Charter change and further economic liberalization

July 13, 2012. Once again, our politicians and their patrons are peddling the lie that the only path to the economic salvation of the Philippines is through more intensified foreign intervention in the economy and a more intensified liberalization of “key industries”. It is almost like routine, from the administration of President Fidel Ramos, to Joseph Estrada, to Gloria Macapagal-Arroyo to Benigno Aquino III, every year or two, the leaders of both Houses of Congress peddle the proposal of changing the economic provisions of the Constitution in order to liberalize the remaining sectors of the economy with “nationalist restrictions.” True enough, faithful to tradition, Senate President Juan Ponce Enrile and House Speaker Feliciano Belmonte comes out today, a few weeks before the State of the Nation Address and the opening of the last session of Congress, to promote “charter change.”

This begs the question, is “free market” liberalization the only path to economic prosperity? A brief look at the economic history of today’s prosperous and developed nations will prove that the path to economic prosperity is paved by national industrialization with strong basis in state intervention through regulation and subsidies, and protectionism–quite the opposite of the neoliberal dogma most of these countries now peddle and force upon the throats of the people of the “third world.”

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So why do you wear jeans, use a laptop and a camera?

So, you believe in socialism, why do you use Facebook, your phone and laptop, why do you wear branded jeans or shoes or eat at fastfood chains, all “products of capitalism”?

This is a typical rhetoric, and a stupid one at that, I get many times from those who are just eager to try and discredit activists and leftists but refuse to engage in ideological tussle.

The first answer is, most often, necessity. So, what do you expect us to wear, loincloths? Second, just so they realize, “capitalism” did not manufacture those products. Industries and the labor of many workers in socialized production did in assembly lines across the globe. We do not owe our shoes, clothes, computers and cars to “capitalism.” Capital did not manufacture them, labor did. In fact, capitalists barely have any participation in production, it is simply by virtue of control and ownership that they appropriate the wealth created by production, and leave the rest scrounging for trickled down salaries and wages.

In a very basic sense, socialism is merely the rightful correction in the contradiction between socialized production and private appropriation of the wealth. Instead of the creation of the “wealth of the few through the labor of the many”, it should be the “wealth of all through the labor of all”. Since products are produced in socialized production, why shouldn’t the appropriation of the wealth be likewise? The struggle for socialism, in the economic sense, is the struggle for the people’s rightful share in the wealth they create.

Third, to demand that leftists reject all products of commercial enterprises when all consumer goods today are produced in private enterprises is nothing but a ploy corner leftists to capitulate their struggle. Which is preposterous, because the entire point of being a leftist and an activist is to continue engaging the status quo, exploit available technologies and everything they need, and change society, not recluse from it. In other words, you cannot demand leftists to live by socialism when it has not yet been won.

The dishrag calling the dust cloth dirty

January 15, 2012. A few days ago, a paper written by ex-President Gloria Arroyo entitled “It’s the economy, student!” was released to the public. In the piece, the ex-President went on great length to champion her economic programs on one hand and to and bash President Aquino for failing to ‘sustain’ the gains she boasts to have accomplished on the other.

What really is the fundamental difference between economic policies of the two? Nothing. President Aquino merely continues the same economic policies of President Arroyo.

Both Presidents’ economic programs adhere to the same dogma of neoliberal globalization. It’s the economy, all right–the economy of big businessmen, foreign investors and their local counterparts. Whether or not ordinary Filipinos benefit from such economic growth is merely incidental. They have a phrase for it–“trickle down” effect. Numbers that proclaim economic growth are rendered meaningless by the fact that poverty has continued to worsen over the decade, so much that the government had to re-define and lower the poverty threshold. The vision of economic prosperity and survival is entirely dependent on foreign investors and all the economic programs of President Aquino and his predecessors are aligned with the agenda of these monopoly capitalists and their local counterparts.

Both Presidents have pushed for the further privatization of public utilities by selling contracts to roads and other public services to private profiteers. Both administrations have strengthened the deregulation of industries imbued with public interest and rejected clamors to repeal the laws that allow such deregulation, from the oil industry (Oil Deregulation Law) to power generation and distribution (EPIRA) to education (Education Act of 1982), which have resulted to public services that are increasingly out of reach to ordinary Filipinos and are increasingly profitable to private corporations.

