DIVINI AMORIS SCIENTIA: Apostolic Letter Of His Holiness Pope John Paul II: Saint Therese of the Child Jesus and the Holy Face is proclaimed a Doctor

1. THE SCIENCE OF DIVINE LOVE, which the Father of mercies pours out through Jesus Christ in the Holy Spirit, is a gift granted to the little and the humble so that they may know and proclaim the secrets of the kingdom, hidden from the learned and the wise; for this reason Jesus rejoiced in the Holy Spirit, praising the Father who graciously willed it so (cf. Lk 10:21-22; Mt 11:25-26).

Mother Church also rejoices in noting that throughout history the Lord has continued to reveal himself to the little and the humble, enabling his chosen ones, through the Spirit who "searches everything, even the depths of God" (1 Cor 2:10), to speak of the gifts "bestowed on us by God... in words not taught by human wisdom but taught by the Spirit, interpreting spiritual truths in spiritual language" (1 Cor 2:12,13). In this way the Holy Spirit guides the Church into the whole truth, endowing her with various gifts, adorning her with his fruits, rejuvenating her with the power of the Gospel and enabling her to discern the signs of the times in order to respond ever more fully to the will of God (cf. Lumen gentium, nn. 4, 12; Gaudium et spes, n. 4).

Shining brightly among the little ones to whom the secrets of the kingdom were revealed in a most special way is Th鲨se of the Child Jesus and the Holy Face, a professed nun of the Order of Discalced Carmelites, the 100th anniversary of whose entry into the heavenly homeland occurs this year.

During her life Th鲨se discovered "new lights, hidden and mysterious meanings" (Ms A, 83v ) and received from the divine Teacher that "science of love" which she then expressed with particular originality in her writings (cf. Ms B, 1r ). This science is the luminous expression of her knowledge of the mystery of the kingdom and of her personal experience of grace. It can be considered a special charism of Gospel wisdom which Th鲨se, like other saints and teachers of faith, attained in prayer (cf. Ms C, 36r ).

2. The reception given to the example of her life and Gospel teaching in our century was quick, universal and constant. As if in imitation of her precocious spiritual maturity, her holiness was recognized by the Church in the space of a few years. In fact, on 10 June 1914 Pius X signed the decree introducing her cause of beatification; on 14 August 1921 Benedict XV declared the heroic virtues of the Servant of God, giving an address for the occasion on the way of spiritual childhood; and Pius XI proclaimed her blessed on 29 April 1923. Shortly afterwards, on 17 May 1925, the same Pope canonized her before an immense crowd in Saint Peter's Basilica, highlighting the splendour of her virtues and the originality of her doctrine. Two years later, on 14 December 1927, in response to the petition of many missionary Bishops, he proclaimed her patron of the missions along with Saint Francis Xavier.

Beginning with these acts of recognition, the spiritual radiance of Th鲨se of the Child Jesus increased in the Church and spread throughout the world. Many institutes of consecrated life and ecclesial movements, especially in the young Churches, chose her as their patron and teacher, taking their inspiration from her spiritual doctrine. Her message, often summarized in the so-called "little way", which is nothing other that the Gospel way of holiness for all, was studied by theologians and experts in spirituality. Cathedrals, basilicas, shrines and churches throughout the world were built and dedicated to the Lord under the patronage of the Saint of Lisieux. The Catholic Church venerates her in the various Eastern and Western rites. Many of the faithful have been able to experience the power of her intercession. Many of those called to the priestly ministry or the consecrated life, especially in the missions and the cloister, attribute the divine grace of their vocation to her intercession and example.

3. The Pastors of the Church, beginning with my predecessors, the Supreme Pontiffs of this century, who held up her holiness as an example for all, also stressed that Th鲨se is a teacher of the spiritual life with a doctrine both spiritual and profound, which she drew from the Gospel sources under the guidance of the divine Teacher and then imparted to her brothers and sisters in the Church with the greatest effectiveness (cf. Ms B, 2v -3 ).

This spiritual doctrine has been passed on to us primarily by her autobiography which, taken from three manuscripts she wrote in the last years of her life and published a year after her death with the title Histoire d'une ⭥ (Lisieux 1898), has aroused an extraordinary interest down to our day. This autobiography, translated along with her other writings into about 50 languages, has made Th鲨se known in every part of the world, even outside the Catholic Church. A century after her death, Th鲨se of the Child Jesus continues to be recognized as one of the great masters of the spiritual life in our time.

4. It is not surprising then that the Apostolic See received many petitions to confer on her the title of Doctor of the Universal Church.

In recent years, especially with the happy occasion of the first centenary of her death close at hand, these requests became more and more numerous, including on the part of Episcopal Conferences; in addition, study conferences were held and numerous publications have pointed out how Th鲨se of the Child Jesus possesses an extraordinary wisdom and with her doctrine helps so many men and women of every state in life to know and love Jesus Christ and his Gospel.

In the light of these facts, I decided carefully to study whether the Saint of Lisieux had the prerequisites for being awarded the title of Doctor of the Universal Church.

5. In this context I am pleased to recall briefly some events in the life of Th鲨se of the Child Jesus. Born in Alen篮, France, on 2 January 1873, she is baptized two days later in the Church of NotreDame, receiving the name Marie-Fran篩se-Th鲨se. Her parents are Louis Martin and Z鬩e Gu鲩n, whose heroic virtues I recently recognized. After her mother's death on 28 August 1877, Th鲨se moves with her whole family to the town of Lisieux where, surrounded by the affection of her father and sisters, she receives a formation both demanding and full of tenderness.

Towards the end of 1879 she receives the sacrament of Penance for the first time. On the day of Pentecost in 1883 she has the extraordinary grace of being healed from a serious illness through the intercession of Our Lady of Victories. Educated by the Benedictines of Lisieux, she receives First Communion on 8 May 1884, after an intense preparation crowned with an exceptional experience of the grace of intimate union with Jesus. A few weeks later, on 14 June of that same year, she receives the sacrament of Confirmation with a vivid awareness of what the gift of the Holy Spirit involves in her personal sharing in the grace of PentecoSaint On Christmas Day of 1886 she has a profound spiritual experience that she describes as a "complete conversion". As a result, she overcomes the emotional weakness caused by the loss of her mother and begins "to run as a giant" on the way of perfection (cf. Ms A, 44v 45v ).

Th鲨se wishes to embrace the contemplative life, like her sisters Pauline and Marie in the Carmel of Lisieux, but is prevented from doing so by her young age. During a pilgrimage to Italy, after visiting the Holy House of Loreto and places in the Eternal City, at an audience granted by the Pope to the faithful of the Diocese of Lisieux on 20 November 1887, she asks Leo XIII with filial boldness to be able to enter Carmel at the age of 15 years.

On 9 April 1888 she enters the Carmel of Lisieux, where she receives the habit of the Blessed Virgin's order on 10 January of the following year and makes her religious profession on 8 September 1890, the feast of the Birth of the Virgin Mary. At Carmel she undertakes the way of perfection marked out by the Mother Foundress, Teresa of Jesus, with genuine fervour and fidelity in fulfilling the various community tasks entrusted to her. Illumined by the Word of God, particularly tried by the illness of her beloved father, Louis Martin, who dies on 29 July 1894, Th鲨se embarks on the way of holiness, insisting on the centrality of love. She discovers and imparts to the novices entrusted to her care the little way of spiritual childhood, by which she enters more and more deeply into the mystery of the Church and, drawn by the love of Christ, feels growing within her the apostolic and missionary vocation which spurs her to bring everyone with her to meet the divine Spouse.

On 9 June 1895, the feast of the Most Holy Trinity, she offers herself as a sacrificial victim to the merciful Love of God. On 3 April of the following year, on the night between Holy Thursday and Good Friday, she notices the first symptoms of the illness which will lead to her death. Th鲨se welcomes it as a mysterious visitation of the divine Spouse. At the same time she undergoes a trial of faith which will last until her death. As her health deteriorates, she is moved to the infirmary on 8 July 1897. Her sisters and other religious collect her sayings, while her sufferings and trials, borne with patience, intensify to the moment of her death on the afternoon of 30 September 1897. "I am not dying; I am entering life", she had written to one of her spiritual brothers, Fr Belli貥 (Letters 244). Her last words, "My God, I love you", are the seal of her life.

