NBN: Recurring themes in our nation's life

I am surely not the only observer of the country's life who noticed that in the testimony of Romulo Neri before the Senate last week, he railed and ranted against the dominant role of the oligarchy in directing the life of the Filipino nation.
On the eve of his appearance before the Senate, I saw him on TV elaborating on a popular theme. Even if there was going to be another Edsa, nothing much would change. Another faction of the oligarchy would just defeat another and the poor among us would be where we were.
Neri's is a well-founded skepticism and I wish we had a dialogue with people like him more often. It might be unfortunate that his arguments sound eerily like those of Ferdinand Marcos in 1972. When Neri gave his testimony before the Senate, it was five days after the 35th commemoration of the declaration of martial rule in 1972. And in some conversations with friends, he had expressed his reservations about telling the truth, because his truth could be used by one faction of the oligarchy against another.
This is where the truth gets muddled. If you believe there is a truth out there which is independent of the oligarchy which funds research projects, you are welcome to elaborate your views. What do you think of the funding you get? And which part of the oligarchs in other countries might they come from?

Whistleblowing in the wind

I have nothing more to say, said Romulo Neri over the weekend. The former NEDA director general and economic planning secretary is an outspoken fellow and it is his outspokenness which led him to disclose his discomfort on the NBN deal to his friends and acquaintances. His friends believed he would disclose all he knew given the right forum and if pressed hard enough.

Their belief was unfounded. For very often, in our day-to-day dealings with government officials, we hear complaints and stories of scandals and wrongdoing, and when we finally ask them whether they are ready to attest to such claims officially, they say no. I, for one, in the course of work in the energy and environment sectors, have heard many tall tales about the highest officials of the land. Unfortunately, my friends and acquaintances in government are willing whistleblowers only when they are whistleblowing in the wind.When the time comes for them to prove they have a backbone, they invariably ask, rhetorically, “You are willing to take care of my family?” Of course, what can I possibly say? And there are also more difficult questions, such as, “when I’m no longer around, who will give you the lowdown on what’s happening?” This last is a question I heard very recently in regard to procurement of fuel supplies. If you or I were in their place, what would we really do"? Could we be as sanctimonious?

Let me first get this out of the way. I am totally disgusted with some commentators who have taunted Romulo Neri about his personal life and preferences because of their disappointment over his behavior. While I can understand their frustration, that is no excuse for lack of decency in the struggle to get at the truth, or the closest approximation to it.

I understand the disappointment of Solita Monsod over Neri’s resort to ‘executive privilege’ over questions beyond his conversation with Comelec chair Benjamin Abalos. But she is most probably wrong in her assertion that he did his boss a disservice, especially if feeding us only the convenient truths was on her orders. After all, we all know that leaders can be myopic, and what we really don’t know is how myopic they can be.

Professors Emmanuel de Dios and Raul Fabella were more circumspect in their analysis, prefacing their paper with the perception of the president’s wish to leave a legacy and contrasting this with the reality of the obvious flaws of the NBN project. Their ciriticisms were also very constructive and could lead to genuine reforms through legislation.

Perhaps it was because of Fabella’s priestly airs and the appearance of de Dios as his willing acolyte that on Thursday last week, there was a palpable sense of a serious discussion going on between the Senate and the country’s respected academics. The senators seemed afraid to be exposed as ignorant boors before the guests. In the previous hearing, they had acted as boorish ignoramuses before hapless guests from the executive, even if that was because the executive did send its representatives to be slaughtered to save the boar, and maybe the bitch.

NBN: Negotiated Truths?

They must find it difficult...

Those who have taken authority as the truth,

Rather than truth as the authority.

I find the quote above, attributed to Egyptologist G. Massey in Zeitgeist, appropriate as we ponder the difficulty confronting those seeking the truth on the National Broadband Network (NBN) scandal. I am often in heated debates with ‘post-modernist’ friends whose definition of truth is too relativistic for comfort. But even they, I hope, would agree that the truth we refer to here are more akin to facts and not some philosophically debated ‘scientific truths.’

In today’s Senate hearing, the resource persons will offer what to me is the most reasoned and sober appraisal on the need for the project itself. When the study of Emmanuel de Dios and Raul Fabella, dean and immediate past dean of the U.P. School of Economics respectively, first came out in the press, one of the immediate reactions from the spokesmen and other motley defenders of the project was, ‘how could they make any valid conclusions when they haven’t even read the contract?” And whose fault was that ? The thieves taunted the scholars: “how can you say we’ve stolen anything when you’ve never seen what we’ve stolen?” (Right after the publication, it was reported that the contracts had evaporated, but could be reconstituted, and perhaps even homogenized, lending credence to suspicions the project was really meant to be a milking cow). Elementary, there is/was something missing in the place it should be: plain and simple reason.

Executive secretary Eduardo Ermita insulted the scholars further as ‘never impartial.” He thus spoke as the authority with an unearned patent on the truth. Yesterday he was at pains explaining ‘executive privilege’ on how the truth could justifiably be withheld from us. who he must look down on as pious subjects, and just take his word for it. I can’t do that sir. Never.

Is the truth subject to negotiation?

In this case I hope not. The House Speaker and his son, and their president have been implicated, as are Comelec’s Abalos, DOTC’s Leandro Mendoza, and the gentle man. But from each their ability for candor and to each according to the degree of mitigation that candor justifies, to borrow loosely from my favorite philosopher.

How might the Speaker and his son twist the truth so as to explicate away the purported actions of the gentle man and his spouse? Simply, but in an incredible way. They can and might lead some to believe the portrait of the gentle man as the model of decency and propriety as painted by the gentle man’s lawyer. After all, JdVIII can always assert that he never attributed any motive to the FG’s words, so he has some room for maneuver there. He can as us to back off and many may unfortunately heed his admonition.

