output as well as investment plunged in 2012. The Implementing Rules and Regulation of EO 79 was suspended in September 2012.

At any rate, the approval and extension of exploration permits continued in 2012. (See Table 13) Most of government incentives are given during exploration stage. In addition, the government allowed the commencement in November of the financial and technical assistance agreement (a mining permit) of Australian company OceanaGold Corp. in Didipio, Nueva Vizcaya even if there are pending legal issues and community disapproval.

Mining CompanyExploration

Permit NumberLocation

Number of

Hectares

Approval

Date

Expiry

DateMineral

4,786.8 03/19/12 03/19/14

2,349.0 04/18/12 04/18/14

2,139.4 01/04/12 01/04/14

3,908.5 01/18/12 01/18/14

4,999.5 04/13/12 04/13/14

1,308.8 05/16/12 05/16/14

15,781.6 06/22/12 02/22/14

Development Corporation EP-VIII-OMR-

12-2009

Offshore area of

Tacloban City, Leyte

and Basey and

Marabut, Samar

Magnetite and other

associated mineral

deposits

Table 13. Mineral Exploration Permits Approved/Extended in 2012

Source: Mines and Geosciences Bureau

Mt. Mogan Resources and EP-VIII-OMR-

11-2009

Offshore areas of

Tanauan, Tolosa,

Dulag, Mayorga,

MacArthur and

Abuyog, Leyte

Copper, gold, zinc

and other associated

mineral deposits

Copper, gold, zinc

and other associated

mineral deposits

Gold, Copper and

other associated

mineral deposits

Gold

Magnetite and other

associated mineral

deposits

MRL Gold Phils., Inc. EP-IVA-009 Lobo and San

Juan, Batangas

Ronquillo Mining Corp. EP-II-00015 Batong, Labang,

Ilagan, Isabela

Philco Mining Corp. EP 000002-09-

XI (Renewal)

New Bataan,

Compostela Valley

Epochina Mining Corporation EP-011-09-XII Bagumbayan,

Sultan Kudarat

Royalco Phis. Inc. (formerly

Oxiana Phils., Inc.)

EP-II-000014

(First Renewal)

Kasibu, Nueva

Vizcaya

Gold, Copper

Northern Horizon Exploration

and Mining Corp

EP-2010-001-I

(First Renewal)

Quirino, Ilocos Sur Gold, copper

Communities continue to feel the impacts of liberalized mining, on livelihood, environment, health and well-being, and lives. Philex Mining spilled 20 million metric tons of mine tailings and sediments, the biggest volume of mine spill in history, from its tailings pond in Itogon, Benguet into the various waterways from August to November 2012. It made the 2.5- kilometer Balog Creek biologically dead, according to the result of an environmental impact mission by the scientists and environmentalists of Samahan ng Nagtataguyod ng Agham at Teknolohiya Para sa Sambayanan (AGHAM). Gold panning and fishing by the locals have been affected.


Oil

The Aquino government created the independent body, Oil Price Review Committee (IOPRC), in 2012, which released its findings in July stating that the prices of oil and other petroleum products are not overpriced. The IOPRC study failed to look into whether the oil firms engaged in transfer pricing where, by setting the ‘transfer price’ of goods and services from the mother corporation to its subsidiary, profits are effectively transferred to the mother corporation and not reflected in the books of the subsidiary – thereby underreporting profits in the Philippines, for instance. By the end of 2012, prices of the socially-sensitive diesel were 12-17% higher compared to yearend 2011 while one tank of the household fuel LPG was Php16 to Php99 higher per tank compared to 2011 prices. (See Table 14)

2011 2012 2011 2012

Gasoline 46

(29 hikes,

17 rollbacks)

41

(19 hikes,

22 rollbacks)

47.79 - 55.70 39.50 - 42.45

Diesel 42

(25 hikes,

17 rollbacks)

39

(18 hikes,

21 rollbacks)

42.54 - 46.13 47.60 - 53.95

Liquefied

Petroleum

Gas (LPG)

12

(5 hikes,

7 rollbacks)

12

(8 hikes,

4 rollbacks)

654.00 - 715.00 670.00 - 814.00

Table 14. Oil Price Movement and Price Range By Petroleum

Product, 2011-2012

Petroleum

Product

Number of

Oil Price Movements

Price Range as of End of Year

(Php)

Source: Department of Energy Oil Monitor

Free Trade Deals

Advanced capitalist countries are still grappling with the global capitalist crisis and have turned to the basics of forging free trade agreements (FTA) especially with underdeveloped countries in order to expand markets. In the domestic front, the US government for example, after bailing out its biggest corporations and banks in 2009 and implementing cuts in health spending, it passed a law that stops the US from falling off its “fiscal cliff” through among others allowing payroll taxes for the majority to increase while maintaining tax breaks for many of the wealthiest Americans (and raising taxes only for the super-richest 0.5% who would not even feel these). It is also considering more spending cuts and tax increases in the near future.

Overseas, the US government is aggressively expanding its free trade bloc in the Asia-Pacific through the Trans-Pacific Partnership Agreement (TPPA), which is rapidly expanding, and the US–ASEAN Expanded Economic Engagement (E3) initiative. The E3 initiative which was agreed on at the US-ASEAN leaders’ meeting in November involves creating concrete steps to facilitate freer trade by simplifying customs procedure, joint development of ICT principles, joint development of investment principles, and creating uniformity in work standards and practices especially in small and medium enterprises and environment. Even without development in the proposed US-RP FTA, the E3 initiative will facilitate more lopsided trade deals between the Philippines and the US and will open up two strategic sectors in the Philippine economy: communication and small and medium enterprise.


The European Union (EU), on the other hand, dealing with a huge sovereign debt problem and worsening economic crisis, has this year inked free trade deals with two Latin American countries and started talks with the Philippine government for the prospects of an EU-RP FTA. The Aquino government has already begun actively doing the consultations in order to proceed with the negotiations. In February, talks between the two governments were stalled as the Philippines wanted to consult with big business in the Philippines first before proceeding with the negotiations. The Aquino government is committed to making necessary structural changes in order for the negotiations to move forward. It is currently on second round of the consultations with the business sector, especially big business involved in the tuna trade and other agricultural products. With agricultural products as the primary export of the Philippines to the EU, it will be the big commercial fishers who would gain, which however shall again be at the expense of the small fisherfolk.

