Will The Last One Leaving, Please Turn-off the Light

Pepe Escobar
Southeast Asia
6 Oct 2004

HONG KONG and MANILA - Palmolive Palma, Rejoice Rivera, Lux Laurel and six other soft-porn "Shampoo Beauties", topless or clad in skimpy underwear and transparent yellow raincoats, didn't break a sweat literally to stop traffic in Manila recently. Nobody knew exactly what they were up to. They could have been mocking the Metro Manila Development Authority, whose chairman Bayani Fernando - in the obvious absence of really serious problems in the megalopolis - decided to go after men who refuse to wear shirts in public. Or they could have been protesting a ban on soft-porn movies ordered by SM Holdings - the country's biggest shopping-mall operator, controlled by Chinese-Filipino taipan Henry Sy.

Who cares? Public scandal or not, at least Palmolive Palma and the rest of the girls, in the midst of the current Philippine economic crisis, have found a niche home market. They don't need to karaoke a Tagalog version of Peter, Paul and Mary's "Leaving on a Jet Plane" and then slog in daily purgatory living the life of an OFW (overseas Filipino worker).

Filipino Central casting

There they are, concentric rings of Filipinas spread out in Hong Kong, on the tarmac, on the subway, on the way to the Star Ferry pier, spilling over from Statue Square through the vault of the HSBC building engulfing Armani and Bulgari luxury compounds, mobbing wily Cantonese operators promoting lucky draws of Nokia cellular phones with prepaid SIM (security identity module) cards - "as little as HK$0.15 a minute [2 US cents] to the Philippines". Everywhere there's the infectious atmosphere of a larger-than-life social club; women of all ages chatting non-stop, comparing notes, staring endlessly at photos of boys and girls in school uniforms, sharing their food, reading Tagalog-language papers or calling home on their discount Nokias. By all means, Filipino maid Sundays in Hong Kong's Central district remain one of Asia's social-anthropology highlights.

The maids configure the most conspicuous example of Ferdinand Marcos' 1970s drive to export Philippine labor as a policy to increase foreign currency and so repay the country's mounting international debt. Now there are at least 7.5 million legalizedOFWs spread throughout 186 countries, apart from at least 1.7 million illegals. The soundtrack of Southeast Asia - and most of the Middle East - is played by Filipinos. Officials and crews on cargo and cruise ships sailing across all oceans are invariably Filipino. Filipino doctors and nurses migrate to overseas hospitals by the thousands every year. At least 4,000 Filipinos risk their lives working in Iraq. (The Philippines banned its citizens from going to work in Iraq after truck driver Angelo de la Cruz was kidnapped by Islamic militants on July 7. However, 42% of all Filipinos believe they have a right to look for a job in a danger zone such as Iraq.)

More than 200 Filipinos recently used the "southern back door" of Mindanao to sail to Turkey and then cross the border to find jobs in Iraq. More than 2,000 OFWs have landed in jail. Two were beheaded in Saudi Arabia. One was hanged in Singapore. One, de la Cruz, escaped beheading in Iraq. Hundreds of thousands live under semi-slavery regimes and suffer daily abuses.

Forced by abysmal mass poverty at home and the never-ending economic crisis, the Hong Kong amahs leave their families behind and embark on three-year contracts that pay a fixed salary set by the Hong Kong government. They then send 70-85% of the total back to the Philippines every month.

The "privilege" of working in a wealthy, advanced and multi-racial society where they keep the house impeccably clean, cook tasty food, communicate well, teach English to the children of their wealthy employers for free, and learn Cantonese almost immediately, is rewarded in many cases with being treated as a very low-class citizen - not to mention a back-breaking, full six-day workweek and a single trip to see the family back home once every two years. The "social club" spread out in Hong Kong's Central district confirms that not a few among them have to sleep on kitchen floors or even on top of cupboards.

In Hong Kong's notorious, decades-old culture of labor exploitation, these women get paid less than half of what is offered by the lowest job in Hong Kong anyone would possibly contemplate taking. It's virtually impossible to gauge how such a warm, lovely people - bearing a strong Latin influence - can endure the worst of the Cantonese Inquisition - horrific abuse not too dissimilar to the case of Celestina Valdez Aquino, 44, who sued her former Hong Kong employer Betty So because she was repeatedly mistreated and then fired. Her crime: she had three deformed fingers.

So what do they get at the end of the calvary? They get education for their children, perhaps the possibility of opening a small business and improving their quality of living when they return home. This, of course, if they are not forced to come back sooner than they think - replaced by cheaper maids from mainland China.

The national heroes' plight

The peaceful weekly downtown Hong Kong sit-in, also referred to as the Sunday social club, is also a tremendously graphic political statement - an explosion of joy and autonomy after every recurrent six-day prison regime. Class struggle yes, but with a wicked smile.

