PH economic competitiveness, the Ateneo Eagle Watch briefing

Yesterday, I attended the Ateneo Eagle Watch briefing, held at the Ateneo Rockwell campus in Makati. The three speakers were Dr. Joseph Lim, "The State of the Economy: What were said and not said in the SONA"; Dr. Alvin Ang, "Economic Forecasts: 2015 Updates and Outlook", and Maritess Danguilan-Vitug of Rappler, "Scenarios for 2016." Dr. Lim and Alvin are professors at the Ateneo Economics Department, both are my friends too.

Among the slides presented by Dr. Lim.

He borrowed some of the presentations made at ADB just two days earlier, during its IPAG meeting. From the above table, a summary of PH situation in the WEF's Global Competitiveness Index (GCI) annual reports.

 In terms of economic resilience -- from world fiscal and financial shocks. Slide he borrowed from BSP Deputy Governor Diwa Guinigundo.

Dr. Lim argued that while PH poverty incidence has been declining, in 2014 it rose. This was not mentioned by the President in his last State of the Nation Address (SONA).

This is from Alvin's presentation. Beautiful charts.  EU and Japan growth are wobbly and sometimes bordering on recession; US barely growing, but our OFW remittances still rising (though not as fast as before). Growth in the rest of Asia, Middle East keep the high demand for Filipino labor.

The business process outsourcing (BPO) rally maintains. As Europe, US, Canada, etc. become more bureaucratic in their labor policies, their cost of labor keeps rising, investors there will demand more Filipino labor in Philippine soil.

The US seems able to sustain a 2 percent average growth. The huge dip in 2008-2009 economic contraction is very visible.

Summary of the Ateneo Econ's forecast for the rest of 2015. These are realistic numbers, Alvin, good. At 1-1.5% annual interest rate of government borrowings (Treasury-bill rates), these are low, compared to the previous 7-10% a decade or so ago. Many people are still angry at these figures, they just complain and complain.

Dr. Lim was left-leaning before while he was still teaching at UP. Until now somehow :-). So during the open forum, I commented and argued that more than "good governance", perhaps we should be asking for "less governance" because as some of his slides showed, growth was faster in sectors and sub-sectors where there are no huge departments overseeing, like the ICT, whereas in agri where we have DA, DAR, NFA, etc., growth was slower. And even socialist Vietnam is cutting personal income tax to around 20 percent next year, PH remains to have the highest personal  income tax at 32%. Vietnam also abolished restrictions to foreign investments, up to 100% foreign ownership is allowed, except in a few sectors like banking. 

He replied that me being a UPSE alumni, goes with the sentiment of many faculty members there of advocating the less government philosophy which is dangerous. Do I want no government irrigation projects, farm subsidies, etc.? The case of Japan, S. Korea industrialization were government-led.

Limited time for Q&A as usual, I did not make a follow up comment on the floor as there were other hands raised to ask questions, make comments. Of course I do not advocate zero governance.sic subsidies like agri infra (rural roads, irrigation, electrification, etc.) should continue but NFA subsidies (buy high and sell low, rice trade protectionism, etc.), endless, no time table forced land redistribution and DAR itself should discontinue.

Growth is a necessary but not sufficient condition for poverty alleviation. Despite what other people who  only complain and  complain, we should aspire for faster growth. And more investments, local and foreign. It leads to more job creation, more poverty alleviation.

Thanks again to Dean Nandy Aldaba for the invite to that great forum.

------------

See also: 
Market Failure vs. Government Failure, Part 5, June 16, 2015 
Investment liberalization, trends and lessons, July 26, 2015 
BWorld 13, SONA's liberalism, five years after, July 28, 2015

Pilipinas Forum 23: On Debt Repudiation

As of end-September 2011, total debt of the national government was P4.87 trillion. This is P206 billion (or 4.4 percent) larger than its year ago level. See the Bureau of Treasury (BTr) Press Release last December 09.

As of October 2011, there were 38.5 million employed Filipinos. This means that each employed Filipino, young and old, fully- or under-employed, is indebted by P126,515.00. And it's not even personal or household debt. It is government debt, to be passed on to each taxpayer in this country. That's how great, sensitive and welfarist the government is.

And there's more debt: contingent debt, mainly guarantees by the national government which can become part of the outstanding debt stock if the guarantee recipient (a government corporation or financial institution, etc.) cannot pay its debt. This is P583 billion as of September 2011. And that's how great, sensitive and welfarist the government is.

More than seven years ago, we have a lively exchange of ideas on the question: Is repudiation of public debt a good option? That was in pilipinasforum@yahoogroups.com, an online discussion group which I formed and co-moderated since 1999. The voices of "repudiate the debt" are still with us until now, coming from different sources. So perhaps these exchanges will help clarify the issue.