Conclusion

The Aquino administration seems to have emerged from 2012, despite the lack of meaningful reforms and the emptiness of its good governance platform, as more solid in managing the economy. Its claim of “good economics”, however, is bolstered only by financial and speculative gains that fail to conceal people’s harsher economic conditions. The so-called spectacular growth has only revealed that such growth has been achieved by elitist and pro-foreign neoliberal policies and at the expense of the toiling people. ‘Good economics’ has also heightened inequality between the growing profits of a few and the growing bankruptcy of small business and poverty of the majority. The Aquino government’s optimism about “maintaining high growth” in 2013 shall be as short-term as its seeming stability in dealing with the country’s chronic crisis. The global economic crisis is intensifying and shall continue to impact adversely on economies such as the Philippines, to which the Aquino government has only responded with more and harsher globalization policies. Without reversing from such policy direction, growth is unsustainable and development and meaningful changes shall remain elusive.

Malfunctioning democracy

The Aquino administration consolidated its political position in 2012 – it successfully neutralized former president Arroyo and her political allies, gained the support of foreign and domestic big

business, maintained a core public following, and solidified its backing from the United States (US). This was achieved in time for the May 2013 mid-term elections and corresponding maneuvering towards the 2016 national elections.

Yet the administration has continued to be undermined by the absence of real reforms and tangible economic progress. Illusory financial and speculative gains were hyped but still could not detract from the larger reality of increasingly harsh economic conditions on the ground. Even the banner anti-corruption campaign has been criticized as using executive power for partisan purposes and affirming rather than remedying elite abuse of the country’s political institutions. Dissatisfaction thus continued to spread while social unrest, which State repression has never been able to put down, kept growing.

The midterm elections signal the start of preparations for the next change of government in 2016 where the Aquino faction of the elite will seek to stay in power while contenders will seek to replace it. Old-school politicking will likely become more obvious and foster public realization that there have not been any steps toward real political change. The ruling coalition will maximize its advantages but it is not assured that it will come out of the elections much more consolidated or strengthened.


Public disapproval in any case can only grow as joblessness and poverty worsen, as the inequity of only a few growing wealthier becomes more glaring, and as further economic good news are pre-empted by the lingering global crisis. The unintended consequences of the Philippines’ complicity in the growing US military presence in the region also cannot be dismissed lightly. The coming year could then see the beginning of the end of this period of relative political stability as the problems of an unreformed system, of a malfunctioning democracy, come to the fore.

Seeking political stability

The Aquino administration consolidated control of the various branches of government in 2012 and kept factional conflicts in check. After a tentative start to its term it regrouped and used its electoral legitimacy and momentum of popular support to secure its political position. Overcoming initial hesitation it eventually mounted bold counterattacks against its most immediate political opponent Gloria Macapagal-Arroyo, former president and now representative of Pampanga province, and her allies. The frontal defiance of the Supreme Court which culminated in the successful removal of Chief Justice Renato Corona in the first semester of 2012 effectively eliminated Rep. Arroyo’s highest-level and most strategically critical political ally (complementing the earlier removal of Ombudsman Merceditas Gutierrez). Since the Arroyo camp does not otherwise command any support among the general public it is now a politically spent force.

Pres. Aquino broke Supreme Court tradition on seniority and appointed Ma. Lourdes Sereno as chief justice. Notwithstanding the apparent bias of Pres. Aquino for the new chief justice the Supreme Court does not appear particularly intimidated with calculated absences by justices during her oath-taking and flag ceremonies, the en banc revoking her order opening a Regional Court Administration Office in Cebu City without authority from the en banc, and questions publicly raised about her railroading the appointment of the high court’s spokesman and chief of its public information office. Chief Justice Sereno’s independence from the administration is still to be tested.

Rep. Arroyo was released on bail in July when the court decided that the vote-rigging case against her was weak but then re-arrested in October on charges of corruption related to the alleged misuse of Php366 million in Philippine Charity Sweepstakes Office (PCSO) funds between 2008 and 2010; she remains under hospital custody. Former trade minister Roberto V. Ongpin in turn was accused for alleged behest loans in what has been speculated to be a maneuver on the finances of Arroyo and at least one other prominent political family for whom Ongpin purportedly fronts. This has already resulted in the freezing of some 100 of Ongpin’s bank accounts in 20 banks and financial institutions.

A perceived selectivity in Pres. Aquino’s anti-corruption drive has raised criticisms that these are more attacks against political opponents than a genuine thrust for accountability and the rule of law. By 2012 the administration visibly demonstrated its willingness to use not just line agencies but also Congress and such as the Anti-Money Laundering Council (AMLC) for partisan political purposes. The heavy-handedness especially by an administration that avows good governance and reform has reinforced the persistent problem of State powers and institutions being used for narrow political purposes. In any case, this political muscle-flexing coupled with Pres. Aquino’s degree of steady popular support has seemed to keep the traditional political opposition uncharacteristically restrained.

The Aquino administration has also been systematic in building up its image as a government that breaks the country’s tradition of corrupt and elite government, is concerned about the poor, and delivers economic results. In many ways it deftly exploited the public frustration and yearning for good news that accumulated under the previous Arroyo administration. Government propagandists played up every possible positive development no matter how insignificant while downplaying negative trends


no matter how consequential. The president himself even publicly berated media outfits that he saw as uncooperative. This image-building has been important to shore up his administration’s legitimacy.

The anti-Arroyo campaign is the main basis for claims that the administration was serious in cracking down on corruption. The massive multi-billion high-profile short-term conditional cash transfer (CCT) scheme under the Pantawid Pamilyang Pilipino Program (4Ps) – costing Php44.3 billion just in 2013 and claiming to eventually reach over four million beneficiary households – in turn is the main basis for the administration to project a concern for the poor. Poverty is so widespread that every government has to establish some kind of anti-poverty credentials.

The administration built up its public image with the help of key supporters. Hundreds of civil society groups, including some that were previously critical of government, were enlisted as active partners in administration anti-corruption and anti-poverty programs at the national and local levels. For their part, international agencies such as the World Bank and the Asian Development Bank (ADB) hailed the administration’s efforts at good governance and 4Ps, which they partially fund, as notable successes. Even sections of big foreign and domestic business repeatedly commended the new administration.