To the extent that their expectations of Romulo Neri were high in yesterday’s hearing, so did the frustrations of those who saw the controversy as just another chance to gain power have a potential to fall. Don’t misundertand me, I share the same passion for radiclal changes, but not the easy way.

They expected Neri to implicate the president and the gentle man unequivocably. As far as I’m concerned , if we activists for a better society had done our homework, that would have been enough to trigger large-scale demonstrations. Instead, the politically voyeuristic public has been and continues to be non-committal. Whose fault is that?

To be more blunt, I have observed that friends and acquaintances in the Left who are supposed to be guided by a more realistic theory of social change have been caught in a time warp of sorts, way back to the middle ages. They are prone to pin their hopes on heroes and have for the past decades, even portrayed social problems as a battle between good and evil. Where have they been these past few years?

If these friends find the time to dilligently read the paper by de Dios and Fabella, they would find that they could not pick the observations and conclusions just to support their own biases. The two scholars did provide the executive branch, leeway for a change of course and gave the president the benefit of the doubt. Granting that the facts will eventually support accusations of corruption? What then? That was the question posed by Neri on the eve of his Senate testimony.

I’ve met Neri only once, and that was last year, in a meeting of stakeholders in the power sector and in the presence of some foreign funders. (As I left the premises of a business organization based in Makati, the ambassador of a superpower came in). At the time I ‘challenged’ the view of Neri in regard to effecting immediate reforms in the power sector. While I agreed with his views on market power and more effective regulation, his ideas seemed to me to be hatched on another planet. Some other friends agree with me about his good intentions but question his technical competence, something he himself admits. Unfortunately for me, he saw me in that meeting as a minion instead of as an independent guest and resource person, and that is why I walked out and left with the impression of him as well-intentioned but not really competent.

We’re on Earth, aren’t we?

So what can and what should we reasonably expect from the Senate hearings?

From reading his columns and blogs and watching his TV program, I had the impression of Manolo Quezon as impartial and sober. But he was so incensed because of yesterday’s hearing, which, according to my scorecard, only one in four questions were relevant and helpful. Keep your cool Manolo, you’re doing us all a great service. But be cool.

At the very least, we expect the Senate to finally help resolve the question of executive privilege. If they can’t even resolve that question, they might as well just abandon the hearings for good.

September 23, 1972: incoherent memories

September 23, 1972

It was a Saturday and I took two jeepney rides from Lawaan, Talisay to the U.P. Cebu campus in Lahug. I was excited because I had been chosen as one of two editors for the high school paper Tambuli, old vernacular for horn shell. There really might be no English equivalent, as with many words outside of English. Picked as a co-editor was my classmate Rita Murillo. It was supposed to be our first editorial meeting to discuss the launch of the paper and the articles for the first issue. I cannot now recall who else were chosen to staff the paper except Ella Rose Cabiluna and Rosendo Estoye.

Fe Reyes, the paper’s adviser, met us near the oblation to say we should all just go home because ‘martial law’ had been declared. It was the first time ever I had heard that phrase. A year earlier I had heard of ‘writ of habeas corpus.’ But in September of 1972, I was just seven months into my first year as a teenager.

I did not go straight home but instead went to my aunt and uncle’s bookshop (Paul's bookstore was the first after WWII in Cebu) at the time one of the top three book stores in Cebu. My aunt Fidela did not really know what had happened or what was happening. So she allowed me to hang out and browse while waiting for word from home. I don’t even remember where I had lunch that day but I do remember buying ‘My Name is Asher Lev’ by Chaim Potok for my older sister Josephine, who turned 17 two days earlier and who had planned on inviting her college sophomore classmates to the house for a celebration that Saturday. There was a another bookshop near the jeepney terminal, and I spent some more time there because it was in a block we called ‘Lane’ and I recall having been home that night in time to see the official broadcast with the president who said he had declared a state of emergency to save the country from all sorts of trouble makers.

The remainder of the year and the following were eventful to say the least. The crisis in the Middle East, including the Munich hostage crisis and the Yom Kippur War. As a junior in high school I chose Yom Kippur as the subject of my English class baby thesis and it had to go through an oral defense when I was fourteen.

But before that I had had a lot to read, and many of the books I didn’t really understand (Orwell’s Animal Farm and 1984, Koestler’s Darkness at Noon, ... I tried but at the time there really wasn’t much to do aside from brood and since I wasn’t ‘normal’ in terms of being a boy chasing girls, I was in the library often. And when I wasn’t in the library I was in the faculty room. I don’t know why my teachers allowed me in there to have coffee with and even smoke with them, even after the edicts on short hair, and the subsequent youth civic action program (YCAP) and citizens army training (CAT) had been imposed.

After graduation from high school, my values had pretty well been shaped. I was an atheist even before I called myself Marxist. I was first associated with the group of the Maoist party in Cebu before I joined the old communist party (PKP) in 1977 or 1978. In 1990 the PKP expelled me after I ahd spoken out at a forum challenging the scientific nature of historical and dialectical materialism.

Now after 35 years, I feel just slightly older than I was in 1972. Old comrades have moved on with their families and careers. They may have perfected the art of forgetting and surviving. I wake up and still ask myself the same questions, perhaps more calmly now, but still the adolescent I was on September 23 35 years ago.

JdVIII on taking the high road

If there is anything which has so far diminished the credibility of the father's son, it must be his claim that 'experimenting with marijuana and beer' was a mistake, especially while doing that in Boston, where some geniuses are self-reliant and reportedly grow the best weed in the world in their own dorms.

