The State of the Filipino Nation On the Road To 2010

Elections and Beyond

This is the State of the Filipino Nation. First, institutions have slowly degraded and are crumbling
as the tendrils of corruption extend beyond every strata of government and into every aspect of
society. Second, the stark economic reality as posited by the World Bank in a research paper is
this: the Philippines’ public sector is constrained by serious fiscal pressures, a weighty debt service,
and a high cost of input, and that it will be hard pressed to keep public investments growing at GDP
growth rate1.
Cynics charge that nothing will change and the belief that 2010 is about good and evil is a mistake.
The year 2010 and beyond is about ending the quarrel of our past and present. It is about building a
future. The sad reality is that we cannot solve the Philippines’ serious fiscal problems and our
people’s unanswered questions of poverty and surplus without Institutional Reform and yet, neither
can the Philippines stand still as the world marches forward.

How is this best realized? Where do we begin?

Institutional Reform
Graft and Corruption
The most problematic factor for doing business in the Philippines as listed by Global Economic
Report 2009-2010 is as follows: Corruption (24.4%), Inefficient Government Bureaucracy (20.6%),
Inadequate supply of Infrastructure (15.0), Policy Instability (12.6%), Access to financing (5.2%)2.
This is endemic in the Philippines. Graft and corruption extends across every fabric of society.
Even well meaning people are forced to bend to its mighty grip3. Word is, justice, whether court of
law or Ombudsman can be bought and yet no one would come out on record to say so for fear of
being harassed or worst. Graft and Corruption also accounts for leaks in Government spending and
inefficiency. A parallel could be drawn between the state of Hong Kong in the 1960s and 1970s and
the Philippines today.

In 1974, Hong Kong created the Independent Commission Against Corruption (ICAC) that
answered only to the Governor of Hong Kong. It rooted out corruption, with a mass purge in 19784.
ICAC used a three-prong approached: law enforcement, prevention and education and it required a
first successful case by bringing Police Officer Godber’s extradition and prosecution to prove
ICAC’s commitment5.

Something similar must happen in the Philippines.

The Office of the Ombudsman today is already patterned after ICAC but without political will to
exercise that power, with political will directed at keeping the status quo, where then does it leave
us?

In the Philippines, areas of priority to root out corruption must be in law enforcement and the
judiciary. There must be an independent commission against corruption that prioritizes the
following targets:

1) Office of the Ombudsman;

2) Philippine National Police;

 3) Department of National Defense and the Office of the President;

4) National Bureau of Investigation and,

5) Judiciary.

It must be answerable to the President of the Philippines. While an Independent Commission deals
with Law Enforcement, and lays down the foundation for preventing corruption6, it needs the Office
of the Ombudsman and the Judiciary as a whole to be clean and efficient as much as it is
independent in prosecuting cases and settling disputes.

Law Enforcement and a Judiciary that people trust must be top priority to bring civility into society.
While this is an important and crucial first step, on the one hand this does not solve entirely the
problem of corruption.

The Next Government must also sign the Rome Stature of the International Criminal Court as
added safeguard that Future Filipinos can use to engage its government.

Taxes and Revenue Collection and Budget

For many years, revenue collection has been exasperated by corruption. It has led to rising of taxes
to cover the myriad inefficiencies of the State. Only when we guarantee that the agents of Justice
are far from reproach will people believe the seriousness of any campaign against graft and
corruption. With Agents of Justice far from reproach the road is clear to take down the ultimate
target, which of course is to reduce inefficiencies in revenue collection and spending.

The National Bureau of Investigation must be reorganized and refocused to deal with the problem
of corruption in the Department of Finance, specifically the Bureau of Internal Revenue and the
Bureau of Customs, organized crime and the private sector. Not only is this an imperative of
institutional reform but it is likewise vitally important to the economy by plugging inefficiencies
and leaks in revenue collection. It improves our capacity to generate revenue, to pay for the nation’s
weighty debt and to finance future programs.

