Archive for the ‘Resources’ Category

Wigberto Tañada, Lead Convenor

I would like to thank the Scalabrini  Migration Center and the other organizers of this conference for inviting me to this important forum.  I would like to congratulate Dr. Manolo Abella, a kababayan from Quezon, for his enlightening and provocative piece on migration and development.

The debate on the migration-development nexus is an old one in the Philippines.   Four decades ago, under martial law, Marcos justified the labor migration policy, focused then in the deployment of overseas contract workers (OCWs) in the Middle East, as a stop-gap temporary measure.  The argument then — deploy the OCWs to ease the unemployment problem  while the new economic doctrine propounded our political and economic leaders had not yet delivered the promised full employment.  What was this doctrine?  The labor-intensive export-oriented or LIEO program, which gave birth to the garments, electronics assembly and various EPZ-based enterprises.  The LIEO program was also used to justify the massive borrowings from the IMF-WB.

By the l980s, the debt crisis exploded and the economy collapsed.  The LIEO failed to take off and the outward movement of Filipino OCWs intensified.  This time the destination countries in Asia had multiplied, with the addition of Japan and the Asian NICs.  This time, our economic technocrats deepened the LIEO and baptized it as the structural adjustment program (SAP) backed up by the IMF-WB’s structural adjustment loans.  This time the SAP slogans were even shriller – open the economy through the all out-liberalization of the trade regime, all-out liberalization of the investment regime, all-out deregulation of agriculture, and all-out privatization of government assets and corporations competing with the private sector.

By the mid-1990s, the Philippines was second only to Singapore in economic openness in Asia.  And yet, it still registered one of the highest unemployment and underemployment rates in the region.   Yes, I agree with Manolo Abella — the high population growth rate was and still is a major explanatory factor to the unemployment problem.

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New FairTrade materials on JPEPA available for download:

Matrix of reservations on the various EPAs of Japan from FairTrade Research
Comparison of reservations of RP and Japan
JPEPA: An Assault on the Constitution and the Nation
Letter to the editor: Response to Prof. Monsod on JPEPA from Atty. Meilou Sereno

The Japan-Philippines Economic Partnership Agreement or JPEPA is by far the most comprehensive bilateral economic agreement that the country has entered into since the RP-US Parity Agreement of 1946. It combines a bilateral investment treaty (BIT) and a bilateral free trade agreement (BFTA) on goods (manufacturing, agriculture and fisheries) and services. It also has provisions on intellectual property rights, movement of natural persons, mutual recognition and bilateral cooperation. Further, it covers the so-called Singapore issues: trade facilitation, government procurement and competition policy.

As the country’s first comprehensive bilateral in the new millennium, JPEPA is seen as a template for other BFTAs and BITs which are now placed on the Philippine trade negotiating table. But is it a good template? Is it a sound compass to national development? Will it redound to the nation’s best interests?

We, at the Fair Trade Alliance (FairTrade), are not convinced that the JPEPA is a good template for a productive, balanced and win-win trade and economic partnership between two countries. A closer scrutiny of the 1,000-page partnership text shows that there are imbalances which need to be corrected.

Download FairTrade materials on JPEPA here:
FairTrade position on JPEPA: Para saan? Para kanino?
FairTrade research on the fisheries aspect on JPEPA

Last year, the Fair Trade Alliance (FairTrade) brought to the public’s consciousness the economic dimension of the unregulated exodus of our health and mission-critical workers through a one-page ad entitled “Saan Pupulutin Ang Pilipinas Kung Wala Nang Industriya?” The Alliance raised the grave threats facing the country because of the unchecked outflow of mission-critical skills and talents such as the likely closure of more hospitals, the grounding of the domestic aviation industry and the collapse of critical industries, e.g., power, steel, petrochemical and telecoms industries. The ad generated a lot of discussions and debates on the FairTrade’s stand.

