Health Spendng 2: DOH, Public Health Budget

After posting Fat-Free Econ 13: P2 Trillion of Election Spending and Taxes in our CHAT googlegroups, there were a few discussions among us.

James Auste of the Cancer Warriors Foundation (CWF) suggested that it is okey to engage in spending splurge, so long as "we are investing in life" by prioritizing public health.

If we go back to Table 2 of the article above, this is the priority spending for 2012 (this year), out of the P1.82 trillion total budget:

1. Interest payment of public debt, P333.1 billion.
2. Local government units (LGUs) IRA, P291.6 B
3. DepEd, P228.9 billion
3. DPWH, P125.5 billion
4. DND, P106.9 billion
5. Personnel benefit (bonuses of gobyerno personnel) P101.5 billion
6. DILG, P96.2 billion
7. DA, P54.1 billion
8. DSWD P49.4 billion
9. DOH, P43.3 billion
10. Government corporations, P43.2 billion

I do not know how much of the P43.3 billion DOH budget is alloted to procurement of medicines. But I notice that many LGUs are spending high for local public health.  The Manila City government alone maintains  6 city-owned hospitals, some are more modern than the UP-PGH, like the Santa Ana Hospital, 10 storeys high, fully air-conditioned.

From http://www.manila.gov.ph/manilahospitals.htm, these are:
Photos below, 1st row: Gat Andres Bonifacio Memorial Medical Center, Justice Abad Santos Mother and Child (General) Hospital.
2nd row: Ospital ng Maynila Medical Center, Ospital ng Tondo II,
3rd row: Ospital ng Sampaloc, Santa Ana Hospital.

Other rich municipalities and cities and almost all provinces, have their respective municipal/city hospitals, provincial hospitals.

CSOs and State 15: Old Debate on Competition and Markets

Many civil society organizations (CSOs) leaders remain unfriendly to the idea of moving society from more government to less government via more CSOs and voluntary groups. Below is one of the debates I've had with some friends more than eight years ago. I think a number of arguments remain relevant, hence posting them here. A bit long, get your popcorn. :-) 

Exchanges on Competition and the Market

June-July 2004

Hey Vince, folks, If GMA will do or support this -- fewer bureaucrats and higher pay for those who will be retained -- I say halleluiah for her! Enough of "more taxes" moves. I say "less tax rates" and there will be larger tax base.

Expenditures cut through merger, corporatization, if not outright abolition, of some govt. agencies, will inspire taxpayers that the money they surrender to govt. (nay, govt. automatically expropriates) is wasted less and less. Will the group possibly support these developments, or it will keep its focus on tax admin reforms?

-- Nonoy

Noy, I would dare say that the group effort will stay focused on tax administration reform. But I do agree with you, enough of the "more taxes" approach, it merely masks the problems in tax administration.

-- Vince

P.S. Why am I not surprised at your response to this article?

ha ha ha, right Vince -- you know my advocacies are very clear: small government, small bureaucracy, small taxes; more and freer markets and trade. so my reaction to news reports like these are highly predictable.

I have a new org. Vince, folks -- Minimal Government. Among our major advocacies are (a) flat 10% individual income tax (vs. the current 6-tiers, from 10% to 32%), and (b) a lower, 16% of net corporate income (vs. the current 32%). These smaller taxes will be compensated by fewer line departments, bureaus, and state universities and colleges, smaller bureaucracy.

So, somewhere we shall complement each other's advocacies. The group on tax admin reforms, us and other orgs. and individuals on tax rates and policy reforms. Pero mahirap magbago ng utak pre, when people's minds are "statist" -- that the state should intervene, regulate, subsidize, etc. in almost all aspects of our lives.

-- Nonoy

Folks: Today, I speak purely as a taxpayer and not as a reform BIR advocate.

I am tired of new taxes (or at least proposals for new taxes). I think the government should not be able to impose new taxes unless it can show: 1) that it can improve collection of existing taxes; 2) that it can plug leakages on the collection side; 3) that it can plug leakages on the expenditure side; and 4) that the first three are not enough to narrow the budget gap to manageable levels. Otherwise, any time there is a revenue shortfall, the government will resort to new taxes. If the figures coming out of the office of the Ombudsman or the World Bank are accurate, anywhere from P240-P400 billion is lost EVERY YEAR through "leakages" in the BIR. As far as I know, these leakages are still rampant and SOP. I am aware of several firms that are at the moment being extorted for money by BIR examiners. Despite vigorous, and largely successful efforts, by Parayno to clamp down on tax loopholes, extortion by BIR officials seems to go on unabated. Another P20 billion or so is lost in the procurement process. One can only guess how much is lost through inefficient government service or substandard delivery of goods and services.

Imposition of new taxes increases the burden on the taxpayer, while relieving pressure on the corrupt BIR official and pork barrel-gorging politician. New taxes are a means to subsidize the corrupt lifestyles of the tax collectors and politicians.

And that's plain and simple, WRONG!

-- Vince

CSOs and State 14: Lady Gaga and the Intolerant Religious Groups

One indicator of the corruption of civil society organizations (CSOs) and NGOs is that they think that for most if not all problems in society, the solution is more government. If they do not like a particular group to do a concert for instance, they want the government to come in, intervene and ban such concert.

