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Photo from Luisita Watch

Despite decades of land reform programs, millions of peasants remain landless. Land monopoly persists and continues to expand under various agribusiness venture agreements (AVAs) and other market-oriented land reform schemes such as the stock distribution option (SDO). Farmers and farmworkers who stand their ground demanding land distribution are meanwhile met with violence or intimidation by landowners and corporations.

According to the Department of Agrarian Reform (DAR), 93% of the remaining balance for land redistribution are private agricultural landholdings. There are more than 97,000 hectares of agricultural land converted to other uses while more than 120,000 hectares have been approved for conversion between 1998 until January 2016. The number is bound to increase as the Duterte administration’s economic managers barred the proposal for a moratorium on land use conversions. Land that can be planted to food is continuosly narrowed.

Former DAR Secretary Rafael “Ka Paeng” V. Mariano had proposed the moratorium to increase the country’s food production. Mariano also intended to make a comprehensive inventory of the current state of landlessness. This was to confirm if agrarian reform beneficiaries (ARBs) are indeed in control of the land acquisition and distribution (LAD) accomplishment as reported by the DAR and the Department of Environment and Natural Resources (DENR).

Also according to the DAR, there are more than 1.2 million hectares of distributed lands that are under various AVAs. These are on top of the 57,000 hectares officially listed with the DAR. In many of these AVAs, ARBs still do not have control over their awarded lands. They either work as farmworkers or perform odd jobs as corporations lease their lands for production of export crops such as bananas and pineapples.

Hacienda Luisita

The continuing struggle of ARBs to assert their claim over the sprawling 6,453-hectare Hacienda Luisita in Tarlac attests to the failure of decades of a faulty land reform program under the Comprehensive Agrarian Reform Program (CARP) and its extension, CARPER. The Aquino-Cojuangco clan continues to employ all means including harassment and intimidation of the ARBs to maintain control over the hacienda.

Earlier this year, Nanay Violy Basilio’s makeshift hut in her rice farm at Hacienda Luisita’s Barangay Mapalacsiao was bulldozed by private guards. She has been tilling here since her son, Jhavie Basilio, was among the seven who were killed by Armed Forces of the Philippines (AFP) troops in what is now known as Hacienda Luisita Massacre 13 years ago. They were protesting against the Cojuangco-owned Central Azucarera de Tarlac (CAT) company’s union busting and deceptive stock-sharing scheme that entailed a measly Php9.50 per day in hacienda wages. They were demanding genuine land distribution.

Nanay Violy was one of the 111 farmers who refused to accept their Certificate of Land Ownership Award (CLOA) and sign related documents accorded by the tambiolo system, which she said was anomalous. Described by farmers to be the DAR and the Cojuangco-Aquinos’ mockery of land distribution, the tambiolo raffles supposed farmworker beneficiaries’ names, arbitrarily assigns them lots, and requires them to sign an Application to Purchase and Farmer’s Undertaking. It is in purported compliance with the five-year-old Supreme Court order to distribute the land to Hacienda Luisita farmers. But it also stipulates the latter’s obligation to amortize the land. Low- or no-income farmers deem this unreasonable. The hacienda lands should have been given back to the farmers 50 years ago per government’s condition to the Cojuangcos who secured a loan to buy the property from the Spaniards in the 1950s.

Tatay Onie Santos and his wife Nanay Dolor also refused to accept their CLOAs and sign the undertaking documents. According to Tatay Onie, the tambiolo awarded parcels of land to around 1,000 non-beneficiaries such as Cojuangco’s driver and gardener, while farmers who are vocal against the Cojuangcos’ schemes are being thrown to critical areas. He was, for instance, transferred to Barangay La Paz after his mango and santol trees in Barangay Texas were cut down by hacienda guards. Meanwhile, part of Nanay Dolor’s assigned .66-hectare land was a garbage lot in Barangay Silangan, which is around 3 kilometers away from the rest of the parcel awarded to her.

Assertion

Through cooperative land occupation or bungkalan, peasants in various provinces across the country assert their right to make land productive. With bungkalan, peasant communities are able to directly address food insecurity and hunger. Agrarian reform and rural development are also forged right from the heart of the struggle for land and social justice.

Nay Violy, Tay Onie and Nay Dolor have been joining peasants from the other Hacienda Luisita barangays in consecutive bungkalans for years now. They said that even after the massacre, the Cojuangcos have repeatedly attempted to dampen the farmers’ unity through harassment, burning or bulldozing bungkalan tillings. Peasant leaders and activists have been murdered. Yet, this only fired up the resolve of farmers’ groups to stand their ground and to continue strengthening their ranks in reclaiming their land.

Last year, bungkalans took  place in more than 300 hectares of Hacienda Luisita not included under land reform. These are now planted to rice and various vegetables which the farmers both consume and sell. This year, about 250 individuals benefited from bungkalans. On the fifth anniversary of the Supreme Court (SC) decision this April to distribute the hacienda lands to the farmers, sectors joined forces in symbolically damaging the wall around a 500-hectare parcel which the Cojuangcos sold to the Yuchengcos’ Rizal and China Banking Corporation (RCBC).

In June this year, on the anniversary of the failed Comprehensive Agrarian Reform Program (CARP), Luisita farmers and other sectors from Central Luzon and Manila worked together in parcels planted to rice and corn. They were  unfazed by high-powered firearms-bearing Philippine National Police (PNP) troops guarding hacienda portions that the Cojuangcos still claimed. On the same day, simultaneous bungkalans were conducted in various provinces nationwide, challenging the prevailing land monopoly of a few clans.

In Batangas, over 100 farm workers and advocates successfully occupied 51 hectares of idle Hacienda Roxas lands. These have been distributed more than two decades ago but farmers’ attempts to cultivate it were prevented by Roxas and Co., Inc. (RCI), which wants to convert the land to other uses. After persistent assertion by the Damayan ng mga Manggagawang Bukid sa Roxas-National Federation of Sugar Workers (DAMBA-NFSW) and with help from the local government over the past months, the bungkalan participants were finally able to plant rice, corn and different kinds of vegetables in said land. These hectares used to be planted to sugarcane along with more than 2,500 distributed hacienda hectares.