This is more than 20 pages long, so get your most liked snacks. Special thanks to Dr. Butch Arroyo, my batchmate from UP School of Economics in 1984, for his elaborate discussion of the subject. Butch is an Economics Professor at the Johns Hopkins Univ. in Washington, DC.
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On Debt Repudiation
March 2004

About debt repudiation, I am attaching below Butch Arroyo's posting in PF about the subject. He posted this in reaction to a privilege speech given by Sanlakas party-list Cong. JV Bautista, arguing for "selective debt repudiation".

Twitter Notes, July 2011 (d)

Below are my twitter notes from July 15-25, 2011. My tweets related to the Reproductive Health (RH) bill on that period are not included here, I will make a separate discussion paper about them.
-----------

@philoquotes "Fury itself supplies arms ~ Virgil" True. Anger may not need arms. Brute force and irrational mind are enough to cause damage

philo_quotes Philosophers quotes by Noysky
Peace is not an absence of war,it is a virtue,a state of mind,a disposition for benevolence,confidence,justice ~ Spinozahttp://bit.ly/philq

TehminaZaman Tehmina Zaman by Noysky
If you don't like something change it; if you can't change it, change the way you think about it. ~Mary Engelbreit

@philoquotes "Silence is a true friend who never betrays ~ Confucius" True. In many cases, silence is golden, and motor mouth is hell.

AncientProverbs Motivational Quotes by Noysky
I ask not for a lighter burden, but for broader shoulders. -Jewish proverb

@GreatestQuotes "What keeps me going is goals - Mahummad Ali". Cool. Forward looking always. Look behind, sides, watch danger, move forward.

@philo_quotes "Each of us bears his own Hell ~ Virgil" True. But each of us can also decide when to shrink or dispose such hell.

"The greatest wealth is to live content with little. ~ Plato". True. Live within our means. Almost all govts live byond their means, hi debt

Zen_Moments Zen Moments by Noysky
The rigid and inflexible will surely fail, while the soft and flowing will prevail. ~ Lao Tzu http://dld.bz/uAv5

@dost_pagasa Since you didnt reply to my question why temp data not available in ur website, I wrote an article about u, bit.ly/o7MwZD

@ruffybiazon Shd govts keep a zoo? Why not leave that to priv firms? Those firms pay taxes anyway, some taxes to feed very poor, not animals

Montberte Steve Cushing by Noysky
capital punishment - 1 income tax 2 what your congressman does to you after he's elected

Zen_Moments Zen Moments by Noysky
Holding on to anger is like grasping a hot coal with the intent of throwing it at someone else; you are the one who gets burned. ~ Buddha

Montberte Steve Cushing by Noysky
cold war - the nightly battle between man and wife to secure and hold all the blankets

The US govt should NOT even entertain debt default as an option. It should shrink its size & spending instead, bit.ly/rufjKl

philo_quotes Philosophers quotes by Noysky
He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has. ~ Epictetus http://bit.ly/philq

@Montberte Include also d Pres. or PM, Senators, Governors, Mayors, non-elected bureaucrats. The raise taxes, mandatory fees, spending.

Most NGOs and acad research instns are corrupted by foreign aid money. They don't question big & intrusive govt, only "bad" governance.

@ruffybiazon Bigger challenge to both mil & civilian estab, is to respect d rule of law, not rule of men. Both are violators of rule of law

@maria_ressa the bigger d mil. & spying activities, the more attractive to hackers. Pentagon will learn to hire less soldiers, more IT spies

Zen_Moments Zen Moments by Noysky
Though a man go out to battle a thousand times against a thousand men, if he conquers himself he is the greater conqueror. ~ Dhammapada

GreatestQuotes Great Minds Quotes by Noysky
"The bad news is time flies. The good news is you're the pilot." - Michael Althsuler

Montberte Steve Cushing by Noysky
Even a fish can escape being caught, if it keeps it's mouth shut. #stevec

philo_quotes Philosophers quotes by Noysky
We do not know what we want and yet we are responsible for what we are - that is the fact. ~ Sartre http://bit.ly/philq

Quotes4Writers Quotes4Writers by Noysky
"Listening to both sides of a story will convince you that there is more to a story than both sides." Frank Tyger

Jimparedes Jim by Noysky
It's a beautiful day.. Why? because I said so. It's great to know you have power and to use it as it should be used.

@ruffybiazon @indayevarona If politicians can politicize educ, commod pricing, fare- and wage-setting, impossible not to politicize soldiers

philo_quotes Philosophers quotes by Noysky
If you are lonely when you're alone, you are in bad company. ~ Sartre http://bit.ly/philq

@ruffybiazon @mitosmagsaysay Military as a pol. instn. is politicized since its creation. Heavier politics since Martial Law in '72.


@TgGuingona "5% of STL proceeds goes to PNP" that may just be "legal" proceeds. If there are llegal proceeds (extortion), could be higher

@TgGuingona "May kakayahan ba COA o PNP na malaman (saan napunta pera)? COA, PNP: We do not know." So many screts, non-transparency in govt

@indayevarona Congress and PNP now "poor" instns that must receive charity fund from PCSO? So many hypocrisies in govt.