How many are there in Hong Kong? The official numbers list at least 240,000 foreign maids - the absolute majority are Filipinas, with a smaller contingent of Indonesians, Thais and Nepalese. Unofficially, they number at least 400,000. The odds are always stacked against them. Racism is evident. Mean tai tais, or women of taste, don't like them - it's not hard to overhear the Chanel crowd in Hong Kong labeling Filipinas "public nuisances" or "impolite guests". In 2003, Hong Kong slashed the maids' minimum monthly wage of HK$3,670 (US$470) by HK$400 (US$51). This year, to help fund President Gloria Macapagal-Arroyo's presidential campaign, the government in Manila raised the processing fees for their employment contracts from HK$85 to HK$297.50 (US$37).

No wonder the Sunday social club, apart from the odd beauty contest - like the recent search for the "Summer Babe 2004", all contestants duly numbered, carrying a rose and sporting the same mauve dress - is also the ideal place for myriad Philippine organizations to rally against the terrible working conditions as well as the homeland policies that encourage the export of Filipino women.

Connie Bragas-Regalado, chairwoman of the Migrante Sectoral Party, is one of the fiercest voices defending the interests of OFWs. Migrante's position is that the Philippine government should at least give these women and girls adequate protection, since it can't already guarantee them jobs in their homeland.

Former president Cory Aquino used to call the Hong Kong amahs "national heroes". Not only that, they were also the unknown heroes of an Asian phenomenon - the economic boom in Hong Kong from the 1980s up until the 1997 Asian financial crisis. After all, because of the amahs the white-collar elite in Hong Kong didn't need to worry about taking care of their homes, so there was plenty of time to concentrate all their energies on making loads of money.

Now Arroyo's government wants to tax OFWs' income. Former Philippine labor secretary Nieves Confesor once said that "Filipino overseas labor should be viewed as an internationally shared human resource, whose work benefits both the host country and the Philippines". The people from Migrante totally disagree: "That's very degrading. How can you share your migrant workers when they are treated as modern slaves in different countries? The expertise of the migrant worker should be used for the development of our own country and secondarily for the development of other countries - not to provide 'entertainment' and cheap labor for foreign countries." No wonder the crucial theme of Migrante's platform is the struggle for the creation of a sustainable internal market so millions of Filipinos are not forced to go into exile to find a job.

In Manila, Bragas-Regalado lays down the line: "GMA [Gloria Macapagal-Arroyo] is pushing OFWs to pay taxes, despite the absence of adequate government services and protection here and abroad. This administration is propagating a big lie by indirectly blaming us for the fiscal crisis and poor tax collection." And this is happening while "big-time tax evaders like [Chinese-Filipino tycoon] Lucio Tan go unscathed". Migrante stresses that the US$7.6 billion in remittances by OFWs in 2003 "is almost 100 times the figures of foreign direct investments".

Bragas-Regalado points out that "both the dollar remittances and government fees on OFWs help keep the economy afloat. How can this administration even think that OFWs are not helping the country? President Arroyo and her minions brought the country to this fiscal crisis. They are the culprits who should be made to account to the overseas Filipinos and the people in the homeland."

Nightlife economics

There are OFWs who are not as patient as the Hong Kong amahs and prefer to take a shortcut. Every day, when the bright lights start shining in Wanchai, one of Hong Kong's financial districts, an army of made-up, dressed-up young Asians - Chinese, Mongolians, Thais and most of all Filipinas - hits a string of bars like the immense Neptune II. At 4 or 5 in the morning, if they're lucky, they may be richer by US$100 or so - courtesy of business executives and expats. This certainly beats one week of toiling under the domestic Cantonese Inquisition.

These so-called public relations girls play the game with deftness. All it takes is to be "tabled" (served drinks by a customer), occasionally danced with, served as many drinks as possible, and then the girl can collect a percentage from the bar or club owner (who is not her employer). In one hour in a nightclub, a girl makes three or four times what she would make in one hour under the Cantonese Inquisition. And everything extra that happens outside the nightclub is the girl's own business. More than a few young Filipinas in Hong Kong end up following the bumpy road of working as a maid, then a waitress, and then PR girl, until they reach Valhalla: marriage with a Westerner.

There is no shortage of websites advertising Filipino ladies for Westerners; some even boast a top 10 on why they are the ultimate prize. (For the record: a Filipino lady is loving, romantic and caring; puts family first ahead of money; is deeply religious; believes in a one-man, one-woman relationship; is understanding, patient and supportive; has a flexible personality and is very optimistic; is well educated; dedicates profound respect to her partner or provider in the family; and adores a partner that makes her feel good about life.) Since the International Monetary Fund and the World Bank are not doing much to alleviate the Philippine economic crisis, some Western lonely hearts are more than happy to volunteer for the job.

(Copyright 2004 Asia Times Online Ltd. All rights reserved.

Poverty and Corruption: The Ties That Bind

MANILA - Smoky Mountain, in the Tondo neighborhood across Manila harbor, is a Dantesque vision from hell turned postcard of global poverty. Smoky Mountain is a 40-year-old mountain of garbage. The locals literally live off it - they search it, burn it, separate it in plastic bags, recycle it, sell it to junk shops, even eat some of the remains.