I have heard a lot of anecdotes about the humility and simplicity of the first and only daughter of her mother, but her stupid insinuation that JdVIII's recklessness might be due to Jane takes and beats the brownie. Have the accusations come too close to home that she has to strike below the belt? Is her unaffected demeanor denial of the lowest kind? My unsolicited proposal is: try it, and she may yet giggle and finally see what scum she came from.

As for JdVIII, all I can say is that he may not have inhaled deep enough. Experiment some more man!

NBN: Back-off-the-envelop estimates?

If this DOTC presentation at the Senate hearing on the NBN-ZTE-BA-FG deal was meant to explain to and convince taxpayers that it is beneficial and aboveboard, it failed miserably. What we have here is a table which purports to compare simply specifications and costs of three proposals/proponents. Because the specifications are different, what DOTC assistant secretary Formoso did was to 'extrapolate' unit costs to estimate the equivalent total costs for both Amsterdam Holdings and Arescom using the specs offered by ZTE as the baseline. (How in hell did he do this in multiple dimensions?) Apparently, all three proposals were unsolicited. The following questions immediately arise:

1. If the project had been a priority since 2000 after the passage of the e-commerce law, why didn't government have any list of minimum requirements? Such a bill of specifications would allow us to appreciate the general and specific needs for a national broadband network, and led to a more transparent and publicized invitation for courtship?
   
2. If we grant that at some point the ZTE-PROC executive agreement/tied loan possibility became too beautiful to resist, why didn't the DOTC and NEDA-ICC give the other proponents a chance to modify their own proposals or offered costs?
3. Why did Malacanang (PGMA) and when did it "back off" from the initial desiderata (BOT without take-or-pay, no guarantees...) officially articulated by JdVIII's president?

I have an open mind about whether a fundamental service should be provided by government or the private sector, although in the past I had an ideological bias against the latter. It is a matter of incentives, after all. But what strikes me about the Formoso presentation is the lack of rigor and detail in regard to project benefits. His oral testimony referred to cost savings (and I will not get into that for lack of reliable data) but not to any valuation of benefits.

1. Why is it so important for government to have its own network? And what is the difference in value between using private and self provision? Can they quantify or monetize the value of enhanced (but still imperfect) security?
2. More importantly, do the DOTC and the NEDA have an estimate of the value of improved communication among and between government agencies at different levels?

Unfortunately, what the hearings yesterday unintentionally demonstrated was government (executive) instrumentalities was that even with low-tech methods, they don't communicate. They have no common appreciation of the relevant laws and not even prescribed executive procedures.

Information, Democracy, Communication

DOTC Secretary Leandro Mendoza adverted to his background in 'intelligence' and proceeded to contradict himself with his subsequent responses. Could he not be aware that under his watch that his very own agency is among the least communicative ( to the people) and the most corrupt?

If we have to prioritize the information and communication problems that should be addressed, there are many, unfortunately, and these don't really require much expense or commissions. It is a matter of culture. In many cases, such as in the communications and energy bureaucracy, there are debilitating turf wars. Why? Your guess is very good.

Okay, let's grant that the private providers have limitations. But these have not yet even been breached! I would have asked Formoso for evidence that a public servant from a 6th class municipality in Mindanao wrote to someone in the central government (maybe the president) to complain of inaction. I bet the bottleneck is not in the medium but in the message and the way it is formulated.

Mam, I am a lowly farmer wanting to use a plot for biofuels and I seek advise on how I may and can avail of govenrment help, if any.

Culture and communication

Just visit the websites maintained by government ( three levels) and you are very likely to agree that the problem is not hardware but software (including the processes in the brains of public servants). Government officials who have e-mail addresses don't even read much less answer electronic mail! Yes of course they have minions to do that. But these minions are not empowered and are just like the customer service staff of private providers and worse. They get paid anyway, regardless of how they deal with the public.


So why not e-mail?

Using currently available technology but under a much-improved culture of transparency and responsiveness, a lot can be accomplished to improve government services. And there would be an electronic trail, especially with commercial media. The problem with the NBN, even if it may have a few merits, is that it would only reinforce biases of a government so secretive but still so incompetent, it doesn't know how to talk to minions and other branches. But this can serve loyalists or minions, and a dictatorship and what it means is what we are all supposed to remember on Sunday.

If you ask me, the more pressing need is for government to communicate to you and me. The only reason they need a dedicated and secure network is because they want to screw us, secretly. Secretary Mendoza appeared before the Senate yesterday, but only to defend the FG. And, even if I had a colony of ants to bite his scrotum, I'm afraid they would rather go to Mars than wait for him to tell the truth.

Sex, lies, and Abalos or Just another day for the Chairman

And death threats and wiretaps. What else could be added to this brew?

Today has been just another day for Comelec Chairman Benjamin Abalos, who reportedly reported for work to preside over election dispute hearings, presumably after his routine at the golf course. Undaunted by what we consider the explosive testimony of Jose de Venecia III at the Senate, the chairman, after emerging from the hearings, simply reiterated his blanket denials and would not speculate on what could be motivating JdVIII and the columnist Jarius Bondoc. Unlike DOTC Secretary Leandro Mendoza, who called the 'rantings' fairy tales of a 'losing bidder' (what bidding?). The sons of the FG, meanwhile, called the testimony 'black propaganda,' but did not explain why the son of the House speaker would risk prosecution and his and his father's future.

