Fears beyond 2013

DIE HARD III

Herman Tiu Laurel

5/6/2013

Daily Tribune

My youngest are twins. One is in Philosophy in DLSU who has delayed his graduation this year by taking fewer units, opting to work part-time. The other is a graduate of Journalism from UST and is already job-hunting while helping out in the family business. Deciding on either of their prospects has not been easy as starting pays don't look attractive. Having started driving regularly of late, the latter of my twins went along with me to my grocery trip a few days ago. While I was paying at the check-out counter, he scanned the bill and exclaimed, "How could these few things cost over a thousand?" Perhaps because he's now earning an allowance tending to one of the family's stores, he's beginning to understand the economic angst I've always discussed with the family over meals and how everyone should be ready to cope with harder times.

One recent headline reflects the worsening economic prospects ahead. Coming out on Labor Day, the report entitled, "Joblessness increases," centered on the recent jobs data culled by survey firm Social Weather Stations (SWS), which indicated that "Unemployment has picked up anew after an improvement seen at the end of last year… with one million more Filipinos joining the ranks of the jobless. At 25.4 percent, unemployment among Filipinos at least 18 years old was higher than December's 24.6 percent…" And the joblessness reports, particularly with respect to new labor entrants, just keep piling up.

Still, my journalism graduate son is undeterred. Seeking a job in reporting or writing, he apparently wants to prove that his skills can be of use in the market place. Indeed, after months of searching, he seems confident of landing a job in a transnational headhunting firm. His twin brother, meanwhile, is tending to their eldest brother's bar and is earning an income even if less than the minimum wage. As such, one of the frequent issues in our family's discussions is the electricity bill, particularly the use of air-conditioning units in the twins' separate rooms. With the first billing this summer doubling from the same period last year, awareness of the high power cost has finally seeped into the consciousness of all members of the family.

I am therefore no longer alone in my obsession to keep power cost tamed by turning off the lights whenever leaving any room and the sala; Or quitting the use of the water pressure pump for showers, opting for the tabo instead; Or sharing a single air-conditioner for two instead of going solo in one's room.
Indeed, the power price crisis is not going to go away even if the artificial power shortages created by the ruling powers are halted by everyone's (including the Mindanaoans') capitulation to the blackmail of using coal-fired plants instead of cheap hydroelectric power, under an abusive regime of the 17-percent so-called Performance Based Regulation and the privatization-mad Electric Power Industry Reform Act where power companies of all stripes get to enjoy ridiculously humongous profits.

If labor groups and trade federations were powerless in extracting even paltry concessions from BS Aquino III (as is traditionally expected on Labor Day), what other reason should the ruling capitalist foreign powers and their local partners have in shunning their mercilessness toward Filipinos, whose nation's wealth they have long extracted in support of the West's failing economies?

By the way, the SWS jobs survey also indicated that jobseekers are still hoping for a better future — even if such perennial hope remains unfulfilled. And even after two ballyhooed Philippine ratings upgrades (the last from Standard and Poor's), the usual mainstream media (such as Bloomberg) obligatorily feature shallow headlines such as "Philippines beats Indonesia in gaining S&P investment grade," while deliberately skirting a real economic indicator — foreign direct investment (FDI) — that shows an appalling negative for the Philippines. From Indonesia Investments: "'Domestic and Foreign Direct Investment in Indonesia Grows Strong in Q1-2013' … US $9.58-B;" while for Philippine business news, it was "'FDI drops almost 50 percent to $576 million in January (2013)'… lower than the previous year level of $1.1 billion…"

According to Wikipedia, Indonesian electricity price (in US dollar terms) is $0.0875 per kilowatt-hour (kWh) while the Philippines is at $0.3046/kWh. Despite FDI being a real measure of a country's economic prospects, reflecting the assessment of foreign and local businesses (not the subjective views of governments) and despite the holding of elections in a week's time, the Philippines will still not see any improvement as no candidate of consequence has dared raise this issue of power rate-gouging. Hopefully, though, a few will go out on a limb and start taking up the matter as it is a life-or-death issue for the Philippine economy and for our children's prospects for a good, productive and happy future.

But frankly, I'm not optimistic. As Western powers desperate for war will stop at nothing to recapture their former glory, there is just nowhere to run. Thus, I'm preparing my mountain redoubt farm cum social laboratory, concentrating mainly on coconuts (which, after a long study, are a far superior economic investment to mangoes) cross-cropped with coffee, cacao, macadamia nuts and orange camote. It's a long-term project I can leave my grandchildren as a refuge in the really perilous decades ahead and a teaching laboratory for all to learn how to grow food and stay free and dignified in the looming Dark Age.