It is not to say we cannot reduce taxes for people who are punished by excessive taxation. EVAT
already covers a wide range of goods and services that even the underground economy already pays
tribute to. So it becomes the salaried employee who carries such a heavy tax burden. It is this strata
of our society which we must assist.

It becomes imperative to remove withholding and income tax from people earning PHP500,000 or
less.

In a reply to a comment, Dean dela Paz wrote on income tax scrapping: “Good idea on scrapping
income taxes for those below a certain income bracket. The scrapping of the income tax for those
earning at the minimum wage level (about Php 3,200.00 a month, I think) or the poverty line (about
Php 6,195.00 a month or Php 265.00 a day for a family of five) is contained in a draft bill but has
not been deliberated on. Those below the poverty line are 30% of the population (its 11% for the
USA), so the effect should not be that substantial for government tax collections.” 7

Translated into human terms, tax reduction for this income bracket opens a door to allow people to
either save more, or spend in the economy.
There must also be substantial Budget Reform8. It becomes prudent that the Next Administration
make this a top priority, as part of the overall strategy of Institutional Reform.

New Labor

There is a sad truth in the Philippines that hiring is like marriage and firing is like a messy divorce.
This is no more than apparent as the Philippines did not rate very well in the Global Competitive
Report 2009-2010 when it came to labor laws, particularly in the hiring and firing of employees9.
There must be a reassessment of Philippine labor laws. The stark reality is that Philippine labor
laws need to equally treat both employer and employee, fairly. It must also give employers greater
liberty in providing just compensation just as it ought to give employees the freedom to leave, with
due notice. A push must therefore be made to bring Philippine Labor Code into the 21st Century.

Government Transparency and Civil Rights

The last decade has seen a degradation of the Democratic foundation. Civil liberty has constantly
been under assault. It does not help the Philippines that the growing trend across the world is to
exchange more of essential liberty and freedom with assurances of temporal safety. In the
Philippines, government has evoked executive privilege to shield the public from knowing the truth.
It becomes a massive imperative to reverse this course by taking a first step. Essential information
about government officials and government transaction must be transparent. The Philippines must
enact a Freedom of Information Act, which is languishing in obscurity in the Senate10. Making
information free is a first and important step to creating true government transparency.

In keeping with this freedom of expression and speech is best preserved by the decriminalization
and a rethinking of defamation law.

The Internet and Network Neutrality

As increasingly Filipinos go online and participate with the larger Network, whether through a
computer or through mobile phone, there is a clear and present danger that the Filipino’s right to
Free Speech and Free Expression are trampled.
Telecom companies seek to impose tiered service model to control the flow of information.

Proponents of Network Neutrality argue that Internet users ought to be in control of what content
they view, what applications they use because this is how the Internet has operated since its
inception11. The father of the World Wide Web, is also for Network Neutrality12. On February 7,
2006, the co-author of the Internet protocol, Vinton Cerf testified before the US Senate Committee
on Commerce, Science and Transportation Hearing on “Network Neutrality” and he said:
“Allowing broadband carriers to control what people see and do online would fundamentally
undermine the principles that have made the Internet such a success.”13

The Philippine government must legislate the principle of network neutrality to safeguard Filipino
users’ Internet rights. It means that all networks in the Philippines must not have restriction on
content, site or platform, on kind of equipment attached or the modes of communication allowed on
said network and communication is not unreasonably degraded by other communication streams.