This is the case of the Lady Gaga concert in Manila today and tomorrow. A religious NGO called "BibleMode International" held rallies at Manila City Hall and perhaps other places, asking the natinoal government, later the local government, to cancel or ban the scheduled concert of Lady Gaga because they think the famous singer is "Anti-Christian, Anti-Jesus Christ".

Good thing that the national government did not dip its fingers on this issue. The Vincenton Post made a harsh criticism of these groups in its post,  TO HELL WITH YOUR GOD!.

I think the original plan was a one-day concert only, but with heavy demand, the organizers opened a second night concert, same venue.

The producers in their pomotion Born This Way Ball Tour: Lady Gaga Live in Manila 2012 described the artist as

Gaga was named Forbes’ Most Powerful Woman in the World 2011 and was included in Time’s annual “The 2010 Time 100″ list of the most influential people in the world. With over 2.2 billion combined views of all her videos online, Lady Gaga is one of the biggest living people on Facebook with over 47 million ‘likes’ and is #1 on Twitter with nearly 19 million followers. Lady Gaga is the only artist in the digital era to top the 5 million sales mark with her first two hits.

Ticket prices (inclusive of VAT, entertainment tax, other local government taxes and fees) are expensive. For foreigners, the PHP to US$ exchange rate as of last Friday was P43.20/$.

PATRON Standing – P15,840
LOWER BOX Reserved Seats - P11,620
LOWER BOX (Persons w/ Disability) Standing – P11,620
UPPER BOX (Free Seating) – P5,280
UPPER BOX (Persons w/ Disability) Standing – P5,280
GENERAL ADMISSION (Free Seating) – P2,120
GENERAL ADMISSION (Persons w/ Disability) Standing – P2,120

So the highest ticket prices are sold at $367 equivalent, the cheapest at $49.

A friend in my UPSE alumni association yahoogroups, Jack, made this observation:

Is it the function of government to ban these shows. Several from the religious right and several of our church leaders have called for a ban on these concerts claiming that Lady Gaga's music represent "godlessness" and is "blasphemous". A friend tells me that in a mass he attended yesterday, there was a circular and a sermon made by the clergy against her concert. No other Southeast Asian country, except for Indonesia, has imposed a ban on her concert. Her tour took her to Korea, Japan, Taiwan, and after the Philippines, will take her to Hong Kong, Thailand, Singapore,

Although we respect every citizen's right to practice their religious beliefs, I think we must draw the line against censorship. Lest we go back to the days of the Spanish Inquisition.

No one is forcing anyone to go watch her concert so these efforts to ban her show are really upsetting. I don't really know much of her music but efforts to ban her concert do not make us any different from the Taliban in Afghanistan. Or could this be the Orwellian 1984 nightmare, happening in 2012 to the Philippines.

It speaks well of the P-Noy administration that they didn't get drawn into this and they took a stand that there will be no ban, there will be stopping her concert.

Otherwise, we go down again worldwide into infamy. A ban on Lady Gaga will erase all the goodwill Jessica Sanchez is creating for the Philippines in American Idol. Or the gains Charisse, Manny Pacquiao, Eric Spoelstra coach of Miami Heat have done for us. Oops, sorry, Pacquiao just erased himself with his religiously intolerant attack on gay couples. We are already famous for having Marcos' thugs beat up the Beatles when they did a concert in Manila just because they were so tired and couldn't make the instant reception Ferdie and Meldy wanted to host for them. We are also (in)famous for some grandstanding and politicos and again the clergy who called for a ban of The Da Vinci Code. It's More Fun in the Philippines. They beat up mopheads, boycott Lady Gaga and the Da Vinci Code, our most famous boxer is against gays and they threaten to excommunicate you, even if you are the President of the Republic, if you are for the RH bill.

I like Jack's title, that somehow summarizes his argument -- Going gago over Gaga. People who want to bring in the government to intervene even for the most banal issue that may touch their ideological or religious bigotry are indeed gago.

The easier way for them to handle this, and allother related issues, would have been to campaign for a boycott of Lady Gaga's concert, period. Do not bring in the government to intervene and ban the concert.

It's another thing if the city government of Cebu or Pasay or other LGUs, or the DOT or other national government agencies, would sponsor this concert using taxpayers' money and hence, money collected via coercion, then private citizens and civil society groups should rally another government agency to cancel or ban that concert.

Government should focus on going after killers, murderers, thieves, rapists, extortionists, bank robbers, kidnappers, land grabbers, other criminals. What we have now is government failure in doing this important function, because government focus is more on running universities, banks, corporations, casino, pension fund, etc., and in creating various regulations, restrictions, prohibitions and taxation.

We live in modern times where diversity and spontaneity is the rule, not the exception. This demands more tolerance -- personal, religious, cultural, political, economic tolerance. The reason why millions of Filipinos were able to study, work and live in other countries is because the people of those countries have somehow tolerated Filipinos and other migrants into their society. The same way, there are more Koreans, Chinese, Japs, Europeans, Americans etc. who work and live here, because they find that their culture, religious belief, personal idiosyncracies, are tolerated here.

More tolerance means more peace, more businesses, more economic growth.

More intolerance -- like those gago who want the government to ban the Lady Gaga concert -- more disorder, more bigotry and hypocrisy, less businesses, less economic growth.

