Corona Trial 3: Impeachment, the Senate and the Supreme Court

I personally believe that Chief Justice (CJ) Corona is corrupt, he should have resigned early on. Or he should have not accepted in the first place, the offer of being a CJ during the last few weeks of the Gloria government. But government being an institution of coercion, is full of hypocrisy, both the accused and the accusers have dirt in their hands. Nonetheless, the impeachment proceedings are going along the rule of law, the law as stipulated in the 1987 constitution.

If he is not corrupt, he should have volunteered to face the impeachment court even on Day 1 of the Senate trial. If someone will accuse me of being a theft or corrupt or what have you, I will challenge that person to a public debate or trial not a month or a week from now, but right there and then. People who are evasive and most likely guilty of corruption, would buy time, employ all forms of legal technicalities to delay or even duck personal appearance, showing cowardice in a highly charged impeachment trial. He was forced to announce an appearance only after the damaging testimony of the Ombudsman.

The discovery of his huge dollar accounts that were not reflected in his Statement of Assets, Liabilities and Networth (SALN) is now a big proof of his dishonesty. Private citizens have the right to privacy like keeping huge dollar accounts, true. But public officials are not private citizens. No one put a gun on their head to join government, they entered the service on their own, voluntarily. Thus, the law on transparency of public officials should apply to them, ALL of them, from local to national government officials and personnel.

If one is already rich and has joined the government, then one should declare those wealth, say a billion pesos networth. After his term and the networth is slightly bigger than the original amount, no one can accuse that official of enriching himself while in government, because the public is aware that he was already rich before joining the government.

Thus, even if Corona has only US$ 1,000 in his foreign currency accounts, he still should have declared it in his SALN. By hiding it, is additional proof that he indeed cheated on his SALN. A cheater on small things can be a cheater on big things, and he is the CJ of the Supreme Court, the last bastion in society to promulgate the rule of law.

Private intrusion of public officials' lives is limited to what are provided in existing laws. Like the law on mandatory declaration of SALN each year. If someone will demand that the SALN of official X is questionable for whatever reason or purpose, then such SALN should be readily available, no presumption of guilt yet.

If one is rich and does not want his/her wealth to become a public commodity someday, then he/she should not join the government. If there is low supply of qualified people to head certain bureaucracies for fear of such public scrutiny, then well and good, we can start abolishing some agencies and we also start reducing if not abolishing certain taxes that finance those agencies.

Meanwhile, I like this article by Peter Wallace....

http://manilastandardtoday.com/2012/05/04/its-all-about-morality/

It’s all about morality

Posted May 4th, 2012 by Peter Wallace & filed under Opinion.

I was at the Supreme Court before Holy Week and was horrified to see huge “campaign” banners proclaiming SC personnel’s support for Corona. It looked like campaign headquarters, not a nation’s Supreme Court. These are people who are supposed to take no sides, to be completely dispassionate and make no judgments outside what the court decides. It may be that it’s not only Corona who doesn’t have the moral character for the position, but the whole court. Is it why there are close to 8,000 pending cases in that court? Is it why cases in the courts under its control can linger longer than the sentence that would be imposed IF people incarcerated in jails awaiting trial are found guilty? Is it why the alleged (I must say that according to the lawyers) murderers of 57 people can be in a court for two years and four months with no progress on the trial at all? Yet a former president, a friend of the court, can get an inconsequential, in comparison, a temporary restraining order issued in hours.

It seems Corona was right on one thing, this is not an attack against him, as a person, but the Judiciary as a whole. Given this disgraceful exhibition on the front of the Supreme Court of the Republic of the Philippines, the court as a whole should indeed be under investigation. This is partisan politics of the worst kind. If Corona is found guilty simple logic says they should go too. Or don’t court employers do Logic 101, let alone courses on morality, decency and polite social behavior?

When a man can accept an appointment with glaringly obvious political motives from a leader who will no longer be there, and nine of 15 Supreme Court justices can agree it’s OK, then the moral fabric of Philippine society is indeed in tatters.

It’s time for a complete shakeup of the Philippine court system in its entirety, not just removal of one man. Let’s hope this is the catalyst for that.