In the same province, portions of the of the 8,650 hectares Hacienda Looc, in Nasugbu, Batangas, claimed by the Henry Sy-owned Manila Southcoast Development Corporation (MSDC), was collectively cultivated by farmers in January of this year. They are now harvesting bananas, papaya, corn and other vegetables such as okra and eggplant. In Dasmariñas, Cavite, about 100 farmers from the community and neighboring farms occupied 155 hectares of idle agricultural lands. Realty corporation Sta. Lucia Inc. plans to develop these lands into a subdivision. Security troops and military personnel constantly conduct door-to-door searches, threaten and harass farmers and file trumped-up charges. Still, farmers’ groups persist in collective land cultivation.

In May, over 150 banana farm workers belonging to the Madaum Agrarian Reform Beneficiaries Incorporated (MARBAI) in Davao del Norte and accompanied by thousands of supporters from Mindanao and other regions have finally been able to start occupying 145 hectares formerly of Lapanday Foods Inc. (LFI). The lands have been awarded to them under the CARP. Contesting DAR’s order for the farmers’ installation, the Lorenzo clan-owned LFI has repeatedly—sometimes violently—foiled farm workers’ attempts to occupy their land and has even filed a case against DAR for facilitating the farmers’ installation.

Among numerous land cultivation activities in the Negros island, there have been more than 200  bungkalans which began since 2009 spanning 3,000 hectares and benefiting 2,000 farmworkers in Negros Occidental. Farmworkers or dumaans here are known to receive only a meager Php170 in daily wages. Sakadas, or farm laborers not from the area, receive much lower wages  (Php110 for males and Php100 for females). Still, others receive Php80.00. Most land cultivation endeavors that plant rice, sugar and vegetables including squash and mongo, succeed with members of the National Federation of Sugar Workers (NFSW) from various communities banding together to help each bungkalan area. Peasants here make sure that the lands where they implement bungkalan already have official notices of coverage. Yet, especially in landholdings claimed by big political clans such as the Cojuangcos, many peasants are still charged with fabricated cases such as forcible entry, malicious mischief, grave coercion and theft or robbery in band. Various security forces including blue guards, police and firemen and even army battalions continue to perpetrate rights violations from harassment to extrajudicial killings.

In far north Philippines, almost 200 families composed of Kalinga, Isneg and Agta indigenous peoples also launched bungkalan over 561 hectares in Lallo, Cagayan Valley. It was a civil reservation for cultural minorities allocated during the Marcos regime, which they planted to fruit trees such as mango, coconut, banana and jackfruit. While collective CLOAs already cover said lands, various businesses such as in real estate, transport vehicles, agro-industrial, mining, among others, attempted to encroach the area. The people repeatedly and collectively confronted the DAR until it acceded to their demands. In 2015, Isabela farmers also successfully reclaimed lands in Delfin Albano, which Japanese and Chinese companies planted with sugarcane and cassava plantations for bioethanol production. Farmers belonging to the Sta. Cruz Farmers Association-Danggayan Dagiti Manalon (DAGAMI)-Kilusang Magbubukid ng Pilipinas (KMP) launched a sustained bungkalan in said lands spanning about eight hectares by planting monggo and other vegetables. With the participation of farmers from neighboring municipalities, the former landlord’s maneuvers to suppress the collective action were frustrated.

Building blocks

Through the bungkalans, farmers across the nation have been making dents in ensuring their own food security and in breaking land monopoly and defying big businesses’ landgrabbing through sheer collective action. This has been made possible by the solidarity of other sectors of society, including the support of sympathetic business, religious, professional, government, non-government and other offices and groups. According to Tay Onie, being able to harvest one’s own rice or vegetables for their families to get by on a daily basis gives substantial relief to farmers compared to having to work in farms for very scant wages and under exploitative terms. Nay Violy also said that she would not for anything exchange the gains of bungkalan in terms of self-determining what food to produce and how.

Collective land cultivation staged by stronger and an increasing number of peasants’ organizations nationwide are also building blocks to agrarian reform and rural development. These involve increasing farm production and lowering its costs, improving farmers’ wages, modernizing the process through mechanization and ample agricultural implements and ultimately appropriating all arable lands to the nation’s tillers.

 

 

Land holdings 2
After a series of failed land reform programs, the large landholdings of the country’s big family names remain. These include plantations of coconut, sugar, banana, pineapple, palm oil, and mango orchards. Their monopoly control extends over the country’s natural resources through mining tenements, forest leases and management agreements, foreshore leases, special economic zones, and tourism zones, and tourism zones including coastal and marine areas, and even expanding in urban areas.
That farmers and the rural communities continue to wage agrarian struggles is proof that the social injustice committed by Spanish and American colonizers when it comes to land retention and reconcentration continues to this day. The country has a long way to go to attain genuine agrarian reform, and only the concerted efforts of Filipino farmers and other sectors can achieve it. (Large Landholdings, IBON Facts & Figures 2014)
Land holdings 2

By Manix Abrera

The Philippines will be more incapable of building and protecting its own industries and economy under another Millennium Challenge Corporation (MCC) grant from the United States. Research group IBON said this in light of the recent agreement between US president Donald Trump and Philippine president Rodrigo Duterte to strengthen socio-economic ties in their Association of South East Asian Nations (ASEAN) Summit bilateral conversation.

The MCC  is the multi-million dollar centerpiece program of the Partnership for Growth (PFG). The PFG is the most comprehensive US intervention in economic policy-making in the Philippines. It funds programs and projects purportedly aimed at economic growth and slashing poverty. The country was previously enrolled in a US$434-million MCC grant. Amid the international community’s expression of alarm over tens of thousands killed in Duterte’s anti-drug war in 2016, the US did not renew Philippine availment of the MCC grant due to diminished scores in curbing corruption and upholding the rule of law.

Government’s economic managers have meanwhile expressed optimism that the country can requalify for an MCC grant once the US takes into account the Duterte administration’s current efforts in improving governance and further liberalizing the economy. The US aid agency has in fact signified that the Philippines is among the candidate-countries for compact eligibility for 2018.

