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.

Philippines: More pain, no gain

EDITORIAL
2004 Asia Times Online

In a statement printed in the Philippine Star newspaper on September 21, Philippine President Gloria Macapagal-Arroyo urged her fellow citizens to "suffer the pain now and experience the gains two years hence [rather] than postpone the pain and die a painful economic death two years from now".

The pain hapless, ordinary Filipinos are told to suffer comes in the form of new tax measures to the tune of P80 billion (about US$1.43 billion) a year Arroyo has asked Congress to enact posthaste. The sum amounts to 1.8% of the country's 2003 gross domestic product (GDP). The promised gain is uncertain at best: passage of the measures might forestall a threatened sovereign credit downgrade from the country's present rating, already two notches below investment grade.

Big bloody deal, say a large majority of Filipinos. A mid-September survey by the Manila-based Pulse Asia polling organization found that 78% of respondents "see no need to impose new taxes as long as the government strengthens its tax-collection efforts".

It's time to bell the cat. Who's to blame for running up the country's massive public debt to more than 70% of GDP, in spite of which abject poverty continues to increase; in spite of which some 27 million Filipinos (one-third of the population) have to subsist on less than a dollar a day; in spite of which Filipinos in ever-larger numbers are forced to leave the country to make a living and support the relatives they leave behind?

In an upcoming five-part series, Asia Times Online's Pepe Escobar explores both the makings and the makers behind the social catastrophe a once rich and promising nation (called "the next Japan" 40 years ago) has become. We won't preempt his findings but will note some equally astonishing and disturbing, but incontrovertible, facts.

Unsustainable demographics. The total population of the Philippines will reach nearly 84 million by the end of 2004. After slowing somewhat in the 1980s and '90s, the population growth rate has once again accelerated to 2.36% per annum, or a doubling rate of just 30 years. The total population could exceed 200 million well before 2050. However, the Catholic Church, to which the great majority of Filipinos belong, continues to prohibit contraception.

Declining per capita income. High population and mediocre GDP growth make for a noxious mix. In real (inflation-adjusted) peso terms, GDP per capita has remained virtually unchanged since 1980 (P12,619 vs P13,139 in 2003). In US dollar terms, it peaked at $1,180 in 1996, and in 2003 had declined to $953.

Growing poverty. Incidence of poverty - the inability to provide for basic food (adequate caloric intake) and shelter - increased from 36.8% of the population in 1997 to more than 40% in 2002. Thirty-eight percent of families do not have solid-structure shelter. Access to safe drinking water declined from 81.4% of families in 1999 to 80% in 2002. Twenty-one percent of all families and 44% of families in the lower 40% income group have no electricity.

Super-rich in undiminished control. The Philippines boasts an unenviable Asian, perhaps global, record among major nations. One family, the Ayalas, controls 18% of total stock-market-listed corporate assets. Moreover, the country's top 10 most powerful families control 56.2% of such assets. Just over 50% of total GDP is controlled by the top 15 families. In sharp contrast, only 2.8% of listed corporate assets are owned by the 15 top families in Japan.

These facts in combination define socially, economically and politically unsustainable circumstances and go a long way in explaining the persistent political turbulence of the past two decades. Time and again since the first so-called People Power revolt of 1986 that swept away the Ferdinand Marcos regime, the hopes and aspirations of the large majority of impoverished Filipinos have been thwarted. Neither Cory Aquino nor Fidel Ramos, who lifted Aquino into the presidency before becoming president himself, carried out the land-reform measures they had promised. What land reform was enacted was largely a sham. Aquino, who talked about it incessantly, still owns the huge hacienda that should have been one of the first reform targets. Most senators and congressmen are rich landowners and members of or hangers-on of the elite families that control the bulk of the nation's wealth. No one else can afford to run for office.

When the poor thought they had elected a president who would champion their cause, he was promptly overthrown by another People Power revolt organized by the elite families and the Church on charges of corruption, real or contrived. The person who was installed as president, Arroyo, now has won an election in her own right. A captive of the de facto feudal powers that be, she'll prove every bit as unwilling and unable to bring basic social and economic change as Aquino.

The Filipinos are a capable, well-educated, joyful people. Most who have settled abroad, escaped the misery of semi-feudal rule, and been given the opportunity to prosper have done so. But, of course, they can't all emigrate or become overseas workers. Ultimately, they will need to find the political means to rid themselves of the oppressive medieval structures that make their lives on Earth the equivalent of purgatory.