The Dalai Lama said “there is no religion higher than truth”. Corona and his lawyers might want to reflect on this. They should be wanting to expose the truth, not hide through obfuscation as has been their want to date. The Dalai Lama added, “What really is important to me is your behavior in front of your peers, family, work, community, and in front of the world”. And Corona might want to add “in front of his god”. Does he have the clear conscience God will expect?

The acceptance of a midnight appointment was behavior unbecoming of a Chief Justice of a nation. For that reason alone, he is unsuitable. An honorable man would have politely declined and left it to the incoming leader to make the choice. He failed to meet the high moral standards demanded of a Chief Justice. If he were an honorable man, as he claims, he would save the nation from all this divisiveness and dissension, and resign. That he doesn’t is another reason he’s unsuitable.

The nine 9 justices who declared the midnight appointment as constitutional should also be impeached. Better yet, they should resign in shame. They have brought shame to this society dismissing morality so cavalierly, so loosely. They should have spent the Lenten break reflecting on what Christ taught about the absolute importance of morality in society.

I’ve read an argument that public opinion doesn’t matter, and that the senators should ignore it in their judgment of Corona. But it does matter, the people must have faith and confidence in their court system, and particularly in the Supreme Court. More particularly in the head of that court. If the people no longer trust him he cannot function and he brings the whole court into question. Whatever the Senate decides he can no longer lead the court.

Corona must resign for the stability of the Judiciary. The very fact that he already hasn’t given all the controversy is itself reason he’s unsuited for the position. His ambition (evident in his acceptance of a midnight appointment) overrides his conduct as a gentleman. He may be as innocent as hell (a carefully chosen word) but no legal chicanery to claim him so will be accepted. This is a reality his lawyers might want to ponder.

Speaking of legal chicanery, how can the defense claim that it will prove Corona’s wealth was not ill-gotten (a newspaper report) when it was the defense that blocked investigation into the source of his wealth at the beginning of the trial because it “wasn’t in the articles of impeachment”. It wasn’t because its existence wasn’t known at the time the articles were prepared. Once uncovered, of course the source should be investigated as it’s very, very relevant to his honesty, or otherwise. His dollar accounts must be opened. But it doesn’t matter how much is in them, they weren’t listed at all in his SALN. That alone makes him guilty.

The President seems hell-bent in reforming the judicial system. I support that, as well as his single-minded focus on Corona as a start of this reform. Someone has to do it.

This is not a legal case. It is a test of the moral fiber of the nation.
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See also:
Corona Trial 1: Impeaching the SC Chief Justice, December 13, 2011
Corona Trial 2: Impeachment for Beginners, December 14, 2011
Weekend Fun 29: Corona Impeachment Cartoons, March 02, 2012


Rule of Law 12: Gloria Arroyo, Travel Abroad and the SC, November 16, 2011

Pol. Ideology 29: Raison d 'Etre of Government

In my UPSE alumni association yahoogroups, the back cover of a new book written by a fellow UPSE alumni, Dr. Armando "Mandy" Armas Jr., Impeachment Quagmire: Is the JPE Senate Court Legitimate? was posted.

I commented on it, and another alumni, Gary Makasiar, posted several questions. Here is our exchane, from May 17 to 20, 2012. Posting this with implicit permission from Gary as he has given me such privilege in our previous exchanges.
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I like Mandy Armas' point on

Justice is of higher law than of national defense and the economy... The raison d'etre of the State is to render "No injustice to anyone.

This is the essence of the rule of law. I agree with Mandy that this is the main function of government -- promulgate the rule of law -- plus protect private property rights and civil rights (freedom of expression, freedom from aggression) of the people. All other functions like to give endless subsidies and welfare, to run state universities (like UP), govt hospitals, casino and sweepstakes, other govt corporations, to "save the planet" are secondary if not non-essential functions of government. But I digress.

On the corona trial, I personally believe that CJ Corona is corrupt, he should have resigned early on. Or he should have not accepted the offer of being a CJ during the last few weeks of the Gloria government. But government being an institution of coercion, is full of hypocrisy, both the accused and the accusers actually have dirt on their faces. Just to simplify the matter, the impeachment proceedings I think, are going along the rule of law, the law as stipulated in the 1987 constitution....

