Philip Camara

Philip Camara

Thursday, 19 October 2017 11:05

Disappointment and reset

WHAT a huge disappointment the Duterte administration has evolved into after so much hope and hype were generated from the election. Instead of bold moves to restructure the country towards more manageable governance units, not much actual progress towards a unified vision with gameplan and timeline of transforming into a federal government has been achieved. The drug war has been discredited with outlandish claims of police “fighting back” and investigating vigilante killings that some count as high as 7,000 dead in total.
The Duterte administration seems to be expending much energy in fighting the previous administration’s leaders and current critics. Incredulous statements defending the administration’s performance to date weaken the credibility of the government. You cannot govern effectively for long when credibility is diminished.
The political meltdown gripping the nation clearly shows that the Philippines is losing ground and time, and showing again that it is not governable as a unitary state and while federalism will take time, President Duterte must reset the national political discussion and move away from the old subtext of persecuting personalities and move boldly into taking concrete steps towards the national vision he laid out when he ran for president. Time is running out because after another year of this governance crap, the pull of the mid-term election will release mega money for all kinds of media plays that will confuse the average Juan will all sorts of BS.


Empower regional governance now
No, something big, like real change, must happen so that a chance at unity towards a better Philippines can take place. I would say that empowering regional governance now through executive fiat is a much better call than to threaten a “revolutionary government for the remainder of my term.” The latter doesn’t open genuine debate, rather, it engenders dissent, fear, anger, hopelessness, etc. and ultimately opposition based on personalities who said this or that, not the substance that we need to talk about to move forward for the sake of our youth. That RevGov is not only unnecessary, but it certainly won’t work, generating divisive heat and will set back his legacy of systemic change.


The proposal therefore to improve governance now is to empower the existing regional development councils and transform them into “regional development authorities,” or RDAs, through an executive order. It will be recalled that such bodies and authorities are already included in Article X, Section 14 of the Constitution. (The President shall provide for regional development councils or other similar bodies composed of local government officials, regional heads of departments and other government offices, and representatives from non-governmental organizations within the regions for purposes of administrative decentralization to strengthen the autonomy of the units therein and to accelerate the economic and social growth and development of the units in the region.)


What will the RDAs be managing? It is proposed that the RDAs manage the central government functions that have not been devolved to the local government units and supervise the faithful implementation of all laws that call for LGU implementation. We should see the national government in charge of “steering” and the LGUs doing the “rowing.” Correct ordering is a key principle of management, particularly if the desire is to unleash human potential.


Thus, national policy direction on economic development, environmental and natural resources, public works and highways, education and culture, justice, etc. will be set by the national government through the various Cabinet secretaries and the President, but the translation to regional and local action plans and budgets will be done by the regional development authorities (present RDCs on steroids so to speak). Again, the transformation of toothless RDCs into national partners in nation-building with real budgets and power is something that can be legally done by presidential executive order without need for legislation as the constitutional language is such that it is self-executing (unlike the anti- political dynasty provision).


What RDAs can manage
In short, it is proposed that the RDAs receive presidential authorization to manage, on its behalf the following functions: directly supervise BIR revenue districts in the region, strictly enforce people’s participation and “bottom-up” planning stated in the Local Government Code; enforce the E-commerce Law by having LGUs display in websites their budgets and expenses; directly supervise the PNP units in the region; ensure rationale regional and local land use and sustainable development plans; grant permits in the use of natural resources; and, directly supervise the regional line agency directors to ensure support for the LGU developments.


Imagine the Filipino potential that will be unleashed when regional line agency functions, talents and budgets are now programmed by the regional development actors and aligning these budgets with the budgets of the component LGUs. In fact, even congressional “pork barrel” can be programmed from regional budgets making their project choices better aligned with regional development and at the same time making them more accountable.


A typical regional development council has a membership 75 percent from the government, which includes elected officials like governors, mayors of chartered cities and regional line agencies like the DPWH, DoH, DA, DENR, etc., and 25 percent from the private sector, including NGOs and POs.


Note that the RDAs will be beyond the control and influence of any one or two existing political dynasts of component cities and provinces as they would be greatly outnumbered and none of the power handles (police, control over budgets) will be under their discretion. In fact, on the contrary, these local warlords will see their powers clipped dramatically, allowing more rational development initiatives to flourish at the sub-regional level.


Currently, something like 50 percent of the total government budget is spent by the regional offices of the line agencies but the spending is dictated by the national and not the component regional local governments. For our own sake, let’s rationalize that huge amount of money and democratize it and at the same time awaken the largely apathetic locals due to lack of power and money. This alone can dramatically change the direction and tone of political discourse nationally and in each of the 17 regions that make up our country.
Thursday, 14 September 2017 08:35

Doing business in a federal government

WILL it be easier, especially for the micro, small and medium (less than P100 million assets) enterprises to do business under a federal set-up? Since Federalism essentially means a smaller sovereign state (the region) within a larger sovereign state (the federal government) wouldn’t it make it harder for this economic sector, a sector that accounts for over 60 percent of our employment and makes up 99.5 percent of total enterprises, to do business? (These figures are a dead giveaway that MSMEs suffer from low productivity and that economic opportunities are concentrated in a few regions and a few (.5 percent) of the total number of enterprises.


