DIE HARD III
Herman Tiu Laurel
4/29/2013
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!
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)