-- Nonoy

Noy, we may have to make a distinction between two activities. It is one thing for the State to apply and enforce the Law equally or equitably on everyone. That surely sounds like it meets the ;no injustice to anyone' principle. Though even here, not all states are able to comply impeccably.

It is quite another thing for the State to adopt only fair and equitable laws so that there is 'no injustice to anyone'. Here, many states seem to fail miserably. Even representative governments. Especially states where lobbies are legally recognized.

So which activity were you referring to as the state's main function?

-- Gary

Health Transparency 6: Physician Protectionism

Nearly 3 years ago, I wrote this:
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Physician Protectionism

July 24, 2009

My clubmate in Rotary, a board member of MG Thinkers and a physician friend, Dr. Jed Inciong, wrote about a certain bill in Congress that imposes what can be considered as "physician protectionism".

Jed said that certain elitist specialty societies and medical practioners who belong to private associations affiliated with the Philippine Medical Association (PMA), are now moving to corner the practice of specific aspects of medical practice in pushing for the Medical Integration Bill, House Bill 5575. Jed added,

In the guise of moving into self-regulation of the practice of medicine, the PMA follows meekly in the dictates of the specialty societies. What the House Bill actually aims for is to limit specialty practice to only those that these specialty societies approve. But the reality is these PMA affiliates are not the only "umbrella organization" of specific medical specialty practice. An example would be that there are 2 or 3 more umbrella organizations for the practitioners of dermatology not belonging to the derma society which is affiliated with the PMA.

If this bill becomes law, it shall discriminate against the vast majority of physicians practicing outside the major metropolitan Philippine cities. Even more so, it shall compromise the practice of the majority of physicians employed in government hospitals outside these same Metro areas.

It was the first time I've heard of this issue, I thanked Jed.

Protectionism -- only us, no competition -- by so many professions in the country is institutionalized in the Constitution itself: engineers, architects, lawyers, physicians, nurses, accountants, etc. are reserved only for Filipinos. Filipino doctors and nurses can practice almost anywhere in the world but foreign doctors and nurses cannot practice here! Talk about hypocrisy and double standard.

Now among Filipino physicians, there is this physician protectionism proposal in Congress. It never fails. People who have some protectionist, even evil, plans always run to the State.

In a free market environment, patients and the public have the freedom to choose who are the doctors and health professionals who can treat them. This pressures the health professionals and establishments (hospitals, clinics, HMOs, etc.) to have good professional reputation and good corporate integrity. They may be expensive but there is good quality of service attached to their names and patients hold on to that image.

No government coercion needed here, by forcing patients to seek treatment only to physicians affiliated with a particular medical association or society. And physicians outside of that medical association will be penalized with "non-accreditation" and hence, will get somehow a negative image from the patients, even if those physicians have good professional record.
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I think this bill did not  become a law, thanks.  Last week, a discussion with some friends in facebook about "open sky" policy and airline reciprocity moved to a discussion on reciprocity in the practice by professionals from other countries. Here's our brief exchange on the subject:

Nonoy: When Filipino doctors, nurses, engineers are allowed to work as doctors, nurses and engineers in the US, UK, Canada, etc., those countries did not ask for "reciprocity", that American, British, Canadian, etc. doctors, nurses and engineers should also be able to work here. They are banned from practicing here, Constitutional ban.

Steve: Nonoy, thanks for raising the issue of the closed doors of the Philippines to any non-citizens receiving licenses to practice, although our citizens can and do freely practice in many other nations, as long as they pass the test and pay the licensing fee. I think registered dietitions (or nutritionists) are the only ones allowed reciprocity and that only with the US.

Nonoy: Discussion of reciprocity, I think an "innocent" but hypocritical concept. "I open thiis so long as you open that too." So if one or both won't open, or just open up a bit, then both parties or both governments will be closing opportunities for their people. It's good that the US, UK, etc. are more open minded with regards to mobility of people, they allow Fil doctors, nurses, engineers, dentists, etc. to practice in their countries, did not ask for reciprocity from some slightly xenophobic governments like the Philippines.

Steve: I don't know the policies of openness in licensed professions for Japan and Korea, but the US and UK certainly allow any competent person to practice, regardless of citizenship. Perhaps a case could be made for that infusion of talent and "mind-power" adding to the power of the economy?