IBON however said that being a highly conditional aid, the MCC further compels the Philippines to strip its economy of protection to fulfill the aid’s ‘economic freedom’ requirement. The MCC may suspend or terminate the grant if the country fails to remove trade barriers such as trade quotas, production subsidies, government procurement procedures, and local content requirements.

The US has been among the beneficiaries of Philippine trade liberalization, noted IBON. Specifically, a significant portion of Philippine export of raw materials goes to the US while the latter exports products that the country either can produce or does not necessarily need. For instance, no less than 70% of Philippine coconut oil, sugar and pineapple exports go to the US and other countries. Meanwhile, up to 90% of imported wheat, milk and cream products and soya come from the US and other countries. The Philippines also imports a huge amount of sugar from the US. At the losing end is Philippine food security and Filipino farmers, said IBON.

US corporations are also among the Top 1,000 companies in the Philippines, IBON observed, such as Texas Instruments, Chevron Corporation and Proctor & Gamble. Under so-called ‘economic freedom’, foreign companies get to cut production costs with cheap Philippine labor at the expense of millions of Filipino workers and their families. They also avail of tax holidays and other perks institutionalized by the government ‘for ease of doing business’ and attracting even more foreign investments. There are also no requirements for technology transfer, thus leaving any prospect for local development void.

According to IBON, the Philippines should build, strengthen and protect its own economy instead of entering disadvantagous compacts such as the MCC.  Instead of allowing US aid and investments to exploit Philippine resources for corporate profit, the Philippine government should be able to set a path that prioritizes the utilization of all of these to forge industries that will meet the Filipino people’s and nation’s needs for genuine development.###

FreeTradePH

By Audrey De Jesus

Free trade agreements (FTAs) is a major agenda item for countries attending the 31st Association of Southeast Asian Nations (ASEAN) Summit. whether at the meeting proper or the sidelines. Contrary to the projection that FTAs promote partnerships for development, however, these FTAs are becoming more and more one-sided.

As the world financial crisis persists, developed countries like the United States and China are taking increasingly protectionist stances to further the interests of their big local firms and economies. At the same time, they are also aggressively pursuing the further liberalization of less developed countries like the Philippines through multi- or bilateral trade deals that open up their economies and resources to even more corporate plunder.

Increasing protectionism

There has been a trend of increasing protectionism particularly among the world’s largest economies. Though not new, the rise in protectionism further indicates that globalization is not working.  The FTAs forged have not really been about “leveling the playing field” and helping smaller economies develop, but making it easier for big corporations, mainly from developed countries, to do business and reap profits.

Such protectionism refers to economic policy where governments employ various methods such as import tariffs and quotas and state subsidies to restrict trade between countries, usually to protect or fortify a country’s domestic industries from foreign competitors.

Still struggling to recover from the 2008 financial crisis, industrialized countries are resorting even more to protectionist policies to the detriment of less developed countries like the Philippines.

Data from Global Trade Alert (GTA)’s website shows that since the 2008 global financial crisis, the number of new protectionist measures implemented by all countries per year has risen from 295 in 2009 to 585 in 2017, an increase of 89.3 percent. This is the second highest since 2015 with 612 new protectionist measures.  New liberalizing measures implemented had a faster growth rate at 97.2% from 2009 to 2016. But these measures are still comparatively less year-on-year than new protectionist measures implemented. Liberalizing measures numbered only 248 in 2015, and 215 in 2016.

According to the 21st GTA Report, members of the Group of 20 (G20), which is made up of the world’s largest and emerging economies, are resorting more and more to protectionist measures. Meanwhile, the Group of 7 (G7) countries plus Australia, accounted for an increasing share of the group’s protectionism. These largest industrialized country members of the G20 accounted for 39.2% of protectionist measures in 2015, which grew to 46.9% of in 2016, and 54.9% in 2017.

Of the G20 members, the United States government has implemented the most protectionist measures at almost 1,250 policy instruments since November 2008. The US was followed by India, Russia, Argentina and Germany.  The United Kingdom, Japan and China came in seventh, eleventh and twelfth among the G20 resorting to protectionist measures.

US’s blatant protectionism

Bannering the slogans “America First” and “Make America Great Again”, US Pres. Donald Trump has made his protectionist stance loud and clear. His administration has already taken several steps to address what it calls “unfair trade deals” allegedly behind the US’s mounting trade deficit and American job losses.

Trump has already withdrawn or threatened to withdraw from regional or multilateral trade agreements. One of the first things Trump did as president was to withdraw from the Trans-Pacific Partnership. More recently, Trump also threatened to walk away from the North American Free Trade Agreement (NAFTA) the US has with Mexico and Canada if more favorable trade terms for the US are not reached. Among the controversial US proposals is a sunset clause if NAFTA is not renegotiated every five years, the removal of a dispute resolution mechanism, and including in the rules origin at least 50% US content of automobiles to avail of zero tariffs.

Wary of multilateral trade agreements, Trump is now prioritizing bilateral talks to gain better trade deals for the US. For instance, South Korea agreed to enter renegotiations of the Korean-US (KORUS) trade deal next year, as well as pledged to buy billions of dollars-worth of US arms during Trump’s visit to the country. Of course, South Korea may have been pressured to enter renegotiations for fear that Trump would make good on threats to rescind their trade deal.

Trump is also cracking down on countries it feels are committing trade violations to the detriment of US interests. The US Commerce Department recently imposed a more than 200% tariff on the CSeries jet of Canadian aircraft maker Bombardier. This was after Boeing filed a case against Bombardier for receiving unfair subsidies from the Canadian government that allowed them to sell their jets at low prices. Last August, Trump also signed an executive memorandum ordering the investigation of China for unfairly acquiring US technology and intellectual property in violation of trade regulations. If proven, the US will pursue penalties against China. To enforce such measures, Trump has appointed a trade team of known for their strong protectionist leanings, particularly against China.

The GTA further confirmed in its June 2017 report that US trade policy has become more protectionist and less liberalizing compared to the previous year.

China’s covert protectionism

At the World Economic Forum in January earlier this year, China’s President Xi Jinping pronounced China as a “champion of globalization”. In other words, it would fill the vacuum the US left after it withdrew from the TPP and lead in advancing the neoliberal agenda globally. China has also been a critic of the US’s increasingly protectionist measures. However, despite such proclamations, recent China policies reveal that it too is taking a more protectionist stance.