The recent series of flattering economic indicators in particular has had positive political effects in terms of image-building. Although illusory gains only remotely related to the working people’s daily lives they still boosted Pres. Aquino’s efforts to attract foreign investors and appeased otherwise restive sections of the upper and middle classes.

The administration’s support meanwhile for the landmark reproductive health law enacted in December was welcome – the law is a constructive step that reflects growing appreciation of women’s concerns and indicating progress on the vital issue of maternal and reproductive health care. Yet while it is a long-overdue measure that is mostly positive on its own terms, it is appropriate to put it into perspective as still needing wider social and economic reforms to fully achieve its desired results especially for poor women.

The Aquino administration moreover sought to preclude dissent from the Armed Forces of the Philippines (AFP) by pouring funds into it. In December it signed the Revised AFP Modernization Act which allocates a budget of Php75 billion for the first five years of its implementation as well as extends the modernization program for another 15 years. This initial five-year modernization budget is more than double the cumulative Php33.6 billion over fifteen years under the previous Ramos, Estrada and Arroyo administrations. The initial acquisition list includes 25 aircraft, eight helicopters, a frigate, light weaponry, ammunition and other equipment for the air force, navy and army.

The military budget is already dramatically higher than under the previous administration. From Php91.5 billion in 2010 it increased to Php101.5 billion (2011), Php113.1 billion (2012), and then Php120.3 (2013) – or a 31% increase in just three years. The administration has also taken the military’s preferred tough line with the Communist Party of the Philippines-New People’s Army (CPP-NPA) of intensified military offensives astride belligerence on peace negotiations. Clandestine military factions apparently remain but are still quiet for now.

Seeking US support

Political counter-attacks, image-building and relying on a mercenary tradition of the AFP have their limitations though, so Pres. Aquino has most of all endeavored to get the full support of the US, one of the most significant if somewhat concealed influences on Philippine politics. Explicit US endorsement of a sitting administration sends strong signals to major reactionary political forces – the international community, foreign investors, domestic big business, middle class intellectuals, churches, civil society, and the military and police hierarchy.


The administration is conscious of how US interference and patronage have been decisive in the past: supporting then later disapproving of Marcos leading to EDSA 1 in 1986, likewise with Estrada leading to EDSA 2 in 2001, and then similarly with Arroyo although culminating instead in an electoral transition to Aquino himself in 2010.

The Aquino administration will be distinguished for ushering in a new era of a greater US military presence in the country and of more formal mechanisms for US intervention in domestic economic and political matters. The US government sees the Philippines as a key link in the evolving US foreign policy ‘pivot’ or ‘rebalancing’ toward Asia and has actively been rebuilding the country as a client state whose policies it can significantly influence (discussed more extensively in previous Birdtalk briefing papers: January 2011, July 2011, January 2012, and July 2012). While this ‘pivot’ was only declared last year the US military presence in the country and interference in domestic affairs has actually been steadily growing in the decade since 2002 and the start of the US’s so-called war on terror.

Nevertheless the series of high-level visits and exchanges between US and Philippine officials in 2012 is unmatched since at least the closing of the US bases in 1992. There was the official working visit of Pres. Aquino to the US including a meeting with US Pres. Barack Obama (June), the first ever “Two-Plus-Two” Ministerial Consultations in Washington between the respective foreign and defense secretaries (April), two Bilateral Strategic Dialogues (Washington in January, Manila in December), and visits to the Philippines of the US Chairman of the Joint Chiefs of Staff (June), Pacific Command chief (July), Deputy US Trade Representative (February), the most senior Republican senator (October), and a congressional delegation (January).

The Aquino administration last year agreed to a wider and virtually permanent US military presence in the country under the euphemism of a ‘temporary rotating’ presence. It agreed to more deployments of increased numbers of US troops for exercises, repairs, resupply, and relief operations. This is on top of some 600-700 US troops that have already been ‘temporarily’ deployed in the country for a decade particularly in Southern Mindanao.

The number of military ship visits (i.e. aircraft carriers, submarines, destroyers and assault ships) has dramatically increased especially to strategically important Subic Bay but also to other ports such as Manila Bay and in Cebu. Among others these have already included many nuclear-powered and -armed attack submarines and the supercarrier USS George Washington. AFP chief General Jesse Dellosa reported port calls and emergency repair stops at Subic Bay increased by 30% in 2012 from the previous year.

In October senior US and Philippine military officials confirmed that Subic Bay, once the US’s largest overseas naval base, will have a much larger role in US Pacific Fleet deployments in the coming years. Earlier in June, then US defense secretary Leon Panetta declared that the US will shift the bulk of its naval fleet to the Pacific by 2020 as part of its new strategic focus on Asia. Subic’s deep water port can accommodate the range of US naval ships and assets so the US Navy is setting up a maintenance, repair and logistics hub there.

The US will also be transferring forward deployed supplies and logistics from Afghanistan to the Philippines (and Singapore) – meaning pre-positioning of war material starting with innocuous tents, blankets and generators ostensibly for humanitarian assistance and disaster relief operations but also for use in other military missions. The US also asked for access to some half a dozen civilian airfields around the country for its fighters, transports and spy planes to use for repairs, refueling and temporary deployment. Among those planned for deployment in the country on a ‘temporary rotating basis’ are P-3C Orion long-range surveillance planes, Global Hawk drones, and advanced littoral combat ships.

The Aquino administration is playing up the military and other assistance the country receives from the US – reportedly US$2 billion from 1999-2011, aside from over US$111 million more in 2012 including


US$43.2 million under the Partnership for Growth (PFG) program. US Foreign Military Financing (FMF) for 2012 was more than doubled from an initial allocation of US$14.6 million to US$30 million. The country also received its second decommissioned US Coast Guard ship last year. The US military further announced that it planned to provide a powerful land-based radar and develop a National Coast Watch Center ostensibly to improve security in the West Philippine Sea (South China Sea). This military aid is portrayed as developing Philippine defense capabilities but is more fundamentally about further developing the AFP and the Philippines as a subordinate link in US military force projection in the region.