6. Th鲨se of the Child Jesus left us writings that deservedly qualify her as a teacher of the spiritual life. Her principal work remains the account of her life in three autobiographical manuscripts (Manuscrits autobiographiques A, B, C), first published with the soon to be famous title of Histoire d'une e.

In Manuscript A, written at the request of her sister Agnes of Jesus, then Prioress of the monastery, and given to her on 21 January 1896, Th鲨se describes the stages of her religious experience: the early years of childhood, especially the time of her First Communion and Confirmation, adolescence, up to her entrance into Carmel and her first profession.

Manuscript B, written during her retreat that same year at the request of her sister Marie of the Sacred Heart, contains some of the most beautiful, best known and oft-quoted passages from the Saint of Lisieux. They reveal the Saint's full maturity as she speaks of her vocation in the Church, the Bride of Christ and Mother of souls.

Manuscript C, composed in June and the first days of July 1897, a few months before her death and dedicated to the Prioress, Marie de Gonzague, who had requested it, completes the recollections in Manuscript A on life in Carmel. These pages reveal the author's supernatural wisdom. Th鲨se recounts some sublime experiences during this final period of her life. She devotes moving pages to her trial of faith: a grace of purification that immerses her in a long and painful dark night, illuminated by her trust in the merciful, fatherly love of God. Once again, and without repeating herself, Th鲨se makes the light of the Gospel shine brightly. Here we find the most beautiful pages she devoted to trusting abandonment into God's hands, to unity between love of God and love of neighbor, to her missionary vocation in the Church.

In these three different manuscripts, which converge in a thematic unity and in a progressive description of her life and spiritual way, Th鲨se has left us an original autobiography which is the story of her soul. It shows how in her life God has offered the world a precise message, indicating an evangelical way, the "little way", which everyone can take, because everyone is called to holiness.

In the 266 Letters we possess, addressed to family members, women religious and missionary "brothers", Th鲨se shares her wisdom, developing a teaching that is actually a profound exercise in the spiritual direction of souls.

Her writings also include 54 Poems, some of which have great theological and spiritual depth inspired by Sacred Scripture. Worthy of special mention are Vivre d'Amour!... (Po鳩es 17) and Pourquoi je t'aime, ͡rie! (Po鳩es 54), an original synthesis of the Virgin Mary's journey according to the Gospel. To this literary production should be added eight R飲顴ions pieuses: poetic and theatrical compositions, conceived and performed by the Saint for her community on certain feast days, in accordance with the tradition of Carmel. Among those writings should be mentioned a series of 21 Prayers.Nor can we forget the collection of all she said during the last months of her life. These sayings, of which there are several editions, known as the Novissima verba, have also been given the title Derniers Entretiens.

7. From careful study of the writings of Saint Th鲨se of the Child Jesus and from the resonance they have had in the Church, salient aspects can be noted of her "eminent doctrine", which is the fundamental element for conferring the title of Doctor of the Church.

First of all, we find a special charism of wisdom. This young Carmelite, without any particular theological training, but illumined by the light of the Gospel, feels she is being taught by the divine Teacher who, as she says, is "the Doctor of Doctors" (Ms A, 83v ), and from him she receives "divine teachings" (Ms B, 1r ). She feels that the words of Scripture are fulfilled in her: "Whoever is a little one, let him come to me.... For to him that is little, mercy shall be shown" (Ms B, 1v ; cf. Prv 9:4; Wis 6:6) and she knows she is being instructed in the science of love, hidden from the wise and prudent, which the divine Teacher deigned to reveal to her, as to babes (Ms A, 49r ; cf. Lk 10:21-22).

Pius XI, who considered Th鲨se of Lisieux the "Star of his pontificate", did not hesitate to assert in his homily on the day of her canonization, 17 May 1925: "The Spirit of truth opened and made known to her what he usually hides from the wise and prudent and reveals to little ones; thus she enjoyed such knowledge of the things above - as Our immediate Predecessor attests - that she shows everyone else the sure way of salvation" (AAS 17 [1925], p. 213).

Her teaching not only conforms to Scripture and the Catholic faith, but excels ("eminet") for the depth and wise synthesis it achieved. Her doctrine is at once a confession of the Church's faith, an experience of the Christian mystery and a way to holiness. Th鲨se offers a mature synthesis of Christian spirituality: she combines theology and the spiritual life; she expresses herself with strength and authority, with a great ability to persuade and communicate, as is shown by the reception and dissemination of her message among the People of God.

Th鲨se's teaching expresses with coherence and harmonious unity the dogmas of the Christian faith as a doctrine of truth and an experience of life. In this regard it should not be forgotten that the understanding of the deposit of faith transmitted by the Apostles, as the Second Vatican Council teaches, makes progress in the Church with the help of the Holy Spirit: "There is growth in insight into the realities and words that are passed on... through the contemplation and study of believers who ponder these things in their hearts (cf. Lk 2:19 and 51). It comes from the intimate sense of spiritual realities which they experience. And it comes from the preaching of those who have received, along with their right of succession in the episcopate, the sure charism of truth" (Dei Verbum, n. 8).

In the writings of Th鲨se of Lisieux we do not find perhaps, as in other Doctors, a scholarly presentation of the things of God, but we can discern an enlightened witness of faith which, while accepting with trusting love God's merciful condescension and salvation in Christ, reveals the mystery and holiness of the Church.

Thus we can rightly recognize in the Saint of Lisieux the charism of a Doctor of the Church, because of the gift of the Holy Spirit she received for living and expressing her experience of faith, and because of her particular understanding of the mystery of ChriSaint In her are found the gifts of the new law, that is, the grace of the Holy Spirit, who manifests himself in living faith working through charity (cf. Saint Thomas Aquinas, Summa Theol., I-II, q. 106, art. 1; q. 108, art. 1).

We can apply to Th鲨se of Lisieux what my Predecessor Paul VI said of another young Saint and Doctor of the Church, Catherine of Siena: "What strikes us most about the Saint is her infused wisdom, that is to say, her lucid, profound and inebriating absorption of the divine truths and mysteries of faith.... That assimilation was certainly favored by the most singular natural gifts, but it was also evidently something prodigious, due to a charism of wisdom from the Holy Spirit" (AAS 62 [1970], p. 675).

8. With her distinctive doctrine and unmistakable style, Th鲨se appears as an authentic teacher of faith and the Christian life. In her writings, as in the sayings of the Holy Fathers, is found that lifegiving presence of Catholic tradition whose riches, as the Second Vatican Council again says, "are poured out in the practice and life of the Church, in her belief and prayer" (Dei Verbum, n. 8).

If considered in its literary genre, corresponding to her education and culture, and if evaluated according to the particular circumstances of her era, the doctrine of Th鲨se of Lisieux appears in providential harmony with the Church's most authentic tradition, both for its confession of the Catholic faith and for its promotion of the most genuine spiritual life, presented to all the faithful in a living, accessible language.

She has made the Gospel shine appealingly in our time; she had the mission of making the Church, the Mystical Body of Christ, known and loved; she helped to heal souls of the rigors and fears of Jansenism, which tended to stress God's justice rather than his divine mercy. In God's mercy she contemplated and adored all the divine perfections, because "even his justice (and perhaps even more so than the other perfections) seems to me clothed in love" (Ms A, 83v ). Thus she became a living icon of that God who, according to the Church's prayer, "shows his almighty power in his mercy and forgiveness" (cf. Roman Missal, Opening prayer, 26th Sunday in Ordinary Time).

Even though Th鲨se does not have a true and proper doctrinal corpus, nevertheless a particular radiance of doctrine shines forth from her writings which, as if by a charism of the Holy Spirit, grasp the very heart of the message of Revelation in a fresh and original vision, presenting a teaching of eminent quality.

The core of her message is actually the mystery itself of God-Love, of the Triune God, infinitely perfect in himself. If genuine Christian spiritual experience should conform to the revealed truths in which God communicates himself and the mystery of his will (cf. Dei Verbum, n. 2), it must be said that Th鲨se experienced divine revelation, going so far as to contemplate the fundamental truths of our faith united in the mystery of Trinitarian life. At the summit, as the source and goal, is the merciful love of the three Divine Persons, as she expresses it, especially in her Act of Oblation to Merciful Love. At the root, on the subject's part, is the experience of being the Father's adoptive children in Jesus; this is the most authentic meaning of spiritual childhood, that is, the experience of divine filiation, under the movement of the Holy Spirit. At the root again, and standing before us, is our neighbor, others, for whose salvation we must collaborate with and in Jesus, with the same merciful love as his.