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

The Sick Man Of Asia

MANILA - Now let's put our hands together and pray.

This is exactly what the top stars in the administration of President Gloria Macapagal-Arroyo did recently at the 23rd National Prayer Breakfast in a Manila hotel. Everybody was there, from cabinet ministers to Supreme Court justices, from former president Fidel

The crisis is triggered by a P200 billion (US$3.5 billion) budget deficit and a P3 trillion ($53.2 billion) public-sector debt. The budget crisis gets even more serious because of the ballooning foreign debt. According to the Freedom from Debt Coalition, total Philippine debt, public and private, domestic and foreign, is now $96 billion - and counting. More than 31% of the 2004 national budget bleeds to service the debt. Many an economist warns that the Philippines could soon face a crisis of Argentine proportions.

Just so the message was clear, American motivational speaker John Maxwell also lent a hand to the National Prayer Breakfast. Maxwell called on all Filipinos to support Arroyo, asking that she be "the servant of all Filipinos". Compounding the mood of non-separation of Church and state - which would have pleased many a member of the Christian Right in the United States - Foreign Affairs Secretary Alberto Romulo even implored the Lord to help Arroyo bear the cross of leading the Philippines out of a number of appalling poverty statistics: "Bless her, O Lord, and give her the courage to carry on."

There's only one problem. The Lord does not seem to be listening.

Have mercy

In the 1950s, the Philippines was the most dynamic economy in Asia - hailed by the World Bank as a future powerhouse. Half a century later the country is, in the words of Rommel Banlaoi, a political-science professor at the National Defense College, "the sick man of Asia".

The numbers are extremely alarming. Let's start with the demographic bomb. The Philippines is already the 12th-most-populous country in the world: 84 million by the end of 2004, and counting. At an annual growth rate of 2.36%, the population will have doubled by 2033 and may reach 200 million by 2042. The growth rate is extremely high compared with other Association of Southeast Asian Nations (ASEAN) countries such as Indonesia (1.6%) and Thailand (1.3%). Thailand and the Philippines had the same population size in 1965. Twenty years later, Thailand was at 52 million and the Philippines at 55 million. In 2004, Thailand's population stands at 64 million while the Philippines is approaching 84 million. Sheila Coronel, executive director of the remarkable Philippine Center for Investigative Journalism, says "we'll have to endure nine years of Arroyo without a population policy. She's a devout Catholic. She won't budge. A partial solution would be the private sector taking over the distribution of contraceptives."

This is a young population - 50% under 21 years old - and it's facing myriad very serious shortages. According to Congressman Gilbert Remulla, the latest data reveal that in 2003 there was only one government doctor for every 28,493 people; one government nurse for every 16,986 people; one government midwife for every 5,193 people; and only one rural health-care unit for every 29,746 people. The Philippines needs 9,000 additional teachers per year just to cope with the arrival of new students.

The missing doctors, nurses and teachers are part of the vast legions of Overseas Filipino Workers (OFWs) - something that leads former senator and vice-presidential candidate Loren Legarda to cry over the international image of Filipinos as "the groveling nomads of the world". Up to 8 million Filipinos are OFWs. Of those, about 2.5 million are permanent foreign residents; but the majority are registered (42%) or illegal (58%) overseas workers, at least 50% of them women. Without OFWs, the Philippines would already have hit rock bottom: they are sending about $8 billion back home per year, and counting. Unofficially, the total amount of remittances may be 50% higher, or more.

Incredible as it may seem in booming East Asia, the Philippines' average gross domestic product (GDP) per capita is actually shrinking. It peaked at $1,180 in 1996 (before the Asian financial crisis), stood at $998 in 1999 and was at $953 in 2003. Compare this with Thailand: from $1,876 in 1999 to $2,322 in 2003. Last year, at least 27 million Filipinos - one-third of the population - were living with well under $1 a day, too poor to sustain their basic food and shelter needs. Today these poorest of the poor may be closer to 40% of the total population. According to a 2002 National Statistics Office report, during that year 3.4 million Filipinos were unemployed and 4.6 million underemployed. Today it is widely assumed, unofficially, that there are at least 10 million unemployed or underemployed Filipinos. The national debt is hovering around 85% of GDP. And with the price of oil on the rise, poverty in the Philippines is expected to worsen.