Last week, the Center for Philippine Futuristics Studies and Management, Inc. held a conference with this theme where the keynote address was given by retired Chief Justice Reynato S. Puno. Speakers from Germany and Canada gave excellent inputs on their respective countries’ experience with federalism and business operations. Both have robust MSME sectors.
For the Philippines, since I too am an entrepreneur within this category and a strong advocate for federalism to equalize development opportunities to spread benefits and reduce poverty where it is raging (areas further from Metro Manila), I certainly desire that doing business be made simpler. Because the reality now, under a unitary government set-up is, it is clearly disadvantageous to the MSMEs, particularly those that are in the regions further from Manila. Why?


The first thing to note is that because NCR, Calabarzon and Central Luzon regions, just three regions out of 17 (PRRD nixed Negros Island Region last month), captured almost one-half of total government expenditure in 2016 and having the remaining 14 regions share in the remaining 50 percent, it is but a certainty that MSMEs in those 14 regions will struggle. For government itself is an important market for this sector and having smaller regional budgets deprives them of a more vigorous market for products and services that they can offer. Well, even in the NCR and its two neighboring regions in the north and south, because of the overly large expenditures, it makes it also difficult for MSMEs to muscle in on the big boys who are obviously well-connected and have easy access to government officials and natural resources.
Federalism assures a much better distribution of government expenditures and that alone will encourage MSMEs in other regions to sprout up and meet new demand for goods and services.


But what about business permits? Wouldn’t it be more difficult since now you would have local, regional and national offices to register with? Mr. Julian H. Payne, the president of the Canadian Chamber of Commerce of the Philippines, said that in Canada a business registers with the appropriate set of government offices that is matched with its scope of operations. Meaning, if an enterprise will do business all over Canada, then it gets a federal registration and permits, while if it’s business is limited to one province (their term for a region) then the permits are only applied in that province.


If the Philippines had a federal government structure, then the bulk of the MSMEs would only need to register and be permitted mostly at the municipal and probably regional levels but not anymore at the national level. Even businesses that were only limited, say, to a barangay would only need to register and be permitted at that level. Can you imagine the explosion of new and creative enterprises when both expenditures are increased in faraway regions and it is much easier to register and get permits? Maybe this alone will be a big boost to stop our country’s shameful slide in its economic standing among comparable members of Asean where we are at the bottom of similar countries that did not have a wrenching war and its impacts to overcome. Not only do we have a low per capita GDP but according to the ADB, in 2016 only Myanmar and Laos had slightly higher poverty rates than the Philippines. So, we have low GDP and on top of that, it’s concentrated, leaving behind mostly crumbs or trickles for the majority, thus high poverty rates.


In Canada as in the US, states can make up their own sales tax and other income tax rates and a federal Philippines would be no different. A regional government, say, Region 8 which had a poverty rate of 37 percent in 2014, could determine a more attractive mix of taxes for the business sector and provide incentives for particular industries that make use of the local skills and resources in the area. They will be free to do that at the regional level which gives a sizable enough population (about 6 million people, or 1.2 million households) and combined with a heftier government budget will be an attractive enough market for regional and local enterprises to go after.


When surveyed, MSMEs in developed federal countries spend their energy dealing with the internal dynamics of the enterprises like labor productivity, R&D and innovation, making it more efficient and good enough to go global. Witness the great products from Thailand, etc. Here, because of a very centralized government, MSMEs report that most of their time is spent with external factors like business permits, corruption and taxes. Many transactions are handled by “facilitators and fixers” as red tape and delays can be legendary. This sucks away energy that could have been used to run a better MSME.
Yes, federalism bodes well for the MSME sector. Much more than our present unitary system where the data on their economic performance is very disappointing. Since we encourage our returning OFWs to venture into this sector, we must prepare for the ground to be more fertile that what it presently is.


A co-convenor of Subsidiarity Movement International, and Federalist Forum of the Philippines, the advocates for the bottom-up development model as well as proper decentralization; and the strengthening of regional governance. He served for 12 years in the Regional Development Council of Central Luzon as chair of the economic committee. He is a member of the board of advisors of CDPI.
SECTORIST policies dominate Philippine politics and overflows to the economy and then impacts the way majority of Filipinos experience life in these islands. It is laudable that the goal of the Duterte administration is a “comfortable life” for every Filipino but alas, while the goal is good, the means (reliance solely on sector dominance) will not be the right vehicle. It has already been proven to be the wrong vehicle. In fact, the sectorist bus will lead the Duterte administration off the cliff, pretty much the way the Aquino 2, Arroyo, Erap, and Ramos sectorist buses led the Philippines off the cliff.