A prime example of this is “Made in China 2025”.  According to a US Chamber of Commerce report, “Made in China 2025”, released in 2015, is the China government’s blueprint to strengthen and build its domestic industries, and make it a global manufacturing leader. It is also in accordance with China’s 13th Five-Year Plan, among other state-led development plans.

Under “Made in China 2025”, ten strategic industries are targeted: agricultural machinery and equipment; aerospace and aviation equipment; energy-saving and new energy vehicles; next generation information technology; high-end numerical control machinery and robotics; maritime engineering equipment and high-tech maritime vessel manufacturing; advanced rail equipment; electrical equipment; new materials; and biomedicine and high-performance medical devices.

The plan aims to build or strengthen these local industries so that foreign technology and products can be replaced with domestic ones. To do so, it is employing what the US and European Union have criticized as trade-distorting protectionist policies and methods. These include, among others, preferential support like subsidies and capital to local corporations, buy-local requirements, requiring technology transfers from foreign firms to do business in China, and state-led or state-directed investment in foreign firms abroad.

GTA data indicates that protectionist measures enacted by the China government in the past five years grew by 45.9% from 181 protectionist policy instruments to 264 in 2017.

On the losing end

In contrast, less developed countries like the Philippines have had to follow neoliberal dictates and open-up their economies under one-sided trade deals. The Philippine government, for instance, has long complied with globalization mandates including “integration” under ASEAN. But this has only stunted the country’s economic development, and worsened poverty and joblessness.

For instance, trade liberalization has reduced tariffs to lowest levels and worsened Philippine trade deficits, significantly in food and agriculture. The country has among the lowest agricultural tariffs in Asia at 0-7% in food and agricultural products, except for rice, this year. Meanwhile, the share of agriculture and manufacturing in gross domestic product (GDP) have shrunk to 18% and 9%, respectively, as of 2016. Over 11 million Filipinos are either jobless or underemployed. Real wages are falling. Extreme poverty grips a fifth of the population.

In this climate of rising protectionism amongst the world’s industrialized economies, countries like the Philippines can only expect even more one-sided FTAs, whether regional, multilateral or bilateral. As the past four decades of globalization have proven, the Philippines has been on the losing end and stands to lose even more if it stays the course of neoliberal framework.

However, the Duterte administration appears to not only be staying the course, but trying to fast track it through the enactment of even worse neoliberal policies that cater to big foreign corporate interests. On his to do list is his regressive Comprehensive Tax Reform Package, Build Build Build infrastructure program, the Public Utilities Act, and the lifting of foreign restrictions through Charter change, to name a few.

The government should not be seeking help from global powers who are responsible for the world’s globalization woes in the first place, and are pursuing the same old failed market-driven policies. Instead it should take decisive steps to protect the Philippine economy and the Filipino people’s welfare towards the genuine development of domestic industries. ###

 

Photo from canstockphoto.com

At the onset of the much-anticipated first-ever bilateral talks between United States president Donald Trump and President Rodrigo Duterte on Philippine soil, it should be reiterated that the US has a hand in what would be the most anti-poor tax program in the country’s history. The Tax Reform for Acceleration and Inclusion (TRAIN) exemplifies how US hold of country’s economic policies remains very much intact.

Malacanang’s elation over the American Chamber of Commerce (AmCham) lauding the tax reform program also shows how beholden the Philippine government remains to the US contrary to whatever nationalist stance taken just the previous year. AmCham has praised TRAIN to be inclusive and said that it would certainly expedite Philippine development.

Certified anti-poor

TRAIN is targeted by government to take effect in 2018 to generate over Php1 trillion in funds for its grand infrastructure campaign until 2022. A priority program of the Duterte administration, it will lower personal income, estate and donor taxes being paid by the highest-income 40% of Filipinos. It will also increase taxes by broadening the base of items charged with the value added tax (VAT) such as electricity transmission, shipping, and low-cost housing; and by imposing additional taxes on excise oil, automobiles, and sweetened beverages.

TRAIN would be the most blatantly anti-poor tax program of any Philippine government. It can take away anywhere from Php807 to Php3,794 from the already meager earnings of the poorest 60% of the Philippine population on the first year of implementation due to paying higher taxes and fees bound to increase through time. On the other hand, TRAIN will allow the richest 10% of Filipinos to take home Php33,795 more due to lower personal, estate and donor taxes.

Moreover, the Build Build Build infrastructure campaign, which will purportedly be funded by TRAIN, assigns the biggest bulk of its flagship projects to already established economic centers such as the National Capital Region, Central Luzon, and Southern Tagalog. Noticeably, the smallest amount of infrastructure is allocated to the poorest regions where social and economic infrastructure are needed the most. Big local and foreign construction firms and their bureaucrat middlemen are the ones to certainly benefit from Build Build Build.

US recommendation

Duterte’s tax reform program takes into account US policy recommendations included in a Partnership for Growth (PFG) project with the Joint Foreign Chambers of Commerce (JFCC). The PFG is the most comprehensive US intervention in policy-making in the Philippines in coordination with many US government agencies such as the US Agency for International Development (USAID) and the Millennium Challenge Corporation (MCC), as well as the IMF-World Bank.

Made up of 471 economic policy recommendations, PFG’s The Arangkada Philippines Project (TAPP/ Arangkada) includes the following in 29 of its macroeconomic policy suggestions: “Undertake comprehensive tax reform to reduce CIT (corporate income tax) and individual income tax, while raising VAT, ACT (alcohol, cigarettes and tobacco), and fuel excise taxes. Reduce or eliminate small taxes and fees that increase business costs.” Such comprehensive tax reform program failed to take off under the previous administration.

Last September, the AmCham/ Arangkada came up with “Arangkada Philippines: Implementing the 10-Point Agenda” which combines an additional set of recommendations with the 2010-2016 batch. The recommendation includes, “There is a need to reduce corporate income tax to a level that makes Philippines competitive in a field of countries competing for the same direct investment funds.”

According to the Arangkada publication, the implementation of these recommendations will assure that the Philippines “will be rated in future years much closer to the other ASEAN-6 economies that it currently lags behind”. This must pertain to an expected increase in now declining foreign investments upon lessening the cost of doing business, part of which will be due to relieving business tycoons and foreign corporations further of tax obligations.