Nonoy: I think even the leaders of the local professional organizations (PMA for physicians, PNA for nurses, UAP for architects, IBP for lawyers, etc.) who probably lobbied for that provision in the constitution to ban foreign professionals from practicing in the country know the arrogance and hypocrisy of their position. They did not even cite "reciprocity", they simply wanted an outright ban and prohibition of foreign professionals.

All economic growth of any country mainly comes from one important resource: people, their brains and muscle. That is why big population countries usually have large economies -- more entrepreneurs, more workers, more professionals, more consumers. But some small population countries have big economies too, because of the entry of more brains, including foreign brains and muscle, into their country. LIke HK, Sing, Netherlands, etc.
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I hope that should a constitutional change become a reality someday, not only the 60-40 restrictions on foreign equity be removed, ie, foreigners can own 100 percent equity in more sectors and industries in the country, but also the restrictions on the practice of foreign professionals here will also be lifted. Especially for health professionals like physicians, dentists, nurses, med techs, pharmacists, and so on.

See also:
Health Transparency 1: MeTA Forum January 2009, January 26, 2009
Health Transparency 2: CHAT Discussion and Debates, June 15, 2009
Health Transparency 3: MeTA Forum January 2010 (Prevention vs. Medication), January 27, 2010
Health Transparency 4: Drug Promotions and Government, September 03, 2010
Health Transparency 5: Forum on Good Governance in Health, March 08, 2012

Weekend Fun 34: Greece to Become a Social Network

I found this funny story today. All the cartoons I got from the web.

http://www.borowitzreport.com/2012/05/18/greece-no-longer-a-nation-announces-plan-to-become-social-network/

Greece No Longer a Nation; Announces Plan to Become Social Network

IPO Imminent for FetaBook

POSTED MAY 18, 2012

ATHENS (The Borowitz Report) – After struggling for months with an intractable financial crisis, Greece announced today that it would cease to exist as a sovereign nation and would instead reboot itself as a social network.

The new entity, FetaBook, is expected to raise much-needed billions in an upcoming IPO.

The social network formerly known as Greece announced that it would cancel its upcoming elections and instead install a CEO, a 24-year-old hacker from suburban Athens named Ciro Mavromatidis.

Speaking from the newly opened offices of FetaBook, Mr. Mavromatidis explained how the social network would be attractive to the investment community in ways that Greece was not.

“We’re keeping all the aspects of Greece that made it a cool brand – the ruins, the Olympics, the olives,” he said. “We’re just losing the things that were a drag on the Greek economy: namely, the Greeks.”

He said under the new plan, all Greeks would cease to be citizens of Greece and would instead become friends of FetaBook: “They won’t receive any government benefits anymore, but they’ll be able to grow all the imaginary food they want.”

Mr. Mavromatidis said that by converting from a nation to a social network, FetaBook will enjoy other cost savings as well.

“We Greeks waste billions of dollars a year smashing plates after meals,” he said. “Now that’s going to be done by an app.”
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And more cartoons...

Happy weekend.
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See also:
Weekend Fun 26: Jokes in PH Elections, January 15, 2012
Weekend Fun 29: Corona Impeachment Cartoons, March 02, 2012
Weekend Fun 31: Filipino Shop Signs, March 17, 2012
Weekend Fun 32: Angry Birds, Angry Taxpayers, March 24, 2012
Weekend Fun 33: Government Welfarism Moolaah, May 06, 2012

FDA Watch 3: Retirement of Dr. Suzette Lazo from FDA

(* Note: the original title of this paper was "Resignation of Dr. Suzette...")

I posted my initial observation about the Senate hearing last week on DPRB,  Fat-Free Econ 9: Drug Pricing Bureaucracy is Not Cool in our CHAT googlegroups. FDA Director, Dr. Suzette Lazo, is a member of our discussion group as she used to be with us before she was appointed to head that office.

In my notes to the group, I said that some of our legislators motormouth like they know everything in this planet, they are hypocrites. I pity Doc Suzette and other guest speakers sometimes because while they have to do many administrative work in their offices, attend to various invites and meetings by sectors that they  regulate, they have to spend many hours at the Senate or Congress, only to speak for 3 minutes or less.