Gloria in excelsis

So what is Arroyo doing about this unmitigated disaster? The buzzword in Manila - from the Malacanang presidential palace to state-run companies - is "austerity". For many Filipinos - smiling, lovely, very perceptive - it's just panic: Aquilino Pimentel Jr, the minority leader in the Senate, agrees. For the absolute majority of an impoverished population, the whole thing means more sacrifice: Arroyo, via press secretary Ignacio Bunye, hinted there will be no wage increases until the economy is "nursed back to good health". Acid commentator Adrian Cristobal, a former press secretary to mega-dictator Ferdinand Marcos and currently a columnist in the Manila Bulletin, says that "if anyone is in panic, it's the people who have to live with rising prices for everything while salaries stay the same". But still everyone wants to help. "Their only condition is that since the crisis has to do with the foreign debt [more than P5 trillion], they want the IMF [International Monetary Fund], the World Bank and other foreign banks to receive their contributions directly," Cristobal says.

Press secretary Bunye - who did not reply to an Asia Times Online request for an interview - actually told workers demanding a modest wage increase they should be grateful they still had jobs. Cristobal once again hit the right note: "Shouldn't Mr Bunye be also grateful that his fellow countrymen are grateful? It took 330 years for them to be ungrateful to the Spaniards." The Philippines, as is well known, spent more than three centuries as a Spanish colony before its half-century under the Pentagon/Hollywood axis.

Arroyo, always sporting a Philippine terno (women's business suit), tries to look as though she does mean business. Her current mantra is Administrative Order No 103, which spells out a torrent of cost-cutting measures, including no foreign and local travel, no overtime pay and a ban on benefits for top executives in state-run corporations and agencies. Those who won't bow to austerity will be summarily fired. As for the 68,437 government-owned vehicles, in theory they are now closely monitored: no more free trips to the mall or weekend holiday getaways.

The frenzy inevitably has led to a surrealist show, including the campaign to have government workers drop their coins into contribution boxes and the idea that every policeman should contribute to the government one day's pay (a little more than $5). Police bosses happily say that if every cop did this they could hand a hefty $450,000 to the government. Cynics like Senator Pimentel insist that if that happens, it would only compel dirty cops to raise extra money from petty rackets.

On a more serious note, Malacanang decided to cut by 38% the P70 million of pork-barrel funds allocated to each congressional district. House Speaker Jose de Venecia swears that pork barrel will totally disappear from the 2005 national budget. The name of the game will be line-item budgeting, so "there can be no more suspicious realignment of funds". In theory, in a new, cleaned-up Philippines, the pork barrel would disappear from the Senate, the House and the executive. Cynical businessmen are not so sure. For his part, perpetually scowling Senator Panfilo Lacson - who ran against Arroyo in the latest presidential election - worries about much-needed funds ceasing to flow toward poor cities and towns that need to improve their water systems, barangay (district) roads and other vital projects.

Besides the austerity pose, Arroyo travels. She recently carried the whole family to China, including shady First Gentleman Mike Arroyo - prompting angry cries of a "family vacation". Powerful Chinese-Filipino tycoon Lucio Tan apparently paid for the family's expenses. But then Arroyo managed to bring home an alleged $1 billion in investment and soft loans. Arroyo gloated that Chinese President Hu Jintao was glad bilateral trade has gone "from practically nothing to $10 billion". She also touted the outcome of her visit: "We made another agreement, this time to increase total trade to $20 billion in the next five years."

A strong partnership with China would be essential at least to alleviate the Philippine drama: think of millions of Chinese tourists ready to burn their yuan on the pristine beaches straddling the Philippines' 8,000 islands. Moreover, it's in China's best interests to fish in the Philippines' pool of millions of skilled, English-speaking - and in many cases unemployed - professionals in communications, construction, engineering, education, distribution, environment, finance, health, tourism, travel and transport.

The non-stop Filipino talk show

The daily lunch buffets at the Peninsula or the Shangri-La in the Makati business district are essential to gauge business sentiment in Manila. And the mood is somber indeed. As a local factory owner puts it: "The banks are not lending to us. They'd rather buy [Treasury] Bills and government papers. The rates are so attractive, and the investment is risk-free and protected from depreciation." Other businessmen complain that the Philippines is forced to pay much more than Malaysia or Indonesia to get foreign currency loans. A bank analyst is adamant: "Arroyo has no short-term or long-term strategy whatsoever on how to deal with the fiscal and economic crisis. I have yet to see a well-documented plan."

Among Filipino businessmen, criticism of the daily barrage of Malacanang speeches alerting about the crisis is pointed. At the mention of Thailand or Malaysia, Filipino businessmen acknowledge that other ASEAN counties also borrowed a lot, but at least they have built highways and improved their education systems. "Our greatest achievement in education is the increase of illiteracy in our public schools," says an angry teacher.