Finally, the role of CSOs is to help educate people towards self-reliance and independence from the State, being an institution of coercion. More CSOs should mean less government, not more.
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See also:
CSOs and State 10: The Role of Civil Society, June 15, 2010

CSOs and State 11: Rights and Responsibilities, Liberal Civil Society, July 11, 2010

CSOs and State 12: From NGOs to GFOs, February 26, 2012

CSOs and State 13: Technology, Omidyar Network and Governments, May 14, 2012

CSOs and State 13: Technology, Omidyar Network and Governments

This is another example of civil society organizations (CSOs) doing their share in community development; in this case, in making governments become more transparent, more open, via technology This is posted yesterday in interaksyon.com.
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http://www.interaksyon.com/article/31763/technology-and-open-governments

Technology and open governments

13-May-12, 12:10 PM | Stephen White, special to InterAksyon.com

Technology is helping us transform our world for the better. The unpreced-ented opportunities it provides to connect with each other and with information easily and instantly is changing the way we communicate, how we do business and how we live our lives. By putting power in the hands of billions of consumers, prices have fallen and the choice and quality of goods and services have improved dramatically. Businesses, too, are gaining through the chance to know their customers better, strengthening relationships, building trust and increasing sales.

But while individuals as consumers are already reaping these benefits, as citizens they have yet to see the same improvements. Governments have often been slow to see the advantages that openness and dialogue brings for their countries. Some, to be frank, remain suspicious of the power it might hand to individuals and communities.

Slowly but surely we are seeing this change. Last year, we saw a small number of governments including the United States and the Philippines join together with citizens’ groups and businesses to promote openness and improved engagement with their citizens. The efforts of the Open Government Partnership were stepped up at a conference in Brasilia last month when 42 new countries joined. The meeting was attended by US Secretary of State Hillary Clinton and Philippines Budget Secretary Florencio B. Abad, who led discussions about how governments can use technology to improve their accountability to citizens.

The initiative is still in its early days. But by improving accountability and transparency, it has rich potential to improve public services, ensure money is spent wisely and break down the barriers between the government and the governed. At a time when this divide has never seemed bigger in many countries and when public finances are tight, these are goals of crucial importance.

Countries that sign up to the partnership have to demonstrate their commitment to open government. Each will set out this week their plans on how more information will be made available to citizens, how genuine engagement will be encouraged and how this dialogue will help drive social change.

Having seen first-hand what can be achieved if we can better connect people, I am excited by its potential to deliver positive change. The global success of eBay – the world’s on-line market place which now has over 220 million customers - was based on confidence in people and creating a network to enable them to come together. Consumers have gained from sharing their passions and interests. Many thousands of new businesses have been able to compete on a level playing field, challenging the dominance of established players.

Technology gives us, on a scale and speed never possible before, the opportunity to magnify the power of every individual. There will always be a tiny minority who might abuse this opportunity. But our experience at eBay is that the overwhelming majority use this power responsibly. We must have the confidence to harness this ability to give people a voice. If we do, the rewards will be enormous.

Governments which tap into the collective expertise and experience of their citizens will make better decisions. Increased transparency, participation and accountability will increase protection against corruption.

By using technology to empower individuals, we enable them to influence policies and priorities at a national and community level. It raises ambitions and increases interest and participation in public life.

But using the opportunities that technology brings to share information is only one half of the equation. We will only reap fully all these rewards if citizens, civil society and businesses use this information to monitor progress, hold those making decisions to account and to encourage change. Transparency is vital but so is the active engagement and participation of citizens.

It is vitally important, too, that we work at both a national and local level to help provide the skills and tools to use this data and the opportunities it brings to make a positive impact on lives and communities. This means developing the tools and partnerships which make this new era of active citizen engagement a reality. It is something Omidyar Network, which encourages the use of technology and markets to foster social change, is already supporting in many countries.

We are already seeing examples of what can be achieved and the difference it can make. In the Philippines, Omidyar Network is providing support to checkmyshool.org, a website that provides parents with independently sourced information about the quality of public schools.

But this is only the beginning. The ability to encourage honest and responsive governments and to allow citizens and communities to shape rather than just accept the services they receive holds great potential. We have seen a revolution in the way businesses and consumers interact. If we can harness the same power to improve standards of governance, we can help create jobs, strengthen societies and transform the quality of life of millions of people.

Stephen King is a partner at Omidyar Network, a philanthropic investment firm started by eBay founder Pierre Omidyar.
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See also:
CSOs and State 1: AIDS and Perversion of Welfare, June 16, 2006

CSOs and State 2: NGOs and Government Clubs, November 09, 2006

CSOs and State 3: Poverty and Public Education, February 12, 2008
CSOs and State 4: Local Government and Civil Society, August 12, 2008
CSOs and State 5: Subsidiarity, Decentralization and Privatization, September 04, 2008
CSOs and State 6: Stichting Kapatiran and Books for the Barrios, December 07, 2008
CSOs and State 7: Public School Library with Minimal Government, BftB, June 29, 2009 
CSOs and State 8: Gawad Kalinga, Health NGOs and Taxes, September 19, 2009
CSOs and State 9: The Global Fund and Corruption by Some Phil. Health NGOs, March 10, 2010
CSOs and State 10: The Role of Civil Society, June 15, 2010

CSOs and State 11: Rights and Responsibilities, Liberal Civil Society, July 11, 2010

CSOs and State 12: From NGOs to GFOs, February 26, 2012

CSOs and State 12: From NGOs to GFOs

This is my article for the online magazine today, refreshing the page. Original title is Civil Society and the State.
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Civil society, like many other social concepts, has a varying definition for different groups. There is no single, “unanimous” or “consensus” definition of the term. And very often, the definition is patterned after the social or political philosophy that a particular group adheres to.