Sen. Villar and the congressmen, they have been in the legislative body for many years (Villar has been in Congress since the 90s), and they do not understand that FDA's mandate is on food and drugs' quality, never on pricing. Yet they keep inviting the FDA officials to discuss bills on drug pricing, weird.

Doc Suzette replied to my observation, rather long. I thank her for giving me permission to post it in this blog. She wrote,

Noy,

This very perceptive insight on your part is totally correct and I really appreciate. In fact very few in government understand what the FDA is all about- although they act like they do. I have been giving presentations on this when I get the chance- para akong evangelist ng FDA. It is a poorly understood agency, much maligned and very little appreciated. People don't realize that it is the only government agency that stands between them and safety - as it looks after a very wide array of products: food, drugs (including biological vaccines and veterinary drugs), cosmetics and all personal care products, household hazardous substances (detergents, antiseptics, etc), household pesticides, medical devices including radiation-emitting devices, medical gases, in vitro reagents, bottled water, toys, some school supplies (pencils, crayons, inks), even tobacco but voided by an RTC court (no regulation to thwart the recruitment of the young to become hooked to tobacco).

I also want to share with the MeTA family that my position as head of the agency will be coming to a close next month. It has been a life-changing experience for me and an honor to serve government. I hope the many reforms I have started will be continued. This includes requiring mandatory GMP , inspection of foreign drug sources, evaluation of the drug approval process with the help of WHO who will be conducting an assessment on JUne 18th this year. The FDA is now undergoing ISO-certification hopefully to be completed within the year and it will also undergo PIC/s audit on September. A new Bioequivalence Committee is now in place and reviewing the list of products that will require bioequivalence testing; a new Advisory Committee on Pesticide is being set-up to address the critical safety issues and strengthen FDA's regulatory capability in this area; pesticides was placed under FDA jurisdiction in 2007 from the Fertilizer and Pesticide Authority. It was a great privilege to work with other agencies in governments such as the Dept of Agriculture to craft a much needed Food Safety Bill that will hopefully be passed soon. Linkages with other agencies were also a source of support.There were other great linkages such as with advocacy groups like ECOWASTE whose goals paralleld FDA's in line with ensuring safe cosmetics and toys; all the groups under CHAT also supported me at all levels from the budget to the most personal level and I will forever be grateful. And more - Health Justice for their support in the issues FDA faced with tobacco groups. With the academe, notably PCP and PSECP, as well as other specialty medical organizations there were multifold projects and support- such as ensuring the usefulness of the last medicines effective against MDR-TB. The Phil. Society of Dermatology helped FDA's campaign against the irrational use of intravenous glutathione. With DOST=PCHRD, and the ethics board, PHREB, a new framework and road map for clinical research management seeks to create a streamlined environment for global clinical research that will ensure the protection of Filipino patients participating in clinical trials and make available a robust regulatory environment that that promote and not impede progress. It has also been my honor and burden to play a major role in the implementation of RA 9711 which is now in the hopefully, final stages of review by DBM.

It has also become very apparent that there is a lot of work that needs to be done. First, the country needs an institution geared at training people in regulatory affairs. Second, there is a need to bridge science, real science, into the government decision making process. Countless sessions to clarify many issues should precede legislative hearings. Third, our innumerable laws need to be reviewed and harmonized. For the clinical research project, there is a collaborative effort between government, academe and industry that seeks to come up an integration of all the documents, to see if the laws jive or contravene one another, to cross-reference, etc and to distill the entire substance into a clear summary.

I have known Doc Suzette for about 3 1/2 years now, since January 2009. And I can say that being incompetent or corrupt is the last thing that can describe her. She is simply a down to earth pharmacology scientist and academic who was appointed to head a big regulatory body like the FDA.

Now that is leaving the FDA, not due to health reason perhaps, my rather malicious mind would like to think that there could be something rotten in that agency, but I doubt that she will discuss it publicly.

FDA, like all regulatory agencies in the government, national and local, can be a good magnet for scumbugs and bad elements in society. Why? Because those agencies can say Yes or No to anyone trying to bring in or introduce new products and services -- a new drug, a new skin whitener or shampoo, a new toothpaste or deodorant, a new sauce or pasta, a new juice or energy drink, etc.