It becomes not just a moral imperative, but also a matter of economic development that the
Philippines enact Five Freedoms of Internet Rights for Filipinos14:
We must hold these five truths to be self-evident that a free nation such as the Philippines is
expected by our people to have these simple inalienable rights:

1. The Freedom to freely access Content, sites, platform of their choice;

2. The Freedom to run Applications of their choice;

3. The Freedom to Attach Personal Devices of their choice;

4. The Freedom to have Online Privacy protected and to have no interference from a
public authority except what is necessary in a democratic society in the interest of
national security, public safety or economic well-being of the nation for the
prevention of disorder or crime, for the protection of health or morals or for the
protection of the rights and freedoms of others;

5. The Freedom to receive reliable and fast Internet that is not unreasonably degraded
by other traffic as much as to receive meaningful information regarding Service
plans;

To lower the bar of access, to accelerate distilling Information Technology a two-fork approach
must be made. First, government must remove EVAT on broadband, computers, and mobile phone
to ensure the free flow of information and to guarantee the cheapest, and lowest access to
information. Second, a massive training focus must occur via the public and private education
sector. It must push front and center that the Internet and that the computer and the mobile isn’t just
a tool for social networking but a power platform for innovation.

Social Justice and Welfare

There are grave injustices existing in our society. The problem of juvenile delinquency in the
Philippines must be addressed15 It must be a cause for alarm that many are caught with petty crime,
and this is symptomatic of the languishing state of society16.

It is in keeping with a theme of Justice that children and child welfare must therefore be a top
priority. We must protect their rights to be children. What kind of nation will we hope to build if
they are allowed languish and be abused?

National Capital Region

In keeping with defeating inefficiencies and raising revenue and a forward-looking outlook, there is
a problem with how Metro Manila operates and it must be remedied. According to the Philippine
Daily Inquirer, Metro Manila had P2.24 trillion gross regional domestic product in 2006 and the
news item noted that that is thirty seven percent (37%) of the Philippines’ gross domestic product
for that year, which was over P6 Trillion17. Therefore, the National Capital Region did not return a
“bang for its buck” with its perennial flooding, constant traffic congestion and problems with
garbage collection.
Why is this?
Metro Manila is made up of a loose confederation of sixteen cities and the municipality of Pateros.
There is no central governing authority, meaning each city tries to solve both distinctive problems
and similar problems separately while sharing a common infrastructure. They have interconnecting
roads, sewerage, and garbage disposal problems. Whether crime, garbage, quality of roads, traffic
affects every city but there is no common thrust to systematically solve them. So the problem of
traffic on one end of Makati can find itself stretching all the way to Quezon City, passing through
Mandaluyong, as an example. Excessive traffic along Espana caused by flooding (however fast it
recedes) affects traffic in Quezon City. All the cities share the same problem of waste disposal, and
pollution and a population that constantly travels across city lines.
There is a Metro-wide service agency called the Metro Manila Development Authority (MMDA)
that does planning, monitoring, and other functions. The MMDA council is composed of mayors
that approve of the plan but an appointed official by the Philippine President heads the agency.

More often than not, Metro Manila Mayors are up in arms against the head of the MMDA. From the
mayors’ point of view, this is understandable. They are elected officials. They are subject to the will
of their constituents. The MMDA Head is not and subject only to the whims of the sitting President
of the Republic.

The position of the MMDA Head is likewise understandable. He has a job to do. His job is urban
planning, monitoring but he needs to do more: he needs to solve traffic among other things. Given
the limited funds he has and given the limited powers of his office. That and we the people can’t
fire his behind, or reward him with a new term if he does a great job.

The existing structure promotes conflict between various stakeholders and makes the delivery of
infrastructure and city-services much more difficult.

A number of models already exist that provide an answer to the festering problem of Metro Manila.
Montreal18 and New York City19 are perfect example of what Metro Manila can be. New York
magazine recently asked why New Yorkers are living longer than most Americans and it described
the city with its massive subway and stairway system as a citywide stair master20 and it is attributed
to urban design and how well the city is run.

A capital is a metaphor for what the country is, and what it hopes to be. It can be a source of
national pride. It is vital that Metro Manila be reorganized and integrated and be the crowning
symbol of what the Philippines is.