Take the following definitions of “civil society”:

1. Civil society is an invention to correct state failures and inefficiencies, later lambast market's self-correcting mechanisms (such as de-monopolization of industries through deregulation & more competition).

2. Civil society is a cultural phenomena and has other tasks aside from a mere focus on economics. It does not exist just for the market. To balance out market imperatives is only one of its functions.

3. Civil society role is to encourage and empower individuals and citizens to take on more personal and parental/guardian responsibilities in running their own lives. The principle of subsidiarity says that things that can be done better by the lower level of social organs or entities should not be given to higher social organs, things that can be done by the individual should not be given to the government.

(Above three definitions lifted from CSOs and State 10: The Role of Civil Society)

4. Civil society is the arena outside of the family, the state, and the market where people associate to advance common interests. It is sometimes considered to include the family and the private sphere and then referred to as the "third sector" of society, distinct from government and business. Dictionary.com's 21st Century Lexicon defines civil society as 1) the aggregate of non-governmental organizations and institutions that manifest interests and will of citizens or 2) individuals and organizations in a society which are independent of the government.

(Wikipedia definition)

5. Civil society is as a "third sector," distinct from government and business. In this view, civil society refers essentially to the so-called "intermediary institutions" such as professional associations, religious groups, labor unions, citizen advocacy organizations, that give voice to various sectors of society and enrich public participation in democracies.

(Definition from www.civilsoc.org)

6. If all means of decentralisation, deregulation and privatisation have been implemented and citizens have been involved as comprehensively as possible, there is nothing to stop the definitive self-administration of citizens. A civil society has emerged.

(See CSOs and State 4: Local Government and Civil Society)

It is possible to find a hundred (or more?) definitions of civil society, along with their respective role in relation to the government, private enterprises and individuals. I am taking the liberal definition of the term. The 3^rd definition above is actually mine. And this clashes with the mainstream or dominant definition, that civil society organizations (CSOs) exist to fill in the gap by government inefficiencies -- note that they do not want to use the term “government failure” while frequently mentioning “market failure” -- in addressing various social and economic problems, from garbage to health to poverty alleviation.

In the mainstream definition therefore, there is a close if not symbiotic relationship between government and CSOs. A big and interventionist government is consistent with a big and interventionist civil society community, they often conspire to harass what they think is the source of various social ills – the private enterprises, corporations big and small, businessmen and capitalists. So that in this symbiotic relationship, many CSOs get various contracts and funding from government – local, national and multilateral or foreign aid. But CSOs are supposedly “non-government” groups and organizations; when they get huge funding from government, they become government-funded organizations (GFOs).

The Department of Budget and Management (DBM) has released a new regulation, National Budget Circular (NBC) No. 536 dated January 31, 2012 or just two weeks ago. It is called “Guidelines on partnership with civil society organizations and other stakeholders in the preparation of agency budget proposals.” The DBM has created a “CSO Desk” that will monitor the initial 12 departments and 6 government owned and controlled corporations (GOCCs) that will be covered by NBC 536, so that those departments and GOCCs are required to involve CSOs in their budget preparations.

 I attended the DOH-DBM meeting with CSOs about this circular last February 14, 2012. All CSO leaders and representatives involved in health introduced themselves, their organizations and their specific interests on public health issues. As expected, our group, Minimal Government Thinkers was the odd-man-out because we always link rights with responsibilities, entitlements with obligations, and delineate which healthcare services are personal and parental/guardian responsibility and which ones are government responsibility. I emphasized that people who over-smoke, over-drink, over-eat and over-sit cannot just assert that “health is a right” because they did not recognize that “health is a personal responsibility” too. It was good to see a number of heads among the participants nodding after I spoke. 

I observed later how some CSO leaders would use the occasion to lobby for more DOH support if not funding for their specific advocacies. And this is part of the process by which NGOs become GFOs. I think the appropriate term for that will be "CSO Insertion" to differentiate it with "Congressional Insertion" and pork barrel in the national budget that many NGO leaders and the public so dislike.

 Government is very often the arena of irresponsibility and hypocrisy. Of living beyond one’s means, of spending much larger than income and revenue, and resorting to endless borrowings to finance the funding gap, year in and out. The continuing financial turmoil worldwide is very much caused by government fiscal irresponsibility and huge public debts. From north America to Europe to many Asian economies. One can count in his fingers the number of governments that are not heavily indebted, say with public debt of 15 percent of GDP or lower. The bulk of these governments have debt/GDP ratio of 30 to 200 percent, and such ratio is still understated because contingent debts (debts by government corporations and financial institutions guaranteed by the national or central/federal government), as well as local government debts (provinces, states, cities) are often not included.

When CSOs become indebted and dependent for funding with government, their capacity to fiscalize and criticize the government for its excesses and wastes becomes limited. This is something that CSOs should try to avoid as much as possible.