The cliff I define to be the bare minimum to say “yes, the Philippines has an economy that allows one to choose to stay here to work, earn a dignified living (even if simple), allows school attendance up to vocational or college, and can tell any foreign country (even those who lend us money) not to dare point any missile at any part of our territory or at least have a modicum of defense capability.

From the above, we have fallen off the cliff for most periods of our history except maybe very briefly after World War 2, in the mid-1940s to early 1960s, when massive hardwood and other natural resource extraction was undertaken by the elite of those years (about less than 100 Filipino families) and a nascent industrialization was attempted. Then we were way ahead of China.

Even that effort was not sustainable beyond the 1970s partly leading to Martial Law and after the first oil crisis of that era, with the nation’s back against the wall, the OFW segment was developed as a safety valve.

Ever since, the Philippines has undergone several boom-bust cycles and only recently has been able, with sound macro policies in place after the Asian crisis of 1997, to become a relatively well-performing economy. “Well-performing” as far as sectorist metrics are concerned like gross domestic product, BoP, foreign reserves, etc. but we know that these masks the true state of the average Juan. Certainly, the minimum wage can barely give a dignified life and cannot make those who earn such levels go beyond consuming sachets of their necessities.

What we have seen during the recent Arroyo and Aquino years, and what we are apparently going to see with the Duterte administration, and I sincerely hope I am wrong, is more of the same “jobless and trickle-less GDP growth” even if it grows at 8 percent per year, because of the sheer number of new entrants of young Filipinos into the labor market. Low-quality informal job generation is the norm.

Why is this so? After only 12 months, the Duterte policy initiatives have resulted in policies that benefit sectors (mining, energy, etc.) at the expense of local areas (sectorism). Measuring progress by GDP growth primarily rather than household networth growth is the core of sectorism. The opposite is areaism.

Policy initiatives that would strengthen families and their surrounding local environment, or areaism, that emanate from some other quieter secretaries are withering in the vine. Land conversion suspensions, irresponsible mine closures, genuine ending of endo schemes, climate change mitigation and adaptation, effective and new anti-poverty programs are not nearly getting the attention of government initiatives like “Build! Build! Build!” and more coal plants and policies that make urban development a playground for the top five property developers.

Yes, there are crumbs that are being dispensed, like the guidance for MSEs through the Go Negosyo initiative, the continuation of the 4Ps (likely to end by 2019), but these are not logically leading to a new development paradigm based on areaism policies.

Areaism would see local communities defining their needs for urban development, infrastructure, economic programs and a balanced environment and having the sectors respond to those needs instead of dictating on local areas. Thus, for example, instead of property development oriented towards enclaves with exclusive access and facilities, whole urban blocks would have mini-parks, safe pedestrian walkways and bike lanes, lots of trees and walkable neighborhoods that encourage interaction between all sectors of society instead of stratified bonding only within certain classes.

Areaism, for example, would see the DENR’s reforestation program seriously implemented by upland households who would have secure tenurial rights and are part of a bigger agro-forestry system that produces badly needed wood products like lumber, among other forest products that we currently import. We have over 10 million hectares of forestlands and yet we are now importers of lumber and timber products. This is even after the fact that DENR spent over P35 billion in sectorist fashion by spending these refo funds (since mid-1990s)with ineffective PO and NGO contracts involving foreign species with little value that barely serve the local market instead of empowering communities to regrow original rainforests. Thus, the local market still thrives on illegal logging and imported timber and upland families are still poor.

Federalism was supposed to lead us towards areaist policies, with regional or state governments (enlarged LGUs) being the ones to craft development programs for the constituent communities and put a damper on sectorism. Alas, sector dominance lives (again) and very likely will lead to a deadend again.
Friday, 28 July 2017 09:38

Mining sector vs area dev policies

PRESIDENT Duterte, at the start of his off-the-cuff remarks in his 2017 State of the Nation Address last Monday, said that the lengthy feature of ABS-CBN’s Ted Failon on the damage wrought by mining on natural ecosystems that poor families depend on for their food and life, moved him so much that he threatened the mining industry with being “taxed to death” if they did not restore the damage.

In my two previous columns here, I have been pushing the point that “sectorism” (defined as dominant public policies that primarily empower a sector at the expense of areas), introduced together with colonialism in the 16th century (496 years ago) continues to drive the whole economy and defines how average Filipinos experience living in these islands. It certainly provides little comfort for the majority.

President Duterte closed his SONA by saying, ““Believe me, it is easier to build from scratch than to dismantle the rotten and rebuild upon its rubble. Let us work together and lay a new foundation in which a better Philippines can be reconstructed. Help me build a better tomorrow.”.

This statement could not be any more true than for our mining sector, which largely, against our very constitutional mandate to protect Philippine territory—whose subsoil with a mere 1 percent mineral content miners ship out to China and Japan in volumes of over 40 million metric tons a year—needs to be dismantled and totally rebuilt upon. Rebuilt specifically along the lines of Areaism, or area development policies.