If you are a well-meaning and upright citizen hoping to shame the chairman into resignation, or worse, into suicide, yours is a losing battle. The reason Abalos comports himself the way he does is his confidence he will go down only with the rest of the boys, and girls, and the school marm who are at the very core of our society's power structure. If we were a functioning democracy, JdVIII's revelations alone would have been enough to trigger a wave of resignations and immediate indictments. But it is not, and, depending on the appreciation of the silent majority, our society can either implode , or revert to business as usual (BAU) mode. If the former, we risk manipulation by forces just as insidious and unethical as those they want to replace, especially in the absence of a democratic mass movement strong enough to take the reins. But that is still a better option than BAU, whose rottenness and workings JdVIII may have unwittingly exposed.

First, look at Abalos's disingenuous protestations. On the alleged sexcapades in Shenzen: my sexual prowess is myth. On his alleged power-brokering or 'commissioning' : who am I to wield such influence? I can attest to the chairman's integrity, to the effect that he, in hell, would rather consult his lawyers rather than his conscience, and this guy could swindle the devil himself as long as he could get away with it.

Second, take the narration of JdVIII at face value and appreciate that the guy has exposed his own culpability under our graft and corruption laws. But more important to me is the value of his own account of the way deals are made in this country.

• Would the proposal of his company have been taken seriously if he were not the son of his father?
• Would he have had access to high officials, the DOTC and Finance secretaries? Why would the DOTC secretary arrange a reconciliation meeting between two entities unless the secretary considered them part of the boys' network?
• His testimony also implied that his President knew of Abalos's brokering efforts and of his own proposal.
  

Now look at why Abalos apparently failed to, excuse my language, cover his ass with a cover story underpinned by 'plausible deniability?' Simply because he considered the young man and the father part of the 'old boys.'

In recent weeks, acquaintances in the energy sector have reported that their colleagues have admitted regularly delivering millions to the mystery man from procurement deals. I can only hope that at some point they find their balls and free themselves from this vicious circle or cycle.

And what of Romulo Neri? I was in a meeting with him last year with stakeholders of a foreign-funded project. I was initially turned off because he admitted to me that some columnists were in his payroll but this was mitigated by his independent attitude toward power sector regulation. I just hope he will surface and stand for his convictions, if any remain. I know that he has always been a player. In the next few days, we will know the game he has chosen.

And what about my favorite morally challenged senator? During the impeachment hearings in 2000, she questioned the testimony of a UP law graduate, insinuating that Ms. Banal's behavior was questionable because it was unlike her own documented opportunism. Yesterday, she questioned JdVIII's integrity on the same grounds. You want her to commit hara kiri. Chew your fingers.

In haste, Sandiganbayan jiustices forgot death penalty had been abolished

Just over an hour ago, the verdict in the plunder and perjury trial of former President Joseph Estrada was read, and the most telling sign of haste was that the justices forgot the death penalty had been abolished. The clerk of court said:

...the penalty for (plunder) is a minimum of reclusion perpetua and a maximum of death. But there having been no mitigating nor aggravating circumstances, the minimum of the two is hereby imposed...

None of the anchors of the ANC, nor the legal experts in the studio notice the egregious error. Neither did the former president's lawyers advert to this in their immediate reactions to media.

Biofuels and cow fart

Finally, here is a sobering study by experts from the College of Agriculture of U.P. Los Banos on the technical and economic prospects of jathropa, hyped to be a boon not just for local farmers, the environment, and for the ill-advised policy goal of energy self-reliance. Professors Ted Mendoza, Oscar Zamora and Joven Lales are in the crop science faculty of the agriculture college, and one would expect them to jump on the bandwagon of biofuels consultancy if they were so inclined. My only beef is, they should have spoken up much earlier. Because they didn’t, we have had to contend with a lot of cow fart from government.

Humble enough to admit what they have not studied, they proceed to illustrate why government claims about extra-ordinary profitability for farmers planting jathropa don’t stand closer scrutiny. They say, essentially, that with the most optimistic assumptions, the claims of government stink. But read the report for yourself.

Environmental activists are right to demand that government study options for energy supply now and in the future, but they should also remain vigilant and identify hype. In my case, I still have not wiped off all the egg off my face in regard to natural gas vehicles, promised by government to have been operational in 2005. In December 2004, using data from government, I made a presentation in Agra, India optimistic about the economic viability and positive environmental impacts of the program, to an enthusiastic audience. Three years later, the program has yet to materialize because of hitches in infrastructure and financial and economic problems with the supplier of LNG. Other participants in the Better Air Quality (BAQ) conference joked that I was taking my paper too seriously, because I did not even find time to visit the Taj Majal.

A brief historical review should make us wary of astounding claims on alternative fuels. In 1982, at the height of the Marcos government’s alcogas program, which entailed the blending of anhydrous alcohol with regular and premium gasoline, I was making the rounds in Negros and Panay trying to address the problems of water intrusion into the gas station tanks and engine incompatibility. At the time I was disgusted to find out that the sugar planters, for whom the project was meant to help, were among the most stubborn oppositors.

The program was heavily subsidized for their benefit. I remember I and my colleagues driving around Iloilo City and Bacolod at night and being offered child prostitutes for about P2 a piece because of the slump in world sugar prices. One would think that in these times, government would be studying not only the technical aspects of the biofuels program but also the equity implications. I will leave that for another post.

Corrruption and inefficiency in Philippine Rural Electric Cooperatives

The conventional wisdom is that the major reason for inefficiency and corruption in rural electric cooperatives in the Philippines is the lack of incentives for good management. Because there is no group of private stakeholders large enough to care how an REC (rural electric cooperative) performs, the managers are left to their own devices, especially if their pay is not linked to such performance. While the coop members elect the boards of directors which in turn supervise the managers, that is pretty much where their participation ends, which is why it has been said that the RECs are cooperatives only in name.

REC elections are also said to be well-contested because the boards exercise tremendous political power; in some cases even more so than local government elections. In fact, the party-list party of the rural coops, APEC, has always been a top vote-getter in national elections owing to a large bloc of ‘command votes.’