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We make the university, they make the crisis

Today the House of Representatives will start hearing the 2010 budgets of country’s state universities and colleges (SUC’s).

We are of course, for the increase of the budgets of public institutions of higher learning. Unfortunately however, many of the appointed administrators of state universities are resigned, even subservient, to the government’s policy of reducing government support to SUC’s.

This year, the total allocation for the country’s 110 state universities and its almost 1 million students was slashed by P3 billion pesos. This situation, for the past years, has lead to the rampant increases in tuition and other miscellaneous fees in SUC’s, fervently implemented by its administrators. These have, in turn, made tertiary education in the Philippines increasingly inaccessible to the vast majority of Filipino youth.

This phenomenon of state abandonment of public higher educational institutions is not confined to the Philippines. It is a challenge being faced by many state universities and colleges around the world as an effect of a global free market philosophy that forces governments to cut on social services such as higher education in order to “balance the budget” and finance debt servicing.

A few days ago, thousands of students from state-funded University of California (UC) and other state universities and colleges in California walked out of their classes and protested against the budget cuts and the consequent tuition increases that were to be implemented by the state government. In defense of the cuts, the state government hammers the justification that everyone has to tighten their belts in light of fiscal crises and growing budget deficits. It is a rhetoric that is echoed even by the Philippine government. These belt-tightening justifications are nevertheless rejected as crises of their own making and as hypocrisies because governments continue to provide huge sums on questionable allocations and continue providing huge tax incentives to large corporations. In the Philippines for example, the government annually allocates tens of billions of pesos in Presidential discretionary funds that are immune from auditing scrutiny.

These state-abandonment policies conveniently forget that tertiary education is integral in the economic prosperity and political maturity of the people. Denying the youth of accessible and quality tertiary education will, without a doubt, create a more serious and long-term social crisis that will be detrimental to the progress of a nation.  Here are some links to news stories about the walkout: “University of California campuses erupt into protest”“Thousands protest fees, cuts at UC campuses”

California students walkout against commercialization of education

Even state university students and faculty in California are walking out in protest to the present state government’s policy of privatizing state public higher education institutions, from UC Berkeley to California State University.

Budget cuts, tuition hikes, limited admissions, corporate tie-ups, these are phrases that sound all too familiar to students from state universities in the Philippines. It is a reinforcement of the assertion that commercialization of public higher education is a product of a global free-market philosophy.

The budget cuts in California and in the Philippines take on very similar forms, as do their consequences. State policies (Higher Education Compact in California, Medium Term Higher Education Development Plan in the Philippines) declare that state universities should generate their own income from privatization and tuition hikes. Consequently, state funding is reduced as school administrators raise tuition and limit certain student services. It’s even worse in the University of California where salaries are also being slashed and enrollment/admissions are being limited.

In California as it is in the Philippines, despite gradual state abandonment of public higher education institutions, enrollment in state universities is increasing, students continue to flock to public institutions and their share in the total enrollment of all college students is growing larger by the year. The situation is more serious in California where public institutions enroll 79% of all college and university students. The share in the Philippines is 35% in 2008 (from only 10% in 1980). These figures should actually reinforce the policy of strengthening support to public higher education institutions instead of cutting subsidies.

In California, the ratio of state subsidy and internally-generated income is almost at 50% : 50%. In the Philippines, it is at more or less at 70% : 30% (on its way to 30% : 70%). State universities are being forced to rely less on state subsidy and more on internally-generated income.

Both California and Philippine governments conveniently dismiss the idea that higher education is integral in the road to prosperity of a state or a nation. Professionals, from doctors, engineers and even artists drive a vibrant economy. It has helped lead California to the economic prosperity it experiences while it is yet to drive the Philippines into progress. It is no doubt that denying the youth of affordable, if not free access to tertiary education is a tragic detriment to the growth of a nation. I may not have any readers from UC, but I would like to express my support to the multi-sectoral, system-wide strike in the University of California. You are not alone in your fight for accessible state-sponsored tertiary education.