Businessmen also complain the government is not doing anything about smuggling. Car assemblers complain that they sell a maximum of 100,000 automobile units a year while Thailand, with a smaller population, sells more than 500,000: they're still waiting for a ban on the unlimited import of used cars. "We keep asking the Americans and the Japanese to set up their Asian manufacturing hubs here, but obviously they prefer Thailand," says a Toyota dealer. "We lose because our market has no purchasing power, and on top of it there's a lot of smuggling."

There's a certain degree of schizophrenia in the air, though. While a delegation of American businessmen has praised Arroyo's "decisive steps" to deal with the crisis, local businessmen question why these "decisive steps" have not addressed another major Philippine catastrophe in the making: a looming power crisis in 2007 or 2008. "It's tempting to reach the conclusion that what's good for American investors is not necessarily good for Filipino investors," says one businessman. This perception dovetails with what Alexander Remollino writes on the independent website Bulatlat ("to search" or "to probe" in Tagalog) about how Arroyo is very close to US President George W Bush and the reason she was Washington's favorite in the May presidential race: "The United States [is] the real decision-maker ... no one has been able to ascend to Malacanang, and stay there, without its blessings."

A consensus emerges anyway. The crisis has existed since Marcos; it's a consequence of what happened under Marcos. And Malacanang rhetoric will do nothing to solve it. But then there's the "dirty secret" that the elites will never admit to openly: the iron link between the Marcos, Aquino, Ramos, Estrada and Arroyo administrations, unable to pierce an immutable class structure in which wealth and income distribution is one of the worst in the developing world.

No biz like political show-biz

Is Arroyo credible and legitimate enough to pursue the austerity measures that would "save" the country? Hardly. According to Social Weather Stations, an independent think-tank, her popularity index is at 48% - and going down. Much of this has to do with what happened in the May presidential election.

Banlaoi of the National Defense College charges that in the Philippines "elections are nothing but overt expressions of competing interests of the Filipino elite rather than venues of contending programs of government". This being the easy-going Philippines, competitive elitism takes the form of a huge fiesta - or politics as entertainment. "Filipino voters participate in the election for the same reason they go to cockfights, boxing and basketball, festival and beauty contests," Banlaoi says. "Election season is like a big sports or concert season - highly entertaining." That's the same analysis given by Coronel from the Philippine Center for Investigative Journalism.

So the May election - the fourth presidential contest since the restoration of democracy in 1986 - was a fiesta, including elite stalwart Arroyo, inevitable former action star Fernando Poe Jr and even born-again televangelist Eduardo Villanueva. Arroyo, a self- proclaimed Harvard-trained economist and daughter of former president Diosdado Macapagal, ran under a party coalition named K4 - in pure Philippine show-biz style, the acronym was copied from F4, a male pop singing group from Taiwan. Show-biz politics has already given the Philippines former action star and disgraced former president Joseph Estrada - not to mention his son Jinggoy, who got a Senate seat last May. Nowadays the Senate has no fewer than three Filipino clones of Ah-nuld the Gubernator, California state Governor Arnold Schwarzenegger.

Former action star Poe, a very close friend of Estrada, ran without a program or even ideas, apart from a vague "unity of the Filipino people". It doesn't matter, because he got the vote of the TV-and-cinema-going masses. Manila Archbishop Rosales was not very pleased with the whole show, even saying that the greatest destructive element that ever visited the country in the past 58 years was Philippine politics. He hit the fundamental nerve when he organized a movement called Pondong Pinoy (Filipino Fund) to force people "beyond the politics of money, power, class, greed and family ambitions that has held the country captive for many generations".

The first People Power revolt in 1986 got rid of Marcos - and inspired, among others, the mass protests that got rid of Suharto in Indonesia in 1998. People Power 2, in 2001, ousted the mega-corrupt Estrada. In both events, the Catholic Church played an absolutely crucial role - mobilizing millions to change the course of Philippine history. But now the Church simply has no one to trust: it has barely begun to contemplate the implications of the four-day military-backed civilian uprising - a de facto coup d'etat - that put Arroyo in power in January 2001. Estrada, a certified rascal, never formally resigned as president and still claims he was "robbed" - the ultimate irony. He now lives under a relaxed form of house arrest near a military camp. As for the Church, it is mired in crisis, with a shortage of priests and the occasional ban on a progressive bishop.