DU30 being fed wrong info

All the mining policies being implemented now allows them, aided and abetted by a compliant MGB unit of the Department of Environment and Natural Resources (DENR), to provide the substance of the Failon mining impact feature that made a big impression on the President. And it is an ugly presentation of photo and video documentation of brutalized local areas. But imagine if we recoil at the images, imagine what it is like to actually be from those areas and facing the full brunt of living dangerously with orange toxic floodwaters.

Under previous administrations, large mining companies enjoyed unhampered permission to violate environmental laws and were caught off guard only when Duterte appointed Gina Lopez environment secretary, and who made the effort to fly over and visit mine sites to assess for herself. This resulted in closures and suspension orders that, to this day, about five months later, are still “being reviewed” by Malacañang. Thus, the environmental impacts are being felt, especially in Surigao Sur and Norte, Dinagat and Agusan Norte, to this day without let-up.

It is obvious that the President is being fedtwisted mining information by the sectorists (those who espouse sectorism, or the power of sectors over areas) led by Finance Secretary Sonny Dominguez; like when Duterte started his remarks on mining by saying in so many words “because of the threat of a mandamus that can be filed by the miners we have no choice but to allow them to continue but they must repair the damage or I will tax them to death”. The President also said he wants minerals to stay in the country for further processing to aid in our industrialization. Well and good, and yes, these are good “areaism” statements. However, areaists like me cannot be misled by what is really happening. Sectorism will continue to prevail as there was zero articulation of controlling sectorists in mining and placing them under areaism policies.

There were some misleading sectorist statements of the President, such as when he said that mining contributes P70 billion annually to the treasury when in truth that is the total sales of the whole industry. Its financial contribution to government coffers is a measly P15 billion as of a few years back. Also, when Duterte said we have respect mining contracts because of a possible “mandamus” against the government, which isn’t really true because of the well-documented gross environmental law violations by miners. Further, the old-hat promise of “minerals needed for industrialization” which was also used as a gimmick when the Mining Act was being pushed, will not likely happen given the lack of interest from miners who can make humongous amounts of dollar profits with minimal, I mean really minimal, effort and risk (putting soil on ships seems to have zero risk). Why put up mineral processing?

Areaist reforms in mining

What are mining area-based reforms that are badly needed? Areaism policies are those that enhance an Area’s resident households and ecosystems net worth over time while providing a dignified standard of living (good education, cultural development, increasing social capital).

For one, extracting subsoil (up to 20 meters deep) for shipment abroad by clearing all-important trees at the top of watersheds, and under-providing siltation capture ponds that means certain death for the ridge-to-reef interacting ecosystems that provide the platform for farmers, fishers and all of the local ancillary services to make it happen, must stop. This violates current forestry laws and the Clean Water Act and marine protection laws and is simply not allowed but is allowed to continue by the non (or really delayed) action on former Environment Secretary Gina Lopez’s orders which have all been appealed by miners to the Office of the President. He has probably been misled, even if he is a lawyer, that he cannot touch or close them because they are compliant with just one law: the Mining Act of 1995. That may be true but that Act also says that all environmental laws and the Constitution must be followed as well. So, areaism would implement all environmental laws strictly just like what Secretary Lopez did as she is a genuine Areaist.

Another areaist mining policy would be to ensure that local value-added is sustainable and maximized from the minerals while still providing profits to risk capital to develop the mine site. Households from the area must directly benefit not just from income flows but from improving assets, natural, human, and manufactured, to assure future generations of the area that they were not simply robbed by sectorists.

In sum, the President’s SONA was disappointing from an area policy perspective and is another indication that this at-first-hopefully areaist President has been captured by the sectorists. Too bad as President Duterte himself said that it is easier to build from scratch a new way, but I heard no boldness coming from him at all in this compartment of the Philippines. Again, only a genuine areaist political party that takes over the government has any chance now to rebuild this country, area by area, with areaist policies.
Thursday, 20 July 2017 13:21

Area vs sector policies

IN my previous column, I posited the need to redefine the political spectrum from “left-right” to “area-sector” wherein Area represents the direct interests of local communities and their geography/territory or area, including its physical environment, and Sector represents the specific interests of specific institutions, mostly corporations and enterprises represented by their owners.

Since Area is “community + environment” and Sector is essentially “capital invested in a specific corporation or enterprise,” we can take any economic sector and determine which politics, Area or Sector, is dominant. Dominance is a political expression which ideally would have been articulated as a political platform understood by voters and then executed upon its assumption of political power or governance. But because the political spectrum is still cast in the old “left-right” narrative and the unitary (centralized) structure of the colonial Philippines has been retained in its independence, what we get is a mishmash of policies (mixed left-right as well as mixed area-sector) but with an overall slant towards Sectorism to the detriment of Areaism. The sad part though is that the unitary structure amplifies the weakness of Areaism in the country and necessarily strengthens the Sectorism no matter what political propaganda was used to win the election (thus the need for federalism).