Occasionally a group of members might have enough community spirit to exercise vigilance over management while the rest of the members simply ‘free-ride’ on their efforts. This is also why the standard (and perhaps even dogmatic) prescription is to encourage the entry of private capital imbued with a profit motive to lower costs. But that is just one solution to enforce greater accountability and efficiency, by encouraging greater membership participation.

This is what this account of graft and corruption in BATELEC II (Batangas Electric Cooperative II) illustrates: member vigilance and heroic management. The board, elected in 2003, is facing charges of corruption brought by some members (in 2005) for approving and awarding a P75 million computerization contract to I-Solv, a company based in Metro Manila, with a paid-up capital of P62,500 and organized just a few days before the contract award in April 2004.
The graft charges were presumably lodged after the National Electrification Administration (NEA) audit, at the instance of the same group of members, found the whole project irregular for lack of the proper technical study and bidding. Furthermore, the board had usurped the authority of the bids and awards committee, the audit said. It also found that the board approved a 100% overprice of 10 boom trucks. In this controversy, general manager Marlyn Caguimbal has been on the side of the members.

It is unfortunate that PDI reporter Marlon Ramos ends his account with developments way back in 2005 and thus leaves us wondering on the status of the case and what other actions, if any, the NEA has taken against the board.

About nine years ago, I had occasion to visit the offices of BATELEC I, the other REC serving Batangas, and was impressed by the professionalism of management. The REC had been chosen for a brief historical case study, excerpted in a chapter of The Challenge of Rural Electrification, Strategies for Developing Countries, edited by Douglas Barnes and recently published in May by Resources for the Future (RFF) and Energy Sector Management Assistance Program (ESMAP). I co-wrote the chapter on the Philippines “Power and Politics in the Philippines” with Gerald Foley.

Taxi strike: unfare?

Philippine taxi drivers are generally a friendly lot, though there are many horror stories associated with rogue drivers who reject fare, short-change passengers, collude with robbers, and eject customers midway through trips. (The last shows cab drivers know their economics and the value of time, because some would even give up the registered fare simply because going further would result in a loss---in other words, they think in terms of 'net incremental benefit.'

They are are also a bit talkative and need little provocation to lecture you on politics and philosophy, and many of them in their 60's would still even hark to the 'good old days' of Marcos and the period of discipline and (false) sense of national purpose. With a little provocation they'll even tell you whom they voted for in elections and subtly try to sway you to their position. I have always used their stories as a vane to give me a sense of the social weather. In one unforgettable ride not too long ago, a driver, having eavesdropped on my conversation on politics with a friend, butted in politely and eventually confessed he was an 'intelligence agent' of the armed forces. No, his cab driving was not a front but genuine moonlighting, though that was not really reassuring. And cell phones were not affordable then. In fact, at about the same time in 1995, I was amazed that my cabbie in HK handed me his handset to call a friend to ask for directions. And no, his name was not Vidal Doble.

Once, in my early 30's, I was mistaken by a cabbie as of his age. After I complained about the metallic rock on his radio, he gently reminded me that things were a lot different in 'our time.' I didn't protest that because I had much earlier accepted having been born old and grumpy. But then, in another ride, while I was waiting for change, this young driver insisted he recognized me as a lead member of a local rock band.

I don't know the status of renewed efforts to finally enforce the requirement in the tax code (circa post-Marcos 80's) that cabs should issue receipts to passengers as part of enhanced tax-revenue generation. I guess government has balked again. I agree with the measure but recognize government has to be fair to both cab companies and drivers but fairer to drivers and to passengers. Clearly there is a lot of room for improved regulation of behavior. The economic fact is that drivers merely respond to the so-called incentive structure of the system, like free 'profit-maximizing' agents who take all the demand risk, because they pay a fixed rent regardless of kilometers travelled or fare volume. Bus drivers, on the other hand, get a share of revenues. But in congested thoroughfares, the resulting behavior results in disastrous consequences for both passengers and air quality (I digress too much, as usual).

I travel fairly often and fairly wide and know that Philippine taxi rates are among the cheaper in the world, and have spent large sums because of my habitual laziness and addiction to door-to-door delivery. An absolute increase in fares resulting from regulation might do a lot of good all around, most of all by encouraging more mass transit patronage. With some caveats, mainly for people like myself, who, as a lazy patron, also use cab drivers to attend to other addictions. When I was a beer-drinker and smoker, and whether alone or with guests, but as lone occupant in a single male-headed household, I would call the nearest cab company to request delivery of beer and cigarets.

Do cabbies generally overcharge? I don't think so. Rates are much higher in areas where entry is either regulated or banned, especially airports. That is because the entry regulator is usually corrupt but justify the regulation as part of ensuring passenger safety. Hell, they could do that by simply charging a parking fee and enforcing a monitoring system.

Without much ado, local cab companies have been shifting to alternative fuels like liquefied petroleum gas (there is an LPG filling station just a few hundred meters from where I live) because it makes financial sense. It also results in less harmful emissions.

This brings me to the implications of this news article from the New York Times, New York Taxi Strike:

Fare increases in 2004 and 2005 — totaling some 25 percent — were contingent on taxi owners installing global positioning systems and credit-card machines. Drivers were desperate for the increase — the first in eight years — and accepted the terms. That was the deal they made, and they should stick to it. The city had an equal obligation to make sure the mandated technology is functional, up-to-date and serves both driver and passenger. So far, the results are not encouraging.

It is not surprising they are talking about GPS and credit card payments while we are arguing about receipts. After all, we are in the Philippines. But our level of economic development, I should say, does not really indicate our comparative level of civility.

