[asia-apec 1004] Main events in RP in 2nd half of 1998

[BAYAN]

From: COUNCIL FOR HEALTH AND DEVELOPMENT <<chd at compass.com.ph>

Date: Thu, 07 Jan 1999 11:15:02 +0800

<bold><color><param>ffff,0000,0000</param>

</color>Main Events in the Philippines

July - December 1998

</bold>

<bold>Philippine Economy in Recession</bold> 


Predictably, the Philippine economy remained in a sorry state throughout
1998 after the global crisis hit our country extraordinarily hard last
year. The worsening crisis caused the economy to slip into recession
during the second half of the year as it posted a shrinking Gross
Domestic Product (GDP) – a contraction of the economy – in two successive
quarters. The GDP, the measure of goods and services produced in the
country, declined by 1.2% in the second quarter and by 0.1% in the third
quarter. Economists were stunned by the government's imagination and
sheer denial of the recession when President "Erap" Estrada declared that
his administration is using another definition of recession. If
statistics prove you wrong, change them! 


Recession or not, there are more than enough signs that something is
fundamentally wrong with the economy. Foreign investments, hailed by the
advocates of neo-liberalism as the remedy to our sick economy, dropped
43% in the first nine months of 1998. Apparently, the foreign speculators
and businessmen who withdrew their money from the country last year to
seek higher profits elsewhere are still waiting for the right
opportunities to intensify their exploitation of the country's work
force. The financial sector remains volatile as the ratio of
non-performing loans of the commercial banks further surged to 11%, more
than three times higher than in July 1997. For these loans, no interest
has been paid in the past three months. Translated into everyday language
this means that more bankruptcies can be expected in the near future. 


The agricultural output declined 6% in the first nine months of 1998
compared to the same period last year. The output of the manufacturing
sector plummeted by 17% in August compared to the same month in 1997.
Analysts explained that the drop in industrial output is triggered by
weak consumer demand. This phenomenon also explains why, since September,
the Philippines is posting a trade surplus instead of the usual deficit.
Imports were lower than exports because of the weak demand in the
domestic market. Consumers simply cannot afford the imported products
anymore, and Philippine companies, who used to import raw materials and
intermediate goods to make export products, are ailing. Economists expect
that export figures will go down more as the crisis in the world market
persists. The usual Philippine trade deficit, trademark of its
import-dependent, export-oriented economy, might be back soon. 


Inflation, the measure of price increases, stayed at the double-digit
level throughout the second half of the year, reaching 11.2% in November.
Especially for food items, the consumer goods that are so badly needed by
the poor, high price increases were noted. The inflation for food stood
at 12.3%. Items that became much more expensive included rice, fruits and
vegetables, eggs, meat and fish. This is another indication that the poor
have to bear the brunt of the current crisis. 


<bold>Workers and the Poor Bear Brunt of Economic Competition</bold> 


About 420 workers joined the ranks of the unemployed every day from
January to June this year, about half of whom were hit with permanent
layoffs. According to Congressman Ernesto Herrera, the Philippines now
has one of the highest unemployment figures in Asia with 13 million
people or 21% of total population out of work. Intensifying competition
brought about by the deepening economic crisis is management's excuse to
increase the exploitation of the workers. Only 40.3% of establishments
nationwide are complying with the general labor standards (which are
unjustly low already). For example, almost a quarter of companies are
violating the minimum wage law. Subcontracting, although not a violation
and even encouraged by the government, is affecting more workers as the
number of companies that use subcontracting increased by more than half
since 1994. Given these conditions, it should not be surprising that the
number of strikes increased 45 percent in the first half of the year. 


Other developments indicate that people's lives became more miserable due
to the crisis. Police relates the increasing use of drugs with growing
poverty, while researchers give the same explanation to the rising number
of abortions. That women are hit extra hard by the crisis can be
illustrated by the increasing number of women who resort to prostitution
in order to make a living. The World Bank predicts that the worst is
still to come for the poor. One of its recent researches notes that the
social impacts of the crisis have been delayed but that they will become
more apparent as time passes by. 