Over the next columns, let us take a cursory look at the important sectors of the Philippine economy and see which politics, Area or Sector, is dominant. Let us start with the energy sector:

Energy policy

Energy is big business in that it requires humongous capital to put up, say, a 600MW plant (billions of pesos). Recently, President Duterte signed EO 30 on June 28, 2017, vouched for by the power oligarchs and Energy SecretaryAlfonso Cusi (the sector leader) who used to work for some of them so that new power plants can set up without any delays from the local and national bureaucracies. The EO will reduce permit-getting time from three years to just 30 days for projects of national significance.

Ostensibly, this long period was specifically mandated by law (can an EO change a law?) so that social and environmental impacts (minor concessions to areaism) could be determined and vetted and even mitigated prior to the operation of the plant. With big money for big projects comes a budget to grease the process along, from the barangay all the way to DENR and to Malacañang, if needed. What a fantastic bonanza this EO will be to the power oligarchs and to the further concentration of Sectorism in the country in the energy sector. The proponents no longer need to go through what was just a little accommodation to “arearism”. Sectorism in the power sector just got more powerful. Will this EO primarily serve the interest of the owners of the powerplants or the communities that purchase its output?

Time and time again it has been shown that the Filipino has been very ill-served by energy oligarchs as shown by the excessive prices paid for this energy and the many environmental and health issues posed to local communities. The only positive thing (for the few) are the humongous profits (higher GDP) ensnared from the tiny pockets of the majority and concentrated with the few owners. Just three family/corporate groups control about 70 percent of all energy generation in the country. Furthermore, these power corporations (many previously were state enterprises, now privatized) and systems leave many peripheral areas with the lousiest of services.

Yet, how would “areaism” energy policies be effected by a government that espoused Area politics? If Areas had even just half the political power of the power oligarchs you would see a better balance between new renewables and climate-changing fossil fuels like coal. Through their controlled media, bureaucrats and politicians, mostly fossil fuel sources are being fast-tracked and helped by this new EO 30 while lip service is paid to renewables. Considering that renewables like solar and wind and biomass sources are safe and non-pollutive, why are new projects given such a difficult time by the law, by the Department of Energy, even by the Supreme Court in certain recent rulings?

Therefore, in a clean slate, government policies would be reformed to dramatically increase renewables to easily make up even up to 75 percent of our power generation, most of which can be produced at the local level for local consumption.

Roof-installed solar panels installed under an incentive program with built-in, government-supported financing could easily generate massive amounts of megawatts of power that can reduce the need for very pollutive coal-fired power plants from existing rooftops of warehouses, factories, malls, schools, community centers like basketball courts etc. DOST and DTI policies would support this thrust by encouraging local manufacture of solar panels, ancillary technologies like power storage (batteries) and attracting and facilitating small and medium investments in this field.

For every hectare of surface area (mined-out land or warehouse rooftops) 1MW of power can be capacitated. This power currently can be generated at a profit when sold for about P5/kwh. With batteries, the cost goes up to about P8. However, there are new technologies in power storage (liquid salt) that may result in even lower costs than this. Already, this is better than diesel and suitable coal (low mercury and sulphur that cause acid rain and agricultural land degradation) but the whole ecosystem of coal power plants (continuous buying and burning of coal, shipping, trade finance, etc.) and the dominance of Sectorism in the energy sector means that we will not have pro-renewable policies even if that were a major benefit to all Filipinos.

What does this say about the Duterte administration? The politician who came in the name of fixing a previously bad area (Davao City) and turned it into a vibrant city-area and who espoused federalism to align the government structure with the basics of Areaism made this columnist feel that Areaism had a chance.

Alas, just one year into his term (and just like what happened to all previous Philippine Presidents) the Duterte administration, as shown in the energy sector, has been re-captured by the Sectorism policies that fail the ordinary Juan in the street. See, they can’t even restore power after major areas were simply hit by an earthquake in the Visayas a week ago. Why do we rely on massive national grids when we are an archipelago that can generate massive amounts of energy locally from biomass and solar? Decentralized and locally owned systems can respond much better in the future where disasters are becoming more common. But that would only happen when a political party founded on Areaism takes power. For now, we can only weep and bemoan the capture of the energy policies by Sectorists from a posturing Areaist President.
POLITICAL actors have traditionally been classified as “left-leaning or right-wing” and at times “centrist” based on their positions on major governance issues such as: role and size of government, welfare policies, production and delivery of public goods, stance towards the private sector and human rights, among other governance issues.

Since the re-start of the Philippines’ life as an independent nation in 1946, we might say that there wasn’t much difference with the two main parties formed, the Nacionalista and Liberal parties, in terms of where they stood in the spectrum. And more telling, the Filipino on the street probably couldn’t tell the difference no matter which political party or mix thereof governed the country.