Eighty percent of the children of the estimated 30,000 people living in the area don't go to school - although there are a kindergarten and an elementary school in the surroundings. Some of the locals set up food stalls at the harbor, some are cargadores (porters), some are pedicab drivers, but most live off the garbage. Under a bridge by the Pasig River rattled by the non-stop traffic of container trucks, stuck under the pollution, haze and that unbearable smell, a teenager beams: "It's good to make money here. Three hundred pesos a day [a little more than US$5] if you work hard." In the May presidential election, he voted for action star Fernando Poe Jr, a close friend of ousted-in-disgrace former president Joseph Estrada (Poe won in Manila but lost overall to incumbent Gloria Macapagal-Arroyo). He believes the elections were stolen, as do 55% of Filipinos. And he wouldn't leave Smoky Mountain for anything. "There are no jobs out there," he says, pointing toward Metro Manila.

The notoriously corrupt Metro Manila Development Authority (MMDA) - which also indulges in a quirky form of performance art, tagging colored walls around town with its acronym - keeps a sinister top-10 list of the dirtiest barangays (districts) in town. Just for the record, Smoky Mountain is not even close to No 1; that honor belongs to Barangay 145, Zone 16 in Pasay City - notified 225 times (and counting) as having mountains of uncollected garbage.

Why us?

It didn't have to be this way. Filipinos, rich and poor alike, often look in awe at the so-called newly industrialized countries (NICs) ofNortheast Asia and ask themselves: Why haven't we accomplished anything similar? The main reason may be the absence of a real agrarian reform (see Part 2 of this series) - an absolute precondition for the economic miracle in Taiwan and South Korea. Land reform created an egalitarian distribution of income, ignited domestic demand, and the whole thing drove an industrialization drive in the 1950s and '60s.

Meanwhile, in the Philippines, few were paying attention: after all, the country was growing at rates from 6-10% a year, fueled by its own brand of import-substitution industrialization. But in the late 1960s, the turbo-jeepney came to a halt, because of a structural problem still not solved in 2004: the Philippines was and remains a small market, chiefly because of its tremendous income inequality.

With no land reform and anemic exports, the dictatorship of Ferdinand Marcos came up with what might have been a great coup: exporting the country's labor force. Economists in Manila say this was supposed to be a temporary measure. It turned out to be the ultimate lifeline to the Philippine economy - with remittances even helping to prevent the peso from spiraling into total disaster after the 1997 Asian financial crisis. No wonder: when the internal market remains small and jobs are scarce, the only way, if you don't want to recycle garbage, is out - often by a one-way ticket departing from the ghastly Ninoy Aquino International Airport in Manila. According to labor-export specialist Jorge Tigno, almost 10% of the country's population are now OFWs (Overseas Filipino Workers). In Metro Manila, at least one in every three households has a member who was or still is an OFW.

Where is our sushi?

The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines, a recent joint publication by the Universityof the Philippines and the non-governmental organization (NGO) Focus on the Global South, written by respected activist Walden Bello and co-authored by Herbert Docena, Marissa de Guzman and Marylou Malig, spells out a devastating case on all the reasons for a crisis that's been going on for four decades. It's unlikely to find readers in Malacanang, the presidential palace. Absence of meaningful land reform certainly is one of the reasons for the crisis. But another, almost as compelling, has been the absence of Japanese capital.

"In the period 1985-93, some $51 billion worth of Japanese investment swirled though the Asia-Pacific in one of the most rapid and massive outflows of foreign capital toward the developing world in recent history," the publication states. Thailand, Malaysia and Indonesia could not but grow at dizzying rates - while the Philippines was almost totally bypassed. According to Japanese figures, from 1987-91 Thailand benefited from $24 billion in Japanese, Hong Kong and Taiwanese investments. The Philippines, on the other hand, got only $1.6 billion.

The authors speculate: were the Japanese put off by Philippine corruption? Not really, because South Korea was as corrupt, and Indonesia under Suharto infinitely more corrupt. The answer, once again, refers to the anemic size of the Philippine market. "Japaneseinvestors are strategic investors - that is, they invest if there is the prospect of a growing market ... In the late 1980s, the Philippines was simply not attractive since development, expansion of the market, reducing poverty to create more purchasing power were all being sacrificed to the national priority of repaying the foreign debt - a goal forced on the country by the IMF [International Monetary Fund] and the World Bank acting on behalf of the country's foreign lenders."

So the Philippines under president Cory Aquino was basically servicing the huge debt incurred by the Marcos dictatorship. The country's physical, technical and educational infrastructure was left to rot - as it is still. Aquino sank the country further into debt - to pay for the past pile of debt. When Japanese executives examined this situation, they identified nothing else than a strategically depressed market.

As for the poor Filipino taxpayer, he will keep paying for Marcos' debts until at least 2025, according to a recent report by the Ibon Foundation. The foundation reminds everyone that "before Marcos became president in 1966, the country's foreign debt was only $599 million. When he fled Malacanang 20 years later, the foreign debt had already ballooned to $28 billion. Most of the debts were incurred during martial law, when foreign debt grew by 27% per year from 1973 to 1982."