For the US, which remains among the top sources of foreign direct investments as of early this year, easier taxes on foreign corporations may yield even more imports to and expanded operations in the Philippines. In 2014, US firms accounted for 45% of the country’s electric power systems imports, 25% of aerospace imports, 24% of medical equipment imports, 10% of water equipment and services imports, and 26% of information technology imports. US firms also accounted for 31% of foreign equity in business process outsourcing (BPO) companies.

Railroading TRAIN

To railroad its passage in the national legislature, Pres. Duterte sent a letter to House Speaker Pantaleon Alvarez and Senate President Aquilino Pimentel III on May 29 certifying the TRAIN bill as an urgent and priority measure.

With this certification, the TRAIN has swiftly hurdled the lower chamber on the last day of May with 246 congressmen in the affirmative, 9 negative, and only one abstention following 13 public hearings in the course of four months. The Senate ways and means committee led by Senator Juan Edgardo Angara filed its version of the bill in September. While Senate approval looms as Angara’s and Pimentel’s bills have been debated and interpellated in plenary sessions, the DOF is reportedly insistent on its version.

Regardless of which version makes it through, the general frame as per US recommendation of decreasing taxes for ease of doing business on one hand, and on the other hand increasing taxes imposed on consumers – regardless of income – is retained.

ASEANotForChange

By Casey Salamanca

On its 50th year, and under Philippine chairmanship, the Association of South East Asian Nations or ASEAN is being hyped to have brought development to its member countries. Themed “Partnering for Change, Engaging the World” for 2017, the convergence of ASEAN’s ten-member countries and its dialogue partners is anticipated to bolster the regional economy and its contribution to the global market.

Beyond the government-declared week-long holidays in Metro Manila in the duration of the ASEAN meetings, this is an opportune time to note how ASEAN has only been “One Communty” for the big players of the global market and not for the region’s peoples:

1.       Selling the region’s resources through policies

One of ASEAN’s most compliant member-nations, Philippine economic policy for the past three decades has opened the economy ever wider for global economic powers to benefit from cheap natural resources, cheap labor and captive markets through various laws. These include the Foreign Investments Act, Retail Trade Liberalization Act of 2000 and the Philippine Mining Act of 1995.

Past administrations as well as the current Duterte administration have also always been persistent on changing the Constitution to remove remaining economic protection and restrictions to trade and investment. Duterte’s economic managers are determined to shorten the Foreign Investments Negative List (FINL) and open more sectors such as telecommunications, the media, education and business enterprises to foreign ownership by the end of the year. The ASEAN’s push for further economic liberalization is also evident in the administrations’ list of priority bills like the Ease of Doing Business Act. Aside from this, the government will also streamline customs procedures and create a National Single Window linked to ASEAN’s planned Single Window.

This is in accordance with the ASEAN Economic Community’s (AEC) aim to create an ‘open ASEAN’ even to non-ASEAN member countries. Its primary objective is to “transform ASEAN into a single market and production base, a highly competitive region, a region of equitable economic development, and a region fully integrated into the global economy”.  Regardless of unequal levels of development, ASEAN countries have been entering various agreements liberalizing trade in goods, investments and services. It has also started negotiating as a bloc: the Regional Comprehensive Economic Partnership (RCEP), the mega-FTA between ASEAN and the six countries it has an FTA with – China, Japan, South Korea, Australia, New Zealand and India, is currently under negotiation.

2.       Expanding trade and investment in sectors vital to business but not to national development

AEC made doing business easy for TNCs but has disregarded supporting real development for its underdeveloped members like the Philippines, Vietnam and Cambodia. These economies have not actually improved significantly to finally become “developed”.

ASEAN boasts of its relatively stable FDI inflow contrary to the global trend, experiencing only a slight decrease from US$121 billion in 2015 to US$98 billion in 2016. Note that the top sources are EU, Intra-ASEAN, US and Japan. [1]

But this amount cannot be said to have a significant impact on economic development. Almost 75% of ASEAN’s total FDI flow went to services, the bulk of which amounting to US$33.6 billion went to the financial and insurance sectors. Industry accounts for only 18% or US$17.3 billion, with Japan as the top contributor, investing US$21 billion particularly in manufacturing.[2]

Also, being a mere part of the global assembly line, the largest share of ASEAN’s trade went to intermediate goods in terms of both exports and imports.  Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and `parts and accessories of such articles topped the list for exported and imported commodities at 23.6% and 20.3% respectively.

3.       Peddling the labor force 

Since it opened its economy as a bloc, TNCs from developed countries were immediately captured by ASEAN’s large cheap labor force. In 2016, its working age population was at 430 million or 67.8% of ASEAN’s total population.[3] Low labor costs had electronics companies such as Korea’s Samsung and LG and America’s Intel building factories in Indonesia, Thailand, the Philippines and Vietnam. The biggest winner in this race to the bottom is Vietnam, FDI inflows to which rose by 7%.[4]

Aside from slave-like wages, the global assembly line also brought with it intensive labor exploitation and abuse. For example, workers at garment factories that supply America’s Walmart in Cambodia are already denied of benefits and receiving harsh penalties for engaging in union activities including retrenchment, they are also forced to work overtime even during the hottest season resulting to mass collapsing episodes. Complaints of sexual harassment were also reported.

Aside from its large pool of cheap labor force, ASEAN also sells its massive captured market. Its 2016 population of 635 million is the 3rd largest population in the world next to China and India.[5] Singapore is the largest host of TNC headquarters in the region targeting the Asia and Pacific markets.[6] One of the reasons why Japanese zaibatsus like Toyota, on the other hand, chose Thailand to be its regional hub is because it is the regions’ leading consumer and market for automotive products.[7]

4.       Hampering national progress 

This ASEAN “openness” has in fact closed the door to the development especially of backward economies such as the Philippines. Prospects for rural development and domestic industrialization have stayed grim due to the economic framework and policies of countries that follow the mantra of so-called “globalization”.