Through spiritual childhood one experiences that everything comes from God, returns to him and abides in him, for the salvation of all, in a mystery of merciful love. Such is the doctrinal message taught and lived by this Saint.

As it was for the Church's Saints in every age, so also for her, in her spiritual experience Christ is the center and fullness of Revelation. Th鲨se knew Jesus, loved him and made him loved with the passion of a bride. She penetrated the mysteries of his infancy, the words of his Gospel, the passion of the suffering Servant engraved on his holy Face, in the splendor of his glorious life, in his Eucharistic presence. She sang of all the expressions of Christ's divine charity, as they are presented in the Gospel (cf. PN 24, J鳵s, mon Bien-Aim鬠rappelle-toi!).

Th鲨se received particular light on the reality of Christ's Mystical Body, on the variety of its charisms, gifts of the Holy Spirit, on the eminent power of love, which in a way is the very heart of the Church, where she found her vocation as a contemplative and missionary (cf. Ms B, 2r -3v ).

Lastly, among the most original chapters of her spiritual doctrine we must recall Th鲨se's wise delving into the mystery and journey of the Virgin Mary, achieving results very close to the doctrine of the Second Vatican Council in chapter eight of the Constitution Lumen gentium and to what I myself taught in the Encyclical Letter Redemptoris Mater of 25 March 1987.

9. The primary source of her spiritual experience and her teaching is the Word of God in the Old and New Testaments. She herself admits it, particularly stressing her passionate love for the Gospel (cf. Ms A, 83v ). Her writings contain over 1,000 biblical quotations: more than 400 from the Old Testament and over 600 from the New.

Despite her inadequate training and lack of resources for studying and interpreting the sacred books, Th鲨se immersed herself in meditation on the Word of God with exceptional faith and spontaneity. Under the influence of the Holy Spirit she attained a profound knowledge of Revelation for herself and for others. By her loving concentration on Scripture - she even wanted to learn Hebrew and Greek to understand better the spirit and letter of the sacred books - she showed the importance of the biblical sources in the spiritual life, she emphasized the originality and freshness of the Gospel, she cultivated with moderation the spiritual exegesis of the Word of God in both the Old and New Testaments. Thus she discovered hidden treasures, appropriating words and episodes, sometimes with supernatural boldness, as when, in reading the texts of Saint Paul (cf. 1 Cor 12-13), she realized her vocation to love (cf. Ms B, 3r -3v ). Enlightened by the revealed Word, Th鲨se wrote brilliant pages on the unity between love of God and love of neighbor (cf. Ms C, 11v -19r ); and she identified with Jesus' prayer at the Last Supper as the expression of her intercession for the salvation of all (cf. Ms C, 34r -35r ).

Her doctrine, as was said, conforms to the Church's teaching. From childhood she was taught by her family to participate in prayer and liturgical worship. In preparation for her first Confession, first Communion and the sacrament of Confirmation, she gave evidence of an extraordinary love for the truths of the faith, and she learned the Catechism almost word for word (cf. Ms A, 37r -37v ). At the end of her life she wrote the Apostles' Creed in her own blood, as an expression of her unreserved attachment to the profession of faith.

In addition to the words of Scripture and the Church's doctrine, Th鲨se was nourished as a youth by the teaching of the Imitation of Christ, which, as she herself acknowledges, she knew almost by heart (cf. Ms A, 47r ). Decisive for fulfilling her Carmelite vocation were the spiritual texts of the Mother Foundress, Teresa of Jesus, especially those explaining the contemplative and ecclesial meaning of the charism of the Teresian Carmel (cf. Ms C, 33v ). But in a very special way, Th鲨se was nourished on the mystical doctrine of Saint John of the Cross, who was her true spiritual master (cf. Ms A, 83r ). It should cause no surprise, then, if she who had been an outstanding pupil in the school of these two Saints, later declared Doctors of the Church, should later become a master of the spiritual life.

10. The spiritual doctrine of Th鲨se of Lisieux has helped extend the kingdom of God. By her example of holiness, of perfect fidelity to Mother Church, of full communion with the See of Peter, as well as by the special graces obtained by her for many missionary brothers and sisters, she has rendered a particular service to the renewed proclamation and experience of Christ's Gospel and to the extension of the Catholic faith in every nation on earth.

There is no need to dwell at length on the universality of Th鲨se's doctrine and on the broad reception of her message during the century since her death: it has been well documented in the studies made in view of conferring on her the title of Doctor of the Church.

A particularly important fact in this regard is that the Church's Magisterium has not only recognized Th鲨se's holiness, but has also highlighted the wisdom of her doctrine. Pius X had already said that she was "the greatest saint of modern times". On joyfully receiving the first Italian edition of the Story of a Soul, he extolled the fruits that had resulted from Th鲨se's spirituality. Benedict XV, on the occasion of proclaiming the Servant of God's heroic virtues, explained the way of spiritual childhood and praised the knowledge of divine realities which God granted to Th鲨se in order to teach others the ways of salvation (cf. AAS 13 [1921], pp. 449-452). On the occasion of both her beatification and canonization, Pius XI wished to expound and recommend the Saint's doctrine, underscoring her special divine enlightenment (Discorsi di Pio XI, vol. I, Turin 1959, p. 91) and describing her as a teacher of life (cf. AAS 17 [1925], pp. 211-214). When the Basilica of Lisieux was consecrated in 1954, Pius XII said, among other things, that Th鲨se penetrated to the very heart of the Gospel with her doctrine (cf. AAS 46 [1954], pp. 404-408). Cardinal Angelo Roncalli, the future Pope John XXIII, visited Lisieux several times, especially when he was Nuncio in Paris. On various occasions during his pontificate he showed his devotion to the Saint and explained the relationship between the doctrine of the Saint of Avila and her daughter, Th鲨se of Lisieux (Discorsi, Messaggi, Colloqui, vol. II [1959-1960], pp. 771-772). Many times during the celebration of the Second Vatican Council, the Fathers recalled her example and doctrine. On the centenary of her birth, Paul VI addressed a Letter on 2 January 1973 to the Bishop of Bayeux and Lisieux, in which he extolled Th鲨se's example in the search for God, offered her as a teacher of prayer and theological virtue of hope, and a model of communion with the Church, calling the attention of teachers, educators, pastors and theologians themselves to the study of her doctrine (cf. AAS 65 [1973], pp. 12-15). I myself on various occasions have had the joy of recalling the person and doctrine of the Saint, especially during my unforgettable visit to Lisieux on 2 June 1980, when I wished to remind everyone: "One can say with conviction about Th鲨se of Lisieux that the Spirit of God allowed her heart to reveal directly to the people of our time the fundamental mystery, the reality of the Gospel.... Her 'little way' is the way of 'holy childhood'. There is something unique in this way, the genius of Saint Th鲨se of Lisieux. At the same time there is the confirmation and renewal of the most basic and most universal truth. What truth of the Gospel message is really more basic and more universal than this: God is our Father and we are his children?" (Insegnamenti di Giovanni Paolo II, vol. III/1 [1980], p. 1659).

These simple references to an uninterrupted series of testimonies from the Popes of this century on the holiness and doctrine of Saint Th鲨se of the Child Jesus and to the universal dissemination of her message clearly express to what extent the Church, in her pastors and her faithful, has accepted the spiritual doctrine of this young Saint.

A sign of the ecclesial reception of the Saint's teaching is the appeal to her doctrine in many documents of the Church's ordinary Magisterium, especially when speaking of the contemplative and missionary vocation, of trust in the just and merciful God, of Christian joy and of the call to holiness. Evidence of this fact is the presence of her doctrine in the recent Catechism of the Catholic Church (nn. 127, 826, 956, 1011, 2011, 2558). She who so loved to learn the truths of the faith in the catechism deserved to be included among the authoritative witnesses of Catholic doctrine.

Th鲨se possesses an exceptional universality. Her person, the Gospel message of the "little way" of trust and spiritual childhood have received and continue to receive a remarkable welcome, which has transcended every border.