(Tune in to 1098 AM, Tuesday to Friday, 5 p.m. to 6 p.m.; watch GNN Destiny Cable Channel 8, Saturday, 8:00 p.m. and replay Sunday, 8 a.m., on "Hopeless elections: Looking for revolution"; also visit http://newkatipunero.blogspot.com)

Cheap power = Jobs, wage hike

DIE HARD III

Herman Tiu Laurel

5/1/2013

Daily Tribune

It is the Philippine labor movement's day today. It is once again an opportunity for our workers' unions and federations to make an impact with whatever demands from government or the rest of society they would wish to highlight.

In the statements we have read from this sector the past days, we have found reason to be hopeful. In the order of its major demands, the call for "cheaper electricity" is now on top of the labor movement's list, with "higher wages" coming in second. I believe this is the first ever May Day celebration that will see the ritual demand for an increase in the minimum wage come second to anything else — an indication of the severity of the electricity price gouging that has become the hallmark of the Philippine economy as well as an enlightened maturity of our laborers to discern the broader economic issue that affects the working class of the nation.

This new order of priorities had been in the works since the Trade Union Congress of the Philippines and other major labor federations issued demands on BS Aquino III to personally step into the electricity overpricing crisis. The other major group, led by Kilusang Mayo Uno (KMU), which also issued a similar call for this year's Labor Day, has put the issue ahead of all others. Its chairman, Elmer Labog, declared that "High power and water rates, the flood of imported products, high taxes and government corruption… make doing business in the country difficult" before taking the BS Aquino government to task as the latter "refuses to address these issues and merely keeps on pressing down workers' wages." As a citizen and social journalist-activist relying on our small family enterprise to earn a daily bread for my advocacy and family, I appreciate the line expressed by KMU.

BS Aquino III did step out alright but on the wrong side of the fence, chastising those who press for the lowering of power rates while weighing his presidential authority on the side of the decade-and-a-half-old global corporatist energy and electricity industry privatization scam. Remember the gigantic swindle that was the Enron debacle in California that got transplanted to the Philippines with unequalled success compared to other Third World countries? That resulted in the "highest power rate in Asia," causing the country to be at the tail-end of foreign direct investments in the region, in stark contrast to the bonanza in the energy sector. Today, foreign power companies and local oligarchs are sharpening their knives yet again to feast on Mindanao's energy woes — much like how they feasted on Luzon and Visayas in the past decade — this, after BS Aquino blackballed and blackmailed Mindanaoans with massive blackouts.

To reinvigorate the Philippine labor movement, labor leaders must begin to harness the people's anger over the exorbitant electricity price into a popular and highly charged issue for the nation as all sectors of society are suffering. From the largest companies to the smallest sari-sari store (or at least, the few that still exist), the burden of high electricity cost is universal. In fact, the true driver of the Philippine economy, the small and medium-scale enterprises (SMEs) that provide up to 98 percent of the total jobs in the country, are reeling from high power costs. The health of ordinary citizens is being adversely affected by the high power cost as well, especially that of senior citizens, who would have to bear the scorching heat of summer as air-conditioning becomes a luxury too costly to afford. With all these insights, the labor movement will surely find renewed enthusiastic support from the people —something it had lost in the past.

While today 97 million Filipinos and their economy suffer exorbitant power costs, power companies enjoy yearly profit bonanzas. For the first quarter of 2013, the dominant player in the power sector, had 20 percent higher profits than last year without any significant increase in its customer base. In fact, this company had been piling up annual profit increases of up to 90 percent per annum since the 2001 Electric Power Industry Reform Act (Epira) and the 2005 PBR (Performance Base Regulation) scheme of the Energy Regulatory Commission made the power business better than any pyramid scam around.

As Jojo Borja, a major stockholder of Iligan Light and Power, would repeatedly stress, "With Epira, power companies earned in six months what used to take them a year; with PBR added, it's down to three months to earn what used to take a year." Thus, poverty rates have worsened over the decade as the people's purchasing power has been sucked dry by exorbitant power rates. The SMEs have always gotten the short end of the stick in the minimum wage issue; the conglomerates, on the other hand, are hardly affected as their employees are largely above minimum wage levels already.

Labor leaders should know the kind of distortions that new minimum wage orders cause the SMEs, which have always teetered at the edge of survival with the onslaught of high power rates, as well as the other operating costs and demands of labor groups, i.e. trade dumping, high water costs, taxes, corruption, high financing costs, indiscriminate senior discounts, etc. Across-the-board minimum wage hikes will be realistic only after other economic inputs for SMEs are rationalized and balanced.