@TgGuingona PNP getting monday from annual appro, from PCSO, where else, PAGCOR, LGUs,..? is PNP a poor body that needs charity fund?

WhoIsMikeGordon Mike Gordon by Noysky
If you wish to grow thinner, diminish your dinner. H S Leigh

wansaiful Wan Saiful Wan Jan by Noysky
RT @IDEASMalaysia: We are the 18th best new think tank in the world. Come join us and help make a difference http://bit.ly/iz9O6R

GreatestQuotes Great Minds Quotes by Noysky
"When the grass looks greener on the other side of the fence, it may be that they take better care of it there." - Cecil Selig

philo_quotes Philosophers quotes by Noysky
Princes and governments are far more dangerous than other elements within society. ~ Machiavelli http://bit.ly/philq

@indayevarona Privatize PCSO. Wrong for govt to fool the public they can get rich in sweepstakes & gambling, & get more money from the poor.

@maria_ressa "From bin Laden to Facebook" Terrorism is too private, fb is too public. There is a big "jump" bet the two.

Quotes4Writers Quotes4Writers by Noysky
"When I quote others I do so in order to express my own ideas more clearly." Michel de Montaigne

IPNLondon IPN by Noysky
@ipnlondon competition rules amended - Writers can enter both #Bastiat and #Hoiles Prizes bit.ly/oNLIwl #journalist #tcot #tlot

Zen_Moments Zen Moments by Noysky
There's no reason to be the richest man in the cemetery. You can't do any business from there. ~ Colonel Sanders

@gpph Greenpeace & other warming racket groups refuse to see warming-cooling-warming-cooling cycles in the ocean,wattsupwiththat.com/reference-page…

Quotes4Writers Quotes4Writers by Noysky
My life has no purpose, no direction, no aim, no meaning, and yet I'm happy. I can't figure it out. What am I doing right? —Charles M Schulz

@marykissel Carbon cap & tax in Australia is good reminder that socialism has good entry point at environmentalism. Gillard will pay dearly

@GoYoLarrazabal Plenty of clouds, cool or even rains. Cloudless, hot. Weather or climate is mostly determined by the vol of clouds in d sky

bibekdebroy Bibek Debroy by Noysky
Pondering a question. Why are Ministers who become friends more approachable than friends who become Ministers?

acopatunru Aco Patunru by Noysky
One of the important propositions in trade is Rybczynski Theorem. Hard to spell, yes. But no one changed it for convenience's sake.

@acopatunru And the Heckscher-Ohlin theorem in trade, also hard to spell. Or did I misspell it too? :-)

@philo_quotes "All wealth is the product of labor ~ John Locke" True. Capital is accumulated surplus of labor w/c improves labor productiv

Oprah_World Oprah Quotes by Noysky
I don't believe in failure. It is not failure if you enjoyed the process. -Oprah

@mitosmagsaysay "Traffic is so bad", MMDA busy catching smokers, coding cars, removing sexy billboards, instead of buildg more interchanges.

@vamush @mitosmagsaysay If people expect free educ, healthcare, housing for all, they're asking for socialism. Govt will get all from us too

@charievilla @AJEnglish Debt crisis by Greece, Ireland, Portugal, Spain, US, UK, etc. Fiscal irresponsib will only lead to debt crisis soon.

@teddycasino @gmanews NEPA not an "economists group", Its a protectionist lobby & non-Econ academcs. PNoy is fr liberal, not socialist party

marykissel Mary Kissel by Noysky
Your taxpayer $ at work: U.N. considers creating climate-change peacekeeping force http://bit.ly/qnxlH9 | Guardian

Karen_DaviLa Karen Davila by Noysky
Over 300 govt agencies & LGUS have not remitted GSIS contributions of their employees. Caloocan Mayor Recom Echeverri not only one.

@Karen_DaviLa Ampatuan overnight at Heart Center, another instance of the rule of men, not rule of law. Courts r disobeyed in simple orders.

@marykissel US, EU, etc that finance big d UN, in deep public debt problems. And d UN wants more tax money for fictitious war on clim change

@Karen_DaviLa Go Harry. Give Ampatuans and lawyers more hell. Disobeying court order of "out-patient only" already ground for Court penalty.

@philoquotes "Freedom is what you do with what's been done to you ~ Sartre" Wrong. That is rule of men and vengeance, not rule of law.

NathanielMccabe Nathaniel Mccabe by Noysky
Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen. - Winston Churchill

@Jimparedes Politics & govt is the art of coercion & often, deception. So, many want socialism & authoritarianism, they can coerce anytime

@raissawriter But Bunye was rewarded with high paying Monetary Board member for shutting his mouth on Gloria-Garci scandal.