The share of production to Philippine gross domestic product (GDP) steadily dropped from 60% in the 1950s to the 1970s to just 39.2% in 2016. Agriculture fared no better dropping to 9.2% from more than 30% during the same time span. Manufacturing managed a 24.3% share in GDP in 2016 but it is also noteworthy that 63% of the gross revenue of the top corporations in manufacturing went to foreign TNCs.

Government’s hollow manufacturing drive can be gleaned from the Comprehensive Automotive Resurgence Strategy (CARS) which favors already dominant Japanese, American and Korean automotive companies. It is also very import-dependent. The local content of the Philippine automotive parts sector is only 40% and many of its products involve the mere assembly of car parts components. Over 90% of automotive parts that the country exports are produced by TNC subsidiaries or affiliates, including the Japanese zaibatsusand German firm Telefunken.[8]

If ASEAN indeed opened opportunities for the Filipinos, it is mostly for old time big players like Tan-Caktiong, Ayala and Aboitiz. Almost 4 decades of ASEAN integration has not improved the lives of the majority of the Filipinos. There are still 66 million Filipinos living at Php125.00 per day and worse still are the 21.9 million Filipinos struggling at Php60.00 per day. Combined unemployed and underemployed Filipinos have reached 11.5 million. Only a little over half of employed Filipinos are paid at least the minimum wage, the highest of which is in the National Capital Region at Php516 per day, which is not even half of the Php1,130 per day Family Living Wage that a family of six members needs to live decently.

5.       Non-adoption of principles of genuine cooperation

ASEAN pushes partnerships and engagements that are highly favorable to capitalists disregarding its effects to the majority of its people. This is contrary to what history has seen to be doable alternatives to regional formations like the ASEAN– such as the 1955 Bandung Conference or the Asian-African Conference. It was attended by 29 countries representing some 1.5 billion people or the majority of the world’s population at the time. It “considered problems of common interest and concern to countries of Asia and Africa” and its primary objective was to “discuss ways and means by which their people could achieve fuller economic, cultural and political co-operation.”

It declared the global South’s agenda to reform the international system to one not defined by power, oppression and exploitation, starting with the decolonization of the Third World. Participants envisioned economic development, and an end to colonialism. The ‘Dasa Sila Principle’ or the conference’s ten principles which promotes world peace and cooperation is still relevant today.

For a country like the Philippines to engage effectively with other nation-states for cooperation and against the domination of capitalist powers, it must also prioritize national development and the welfare of the people. Continued adherence to the neoliberal framework runs counter to this. It should be replaced with pro-people economics putting primacy in supporting its productive forces by implementing policies for agrarian and rural development and building national industries.

There is nothing wrong with forming communities. But communities should serve the interests of the majority of its stakeholders. The Philippine government’s avid participation in the ASEAN community has been consistent with its historically pro-business and pro-foreign stance. A strong clamour from the ground is needed to push for national development and foreign policies that will genuinely benefit the people.###



[1] ASEAN Sectretariat – ASEAN FDI Database as of 31 October 2017

[2] ibid

[3] Celebrating ASEAN: 50 years of Evolution and Progress A statistical publication, July 2017

[4] UNCTAD, World Investment Report Chapter II, 2017

[5] ASEAN Economic Integration Brief, June 2017

[6] UNCTAD, World Investment Report Chapter II, 2014

[7] CARS and National Industrialization, IBON Facts and Figures, Feb. 2017

[8] ibid

Residents of shores erstwhile declared as no dwelling zones (NDZs) prefer to stay put instead of resettle to a place that is far from their source of livelihood

Four years after Typhoon Yolanda struck the Visayas region, reconstruction and rehabilitation is still not being felt by many of those in disaster-affected communities.

This is because the Philippine government’s approach to recovery and rehabilitation and its measurement of success has been based on an erroneous neoliberal framework that prioritizes big business interests over the needs and interests of disaster-affected communities. It is aligned with the same old neoliberal policies that made communities vulnerable in the first place. There is no promise that any calamity’s survivors will face better prospects than those of Yolanda’s without shifting to a framework that genuinely prioritizes survivors’ welfare.

Private sector-led, investment driven

In the aftermath of Typhoon Yolanda, and as soon as an assessment could be made and plans drawn up, the government has pushed for a private sector-led reconstruction and rehabilitation program.

The Reconstruction Assistance on Yolanda (RAY) – Build Back Better written by the National Economic and Development Authority (NEDA) includes a preliminary assessment of damage and losses (pegged at US$12.9 billion), pushes for a private sector-led reconstruction and outlined the guiding principle of “Build Back Better”.

The Office of the Presidential Assistant for Rehabilitation and Recovery (OPARR) drew up a three-year privatized, corporate-led and investment-driven Comprehensive Rehabilitation and Recovery Plan (CRRP) for 2014-2016.

The RAY: Implementation for Results, also written by NEDA, is based on the CRRP and also continues the neoliberal-based design. It provides a results framework for monitoring progress and to ensure close alignment between the objectives of the recovery and rehabilitation program and Philippine Development Plan (PDP).

The latter is basically a package of neoliberal–or market-oriented–economic policies. These place social services and public utilities in the hands of the private sector which demands user fees regardless of service quality; profit from extractive economic activities thus marginalizing land and other natural resources;  reduce government regulation or responsibility in rate determination; obligate government to guarantee private profits; and develop infrastructure and lower the cost of doing business to attract investments even more, to the benefit of bureaucrats and big local and foreign investors.

Flourishing economy?

Eastern Visayas registered its fastest economic growth since Typhoon Yolanda, and the fastest growth of all the country’s regions in 2016.  The growth rate of its gross regional domestic product (GRDP) rose from 4.5% in 2013; 2.4% in 2014; 3.9% in 2015 to 12.4% in 2016.

The NEDA Region VIII lauded this 2016 regional economic growth and how it resulted in a per capita GRDP of Php37,261 (in constant terms), which is the highest in the last seven years and grew the fastest year-on-year across the regions.

The industry sector grew 20.2% from 4.9% the previous year. This was largely attributed to a significant 44.5% growth in public and private construction and rebound in manufacturing with a 19.6% growth from a 3% contraction in 2015.

The services sector registered an 8.6% growth, largely due to an 11.1% growth in financial transactions and 6.3% growth in government spending in construction. The agriculture sector also rebounded by 2.4% in 2016 from a 12.7% contraction in 2015.