Some neo-liberal economists are saying that the exodus problematique can easily be solved through the free interplay of the supply and demand forces, specifically through the increased training and education of pilots, engineers and other mission-critical personnel and professionals. They argued that the remaining industries should simply invest more in the training of new pilots, engineers and other professionals to replace those who have left the country.

This answer is a non-solution.

First, it takes time to identify, develop and hone talents and skills. Second, it is expensive to invest in the development of these talents and skills. Finally, our own industry becomes less competitive and loses out in global competition while waiting for the new talents and skills to be developed.

As it is,we are honing skills and talents for other countries, which have managed to avoid invest time and money in producing their own mission-critical personnel and professionals. In the process, they are able to save their own critical industries and economy, while our own industries suffer and even collapse.

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The government organized a big PR event to demonstrate to the public its determination to weed out smuggling in the country. Through the glaring lenses of the media, two wrecking machines at the Subic Freeport thrashed, with impunity, a Ferrari, Lamborghini, Porsche Cayenne, Carrera, BMW and other high-end smuggled luxury cars. Ostensibly, the idea is to teach the car smugglers an expensive lesson.

But before smuggling as a national issue gets buried by the deepening war in the South and the swings in the peso value, we at the Fair Trade Alliance (FairTrade) would like to ask — after the ceremonial destruction of a dozen or so smuggled vehicles, what now? Has smuggling stopped? Have the smugglers disappeared?

If the idea is to exterminate smuggling, the government should have fastened the car smugglers inside these luxury cars before proceeding with the destruction. Of course, the smugglers are worse than the Abu Sayyafs – for they kill not dozens of Filipinos but virtually millions, millions who are unable to find jobs due to the collapse of local industry and agriculture as a result of the widespread and still unchecked smuggling of goods from China and other countries. In addition, these smugglers deprive the government annually of at least P175 billion, not P50 billion, of foregone revenues.

The point is that the car destruction exercise is dramatic but meaningless – because it is faceless. As if the vehicles entered the Philippines without any human being touching them. For the government’s anti-smuggling campaign to gain credibility, the campaign should reveal the names of the big-time smugglers and coddlers in the country. These smugglers and coddlers should be put behind bars.

Without a name-and-shame campaign, the ceremonial car destruction might end up as a rehash of what happened in Divisoria March of 2006 when the government raided and closed Mall 168, the country’s biggest outlet for smuggled goods. Weeks after the crackdown, the mall reopened; it has since been operating without any respite, bursting to the seams with all kinds of smuggled goods.

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Wigberto Tañada, Lead Convenor

Congratulations to PLCPD and its partner civil society organization for organizing this event. Hopefully, this conference will see a rich harvest of ideas on the right development policies that will benefit the 88 million Filipinos, specially the poor and the marginalized within our midst, and finally propel this nation to a higher, real and not illusory, level of development and prosperity.

I believe all of us gathered in this hall share the same view – the be-all and end-all of policy making is the development of our people. This is non-negotiable. The policies that we make should lead not only to the creation of more and better jobs and the delivery of more and better social services to our people, but also to the enlightenment and empowerment of ordinary citizens, ordinary Filipinos. They must become active agents, not passive objects of development. This means institutionalizing and broadening the process of information sharing, public consultation, multi-sectoral social dialogue, and public participation in the crafting and implementation of any policy.

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Last July 17, FairTrade published, in the Philippine Daily Inquirer and the Philippine Star, an open letter to the President on trade liberalization and was signed by various FairTrade partners, networks and friends. Here’s the text:

Zero tariffs para sa dayuhang kalakal?
Trabaho at negosyo para sa ibang bayan?

Madame President:

In the past, you not only championed the nurturing and strengthening of our industrial base. You even took the unprecedented bold move of temporarily freezing tariffs. However, some of your technocrats maybe straying from your vision. We therefore bring this matter to your attention, so that the Philippines may not appear to be an aberration in Asia.