The government shows no indication of intention to alleviate the impact
of the crisis on the health and lives of the poor. On the contrary, it is
giving priority to the military, seemingly anticipating the need to
repress people's protests. In the P579 billion 1999 national budget,
health is only the tenth priority with a P11.8 billion share, about 2%.
The military gets the second biggest slice of the pie, P51.6 billion—
almost 9%. 


The 1997 Family Income and Expenditures Survey gives a good picture of
the social consequences of the economy's "boom" during president Ramos'
term. Although the average family income has grown slightly between 1994
and 1997, inequalities between the rich and the poor became wider than
ever. The richest 10% got 39.7% of the national income in 1997, much more
than their 35.5% share in 1994. The share of the poorest 30%, to the
contrary, dropped from 8.8% in 1994 to 7.8% in 1997. In 1994 the average
income of the top 10% was 19 times higher than the income of the poorest
10%; but in 1997 their slice of the pie was 23.8 times bigger. The
National Economic and Development Authority expects that figures for 1998
will be even worse. Income redistribution is indeed happening in the
Philippines – from the poor to the rich! 

  

<bold>Super-typhoons Take Heavy Toll</bold> 


After the distressing long dry spell of El Niño, the Philippines was hit
by two super-typhoons only two weeks apart during the month of October.
The consequences were grim. According to eyewitnesses, the greater part
of Luzon looked like a war zone. Typhoon Iliang was the first to hit the
country. With maximum winds of 240 kph Iliang unleashed her fury on
Northern Luzon cutting power lines, swelling dams and rivers, flooding
coastal villages and forcing more than 9,000 people to flee their homes.
When the typhoon left the country, Iliang left behind an estimated P422
million worth of crops destroyed and 83 dead. At least 26 people were
killed in landslides. 


Typhoon Loleng, focusing on Southern Luzon, killed 189 people, left 23
missing and destroyed at least P1.92 billion worth of crops. In Metro
Manila, 23,855 people were evacuated due to floods. Nationwide, 1.8
million people were left homeless.  The total damage of both typhoons to
crops, private property and public works was estimated at P6.57 billion. 


<bold>VFA to Bring Back the US Military</bold> 


Both Madeleine Albright, United States Secretary of State, and William
Cohen, US Defense Secretary, visited the Philippines to campaign for the
ratification of the Visiting Forces Agreement (VFA) between the
Philippine and US governments. With the VFA, the US seeks to transform
the entire country into a virtual military base for its "engagement and
enlargement" strategy in the Asia-Pacific region. The agreement is
essentially a license for US troops to operate within the country without
impediments. About 22 Philippine ports and other facilities would be open
for US military use. It would even grant impunity to US soldiers who
commit crimes on Philippine soil.

 

Many cause-oriented groups joined the Junk VFA Movement to oppose this
lopsided treaty. On September 15 and 16, the 30,000-strong Junk VFA rally
in Manila showed that opposition to the VFA cuts across all sectors.
Cause-oriented groups, religious organizations, artists, students,
professionals, non-government organizations and people's organizations
were present. 


According to the Junk VFA Movement, it would be politically costly for
the Senate and the Estrada government if they insist on pushing for the
agreement's ratification. "Should the government remain stubborn and
insist on ramming the VFA down the throats of the people, they should be
prepared for stronger and more protests," said Ret. Capt. Danilo
Vizmanos, spokesperson for the Movement. 


The government launched its own propaganda campaign in support of the
VFA. Illusory terrorist threats in Mindanao were conceived and grossly
overdrawn in the media. Even the Spratlys issue, a dispute with China
about uninhabited islands in the South China Sea, is being used as a
justification for the controversial agreement. 


The ratification of the VFA became, quite literally, a "done deal" at the
APEC Summit in Kuala Lumpur in November. During a meeting with US Vice
President Al Gore behind the scenes of the summit, President Estrada
assured him of the VFA's swift ratification in exchange for American
support to the Armed Forces' modernization program – using US purchased
military equipment, no doubt. 


<bold>Cronies' Comeback</bold> 


If the first months of Erap's presidency had to be characterized by one
single issue, it would be the astonishing and blatant comeback of the
Marcos cronies. Erap himself was of course a Marcos devotee. Cojuangco
was one of the dictator's most intimate accomplices who even had the
dubious "honor" to join Marcos in the US military helicopter that saved
him in 1986 from the people's anger and brought him to Hawaii. Thirteen
years later and in the first months of Estrada's presidency, this very
Cojuangco acquired control again over the coconut levy, the United
Coconut Planters Bank, and San Miguel Corporation, one of the country's
biggest enterprises.  