Local Government

There is a need for greater local government autonomy. The National Government can control or
harass a local government official by suspending or removing said elected official or by delaying or
withholding funds to a local government. This policy must change to ensure local government
autonomy and to protect the will of the people who reserve the right to elect their leaders.

Infrastructure
Transportation
There is a massive need to create cheap, and efficient transportation in Luzon. The Philippine
National Railways, renamed “FilTrack,” by Gloria Macapagal-Arroyo is a good step forward in
rehabilitating the railway system.
To further this interest and to accelerate development, as well as to ensure its future commercial
viability, this organization must be separated from politics. While it must remain as a government
corporation, it must be reconstituted into a separate legal personality from the Philippine
government.
New Energy
With Energy the challenge of the 21st century, government must lay down the foundation to
embrace both alternative and renewable energy and nuclear power and reduce energy dependence
on oil.
When applicable and cost-effective, all planned infrastructure, building, street lamps, traffic
infrastructure, will use solar powered lamps and power efficient technologies.

It must be a practical, methodical approach that must be forward thinking.

Healthcare
The ten leading causes of disease in the Philippines according to the Field Health Service
Information System 2007 include: ALRI and Pneumonia, acute watery diarrhea, bronchitis,
hypertension, influenza, TB respiratory, diseases of the heart, dengue fever, malaria and chicken
pox21. Women’s health and rights, a timely issue that likewise plays a huge role in any national
healthcare strategy22. On the other hand, the National Objectives for Health 2005 to 2010 note that
Cancer, is among the leading cause of disease in the Philippines23.
Two point approach need to be done here. The first is the continued strengthening of basic health
service in the local government level. This will form a first line defense in preventing disease as
well as basic health education. The second approach is to strategically upgrade four or five
government run tertiary hospitals, one in Baguio, Metro Manila, Cebu and Davao to fully equip
medical centers that can address a wide range of services including oncology.

The Philippine General Hospital and Medical School need to be independent of University of the
Philippines Manila. Its facilities need to be rehabilitated, and equipment upgraded. Its staff needs to
be professionally paid as much as it is professionally run.

Creative Education
As we face an education system that spend US$ 138 per student per year as compared with
Thailand, US$ 853, Singapore US$ 1,80024; the growing reality is that University degrees become
less useful, we must rethink what education is. As Ken Robinson put it: "we must see our creative
capacities for what they are, and to see our children for the hope that they are. Our task must be to
educate their whole being so they can face this future because it is our job to get our children make
something of it."25
In line with this, Government must continue to abide in the strictest sense with the Florence
Agreement26.

It will not happen over night but Government must lay the foundation on producing diplomas, but
more about developing a whole person.

Investing in the Future

Future Technologies
Alessandro Magnoli Bocchi of the World Bank sought to answer the question of GDP growth rates
in the Philippines while investment continued to decline and Bocchi argued that the Philippine
economy needs to move to a “high capital stock” equilibrium through “better performing eco-zones,
a more competitive exchange rate, greater government revenues and fewer elite capturing
regulations.”27
How does one “force” the private sector to reinvest?
As Institutional Reform slowly levels the playing field and brings down the cost of doing business,
government should behave itself like a corporation that manages the public sector and the nation in
total to create greater profit opportunities. It becomes the government’s duty to ensure public
responsibility and it must spark private incentive. At the same time, since the Philippines is behind
in technological innovation. It needs to invest in future technologies to serve its national interest.
The Philippines must act as a venture capitalist.
In 1998, the Central Intelligence Agency started a not-for-profit venture capital firm that invests in
high-technology companies to keep the CIA abreast with information technology to support its
intelligence gathering capability. Each year, 40 Million dollars is used to fun In-Q-Tel whose
charter is based on Title 10, Subtitle A, Part IV, Chapter 130. Sec. 2371 on research projects:
transactions other than contracts and grants28.