In his monumental Crime of Empire, Filipino economist Ricco Alejandro Santos estimates that the Marcoses, Ferdinand and Imelda, "have looted $10 billion in the course of 20 years". As for his American business and government patrons, they certainly were not innocent bystanders: "They were the first to know about this, before most Filipinos would." The US Central Intelligence Agency knew about it as early as 1969. "And yet American foreign investors and government, then under presidents [Richard] Nixon, [Jimmy] Carter and [Ronald] Reagan, would be Marcos' prime backers and patrons until his ouster and exile."

Arroyo inherited this giant bitter pineapple from Marcos and subsequently Aquino, Fidel Ramos and Estrada in early 2001. But according to many a Manila businessman, she came up with no development strategy whatsoever. Not that Estrada, her predecessor, had any. The authors of The Anti-Development State ram the point home: the only "strategy" by Arroyo was to attach the Philippine jeepney to Washington's B-52s after the attacks on the United States on September 11, 2001. "Massive economic aid and investment from US business was at the top of President Arroyo's concerns when she reversed 10 years of an increasingly independent foreign policy followed by the country since the expulsion of the US bases in 1992. 'It's $4.2 billion and counting,' she gushed during her state visit to Washington in October 2001, calculating the sums of aid and capital promised by President George W Bush."

The problem is that most of the money - like the billions promised to Afghanistan - never materialized. And it won't: Washington is still obsessed with Iraq. So throughout 2002 and 2003 the Philippine fiscal crisis spiraled out of control, leading to the current climate of panic and hastily arranged austerity measures in Malacanang (see Part 1 of this series).

Ruling elites in perpetual war

The greatest merit of The Anti-Development State is the powerful case it makes in puncturing a pervasive myth not only in the Philippines but found with minute variations all over the developing world: the myth that a country is poor because its leaders are corrupt. The authors of the book get very close to the heart of the matter when they write, about the Filipino case: "A more adequate explanation lies in the state being subjugated by a succession of ruling elite factions to serve narrow interests instead of the larger goals of sustainable development and social justice."

Most Filipinos have no reason to doubt that sleazy Estrada and his cronies "represent what is so wrong with the Philippines and so many other poor countries - the rampant bribery and fraud, the unbridled rent-seeking, the brazen patronage politics, the flagrant abuse of public resources for private gain, and the widespread clientelism".

A Coalition Against Corruption led by business groups, NGOs and the Catholic Church has just been launched in Manila. Former president Cory Aquino, delivering the keynote address, said that everyone had to pay his due taxes and so exercise his moral right to "demand from government transparency, accountability and the political will to prosecute tax evaders, smugglers and those who disgrace public service". Lofty rhetoric apart, the results remain to be seen.

Corruption, embodied in "crony capitalism" - as ATol readers will remember - also was pinpointed by the US establishment, from treasury secretaries Robert Rubin and Lawrence Summers on down, as the main reason for the 1997 Asian financial crisis, implying it was all Asian governments' fault. But then the assumption can be turned on its head: "If corruption is the reason the Philippines is poor, why are so many rich countries also corrupt?"

The definitive comparison is between the Philippines and South Korea, as argued by the authors of The Anti-Development State with substantial help from Crony Capitalism: Corruption and Development in South Korea and the Philippines, by David Kang of Dartmouth College in the United States. Kang poses the million-dollar question: "If both Korea and the Philippines experienced extensive corruption, why did Korea grow much faster than the Philippines?"

Filipinos watch while Koreans act

These are the main points. Both countries started at the same level; the average Filipino even earned slightly more than a South Korean in the mid-1950s. In 50 years, the South Korean economy has grown by more than 10 times, while the Philippines' has only doubled. South Korea is a more egalitarian society: the richest 20% are only five times as wealthy as the poorest 20% (in the Philippines they are 13 times as wealthy); and only 7% of South Koreans are poor, while two in five Filipinos live below the poverty line.

Then there's the United States, considered by Blowback author Chalmers Johnson as "the most legally corrupt political system in the world today". The Enron debacle and the Halliburton and Bechtel bonanza in Iraq dwarf anything perpetrated by Estrada or his cronies Lucio Tan and Danding Cojuangco. Economist Paul Krugman was once hired as a consultant by the Philippines, and often joked while comparing George W Bush to Ferdinand Marcos in the cronyism stakes. Economist Jeffrey Sachs insists, "America has shown itself to be second to none in practicing cronyism, first with its rotten corporate scandals of recent years, and now in Iraq."

The authors of The Anti-Development State stress instead how the Philippine state has been "successfully taken over by one faction [of the ruling elite] in order to dominate the other factions". So the big difference, compared with South Korea - or Thailand, Indonesia and Malaysia, for that matter - lies "not in the extent of corruption but the balance of power among ruling elites as well as the balance of power between these elites and the state".