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See also:
CSOs and State 7: Public School Library with Minimal Government, BftB, June 29, 2009

CSOs and State 8: Gawad Kalinga, Health NGOs and Taxes, September 19, 2009

CSOs and State 9: The Global Fund and Corruption by Some Phil. Health NGOs, March 10, 2010

CSOs and State 11: Rights and Responsibilities, Liberal Civil Society, July 11, 2010

Tobacco Tax 3: When Supply is Killed But Demand Persists

Smoking and tobacco use is increasingly being regulated, over-regulated, over-taxed, in more cities and more countries around the world today.

There was a joke I read that goes like this:

1980s and earlier: A man goes to a convenience store, buys cigarettes and whispers to the salesman, "And condom please."

Now: A man goes to a convenience store, buys condom and whispers to the salesman, "And cigarettes please."

Personally, I am for regulating tobacco use. Well, the fact that I'm a non-smoker, that probably explains why. Also, when coupled with "health is a right" mantra, where people who over-smoke, over-drink and over-eat have the "right" to run to the state later to demand that "health is a right" when their lungs, liver and other internal organs become dilapidated, I don't like that.

My concern is when demand will remain even if supply is cut or killed. Hence, the sub-title, "Supply is killed, demand persists".

Take gambling. Governments have illegalized many gambling events like "jueteng" in the Philippines. And more illegal gambling flourishes in those countries.

Take drugs. The US and many other governments have illegalized various drugs, and more illegal drug supply flourishes. And they're really killing each other big time, hundreds killed on both sides, just to implement anti-drugs policies.

Take prostitution. And Catholicism in some non-Catholic countries. And gays and lesbians in supposedly macho societies.

Or when we raise alcohol taxes too high, people will simply shift to lambanog, tuba, tapoy, etc. People just love high octane drinks, they just want to drink, without taxes preferably.

So now, if we ultimately "succeed" in banning legal tobacco from the "evil" multinational tobacco companies -- like the "evil" multinational pharma? -- what if people will just shift to home-made tabako, or smuggled tobacco, nga-nga, ma-ma` (Ilongo term). In those non-traditional tobacco products, there is zero government regulations in terms of advertising and marketing, zero taxes, only high corruption and bribery with government officials. People just want to smoke, to puff nicotine and various other chemicals into their lungs.

Will this be helpful?

I don't think so.

Thus, there should be a balance between allowing smoking by people who are fully aware of the long-term consequences of smoking. Tax-hungry governments will earn lots of taxes and money from tobacco companies and sellers.
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Here are my two related papers recently.

(1) Why Are Excise Tax Revenues Declining?

September 13, 2010

(This is my article for People's Brigada News last weekend)

As expenditures keep rising, tax revenues also keep rising. Not because tax rates are rising, the same rates will apply, but with increasing number of individual and corporate taxpayers, the overall tax revenues will increase.

Tax collections by the BIR will increase from P750.3 billion last year to projected P860.4 billion this year and P940 billion next year. The bulk of the increase will come from corporate income tax, VAT and personal income tax revenues. Other taxes like documentary stamp tax, percentage tax, banking tax, are on an increasing trend.

But curiously, excise tax revenues are projected to decrease, not increase. An excise tax is imposed on certain goods that are deemed “public bads”. Below is the table on excise tax revenues. Units in P billion.

Products : 2009 / 2010 / 2011

Total, Excise tax: 59.82 / 61.55 / 55.64

Alcohol: 20.64 / 22.60 / 22.49
Tobacco: 24.23 / 25.81 / 20.18
Fuel and Oils: 12.77 / 10.81 / 10.43
Others: 2.18 / 2.34 / 2.54

Source: DBM, BESF 2011, Table C.2, http://www.dbm.gov.ph/BESF2011/C/C2.pdf

As the number of smokers, drinkers and vehicles in the country increase, excise tax collections are supposed to increase. But this does not seem to happen What happened? Two factors can possibly explain.

One, taxation of alcohol and tobacco products is considered among the corruption-prone measures. Big, rich and influential businessmen with high political connections among legislators who craft tobacco taxation are involved in the sector.

Two, fuel products are a big necessity for all sectors of the economy, certain sectors resort to smuggling the product to keep the prices relatively low.

The government should simplify the tax rates on alcohol and tobacco, have only one or two rates for all products, and throw away the multiple classification of such products that creates lots of loopholes for tax cheating. And government should abolish the excise tax on fuel products because oil is not a “public bad”, it is a necessity for all sectors of society.

(2) On Increasing Tobacco and Alcohol Tax

September 23, 2010

Our think tank, Minimal Government Thinkers, is among the signatories of a campaign to hike the taxes on tobacco and alcohol products.

Today, the statement was covered in BusinessMirror, I dont know where else. The title is 33 CSOs urge Congress to increase ‘sin’ taxes. Portions of the report,

AT least 33 civil-society organizations and leaders on Thursday called on Congress to immediately act on the increase of excise taxes, following a statement by President Aquino backing reforms on excise taxes on “sin” products, including tobacco and cigarettes....

“In the Philippines alone, almost 90,000 die every year [or about 10 Filipinos die every hour] from smoking-related diseases.” Thus, they added, “increasing taxes of tobacco products is the most effective means to reduce tobacco consumption....

Among the signatories are... Former Health secretary Jaime Galvez-Tan; UP Law Dean Marvic M.V.F. Leonen; UP economic professor and ex-Neda chief Solita C. Monsod; Bienvenido Oplas Jr., Minimal Government Thinkers Inc.; and Jessica Reyes Cantos and Filomeno S. Sta. Ana III, president and coordinator, respectively, of the Action for Economic Reforms.