The influence of her message extends first of all to men and women whose holiness and heroic virtues the Church herself has recognized, to the Church's pastors, to experts in theology and spirituality, to priests and seminarians, to men and women religious, to ecclesial movements and new communities, to men and women of every condition and every continent. To everyone Th鲨se gives her personal confirmation that the Christian mystery, whose witness and apostle she became by making herself in prayer "the apostle of the apostles", as she boldly calls herself (Ms A, 56r ), must be taken literally, with the greatest possible realism, because it has a value for every time and place. The power of her message lies in its concrete explanation of how all Jesus' promises are fulfilled in the believer who knows how confidently to welcome in his own life the saving presence of the Redeemer.

11. All these reasons are clear evidence of how timely is the Saint of Lisieux's doctrine and of the particular impact her message has had on the men and women of our century. Moreover, some circumstances contribute to making her designation as a Teacher for the Church of our time even more significant.

First of all, Th鲨se is a woman, who in approaching the Gospel knew how to grasp its hidden wealth with that practicality and deep resonance of life and wisdom which belong to the feminine genius. Because of her universality she stands out among the multitude of holy women who are resplendent for their Gospel wisdom.

Th鲨se is also a contemplative. In the hiddenness of her Carmel she lived the great adventure of Christian experience to the point of knowing the breadth, length, height and depth of Christ's love (cf. Eph 3:18-19). God did not want his secrets to remain hidden, but enabled Th鲨se to proclaim the secrets of the King (cf. Ms C, 2v ). By her life Th鲨se offers a witness and theological illustration of the beauty of the contemplative life as the total dedication to Christ, Spouse of the Church, and as an affirmation of God's primacy over all things. Hers is a hidden life which possesses a mysterious fruitfulness for spreading the Gospel and fills the Church and the world with the sweet odor of Christ (cf. LT 169, 2v ).

Lastly, Th鲨se of Lisieux is a young person. She reached the maturity of holiness in the prime of youth (cf. Ms C, 4r ). As such, she appears as a Teacher of evangelical life, particularly effective in illumining the paths of young people, who must be the leaders and witnesses of the Gospel to the new generations.

Th鲨se of the Child Jesus is not only the youngest Doctor of the Church, but is also the closest to us in time, as if to emphasize the continuity with which the Spirit of the Lord sends his messengers to the Church, men and women as teachers and witnesses to the faith. In fact, whatever changes can be noted in the course of history and despite the repercussions they usually have on the life and thought of individuals in every age, we must never lose sight of the continuity which links the Doctors of the Church to each other: in every historical context they remain witnesses to the unchanging Gospel and, with the light and strength that come from the Holy Spirit, they become its messengers, returning to proclaim it in its purity to their contemporaries. Th鲨se is a Teacher for our time, which thirsts for living and essential words, for heroic and credible acts of witness. For this reason she is also loved and accepted by brothers and sisters of other Christian communities and even by non-Christians.

12. This year, when the centenary of the glorious death of Th鲨se of the Child Jesus and the Holy Face is being celebrated, as we prepare to celebrate the Great Jubilee of the Year 2000, after receiving a great number of authoritative petitions, especially from many Episcopal Conferences throughout the world, and after accepting the official petition, or Supplex Libellus, addressed to me on 8 March 1997 by the Bishop of Bayeux and Lisieux, as well as from the Superior General of the Discalced Carmelites of the Blessed Virgin Mary of Mount Carmel and from the Postulator General of the same order, I decided to entrust the Congregation for the Causes of Saints, which has competence in this matter, with the special study of the cause for conferring the title of Doctor on this Saint, "after hearing the opinion of the Congregation for the Doctrine of the Faith regarding the eminent doctrine" (ApoSaint ConSaint Pastor Bonus, n. 73).

After the necessary documentation had been collected, the two above-mentioned Congregations addressed the question in the meetings of their respective consultors: the Congregation for the Doctrine of the Faith on 5 May 1997, with regard to the "eminent doctrine", and the Congregation for the Causes of Saints on 29 May of the same year, to examine the special "Positio". On the following 17 June, the Cardinals and Bishops who are members of these Congregations, following a procedure approved by me for this occasion, met in a plenary interdicasterial session and discussed the cause, giving a unanimously favorable opinion on granting the title of Doctor of the Universal Church to Saint Th鲨se of the Child Jesus and the Holy Face. I was personally informed of this opinion by Cardinal Joseph Ratzinger, Prefect of the Congregation for the Doctrine of the Faith, and by the Pro-Prefect of the Congregation for the Causes of Saints, Archbishop Alberto Bovone, titular Archbishop of Caesarea in Numidia.

In view of this, on 24 August last, during the Angelus prayer in the presence of hundreds of Bishops and before a vast throng of young people from around the world, gathered in Paris for the 12th World Youth Day, I wanted personally to announce my intention to proclaim Th鲨se of the Child Jesus and the Holy Face a Doctor of the Universal Church during the celebration of World Mission Sunday in Rome.

Today, 19 October 1997, in Saint Peter's Square, filled with faithful from every part of the world, and in the presence of a great many Cardinals, Archbishops and Bishops, during the solemn Eucharistic celebration I proclaimed Th鲨se of the Child Jesus and the Holy Face a Doctor of the Universal Church in these words: Fulfilling the wishes of many Brothers in the Episcopate and of a great number of the faithful throughout the world, after consulting the Congregation for the Causes of Saints and hearing the opinion of the Congregation for the Doctrine of the Faith regarding her eminent doctrine, with certain knowledge and after lengthy reflection, with the fullness of Our apostolic authority We declare Saint Th鲨se of the Child Jesus and the Holy Face, virgin, to be a Doctor of the Universal Church. In the name of the Father, and of the Son and of the Holy Spirit.

This having been duly enacted, We decree that this Apostolic Letter is to be religiously preserved and to have full effect both now and in the future; furthermore, it is thus to be judged and defined as right, and whatever to the contrary may be attempted by anyone, on whatever authority, knowingly or unknowingly, is null and void.

Given in Rome, at Saint Peter's, under the Fisherman's ring, the 19th day of the month of October in the year of the Lord 1997, the 20th of the Pontificate.

Police Crimes

Posted by Sheila Coronel 
PCIJ

TWO of the country's biggest anti-crime groups issued a joint statement today expressing their concern about an upsurge of crimes involving rogue policemen.

The Movement for Restoration of Peace and Order and the Citizens Action Against Crime listed three kidnapping incidents, two murders, and an undetermined number of car thefts in the past month in which, they said, policemen and police offers were the prime suspects.

Last July, anti-crime groups had already expressed their alarm at the rising number of kidnapping incidents, which they said was partly the consequence of the police's preoccupation with monitoring anti-government protests.

Today the anti-crime groups said that "their worst nightmare," that of policemen themselves taking part in crimes, had come true. They were particularly upset about three abductions and one attempted abduction that took place in Metro Manila since September.

A one-year-old girl was accidentally killed on September 14 in an attempted abduction in Cainta, the groups' statement said. The following day, a Hong Kong national was kidnapped and subsequently killed by the policemen who were allegedly his abductors.

The anti-crime groups credited the Philippine National Police (PNP) for solving the crimes, even if those among their ranks were involved in them. But they also asked the PNP to act swiftly on similar cases involving rogue policemen.

The full statement:

Our worst nightmares have once again come true. In the past month, rogue policemen were involved in three kidnappings, two murders, and an undetermined number of car thefts. It seems we must again be wary of the men who are supposed to protect us.

We recognize that these policemen do not represent the entire police force. They are among the few rotten eggs and we are heartened by the fact that police authorities have not tolerated these hoodlums in their ranks. But we cannot help but be alarmed by the brazenness and utter regard for life and decency shown in these recent incidents:

• On Aug. 31, 2005, the 11-year-old twins, Jin Ritz and Kelvyelt Sermonia, and their 9-year-old sister, Vinz, were kidnapped on their way to school. The children, who were later rescued, recounted how the kidnapers tied them up in a stinking bathroom, fed them only crackers, beat them up and harassed them.

  The suspected perpetrators of that abduction were PO1 Antonio Castillo, assigned to the PNP Aviation Security Group, and PO1 Jose Lonmar Zapatos, who is assigned to the PNP Special Action Force. They were arrested by elements of the Police Anti-Crime Emergency Response (PACER) team and are now in custody.

