Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Archive for July, 2010

Privatizing PAGCOR

Posted by butalidnl on 31 July 2010

I think that President Aquino’s plan to privatize PAGCOR is a good idea. In the first place, it will remove the government’s hand from directly “promoting” gambling. And if it does it the right way, government will continue to earn revenue from PAGCOR.

Separation of Functions
By privatizing PAGCOR, the government would have the opportunity to separate its task of regulating the gambling industry, from its task of operating a gambling business. This should mean that gambling will be more regulated than it is at present, with the combined functions of PAGCOR.

The government should first set up a special Gambling Authority, which would take on the task of regulating all forms of legal gambling – cockfighting, lotto, sweepstakes, Small Town Lottery and casinos. This new body would determine where casinos would be allowed, etc. This way, the new body should be able to concentrate on regulation of all gambling; and not be “distracted” with the task of maximizing revenue. This latter task should then go to the management of PAGCOR.

Government Revenue
The government should then  impose a special tax on casino operations, so as to “discourage” gambling, and at the same time raise money from these – as a sort of special “sin tax”. This tax will be in addition to the usual business tax. This way, the government will be able to earn money from gambling, but not be involved in managing the gambling system itself.

The object of government should not be to maximize incomes from gambling, but rather to make the best out of a bad situation – i.e. that people feel the need to gamble.

Shares in PAGCOR
The government seems to be studying the possibility of selling PAGCOR to a single entity, either domestic or foreign. I think this will end up with a privately-owned  casino monopoly, which will not be desirable. The solution that I propose is to sell 50% of  PAGCOR shares on the open market, as an IPO (Initial Public Offering), preferably to Filipinos. The government will retain 25% as a “Golden Share” , to help ensure that PAGCOR will be operated correctly (according to the government, that is). And the final 25% will be sold to a management group, which could be auctioned off to either domestic or foreign parties.

Or the government could do it there other way around, by first auctioning off the 25% to a management group, and then later selling 50% to the general public.

This way, the management will control only 25% of the company. Enough for it to have a decisive say in the day-to-day operations, but not enough to control the direction or objectives of the company. They will not be able to sell it to another party or diversify, since the government controls one fourth of the shares, and will not agree to such changes.

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On Robredo’s LGU Transparency Project

Posted by butalidnl on 18 July 2010

Secretary Robredo of the DILG (Dept of the Interior and Local Government) said that he will encourage LGUs (local government units) to post their income and expenses in the DILG website. This is to promote transparency in the management of LGUs.

I think that Robredo’s plan is a good idea. However, there are a number of things that may delay or could frustrate a good outcome of the plan. First among this is the fact that Robredo cannot compel LGUs to actually report their incomes and expenses. Robredo’s idea is that LGUs who don’t report will be shamed into reporting, since otherwise they will be accused of “hiding something”. This is well and good, but this will work only when the great majority of LGUs do report, and we don’t know if they will, or when they will, report. Thus, if only a few report, the rest can always say that they have practical problems in reporting, so they can’t report this year, or something like that. And since the DILG can’t force them to actually report, they may go on saying this for a number of years.

And of course, even if LGUs do actually report their expenses, we cannot expect them to be detailed below the project level. Thus, at best, we will know how specific projects cost, but we will not get details as to what exactly the project consisted of. And, thus, it would be quite difficult for outsiders to judge if the money had indeed been well spent, for most projects.

And then, there are expense items which could not be judged even if reported.  Take for example, municipal employee’s salaries. How are we to know how many of these employees actually appear for work (and how many are merely “15-30” employees, because they appear only to collect their pay checks)? Or that they are doing their work efficiently?

Citizens’ Participation
I think that  Robredo’s plan would not work automatically, and that citizens should participate in this plan of getting LGUs to be more transparent. Citizens residing in the provinces and towns themselves would be in a good position to judge whether the reported expenses are well spent.  And this means that someone local should review their LGU’s report, and investigate if it is correct, and if the items are not overpriced.

But even before that, there needs to be a network using both traditional and alternative media in which citizens would pressure LGUs to really disclose their income and expenses. This will not be easy, but we really need to do this as citizens. I think we need to form something like a “LGU Transparency Watch” (composed of bloggers, tweeters, newspaper, radio, etc)  to monitor and compel LGUs, through public opinion, to disclose their income/expense accounts. Later, when more of them report regularly, we can even try looking into these accounts to see if their money is spent correctly.  Also, those LGUs which hold out (i.e. don’t report their income/expenses) should really be exposed through this network.