Yes, taxes on tobacco and alcohol products should rise. If people do not want to be taxed high, then they can reduce smoking and drinking. Me, I never smoke, and I drink only occasionally.

And taxes on medicines -- import tax, value added tax -- should be abolished. It is hypocritical for government to announce over and over, "cheaper medicines" but actually impose taxes that contribute to expensive medicines.
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See also:
Tobacco Tax 1: Telecom and Medicine Taxes Too, September 15, 2009 
Tobacco Tax 2: Higher Tax + Corruption = Lower Revenue, June 06, 2010

CSOs and State 11: Rights and Responsibilities, Liberal Civil Society

(This is my article for www.thelobbyist.biz, July 10, 2010 with original title, "More Statist than the State")
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A statist view is one arguing that things and social processes, as much as possible, should be done by the State and not by individuals, households, their voluntary organizations, or private enterprises. This view therefore, belittles if not removes the role of personal and parental responsibility in running our own lives, our own households, our own community.

There is an often-quoted phrase, “more popish than the pope”, to refer to persons and institutions who seem to be more fundamentalist in Catholic belief than the Pope. The phrase “more statist than the state” may as well apply to people who seem to be more fundamentalist in their belief of the big role of the state than the administrators of the state itself.

In my personal observation, these “more statist than the state” individuals and leaders have certain characteristics.

One, they are seldom found in mainstream political parties. Rather, they are found among mainstream NGOs and civil society organizations (CSOs), media and the academe. Check for instance the paper, “Why do intellectuals oppose capitalism” by Robert Nozick, and I wrote a brief discussion about the paper here, http://www.minimalgovernment.net/media/nozick.pdf.

Two, these individuals and leaders are obviously driven by socialist belief and deep hatred of the profit motive and social inequity under capitalism. But they do not belong to a Socialist or Communist political party. Rather, they espouse socialism on a sectoral basis. Like health socialism, education socialism, ecological socialism, land redistribution socialism, and so on.

Three, while they may not explicitly admit that they are socialist or driven by socialist philosophy, they are explicit and unequivocal in demanding that “health is a right”, “education is a right”, “pension is a right”, “clean environment is a right”, “social insurance is a right”, “land ownership is a right”, and so on. For them, almost everything is a right, an entitlement from society via the state and its various subsidies. Even if some citizens are lazy and irresponsible, they are still entitled to certain subsidies by the state because “life is a right.”

Four, one will seldom or never hear from them the words “personal responsibility.” As almost everything is “government or state responsibility”, then there is little role for personal and parental responsibility in running their own lives. The state should allocate v percent of GDP for education, w percent of GDP for healthcare, x percent for environmental protection, y percent for food security, and so on. They may not be explicit in advocating for central planning but that is exactly what they want the state should do.

Five and a corollary to #4 above, one will seldom or never hear from them the advocacy for individual liberty and individual rights. What is paramount for them are national and collective freedom and collective rights. Individualism is taboo and the individual can only realize his/her growth potential if the collective is well-taken cared of by the political administrator of the collective, the state.

As a former Marxist-socialist myself more than two decades ago, it is somehow easy for me to identify such kind of attitude as I used to harbor such sentiments too. And having abandoned that statist philosophy several years ago, I have learned to embrace the value of individual liberty and its sacredness not to be subsumed most of the time under collective liberty.

People should assume more personal and parental (or guardian) responsibility in running their own lives, their own households and communities, if they wish to realize more individual freedom. Freedom and responsibility are two sides of the same coin.

At the end of the day, fear of responsibility is fear of freedom itself.
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Meanwhile, here's a related short paper from the FNF, sometime in October 2008:

The Vision of a Liberal Civil Society

The term “Civil Society” is used with many different meanings in the political discussion at different political levels. In our context, we are only concerned with the local level and the idea of a liberal civil society.

Inhabitants and citizens of a community generally have to accept specific restrictions in their individual freedom to guarantee peaceful living within their community. They agree to these limitations and accept the given laws, decrees and regulations in a wide range, which are set up by their local government.

Administrations have the tendency of covering the society with a dense network of regulations, as they tend to say in “the best of the citizens”. These regulations not only define what is not

allowed, but in many cases, what is allowed or what a citizen can do.

Through these networks of regulations, the administration tends to limit the citizen’s responsibility for acting and, at the same time, takes away certain aspects of his or her personal freedom. And this can happen in a way which exceeds necessary limitations by far.

But an individual can only keep his dignity through personal responsibility. Therefore the citizens in a community need to trust each other, so that all individuals are able to act and live without unnecessary regulations affecting their freedom or self-responsibility.

This is the image of a liberal civil society, to live in a community/municipality with as few regulations as necessary. However, a liberal civil society is characterized by an active citizenship where each individual feels responsible for the general public, demonstrated through free activities, voluntary co-operation and work, as well as taking responsibility.

This ideal image of a broad self-responsibility requires as many ways of influencing the structure  of the local government. The Swiss model with a high degree of plebiscitary elements is one example of such a model.

To adopt the Swiss model is almost impossible in most countries of the world. However, there

are some visible ways of increasing citizen’s participation. Such means to improve public participation can be found in the work fields of “city development” and in some cases through the setting up of the municipality’s budget, which can be called the citizen’s budget.