By lowering our tariffs ahead of other Asian countries and yet failing to provide our local producers a competitive enabling environment (cheaper energy and utilities, quality infrastructures, friendly business rules, credit access, etc.), some of our own government officials have managed to stop our industrial and agricultural sectors from growing in the last three decades! In this period, the Philippines was overtaken and left behind in the growth process by our Asian neighbors. Even Vietnam is about to overtake us

And yet amazingly, some of our economic technocrats are bent on pushing the country to the extreme edge of the disastrous program of unilateral and one-sided economic liberalization. They want our industrial tariffs, at an average of five (5) per cent and already the lowest in Asia with the notable exception of Singapore (whose industry enjoys heavy government assistance) and Japan (which maintains a labyrinthian system of non-tariff protection), to even go down to zero! This despite the fact that our government is facing a severe fiscal shortfall – with the Bureau of Customs unable to meet its targets because of our low tariff rates and widespread smuggling, and our Bureau of Internal Revenue unable to collect more taxes from a shrinking domestic industrial sector. This illogical move to go zero tariff shall reduce the government’s revenue and weaken further our domestic industrial and agricultural producers!

For example, the domestic cement industry is now able to survive the existing five per cent tariff, which is unfairly low compared to the 50 per cent tariff imposed by Malaysia, 40 per cent by Vietnam, and 10 per cent by Thailand (which maintains zero-cement import policy).

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Wigberto Tañada, Lead Convenor

We, at the Fair Trade Alliance, are happy to be part of this conference-workshop on social protection for the informal sector. The informals are indeed the most numerous and yet they are the least protected. No minimum wage. No overtime pay. No night differential. No collective bargaining. No health insurance. No pension system. No death and accident benefits. Mahirap mabuhay, mahirap ding mamatay.

According to the ILO, the informals constitute 65 per cent of the work force. If I may borrow from one old folk wisdom, God so loves the informals, He made so many of them.

The army of the informals is large and keeps growing. Every city and town in the Philippines today is teeming with the informals. Inpormal sa kalunsuran, inpormal sa kanayunan. In fact, you easily see them in the proliferation of cardboard villages all over the country.

Why are the informals multiplying? Why is the informal economy large and growing?

The answer is not difficult to find. Because the formal economy is not growing fast enough. Because the creation of good, quality and protected jobs is not moving fast enough. Because the Philippines has failed to industrialize – despite five decades of IMF’s so-called assistance and despite three and a half decades of World Bank’s ‘structural adjustment’ program for the country.

In short, the large and growing informal economy is a giant testimony to the grand failure of the economic technocrats to build a modern and progressive economy based on their narrow concept of development — That growth automatically happens when the market is liberalized and opened up. This is exactly what the government did. In the l980s and l990s, the industrial and agricultural sectors were opened up. In fact, we cut our tariffs way below those of other countries and way below our own commitments to the WTO. And look what happened. Natimbuwang parang mga cardboard boxes ang ating mga pabrika. Maraming na-lay-off. Ang ating agrikultura ay di na umusad. From a net agricultural exporter up to l994, the Philippines, starting in 1995, has become a net agricultural importer. This year we are headed towards the importation of two (2) million tons of rice, the highest in the country’s history. And yet, our agricultural officials are even thinking of setting aside 1.24 million hectares for Chinese investors, to allow them to grow hybrid rice, hybrid corn and hybrid sorghum. For whom? Of course, for the Chinese, not for the hungry Filipinos.

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Wigberto E. Tañada, Lead Convenor

We, at the Fair Trade Alliance (FairTrade), welcome this initiative of the Philippine Chamber of Commerce and Industry (PCCI) to hold this forum on “Save our Skies or Open Skies: A View from Both Sides.” Yes, we do need more public discussion on an issue that has apparently generated acrimony and confusion, not unity and clarity of what is best for the national interest.