• On Sept. 1, 2005, businessman Henry Sia was abducted, detained and robbed. In addition, money was extorted from him. The main suspects in his case are two policemen and a police officer. The two policemen are PO2 Clifford de Guzman assigned at the NCRPO (National Capital Region Police Office) and his brother PO2 Jeffrey de Guzman of the Western Police District (WPD). According to the WPD's Chief Supt. Pedro Bulaong, Insp. Marijon Perez, who is assigned at the PNP-Camp Vicente Lim, is also suspected of involvement in the abduction.

  In August, the same group of policemen was also tagged in the abduction of John Chua.

• On Sept 14, 2005, Rosanna Guevarra was driving along the main road in Cainta, Rizal with her 1-year-old daughter, Erica Charlene, when her car was blocked by motorcycle-riding men. When Rosanna refused to stop, the armed men opened fire at the car, hitting and killing the 1-year-old Erica.

  The suspected perpetrators: PO1 Candido Vallejo, P01 Roel Palana and the alleged leader, PO2 Joel Tapec, all from the district mobile group of the Eastern Police District. At the time of the killing, Tapec was out on bail for the robbery of Fernando Siy's candy factory in Pasig City last Aug. 26. Suspects Vallejo and Palana were arrested on Sept. 28, while Tapec remains at large.

• On Sept. 15, the day after the girl's killing, Vallejo and Palana were again involved in the abduction of Michael Chan, 33, a Hong Kong national. The abductors asked for a P5-million ransom. They killed Chan on Sept. 17 when his family could not afford to raise the ransom demanded. Rizal police officers said that when arrested, Vallejo's mobile phone yielded text messages on the ransom negotiation, so they contacted PACER and learned about the kidnapping. The suspects later admitted to the murder and pointed where they dumped Chan's body.

  Chan left a 1-year-old baby and is now lying at the Funeraria Paz on Araneta Ave., Quezon City.

Two innocent victims were killed in the span of just five days. There were two armed robberies in just two weeks. Policemen were responsible for all of them. What do these say about our police force?

We have also been informed that many incidents of carjacking and hijacking in Quezon City in recent months were supposedly perpetrated by rogue policemen. The problem is that few of the victims dared to report the incidents. As a consequence, the crimes multiplied because the victims, through their silence, allowed the perpetrators to go unpunished.

Fortunately, in the end, decent police officers showed determination in getting the criminals, even if these were their fellow policemen. We condemn the dastardly acts of rogue policemen who have betrayed their duty to protect citizens and instead prey on those whom they are sworn to keep safe from harm. We commend the police force for their swift action in arresting the hoodlums in their ranks. We exhort them to exert even greater effort to arrest policemen who are still at large for the crimes they had committed. We urge them to conduct a prompt and honest-to-goodness cleansing of their ranks. The government must also act fast in supporting the transformation and professionalization of our police force and backing it with the logistics and resources it needs to put a stop to this scourge.

Signed:

OFFICERS AND MEMBERS
Movement for Restoration of Peace and Order and the
Citizens Action Against Crime

No More EVAT

Collection seen hitting only P5B
Finance dept loses hope on VAT implementation this year
Daxim L. Lucas
Inquirer News Service

TAX collections under the expanded value-added tax (VAT) law for this year will be "negligible" even if the Supreme Court allows it to take effect next week, an official of the Department of Finance said.

Because of this, the government has abandoned the VAT law as the cornerstone of its fiscal policy for the remainder of the year, Finance Undersecretary Emmanuel Bonoan said in a telephone interview.

"It's so delayed that we're no longer counting on it to help us this year," he said.

VAT collection this year may reach only P5 billion even if the Supreme Court affirms the law's provisions next week, Bonoan said.

"We could have earned up to P60 billion if this [the law] was implemented on July 1," he said.

The Supreme Court has given the law's backers another five days to respond to comments made by those opposing it before ruling on the legality of its controversial provisions, including the so-called "no pass-on provision" and the input VAT cap for oil companies.

The government earlier downgraded its expected VAT collections this year to P28 billion from P60 billion because of the delays, but Bonoan said tax authorities would likely miss this figure and that, at best, VAT collections might reach only P5 billion.

Despite the loss of proceeds, he said the national government's budget deficit would fall within its P180-billion target ceiling at the end of the year and possibly be as low as P161 billion.

President Gloria Macapagal-Arroyo has affirmed her support for the VAT law after giving hints of her willingness to see its implementation postponed, Inquirer sources in Congress said.

The President recently met key leaders of the House of Representatives and the Senate to express her support for the VAT law, the sources said.

They said Arroyo assured lawmakers at the meeting that she would not support a proposal of Rep. Jose Salceda to delay the implementation of the controversial law.

They said she made the assurance to clarify the Palace's stand on the issue and to reassure investors that the country was serious in its efforts to put its fiscal house in order. With INQ7.net

Cheating In 2004

As I See It : How cheating was done in 2004 polls

Neal H. Cruz
Inquirer News Service

BELIEVE it or not: The answer to the present political crisis is in the hands of the Presidential Electoral Tribunal (PET) and in the electoral protest of opposition vice presidential candidate Loren Legarda against Vice President Noli de Castro. President Gloria Macapagal-Arroyo's problems emanated from a question of legitimacy. Is she the legitimately elected President? Or is she a fake President? The people's faith in her as the duly elected President was rudely shaken by the discovery of the "Hello Garci" tapes where she was caught in conversations with Election Commissioner Virgilio Garcillano, plotting to cheat in the last elections.

Fernando Poe Jr. died before his poll protest, alleging fraud and cheating in the last elections, could be heard, and the petition of his wife Susan Roces to substitute for him was dismissed by the PET. The question of who really won, Ms Arroyo or Poe, was left unresolved. Former Senator Legarda, claiming her rival, VP De Castro, also cheated in the polls, filed an election protest. The protest of Legarda has started to move -- after lying dormant in the PET for more than a year -- and she is optimistic that the recount of the votes in six pilot provinces would be finished in six months.

How does that affect the question of Ms Arroyo's legitimacy? Also on the same election returns where the votes for the vice presidential candidates are recorded are the votes for Ms Arroyo and Poe. It would take no more than several seconds to look at the votes cast for the presidential candidates after tallying the votes for Noli and Loren. Thus, the questions of who won in both the presidential and vice presidential races could be resolved at the same time. For the cheating was a "Cheat One, Cheat Two" operation.

While it is true that there is no valid poll protest in the presidential contest, the PET can exercise judicial statesmanship in recounting the presidential votes at the same time it does with the votes for VP in order to resolve the crisis that is ripping the nation apart. The opposition can petition for the reopening of the Poe poll protest, and Ms Arroyo -- if she really won "fair and square," as she claims -- should welcome it. as that would finally prove her legitimacy. If she opposed it, that could mean only one thing: A recount would reveal the cheating.

In a PowerPoint presentation, Legarda and her principal witness, Segundo Tabayoyong, showed the Kapihan sa Manila forum last Monday how the cheating was done. It was simplicity itself and very easy to do. It was a new way of cheating, used for the first time in the elections of 2004. (Tabayoyong was a Questioned Document Examiner and former chief of the Questioned Documents Division of the National Bureau of Investigation. He has retired.)

Instead of changing the ballots at the precincts -- as was done in the past, which is difficult and labor-intensive -- the cheating was done on the election return (ER), the summary of the votes in the precincts. Election returns of a city or municipality are totaled in the Statement of Votes (SOV) which are, in turn, summarized in the Certificate of Canvass (COC) for the province. It is the COCs that are added by Congress to determine the presidential and vice presidential winners.

What the cheaters did -- Legarda and Tabayoyong explained -- was simply fill up new election returns, disregarding the ballots. These spurious ERs were prepared in advance, by a special force of about 200 persons in two places in Metro Manila (one in a hotel near the Edsa highway) and then sent to the provinces. Thus, the votes were already counted and the "winners" known even before the voting started. It didn't matter for whom the people voted. It was the special force that decided the winners.

The Commission on Elections has admitted that it overprinted 32,000 sets of these ERs before the elections. It has not explained fully what happened to these excess ERs. It is believed that these were the same fake ERs used by the cheating team. It was a systematic, well-financed, well-managed and well-supervised operation by professional cheaters, Legarda and Tabayoyong said.