Corrupt or shrewd businessmen with connection to powerful politicians though, can bring in the most unsafe drugs, the most unsafe food and drinks, to the country and avoid any requirement for bioequivalence test, or food safety test, by paying off some regulators. Likewise, businessmen who want to bring in really safe drugs, food and drinks cannot sell their products if certain regulators and product inspectors will demand extortion money.

I am not saying that certain FDA people are corrupt, that's too malicious and would require substantial proof which I do not posses. But theoretically, it is a possibility, given the high level of corruption in the Philippine government, in all branches. That is why I can never support any expansion of government, like creating a new bureaucracy called the Drug Price Regulatory Board (DPRB) because it will invite another opportunity for corruption. If the government and all its anti-corruption bodies -- Commission on Audit (COA), Ombudsman, Civil Service Commission (CSC), Presidential AntI-Graft Commission (PAGC), etc. -- cannot control existing corruption, how can they control future corruption with future bureaucracies to be created?

That is why we in civil society like the member-NGOs of CHAT, should never be hoodwinked that government is the solution to many problems in society. A lot of the problems in society in fact, are created by governments. Like the poor who do not want to be dependent on politicians, they put up a barbecue stand, a barber shop, vulcanizing shop, buko kariton, etc., and yet the local governments think these are illegal because they need to get various permits from city hall before they start their business. That's how buko kariton are being confiscated here in Makati by city hall trucks, the penalty is P1,000 no receipt possibly, they release the kariton, then go and confiscate them again the next few months. Money that could have been used by the poor vendors for their family is given to city hall or BIR bureaucrats. But I digress.

In order to make the job of the FDA and other government regulatory agencies in charge of ensuring public safety from harmful substances much easier and less bureaucratic, I think we should encourage, or at least not put more bureaucracies, companies and entrepreneurs to develop their own brands. Corporate trademark and brands that simply say, "Our name is our guarantee to the good quality of our products."

Thus, food manufacturer A that sells dozens of different food products need not bring in all their existing products to the FDA for quality testing. The trick is that just one, just one of its dozens or hundreds of different products that is found to be unsafe, will negatively affect the entire company. It will be a corporate brand that was built for many years or decades as having good image, will now be tarnished by just one product that is found to be dirty or harmful. That public penalty is worse than the FDA stopping the sale of one or two of its products into the market.

The same principle should apply to drug manufacturers, innovator or generics; should apply to all juice and drink manufacturers, multinational or local.

I doubt though that this principle will be considered by any government regulatory agency. There is money involved also in each approved product, like product certification fee, something that goes to the coffers of a regulatory body.

Meanwhile, I wish to see Doc Suzette more in CHAT and MeTA Philippines meetings and other activities when she goes back as an academic and NGO leader.
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See also:
FDA Watch 1: BFAD Strengthening Bill, May 06, 2009
FDA Watch 2: Inspection of cGMP Compliance, January 31, 2011


Health Transparency 1: MeTA Forum January 2009, January 26, 2009
Health Transparency 2: CHAT Discussion and Debates, June 15, 2009
Health Transparency 3: MeTA Forum January 2010 (Prevention vs. Medication), January 27, 2010
Health Transparency 4: Drug Promotions and Government, September 03, 2010
Health Transparency 5: Forum on Good Governance in Health, March 08, 2012

Privatization 9: PAGCOR and Casino Operations

There is a bill by Sen. Ralph Recto, SB 3178 abolishing and privatizing the Philippine Amusement and Gaming Corporation (PAGCOR), and creating the Philippine Amusement and Gaming Commission (PAGCOM), a regulatory agency.

I support this move for two reasons: One, get the money from such privatization and retire some public debts. When the debt stock is reduced, interest payment will decline. And two, government should shrink somehow, get out of casino operations and not be a player and regulator at the same time.

Proceeds of privatization should as much as possible, go to retire some debts or the excesses and over-spending in the past. Whatever savings from principal amortization + interest payment should be larger than privatization proceeds to be allocated directly to certain sectors. Hence, the savings from the reduction in debt stock and annual interest payment is sustainable.