The closer ties between the US and the Philippines under the Aquino administration have serious implications for the Philippines. The country is becoming complicit to the US’s often violent foreign policy which has already made the US unpopular and even a target of attack by aggrieved peoples worldwide. The US invokes ‘universal values’ of freedom and democracy but its foreign policy decisions in just the last decade have already cost the lives of some 750,000 civilians in Iraq, Afghanistan, Pakistan, Libya, Somalia, Yemen, Algeria and other countries. The US methodically uses embargoes, blockades and outright military action – including through remotely-controlled drones or direct attacks, bombings and invasion – to advance its geopolitical ends.

The US is also increasing its direct and indirect influence over Philippine policy-making. There will be sustained pressure to implement neoliberal policies that open up the economy and are biased against national social and economic development. This is already taking place under the expansive PFG which is pushing charter change, investment liberalization, legal and judicial reforms, and fiscal reforms. It is also significant that the US has a long record of opposing the emergence of democratic alternatives in countries around the world and will likely do so in the Philippines as well, if the time comes.

The Philippines’ room to maneuver on foreign policy issues will be constrained such as in the current territorial disputes in the oil- and gas-rich West Philippine Sea (South China Sea) which is already emerging as the most significant international military flashpoint in Southeast Asia. As it is, the Philippine position is becoming framed according to US parameters such as unduly stressing military rather than diplomatic aspects and pushing for a multilateral approach to open the way for an indirect role by the US in the dispute. These unnecessarily raise tensions although in a way that conveniently serves US interests for a greater military and diplomatic presence in the region.

Less than three years into its term, the Aquino administration is already notable for reversing the historic decision to close the US bases in 1992 and for greatly accelerating the loss of the country’s sovereignty vis-à-vis the US, its former colonial master and current neocolonial patron.

Advancing elite interests

The relative political stability achieved was not used to advance a genuinely reformist agenda but rather merely became more favorable conditions for foreign investors and domestic big business to make commercial and speculative profits. This has benefited financial and speculative interests – such as in the stock market, banking and finance, and real estate – and contributed to building elite consensus in support of the Aquino administration.

Last year for instance did not see the administration reverse any of the government’s long-discredited neoliberal globalization policies benefiting mainly foreign, elite and reactionary interests. Indeed, it is even ironic that one of the most important factors for the fiscal turnaround last year that prompted positive assessments from ratings agencies and foreign creditors is the regressive higher value-added tax (VAT) imposed by the vilified Arroyo administration and continued by Pres. Aquino. The administration also retained the range of incentives for foreign investors even if these are at the expense of national development.


The Aquino administration is to some degree able to project itself as clean, opposed to corruption, and sympathetic to the people. It used this positive image to push further pro-elite measures such as higher taxes (on alcohol and tobacco) and greater privatization of health and education.

Yet there is already speculation that the infrastructure-heavy public-private partnership (PPP) program is stalling less due to a determined effort at transparency but rather due to the difficulties of apportioning contracts between competing corporate interests. Investors publicly hail the government’s PPP program but informally express concerns about the regularity of biddings and security of contracts.

For instance the year ended with a controversial Department of Transportation and Communication (DOTC) bidding rule for the Php10 billion Cebu airport terminal PPP that apparently favored the Ayala-Aboitiz consortium over the San Miguel conglomerate. The DOTC disqualified bidders with a stake in airport transport in the country such as San Miguel Corporation (SMC) which recently acquired a 49% interest in flag carrier Philippine Airlines. The Aquino administration last year also allowed separate proposals by Metro Pacific Investments Corp. and SMC subsidiary Citra Metro Manila Tollways Corp. for expressways (reportedly costing Php45 billion) linking the North Luzon Expressway and South Luzon Expressway that in being redundant will result in higher tolls for road users.

The Aquino administration in 2012 started laying the groundwork for a renewed push for charter change. The US has long sought the removal of the 1987 Constitution’s nationalist economic provisions – most recently in the course of drawing up economic proposals under the PFG – as well as of prohibitions on foreign military forces and bases in the country. These items have heightened importance for the US given its economic crisis and strategic pivot towards Asia. Coupled with the perception of a president uninterested in extending his term, the likelihood of a determined charter change offensive anytime after the 2013 elections is then very strong.

Various foreign and domestic elite interests are already converging on charter change, which makes effective people’s opposition all the more vital. The Senate President and Speaker of the House both asserted that changing the charter’s economic provisions would pave the way for progress and publicly pushed for charter change including conducting Congressional roadshows. Foreign chambers of commerce and domestic big business groups issued statements calling for the same. Even the Catholic Bishops’ Conference of the Philippines (CBCP) declared its openness to amending the Constitution.

The Supreme Court has been instrumental in blocking several charter change moves since the Ramos administration in the 1990s. The new chief justice however has a background of supporting ‘free market’ policies of globalization and charter change in particular. Chief Justice Sereno chaired the Estrada-era Steering Committee of the Preparatory Commission on Constitutional Reform which proposed charter change. She has also been legal counsel of the pro-globalization World Trade Organization (WTO) appellate body secretariat as well as consultant of the World Bank and United States Agency for International Development (USAID), albeit for judicial reforms rather than economic concerns.

It is also not impossible that public enthusiasm for a final peace deal with the Moro Islamic Liberation Front (MILF) will be exploited as another reason for charter change. It is officially said that MILF demands can be met even without charter change but this implies drastically reduced demands from previous positions that the MILF may in practice not really be amenable to. Resolving the Moro armed conflict may then also be raised as an additional justification.

Struggles and repression

The administration has been supportive of the inequitable status quo on key issues, and the corresponding negative impact on people’s welfare drives a strong undercurrent of dissatisfaction and popular protest.


There is for instance a disproportionate concern with competitiveness rankings and credit ratings which are justified as requisites for national economic progress but are really only relevant to short-sighted profit-seeking by big business. This concern however translates into keeping labor costs low through wage repression and avoiding protection for Filipino enterprises which resulted in growing income gaps, worsening inequality and small enterprises closing. It also means increasing revenues through a regressive tax system that burdens the poorest rather than taxing big corporations and rich families, such as through the VAT and the new sin tax law passed last year.

On the other hand the Aquino administration has also failed to take the side of farmers and workers on their vital concerns. Poor land distribution accomplishment in 2012 gives the Aquino administration the dubious distinction of distributing the least land among the five administrations spanning the current agrarian reform program started in 1987 – stirring peasant protests not just in the iconic Hacienda Luisita but elsewhere across the country in Luzon, Visayas and Mindanao.