As mysteriously as they reappear at the helm of Philippine business, the
Marcos cronies disappear from the country's criminal records. This is
mainly the work of Ombudsman Aniano Desierto who is dismissing criminal
suits against Marcos' cronies and kin at high speed, although he is
supposed to sue them on behalf of the Presidential Commission on Good
Government (PCGG). Among the people who were cleared by Desierto were
businessman Eduardo Cojuangco; Marcos' golfing buddy Herminio Disini;
Marcos' brothers-in-law Alfredo and Armando Romualdez; Marcos' elder
brother Dr. Pacifico Marcos, and three nephews of former first lady
Imelda Marcos among others. 


Another Marcos ally, General Fabian Ver, who lived in exile since the
EDSA revolt ousted the former strongman, also achieved a comeback,
although in a coffin. Marcos' ever-loyal Chief of Staff died in Bangkok
but was allowed a burial in the Philippines – with military honors at
that. 


And then there's the former first lady, herself, Imelda Marcos. She
almost managed to have the remains of her husband buried at the Libingan
ng mga Bayani (Heroes' Cemetery), had the people's strongly indignant
protests not prevented her plans. Only a few weeks later, the Supreme
Court acquitted her of corruption, saving her from a 12-year jail term
and overturning her conviction in the only case in which she had been
found guilty. 


Encouraged by the ascent of a president who is openly biased toward the
Marcoses, Imelda is becoming increasingly vocal, presumptuous, and
arrogant. As usual, she is trying to undermine the attempts of the human
rights victims to get their share of the Marcos ill-gotten wealth as
compensation. Most outrageous, however, was her announcement of a new
offensive to recover all her wealth, not only from the government, but
even from the Marcos cronies. According to herself, that includes
"practically everything in the Philippines, from electricity,
telecommunications, airline, banking, beer and tobacco, newspaper
publishing, television stations, shipping, oil and mining, hotels and
beach resorts, down to coconut milling, small farms, real estate and
insurance." Just in case you wonder how the Marcoses were able to amass
such wealth if not through the scandalous plunder of a whole nation, here
is Imelda's explanation: "through divine luck." 


<bold>Land to the Landlords</bold> 


"Land to the tillers" is a remote though justified aspiration of the
Filipino peasants. Even Boy Morales, Erap's high-profile Agrarian Reform
Secretary, made a devastating assessment of his predecessors'
achievements in land reform. He relevantly pinpointed that the agrarian
reform program has hardly touched the estates of big landowners. For
example, he said, the government has distributed only 98,000 hectares of
the nearly 500,000 hectares of private estates which are bigger than 50
hectares. Former administrations have succeeded only in distributing
government's own lands. 


The much-publicized "land reform" of Eduardo "Danding" Cojuangco's
haciendas in Negros was the appetizer of the Erap and Morales land reform
program. It is doubtful, however, whether the farmers will be longing for
more. Under the memorandum of understanding between the farmers and
Cojuangco, the latter will supposedly give away the 4,361 hectares of
land. But the farmers are then obliged to enter into a joint venture
agreement which asks them to give the leasehold rights to the land back
to Cojuangco in exchange for 30% of outstanding shares of the stocks of
the joint venture corporation.

 

"The first catch is, the land is a sequestered property," commented
Teodoro Casiño, Bayan Deputy Secretary General, "and Cojuangco thinks
that this 'philanthropic' move will shield his property from
sequestration." Casiño also said there is a second catch: "Cojuangco will
still lord over the land by making the new beneficiaries surrender the
lease-hold rights to a corporation he owns." This brand of
"market-oriented agrarian reform" obviously leaves the so-called reform
beneficiaries deeper in debt to Cojuangco's Southern Negros Agri Ventures
— and landless as ever. 


With crass insensitivity, Estrada praised Cojuangco, another sponsor of
his presidential campaign and a notorious, merciless landlord, as "the
godfather of land reform." He might as well have called Lucio Tan "the
king of trade-unionism," or ex-dictator Marcos "the patron of human
rights." 