The Communist Party of the Philippines, while not participating in elections, has long held out a political vision that would be at the other end (leftism) of the spectrum but seeks to govern by victory from a “protracted revolution” to become the governors of the Philippines.

Left-right no polar opposites

The left-right political spectrum is aligned with the idea that communism and capitalism are polar opposites where communism represents the left and capitalism the right. But if we take it from the experience of the common citizen, it might seem that both communism and capitalism, the so-called opposite ends of the spectrum of left and right politics, are actually quite similar in many aspects.

First, both political models are deeply rooted in the idea that society needs powerful, even non-democratic, institutions to create a state that can serve the interests of its citizens. Capitalism uses the non-democratic private corporation as the dominant force to mobilize the state’s resources to create an economy and a certain kind of society with built-in inequalities. Communism also uses non-democratic political institutions and non-democratic state enterprises to do the same thing.

While the means might be different (state planning and allocation of capital vs. private allocation of capital based on “market” prices), in many situations the result is the same: monopoly/oligopoly power, elitism, large gap between the haves and the have nots, information manipulation and a kind of contempt for the ordinary citizen (that their interests are not the same as the interests of the rulers necessarily and theirs can go hang).

Second, both communism and capitalism have little regard for natural and social capital putting these secondary to the need to strengthen the basic institutions like their corporations and the state enterprises. This disregard is formalized in the economic sector through the reliance of the use of the gross domestic product (GDP) growth as a proxy for the performance of the whole state and only secondarily with the resulting welfare of the people and the environment. Since GDP is calculated primarily from the income accounts of the corporations and the state enterprises, it is but natural that both political visions will adopt priority policies to grow GDP. And the primary question now is “how to empower corporations and state enterprises to have more value-added or income in the ensuing year”.

If this increased corporate and enterprise income should come in the form of ripping up nature and marginalizing communities wholesale (logging and mining), then so be it as anyway these things are not counted in coming up with the GDP figures, but certainly the corporate and enterprise profits will be.

Thus, there is a need to articulate a different political spectrum in a way that truly represents polar opposites of each other (and where “centrist” then gets redefined too).

Bottom-up vs trickle-down

In my view, the better definition of a more relevant political spectrum is “bottom-up” versus “trickle-down”. It is vertical rather than the left-right horizontal spectrum. I submit that both capitalism and communism are at the same end of the spectrum: both are trickle-down due to their use of the GDP growth measurement and acknowledgment of corporate/enterprise accounts as primary and community and environment as secondary.

The new political spectrum would pit proponents of policies geared towards either “area development” or its opposite, “sectoral development”. Area development measures the success of the state in making the households generate more and more networth and at the same time the natural capital in the area to be used is as well conserved for future generations without significant degradation. More importantly, area development looks at the growth of the “stock” rather than just the “flows” as sector development does.

To explain this more clearly, if your household has say five citizens in it and is located in a beautiful, nature-endowed village, would the household be counting its progress simply by the amount of income it generated for the year without accounting for the impact on the “stock” or assets of the household in creating that income? If the answer is yes, then sectoral development with its focus on income flows is the dominant political paradigm. If the answer is no, that it matters that the stocks have been degraded, then the political paradigm is aligned with that of area development.

You see, the income (sector dev) could have come from drawing down on the “stock” of the household. Sector dev policies would encourage the conversion of the household’s assets into income flows by, say, removing and selling the trees in the garden, scrapping the top and subsoil and sending it to China as “mineral ore,” selling the work animals, sending the wife abroad to work as an OFW, etc. These would all result in higher family GDP without acknowledging the basic unsustainability of these flows once all the assets or stocks are degraded to the point of dysfunction.

As the world of today only knows of sector development, it is no wonder that there is a great political imbalance (only sectorism) and an illusion of democracy when in fact the people around the world, but most especially here, are being fed only one end of the political spectrum resulting in great social and environmental distress.

It is time to recognize the “bottom-up (area) versus trickle-down (sector)” as the more relevant definition of the political spectrum to have a much clearer democratic choice and better policies that save humanity and planet earth from the madness that only comes with reliance on the singular sectoral development paradigm.

Politics based on area development will result in totally different policies from that of sectoral development and this is why it is important to shift our understanding and appreciation of the political spectrum. With this understanding will come a clearer appreciation of the need for relevant political parties that align themselves along the real political spectrum.
Thursday, 27 April 2017 09:44

Love as foundation for an economy

ENVIRONMENT Secretary Gina Lopez believes that “we must build an economy based on love” and this belief is central to much of her vision of genuine development. This vision in turn informs her policy and position towards certain economic sectors like mining, forestry and energy. Certainly, one can understand how today’s “economists” could cringe upon hearing statements like this as our modern economies are largely based on money and politics where, as Bob Dylan, Nobel Laureate for Literature, sang, “love don’t have any place”.

Very true, considering that in an economy exchanges of goods and services between people are facilitated by money, meaning to say two people who do not know each other (and therefore cannot love each other) are able to exchange goods and services because there is money to facilitate the exchange even without love. Likely, the less love, the more money and more money velocity as the transaction is viewed purely on its own, on its utility to both parties and certainly, unless the parties knew and cared for each other, “love wouldn’t have any place” in the transaction.