Farmers waged local struggles in Pangasinan, Nueva Ecija, Bulacan, Batangas, Capiz and Bukidnon (land-grabbing), Isabela (bioethanol project) and Misamis Oriental (palm oil plantation), rose against the encroachment of mining on their land and the destruction of their livelihoods in Batangas and Negros provinces, and opposed militarization. The Kilusang Magbubukid ng Pilipinas (KMP) also held regional consultations culminating in a national summit to campaign for the distribution of coco levy funds worth some Php57 billion (possibly as much as Php80 billion) to coconut farmers instead of being used by the Aquino administration for its preferred projects.

Pres. Aquino personally rejected calls for a Php125 across-the-board wage hike on Labor Day, echoing and even amplifying standard illogical arguments raised by business groups. In 2012 the administration also started implementing the two-tier wage system, beginning in the Calabarzon region, essentially aimed at legalizing further wage repression in favor of capitalist enterprises. Workers such as with the Kilusang May Uno (KMU) correspondingly launched protest actions against these policies – including the largest May 1 Labor Day rally in recent years – as well as strikes in at least a dozen enterprises. The Center for Trade Union and Human Rights (CTUHR) monitored 142 incidents of economic rights violations involving 7,342 workers, more than half of whose victims involved violations of the right to form unions; there were also 26 incidents of civil and political rights violations with 196 victims, mainly threats, harassment and intimidation.

Such protests by grassroots movements are independent of vacillating middle forces or reactionary politicians. Aside from being important for belying the administration’s good governance and pro-people posturing they are among the most important sources of political momentum for long-term fundamental change in the country.

After nearly three years the Aquino administration has still not departed from previous governments’ use of political repression against mass-based protests and movements. The independent human rights group Karapatan monitored continuing extrajudicial killings (EJKs) and enforced disappearances last year bringing the total so far to 132 EJKs and 12 disappearances under the Aquino administration, covering the period July 2010 to November 2012. The total number of political prisoners also continues to rise with 398 documented political prisoners including 123 arrested under the Aquino presidency. Karapatan also monitored 72 cases of torture and at least 467 victims of illegal arrest with or without detention.

In November the administration created an inter-agency “superbody” to investigate EJKs, disappearances, torture and other grave rights violations. Human rights advocates however have questioned its credibility for including the defense secretary, AFP chief of staff, and Philippine National Police (PNP) director general or the highest officials of state security forces seen as responsible for these rights violations. In any case the government will be hard-pressed to explain how yet another committee can resolve the long-standing problem of impunity and no perpetrators being arrested, prosecuted and convicted. Infamous


rights violator Gen. Jovito Palparan for instance remains at large allegedly with the backing of supporters in the AFP.

The current administration’s human rights rhetoric and democratic posturing paradoxically even creates a dangerous situation. The corruption, cronyism and widely-perceived illegitimacy of the previous Arroyo administration were factors in making sections of the reactionary elite and middle class concerned about human rights violations (HRVs) and, at least on this matter, even sympathetic to Leftist forces. The ruling classes, business, church and even media however have greater support for Pres. Aquino than for former president Arroyo and on this account may then be less so inclined. Lamentably, Pres. Aquino himself in October articulated that the way to frame HRVs is to understand these as mere products of “Leftist propaganda”.

Human rights advocates on the other hand welcomed the enactment in December of the Anti-Enforced Disappearance Law and challenged the Aquino government to file charges against the state forces responsible for over 200 disappearances in the last decade. The law is the result of a long campaign by relatives of desaparecidos, human rights groups, and people’s organizations. It will be important to see the law’s impact while military counterinsurgency policy and practice still reportedly contain elements of political repression directed against civilians.

The Cybercrime Prevention Act of 2012 also took effect in October covering a wide range of computer-related crimes, but with critics most concerned about its provisions related to libel. The law liberally conceives libel to cover the range of on-line and other electronic communication-related activities of individuals with the result that writers and sharers of items deemed libelous could face exorbitant fines and even imprisonment. After an outcry the Supreme Court suspended the law for 120 days to consider petitions and hear oral arguments.

The 2013 mid-term elections

The 2013 mid-term elections are important for presidential and other political ambitions in 2016. Last year already saw strains develop within the ruling coalition as the presumed rivals for the presidency, Vice-president Jejomar Binay (PDP-Laban) and Interior Secretary Manuel “Mar” Roxas III (Liberal Party, LP), and their allies started their respective positioning and counter-maneuvering; Sen. Ferdinand “Bongbong” R. Marcos (Nacionalista Party, NP), Jr. is also widely seen to be seeking the presidency.

The divisions developing are not yet serious but the mid-term elections will test the Aquino administration’s consolidation. There is a lot of room for traditional politics to come into play with the elections deciding 18,022 national and local positions: 12 senators, 229 district members of HOR, party-list representatives, 162 governors and vice governors, 3,268 mayors and vice mayors, and thousands of members of local legislatures and councils.

The ruling LP-led coalition is looking to strengthen its dominant position in Congress and to weaken opponents especially at the local levels. Any headway that the contending United Nationalist Alliance (UNA) is able to make will be directly at the expense of Aquino’s LP and lay the basis for growing contradictions in the last three years of the administration. The senate race in particular will be closely watched.

The formidable Liberal Coalition backed up by administration resources and machinery includes the LP, NP, Nationalist People’s Alliance (NPC), Laban ng Demokratikong Pilipino (LDP), and erstwhile marginalized party-list group Akbayan. Its senatorial slate includes: Paolo Benigno “Bam” Aquino IV, Ma. Ana Consuelo “Jamby” Madrigal-Valade, and Ramon Magsaysay, Jr. (LP); Alan Peter Cayetano, Antonio Trillanes IV, and Cynthia Villar (NP); Loren Legarda (NPC); Juan Edgardo “Sonny” Angara


(LDP); Aquilino Martin “Koko” Pimentel III (PDP-Laban); Risa Hontiveros-Baraquel (Akbayan); and independents Francis “Chiz” Escudero and Mary Grace Poe-Llamanzares. The slate conspicuously includes candidates from camps contending the 2010 presidential elections – Aquino, Madrigal and Villar.