@philo_quotes "The greater the difficulty, the greater the glory - Cicero" True. High risk, high returns. Risktaking shd be properly rewardd

@Zen_Moments "Sometimes your only available transportation is a leap of faith ~ M. Shepherd" Cool & true. Faith guided by facts and reason.

@Rochbpu "I found there was only one way to look thin: hang out with fat people" But via osmosis, some fat molecules might move to you :-),

@GreatestQuotes "Anticipate the difficult by managing the easy - Lao Tsu" Cool. Managing d easy can give us insight how to deal w/ difficult

@kristin_09 I think Mla Polo Club, Golf club, want Manny Paquiao in. But they dont like the sight of too many bodyguards roaming around.

@cesdrilon Yes, Heart Center officials shd realize that patient Ampatuan is accused of massacre. He shd be in jail w/ dextrose, not in HC

Montberte Steve Cushing by Noysky
98% of the time I am right. Why worry about the other 3%. #stevec

@philoquotes "The firm, the enduring, the simple, and the modest are near to virtue ~ Confucius" Cool. Humility, simple lives and happiness.

@philoquotes "Freedom is the right to live as we wish ~ Epictetus" True, provided we don't trample on others' freedom or be a burden to them

@Rochbpu "What is the thinnest book in the world? - 'What Men Know About Women'" LOL. May not even a book, maybe a pamphlet, or a flyer :-)

@funnyoneliners "I'm not afraid of hard work. You can tell by the way I fight it." LOL. Simplifying d otherwise complicated hard work itself

@Oprah_World "Luck is a matter of preparation meeting opportunity. -Oprah" Cool. Opportunity also looks for those who are prepared.

@maria_ressa Internet allows more citizen journalism. Many prof'l journalists, media owners jealous. Their control of info flow is broken.

Could Breivik & fellow murderers love d welfare sys but hate migrants to enjoy & be entitled to such system? Welfare sys is very expensive.

Montberte Steve Cushing by Noysky
If your wife wants to learn to drive, don't stand in her way. -- Stan Levenson

Rochbpu Michael Repko by Noysky
The qualities that most attract a woman to a man are usually the same ones she can't stand years later.

Politics have no relation to morals ~ Machiavelli. Possibly explains why many NGO leaders, media pple as corrupt as politicians they attack

@piacayetano I hope PNoy will talk as liberal leader, not as socialist or populist-nationalist leader, bit.ly/oOmQ5V

@Karen_DaviLa NFA, almost all govt corps are milking cow by pols in power & d bureaucracy. Privatize them, pay pub debt, save int. payment

@ruffybiazon "drastically reduce unemployment w/in a year's time" Cut business bureaucracies. From 47 diff taxes & fees per year to only 7.

@cesdrilon More liberal agenda, less govt, less bureaucracy, free market, less subsidies for the lazy

@Karen_DaviLa Educ, health, housing, agri, pub works for d poor on-going, then CCT for d poor, soon condoms & ligation for d poor.

@RPeconfreedom Yes, the Renewable Energy law is a big racket & energy robbery by the RE firms. One of the man-made warming rackets.

Endure the present, and watch for better things ~ Virgil. Yes, hope, perseverance, ambition, goal. A realistic dream can become reality.

I had therefore to remove knowledge, in order to make room for belief ~ Kant. This describes the man-made warming belief.

Personal beauty is a greater recommendation than any letter of reference ~ Aristotle. Right, but it shd be accompanied by brains too :-)

@Jimparedes Yes, Filipinos shd learn to trust themselves, not politicians and govt. State reliance over self-reliance is formula for disastr

@dollyannec @WilsonLeeFlores SONA at 4pm, rains before that accodg to PAGASA tweet. So people will have SONA bath,bit.ly/oOmQ5V

@hermanncalero @piacayetano April 2011 labor force data: unempl 7.2%, underempl 19.4% or 26.6% of LF either jobless or underempl. Hi figures

AngAlvin Alvin P. Ang by Noysky
Winning 001: Positively contented people are discontented with the status quo, they desire growth for everyone. #quotes
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See also Twitter Notes July 2011, Part c,
Part b, and Part a.

EFN Asia 3: Conference in Jakarta

Here in Jakarta, Indonesia, for the Economic Freedom Network (EFN) - Asia annual conference, October 6 to 8, 2010, at Sultan Hotel. Arrived here this afternoon with 3 other Filipinos, all academic economists -- Dr. Alvin Ang (Univ. of Santo Tomas), Dr. Lawrence Dacuycuy (De La Salle Univ.) and Dr. Ernesto Pernia (Univ. of the Philippines). Ernie represents the Foundation for Economic Freedom (FEF), Lawrence represents the Philippine Economic Society (PES), both are local partners of FNF Philippines. Alvin is sponsored by Atlas. I was also sponsored by FNF and I represent our think tank, Minimal Government Thinkers, Inc.

