Legacies, plebiscite and P700-M sinkhole Rappler

Legacies, plebiscite and P700-M sinkhole Featured

A FEW months ago, this column repositioned the two important legacies of PRRD: federalism and the third telco. Today, we add the preparations for the plebiscite for the Bangsamoro Organic Law (BOL), or Republic Act 11054 signed by PRRD last July 26, 2018. With the Comelec scheduling the plebiscite for January 21, 2019, this will be the first test for the Duterte administration going into the midterm of 2019.

The new political entity to be called Bangsamoro Autonomous Region in Muslim Mindanao, or BARMM, would replace the present Autonomous Region in Muslim Mindanao (ARMM) established following a 1996 peace agreement with another rebel group, the Moro National Liberation Front (MNLF) headed by Nur Misuari. The charter for the BARMM must first be ratified by the people in the proposed expanded Muslim autonomous region, composed of the core of ARMM (Maguindanao, Basilan, Tawi-Tawi and Sulu and the cities of Marawi and Lamitan), plus six towns in Lanao del Norte that voted yes in 2001; 39 barangay in North Cotabato that voted for inclusion in the ARMM in 2001; Cotabato City, the present seat of the ARMM; and Isabela City in Basilan, two cities that voted against inclusion in 2001. The law also allows the inclusion of “other contiguous areas” where a resolution of the local government unit or a petition of at least ten percent of the registered voters seeking for inclusion is submitted at least two months prior to the conduct of the ratification.

The plebiscite campaign starts on December 7, 2018 and will last until January 19, 2019, or 45 days, but there is still no budget for the conduct of the plebiscite. The P857 million tab for the plebiscite was not included in the Comelec budget submitted by Malacañang since the law was signed only in July. Three options have been identified on where to source the funds: 1) allow ARMM to use its proposed P10.1 billion infrastructure fund for FY2019; 2) use the Comelec savings from the barangay elections held last May 2018; and 3) secure funding from the Office of the President. A red flag in the preparation for the important yes vote.

Federalism on the other hand, has gone the way of “pepedede;” nobody wanted to touch the advocacy after. Even the cabinet’s economic cluster shot down the Puno-led draft, stressing on the cost and not looking into the benefits of having structural change. There is no lead person in the cabinet on federalism, communication is ad hoc and the Puno draft has been rejected across sectors.

With the economy in a precarious state due to the inflation monster, people are just focused on stomach issues and restructuring at this time has further been sidelined.

This leads us to one of the other legacies of PRRD, the third telco, now known as the new major player or NMP. The National Telecommunications Commission (NTC) has issued Memorandum Circular No. 09-09-2018 on the rules and regulations on the selection process. It used to be that with a congressional franchise, a telco players goes to NTC to secure CPCN and then they roll out their plans without the NTC vetting such plans and use of frequencies.

Under the circular, the congressional franchise is just paper. Two submission packages have been identified: the first submission package refers to all the regulatory documents of the participants, the key point being that it should have a paid-up capital of at least P10 billion in the participants AAFS for the past three years. The second submission package (to be submitted simultaneously) is the filled-up electronic template of Form A (scorecard).

What appears to be the most controversial and totally new is the insertion of a participation security in the amount of P700 million which shall be valid for 180 calendar days from the submission and opening of the selection documents (6.2.j), the non-submission of which will automatically disqualify any participant from the bidding. The duopoly never had this kind of hurdle. With just a congressional franchise, SMART and Globe went to town without any barriers to entry. 

Imagine if there are three bidders, the amount that NTC will be holding will be P2.1 billion for 180 days? Would the amount be deposited in a bank? The Treasury? How can NTC with a budget of P489 million for FY 2018 be a custodian of such a huge amount? Who is the bonded official in the NTC who would be responsible for such an amount? Further, the participation security can be forfeited in favor of government on four grounds: “false information or falsified documents; refusal of the participant to accept its confirmation as a provisional or selected NMP; unjustified withdrawal during the 180-day binding period and when the participants attempt to unduly influence the outcome.” Who earns from the spread? And “unduly influence” is a gag rule to all participants, as if NTC has not been coopted by its process. What does to “unduly influence” mean? So, if PRRD decides to get his way, is NTC saying there is undue influence by a participant?

Let us look into the way SMART and Globe Telecom have controlled the NTC for years with enhanced regulatory capture starting in the early 1990s. And the story of the 18 public telecommunications entities with outstanding SRF tells you a lot about how NTC performs its mandate. The NTC has shown to the public its inability to manage the telcos — from interconnection, to VAS, to dropped calls, to cost of text and per minute calls to VAS to dated promos and very recently, NTC cannot compel the duopoly to deliver the minimum speed of 12 mbps in Internet connectivity that their advertisements guarantee to their subscribers, among others. The same commissioner has been in the seat since Macapagal-Arroyo in 2009, through the Aquino administration, and then got a reappointment in 2016 under Duterte, or a total of nine years and counting.

The legacy of Duterte on the third telco will be on the shoulders of NTC, an agency proven to have been co-opted by the duopoly, hence the delay and the circular itself are barriers to entry. Worse, the roll-out plan comes 90 days after the issuance of a confirmation order (Section 10). And another Humpty Dumpty falls.

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