Unimpeachable?

On the contrary, they are impeachable. In the case of George W. Bush, a strong case could have been made much earlier, and as more evidence comes to light, his term shortens and the Democrats are finding it ever harder to remember where they misplaced their balls. This new revelation Bush knew Saddam had no weapons of mass destruction only adds to the frustration.

In the case of Gloria Arroyo of the Philippines, many would support impeachment only if they were guaranteed a better result, in the short run. Pragmatism wins over principle, especially if one uses a high social discount rate (or holding the present more valuable than the future). The main argument for conservatism and economic policy continuity is the lack of credibility among the opposition, with its fair share of shady characters.

Now that the 'Hello Garci' wiretaps and election cheating investigations are being reincarnated, all the opposition can muster is a case for impeachment against the elections chief commissioner, on an entirely unrelated case. One led by an alleged human rights abuser with unexplained wealth, and the other, someone who had admitted to influence peddling for the sake of his wife's business.

Electricity and Philippine Growth: amateur detective work

I can understand why the recent GDP growth figure of 7.5% has elicited a lot of skepticism and hostile criticism , and most of the justification has to do with the fact that even the middle class, especially in Metro Manila don’t feel better off compared to last year.

Let me first disclose that I am confident about the professionalism and integrity of the people who compile and estimate the growth statistics. I have worked for long periods with NEDA assistant director general Estrella Domingo, mainly in the nineties, and mostly in regard to estimating the environmental impacts of growth. She and her people are competent and open to criticism and suggestions, especially in regard to methods.

First let us grant that the statistics are correct. The natural questions to ask are where did the growth come from, which sectors and which regions?

Growth in electricity consumption

My preferred method of validating economic growth figures is through looking at electricity consumption. So I examined the sales figures of Meralco for the first semesters of last year and this year. The second row of the following table shows percentage growth in kilowatt-hour consumption by customer class. The Meralco service area comprises about 60 percent of value added (GDP) in the Philippine economy.

Residential	Commercial	Industrial	C+I	Others	Total
3.02	5.78	3.59	4.83	-1.80	4.18

From the figures above, here are my initial observations, not necessarily in order of importance:

The NSCB claims growth is consumption-led. Clearly growth in residential consumption is much less than overall growth, and is also less than growth in personal consumption expenditures of nine (9) %.. Thus the elasticity of demand for household electricity is less than 1 (0.33), which means an additional peso of income creates much less demand for electricity in the Meralco area. This could be higher in areas outside MM (AOMM)., which is intuitive because these areas are starting with less electricity consuming appliances.

1. But looking at C+I in electricity consumption in Metro Manila, which is much less than growth in the value added of the service and industrial sectors (8%) per NSCB nationwide, I can only surmise that growth in these sectors must be happening in AOMM. Unfortunately, the NSCB does not provide a spatial disaggregation of value added and growth. But this is the most likely explanation I can find.
2. If we assume that GDP growth in Metro Manila is the same for the rest of the country, it would mean that the elasticity of demand for electricity overall with respect to GDP growth would be .56, which is contrary to historical experience and incredible.

From the above, if we assume the NSCB figures are correct, these can only be explained by higher growth in AOMM.

To whom is credit due?

Here I will allow myself some political bias, which you might agree is justified. The effects of policy always come with a lag, and it would be fungus-faced (to quote my favorite senator) for the Arroyo administration to claim credit for the growth figures. It is probable that phenomenal growth occured inspite of its incompetence and erratic responses to threats of its survival. One thing I can concede, without offering empirical proof, is that the value added tax did and does lead to a higher growth trajectory.

Equity and skepticism

Among the more reasoned essays with respect to equity and healthy skepticism published in cyberspace recently are those of Ricky Carandang and Manolo Quezon.

On the matter of equity, the Central Bank used to publish a disaggregation of GDP into returns to capital and labor but it stopped doing this sometime in the 1980’s. A simple way of ascertaining whether growth is equity-enhancing would be compute the growth in the ratio of labor's share per capita (simply divide the labor share of value added by population growth). Unfortunately I have no method to estimate this, though I suspect that if domestic demand is fueled by OFW income, growth, and if consumption growth accrues to sectors in the economy with market power, growth might be inequality enhancing. Note that I am not sure about this.

For those interested in the structure of the economy and the growth figures click here. The NSCB has one of the better government sites, but please write the webmaster and demand that it present data files in downloadable format.

wiretaps in aid of effective electricity spot market regulation

A funny thing happened on the way to a competitive electricity market in the Philippines.

Let me start again. A funny thing happened when the electricity regulator was investigating anti-competitive behavior of the state-owned utility. The regulator said there was no prima facie case even after the market operator furnished them with affidavits admitting such behavior. This is one for the books, but not surprisingly because the country lacks a history of anti-trust litigation.

Let me start again. In September last year, the Philippine Electricity Marketing Corporation (PEMC) lodged a case with the ERC accusing the PSALM of market manipulation. The investigator of the ERC did not even have to call Jack Bauer of CTU. The affidavits of the PSALM agents are clear that they bid to get a desired price.

Then the ERC dismissed the case for lack of prima facie evidence.

It seems like the ERC was looking for legally wiretapped conversations which could have gone this way.

Hey Juan, at the peak demand, we should tweak our bids this way and that.

Unfortunately for consumers, ERC was not forward-looking enough to install bugging devices in the rooms of PSALM and the ERC or NPC. What a pity.

So the spot market celebrated its first anniversary in the first week of August without fanfare because PSALM was demanding a to collect P9 billion, the difference between spot rates and administered prices imposed by PEMC for two months last year.