All four of us are either panel speakers or panel moderators. Ms. Jyoti Sachavirawong, a friend and the overall conference manager, made sure that Filipino participants will wrack a part of their brains for this conference. :-)

The theme of this year's conference is "Migration and the Wealth of Nations". Sort of "modern Adam Smith" :-)

Well, migration is not exactly a "modern" phenomena, it's an old occurence dating back before the modern man (before the homo sapiens species). It's just that with globalization, migration and people mobility across countries and continents is becoming an ever-increasing phenomenon for many people in many countries. Adam Smith of course, is the author of the famous book, "The Wealth of Nations", among the classic work for people who believe in individual freedom and free market.

The conference program is here,

Going through the names of speakers and moderators, I think I personally know at least 1/3 of them. Some were fellow participants of the 4th Pacific Rim Policy Exchange in Sydney, Australia, last week.

This is my first time to be in Indonesia, so I was excited to see this city. Jakarta's international airport looks old -- well, not the usual steel and glass structures in many modern Asian airports these days -- like Manila's terminal 1. But the Jakarta airport is big.

Jakarta's road infrastructure is better than Manila's. I did not see potholes on the roads, for instance. But Jakarta's traffic is a lot worse than Manila's. We arrived at the hotel around 3:30pm local time, meaning non-rush hour, but traffic gridlock was bad. It's good that our taxi driver was very brave on the road, we sneaked through the gridlock by passing through the highway's shoulder made narrow by huge trucks and thousands of cars.

Of the 10 member-countries of the Association of South East Asian Nations (ASEAN), Indonesia has the biggest population, should be about 230 million now, while the Philippines is 2nd biggest at 94 million. So comparing their capital cities, Jakarta and Manila, would make some sense. Jakarta's population is about 20 million? Metro Manila's is 12 million. Among the megacities of the world.

Hectic days for me lately. Just last Sunday midnight, I arrived from Sydney, went straight to the hospital as my wife was scheduled to give birth that day to our second child. I arrived at the hospital around 1:30am of October 4, the baby was born around 4:30am, she's pretty.

I left the hospital early this morning, my wife and the baby are scheduled to check out later today. They should be home by now. Thanks to my mother in law and two sis-in-law, they help watch my family while I am away.
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See also:
EFN Asia 1: From HK to Phuket to KL, September 16, 2006
EFN Asia 2: Hayek in Asia, September 20, 2010
Jo Kwong rocks, February 09, 2010

Spontaneous Market 6: Removing Pork Barrel

More than three years ago, we were discussing in MG yahoogroups the crafting of a statement about removing pork barrel. Here are our raw exchanges then. This is 8 pages long.
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Removing Pork Barrel

September 2004

Guys, see the draft that I made below:

Why Legislators' Pork Barrel Should be Cut, Eliminated over the Long-Term

The job of governments is to improve their citizens' and taxpayers' well-being, not the politicians and bureaucrats' well-being. If governments can help the citizens with efficient delivery of social and economic services through efficient taxation, so be it. If governments can help the citizens with lower taxes because of inefficient and corruption-tainted services, so be it.

Philippine legislators and politicians, including presidents, past and present, are largely to blame for those perennial budget deficits and ballooning of the public debt. Even when taxpayers were unwilling to part with their hard-earned money because of perceived malfeasance in governance, politicians' spending spree continued. Even when tax collectors were diverting many collections into their pockets and padrinos, politicians' unsustainable subsidy policies continued. Even when interest rates were going up because of the expanding public debt, politicians' penchant for endless borrowing continued.

Thus, legislators should not call the proposed cuts in their pork barrel as "sacrifice". It simply is the right thing to do. Legislators are called as such because their main task is to legislate and craft laws, not to execute and implement local projects. Their task is to talk and debate how to cut expenditures when these are no longer supported by projected revenues for the year, not to further bloat expenditures with their pork barrel and justify irresponsible borrowing spree by the President and the DOF.

The real "sacrifice" that legislators can proudly boast to the citizens is when they will enact legislations giving relief to taxpayers, like cutting income tax so salaried and fixed income earners will have more take-home pay to bring to their families. The real "sacrifice" that legislators can give to taxpayers is when they slash agencies and programs that abet inefficiency and corruption in government, not expand budget for corruption-tainted
agencies and programs.

Those moves are considered "sacrifices" because many of their peers in the Legislative branch will frown upon them when they would seriously push for those reforms. Sacrifices because the President and his/her Cabinet officials will be deprived of further extending political "pogi points" at the expense of taxpayers. Sacrifices because some citizens who prefer to beg for political favors and rely on dole-outs by politicians and state bureaucrats than working hard will begin to oppose them.