This sets the stage to move beyond BPOs and electronics assembly and target areas of interest that
so far been caped because of oligopolistic markets.
The Philippines will need to create a non-profit venture capital firm but funded by the Philippine
government to foster research and development. This firm must encourage new, emerging
information technologies. This firm must be independent of government, including political
appointments. Its board and management must be composed of entrepreneurs. This firm needs to
invest on primarily but not limited to local companies or academia, specifically on firms focus on
software, infrastructure and materials science. This company’s mission is to build partnerships with
the private sector. It needs to network extensively with academia and the banking industry. It must
create avenues of collaboration; see through product prototyping and demonstration. Technology
developed from this venture ought to be used by the Philippines in its pursuit of national interest.

Agriculture and Contract Food Sterilization

There are growing questions on food and food security. In an age when we must meet the the
demands of a young population, efforts must be made to revitalize a dying agriculture industry. It
must be a holistic approach of combing information generated by Weather, by scientists from the
department of agriculture and by training farmers on the ground.

Proponents of the Comprehensive Agrarian Reform Program must take into account the stark
reality that famers are not the most technological savvy. The failure of CARP is that it leaves
farmers to do all the heavy lifting when they don’t know the first thing to do. It isn’t simply a
question of lack of irrigation; drying facilities, farm to market roads or the absence of fertilizers or
of funds. Those are definitely needed and government and the private sector must push for it.
However, any agrarian reform push must take into account that the reality is that Farmers are not
savvy or fast enough to adapt.

A push must be made to how best to get the agriculture sector moving. There is a growing need to
inject technological innovation into the agricultural sector.

For instance, the Philippines will need contract food sterilization facilities. Food irradiation exposes
food to ionizing radiation to destroy microorganisms, bacteria, viruses and insects. Other ways by
which this technology is use is through sprout inhibition, delay of ripening, increasing juice yield
and improvement of re-hydration. Food irradiation also increases shelf life of food for
transportation. It is an essential step to ship mangos to other parts of the world.

The absence of a private sector push (no one with money is interested in it), the Philippines will
need to create for profit Contract Sterilization Firm to provide contract food irradiation by investing
in it.
Threats
There is great skepticism that any leadership in the Philippines can accomplish the needed
Institutional Reform. The Philippines will be hard pressed to accomplish everything given its
limited resources. While a balanced budget is desirable, a massive, sweeping reform may make it
difficult to achieve that.

There is wide range of issues that naturally need to be met. The threat is to try to solve everything at
the same time. It becomes the job of the chief executive to focus attention and to prioritize pressing
issues. A fervent, revolutionary-like Institutional Reform will naturally bring with it great
opposition and great skepticism. It will surely test the steel of any government.

The great hazard on the horizon is the Continued and Persistent Danger of Gloria Macapagal-
Arroyo. Her push towards a congressional seat, the moves her allies are creating to establish a
House of Representatives allied with her is a shot across the bow of survey leader and frontrunner
Noynoy Aquino.

Mrs. Arroyo will not make it easy for any government to take hold on.

Count on a Scorched Earth policy to leave any future administration without funds to navigate with,
post Election Day. Expect the current administration to lay down every obstacle and bog down the
next Administration. Don’t be surprised to win a palace that has no value other than the title home
of “President of the Philippines.”

This is why the negative article, “The Cult of Noynoy Aquino”29 is wrong. It is impressive in how
shallow it looks at what’s important in our national life and how deeply unmindful it is at what the
dangers are. The story of 2010 isn’t about, if an Aquino is fit for the job of President, the story is
about, “Do you want another six years of Gloria Macapagal-Arroyo?”

The story of 2010 isn’t that Gloria Macapagal-Arroyo is no longer president and that a new
administration can usher in change, the story is that May 2010 is just choosing who will fight for
the ultimate crown. The day after the election it will be President versus Gloria Macapagal-Arroyo
and her legislative Army she raises to continue to be the power in the Philippines.