<bold>PAL: Lucio Tan's Plunder and Erap's Anti-Labor Attack</bold> 


In 1992, President Ramos' privatization program allowed former Marcos
crony Lucio Tan to take control of Philippine Airlines (PAL). Since then,
it became the multimillionaire's private milking cow. His strategy was
quite simple. The profitable operations of the company were spinned off
to his wholly-owned companies. That allowed Tan to pocket the profits
while PAL's business reserves became more and more depleted. In the guise
of trying to "save PAL," Tan "offered" PALEA, the union of the ground
crew, three board seats and a 20% stake in the company. In exchange, the
union would waive its right to strike and to negotiate collectively for
the next ten years. 


Inconceivably, the union, supposedly the defender of the workers' rights,
accepted the offer. Later, union officers had to reverse their decision
due to the members' clamor for rejection of the terms. Lucio Tan was not
impressed. Without remorse, he closed down the airline which had been the
country's flag carrier for 57 years. This puts the workers with their
backs against the wall. Under pressure from the union leaders, who had
become accomplices in this vicious ploy, the workers were left the choice
of a yes vote for the agreement – or lose their jobs.  Reluctantly, the
workers chose their jobs, however tenuous job security was. 


Noteworthy in this story is the involvement of President Estrada. Because
the President could not turn his back on Tan who was the number one
financier of his campaign, he actively intervened on the side of
management. He callously commented that "you can't eat a collective
bargaining agreement," revealing how little he knows about workers'
rights but how much he is biased against them. Workers who were yet
undecided about the President's intentions definitely lost this
uncertainty when he insisted, in the aftermath of PAL's closure, that
labor's right to strike should be temporarily suspended while the nation
is in economic crisis. 


<bold>Health Mafia</bold> 


The Secretary of the Department of Health (DOH), Dr. Felipe Estrella,
resigned merely two months after President Estrada appointed him to his
office. From the start, it was clear that the appointments to positions
in the DOH had been a precarious balancing act between the political
factions behind Erap's presidential campaign. Instead of the usual four
undersecretaries and four assistant undersecretaries, for example, the
DOH now has seven undersecretaries and five assistant undersecretaries.
Two under-secretaries even have to share one department. Political
infighting is said to be the main reason for Estrella's early
resignation. There could even be a link to an alleged "DOH Mafia," led by
ranking DOH officials. The "Mafia" has reportedly cornered juicy
multimillion-peso contract for the supply of medicines. Evidently, these
developments are not assuring for the people, who rely on government
health services. 


<bold>An Agreement Is No Guarantee</bold> 


The Comprehensive Agreement on Respect for Human Rights and International
Law (CAHRIHL), signed by the National Democratic Front of the Philippines
(NDFP) and government negotiating panels on March 16, had to wait until
August before the Philippine President signed it. Apparently Estrada's
enthusiasm for the document wasn't very warm. Within a span of two days
he consecutively "didn't know," denied and then admitted that he signed
it. The Estrada administration is currently withholding the
implementation of the agreement pending the resumption of the peace
negotiations. The peace talks were stalled after the government insisted
that the CAHRIHL's implementation be subsumed to the 1987 Constitution of
the Republic of the Philippines. This, however, would be tantamount to
demanding the capitulation of the NDF's forces and contrary to the
agreement itself. Definitely, the government's stubbornness does not
create a favorable atmosphere for the continuation of the peace
negotiations. 


Meanwhile, the Ecumenical Movement for Justice and Peace (EMJP) said its
members have recorded many cases of massive militarization and human
rights abuses during the first six months of Estrada's administration.
According to the EMJP, the military's counterinsurgency operations have
claimed the lives of several persons. These include a fisherman organizer
in Palawan who was killed by members of the First Marine Battalion in an
alleged encounter; Richard Balangiao, a farmer in Misamis Oriental, who
was killed by soldiers of the 31st Special Forces Company; and, Elsa and
Vicente Capistrano, Loreta Velasco and Gemmalyn Velasco, who was six
months pregnant, killed in Quezon Province.#

 


<italic>Information was taken from the following publications: Philippine
Daily Inquirer; Today; Manila Times; KMU Correspondence; Karapatan ng
Sambayanan.</italic>