We can imagine that this can be extended to many more areas of citizens’ participation initiatives.

From a liberal perspective, the goal of municipal politics has to be that voluntary and private initiatives dominate the public life, and public administration only intervenes for subsidiary reasons. But we know that today this is just a vision.

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See also:

CSOs and State 7: Public School Library with Minimal Government, BftB, June 29, 2009
CSOs and State 8: Gawad Kalinga, Health NGOs and Taxes, September 19, 2009

CSOs and State 9: The Global Fund and Corruption by Some Phil. Health NGOs, March 10, 2010

CSOs and State 10: The Role of Civil Society, June 15, 2010 

CSOs and State 10: The Role of Civil Society

Sometime in mid-November 2001, I had a debate with Mr. Nicanor Perlas in the KOMPIL yahoogroups/ Mr Perlas was a known environmental and civil society organizations (CSOs) leader in the country then. He ran for President in the 2010 national elections as an independent, with no established political party to support him. He lost naturally, along with other candidates from small and non-established political parties.

The debate started with his critique of then NEDA Deputy Director General (DDG) Popo Lotilla over certain decisions of the Philippine Agenda (PA) 21. Since the focus of this paper is on the theoretical debate on the role of civil society, I removed discussions that focused on details of the debate then. I copy-pasted Mr. Perlas’ postings in pilipinasforum yahoogroups and that’s where a friend, Ozone Azanza was able to read and made counter-arguments against his points.

Here are the snipped exchanges:

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Dear Mr. Perlas,

You said,

the PCSD and PA21 take, head on, the challenge of globalization in the framing of its agenda, policies, and programs. In this way, the Philippines has a powerful alternative to the neo-liberal, radical free market approach of the World Bank, IMF, and WTO, an approach the NEDA is beholden to, an approach that is starting to collapse rapidly worldwide.

The beneficiary of liberal flows of capital and international NGO funds consider free market as "an approach collapsing rapidly worldwide.” 

In a number of papers and discussions, Mr. Perlas defines civil society as "an institution to challenge the totalitarianism of the state and the market". To which I don’t really buy. For me,

a. Markets - individual producers and traders, individual firms and consumers, from prehistoric times to the present - make the world go round.

b. State - an invention to correct market failures, address harmful "externalities", provide "public goods".

c. Civil society - an invention to correct state failures and inefficiencies, later lambast market's self-correcting mechanisms (such as de-monopolization of industries through deregulation & more competition).

Thus, I find the PCSD's composition - 16 from govt., 9 from civil society, 2 from labor (hence, 2 more for civil society), 2 from business - rather weird. The government bureaucrats and many self-styled civil society leaders outvoting business who provide jobs, who produce & trade the goods and services that give sustenance to the other 2 groups. And this set-up is almost "ideal, second to none", according to Mr. Perlas.

-Nonoy Oplas

I agree with you, Noy. There may really be some extreme positions that the civil society group of Mr. Perlas would want Deputy Director General (DDG) Popo Lotilla to endorse to the Office of the President. And of course, the good DDG would not be anybody's lap dog. As one of the only two real recognized experts in international law (the other would be Commie Haydee Yorac?) of course he would have to view things bearing the Philipines' various commitments in the international arena. The problem with SOME civil society groups/watchdogs is they act like kalesa horses. They can see well up ahead, but their peripheral visions are restricted. In a globalized market setting, nations can not be saddled by NIMBYism and other restrictive tendencies. The world is changing, and we have to change with it.

-Ozone Azanza

CSOs and State 9: The Global Fund and Corruption by Some Phil. Health NGOs

There is "The Global Fund" (TGF, http://www.theglobalfund.org/en) to fight AIDS, TB and malaria. It's a multi-billion dollars fund from different sources, public and private, I think. To be distributed to poor countries to help them fight those 3 dreaded diseases.

Last February 26, 2010, the Office of Inspector General (OIG) released its "Audit Report on Global Fund Grants to the Philippines. Long report, 121 pages, and it showed some ugly findings. That some big health NGOs in the Philippines are engaged in some financial shenanigans in handling public funds. The report can be downloaded at
http://www.theglobalfund.org/documents/oig/Philippines%20Country%20Audit%20-%20Report_26%20February%202010.pdf

On page 12, paragraph 32, the Tropical Disease Foundation (TDF), a "non-profit" group, was shown to have engaged in over-pricing, over-billing, non-documented spending, etc., it has to repay P95 million to TGF.

Here are some details:

Net amounts repayable from reconciliation of Gen Fund, P58.33 million
Overcharged laboratory test fees, P11.83 million
Excess costs charged for the NTPS, P7.47 million
Excess funds drawn for salaries, P7.40 million
Laboratory tests rates that were applied retrospectively, P4.83 million
Billing for tests that were not conducted, P4.60 million
Amounts billed to patients for tests paid from grant funds, P0.54 million

Total P95.00 million or US$ 2.021 million

The OIG summarized its finding re TDF as "TDF lacks the capacity to manage Global Fund resources. The Global Fund cannot safely invest through TDF’s current systems and processes. TDF should also refund" the above-mentioned money.

On page 57, paragraphs 225 to 229, here are some of the questionable funds involved:

a) unpaid service incentives but retained by TDF Gen. Fund account, P642,858.
b) excess service incentives with no support documents, P575,041
c) stolen staff advances, undetermined amount.