So, how then can love become the foundation of the economy? I would say that in a fundamental way, it already is. First, all production and consumption starts from human need. And the smallest unit from which production and consumption starts in a society are the households. And logically, what starts most households are marriages that started from love. The children are normally loved and nurtured, to the point of parental sacrifice, for their own sake and not for money.

Now most households are founded not as a means of accumulating money and property (except for arranged marriages arranged for that very purpose and we know that many of these don’t last very long) but as the fulfillment of a deep love between two individuals who can procreate and form a living, growing household (although households now can be same-sex with adopted children, etc.). Therefore, in the most basic socio-economic unit, love plays the most important role.

Where the formal economy as we know it originates from is the concept of sectoral enterprises that take “land, capital and labor” and organize them for productive purposes so that households and other enterprises (and government) can consume for the totality of their needs for themselves and their household members. These units of organization, the sectoral enterprises, unlike the households, focus entirely on getting the largest sustainable return for the risk capital deployed. And for that to happen you can imagine that love would get in the way of that goal. Even corporate social responsibility projects (CSR) have little to do with love but rather have to do with corporate brand imaging development.

If one looks at the deepest impulses of sectoral enterprises versus households, one quickly realizes that the former depends on extraction, or taking, while the latter, the household impulses, are based on nurturance. And since households are rooted in specific areas or places, and have the impulse of nurturing, the village of households relying on the healthy functioning of ecosystems, in turn, take to nurturing and long-term economic management of their local environment. Natural villages of communities have been proven to be the best managers of their surrounding environment as compared to enterprises or government. This was proven by Elinor Ostrom, the 2009 Nobel Laureate for Economics.

“Elinor Ostrom, a political scientist at Indiana University, received the Nobel Prize for her research proving the importance of the commons around the world. Her work investigating how communities co-operate to share resources drives to the heart of debates today about resource use, the public sphere and the future of the planet. She is the first woman to be awarded the Nobel in Economics.” (

Ostrom’s achievement effectively answers popular theories about the “tragedy of the commons,” which has been interpreted to mean that private property is the only means of protecting finite resources from ruin or depletion. She has documented in many places around the world how communities devise ways to govern the commons to assure its survival for their needs and future generations.

A classic example of this was her field research in a Swiss village where farmers tend private plots for crops but share a communal meadow to graze their cows. While this would appear a perfect model to prove the tragedy-of-the-commons theory, Ostrom discovered that in reality there were no problems with overgrazing. That is because of a common agreement among villagers that one is allowed to graze more cows on the meadow than they can care for over the winter—a rule that dates back to 1517. Ostrom has documented similar effective examples of “governing the commons” in her research in Kenya, Guatemala, Nepal, Turkey, and Los Angeles.

Based on her extensive work, Ostrom offers eight principles for how commons can be governed sustainably and equitably in a community.

The eight principles are anchored on principles of concern and nurturance, or love, which in turn results in long-term optimized use of natural resources that then becomes the foundation of the local economy.

The English word “economics” is from the Greek word “oikonomos” which meant the “management of the household”. And the Chinese knew that if the household was secure, progressive, healthy and productive, then the village would be just fine, and if the villages were doing well, then the town would do well, and if the towns were all doing well then the province and regions and the whole country would be doing fabulous. The global order would be peaceful and progressive when countries are peaceful and progressive with one not trying to over-extract from another to the point of hurting the other.

What can we make of the unraveling of the global economic order created after World War II and has resulted in unbearable inequality and negation of whole peoples that we are now gripped by the hate of terrorism and failed politics? Indeed, to me it means we need to put love back as the foundation of the economy and future columns will look at how that might happen.
Wednesday, 04 January 2017 23:48

Area development, subsidiarity and federalism

TIMES of crisis are windows for great opportunity. That is an old Chinese saying. But in these troubling times (for many), what opportunities indeed lie ahead? There are quite a few and the promising thing is they seem to be opportunities that would open up given current trajectories or the way things are unfolding. Indeed, 2017 may be the year that developmental change finally proceeds.

The world is shifting away from the international policies of recent decades that, while they have created well-being for unprecedented billions of people, have likewise resulted in great tensions. Not just tensions between peoples but tensions between people and their environment and even tensions inside people due to an identity overly linked to consumerism rather than their inherent truths; consumerism that threatens the very sustainability of Mother Earth.

One such opportunity is the re-emergence within government of the area development paradigm or development framework under Environment and Natural Resources Secretary Gina Lopez. While Sixto K. Roxas was its initial advocate in the late 1960s it had unfortunately been bastardized in several big government projects that went puff! (just as the autonomous regional experience is going puff!) due to wrongful implementation, which in turn was due to a misunderstanding of what area, development is basically about.