The NEDA Region VIII mainly attributed this double-digit growth to “flourishing economic activities on the back of high domestic demand; strong business confidence; and public and private investments, as well as continued post-Yolanda rehabilitation and reconstruction activities”.  It stated that to maintain and continue these economic gains it would ensure that its regional development blueprint or the Eastern Visayas Regional Development Plan (EVRDP) 2017-2022 is in accordance with Duterte’s PDP 2017-2022.

Shallow and unsustainable

But a closer look at the Eastern Visayas economy reveals that it is following the same shallow and unsustainable growth pattern as the national economy. This growth is excluding the majority poor in the region.

Temporary factors. The regional economic growth was largely driven by temporary factors that did not contribute to long-term growth and development, such as the high growth in public and private construction. Public construction comprised of flood control and road widening projects, and remaining post-Yolanda reconstruction projects. Private construction involved hotels, malls and other establishments. Election spending also bolstered growth in 2016.

Struggling manufacturing. The manufacturing subsector, which accounts for the largest share in the region’s industry, has not yet recovered its pre-Yolanda growth trend. This is despite a 19.6% growth in 2016, which is attributed to the resumption of regular operations in the region’s economic zones. Prior to the typhoon, manufacturing had a growth rate of 33.5%.  However, the subsector gross value-added (GVA) decreased by 16% in 2014 and 3% in 2015.

Sinking agriculture. Agriculture, which is the main source of livelihood in the Eastern Visayas, has continually contracted post-Yolanda. Agricultural GVA declined in 2013-2015. Growth in 2016 was mainly due to increased poultry and fishery production, which are more feasible for private investments and foreign loans, than crop production.  Even this growth was not enough to recover pre-disaster levels: the region still fell short of the national growth target by 38 percent. Crops production in the region has also been declining. Palay, corn, coconut, abaca, sugarcane and banana production have been steadily decreasing.

For instance, Leyte has been the top producer of palay in region, accounting for half of total production volume from 2012 to 2016. But the province’s volume of palay production continuously declined from 521,115 metric tons (MT) in 2012 to 473,580 MT in 2016.

Meanwhile, from being a top coconut producer next only to Davao from 1997 to 2011, coconut production has also dwindled according to Philippine Statistics Authority (PSA) data.The region fell to being the third largest producer in 2012, fourth in 2013, and sixth in 2014 and 2015.

Poverty. Despite the Php37,261 per capita growth, official data shows that poverty remains acute at 38.7% of the population or 30.7% of families in 2015, though this reportedly has been reduced. Farmers and fisherfolk remain the poorest sectors in Eastern Visayas. The poverty threshold in 2015 was at Php21,304 for an average household, which means that Php8,876 per month is needed to meet based food and non-food requirements – which could not be easily achieved by a vast number of jobless and underemployed.

Unstable unemployment, underemployment. The unemployment and underemployment situation remains unstable. To moderate official jobs figures, the PSA excluded Eastern Visayas from national estimates, and Leyte from the provincial estimates for the first years after Typhoon Yolanda. Thus, actual unemployment numbers could be higher than PSA data showing that the average unemployment rate in 2013-2017 averaged 5.0%, lower than the national average of 6.3 percent.

Meanwhile, underemployment worsened after the typhoon and only started to recover to pre-disaster levels in 2017, though 2017 data is preliminary. The annual average underemployment rate in the region in the same period was higher than the national average, at 27.2 percent. Moreover, according to the National Economic and Development Authority (NEDA), investments that result into new businesses in the region yield even more poor-quality jobs.

Big failure in housing and resettlement. Though the NEDA – Region VIII determined a housing need of 56,140 permanent houses, only 16,846 or 30% of this target was completed as of the second quarter of 2017, while 11,957 or 21.3% of housing units are still in various stages of completion. NEDA Region VIII said this failure is due to unavailable lots, land acquisition issues and procurement problems.

Only 44% of total completed and for-completion housing units have been awarded and occupied.  NEDA Region VIII attributed this delay in transfers to relocation housing units primarily to lack of power and water supply at the sites. Of the 86 resettlement sites, only five are serviced with water supply by the Local Water Utilities Administration (LWUA) and only 59 are energized by the National Electrification Administration (NEA).

Poor social services. The delivery of much-needed social services such as in education and health is also concerning. The Department of Education (DepEd) has completed 1,790 new classrooms out of the targeted 2,313 in Region VIII as of May 2017. New classrooms undergoing procurement are 388, while the status of the remaining 135 new classrooms is unknown. Of the 17,335 classrooms for rehabilitation, 11,720 are completed, while 1,345 are still under procurement and the status of the 4,270 is unknown. DepEd construction of education facilities is contingent to the construction of NHA housing relocation sites, hence the delays. Schools could only be built once families have transferred to their respective relocation sites.

In terms of health services, the Philippine Statistical Yearbook 2016 indicates a significant reduction in the number of hospitals in the region.  From 77 hospitals (28 were private, 49 were public) in 2012, the number of hospitals in Eastern Visayas fell to 42 in 2013 (20 were private, 22 were public). Only one private hospital was added to the number in 2015.

More of the same?

During his presidential campaign and during last year’s anniversary, Pres. Rodrigo Duterte expressed concern over the delay in the rehabilitation of Yolanda-affected areas. However, he would address this only a year later.

Pres. Duterte signed Administrative Order (AO) No. 5 on 8 August 2017 which created Inter-Agency Task Force (IATF) – Yolanda that would implement and monitor the rehabilitation program. This shall serve as the central committee of all executive departments and offices, including government-owned and –controlled corporations. Duterte appointed his long-time right hand, Cabinet Secretary Leoncio Evasco as chairperson of the task force.

Though it is too early to tell if this task force will succeed in bringing justice to Yolanda victims, this may be part of the ongoing image improvement by the current administration. It is currently under fire for its bloody war on drugs while nothing is happening with the economic crisis and intensifying poverty in the country.

At the end of the 2017, the government will also unveil the Eastern Visayas Regional Development Plan (EVRDP) 2017-2022, aligned with AmBisyon Natin 2040, the showcase of Duterte administration’s PDP 2017-2022. This is an initial sign that the current administration plans to continue the erroneous neoliberal framework for rehabilitation and reconstruction, despite its obvious failings under the previous administration.