Resources:
Berkeley Alliance Against the Cuts
Keep California’s Promise
UC Faculty Walkout
UC Student Walkout

Abandonment of State Universities and Colleges

This table shows the share of state subsidy and internally-generated income in state universities and colleges’ (SUC) total operating budget through the years. What is evident is that SUC’s are being forced to rely less and less on government subsidy and more and more on internally-generated income (in the form of tuition and other student fees, privatization of assets, etc.). One sector which has always suffered from the government’s policy of contracting spending for social services in favor of continued debt servicing is the sector of higher education. When I was still in UP, I had friends who abhorred militant activists and the “leftist” slogans. One of the state policies they continuously deny is existing is “state abandonment of education.”

Recently, I’ve been reading through the budget and financing books and policy papers of the government over the past years in order to draft a budget briefer and interpellation guide for some congressmen once the Commission on Higher Education (CHED) and the heads of SUC’s come to Congress to defend their budgets.

Government policy papers are very clear on the direction they intend to take state universities and colleges. Government intends to cut down on spending for public higher educational institutions and encourage such institutions to generate their own income, through tie-ups with private corporations and tuition and other fee increases.

All such mechanisms, unfortunately, places the burden of financing tertiary education to Filipino students themselves, many of whom will be unable to afford it. Such policies, as mentioned in the government’s Medium-Term Higher Education Development Plan include: strengthening income-generating capacities of SUC’s”; providing support to corporatization initiatives in SUC’s”; and encouraging “voluntary merging of SUC’s to pave the way for the direct channeling of financial assistance to students through a voucher system instead of maintaining and financing a large number of SUC’s.” Worse, the same policy paper directs SUC’s to “rationalize tuition by implementing the full cost of education in public HEIs and designing/adapting socialized tuition fee schemes.”

These same policies are echoed in other policy papers such as the Long Term Higher Education Development Plan, the Medium Term Philippine Development Plan, and the President’s own Budget Message for 2010.

Here’s one reason why the government should desist from its policy of minimizing support to SUC’s: Filipino youth are actually flocking to SUC’s due to the increasing cost of studying in private universities and colleges. In the past years, more and more Filipinos are opting to study in state institutions. In 1980, only 10% of all college students were studying in SUCs. By 1994, the number went up to 21%. By 2008, the share racked up to 35%. Here are the statistics for this decade based on CHED’s own data:

Despite the increasing demand and enrollment of Filipino students in SUC’s, its budget has remained stagnant over the years, forcing SUC’s to get its operating expenses from students, eventually leading to the ever increasing cost of tertiary education, which eventually result in the high drop-out rates, and non-enrollment rates in institutions that have hiked up tuition steeply like UP.

The table below shows how much SUC’s have been earning from students over the years, based on the Budget Department’s own data (Sources of Financing and Budget Expenditure books). Clearly, SUC’s income from the students have been growing steadily, which is simply a manifestation of the tuition and other fee increases that have been rampantly implemented in such institutions the past years. If the government aims to “broaden access to higher education,” this is definitely not the way to do it. Not even the government’s scholarship programs can adequately answer for its lack of support to state universities.

In SY 2007-2008, there were only 50,000 beneficiaries of CHED’s scholarships, and such scholarships only amount to P5,000 per student, not even enough to cover tuition in state universities like UP, where tuition is more than P36,000 a year. Budget for such scholarships was even slashed by P100 M this year compared to last year.

For those who say that there’s no such thing as free state-sponsored college education, they only need to look east and west. Ireland, Iceland, Finland, Sweden, Norway and Denmark provide and ensure free college education to its citizens. Even developing countries such as Sri Lanka, Cuba, Brazil, Libya and Argentina provide free college education to its people. Again, this “state abandonment” of tertiary education is real because the government is focused more on ensuring payment of its debt obligations. In order to ensure such, it follows policy mandates from foreign financial institutions and other foreign creditors to minimize spending on social services such as health, education and housing and to implement more consumer taxes in order to “balance the budget” and ensure debt payments. All these go without saying, that truly, the victims of this tragic order are the Filipino youth, continuously robbed and denied of their opportunity to attain tertiary education that is accessible and affordable, if not free. Such is not only a loss to the personal growth of the youth, but will also be a loss with grave consequences on a ‘developing’ country such as ours, denied of the many engineers, scientists, intellectuals and other professionals it needs to fuel the nation’s growth and road to prosperity.