I think Robredo’s plan should work. With the national government and citizens pushing for it from opposite ends, LGUs should eventually become more transparent.

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Limit Private Vehicles, not PUVs, on EDSA

Posted by butalidnl on 14 July 2010

The MMDA proposal [see MMDA Pushes Number Coding for Buses ] to implement a number-coding scheme for buses in EDSA is not a good idea. The MMDA is proposing this, because it says that PUVs are a source of traffic congestion, and that there are just too many buses in EDSA (they cite the fact that buses often are only half full).

But I find that this is a bad idea. Buses, even when half full, carry many more passengers than private autos. In fact, a lot of cars on EDSA often only have one or two passengers (i.e. including the driver).  And for a bus to work at their optimum level, they don’t need to be always full. In fact, they would probably be full only about half of the time. If they are always full, this would show that there is a shortage of buses for a given route.

And besides, the MMDA is applying upside-down logic regarding traffic congestion. It seems that it wants to “decongest” EDSA to make it more convenient for private car owners, and not for the convenience of the wider public. Because if the convenience of the wider public were to be the main starting point, it will naturally mean that EDSA be decongested so that public transportation will flow smoothly.

What should we do with the traffic at EDSA, then? Well, the first thing would be to adopt sensible traffic rules, and implement these quite strictly. Buses, jeepneys, and FXs should stop only at designated pick-up points. They should force buses to leave even when half full (which I said earlier, may be the more optimum use of buses), instead of allowing them to wait till they are full. Nobody should be allowed to walk across EDSA; they should all take pedestrian overpasses. Taxis should be required to take passengers only from designated taxi stations, and not be flagged down.

Reduce Private Vehicles
And then, there should be steps taken to reduce the number of private vehicles plying EDSA. One way would be to implement a congestion charge for private vehicles using EDSA; that is, all private vehicles using EDSA would have to pay a fee to use it. This would be in the form of a sticker for a year’s use (to cost perhaps something like Php 2000 or so per year) or a single day ticket for say Php 50.  This should lessen the use of EDSA – after all, there are alternative ways of going around the city. And, in connection to this, all small roads that open to EDSA should be made one-way (i.e. only traffic coming from EDSA), forcing vehicles that want to enter EDSA to do so only through major intersections (where they will be checked to see if they have the necessary stickers). The money collected from the access fee should be used to improve public transportation e.g. the LRT.

And then, the capacity of the LRT and MRT should be doubled by adding more cars to the trains, and also by increasing the frequency of the trains. This will encourage some auto riders to take public transportation. The fare should also be increased a bit, making it only a little cheaper than the buses; this will help to get buses to be fuller, and also lessen the subsidy of the government for the LRT.

Construct a LRT line along C5. This should further decongest traffic there, and make it easier to go by public transport if your destination is accessible by C5. This will have an indirect effect of decongesting both EDSA and the MRT.

Then, increase the number of FX allowed to ply EDSA. This will further reduce private car use, while providing an alternative to those using private cars. While FXs ferry fewer passengers than buses; they are an alternative to many people who usually take their cars. It would be better to have more FXs on the road, if this comes in place of more cars.

Build “Transferiums”. These are big parking places for vehicles at the edges of a city, so that people could just park their cars there, and take public transportation from that point on.  For people coming from the provinces, this could be a viable alternative for them, rather than being forced to brave Metro Manila’s traffic. The transferiums should also be the starting point for various airconditioned bus routes into Metro Manila, and if possible be near to LRT/MRT stations.

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Why Invest in the Philippines?

Posted by butalidnl on 11 July 2010

Why would foreigners invest in the Philippines? That’s a good question, especially since there are lots of other countries which are trying to attract foreign investors.

Here are some reasons.

Large Population, Big Market
The Philippines has a large population. It is the 12th largest country in the world, with a population of about 96 million people. This is a lot of people, and they can mostly be reached by advertisements in the media. So, this means that, whatever your product, it will probably pay to try selling it to Filipinos. And in turn, this would probably mean that they will need to open at least a sales office in the country. And, for many kinds of products, it will also pay to manufacture these goods in the country itself.

Large Pool of World Class Labor that Speaks English
This is going to probably be why foreign companies would like to set up shop in the Philippines. If they do, they only need to import a few foreign experts, and then avail of the local labor pool. And the labor pool is quite deep, with lots of universities churning out graduates every year, and lots of Filipinos experienced in almost anything (of course, some of these may be abroad).  And  all these have been educated in English. This is not simply English as a subject in school, but English as the medium of instruction in school. We can see this in the fact that we are one of the main countries for call centers; our accent is relatively easy to neutralize.