On page 58, health NGOs World Vision and the Philippine Coalition Against TB (PhilCAT) got these funds with little or zero documentation:

World Vision, Euro 16,911
PhilCAT, US$ 300,000
PhilCAT, Euro 44,691

This is how the OIG wrote,

"The PR charged unbudgeted expenses to SR program budgets. Transfers of the above funds were made to TDF’s Gen Fund account and subsequently used as part of the costs for the National Tuberculosis Prevalence Survey. In the case of World Vision, a letter was written by TDF advising that the transfers to TDF were to be charged as monitoring & evaluation costs. For Philippine Coalition against Tuberculosis (PhilCAT) there was no documentation but funds were drawn by TDF from funds held in trust on behalf of the SR. The NTPS expenditure was not budgeted to be undertaken by the SR and should not have come out of the SR budgets."

Generally speaking, a number of supposedly "non-government organizations" behave similarly, if not worse, than government officials and politicians who are corrupt. Any opportunity where they can get hold of public funds, they also steal. Or at least do not follow the agreed terms in handling and accounting properly the funds entrusted to them.

Real "non-government organizations" (NGOs) and other civil society organizations (CSOs) should not be demanding always for "more government funding" and similar demands. As the acronym explicitly says, they are "non-government" and it is not proper for them to be too cozy with, or acting like spokesmen for, government agencies and bureaucracies.

Read the OIG's audit report and be dismayed.

In the case of TDF (http://www.tdf.org.ph), they should produce a clarification paper quick. They lose their credibility from this damning report by the OIG of TGF.
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Simple Ways for Responsible Citizenry

(Note: this is my article for "People's Brigada News")

Now that the elections are over, we go back to our regular work. And while we expect our newly-elected (and re-elected) political leaders to be good and not corrupt, we citizens should do our part. Below are some simple things that we can do.

One, obey the basic laws and rules. Do not steal, do not kill, do not rape, do not extort. Traffic laws say stop on red lights, so stop on red lights. Environmental laws say do not throw your garbage just anywhere, so put your garbage only on designated places. Let us help promulgate the rule of law in our country.

Two, report directly the law violators. Or if we are afraid to directly confront those who think they are above the law, take pictures or videos, write or blog those whom we saw or observed, to be violating the laws. Like police cars or any other government vehicles, media vehicles, etc. that do not obey simple traffic rules. Let us help promulgate the rule of law in this country.

Three, take good care of our own body and that of our family members. Healthcare is first and foremost a personal and parental responsibility, not government responsibility. Do not over-drink, over-smoke, over-eat, over-fight. Preventive healthcare is several times more effective than curative. Let us have less smoking-related, less drinking-related, less fat-related, diseases and sickness. Currently, about six to seven of the Top 10 causes of death in this country are directly or indirectly related to smoking.

Four, assume more parental or guardian responsibility in our children’s education. Education is first and foremost, personal and parental responsibility, not government responsibility. Responsible parents work hard to bring their kids to good private schools. Or if they cannot afford private education, send them to public schools but provide additional learning materials like computers, books and educational tours.

Five, teach our children and minors the value of hard work and frugality. Let us inculcate self-reliance and independence, not dependence on government welfare, subsidies and dole-outs. Let us encourage them to become non-envious of the wealth and success of others if such wealth is a result of hard work and efficiency.

Six, let us support or form voluntary and civic organizations that provide charity work to our less-fortunate countrymen and fellowmen, even from other countries. The essence of civil society is the voluntary support and active involvement of citizens on issues affecting their communities with the least and minimal involvement of the government and its various agencies and bureaucracies.

Severn, let us convince, even pressure, the government and the politicians to reduce the number of taxes and fees as we are taking more personal and parental responsibilities of certain social and economic concerns that used to be heavily provided and subsidized by the government. Let us keep more of our income and savings so that we can have more resources for ourselves, our households and communities. Government should also reduce the number of regulations, restriction and other forms of prohibitions on citizen activities, especially those related to entrepreneurship and private sector job creation.

This list is not complete nor comprehensive. Readers can add their own suggestions too. What is important is that we always bear in mind the need to respect and promulgate the rule of law, where the law is above everyone, no one is exempted from the law and no one can grant exemption from the law.

If individuals, their parents or guardians exercise more responsibility of their own health, education, nutrition, housing, credit and so on, then there is no need for huge education (elementary to college), health, food, housing and related bureaucracies. And there will be no need for multiple taxes and fees to sustain huge bureaucracies and huge subsidies. And soon we will need less politicians, less government employees and bureaucrats, as more and more people will be engaged in productive work in private enterprises in a competitive business environment. Meaning more people will become self-reliant and are involved in voluntary charity work.

Let there be more entrepreneurship and private sector job creation, less public sector politicians and bureaucrats.

This way, we need not write and expect a lot from the present and future President, legislators, cabinet secretaries and other government officials. Responsible and independent citizenry is all we need to have a small, transparent, accountable and good government.

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See also:

CSOs and State 5: Subsidiarity, Decentralization and Privatization, September 04, 2008
CSOs and State 6: Stichting Kapatiran and Books for the Barrios, December 07, 2008
CSOs and State 7: Public School Library with Minimal Government, BftB, June 29, 2009
CSOs and State 8: Gawad Kalinga, Health NGOs and Taxes, September 19, 2009