(Tune in to 1098 AM, Tuesday to Friday, 5 p.m. to 6 p.m.; watch GNN Destiny Cable Channel 8, Saturday, 8:00 p.m. and replay Sunday, 8 a.m., on "Liling Briones, Kaakbay and Manila's Glory"; also visit http://newkatipunero.blogspot.com)

Chutzpah

DIE HARD III

Herman Tiu Laurel

4/29/2013

Daily Tribune

The latest poverty statistics that came from no less than the BS Aquino government's own National Statistical Coordination Board (NSCB) and National Economic Development Authority shows just how the prevailing economic paradigm of liberalization and privatization has treacherously betrayed the vast majority of the Filipino people.
Over the past 10 years, poverty in the country has stayed at the level of around 28 percent despite perennial claims of "growth" and ad hoc poverty alleviation programs such as the multibillion peso conditional cash transfer doleouts. It's not just that the past and present governments have not made a dent on improving the economic life of the nation; it is the fact that the situation has gotten worse especially since 2005. At present, a recent survey of the Social Weather Stations even placed the self-rated poverty index at 52 percent of the population!

When apologists of the prevailing economic order try to explain away the dire situation vis-à-vis their incessant claims of "growth," they often point to such "jobless growth" as one that has yet to become really "inclusive," as if someday it will. One prominent female economist who has been portrayed as an authority on the matter since the time of Cory Aquino — who was herself a former Neda chief — said so. Yet one will never find any mention of specifics underlying such "non-inclusiveness" from them. Meanwhile, traditional politicians, together with "leftists" associated with the Establishment, such as Ralph Recto and Walden Bello, also speak of the "trickle-down effect" (a central construct of capitalist economics) as not yet happening; but again they point to no specific policies or acts that cause this, since all we read and hear are motherhood statements. Why?

The reason for their lack of specifics is that most of them, by their advocacy of the various economic and political policies institutionalized in the past two-and-a-half decades, have been part of the problem. So let us cut to the chase as we get to the root of our economic and poverty crises.

Two specific events happened in 2005 that had directly worsened the economic plight of the people: 1) the expanded value-added tax (eVAT), which extended coverage of VAT to power, fuel, water, as well as professional and toll fees, amounting to over P100 billion annually or around P900 billion the past eight years and 2) the Performance Based Regulation (PBR) scheme formulated by the Energy Regulatory Commission as the rate base for electric utilities that raised their profit cap from the erstwhile 12 percent (under the RoRB or Return-on-Rate Base formula) to up to 17 percent now.

The latter packed a particularly lethal punch, given the many deformities of the onerous 2001 Electric Power Industry Reform Act, which I summarize from my past articles: "The IPPs (independent power producers), Meralco (Meralco Manila Electric Rail and Light Co.) and industrial consumers, as well as socialized rates, systems losses, missionary routes, seniors' discount, are subsidized by residential consumers; under Epira and PBR, consumers pay VAT. In the midst of national disenchantment generated by government's own poverty numbers, the imperial BS Aquino simply pooh-poohed the data and snubbed the Neda chief in his recent trip to Brunei.

Some oligarchs, who have actually ruled the roost behind politicians since the time of Cory Aquino, felt obliged to react too. One report that headlined his call to "Allow private sector to actively help end poverty" quoted him as saying, "The imperative is inclusive, not exclusionary, growth. Business and government need to work together to identify areas that offer the higher levels of employment and income to our people — agriculture and tourism, for instance."

What chutzpah! My reaction to all of them is "Why not begin by aligning our power rates with the average of Asia?" The whole world knows the Philippines has the highest power cost in Asia and this in no small way has been one of the major causes of FDIs (foreign direct investments) — where the Philippines is behind even Cambodia and Myanmar — being turned off from our country, hence, stunting any jobs creation. How can the economy be inclusive when a growing majority of our people and our few remaining fledgling industries are being excluded from the modern productive mainstream by unaffordable power rates?

Similarly, policy makers need to find a way to bring down the rates for water, where the Philippines is alternately second or third highest in Asia; same with the need to reduce the cost of food transported from the provinces to the cities. Indeed, there are many other things to be done for our economy to become truly inclusive and jobs generating, but let's start by slaying the biggest monster of them all — our nation's murderous power rates.

(Tune in to 1098 AM, Tuesday to Friday, 5 p.m. to 6 p.m.; watch GNN Destiny Cable Channel 8, Saturday, 8:00 p.m. and replay Sunday, 8 a.m., on "Manila's Resurrection?"; also visit http://newkatipunero.blogspot.com)