Contracting social services, bleeding the people dry

It has always been a priority for the Arroyo administration to “balance the budget”–meaning, to decrease the gap between government revenues and government spending. In plain reading, this is good. Trimming the budget deficit should mean less borrowing, and eventually more money for health, education and other social services. However, the goal of balancing the budget under the Arroyo administration, and even before, has always been to ensure the payment of our debt obligations, unfortunately at the expense of social services spending. To make matters for ordinary citizens worse, in order to balance the budget and earn more revenues, the government, for years, has always put a stress on consumer taxes (E-VAT, sin taxes, proposed text tax) instead of directly taxing corporations and high-income tycoons, instead of taxing imports or plugging the leaks from corruption.

In the age of trade liberalization and globalization, government would rather give rich foreign investors, high-income tycoons and importers tariff cuts, tax holidays and other tax incentives. Aside from taxing the consumer, government has also been selling its assets and privatizing services and public utilities in an effort to hide its poor and lopsided tax effort. This results to private companies concerned largely with profit and not with public service controlling public utilities. Thus, the high power and water rates we experience. When corruption and smuggling comes into the picture, we arrive at the terrible fiscal decay we find ourselves in. Ordinary people are being taxed dry, and yet social services are continuously deteriorating, and despite all these, our debt just keeps growing and growing. Below are some graphs that would illustrate the trend of the government in its budget proposals for the past years.

National Government’s Outstanding Debt Stock (1990-2010*)

National Government Spending Per Capita Per Day (1998-2010*)

graphs from IBON Foundation’s “2010 National Government Budget: Confirming GMA’s Legacy of Fiscal Decay” presentation (*estimated)

The second table just shows how much government has been spending on debt-servicing and selected social services per Filipino per day. For the 2010 Budget, the government will be spending P1.10 per Filipino per day on health, but would be spending P21.75 per Filipino per day on debt-servicing. This is one of the simplest way of showing what the government’s priorities are.

Cha-cha beyond term extension motives

Changing the constitution of different countries worldwide has been in the agenda of the lobbying efforts of multinational financial institutions and corporations the past years, in an effort to open up their national patrimonies and natural resources to foreign exploitation and ownership.

If you think it’s all about the personal and political motives of our politicians, it’s worse than you think. All charter change attempts by all Philippine presidents after Corazon Aquino have a common motif–amendments to our nationalist economic provisions, to allow the wanton foreign exploitation of our natural resources and foreign ownership of our public utilities.

Even with the 1987 Philippine Constitution in place (and its 60-40 ownership restrictions in many national industries), the country’s rich natural resources have only been exploited, through legal loopholes, by local and foreign corporations for profit instead of serving its potential of lifting the millions of Filipinos who continue to suffer from abject poverty out of their tragic situation.

The current attempt at changing the Philippine Constitution will not only seek to extend the Arroyo administration’s hold on power, but will also legitimize the economic plunder of our country. All the more reasons to reject the Arroyo administration’s current attempt at Charter Change.

Faced with Recession, US at the Forefront of Amending RP Constitution

The latest report on Foreign Trade Barriers of March 2009 on the Philippines by the United States Trade Representative (USTR) explicitly states the “[aim to reduce or eliminate] the most important foreign barriers affecting US exports of good and services, foreign direct investment [and] intellectual property rights.”

Apart from Politics, Pressure from WTO, US, EU Drives Cha-Cha Bid

The political dimension of charter change has dominated the national agenda. But the constant driving force behind all the attempts since the last decade to modify the Constitution has been the external pressure coming mainly from the WTO, the US, the EU and other rich countries to create the sort of policy environment that will allow globalization to fully thrive in the Philippines.

US ‘Wish List’ vs Philippine Constitution Behind American Lobby for Cha-Cha

The Americans, like the Europeans, have an inventory of what they call “barriers” in the Philippine Constitution that they want the Arroyo regime to remove through constitutional amendments. Meanwhile, the Constitution will have to conform with the Jpepa, the Philippine-Japan agreement, not the other way around.