With Secretary Gina at the helm of a major government department that has a direct and meaningful role in national development, the area development paradigm is set to take off and this time under the leadership of a capable and knowledgeable environment and natural resources secretary. For one, Secretary Gina has been a practitioner of area development approaching the various undertakings of the ABS-CBN Foundation in Palawan and other provinces wherein the local people were the implementers and the beneficiaries of the eco-tourism projects that simply highlighted the potential of their area (thus the term area development).

Secretary Gina knows that with the Philippines’ archipelagic territory, the mountain ridge ecosystem connects by streams, creeks, rivers to the various other ecosystems until the final one (within our territory), the coral reef ecosystem, the totality of which was once teeming with life. “Life in all its fullness” was certainly what the Philippines was (before the times of colonization and industrialization. But alas, development was under the unitary and sectoral paradigm).

Area development deepens this understanding of the fragile but critical relationships between and among interconnected ecosystems and working with the local people applies the principle of subsidiarity which states that functions and decision-making should be undertaken at the lowest possible hierarchical level and the role of the higher organizational level is to support those lower units undertaking the functions.

As Secretary Gina says, “area development is about nurturing and helping the local people nurture their local areas to unleash [their]productive potential”. This means making development based on the potentialities of the area. This is the better opposite to what has been going on since the Philippines became a country under colonial masters where the desires of the corporations were simply imposed on local areas that suited their businesses. And since business was all that mattered, they generally left the place worse off and, in many instances killing off the ecosystem that the locals could have relied on for sustenance. The zenith of this “devil may care” attitude seems to be the guiding principle of many large mines that decimate the geological and hydrological functions of the ecosystem leaving the locals in perpetual risk and scamming the Filipino people by leaving behind a permanent pit hole of humongous dimensions. It wouldn’t be surprising if the economic tab left behind by derelict mines long abandoned by mining companies that have been in turn abandoned by their shareholders are simply dumped on you and me, the taxpayers. Secretary Gina calls this “madness”.

Under the principle of subsidiarity, it is government’s role to assist local people co-create local sustainable economies based on the perpetual beneficial use of the local ecosystem bounties for even distant future generations. Thus, the shift towards federalism is timely in that area development and subsidiarity are wholly compatible with federalism. In fact, they are necessary complements to genuine federalism. Where unitarism (our present centralized system) brought us corporate-led sectoral and highly inequitable development, federalism should usher in community-based, ecosystem-sensitive area development that gives everyone who wants a chance to participate in the local economy that opportunity.

Thus, the Department of Environment and Natural Resources (DENR) is leading the way by selecting 29 priority areas to demonstrate area development and is enlisting the help of the Sixto K. Roxas Foundation that targets poverty eradication by creating the template of an expanded local social accounting matrix of the value-adding power of the local sectors and how incomes are distributed (or not distributed locally but remitted out of the local area). Secretary Gina wants all programs of the DENR like the National Greening Program, Bamboo Program, Biochar Program, Mangrove Rehabilitation Programs, and Mining Programs to be re-crafted along the principles of area development with its concrete manifestation of viable community enterprises that are networked to build up to scale and demonstrate the opposite of “trickle-down” (pinatulo) towards the alternative of “nurturing upwards,” or pinatubo.

President Duterte seems to be instinctively aware that the ideological lines are not anymore between the “left vs. the right,” the old Cold War mentality of these old ideologies (that ironically are united in their pinatulo paradigm as both ideologies rely on trickle-down sectors to benefit the locals) but between the primacy of nurturing people and ecosystems versus sectoral corporations (that have grown so large, moneyed and powerful), or in other words “pinatulo” vs. “pinatubo”. Thus, the push for federalism as a government organizational set-up where now, finally, area development can be its favored bride guided by the vow of subsidiarity.

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The author, a co-convenor of the Subsidiarity Movement International and the Federalist Forum of the Philippines, advocates for the bottom-up development model as well as proper decentralization, and the strengthening of regional governance. He served for 12 years in the Regional Development Council of Central Luzon as chair of the economic committee. He was a consultant for the Philippine Alternative Fuels Corp. (PAFC) and was on the board of trustees of the HARIBON Foundation. He is currently a member of the board of advisors of CDPI.

How to explain the stunning victory of the Donald as President of the US of A, and of Brexit and even our very own PRRD victories? Some analysts and even President Obama picture it as the “populist backlash” against globalization, its super elites and governing institutions that seems to be run by paid hacks of corporations. In other words, a stiff reaction of voters against the great inequality — between the 1% who have and the 99% who can only trying to get by — produced by rapid globalization in the past 40 to 50 years.

As the Philippines transits to a Federal State (hopefully by a Constitutional Convention) it will become important to start thinking of government assets and facilities in terms of their being Federal or Regional in character. While some government assets and facilities are clearly National like the NAIA airport or military camps, others, like the Clark Development Corporation (CDC) OR SBMA are clearly only Regional in character, meaning the impact of operations hardly goes beyond the region.
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