The story is that post Election Day, our politics will be about political compromises because that’s
how things get done. It isn’t perfect but like the American government passing a Health Reform
Bill, the important part isn’t the substance of the bill, but that there is a Health Care Law.

It will be the same for the Philippines.

This is why I think Platforms are less important than Credo.

The ultimate danger is that the Philippines will be bog down with trying to keep its democracy, its
freedom to do anything substantial. The Great Trial of tomorrow is that any Future Administration
must over come the danger of fighting a holding action and mount significant change.

In Warfare, Armies choose the condition for victory. What constitutes, “Mission Accomplished?”
What is the one thing in all the things an Administration needs and wants to accomplish is most
important?

The State of the Filipino Nation is that remove everything else, strip it to its bare essential and the
top priority must be to rebuild our fallen Democratic institutions. That means having credible law
enforcement. That means our people can have a credible and impartial judiciary. That means, the
Rule of Law must be respected and not the perversion of what the rule of law is as defined by
Gloria Macapagal-Arroyo’s government. That battle, before the question of poverty; before the
question of Mindanao; before the question of food or debt service is the only thing that will open
the door for Future generations to accomplish anything is the only thing that matters.

Thus, the Next Administration much choose amongst the long laundry list of things to do, which
one of those will determine what the condition of Victory.

And we the people must accept that.

This is how nation building gets done: one bloody, frustrating step at a time.

Conclusion
Filipinos want genuine choice. The clear and present danger is to let opportunity to shatter the
status quo slip by as well as to let people to believe, to lead on that any leader is a Messiah who can
take up all the problems today.

Honesty, integrity, treating people fairly forms the basis for a mandate that will be needed to take
decisive action. An opportunity is presented to bind our nation’s wounds, to douse anger from our
past failures, to quench the Filipino’s thirst for that elusive dream that the Public Trust was not
given in Vain.

To look at the next presidential election and to look at the presidential candidates without taking
into context that the fight is about Gloria Macapagal-Arroyo and her brand of politics is missing the
point on what the 2010 election is about.

The threats are real. To expect any administration to change dramatically anything the day it steps
onto the plate is a pipe dream. To expect any administration to solve every problem at the end of its
term is even more ludicrous.

The biggest challenge of the Philippines is Institutional Reform. To ignore it, is to keep repeating
the same problems of the past. The biggest danger to the Philippines is the Clear and Present
Danger of Congresswoman Arroyo. To dismiss Mrs. Arroyo as a thing of the past post Election
Day is deluding ourselves to thinking she’ll stop at that.

The only question must be, “What makes [enter name of presidential candidate] different from
Gloria Macapagal-Arroyo?” Whoever substantially fills that question, on Election Day that’s who
you should choose?

This is how nation building gets done: one bloody, frustrating step at a time.

This is not a time for fear. It is not the moment to be timid. The only recourse: decisive action must
be taken to build a true and lasting future for all Filipinos. As we are mindful of Gloria Macapagal-
Arroyo and the threat she represents, we must also realize that it is through “a system of open
markets, unambiguously regulated by an activist state, and one in which the state intervenes to
reduce the greater inequalities that competitive markets will inevitably generate.”30 It is through
properly balancing public responsibility with private incentive that we can Invest in the Future and
it is through Institutional Reform, of building Infrastructure, of meeting New Energy challenges, of
engaging Healthcare and rethinking creatively Education that becomes our nation’s Call to Arms,
for tomorrow; “para sa kinabukasan.”
______
The original version of this position paper was written several months ago and has been rewritten in
several areas to reflect the current political climate.

Acknowledgement
The author would like to express his profound gratitude to fellow bloggers Tony Cruz, The Jester-
In-Exile, @caffeinesparks, Manolo Quezon, Flowell Galindez, to friends A., Ian, Con, L., and to
Roch. Our conversations shaped insight and ideas that ultimately found themselves in this work.

Thank you.

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28
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29
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30
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