UNA in turn is composed of just two national parties – PDP-Laban of Vice-president Binay and the Pwersa ng Masang Pilipino (PMP) of former president Joseph Estrada – and is relying on local alliances to deliver votes for its national candidates. Its slate includes: Ma. Lourdes Nancy Binay, Margarita “Tingting” Cojuangco and Ma. Milagros “Mitos” Magsaysay (PDP-Laban); Joseph Victor “JV” Ejercito, Ernesto Maceda and Juan Miguel Zubiri (PMP); Juan Ponce Enrile, Jr. and Legarda (NPC); Richard Gordon (Bagumbayan-VNP); and independents Gregorio Honasan, Escudero and Poe-Llamanzares.

The only other noteworthy senatorial ticket is the Makabayan Coalition which includes Bayan Muna party-list representative Teddy Casiño and five guest candidates: Legarda (NPC), Pimentel III (PDP-Laban), Villar (NP), and independents Escudero and Poe-Llamanzares. The coalition is composed of progressive political parties Bayan Muna, Anakpawis, Gabriela Women’s Party, ACT Teachers’ Party-list, Katribu Party-list, Migrante Party-list, Courage Party-list, Akap Bata Party-list, Piston Party-list and Kalikasan Party-list.

Neither of the two major coalitions has revealed their policy program if elected although UNA was quick to say, albeit in general terms, that it supported the administration’s policies. At the very least this could imply that a winning Senate slate dominated by these coalitions will not result in any changes to current conservative and pro-elite policies. In contrast the Makabayan candidates agreed on and publicized a wide-ranging platform of taxation and pricing reform, wage and salary hikes, higher budgets for social services, pro-people mining policies, environmental protection, support for Filipino enterprises, agrarian reform, review of foreign debt servicing, review of unequal international treaties and agreements, an end to extrajudicial killings and enforced disappearances, repealing or amending the Cybercrime Law, resumption of peace talks between the government and the NDFP, and others.

The LP-led coalition is coming strong into the May 2013 elections with vast government resources at its disposal and upon the administration’s political consolidation in its first two-and-a-half years. These give it confidence that it will retain its dominance in Congress and, perhaps to a lesser degree, the Senate. As it is there are 92 LP members in Congress, followed by NPC with 49, Lakas-remnant NUP with 34, and NP with 24; formerly ruling party Lakas meanwhile is much-diminished with defections reducing the 106 winning Lakas-Kampi candidates in 2010 to around 20. Out of the total 287 House members, the Majority Bloc has a substantial 255 or so lawmakers versus only about 25 in the Minority Bloc and perhaps a few independents.

Nonetheless the Aquino administration is slowly having to deal with its exaggerated claims of political reform and disillusionment among its middle class and other supporters is steadily increasing. Any noticeable decline in public and political support will just increase the opportunity for the political opposition to begin counter-maneuvering with a view to 2016.

It remains to be seen how much advantage the historical aura of EDSA People Power and social movement-cum-democratic rhetoric gives the Liberal Coalition over the tested populism of UNA. Both camps are in any case already wielding fine-tuned techniques in trapo politics backed up by vast accumulated wealth and electoral war-chests. The reactionary elite consensus built by Aquino has tried to isolate the mainstream Left but its proven nationwide mass base still makes it the most formidable ideological challenge to elite electoral politics in the country.


Unrelenting traditional politics

The Aquino administration does not have a political reform agenda beyond its anti-corruption rhetoric and last year confirmed this with scant movement against traditional political practices much less the domination of entrenched elites. The administration coalition itself has been accused of patronage politics and wielding political largesse.

The LP has grown by un-discriminatingly accepting new members following Pres. Aquino’s ascent to the presidency, for instance doubling the number of LP members in Congress from the original 44 winning candidates to the current 92. Defections are normal upon presidential election results with lawmakers gravitating towards the chief executive to assure their pork barrel funds. This logic has been confirmed with the Aquino administration visibly denying pork barrel funds to its opposition, including progressive party-list groups, while dispensing this liberally to its allies. The 2013 budget has also been criticized for being an ‘election budget’ with anywhere from Php100-300 billion pesos in vague, redundant or otherwise suspicious items.

The run-up to the 2013 elections has already seen allegedly politically-motivated attacks in non-LP allied but electorally-critical provinces – against Pangasinan governor Amado Espino (NPC) who is going up against Hernani Braganza (LP), and against incumbent Cebu governor Gwendolyn Garcia whose brother, Pablo John Garcia, is running against Hilario Davide III (LP). Espino is being investigated for alleged jueteng links while Garcia is facing suspension for an administrative case. Pangasinan (1.51 million registered voters in 2010) and Cebu (1.43 million) are respectively the fourth and fifth most vote-rich provinces in the country. They are however the two vote-richest provinces that the LP-led coalition is contesting. The equity of the incumbent rule was applied in Negros Occidental (1.58 million voters) and Bulacan (1.52 million) while Cavite (1.52 million) was declared a ‘free zone’ by agreement of the LP and NP national leadership.

There is also no indication of any measures against traditional forms of fraud including vote-buying, coercing voters with violence, ballot substitution and pre-shading, and padding of voters lists. At the same time policy studies group Center for People’s Empowerment in Governance (CenPEG) warns of the specter of automation-related electoral fraud because of unresolved vulnerabilities and irregularities in the system dating from the 2010 elections.

The elite character of Philippine politics manifested in two interrelated ways in 2012. First is the elite domination of the upcoming elections which remain skewed towards political dynasties and otherwise wealthy politicians. The 2013 elections sees familiar political clans at the national and local levels: Aquino, Angara, Binay, Cayetano, Cojuangco, Enrile, Escudero, Ejercito/Estrada, Gordon, Marcos, Madrigal, Magsaysay, Pimentel, Villar, Zubiri, Ampatuan, Cua, Defensor, Duterte, Dy, Garcia, Joson, Ortega, Pineda, Singson, Umali, and others. It has been alleged that less than 200 families dominate Philippine politics. CenPEG has reported that 68% of congressmen and 80% of senators come from political families while 94% of provinces have political dynasties.

The party-list system meanwhile remains subverted and a weak mechanism for democratizing politics in allowing traditional and wealthy politicians and non-marginalized groups to participate. Such unqualified groups can account for half to up to three-fourths of the 79 party-list groups accredited by the Commission on Elections (Comelec) to run in 2013.