The cheaters, however, made mistakes. And that gave them away. ERs supposedly coming from areas thousands of kilometers apart were filled in by the same hands, said Tabayoyong. The vertical tally bars ("taras") used to mark the votes on the ERs were written very neatly and not in the uneven manner when written in the precincts because of stress and haste. There are columns where there are totals of votes but no bars. There are totals that do not tally with the bars. Thumb marks used to close the columns -- so no new bars could be added afterwards-were small, purposely smudged to make identification impossible. Required signatures were missing. Some had only initials instead of signatures.

Of the approximately 5,000 ERs analyzed, 3,000 were found to be spurious.

The analysis also showed that the team gave De Castro an average of a 70-vote margin over Legarda, and Ms Arroyo, a 100-vote margin over Poe. Therefore, the 32,000 sets of overprinted ERs could translate to a vote-margin rate of approximately 2.1 million votes in the Legarda-De Castro contest and around 3 million votes in the Poe-Arroyo race. Thus, De Castro and Ms Arroyo had something like 2 million votes and 3 million votes, respectively, for "insurance." Even if their rivals won in other areas, the insurance votes made sure Ms Arroyo and De Castro won in the totals.

* * *

TODAY'S JOKE: Terrorists kidnapped Ms Arroyo and demanded ransom money.

"Pay us P500 million or we will set her on fire," demanded the ransom note.

The bankrupt government asked the people for donations. So far, the donations totaled 2,000 liters of gasoline.

PS: A group of businessmen offered to donate another 2,000 liters if Fidel Ramos and Jose de Venecia were included.

Bush's Favorite Book

Pinoy Kasi : Noli and George

Michael Tan opinion@inquirer.com.ph
Inquirer News Service

I WAS chuckling as I read about the US Federal Bureau of Investigation's report on Vice President Noli de Castro, with dire warnings about more economic and political "uncertainties" if he succeeded Gloria Macapagal-Arroyo.

One passage in the five-page report, dated July 15, was particularly striking: "There is no indication De Castro has much knowledge or interest in foreign policy issues."

It was that part that got me thinking, "Well, I beg your pardon guys, but how much does your president, George W. Bush, know about foreign policy issues ... or, for that matter, about anything at all in the United States or in the world?"

Searching for words

The US report, apparently based on several meetings and visits with De Castro, claimed that our Vice President was unable to answer many of their questions. Asked about his legislative priorities, the report said they had to "wait patiently as he searched for words."

I guess they're not used to having to wait with Bush, who is quick to answer questions. So eloquent is Bush that there are several Internet sites that specialize in collecting quotable quotes from him. I'm going to share some of these "Bushisms," mainly gathered from the online magazine Slate, as we figure out how he compares with our own Tito Noli.

Before Bush was elected president, he was asked how he was with foreign policy. This was his reply: "The fundamental question is, 'Will I be a successful president when it comes to foreign policy?' I will be, but until I'm the president, it's going to be hard for me to verify that I think I'll be more effective."

He did make it into the White House and has been a source of endless gaffes and laughs. He's called the Greeks "Grecians" and thought "Mexican" was the language spoken in Mexico.

Mere slips of the tongue? Maybe. Bad grammar and syntax? Maybe, as we see in this wonderful Bushism: "Too many good docs are getting out of the business. Too many OB/GYN's aren't able to practice their love with women all across the country."

And what about the time when he asked the visiting Brazilian President Fernando Cardoso: "Do you have blacks, too?"

Some of the Bushisms suggest this man knows little, and the little he knows, he can't think through. We see this, certainly, in his views about the world, simplistically defined in terms of good and evil as we see in this gem of a quote in the Washington Post, May 31, 2000:

"This is a world that is much more uncertain than the past. In the past we were certain, we were certain it was us versus the Russians in the past. We were certain, and therefore we had huge nuclear arsenals aimed at each other to keep the peace. That's what we were certain of. ... You see, even though it's an uncertain world, we're certain of some things. We're certain that even though the 'evil empire' may have passed, evil still remains. We're certain there are people that can't stand what America stands for.... We're certain there are madmen in this world, and there's terror, and there's missiles and I'm certain of this, too: I'm certain to maintain the peace, we better have a military of high morale, and I'm certain that under this administration, morale in the military is dangerously low."

Bush certainly isn't a man of few words. That Bushism was made even before 9/11, which helps us understand why eventually he dragged the United States, and a whole "coalition of the willing," including the Philippines' Ms Arroyo, into a wild goose chase for weapons of mass destruction in Iraq.

Incurious

The US report recounts a visit to Noli de Castro: "We inquired about the biography of [former New York Mayor] Rudy Giuliani sitting atop a small stack of books on De Castro's desk and he said that it was a gift and he hadn't read it."

The insinuation here is that this was a man who won't be able to govern because he doesn't read. But we could ask, too, about George Bush, not just whether he reads, but whether he knows how to read. Watch him deliver his speeches and you'll find he stumbles all the time even with the teleprompter.

In fairness to him, there have been reports that George Bush is dyslexic, which is a reading disorder where you get letters mixed up. But again, one has to ask, dyslexic or not, does this president really care to learn about anything?

Let's get it straight: He does seem to read. In New Hampshire back in 1999, reporters asked him about his reading habits and he replied, "I read the newspaper."

Evan Thomas, writing in a recent issue of Newsweek, offers this bit of information: "It is not clear what President Bush does read or watch, aside from the occasional biography or an hour or two of ESPN here and there."

So there, maybe if De Castro had read Giuliani's biography, he would have made a better impression on his American visitors.

No doubt, there's more to the acquisition of knowledge than reading, but I have very real fears that the world's fate lies in the hands of a man who has been diplomatically described in Salon, another online magazine, as "incurious."

Because he has such fixed views of the world, it is unlikely he cares to read anyone or to listen to people other than those who share his views.

The result? Massive incompetence, displayed time and time again in his military adventures and in his bungling on domestic issues, the most dramatic being the disastrous disaster management around Hurricane Katrina. In many other countries, citizens would have demanded his resignation. But Americans seem to be a tolerant and forgiving lot.

Which takes me back to De Castro. We seem ready to live with Ms Arroyo till 2010 because we're so afraid of getting him as president. Maybe there are good reasons for that fear but really now, if someone like Bush could get elected, and reelected, president of the United States, it pretty much shows that nations will get by, in spite of fools pretending to govern.

But, you might argue: Bush has good advisers. And I could retort, "Noli could get good advisers." But really now, I can't even agree that Bush has competent men and women around him. What he has is a bunch of chicken hawks who evaded military service but now sends off America's young men and women to be slaughtered in Iraq and Afghanistan.

Americans deserve better, and we deserve better. The problem is we seem to have decided "better" means the certain uncertainties of incumbent incompetents.

Something light

This has nothing to do with politics. Tomorrow Dr. Margy Holmes is launching a revised edition of her controversial book "A Different Love" at Powerbooks, SM Megamall. I've been ever so gently persuaded to go and give my thoughts about the book and what's happened in the last 10 years since it was published. That's tomorrow at 3 p.m. Yes, the public's invited. And we can check if Powerbooks has a copy of "The Very Hungry Caterpillar," which is said to be Bush's favorite children's book. Well, maybe favorite isn't the right term. It's the only book he reads to children whenever he visits schools.

RP's Economy's Not Tops

Philippines 2006 still behind neighboring economies -- IMF
Inquirer News Service

THE Philippines next year will continue to lag behind its Southeast Asian neighbors in terms of economic performance, the International Monetary Fund said in a report released Wednesday.

Hounded by huge public debts and political uncertainties, the Philippines is expected to post the slowest growth of 4.8 percent in gross domestic product and the highest inflation rate of 7.5 percent among four mid-level peer economies on the Association of Southeast Asian Countries (ASEAN-4) in 2006, the IMF said in its latest report on economic prospects.

Grouped as ASEAN-4 are the Philippines, Indonesia, Thailand and Malaysia. "Looking forward, the key macroeconomic priorities remain continued fiscal consolidation -- particularly in the Philippines, where large external financing requirements and high public debt remain significant vulnerabilities," the IMF said.

The government has a newly revised target of 5.7-6.3 percent for 2006.

The IMF report puts the projected 2006 average growth of ASEAN-4 economies at 5.4 percent, and that of other emerging economies on the regional bloc at 6.9 percent.

It forecasts Indonesia's growth at 5.8 percent, Thailand's at 5.0 percent and Malaysia's at 6.0 percent.