If you read the ERC decision you'll know that the investigator didn't need to call Jack Bauer of CTU because the PSALM affidavits were quite candid and in themselves incriminatory.

Long live Jose Maria Sison!

I am always ambivalent every time I hear any news about this guy's continuing persecution, which only serves to fuel his revolutionary delusions. In fact, one of my favorite conspiracy theories is that Sison's closet allies in the Philippines is national security adviser Norberto Gonzales, who has done more than his fair share in making Sison and his comrades more important than they really are.
Well, if justice has to be done, let it take its course, though I support the hypothesis of Joel Rocamora that the cause of Sison and his comrades still shines only because of the slow speed of light. People might be seeing light from a dying star, but because of the delay, what appears bright is already actually dead. But this phenomenon is not unique to the dead Maoist cause.
One other favorite conspiracy theory is that Sison became a celebrated 'revolutionary' in the Philippines primarily because of the help of the Central Intelligence Agency and Benigno Aquino Jr.

All I'm sure of is Joma Sison must be celebrating this most recent episode of 'persecution.' The first and last time I ever talked to this guy, he was lying though his teeth about the history of the revolutionary movement in the Philippines.

Norwegian Would: Barbara Goldoftas's book on Ecological Decline in the Philippines now available locally

Norwegian Would: Barbara Goldoftas's book on Ecological Decline in the Philippines now available locally

The continuing decline of energy sector institutions

Just had dinner with a reliable newly elected congressman who quoted other neophytes requesting anonymity in aid of obscurity. The buzz in the House is that the unpalatable Michael Defensor is being groomed to be energy secretary. From good to acceptable to bad to worse. What say you?

Being clear on going nuclear

I would not worry too much about reported plans by the energy department, with the imprimatur of the president, to 'study the possibility' of harnessing nuclear power in the country. There is no lack of things to worry about in this world, and there is no dearth of interesting subjects to study either. For all I care, Secretary Reyes can study nuclear physics and rocket science, but on unofficial time. I will start worrying when he gets distracted from the more important tasks of introducing real competition and lowering rates in the power sector and achieving the goals of the rural electrification program.
While I keep an open mind on nuclear power, especially as a potential solution to the risks of global warming, this is a non-starter for the Philippines, where the justifiable knee-jerk rejection of nuclear power is informed by the intertwined issues of corruption and safety.
It came to pass without much ado that the foreign debt of more than $ 2 billion incurred under clearly fraudulent conditions for the Bataan nuclear plant was finally fully paid in April this year. While many in legal circles felt we had a strong case against the Marcos henchman Disini and the supplier, Westinghouse, the Aquino administration had opted to settle out of court with the latter for a meager $25 million worth of old turbines. I don't know what happened to Disini. The Aquino administration also opted to honor the obligation but transferred it from the books of the National Power Corporation to the national account. (Just think how much higher NPC rates would have been if the white elephant had been part of utility's rate base. To its credit, NPC has at least managed to generate some income from the Morong complex by operating a hotel and cabanas---respectable houses meant for the power plant staff--- open to the public for conferences and private breaks. I've tried fishing by the wharf there and snagged some poisonous fish--- no not from any nuclear contamination because no fuel rods were ever stored there. There is also a good firing range for target shooting). Aquino officials shuddered at the thought of triggering cross-default provisions, used to shield banks from the consequences of their bad decisions---sound familiar?---- and lengthy litigation, had they chosen a more militant stance.
That same fear also probably was behind the attitude of the committee tasked to review the contracts with the independent power producers. From the very beginning, it chose a non-confrontational stance. But I've digressed enough.
Perhaps, Secretary Angelo Reyes was misquoted in this reportage on his view that nuclear power would help decrease power rates. A recent Economist article argues this hope rests on shaky ground. I'm all for nuclear power, but for Vietnam, Indonesia, and Thailand. Let them, as long as that decision has popular consent. On safety and sustainability, he can be guided by this real expert. Also, what to do with spent fuel and the risks of nuclear proliferation remain unresolved.
Notwithstanding Three-Mile Island, Chernobyl, and the fears evoked by current difficulties in that Japan nuclear plant undergoing repair after an earthquake, many risk assessment experts would probably tell you that Filipinos living around a nuclear plant would have a greater chance of dying from a motor accident (getting hit by a tricycle?), a fall resulting from a carelessly thrown banana peel, or from the bullets of political hitmen than from a nuclear plant failure. But subjective risk perceptions are always part of objective reality and that is where the main problem is. Moreover, it will probably take us at least fifty years to resolve the issue of safety in this country, where many controversies one hopes could be resolved by hard science never seem to be. (For lack of resources and intellectual boldness, neither the department of energy nor of science and technology could even come to a simple judgment on some alleged fuel-saving automotive gadgets that a former environment secretary had installed in his department's vehicles).
But what is there to study anyway? The energy secretary must of course appreciate that we are not at the forefront of nuclear research and would thus have to depend on technological advances from abroad. He wants a technical pool? For what and at whose expense? Most of the people sent by NPC to train for nuclear plant operations opted to remain in the United States, and my acquaintances who came back formed part of NPC's brain trust, mainly in desk jobs in planning and in environmental work, and are now in the private sector after the utility's downsizing.
As far as I know there is no legal prohibition against putting up a nuclear plant in the country, but the proponent would have to pass the difficult environmental and social hurdles. Identifying potential sites? Okay. We can always let local governments with suitable sites volunteer and take care of the problem of social consent. Cebu? Just kidding. Unless of course one option under study is for government to get back into the business of generation, which some would consider foolish.
Finally, on climate change, we should not worry about that too much either, not in the sense of spending our meager resources. Our climate change policy should be anchored on the fact that historically and currently, we are a very minor source of so-called greenhouse gases. To the extent that we are almost certain to suffer from hotter average temperatures, our national policy should be one of seeking justice and compensation from the culprits, the developed countries responsible for the accumulation of these gases. We should adopt policies encouraging less GHG emissions, sure, but not at the expense of the poor and more important priorities. For one, we can tax, to the extent possible, the energy consumption of the rich.
Okay, let's be open, and just leave it at that.