This means that the Philippines will make a great center for their customer service (as shown by the growing call center industry in the country), and also for things like accounting back-office, or as regional office. The fact that you can source practically all your personnel locally makes it quite attractive. And salaries are still relatively cheap.

Good Infrastructure
The Philippines has relatively good infrastructure. We have a good system of airports  and ports. Our roads are quite good. We have urban mass transit (i.e. LRT, MRT). Electricity supply is regular, with some outages especially during the summer.

The IT infrastructure is also good. High-speed internet is available in our major cities. It is affordable for a lot of middle class families. Mobile telephone availability is practically universal.

Politically Stable
Believe it or not, the Philippines is politically stable. It only looks unstable, specially for those living in the Philippines – with all the rumors and other things you read in newspapers. For one, the homegrown communist movement is more of a nuisance rather than a threat. [See CPP-NPA Helps Maintain Status Quo in the Philippines ] As for the Moro rebels, the government is constantly having a ceasefire with the MILF, while they negotiate a peace agreement.

Military rebels? Kidding? What kind of threat to stability do they pose, when they mostly resort to occupying hotels when doing a “coup de etat”. What kind of coup is that? Besides, the present Aquino government has good relations with a number of military rebel leaders; I don’t expect them to go against the government now.

No major threat to the interests of foreign investors are on the horizon. It is safer to invest in the Philippines, than to do so in places like Thailand or Indonesia. Of course, this doesn’t cover all the country – take the case in point of Western Mindanao, with its Abu Sayyaf – but it is generally peaceful, and stable in the rest of the Philippines. So, for foreign investors: just keep out of the Abu Sayyaf areas, and it’s alright.

Posted in NDF, Philippine economics, Philippine politics, Philippines | Tagged: , , , , , , , , , , | 2 Comments »

Say No to “Wang Wang”

Posted by butalidnl on 4 July 2010

President Noynoy Aquino (aka PNoy) made an interesting statement in his inaugural speech, which was “Walang wang-wang, walang counterflow, walang tong” (no sirens, no counterflow, no police extortion). The part about the “wang wang” and counterflow, is about the abusive practice of public officials to use sirens when they are on the road. This is an abuse of public office. This practice should be stopped.

Corruption
Let me point some more things about this “wang wang” campaign. The first thing is that the use of “wang wang” is a sign of corruption. Corruption, after all, is the use of public office for private gain. And, getting exempted from traffic through the use of wang wang is a very glaring demonstration of abuse of public office. Many officials use sirens to smooth their ride through traffic – just because they can. And nobody could safely ignore these sirens; who knows, maybe you’ll get roughed up or worse by that official’s bodyguards.

The call against “wang wang” is actually a first step in mobilizing the citizenry against corruption. I think that at this point, any politician with the gall to use his “wang wang” would face a public outcry. There will be blogs, letters to the editors, even videos posted in facebook about this. And the police will be forced to take drastic measures against the violator. This will prepare the citizenry to support further steps against corruption.

Wang Wang is Illegal
Unauthorized use of sirens is illegal. There is a law against this – PD 96 – and according to this law, the only ones authorized to use sirens are: “motor vehicles designated for official use by the Armed Forces of the Philippines, National Bureau of Investigation, Land Transportation Commission, Police Departments, Fire Departments, and hospital ambulances”. Through the years, this law has been largely ignored by all kinds of public officials.

Because of the wang wang campaign, now everybody is aware that there is indeed a law against this.  This is sure to help in the campaign against corruption, since after all, corruption is illegal. And specific forms of it are subject to all kinds of laws. But the thing is, we need to be quite conscious of the illegality of something, to be able to stop doing it, and to stop others from doing it.

Not trivial
Some people may think this is a trivial issue. Perhaps, but it is something that irritates ordinary people to no end. So, this campaign (if you could call it that) is quite popular. The wang wang had become the symbol of the abuse of power by elected officials. It is appropriate to make it the first target to hit in the government drive against corruption and abuse of power.

While no congressman or other official will dare use their wang wang now, we don’t know what will happen a couple of months on. I expect that some will start to use it again, perhaps to test if they could get away with it.  And I hope that that official will face public defiance e.g. drivers who will not give way to that wang wang, or people booing that car, and taking pictures or even video of it. Only then can we say that the anti-wang wang campaign will have succeeded. And of course, the police should arrest or fine the wang wang user.

And finally, there is this video:

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