In South Korea the elites were balanced, and disciplined by a very strict central state. In the Philippines, on the other hand, it has always been open war, with the state as the ultimate prize. So corruption, as Kang puts it, "swung like a pendulum. As one group or the other gained predominant power, it would busily set about lining its own pockets, aware that in the next round its fortunes might well be reversed." The crucial point, then, is that in the Philippines "the state has traditionally been hijacked at all levels by private interests, making it an ineffective instrument of national development".

The reasons, of course, are steeped in Philippine history. For 330 years, Spanish colonizers never bothered to establish an effective, competent state administration machine. And during the 50-yearPentagon/Hollywood phase, US colonialism only cared about oligarchy-building, not state-building. In Thailand, by comparison, a great deal of the elite come from the state-administration machine. Today, while the Philippines is a disaster area, Thai officials talk of their country rising to the rank of a developed nation by 2010, while they frantically sell Thailand as the perfect investor destination if one wants to diversify from China and India: "Lower costs than Singapore yet a larger market than Malaysia."

For Filipinos, the conclusions of The Anti-Development State represent a rude blow: "The country has failed to develop and so many of its people are mired in poverty because the state, strangled as it is by competing factions' demands, has been rendered too powerless to even chart the country's direction, much less subordinate ruling elites under its control. Further sapping the state's potential to act according to democratic and developmental lines have been external interests constraining its range of allowable actions in the larger context of the North's persistent and often successful efforts to subordinate the South."

Now tell that to the people of Smoky Mountain - not to mention the absolute majority of 84 million Filipinos.

(Copyright 2004 Asia Times Online Ltd. All rights reserved.

Corruption harmful to Philippines' health

By Seth Mydans Published: WEDNESDAY, MAY 31, 2006

MANILA: Election campaigns are a great thing for Joeje Tubal, a nurse's aide at a small government-run clinic here.

That's when local officials bring out the vaccines, vitamins and painkillers they have hoarded for just this occasion - to show their generosity to voters.

"They'll hold medical missions here and give things away," Tubal said. "Even health workers' allowances increase at election time. We get free meals. That's where the health budget goes, to elections. If there were no elections we'd get nothing."

Doctors say that some of these medications expire or lose their potency through lack of refrigeration as officials delay their release to clinics to achievemaximum political effect.

"It happens a lot," said Philip Paraan, information officer for the Council for Health and Development, a private health network. "It's everywhere. Everyone knows about it. Corruption here is overwhelming, and that includes the health care field."

The use of medications as political pork is just one of many forms of corruption in medical care that a recent study by Transparency International, an independent agency that tracks corruption around the world, showed was directly harming the health of Filipinos.

One of the authors of the study, Omar Azfar, said the picture in the Philippines was not unusual for developing nations. In the study, released in February, Transparency International compared indicators of corruption and health in a controlled study of 80 communities around the country.

It found that for every 10 percent increase in corruption, immunization rates dropped as much as 20 percent, waiting time in public clinics increased as much as 30 percent and user satisfaction dropped 30 percent. It also found that children were one-fourth as likely to complete their courses of vaccination.

"It does reinforce the idea that there's nothing you can do," said Michael Tan, a medical anthropologist at the University of the Philippines. "We are a poor country, but we do have resources. They just get swallowed up by corruption."

In its 2005 report on worldwide corruption, Transparency International placed the Philippines in 117th place out of 159 countries in a listing that ran from the cleanest down to the most corrupt.

The UN Development Program estimated in 2004 that $1.8 billion a year, or about 13 percent of the government's annual budget, is lost to corruption.

The Philippines is trapped in a cycle of corruption that has its roots in a culture of mutual help and obligation, family loyalties and political patronage. Poverty, low pay and a breakdown in services have led to a free-for-all of payoffs and pilferage.

People here say corruption has only grown in the 20 years since Ferdinand Marcos, the former dictator, found a place in the Guinness Book of Records for squirreling away as much as $10 billion of the nation's wealth.

In a recent survey, according to Transparency International, 7 in 10 Filipinos said corruption had grown significantly worse over the past three years.

Accusations of electoral corruption are behind a swelling drive to force President Gloria Macapagal Arroyo to resign. Her predecessor, Joseph Estrada, was driven from office by a popular uprising that grew out of disclosures of presidential corruption.

The two most recent military coup attempts have been motivated in large part by a perception of pervasive corruption in the government and the armed forces.

Because it involves some of the country's most powerful people, efforts to combat corruption have not gotten far. According to a presidential commission in 2003, only 6 percent of cases taken to a special anti-corruption court resulted in convictions.

"These are prominent and wealthy people, and they hire the best lawyers money can buy," said Simeon Marcelo, a former government ombudsman who worked to improve the conviction rate and who reported that statistic.

He declined to comment on the role of corruption within the anti-corruption court itself.

In its report, Transparency International said corruption in the field of health care costs tens of billions of dollars a year around the world.