In addition, if it is true that legislators can identify the needs of their constituencies better than those agencies of the Executive branch, then we better shrink those agencies by demoting them from line departments to bureau-level offices, just implementing the wishes of the legislators and the President. Us taxpayers can save money with the abolition of many
Secretaries, Undersecretaries, Assistant Secretaries, planning and related departments of those agencies.

- Nonoy


"SCRAP THE PROK BARREL UNCONDITIONALLY"

Legislators are supposed to formulate laws; laws that are designed to improve the quality of life -- physical, mental, moral, cultural -- of our people.

For so long, this has not been the case. A vast majority of our national legislators (and in many respects even local ones) aspire for office because of the political and financial benefits that are available as booty when one is a member of the house of congress or the senate.

The single most indecent reality of philippine politics is the fact that candidates spend millions of pesos in campaigning for a seat that pays officially less than a million pesos a year in salaries.

That by itself is the single betraying fact of the hunting-gathering instincts of legislators. And the embodiment of that booty mentality is the so-called "pork barrel".

To heap injury upon insult upon injury, the proposal to cut and/or abolish the countrywide development fund (cdf) is being labelled as a "sacrifice".

We believe that it is about time our country's political leaders show some semblance of decency by scrapping the "pork barrel" altogether, and across the board. "pork barrel", intelligence funds, and discretionary funds are all the same -- they have no accountability. And when a government has no
accountability, it has no business collecting taxes, much more increasing them.

Scrap the "pork barrel"!
No to increase in tax rates!
Yes to stopping corruption in the revenue agencies (bir and boc)!
Yes to minimal government!

- Citizen Kori


Dear Sir Kori, Noy,

Although I don't really like what Sen. Pimentel and Sen. Joker Arroyo stand for these days, I think their points are valid when they dissented the scrapping of the pork because then the President will have the sole discretion and therefore the sole privelege to corrupt and neknok certain percentages of the funds. It will be like transferring the loot from Congress to OP. In a sense, you're making the OP responsible for a bigger portion of the expenditure pie.

There is reason to doubt the accountability and credibility of Pres. Arroyo to manage the funds. It is going to be a frenzy of finger-pointing and mudslinging unless we qualify our position. Make the Executive Department accountable by alligning the scrapped pork solely for interest payments and retirement of the principal.

Dapat hindi mapunta sa infra or social ekek kasi siguradong neneknokin. I mean we know exactly how much our debts are (unless may porsyentohan din sa bayaran ng utang?). We can easily predict when exactly we'll be able to pay off our debts because these are exact amounts.

When were we're able to pay off our debts and the economy stabilizes, let's begin the dismantling of unnecessary government agencies. Now the supposed-to-be pork barrel should be used to fund early retirement claims. Dapat hindi na utangin ang early retirement kasi babalik na naman tayo sa pagbabayad ng utang.

If the President wants to increase her social and development expenditure, kunin nya sa PAGCOR or similar entities.

Eventually, the size of the expenditure pie should shrink. No pork barrel, no utang, ergo, no need for too much tax.

I think, and I've been meaning to post this, the minimal government position should be tempered by the sensitivity for macro-economic stability. The UP Professors are speaking with wisdom when they said that phasing is very important if we're serious about averting a fiscal crisis and moving the economy forward. For instance, we can't possibly retire government employees now because early retirement claims will further widen the deficit; we can't fire them either and scare away investments with social unrest.

Let's pepper the minimal government position with the appropriate number crunching.

- Ellen


Hi Noy,

I agree with the principle you laid down about the pork barrel-- that the legislator's primary purpose is to establish the laws/policies for their constituents. It would be nice if someone can trace the history of the largesse. Has it always been around, or did it evolve due to some failure by the executive branch at one time or another.

Strictly speaking, legislators only "earn" from the pork barrel if contractors who bag the project will give them a %. If procurement in this regard is made more transparent and less discretionary, maybe it won't be a source of leakage.

Remember also that congressmen have to hire political officers and not just technical people. Why? To handle all those requests for assistance in funerals, hospitalizations and other "calamities" from their constituents. Joker Arroyo can afford not to accommodate those requests when he was still congressman of Makati because the local government is affluent. But what about the poorer municipalities in regions, where the congressman is the only source of grasya. It is patronage pure and simple, but it is the reality there. The congressman then becomes the last resort for situations where SSS, Philhealth, DSWD and even the church and civil society fail. Maybe that is part of the reason why they are hesitant to part with pork. Of course, that is a big MAYBE. But think, only the congressman has the incentive to really help because he can expect loyalty in the next election.

- Chichi B.


Hi chi,

Chicken and egg story yang "pork barrel to finance personal requests by constituents to buy their loyalty to get reelected to get more pork barrel to finance requests by constituents..."

A break from this cycle is impossible in the short-term, even in the medium-term.
long-term engagement talaga. kaya nga sa MG philosophy, highlighted ang

greater individual freedom,
greater individual responsibility,
lesser individual dependence from the state and the politicians,
lesser power by the state and politicians to raid our pockets.