I hope that this bill, with revision on the proposed allocation of proceeds, will become a law before the next elections in May 2013. Meanwhile, here are the 3 short papers I wrote in 2010.
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Privatize PAGCOR
August 02, 2010

(This is my article for People's Brigada News this week)

The main function of the government is to protect the citizens’ right to life, right to private property, and right to liberty and self-expression. That is, the government should promulgate the rule of law – the law against killing and murder, law against kidnapping and carnapping, law against stealing and plunder, and so on. And then people can concentrate on productive economic activities that expand the country’s wealth and resources.

The country’s public finance has been in an ugly situation for many years now, where government profligacy as indicated by persistent budget deficit (expenditures are larger than revenues) is the norm. From 2001 to 2009, for instance, the budget deficit averaged about P140 billion per year. That means borrowings of P140 billion per year or more.

This year, the projected budget deficit is P300 billion. But about 60 percent of it has been reached already in the first six months of the year. Raising existing taxes is a bad option for the public.

Privatization of many if not all, government-owned and controlled corporations (GOCCs) has a big potential of reducing the fiscal bleeding. And the Philippine Amusement and Gaming Corporation or PAGCOR should be among the first to go. Why?

One, government can raise new revenues without raising existing taxes or creating new taxes. Two, operating a gambling facility is far out as a "government responsibility." Far out compared to operating a public hospital or a public high school. Three, reduce corruption in government as that corporation is known to be a major milking cow by previous administrations. Four, raise additional revenues through tourism. Gambling and related entertainment is a big tourism project. The best tourist drawers will be the international gaming corporations like those operating in Las Vegas, Macau, Hong Kong and Singapore.

By privatizing PAGCOR and selling it to private operators, government can use the proceeds to retire some of the public debt. Then government’s annual debt servicing (principal amortization plus interests) will decline, then there will be less need for more borrowings and/or more taxation to pay old debts.

How much money will the government earn if it will privatize PAGCOR now? Based on independent assessments, that corporation can easily fetch between P67 to P100 billion if it is privatized this year. Former PAGCOR President Raphael “Butch” Francisco agreed with such valuation.

Gambling is an unproductive activity for the government. Unlike spending time and effort in public education, devoting time and manpower to operate casinos, poker, black jack and other gambling activities is not a wise move for the government.

Government can keep its function of regulating casinos and gambling facilities by private enterprises. In which case, PAGCOR can be renamed as a Philippine Gaming Regulatory Agency or similar name.

Plugging the budgetary leak and fiscal deficit this year and the coming years is among the most urgent challenges for the new government of President Aquino. Privatizing PAGCOR and other state enterprises is an important step in the right direction.

Migration and Freedom 17: US Taxing Nationals Abroad

Migration allows people to move to other places or countries that give them some optimal utility and satisfaction. No place can be perfect of course, but depending on one's priorities in life, say a good paying job, children's education, pursuit of arts and leisure, marrying someone, other reasons, people settle on a place, even temporarily, that give them that optimal degree of satisfaction or fulfillment.

Many foreigners go to the US to work, study, or stay temporarily. Many US citizens also go abroad to work, study, or stay temporarily. Fine, it gives people freedom to pursue their goals and priorities in life.

But a problem will arise if the US government will impose tax obligations to their citizens who have lived and migrated abroad. Or even people who happened to be born in the US and hence, have US nationality, single or dual citizenship, but have moved and grew up abroad. This situation is considered by some people as "tax imperialism" by the US government to their citizens abroad.

Below are three news reports of some Americans moving out and renouncing their US citizenship, or children of migrants born in the US and going back to their parents' home countries.

The first is a rather perplexing story. With the new tax regulations by the Internal Revenue Service (IRS), these Americans have two choices: pay up those tax obligations in the US to avoid further fines and penalties, or renounce their US citizenship and cut clean from such tax obligations as they already pay taxes to their home or host countries where they are staying and working now.

Here are the news reports:'s an interesting news report from the NYT yesterday.
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(1) Many Americans Abroad Surprised by Tax Code's Nasty Bite

By BRIAN KNOWLTON

Published: May 10, 2012

http://www.nytimes.com/2012/05/11/us/11iht-expats11.html?pagewanted=1&_r=1&ref=global-home

WASHINGTON — As Americans abroad chafe under sharply increased U.S. pressure to declare foreign holdings and catch up on back tax filings, one group with tenuous ties to America and the benefits of citizenship is feeling particular pain and unease.