According to one estimate, it said, annual earnings from the sale of counterfeit drugs alone was more than $30 billion.

The report on the Philippines was based on data first published in 2001 byAzfar and Tugrul Gurgur, who are based at the University of Maryland, College Park.

The report said the corruption can take place in procurement, recruitment, the theft of money and supplies, absenteeism, induced demand for unnecessary goods and services and the solicitation of bribes for services.

"It can happen in many ways," Azfar said in an interview. "It is particularly pernicious if vaccines are pilfered and the refrigeration is not effective or if they are diluted and lose their power, in which case resistant strains of bacteria can develop."

In January, Health Secretary Francisco Duque told Congress that millions of pesos had been lost in expired vaccines and medicines purchased in just one government hospital.

In February, the national Bureau of Food and Drugs reported that 8 percent of medicines bought from pharmacies in 1999 were counterfeit. According to the World Health Organization, 6 to 10 percent of all medications on the world market are counterfeit, with estimated sales of more than $35 billion a year.

In the Philippines, corruption eviscerates a health care system that is already severely underfinanced, experts say.

One of the most widespread forms involves payoffs from drug companies to local officials who then pay them inflated prices for often substandard medicines."It's the way of life of the politicians," said Dr. Merry Mia, 29, a general practitioner who has worked in both government and private clinics. As a result, she said, the prices often climb out of reach of poor patients.

In a country that lightens its burdens with wordplay, these payoffs are known as incentives, rebates, internal arrangements, standard operating procedures and love gifts.

Health workers say corruption, including deals with drug companies, has expanded in the past decade as many civic functions have been handed down from the central government to local mayors and governors.

An investigation by the Philippine Center for Investigative Journalism found that these kickbacks can now range from 10 percent to 70 percent of the contract price.

Another common practice is the renting out of pharmaceutical diplomas, together with academic transcripts, to untrained people who want to open a drug store, several health workers said.

"It's almost natural, it's almost an accepted practice, although it's illegal," Paraan said.

The devolution of services to local governments has added medical supplies to the repertoire of political manipulation. Not only do local officials hoard medications for distribution during election campaigns, health workers say, but they also sometimes withhold them from clinics in neighborhoods where the local vote goes against them.

This does have a downside for local officials because, as an accepted practice, people expect them to deliver.

"Our congressman gave us some medicine, but it wasn't enough medicine," said Salvacion Berza, 44, who works at a food stall and whose children have been patients at San Roque Health Clinic Extension, where Tubal works as a nurse's aide.

As with other forms of patronage, local officials are now in a position to appoint unqualified friends or relatives to jobs in health care or to sign up "ghost doctors" and "ghost nurses" to draw government salaries for nonexistent employees."My father is friends with the mayor," Mia said, "and he'll tell him, 'Pal, do you want a job without working?' In many health clinics there are only a few people working, but they declare a lot more."

Tubal herself is a product of that system. She was a campaign volunteer for a local official and was given her job as an untrained nurse's aide as a reward.

"The neighborhood captain chose me because I know the area," she said. "My work as a volunteer was going house to house, so I know the people here."

Now she must deal with the shortages that are partly the result of that same system. In her one-room clinic in a Manila slum, she said, there are generally only about five courses of antibiotics available to serve a population of 5,000. Often the doctors, who visit twice a week, rely on drug company samples to treat patients."If we run out of syringes, we use donations from the patients to buy syringes," she said. "For tooth extractions they have to buy the anesthetic on their own."

In public hospitals, Mia said, interns who have not yet become hardened to these shortages sometimes pitch in from their own allowances to buy things like syringes, sutures and anesthetics for indigent patients. "It's very depressing," she said.

Tan, the medical anthropologist, told of a hospital that did not have gowns to distribute to women in its maternity ward."The funds have been depleted and there has been pilferage of gowns," he said. "The pilferage is amazing; it becomes a dog-eat-dog world. And for it to happen in a sector that is supposed to be nurturing and caring I think says a lot about where we are today."

Grease

Widespread corruption marks the procurement of military equipment and supplies.
by Ed Lingao


THE SIGHT of a cow's head, all that remained of a feast the night before, must have been demoralizing for the government troops that finally overran one of the camps of the elusive Abu Sayyaf in Basilan. After all, the soldiers had been subsisting on a diet of Skyflakes crackers and cheap sardines as they combed the steaming jungles of the island province for their enemy. Among themselves, they would be very lucky if they raised enough money to buy a chicken. Meanwhile, here was their foe, buying a whole cow — for P5,000 cash, said residents of a nearby barangay — to cook and feast on.

It is also no secret to many of the soldiers that the rifles they have cannot compare to those brandished about by the bandit group. Indeed, while government troops have to make do with weapons that are older than most of them, the Abu Sayyaf is known to have the latest firearms from the United States, Germany and Belgium. In fact, the bandits are even supposed to be on the verge of getting a fresh shipment of 100 new Russian-made rifles.