GMA Hires Pricey Foreign Consultant for Cha-Cha

On July 25, 2005, Mrs. Arroyo hired the lobbying and representation services of US-based Venable LLP, one of America’s top 100 law firms, for a substantial sum of $75,000 a month, or $900,000 (P50.4 million) for 12 months, to “secure grants and (US) congressional earmarks” for her initiative to “reshape the form of government”¦into a parliamentary federal system.”

Labor Day in Manila ’09 (Part 4)

My friends in UP and colleagues from Kabataan Party were at the Labor Day rally to affirm the workers’ sector’s causes and to push for the youth sector’s own issues intricately connected with the workers’ struggles. I’ll post some news releases below.

8 out of 10 unemployed Filipinos are youth New grads could end up idle for months, years

Kabataan Party-list Rep. Mong Palatino on Labor Day warned that majority of this year’s 900,000 new college graduates could end up idle months or even years after graduation. “The youth are always at the greatest risk in these economic downturns. Often it is young workers or new graduates who are the hardest hit,” Palatino said. “For every 10 unemployed Filipinos, five fall under the age group of 15 to 24 years,” Palatino said, citing the January 2009 Labor Force Survey. This accounts for 49.2 percent of the total number of unemployed Filipinos. If combined with the 25 to 34 age group, Palatino said the share of young Filipinos in the unemployed accounts for 80 percent of the total number of unemployed Filipinos. “Young, low-skilled workers are easily priced out of entry-level jobs. Young workers are also often disadvantaged in bargaining arrangements,” he added. “The government is trying to hide the high unemployment and underemployment rates in the country by using the call center boom and its new medical tourism program.”

“Malacanang is sponsoring call center and tourism job fairs to create an illusion that there are still decent jobs available in the country. But these jobs are market-driven, meaning they are temporary in nature and are not sustainable for young Filipinos looking for permanent careers,” Palatino said. “The government’s adherence to globalization policies which vulnerably open up the economy to unrestrained entry of foreign goods and capital is slowly killing our own enterprises, leading to mass lay-off of workers and lost job opportunities. Coupled with the present global economic meltdown, they only exacerbate the dismal conditions that our young workers and fresh graduates are already facing,” he said.

When the sun had set, people started lighting up their sulos and the thousands marched to the American Embassy in Roxas Boulevard. We were blocked by policemen in a barricade near the embassy, so we decided to hold the protest program right there and then.

Imperialist virus

“Unjust and deliberate retrenchments, slashing of wages and work shifts, and institutionalization of flexible labor schemes have become the worst epidemic ever as it has already destroyed the lives of millions throughout the world,” KMU Chairperson Elmer Labog said. “It was the big businesses mainly from the US imperialist that have created the economic crisis outbreak, and made workers bear the brunt of it to ensure their continued profiteering. Thus, Labor Day becomes most relevant to all because to defend the cause of the workers — for job security, better wages and living conditions — is to champion the interests of the greater majority, that are always subdued by the capitalist elites.” Labog added. “This May 1, we shall bring the fight at the foot of the global crisis epidemic’s mastermind: the US regime.”

The KMU-led rally trooped to the US embassy with a thousand torches and culminated the program there. “The Arroyo government, as one of the US regime’s most favorite puppets, has consistently enacted policies that make the country’s economy serve US the most, such as limitless lifting of restrictions and giving of incentives to foreign trade products, investments, and ownership. “Arroyo is even railroading the ChaCha now to gain further US support to her term extension plans, for the ChaCha will allow 100 percent foreign ownership — meaning greater US imperialist control — to Philippine resources, media, and basic government institutions. And we expect the onslaught or more lay-offs, wage cuts, and labor rights violations if foreign monopolies will have greater control of our economy,” Labog added. The Labor Day rally also served as an anti-ChaCha demonstration.

University Student Council: Rollback TOFI!