They might be called “accidental” Americans, born during their foreign parents’ brief stay on U.S. soil, or born abroad to American parents who long ago settled elsewhere.

After lifetimes abroad, many in this group, whose total size is impossible to estimate, had believed that because exemptions left them owing no U.S. income tax they had no obligation to file returns; many have been tripped up by a requirement that they still declare their foreign bank and financial accounts.

In interviews, several people declined to allow their full names to be used for fear of complicating already complex tax situations. “Some people have never even lived in the U.S.” and learned belatedly of American tax responsibilities, said Sonia Stewart, a tax accountant in Grayson, Georgia, who works exclusively with overseas filers. “People are panicking.”

Some typical laments include:

•Roy, 37, a lifelong Canadian resident and citizen whose dual-national mother fears the U.S. tax authorities will target the modest savings account the Canadian government provides him as a developmentally disabled adult;

•Jonathan, 34, a teacher whose American parents migrated to Canada 39 years ago. He considers himself 100 percent Canadian — a maple leaf is tattooed on his back — and believed until last year that he did not need to file a U.S. return. Tax advisers now tell him he must file eight years’ returns, at a cost in fees and fines in the thousands, lest an eventual U.S. inheritance be jeopardized;

•The teenage children of Peter Hallworth, a Briton married to a Swede living in Malmo, Sweden; the children were born in the United States but lived there only as infants. Mr. Hallworth, having heard horror stories, now expects to urge his children, when they reach adulthood, to renounce the U.S. citizenship that up to now he had treasured.

Fiscal Irresponsibility 24: More on the PIIGS and European Debt

Below are some charts that I got from various sources, on some fiscal and economic data of Portugal, Italy, Ireland, Greece, Spain (PIIGS) and the other major EU economies. I will limit commentary to the sub-heading in each chart. These images are mostly self-explanatory anyway.

(1) Declining GDP growth while rising unemployment, PIIGS.

source: NYT,   http://www.nytimes.com/2012/05/16/business/economy/leaving-the-euro-may-be-better-than-the-alternative.html?_r=1&ref=global-home#


(2) Government spending 40 to 60 percent of GDP (They need lots of taxes to finance it; taxes not enough, so they borrowed like crazy).

source: Dr. Ed's Blog,  http://blog.yardeni.com/2012/05/europes-wonderland.html

h/t: Prudent Investor Newsletters,  http://prudentinvestornewsletters.blogspot.com/2012/05/unraveling-of-europes-wonderland.html


(3) Governments of G7 countries notorious for fiscal irresponsibility.

source:  http://www.economist.com/blogs/graphicdetail/2012/05/daily-chart-4


(4) 13 European economies have unemployment rate of 10 percent or higher

source:  http://www.economist.com/blogs/graphicdetail/2012/05/european-economy-guide

Meanwhile, in a facebook discussion, my German friend posted that one has to "question the collective wisdom of markets a bit when you see them panicking on the news about Greece..."

I think those bankers and market traders were just watching how much other EU governments (Germany, France, Belgium, etc.) would use their taxpayers' money to bail out Greek pensioners, welfare dependents and the huge bureaucracy. Meaning if more taxpayers' money from other European countries are expected to flow in, those bankers and stock traders will do their usual stuff. If less taxpayers money from other countries are coming in, they will panick and head for the exit. So its a question of how much moral hazards problem is being contributed by those bail out money from other European taxpayers. The bankers and traders mainly react to those moral hazards problem and do their thing as profit-maximizing or loss-minimizing individuals.

Governments created those huge public debts, they are not personal or private debts. These are accumulation of past over-spending and excesses. So the bankers and market traders are watching how much of those excesses in the past will be reformed and thrown away, or how much will be retained or even expanded, via bail out money from other European (or Chinese) taxpayers. Internal reforms like deregulation, liberalization and privatization of some (or many) government assets, and more personal responsibility in many social sectors, do not seem to be highlighted there.

Fiscal irresponsibility, spending always larger than revenues,  living beyond one's means, heavy welfarism even if revenues are not enough to sustain it, reliance on endless borrowing. These are the marks of statism bordering on near socialism policies.

* See also Fiscal Irresponsibility 23: High Debt and Unemployment and Parliamentarism Hard Sell, May 02, 2012