Truth to tell, the Philippine military's budget has lagged behind that of its neighbors. While Singapore buys submarines and Malaysia and Indonesia shop for the multi-role F16 fighter jets, the Philippine military is having great difficulty keeping the wings of its aging fleet of F-5s, OV10 broncos and C-130s from falling off. Getting the old, decrepit planes off the ground is actually just a bonus. Troops like to joke that all that is holding the Armed Forces of the Philippines (AFP) together are rubber bands and electrical tape.

The irony is inescapable. After more than 30 years of dealing with internal conflicts, the AFP can boast of being one of the most experienced armed forces in the world. But the guns and equipment once handled by soldier-fathers have only been passed on to the soldier-sons. Same war, different year. Same guns, different soldiers.

Actually, the defense establishment still gets a big chunk of the national budget. Last year, the Department of National Defense received an allocation of P53 billion, second only in size to the budget of the Department of Education, Culture and Sports (P82 billion), Since the Army is the AFPs workhorse, it usually gets the lion's share of the military budget. Last year, it got P13 billion; the Navy got P6 billion and the Air Force, P5.5 billion.

The military's top brass, however, still complains of a lack of funds. Some military insiders and AFP suppliers say the problem is more like a lack of moral values. This is because, they say, grease money has become as much a part of the military procurement system as the grease used to keep everything from howitzers to gun turrets to aircraft engines in working condition.

Many military contractors admit to setting aside huge amounts to ensure that their contracts travel smoothly down the paper trail and not get lost in Never-Never Land. Inevitably, the added costs are passed on to the taxpayer in terms of more expensive guns, aircraft and ammunition. More importantly, what reach the men and women on the ground are not only equipment that are considerably less in number than what they need, but also of questionable quality.

Corruption has become so much a part of the AFP procurement system that there are now special terms used by those in the know. For example, says a senior officer familiar with military purchases, "cost of money" refers to the cost of corruption; it is the additional cost incurred by the contractor over and above the actual cost of the contract. This may take the form of pay-offs, grease money, or expensive gifts. Since this added expense is usually factored into the final contract price, the cost of money is ultimately borne by the taxpayer.

"Cleared money," continues the officer, is bribe money that has already been properly "laundered." This means the pay-off or grease money can no longer be traced to the original source. If the money has already been 11 cleared," the corrupt supply officer has nothing to fear anymore.

One military contractor even complains of the massive bureaucracy they have to hurdle, even after they had already bagged a contract. He says, "Would you believe that we have to get as many as 136 signatures just to process all our papers?"

He says the red tape is bad enough, but the money needed to unfasten the tape at every level is worse. Each of the 136 signatures, says the contractor, requires different amounts of grease money. Otherwise, a contract that may amount to eight figures could get held up for several months, costing the contractor millions of pesos in interest alone.

The contractor, a supplier of artillery ammunition, remarks it might be cheaper in the long run if government simply institutionalized the corruption. "It would probably be better if Congress just legislates a 10 percent pay-off (for military contracts)," he says wryly "At least that would reduce the amount (of corruption)," the contractor said.


ANOTHER major military supplier who declines to be named says that supply contracts with the Army are padded by up to 35 to 50 percent of their original prices because of the need to pay off officials. That may sound staggering, but contractors say the cuts in the other services are bigger. The way they see it, this is only because regular army supply contracts usually involve small-ticket items, like howitzer shells, bullets, guns and uniforms. Most of the major capital expenditures — for tanks and howitzers — are one-shot deals. This means they are bought and kept operational way past their projected life expectancies through a creative mixture of Filipino ingenuity and super glue.

Capital expenses for the Navy and the Air Force, meanwhile, are bigger. As such, the amount grease money required for the contacts is much higher.

For Navy contracts, grease money paid to corrupt officials can amount to 100 percent, meaning the cost of the contract virtually doubles because of pay-offs. But nothing beats Air Force contracts, the supplier says. Because of the smaller technical tolerances involved in operating and maintaining aircraft, and because of the specialized nature of the chemicals and lubricants involved, few people have the authority to question the value of the contracts. Military contractors, however, say that Air Force pay-offs can drive contract costs up to 200 percent.

Yet another contractor points out that it is no longer unusual to discover that a colonel is living in millionaire's row, especially if he is assigned to the Quartermasters Corps or the AFP Logistics Command. He notes that since these units are populated by colonels, there are more millionaire-colonels than millionaire-generals.

Against this backdrop, it was therefore not surprising that eyebrows were raised over a P2.1-billion contract signed this February by then AFP chief (now defense secretary) Gen. Angelo Reyes and Air Force Chief Lt. Gen. Benjamin Defensor. Malacañang insiders say the contract, which is for the purchase of four second-hand C-130 planes and two scanners, has now been set aside pending further scrutiny

As it was, government officials were already rather wary of military procurements after Commodore Guillermo Wong earlier this year accused Marine officers of making money off purchases of Kevlar helmets and Heckler and Koch MP5 submachine guns. Unfortunately, this brought the Marine Corps on the brink of a mutiny; Wong had to be replaced as the naval service commander to placate the restless corps.