[Drafting this statement was such a grueling ordeal in the University Student Council (USC) with all the contentions and whatnot. But here it is. The original had a discussion on how President Arroyo must be accountable for the education crises and a call for her ouster, but it was unfortunately disapproved by a simple majority within the USC]

The Centennial Iskolar ng Bayan in the Thick of Crises

Last June 20, 2008, the story of a freshman Chemistry major who dropped out on the third day of his classes found its way in the pages of the Philippine Daily Inquirer. The Letter to the Editor was written by a professor in the UP Math Department who was dismayed to find out that his student dropped out because he was assigned to bracket C of the restructured Socialized Tuition and Financial Assistance Program (STFAP), which in consequence would require him to pay P600 per unit. Sadly, our fellow Iskolar ng Bayan’s situation has become more common in UP since the Board of Regents approved the 300% tuition and other fee increases (TOFI) last 2006, despite the lack of comprehensive consultation from the students and the absence of the Student and Faculty Regents in the meeting.

More alarming, however, is how common our fellow Iskolar ng Bayan’s plight is in this country. According to the CHED, 11 million Filipinos aged 6-24 years old or just over one-third of those in that age bracket have stopped going to school. The Commission adds that for this school year alone, approximately a million school-going Filipinos have had to drop out.

Should we be surprised? After all, as the prices of basic goods like rice, bread, canned goods, vegetables, meat, fish, petroleum products, transportation, and electricity skyrocket to record-highs, the Filipino family’s budget for sustaining their children’s education has virtually disappeared. According to the United Nations Food and Agriculture Organization (UN FAO), families in developing countries, such as the Philippines, spend 60% of their budget on food alone. Moreover, the IBON Foundation cites that the poorest 30% of the Philippine population spends even more than that. When the cost of staple foods rises, therefore, the poor are the first to suffer. So when both the cost of staple foods and education simultaneously increase, it is nothing but a recipe for disaster for the 65 million Filipinos living below the P112/day poverty line.

Dole-outs in the form of rice and other subsidies do nothing to address the real causes of spiraling poverty and diminishing access to education in the Philippines. Many groups have insisted that a P125 across-the-board wage hike and the scrapping of VAT are realistic measures the government can take to provide instant relief to those hardest hit by the prevailing economic crisis. Last year, the government allotted a miserable 2.66% of the GNP for education once again, nowhere near the minimum of six percent set by UNESCO Delors Commission for developing countries.

Since 1998, when the education budget peaked at 3.8%, the government has continuously and deliberately decreased public spending on education in line with its commitment to the International Monetary Fund (IMF) and its Structural Adjustment Program (SAP). The IMF’s SAP encourages governments with massive foreign debt to reduce spending on social services so as to increase allocation for debt servicing. Certainly, a look at the Philippine budget in the last eight years clearly illustrates how compliant the government has been to the SAP: giving more than half of the pie to pay off debts and leaving so little to care for the physical and mental well-being of the Filipino people.

Since 2001, President Arroyo with her administration has done nothing substantial to re-appropriate government spending and genuinely prioritize education. On the contrary, she has aggressively pushed for the full realization of the SAP through the Long Term Higher Education Development Plan (LTHEDP), which aims to make 70% of all State Universities fiscally autonomous by raising their tuition fees to private-school-level by 2010. She has also refused to do anything to alleviate the impact of oil price hikes and instead continues to implement E-VAT to the further detriment of Filipinos. In light of all these, we demand for: the immediate rollback of the tuition increase amidst a worsening economic crisis; the junking of the UP’s most recent tuition policy (automatic tuition increase based on inflation, tuition increase to augment government subsidy, restructured STFAP), without prejudice to further investigation of the STFAP, and; the increase of state subsidy for education.

These are but some of the many genuine steps towards providing economic relief to all iskolars ng bayan. These are crucial steps so that families today and in the future no longer have to choose between spending for food or spending for education. As Iskolars ng Bayan, we must analyze these social and economic issues besieging our country beyond the comfortable confines of the academe. We cannot afford to ignore the widespread hardship, which the majority of the Filipino people are barely enduring, because sooner rather than later it will affect us all and the UP Chemistry freshman’s story will be too commonplace to be on the news.

Roll back 300% tuition increase! Junk UP’s newest tuition policy! Push for a comprehensive review of the STFAP! Increase government spending on education! Reform the Philippine educational system!