An informal survey around Manila, especially in poor neighborhoods, reveals a widespread popular perception that the May presidential election was also stolen. Fernando Poe is still contesting the result. The "stolen election" explains both the Church reticence toward Arroyo and Arroyo's low approval rating. Moreover, she was never popular enough to succeed Estrada in the first place.

Filipinos have had more than three years to judge Arroyo in action. When she claimed power in January 2001 she proclaimed "four core beliefs" as her government platform: 1) elimination of poverty within a decade; 2) improvement of moral standards and good governance; 3) true political reforms and "dialogue with the people"; and 4) leadership by example. On the troubled economic front, she set to work brandishing the good old IMF one-size-fits-all recipe book.

In 2000, the Philippines was not in as bad a shape as it is in 2004. With inflation at 4.4%, the lowest in a decade, real per capita GDP growth was only 1.8%, denoting low economic growth. Arroyo's government entered into a so-called Poverty Partnership Agreement with the Asian Development Bank (ADB), which is based in Manila. This was tried in the past - and failed. By 2002, unemployment had expanded from 10% to 11.4% (it currently stands at 11.7%). There were no wage increases. And the debt-service ratio rose from 16% of total exports of goods and services to 17%.

Arroyo's approval rate sank. She then came up with the concept of a "strong republic" as a cure to all ills - an empty public-relations mantra repeated ad nauseam. Arroyo resorted to practicing old-school Philippine politics to the hilt - appointing some dodgy characters to important positions and dressing up every successful government program as an act of personal benevolence by the benign sovereign. In 2003, per capita GDP growth slowed from 2.4% to 2.2% - one of the lowest rates among the 10 members of ASEAN. And the main factor in the growth of the gross national product (GNP) remained the increased flow of remittances by OFWs. Foreign direct investment plummeted from $1.8 billion in 2002 to a paltry $319 million in 2003. Blame the usual suspects: political instability, the terrible state of Philippine infrastructure and, most of all, corruption.

By the time of the May election, Filipinos were extremely gloomy. A survey by the Social Weather Stations think-tank revealed that 44% of the respondents believed their quality of life had deteriorated; and the all-meaningful self-rated poverty index - which had oscillated between 54% and 65% under Estrada and 53-66% during the 2001-04 Arroyo years - was still stuck at 56%. Since July 2001 there have been at least 11 accusations of corruption targeting First Gentleman Mike Arroyo, apparently very fond of dodgy "commissions". In the Corruption Perception Index established by Transparency International, the Philippines is ranked 2.5 on a scale of 0 (very corrupt) to 10 (very clean). Even under the racketeer Estrada, the country's index was 2.9.

After the first 100 days of Arroyo Part 2, enveloped by a rhetorical blitzkrieg from Malacanang, the country remains gloomy. Arroyo's national approval rate remains at only 48% - and falling. And 55% of Filipinos still believe the May elections were stolen.

Blame the poor

The Manila Municipal Development Authority (MMDA) is widely considered to be a nest of bureaucratic corruption - probably even worse than the Department of Public Works and Highways. These two agencies keep exchanging rhetorical blows over who's responsible for Manila's urban nightmare. But it seems some MMDA officials know something that 84 million Filipinos don't. An official with the Estrada government once famously said that Filipinos were rich because they had a lot of garbage. Now MMDA officials under Arroyo have discovered that the "uncontrollable floods" in the national capital are caused by the urban poor and their garbage. So Arroyo may be right, in a sense: waging war on poverty is meaningless. After all, the poor are responsible for the whole mess. Well, not really, as we'll see next in this series.

According to research by the Philippine Center for Investigative Journalism, "the poor vote is a thinking vote". The masses are constantly dismissed by the middle classes and the Filipino elite, but they seem to smell that something is terribly wrong. The shrinking Filipino middle class shares most of the values of the conservative ruling elite. They may be striving to amplify their political voice, but they definitely have no interest in radical change - an absolute must if this long-suffering land of warm, gracious people does not want to be devastated by a social volcano.

People Power 1 got rid of a corrupt dictator, Marcos, and People Power 2 a sleazy, corrupt president, Estrada. Some say a mild version of People Power 3 has already happened - when disgruntled Estrada supporters rallied in May 2001 and almost laid siege to Malacanang. Metro Manila's Epifanio Delos Santos Avenue (EDSA) Shrine - with its faux-golden freedom statue - is constantly barricaded on Arroyo's orders. The president will do anything to prevent a People Power 4, which, considering the depth of popular desperation, is all too possible within the next two years.


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