Wong's mistake was in issuing a blanket accusation against the leadership of the Marine Corps, an elite group known for unit pride and esprit de corps, instead of ordering a careful investigation. Since then, some attempts to look into the matter further have indicated that Wong may have stumbled onto something big. For instance, the military ombudsman found that the contract for the purchase of the helmets was split among eight companies in order to avoid a public bidding. And when broadcast journalist Karen Davila of ABS-CBN, using the receipts issued by the companies, visited the contractors at their listed addresses, she found that most had given phony addresses.

The military ombudsman also discovered that the different check payments from the Marines to all eight companies were endorsed to only one bank account, a strange occurrence considering that all eight companies were presumably competitors. That is, unless they were really just owned by one person.

As for the HK MP5 submachine guns, they were supposed to have been purchased for a special marine security unit. But the contract failed to push through after the Marine Corps belatedly "discovered" that it didn't have the money to pay-for the guns. The guns, however, had already been pulled out of the PNP Firearms and Explosives Office. Somewhere between the PNP FEO and the Marine Corps Headquarters in Fort Bonifacio, the guns appeared to have fallen off the face of the earth. Yet no one seems to have pursued the investigation into the whereabouts of the guns. One gun contractor says, though, that the submachine guns are now in the underground market — ready and available to go to the highest bidder, without the usual paperwork.

IN THE meantime, troops in the field have had to make the best with the worst. The typical fighting firearm of the soldier is still the M16 Al, an automatic rifle designed decades ago by Eugene Stoner. "The typical soldier," says Randolph Limjoco, an arms dealer and an expert in armaments, "is 20, 22 years old, but he is using a rifle that is 35 years old."

In fairness, while it was derisively labeled by its early critics as the "Mattel rifle," in apparent reference to its supposed toy-like qualities, the M16 and its later modifications have eventually proven themselves competent battlefield companions.

Yet even Col. Ricardo Morales of the Army's Planning Office cannot help but note, "The M16 was adopted in 1973. Since then, hindi na tayo nagbago (we haven't improved). In fact, umatras pa tayo (we've regressed), because the M14 is even older than the M16. Some of them were rebarelled, but there is no significant difference. They are still 30-yearold weapons."

Any talk of corruption in the military, of course, demoralizes frontline troops. But the practice has been going on for so long, and conditions in the field have been so bad for what seems like forever that no one remembers better days anymore. For this reason, many in the military, both in the frontline and in the rear, would rather ignore the obvious and go on with their daily routine of surviving.

"Basta bigyan lang nila kami ng baril na hindi nag dya-jam (So long as they give us guns that don't jam, it's fine)," says an army lieutenant who just recently lost two men in an engagement with the Abu Sayyaf on Basilan. They have had instances, he says, where their guns refused to fire.

A captain fresh from patrolling the mountains of Basilan in search of the Abu Sayyaf comments, "Tutal, nasa frontline kami, may nakakataas naman sa amin. Bahala na sila. Sige lang, basta kasama ko ang mga tao ko dito, sa hirap o ginhawa sama-sama kami. (Anyway since we are in the frontlines, there are those higher than us, We leave it to them. It's okay, so long as my buddies and I stay together, we'll manage through thick and thin.)"

Camaraderie among the troops, however, can only go so far.

A soldier gets a meal allowance of only P 60 a day, little more than a dollar. To stretch the allowance to the requisite three meals a day, troops pool their allowances together, and cook and eat as a group. Sympathetic commanders usually let the troops give their allowances to their families, and instead provide the soldiers with tins of sardines and instant noodles using the unit's operational funds.

The poor diet is bad enough for morale. What makes it worse is that it affects the combat effectivity of troops. Admits an Army captain: "Yung P60 sa isang araw, hindi sapat talaga iyan, kaya kung minsan madaling mapagod ang tao. (The P60 peso allowance for a day is not enough. That is why sometimes our troops get tired easily)"

There is also the matter of being properly clothed for war. Troops get one set of uniforms every three years as reenlistment clothing allowance. But jungle warfare takes its toll on military equipment. Boots have been known to bid farewell to their soles after six months, and camouflage uniforms often look like they were stonewashed after only a few rounds with the laundrywoman. One sergeant says, "Kung one month operation na tuluy-tuloy, basa at ano, hindi magtagal ang gamit mo. (if you are sent on a one-month continuous operation, and considering you'd get wet and everything, your equipment won't last.)"

To top it all off, frontline troops get combat pay of only P250 a month, roughly P8.30 for every day they spend in the combat zone. This is the premium they get for putting their lives on the line. Other than that, they get the same benefits and wages as soldiers manning the desks in Camp Aguinaldo.

Observes a crusty sergeant stationed on Basilan: "Kung ang pagtitiwala sa baba, susuklian nila ng tiwala sa itaas, mas maganda ang Armed Forces ng Pilipinas. (If the trust we give them from below is rewarded by trustworthiness from above, we will all have a better Armed Forces of the Philippines.)"



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