Building roads, ports and business establishments are necessary in rehabilitating destroyed communities. However, people’s resettlement and livelihood should come first. Without a radical shift in orientation, subsequent government reconstruction and recovery  endeavors may likewise feature fast growth especially in the construction subsector. But prospects in areas that matter substantially for the people and for development such as quality work, agriculture, local manufacturing , public utilities and social services delivery may all remain as bleak as in Yolanda areas.###

 

Yolanda4_PhotoOp

Undelivered outputs, shallow outcomes and increasing vulnerability for typhoon survivors are proving that the Philippine government’s rehabilitation work in Yolanda-stricken areas is a tragedy. IBON said this in a presentation of its assessment of four years of rehabilitation, reconstruction and recovery in the typhoon-ravaged Eastern Visayas.

On the fourth-year of super typhoon Yolanda, IBON reported its findings on the status of calamity survivors in a media forum. Environmental and disaster response centers meanwhile provided insights on their work in hazard-prone provinces such as those affected by Yolanda.

“Region 8 or Eastern Visayas has an economy of contradictions,” IBON executive editor and research head Rosario Bella Guzman said. “Although the region posted the highest growth rate in terms of gross regional domestic product (GRDP) at 12.4% during 2016, there was an increase in informal work, stark landlessness, and acute poverty.”

According to the Philippine Statistics Authority (PSA), there was a 38.7% poverty incidence among the Eastern Visayas population in 2015. While the average unemployment rate of 5.0% in Eastern Visayas in 2013-2017 was lower than the national average of 6.3%, annual average underemployment rate – pertaining to poor quality work – was higher in the region than the national average at 27.16 percent. Landless farmers were at 53 percent.

Guzman also noted that government’s Build Back Better program facilitated full neoliberal or market-oriented reforms in the rehabilitation of Yolanda-stricken areas. “Declaring the shores as no dwelling zones (NDZ) mandated clearing so-called hazard areas of survivors’ homes and livelihood in favor of business structures such as hotels and resorts. Additionally, the land use policy favored conversion of agricultural lands to other uses,” said Guzman.

“This mode of rehabilitation has aggravated not only the surivors’ difficulty in recovery but also their vulnerability to disasters,” Guzman said. “The so-called rehabilitation projects in fact worsen the people’s diminishing access to resources, livelihoods, public utilities, and social services.”

Climate justice networks Center for Environmental Concerns (CEC), Citizens’ Disaster Response Center (CDRC), Climate Change Network for Community Initiatives (CCNCI) and Samahang Operasyon Sagip (SOS), whose representatives were the forum’s panelists, stressed on the urgency of a pro-people approach to disaster risk reduction.

IBON also disclosed its research findings at the Eastern Visayas Disaster Survivors’ Conference in Tacloban City days before the fourth year anniversary of typhoon Yolanda. #​##

YolandaYearFourAdvisory

ATTENTION: Media practicioners, campaign officers, advocates, researchers, gov’t offices, educators and students

M E D I A A D V I S O R Y

Typhoon Yolanda: Anong Petsa Na?
Assessing rehabilitation, reconstruction and recovery after four years; IBON discloses research findings, environmental and disaster response centers share observations on Yolanda’s year four

What: Media Forum
When: Nov 8, 10am
Where: IBON Conference Hall #114 Timog Ave QC

Interviews, photo ops available. Please cover. Maraming salamat.
Strictly RSVP 9276986/ 09254545577/ 09165314607

IMG_2052

Research group IBON said that while rehabilitation efforts are very much needed in war-ravaged Marawi, the Duterte administration should not consider reconstruction work in Yolanda-stricken areas to be over. Counting down to four years since super-typhoon Yolanda (Haiyan) hit southern Philippines, IBON noted how government’s response remained slow-paced and its policies even counter-productive in the calamity-damaged Visayas communities.

After declaring Marawi free of terrorists, the Philippine government has organized Task Force Bangon Marawi and declared that rehabilitation in the war-torn city will be better than in Yolanda areas. But IBON said that while claiming to apply Yolanda response lessons in Marawi, the Duterte administration still has to carry out rehabilitation efforts in Eastern Visayas especially in the livelihood, housing and resettlement clusters.

Nearly four years after typhoon Yolanda, only 16,846 housing units or only 30 percent have been completed out of 56,140 permanent houses targeted to be built in Yolanda-stricken areas in Eastern Visayas. Moreover, out of the completed units only 12,763 have been given to Yolanda-stricken families. Still in progress are 11,957 units or 21.29 percent, according to data from the Region VIII National Economic and Development Authority (NEDA).

“Major obstacles identified by the governmen were surmountable, if only government prioritized resettling the victims and rebuilding their lives and livelihoods”, IBON executive editor and research head Rosario Bella Guzman said. “Instead, infrastructure was prioritized to immediately restore business activities,” said Guzman.

Out of the 86 resettlement sites, only five water supply projects have been completed and only 59 out of the 86 resettlement sites have electricity.

NEDA Region VIII attributed the slow pace of construction to unavailable lots, land acquisition issues, and procurement problems. The delays in transfers according to NEDA Region VIII were primarily due to unavailable power and water supply in the sites.

IBON also criticized the Duterte administration’s realignment of Php5 billion in unused typhoon Yolanda funds for Marawi rehabilitation. The Department of Budget and Management (DBM) reportedly allocated the amount to build temporary shelters and other priority projects in Marawi.

Guzman pointed out that notwithstanding the urgency of Marawi rehabilitation, the diversion of funds from unfinished reconstruction efforts in the Eastern Visayas indicates government neglect of rehabilitation work there. “It gives the impression that the job has been done while in fact thousands of survivors are still without livelihoods and languish in substandard shelters and living conditions,” Guzman said.

Considered to be one of the strongest typhoons in world history, Yolanda ravaged the country affecting 12,122 barangays, 591 municipalities, and 57 cities in 44 provinces across nine Philippine regions–including the poorest–in November 2013. IBON is set to disclose its findings from research done regarding build-back-better in Yolanda areas on November 8, the fourth-year anniversary of the super-typhoon.

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