As i discussed in my powerpoint presentation, The range is between the "collective/state" on the left, and the "individual" on the right. The extreme left is socialism (practically everything owned by the collective through the state). The extreme right is ultra-libertarianism, zero government (practically the state is unnecessary). The MG advocacies are in-between the current govt's programs and interventions, and the zero govt. philosophy.

the pork barrel politics is pulling the public, the citizens, to embrace the statist, forced collectivism, philosophy. citizens to depend on the politicians in exchange for the politicians' right to raid the citizens' pockets and political beliefs.

so i think, the call remains valid: cut pork barrel in the short-term, abolish it in the long-term.

- Nonoy


Hi Nonoy,
For the administration/executive, legislative, and judicial branches of government, I suggest that the group create a list of two types of areas of concern: (A) areas that the particular branch should be primarily responsible for; and (B) areas that it should stay out of. For example, the judiciary should render constitutional and legal judgments but should do its best to stay out of technical/engineering/accounting/financial/commercial issues that are best handled by the executive branch and also out of certain primarily political topics that have no juridical or legislative significance.

I know that this will be quite difficult and take a long-time to finish but if someone can start working on a basic framework or table for the various topics listed in the MinGovt position paper, the rest of us can just download it, work on it at his/her convenience, and then upload it to a volunteer compiler. This work in progress can then be posted in our website for others to look over and give comments on. Once the framework is done, we can designate sub-areas that we all fully agree on (e.g., that legislators should stick to law-making 90% of the time) versus more controversial sub-areas (e.g., that legislators should minimize or avoid showboat-style exposes “in aid of legislation” which don’t really accomplish much except put their names in the newspapers).

I guess such a checklist should look like the following, more or less:

BRANCH        REGULAR FUNCTION/S                             UNDESIRED ACTIVITIES

Executive:     Administer and execute policies                     Creating unbudgeted projects or institutions

Negotiate international treaties                       Discontinuing successful projects of   predecessor/s

Collect and disburse funds                             Executing projects willy-nilly and without transparency

Legislative:      Debate proposed policies                              Prioritizing and assigning

                                                                                                expenditures in/of LGUs

Create and amend laws                                  Initiating investigations without resolving them

Judiciary        Determine constitutionality of laws                 Issuance of unnecessary TROs

                        Render legal judgments                                  Intrusion into technical or political

                                                                                                decision-making

The purpose of this exercise is to develop an easy-to-read checklist for each of the three major branches of government so everyone can see whether it is fulfilling its responsibilities or straying away from its main mission (as defined by the constitution and by agreement of the majority). Later on, we can add more specific branches of government such as the police forces, the armed forces, the local government units, the presidency, the different government bureaus, the constitutional bodies, etc. With a fully evolved checklist (it could take weeks to over a year to finish), it will become easier to delineate whether or not a particular agency or branch of government is doing its job or usurping another agency’s function. With a job-function checklist in hand, we can point to individual legislators or courts or agencies that are wasting people’s time and money by not doing their job and also doing some other agency’s job (and messing it up), or preventing another branch of government from doing its job.

The country’s political scientists and lawyers would be the major participants and contributors (if they are interested) but I also see a place for specialists in operations research, knowledge engineering, and other professionals to provide their expertise.

Can some others please help flesh out the list and trim/edit it nicely? I’m sure there are a lot more that can be added to the initial framework.

- Selwyn A.


Pareng Noy, Just want to share what i know on this issue. on your question on the history of the pork barrel, i believe it has been in existence for quite a while now, although the amount of the allotment for each legislators have ballooned by so many folds (largely by their own effort and to their sole benefits) and the ways and means by which it can be disbursed have been short-cutted.

pork barrel came from the counrty wide development funds. during pre martial law, each congressman has different percentages of allotment based on the economic status of their district and province. these funds were meant for infrastructure as well as other social projects given to legislators on the assumption that they have a better understanding of their constituents' and districts' needs.

they are, however, obliged to file a bill for a particular project with the corresponding amount to fund the bill. this will be subjected to the natural process in congress wherein fellow legislators will debate on the merit of the bill and the funds requested for it's purposes until seconded and referred to the proper committee. kung local di na to aakyat sa senate.

at present, this is another reason why alot laws passed are useless or do not have enabling laws due to lack the funds for their enactment. Ngayon kasi wala ng bills-bills pa. identify mo na lang ng ghost project bigyan ng pondo 50% and kick back.

- Raymond A.


Noy, Mayroon lang akong kaunting additions on abolishing pork barrel. According to some US papers, pork barrel is coming from the national budget and therefore is to fund national priorities. since we already have the IRA for the local governments, there is no longer any need for the pork barrel. on this note, cutting the IRA must not be across the board and should be prorated by type of municipality.

since most of our apprehension on pork barrel is that it is a major source of corruption, the best way to disprove it, is to have each representative list the details of his/her pork barrel representative and how the money is spent. similarly, other funds that are "discretionary" in nature can be allowed as long as there is regular reporting of how it was used.

abolishing the pork and their similar natured funds will break a lot of the chains that have enslaved philippine society for decades. studied thoroughly and operated carefully, the cutting of these funds will release ultimately efficiency.