The IMF forecasts Philippine inflation in 2006 at 7.5 percent, compared with the ASEAN-4 average of 5.1 percent: Indonesia with 6.5 percent, Thailand with 2.7 percent, and Malaysia with 2.5 percent.

For this year, the IMF forecasts Philippine GDP growth at 4.7 percent, compared with Thailand's 3.5 percent, Indonesia's 5.8 percent and Malaysia's 5.5 percent.

It expects inflation this year to average 8.2 percent in the Philippines, 8.2 percent in Indonesia, 4.2 percent in Thailand and 3.0 percent in Malaysia.

Overall, the IMF said persistently high oil prices would adversely affect the region's economies.

"In the Philippines, where, after several months of improving fundamentals, the recent political turmoil has raised concerns about the prospects for economic reforms and led to downward revisions to the ratings outlook," it said, citing country-specific risks.

The IMF added that the very low level of private investment was the greater concern, underscoring a need to complete the unfinished reform agenda in financial and corporate sector restructuring, including improvements in governance.

The IMF expects the Philippines to perform well, second only to Malaysia, in terms of surpluses in the current account.

It forecasts the Philippine current account surplus at 2.1 percent of GDP this year and 1.9 percent next year, as against a deficit in Indonesia at 0.4 percent of GDP this year and a surplus of 0.7 percent of GDP next year. Doris Dumlao, with INQ7.net

The Sleeping Giant

Commentary : The rise of Chinese 'sea power'

Hideaki Kaneda
Inquirer News Service

IN AN age of missiles and terrorist threats, many people think that "sea power" is a word and concept from the past. Not in China. Indeed, China is increasingly emphasizing its naval and maritime interests: economic development, territorial management, energy and food security as well as trade. A navy sufficient to promote such activities is being rapidly developed and purchased from abroad (mostly from Russia and, when possible, from the European Union).

Many of China's neighbors are alarmed. The United States Defense Department views China's goal as being to build a series of military and diplomatic strategic bases -- a so-called "string of pearls" -- along the major sea lanes, from the South China Sea to the oil-rich Middle East.

China seeks not only to secure its energy supplies but also to achieve broader security goals. For example, the Gwadar military port, which China is constructing in southwest Pakistan, is strategically placed to guard the throat of the Persian Gulf, with electronic eavesdropping posts to monitor ships-including war ships-moving through the Strait of Hormuz and the Arabian Sea.

Similarly, China is building container port facilities at Chittagong in Bangladesh for its naval and merchant fleets; as well as more naval bases and electronic intelligence gathering facilities on islands owned by Myanmar in the Gulf of Bengal. Indeed, China's ties with Myanmar's military dictators look set to turn into a de facto military alliance. In nearby Thailand, China has invested $20 billion in a plan to build a canal across the Kra Isthmus to connect the Indian Ocean and the Gulf of Siam, thereby providing an alternate oil import route that avoids the Strait of Malacca.

In the South China Sea, China is developing systems to allow large-scale deployment of naval and air force units by fortifying bases on Hai Nan Island and the southern Chinese coastal area. On the Spratly and Paracel islands -- seized from Vietnam and the Philippines, respectively -- China is building port facilities to moor large surface ships and runways large enough to handle long-range bombers. In effect, China is in the process of building a group of literally unsinkable aircraft carriers in the middle of the South China Sea.

Why is China, usually considered a "continental power," engaging in this maritime expansion? China dominated Asia in terms of "sea power" until the 17th century. Indeed, during the Ming Dynasty (1368-1644), Admiral Zheng He's "Great Navy" was the world's most powerful. But for the last three centuries, China has had no global maritime strategy; neither has it possessed -- or sought to possess-naval forces capable of supporting such a strategy.

Ironically, China's current maritime strategy has its roots in the United States, the nation that China appears to perceive as its key strategic rival, namely in the "sea power" theory developed by Admiral Alfred Thayer Mahan at the end of the 19th century. In "The Influence of Sea Power upon History," published in 1890, Mahan argued that maritime power and economic development were deeply intertwined. Only the ability to protect trade and project power by sea could assure the vitality of this nexus.

Mahan identified the conditions that determine "sea power": (1) geographical position and environment; (2) territorial capacity, specifically coastline; (3) population; (4) character of people attuned to maritime expeditions; and (5) character of government eager to embrace "sea power."

These conditions applied to the United States of Mahan's time, and they surely apply to China today. China is already the world's third largest trading nation and rapidly developing its port capacities to manage an ever-increasing volume of trade. Its ship tonnage (excluding fleets that sail under flags of convenience) is the fourth largest in the world. Rapid expansion of ship tonnage is part of China's current five-year program, and by 2010 its shipbuilding capabilities will likely rival those of Japan and Korea.

However, unlike the United States and Britain in the past, China today must turn to overseas bases rather than to colonization to enhance its "sea power" -- hence its "string of pearls." Still, China is transforming its coastal navy into an ocean-going navy at a pace far quicker than most experts reckoned possible. By 2010, China is expected to have 70 of the most modern surface vessels, several modern strategic nuclear submarines, and several tens of modernized attack submarines, exceeding the modern forces of both Taiwan's navy and even Japan's Maritime Self-Defense Force, at least in quantitative terms.

Moreover, China plans to improve and expand its capabilities for assault landing and joint logistical support, both of which used to be weak points. This will provide China with necessary capabilities to invade, should China's rulers wish, Japan's most remote islands, including the disputed Senkaku Islands, as well as Taiwan. If China's naval growth continues at its current pace, it may have the world's largest naval force by 2020.

All of Asia must wake up to the arrival of Chinese-style aggressive "sea power." Japan, in particular, must reformulate its national maritime strategy with this in mind. Japan, America and other traditional maritime countries must also once again treat "sea power" in Asia as a key component of their ability to defend their own national interests. Project Syndicate

Hideaki Kaneda, retired vice admiral of Japan's Self-Defense Forces, is currently director of the Okazaki Institute.

Bitter Pill

SPECIAL REPORT
For pre-need plan holders, a bitter pill to swallow
Daxim L. Lucas and Elizabeth L. Sanchez
Inquirer News Service

THE SNOWBALLING troubles of the pre-need industry have plan holders worried about their hard-earned investments.

Many are concerned if the cure being prescribed for the ailing 30-year-old industry can still save it. More importantly, they worry if they can still get their money back.

This year alone, three major pre-need firms have taken the route towards regulator-assisted rehabilitation -- Pacific Plans Inc., Platinum Plans Philippines, and recently, College Assurance Plans Philippines Inc. (CAP).

Pacific Plans asked the Regional Trial Court in Makati City to allow it to suspend payment and go through rehabilitation after running out of cash to service future claims. Platinum also asked the court to be allowed to keep its business running since it has plans to branch out into related fields like marketing.

Both firms face stiff opposition from plan holders who believe that company officials are trying to dodge their commitments to clients -- a charge the companies deny.

For the pre-need firms, survival comes at a high price and it is becoming even doubly difficult to convince the Securities and Exchange Commission (SEC) about the viability of their plans to stay afloat.

Clutching at straws

What will make a rehabilitation plan work?

SEC commission secretary Gerard Lukban said the biggest consideration is the infusion of new capital into a pre-need company.

"When a company goes to court and asks for this relief, the court will have to decide whether this company is entitled to it," Lukban said. "What they will consider is solvency. Is this company worth salvaging?"

Lukban stressed that the SEC was not out to kill the pre-need industry, contrary to claims of the troubled firms that regulators keep shooting down rehabilitation proposals in court.

"The big factor there is the infusion of new capital or they could study venturing into something more profitable," Lukban said. "The SEC also has to be convinced that the money is coming in. Every company in trouble deserves to be rehabilitated but their efforts to seriously implement that rehabilitation is the key."

And convincing skeptical regulators and an increasingly incredulous public about their viability seems to be the biggest liability of some pre-need firms like CAP, at present.

No less than Senator Manuel Roxas II, chairman of the Senate trade and commerce committee, opposes CAP's bid for rehabilitation.

"Obviously, CAP has been engaged in a litany of lies and had been fooling the regulators and the people all along," said the lawmaker, who is spearheading moves to impose tighter regulations on the industry. "SEC was correct in suspending CAP's license to sell. If CAP was allowed to continue selling plans, then more families could have been fooled."