A few weeks ago, a columnist chided the Fair Trade Alliance for siding with the local aviation industry on the proposed wholesale opening of Clark to foreign carriers. By opposing an open skies policy in Clark, we have been taken to task for taking a stand that is allegedly anti-tourism and anti-OFW. We have been reproached and admonished for continuing to adhere to the ‘Filipino First’ policy, which they said had failed and was even anti-Filipino. These certainly are big sweeping accusations by those seeking an all-liberalization of our skies against those demanding a calibrated, measured and progressive opening.

Let me clarify why the Fair Trade Alliance has sided with the local aviation industry by citing here some of our fundamental beliefs as an Alliance:

First, we are not against economic liberalization per se. However, we are for an economic liberalization that is calibrated, measured, progressive and synchronized with our own development priorities and the capacities of our industrial and agricultural producers, many of whom are members of the Philippine Chamber of Commerce and Industry. We are accordingly for calibrated protection, for this is what our neighbors – Japan, South Korea and now China and Vietnam – have done and are continuing to do. The problem is that our economic technocrats, from the time of Marcos to the present, have a very limited concept of attaining economic growth – that is, opening up of the economy in an accelerated, one-sided and even lazy and reckless manner.

Thus, in the l980s and 1990s, we opened up our manufacturing in a wholesale manner in accordance with a World Bank timetable, making us one of the ten most open economies by l997, this according to the Bank of International Settlements of Switzerland. The result? Many of our industries producing textiles, tires, tiles, plastics, chemicals, auto parts and so on have been decimated by the unilateral trade liberalization, aggravated by a culture of smuggling in the country and the anti-Filipino attitudes of our own technocrats. We did the same in agriculture, from the mid-1990s to the present. The result? From a net agricultural exporter, the Philippines is now a net agricultural importer of almost everything — from rice and corn to onion and garlic, from fruits and vegetables to meat and milk. Thus, if a food crisis will break out in Australia, Thailand and Vietnam simultaneously, this country will go hungry, as many of our displaced Filipino farmers have already been experiencing.

And now, from unilateral industrial liberalization and unilateral agricultural liberalization, we want to open up unilaterally our skies, our aviation market, without any equal reciprocity. My God, what is happening to this country?

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Two reflection papers from Dr. Rene E. Ofreneo on ASEAN and investments now available for download:

Closing the Development Gap: An ASEAN Puzzle

In 2006, the Economic Ministers of the Association of the Southeast Asian Nations (ASEAN) made a bold pronouncement: they are advancing to 2015 the formation of the ASEAN Economic Community (AEC), a seamless and tariff-free regional economy. Under the Bali Concord of 2003, the AEC is one of the three pillars underpinning the ASEAN Community (AC); the other two pillars are the ASEAN Socio-Cultural Community (ASCC) and the ASEAN Security Community (ASC) . In January 2007, in their Summit in Cebu, the ASEAN Leaders reaffirmed the regional resolve towards a full AEC when they declared that the vision of one ASEAN Community is being advanced to 2015, from the original 2020.

But can the ASEAN really develop a seamless and integrated regional economy in a span of seven or eight years? To find out, click here.

Hedge Funds and Equities: Defining the Social and Labor Rules of Investment

Its bubble time in Asia once again. Stocks are at all-time high everywhere. Asian currencies are clobbering the once almighty US dollar everywhere. The real estate business is booming everywhere, with the glut of office spaces disappearing and new office buildings dotting Asia’s commercial skylines. This boom is further fueled by the global business process outsourcing (BPO), which is spreading from India and the Philippines to China, Thailand, Vietnam and other Asian countries. Investments, foreign and domestic, backed up by the big banks and financial houses, seem to be flowing and criss-crossing everywhere. As Goldman Sachs and other international credit rating agencies put it, Asia is one giant ‘emerging market’ for hungry investors. Click here, to continue.

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  • Founded in 2001, the Fair Trade Alliance (FairTrade) of the Philippines is a broad multisectoral coalition of formal and informal labor, industry, agriculture, NGOs and youth pushing for trade and economic reforms.
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