Second, there is intra-elite accommodation, compromise and indecisiveness. This was underscored with how the Presidential Commission on Good Government (PCGG) in 2012 prepared for its proposal to wind-down operations and transfer these to the justice and finance departments and which it formally raised at the start of 2013. This is while the Marcoses and their cronies retain their ill-gotten wealth with over half of their supposedly US$10 billion ill-gotten fortune still unrecovered. If the PCGG’s closure


pushes through it will be with the Marcoses still denying any wrongdoing and, despite numerous criminal and civil cases filed against them, none of the heirs or cronies successfully prosecuted for plundering government funds. On the contrary, the Marcoses have regained and consolidated their political base with a senator (reportedly aiming for the presidency), congresswoman, and governorship.

On the other hand the single most concrete legislative measure that the Aquino administration could have taken to possibly initiate ripples of change remains stalled. A Freedom of Information (FOI) law giving citizens undiluted and meaningful access to government papers, documents and record would be a tangible step towards institutionalizing a mechanism to check State abuses. Pres. Aquino pledged to back the bill during his campaign but the LP-dominated Congress has successfully delayed the bill for the last two-and-a-half years.

The year 2012 thus ended with the various advantage of the ruling classes vis-à-vis the democratic classes intact and elite political rule in the country affirmed. A level of stability has also been reached which will likely remain so in the short-term barring a yet unforeseen radical rupture in the political scene around the 2013 mid-term elections until 2016.

Unresolved armed conflict

The Aquino administration had a breakthrough in its drive for political stability with the signing in October of a preliminary US-supported deal with the MILF. The so-called framework agreement brings the peace process with the country’s largest Moro armed group forward. A corresponding final peace deal will be very consequential in pertaining to one of two major armed conflicts in the country as well as in covering provinces rich in fertile agricultural land, minerals and hydrocarbon energy resources.

More details about the corresponding new political entity called Bangsamoro, power- and wealth-sharing, and putting down of arms were due in December but did not materialize upon difficulties on these contentious issues. Still, the Aquino government and the MILF publicly expressed optimism about the complex task of setting up a self-governing Bangsamoro homeland – including the formation of a Transition Commission, passage of a Bangsamoro Basic Law and ratification via a plebiscite, creation of a Bangsamoro Transition Authority, and ultimately formation of the autonomous Bangsamoro government. The MILF conceded secession or an independent state for a more limited form of self-governance under the agreement so it remains to be seen how far the root causes of the Mindanao conflict will be addressed.

Further progress in the talks may however still not necessarily mean an end to the Moro armed conflict and there is still a tendency for instability even amid the glow of a final peace deal. There are already at least two breakaway groups from the MILF: the Bangsamoro Islamic Freedom Movement (BIFM) of Ameril Umbra Kato and another group led by the brother of the late MILF founder Hashim Salamat. Moro National Liberation Front (MNLF) chairman Nur Misuari and other leaders have also denounced the framework agreement as “irrelevant” and not solving the decades-old rebellion in Mindanao. There could also be local and national politicians reluctant to cede power to the Bangsamoro authority.

Fighting with the CPP-NPA meanwhile threatens to escalate with the Maoist forces declaring that their armed struggle will advance and amid government belligerence to pursue more meaningful peace negotiations. The CPP recently announced “substantial progress” in moving “from the strategic defensive to the strategic stalemate” citing more than 100 guerrilla fronts increasing to 180 fronts with 25,000 red fighters “in the next few years”. This is while the military on the other hand declared dozens of provinces nationwide supposedly ‘insurgency-free’.

At any rate the number of armed confrontations between the NPA and government forces monitored by IBON shows these increasing from 90 incidents in 2001, to 172 incidents in 2006, and 347 incidents in 2011. (See Annex) The number of incidents decreased slightly in 2012 to 323 likely due to a CPP-NPA


ceasefire declared in the Davao region in the aftermath of Typhoon Pablo (lasting 29 days) and another nationwide after a special meeting between the National Democratic Front of the Philippines (NDFP) and Philippine government (lasting 27 days).

The peace talks with the NDFP remain stalled. The Philippine government (GPH) is possibly emboldened to keep pursuing a military solution because of its initial agreement with the MILF – and corresponding prospects of redeploying troops from Moro to Communist areas – and with US commitments of increased material and operational support for the AFP. For its part the NDFP has declared continuing openness to resume talks on the substantive agenda of comprehensive social and economic reforms if the GPH recognizes prior agreements including pertaining to the release of abducted NDFP peace consultants. The NDFP had previously proposed an abbreviated fast-track agreement but which Pres. Aquino rejected. Informal backroom talks and special meetings nonetheless continue towards achieving a breakthrough that will give long-missing momentum to the formal talks, perhaps akin to the impetus in the MILF-GPH talks after the historic meeting between Pres. Aquino and MILF chair Al Haj Murad Ebrahim in 2011.

2013: Flashpoints and directions

The Aquino administration is approaching its mid-term still with little to show in terms of remedying the country’s malfunctioning democracy, instituting far-reaching reform and realizing a more

progressive vision for the country. Consequently a number of factors can develop to upset the current relative stability.

Most of all there is the problem of massive unresolved poverty which is a constant source of social and economic unrest. In this regard possible high expectations due to the administration’s growth hype could backfire upon a deeper global economic slump or domestic downturn. There are also shorter-term flashpoints: repressed political rivalries could erupt around the May 2013 elections on any number of issues, a renewed push for charter change could yet be divisive despite administration efforts to build consensus, the MILF-GPH peace process could become very controversial with discord among Moro groups or even between the parties to the peace deal, and military tensions could rapidly escalate in the disputed waters of the West Philippine Sea (South China Sea).

Progressive forces made strides in challenging rigid Philippine political institutions in the late 1990s and early 2000s. These advances were strong enough to alarm reactionary elite interests and prompted them to rally, despite their factional interests, to defend the status quo. This converged with the US’s increased strategic pivot to Asia where the Philippines plays a key role and for which the US requires a reliable client state in place. This is the context for the emergence of the US-backed Aquino administration and its being built up as a democratic and reformist government responsive to the people’s clamor for change. It serves to divert or defuse these challenges while still exercising the option to use force when necessary, though obscuring this underneath a democratic façade.