- Alvin


Dear Nonoy,

You may want to rephrase the last sentence of the first paragraph under the "Role of Government" section. The point should be made that the government should help its citizens with lower taxes and efficient and corruption-free services. Helping its citizens with inefficient and corruption-tainted services should not be accepted nor tolerated.

I suggest to rephrase the first paragraph under the "Abolishing the Pork Barrel" section like the following:

Thus, Legislators should focus their time and energy on finding ways to prevent the slippage of the economy to a possible debt-default crisis. This may require cutting the Executive Branch's excess fat and expeditures, raising power rates to control the financial bleeding of NAPOCOR, scrapping the President's and legislators' pork barrel, and reducing the LGU's Internal Revenue Allotment(IRA) for at least two years.

- Prof. Patalinghug


Kori, Ellen,

How about these compromised formula:

(1) Phase out pork barrel in 3 years time, zero on the 4th year, instead of outright abolition now.
Say 75% in 2005, 50% in 2006, 25% in 2007, zero in 2008 onwards. So, legislators running for the 2007 elections would know that they'll have zero pork barrel starting 2008 should they win.

(2)Phase out also the President's pork barrel at the same rate as phasing out of legislators' pork barrel; ie, 75%-50%-25%-zero in 4 years time. The president to take her social fund and "neknok" funds from Pagcor.

(3) Use the scrapped pork funds of legislators and the President to retire some local debts.
For every P10 billion of domestic debt retired at 8.5% interest rates (upper range of the 91-day T-bills), that's P850 million savings from interest payment per year, a big amount already.

(4) On shrinking government, a 1 paragraph statement in this pork-barrel position paper would go something like this:

"We need to make the government bureaucracy do more for less costs. Currently, about 70% of total budget net of IRA and debt service payment goes to salaries/personnel services alone. Early retirement for redundant personnel should be started soon, starting from agencies with functions that can better be left to the markets. It will be painful for some affected personnel, but maintaining said bureaucracy is even more painful for the taxpayers because of wastes and perceived uselessness of those agencies and/or personnel."

(5) On privatization of govt. corporations, the process takes about 4-6 years/corporation to be completed.
the process should be started this year or next year. So that by 2011, we'll be rid of many of those losing corporations, in particular: Napocor, NFA, PNOC, LRTA, NEA, NHMFC.

- Nonoy


(1) Phase out pork barrel in 3 years time, zero on the 4th year, instead of outright abolition now.

Say 75% in 2005, 50% in 2006, 25% in 2007, zero in 2008 onwards.

So, legislators running for the 2007 elections would know that they'll have zero pork barrel starting 2008 should they win.

Are government programs ever phased out? It seems to me that if you leave anything left then the politicians will just increase funding when the pressure is off.

Two examples from my own experience in the US -- taxes and farm subsidies.

1) In Massachusetts, the raised the state income tax from 5% to 5.95% during a "fiscal crisis". The outrage over the increase was extensive so they promised to make it "temporary": when the crisis passed and budget deficits disappeared, the tax would be lowered. Lo and behold, the crisis passed, surpluses returned, and the money was spent. The tax was not lowered. Eventually, through an initiative petition for a ballot question the tax was returned to the original level, but it took years and the politicians put up a fight all along the way.

2) When the Republicans took over Congress following the 1994 elections, they moved to severely cut if not eliminate farm subsidies, called the Freedom to Farm Act. Unfortunately they did not, in fact, end them. When the farm market soured, Bush promised in the farm state of Iowa, while running for president in 2000, that he would boost funding, and that is what he did. It would have been better to have killed the entire program and dismantle the bureaucracy. Instead, a program was left for Bush to increase.

When given a chance, end a program entirely. Shut down its offices and sell its furniture. Kill it, completely, without mercy, at its roots. It is much harder then for politicians to come back, when no one is looking, and refund the program. They need to start all over again, rebuilding the program, passing enabling legislation. They cannot just quietly add more money to an existing program, a la farm subsidies.

We better end this "pork barrel" now. If any of it survives, it will come back stronger and healthier and it will be much, much harder to kill off.

- Bruce H.
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See also:
Spontaneous Market 1: Profit, Trade and Personal Responsibility, May 22, 2006
Spontaneous Market 2: Market Failure vs. Government Failure, June 07, 2006
Spontaneous Market 3: No Nurses' Brain Drain, June 21, 2006
Spontaneous Market 4: Entrepreneurship, Community and Property Rights, October 23, 2007
Spontaneous Market 5: Limits to Free Market? November 16, 2007