The Philippine Daily Inquirer's recycling advocacy is probably garbage

“Every issue of the Inquirer is already made from 100% recycled paper. But if every reader recycled their (sic) newspapers for one year, we would all save an additional 3.4 million trees, 840 million kilowatthours of energy, and 78
million gallons of oil. Support the PDI NewPaper Drive and help save the environment ...”

The recycling advocacy of the Philippine Daily Inquirer is admirable, but the claim above is mind-boggling and incredible. In what follows I’ll just leave the claim about trees saved to stand.
I did some back-of-the envelop calculations and came out with an estimate of a combined national hardcopy daily newspaper circulation of 6.6 million, assuming the Inquirer assumed its drive would include the recovery of old editions of its rivals. Otherwise, the circulation estimate would be bloated by a factor equal to the reciprocal of its market share. I also estimated that each copy of PDI weighed 200 grams, but even if we grant that that weight is a kilogram, that would still imply a daily circulation of 1.32 million.
(Reliable newspaper circulation numbers are hard to come by because ironically, the principles of transparency and the public’s right to know are not shared by the business and advertising departments of newspapers. The Philippines is one of a few Southeast Asian countries for which newspaper circulation data are missing by the Southeast Asian Ministers of Education Organization).
The electricity savings is already about two percent of generation in the whole of Luzon, and at spot prices prevailing in the WESM, would be worth about P4 billion. So, at this point, I will not even question the claim of the volume of oil saved except to say that at prevailing world prices, that would add another P6 billion in putative savings.
The proper way to estimate energy savings from recycling is to subtract energy consumption with recycling from a base case (meaning transporting old newspapers to a landfill and production of newsprint from trees. For the curious and/or technically inclined, try following this reference.
Aggravating the exaggeration of the claims of the Inquirer, and more unforgivably at that, is the assumption that no old newspapers are being recycled. (If it did, the circulation figures above would again be bloated by another factor). In the United States, the rate of newspaper recycling is around 82% and I dare say that in a poorer country such as ours, the rate would be higher. If you don’t know the schedules of your friendly neighborhood ambulant BDP’s (Bote, Diario, Papel) entrepreneurs, you must be living in Forbes or Dasma. My best guess is that the savings from any newspaper recycling drive such as the Inquirer’s would be much less than 10% of the figures cited above. In my case, all newsprint is sold to vendors by the neighborhood diner (the owners of the diner are friends of the Inquirer’s readers’ advocate) I donate newspapers to after breakfast coffee, except for the crumpled ones I use to wipe grease off dishes and kitchen implements, as absorbent for the occasional water intrusions on my bedroom floor after storms, and to clean glass. I can also safely assume that newsprint not ending up recycled would be re-used as wrappers of choice for bulad and tapa in your friendly neighborhood talipapa. In the latter, the Bulletin trumps the Inquirer hands down. I don’t know why. A secret ingredient from the ink supplier?

But 10% of a billion pesos is still a lot, right? But to whom will these savings accrue? Is the waste collection system competitive? Three years ago I worked for a project with a paper manufacturing facility in Luzon and observed so many layers of middle men enroute to supplying the plant with scrap paper, and that’s one of the reasons I’m able to come up with the estimates above. The spouse of my masseuse was in the garbage business in Antipolo and he had to give it up because of the competitiveness of supply going against the monopsony of the buyers.
It may be that the Inquirer drive will benefit impoverished folk targetted as beneficiaries. But it can actually do better. It can radically change its business model and encourage more readership by scrapping its archaic and unenforceable links policy, and thereby reduce the use of newsprint at source. This commentator, for instance, explains resistance to the net forcefully.

And, if you happen to be like me, sentimentally retarded and insisting on reading the news while sipping coffee, find a cost-effective way to access news in cyberspace.
(I’m still trying to muster the heart to tell the old man who has delivered the Inquirer to my doorstep the past 15 years that I have finally discarded old habits).
A final note: Worthy advocacies often lose credibility by the exaggeration of the advocates. This is obviously one of those. To recycle an old economics argument, allow me to say that if it pays for them to do something, reasonable people generally do it. Except if they read Bulletin Today.

P.S. To those interested in my calculations, the spreadsheet file will be mailed on request.

Mikey Arroyo's thin line on energy

I have no idea where he came from, but he has a lucky mother. But when I saw him on ANC last night saying there was a thin line between the independence of the Energy Regulatory Commission and the wishes (populist and manipulative) of the executive, I was alarmed. Rep. Mikey Arroyo, chair and lone member of the House energy committee, at first seemed cautious, until the interviewers got the better of him. And that was when he not only betrayed his ignorance (forgivable) and then his political tendencies (unforgivable).
Most every observer of the Philippine energy sector would agree that one of the main problems of sector regulation is the lack of transparency aggravated by the discretionary powers of the regulator, complexed with the political influence of whoever wields executive power. Sometimes, this weakness is utilized by all sorts of contending political factions (including, unfortunately, those from the Left and who should know better).
The independence of the regulatory bodies in the sector has seen some ups and downs in the close to three decades I've been in it, as an active participant and observer. I must say we might be hitting anothe new low.
Less power to you, Mikey Arroyo.

p.s. My favorite senator and neighbor, who went epileptic with the appointment of Angelo Reyes as energy secretary, must be baying at the moon.