Under these circumstances the locus of struggle for genuinely democratic pro-people governance in the country all the more shifts to the counter-current of social and mass movements at the grassroots. Indeed even the radical revolutionary forces in the countryside objectively provide additional impetus in this regard. These are the most potent expressions of the unrelenting demand and compulsion for structural change in Philippine society.


Annex

NPA AFP/PNP/CAFGU Civilian NPA AFP/PNP/CAFGU Civilian NPA AFP/PNP/CAFGU Civilian

2010 Jul-Dec 142 43 171 21 1 7 127 13 25 4 25 8

2011 Jan-Jun 171 47 194 9 2 22 145 6 24 6 13 9

2011 Jul-Dec 176 61 179 5 3 39 187 15 6 16 6 12 10

2012 Jan-Jun 197 98 179 18 4 24 188 14 34 1 21 11

2012 Jul-Dec 126 45 145 2 5 25 121 45 7 15 0 36 12

Total 812 294 868 55 117 768 93 114 17 107

AFP - Armed Forces of the Philippines NDFP - National Democratic Front of the Philippines

CAFGU - Citizens Armed Forces Geographical Unit NPA - New People's Army

PNP - Philippine National Police

12 - These include individual civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: a farmer in Sitio Sinalkuha, Bgy Telepaz, Columbio,

Sultan Kudarat on September 29; two (2) civilians in Mandaue City, Cebu on October 5; a security guard, his wife & two (2) companions in Aurora Blvd, Quezon City on

October 5; five (5) farmers in Mulanay, Quezon on December 21; a local of Bgy Tuyod, Manjuyod, Negros Oriental on December 25; and a member of Alliance Concerned

Teachers (ACT) in Bagumbayan, Tuguegarao City on December 28. The following, on the other hand, were illegally detained by the AFP and reportedly forced to admit to

being supporters of the NPA: three (3) locals in Bgy San Lorenzo, Prosperidad, Agusan del Sur on August 28; and19 alleged locals, three (3) of which are minors, in Bgy San Agustin, Isabela, Negros Occidental on December 13.

6 - These include a Lumad woman allegedly mistaken by the AFP as an NPA member; she was shot in Cabadbaran, Agusan del Norte on September 10.

Armed Confrontations Between the NPA and Government Forces Under the Aquino Administration, July 2010-December 2012

DateNumber of

Incidents

Dead Wounded Captured

1 - These include seven (7) civilians branded by the AFP as NPA members: four (4) in Mobo, Masbate on September 7 and three (3) in Catanauan, Quezon on December 1.

There are also three (3) civilians that the AFP claimed to have been caught in crossfire during an alleged encounter in Kananga, Leyte on November 15.

2 - These include two (2) civilians branded by the AFP as NPA members: a Bayan Muna member on February 25; and local resident in Agusan del Sur who was also claimed

by the AFP as a child warrior.3 - These include a local peasant leader that the AFP has branded as an NPA member in Arakan, North Cotabato; he was killed on October 20.

Source: Various publications monitored by IBON Databank

7 - These include a 19-year old teenager allegedly forced by the AFP to admit to being an NPA member after being violently beaten on November 5 in Bgy San Isidro,

Compostela Valley. 8 - These are civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: a farmer resident of Calbiga, Samar on August; two (2) farmers in

Ilocos Sur on September 12; three (3) members of Pagkakaisa’t Ugnayan ng mga Manggagawa sa Laguna in Lumban, Laguna on October 5; four (4) activists in Daet,

Camarines Norte on November 10, known as "Daet 4"; five (5) local residents in Malapatan, Sarangani on December 14; and ten (10) students of Polytechnic University of

the Philippines (PUP) in Bgy San Andres, San Narciso, Quezon on December 28. Fourteen of these civilians were reportedly released by the AFP when the said

allegations were not substantiated, namely the Daet 4 and the 10 PUP students.9 - These include civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: two (2) farmer residents of Sitio Tambulang, Bgy Danwata,

Malita, Davao del Sur on February 27; a member of Karapatan on March 1; three (3) local residents of Bgy Kiling, Alfonso Lista, Ifugao on May 24; and three (3) children

from San Agustin, Surigao del Sur on June 26. There are also two (2) consultants of the NDFP for the ongoing peace talks with the Philippine government and two (2)

activists.10 - These include civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: a local Aggay tribe leader in San Agustin, Surigao del Sur on

July 23; an Agta youth in Burdeos, Quezon on August 5; a local resident of Paquibato district, Davao City on September 21; five (5) local residents in various barangays in

Ilocos Sur on September 23-26; and three (3) locals, two (2) of which are female minors, in Antipolo City on December 25.11 - These include 17 civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: a local in Bgy Calawis, Antipolo City on the 3rd week of

January; two (2) members of Kalipunan ng Damayang Mahihirap (KADAMAY) in Bgy Maitim, Bay, Laguna on February 7; two (2) locals in Bgy Tibagon, Pantukan,

Compostela Valley on March 8; five (5) activists in Bgy Sto Nino, Sta Rosa, Nueva Ecija on March 8; three (3) local minors in Bgy Pansoy, San Andres, Quezon on March

28; a 16-year old boy in Bgy New Visayas, Trento, Agusan del Sur on May 7; and two (2) cattle farmworkers in Bgy Lag-it, Tayasan, Negros Oriental on May 28. There

was also the rearrest of a NDFP consultant in Inopacan, Leyte on May 2.

4 - These include ten (10) civilians branded by the AFP as NPA members: two (2) local hunters in Bgy Ilayang Atungay, Magdalena, Laguna on February 16, one of which is a

15-year old boy; a local farmer (killed were also his two sons aged 7 and 10 years old) in Bgy Malaya, Labo, Camarines Norte on February 25; three (3) locals in San

Francisco, Quezon on April 12; a 17-year old young woman in Lopez, Quezon on April 29; a local youth in Pio Duran, Albay on April 30; a local in Bgy Palma, Kibawe,

Bukidnon on May 8; and a local peasant in Bgy Palale, Bulan, Sorsogon on June 17.

5 - These are a farmer and a 16-year old teenager allegedly mistaken by the AFP as NPA members, shot in Sitio Sinalkuha, Bgy Telepaz, Columbio, Sultan Kudarat on

September 29.


Documents

Deceit of Good Economics and Good Governance by IBON Research