Roxas pointed out that CAP had in the past paraded several names of supposed prospective investors, among them Green Circle Properties & Resources Inc., Green Square Properties Corp., First American Investment LLC, and International Global Capital Holdings AG.

"Up to now, not a single centavo was infused in CAP," Roxas said in a statement. "Their trust fund is down to P4.71 billion from P8.5 billion in 2003."

Bitter pill

No matter what road to recovery the pre-need industry and their clients decide to take, the solution will definitely hurt everyone concerned.

Holders of open-ended educational plans are faced with a dilemma: Should they continue paying their premiums in the hope that the company will honor its commitments, or should they stop paying altogether and stand to recover only a portion of their policy value, or even risk losing everything they've paid through the years?

SEC assistant director Nonilonia Ambat, who oversees the pre-need industry, said that on the average, plan holders can recover 50 percent of what they paid when they choose to terminate their plan benefits -- but only if the policies have been fully paid.

Clients whose policies are only being paid for the first or second year are not entitled to recover any portion of their investments, Ambat said, explaining that terminating the policy at such an early stage will be a desperate move.

More realistically, she said, plan holders must be ready to swallow the bitter pill.

"Pre-need companies should convince plan holders to agree to convert to fixed value benefits," Ambat said. "If they need to beg the plan holder to agree, they should. The public will surely take the hit."

The SEC official's advice assumes that a pre-need company still has enough assets to cover the termination values of policyholders' plans. This may not always be the case as some firms may not only be illiquid, but bankrupt.

For actuaries like Isagani de Castro Sr., however, clients of some troubled pre-need firms are better off cutting their losses and starting from scratch.

"For clients of some firms, I would advise them to just stop paying," he said, adding that paying premium payments to a bankrupt pre-need firm is like throwing good money away.

"For some companies that are not that deep in trouble, like Pacific Plans, there is still hope that clients can recover their principal investment plus a small interest, if they accept the proposed rehabilitation plan," De Castro said. "But they should already forget about receiving the full benefits."

Wanted: Strong regulator

The Philippine Federation of Pre-Need Plan Companies believes, meanwhile, that open-ended plans should have a benefits ceiling.

But more than putting a cap on the amount to be paid to plan holders, the pre-need business model can still work and stay alive under a fixed-value setup, said federation president Juan Miguel Madrigal Vazquez.

"The pre-need industry remains viable because they serve a need," Vazquez said in an e-mailed note to the Inquirer. "The challenge is for the companies to serve those needs properly. People mistake the open-ended plan for the whole industry when it is not."

Vasquez also said that the problems faced by some of the industry's biggest players, like CAP and Pacific Plans, happened before 1994 -- way before the SEC was given resources to regulate the industry, as it has done since the Securities Regulation Code was passed in 2000.

"The law should create a strong regulator, empowered and accountable, with resources to implement this vision prior to, and after, any problem that would arise," he said. "The law should provide proactive protection and post protection or penalties to protect plan holders."

Roxas is hopeful that the pre-need bill pending in Congress will address these concerns, and more.

He explained that the law will specify a uniform accounting system which all players must adhere to, set prudent measures to protect trust funds from abuse and misuse, and require pre-need policies to be insured through a similar system used in the insurance industry.

As such, the pre-need industry will also be transferred under the ambit of the Insurance Commission, which will likely have more success in regulating quasi-insurance products.

Roxas admits, however, that his proposed solution is prospective, rather than retroactive.

While future buyers of pre-need policies will enjoy greater protection, existing clients will likely be left holding the bag, unless they can convince the courts to liquidate the assets of troubled firms in their favor.

On this point, both Roxas and De Castro agree that clients should pool their resources and file a class action suit against erring firms.

"The legal route is the only route," De Castro said, given the state of the industry, where several pre-need firms are on the verge of bankruptcy.

Having been a consultant for several insurance and pre-need firms in the past, De Castro predicts more pain in the coming months and years for all players in the industry—from the clients to the companies, even the regulators.

"It will be very difficult," De Castro warns.

PLDT's Dream

PLDT buying Dream Satellite; price set at $22M
Clarissa S. Batino
Inquirer News Service

PHILIPPINE Long Distance Telephone Co. (PLDT) is buying Philippine Multi-Media System Inc., operator of Dream Satellite TV, from Antonio Cojuangco for $22 million, or about P1.23 billion, Inquirer sources said.

The sources said Cojuangco, former controlling shareholder and president of PLDT, had accepted the PLDT offer because he needs the money to support his other investments, especially television company Associated Broadcasting Corp., which operates Channel 5.

"Both parties have agreed on the valuation," a source said. "It is just a matter of preparing the documents and affixing their signatures."

Another source said Cojuangco's group had agreed to a much lower price than it had originally asked, after PLDT agreed to absorb the debts of Philippine Multi-Media System.

Cojuangco's asking price was $56 million, said an informed source. PLDT offered $25 million, and later $22 million after factoring in the debts, mainly of Dream Satellite, that would be absorbed.

PLDT president Napoleon Nazareno said they were "still in the final stages of negotiations." The deal was not done yet, he said.

Philippine Multi-Media System holds a franchise to operate a direct-to-home programming service.

Acquisition of Dream Satellite would enable a joint venture between PLDT and America's largest direct-TV provider, Echostar Communications Inc., to finally take off.

PLDT and Echostar are planning to invest $85 million in pay TV operations in the Philippines through satellite receivers, not the traditional cable system that is prone to piracy and signal theft.

PLDT and Echostar have an existing venture under ePLDT. Parlance Systems Inc., a subsidiary of ePLDT, has been providing inbound and outbound call center services to subscribers of Echostar in the US since 2002.

Discussions on their investment in a direct broadcast satellite business started as early as 2000 but getting a franchise was one of the issues that impeded the venture.

Cesar Reyes, chairman and chief executive officer of the Philippine Multi-Media System and former PLDT official, said in late August that valuation was stalling the negotiations between PLDT and Philippine Multi-Media System.

The Inquirer tried to reach him Tuesday for comment on the reported developments, but Reyes was not answering his mobile phone.

Philippine Multi-Media System uses PLDT's Mabuhay Satellite to broadcast content to more than 100,000 subscribers nationwide.

Reyes said Dream Satellite was now the second largest pay TV company in the country. The largest is Beyond Cable Holdings Inc.

PLDT owns one-third of Beyond Cable, a joint venture with the Lopez group. It has proposed swapping its Beyond Cable interests for the controlling stake in the Lopez group's phone company Bayan Telecommunications Philippines Inc., or BayanTel.

A source said PLDT chairman Manuel Pangilinan's plan "is to bring down the rate of Dream by offering more programs. He can do that with Echostar, which has more than 200 channels."

Dream Satellite is considered more expensive than the traditional cable providers.

Sources said that if talks with Dream failed, PLDT would open negotiations with other direct-to-home providers such as Pacific Cable Inc. and GV Broadcasting.

Under the plan, the joint venture between PLDT and Echostar will provide clients with home antennas. It will also supply more than 2,000 video and audio channels. With INQ7.net

Glo & Marcos

There's The Rub : Martial law

Conrado de Quiros dequiros@info.com.ph
Inquirer News Service

TODAY is the anniversary of martial law -- a fact that has taken on exceptional importance notwithstanding that it isn't the 25th or 50th but the 33rd. I know that because I've gotten a number of invitations from schools, media groups and NGOs to compare martial law and Gloria Macapagal-Arroyo's rule. That very formulation suggests people see a basis of comparison between the two. I doubt I was invited to show the contrast between them.

There is much ground for comparison. At the very least, both rules are based on an outright lie. Ferdinand Marcos lied about everything, including the date when he declared martial law. He did not declare martial law on Sept. 21, 1972, he did so on Sept. 23, 1972. Sept. 21 was a Thursday. Marcos declared martial law on midnight the following day, Friday, technically the 23rd, Saturday. The reason for it being to prevent the activists and the opposition from taking to the streets or organizing anything to oppose it. Things grind to a halt in this country on weekends and Christmases.

Marcos subsequently antedated it to 21 because of one very interesting thing. He believed in the magical properties of 7 and its multiples, or at least that it brought him luck. Well, there is no arguing against history: He ruled for 14 years under martial law. Lucky for him, unlucky for the country.

Ms Arroyo's rule is also based on a lie, or a series of lies. The first is that she deserved to replace Joseph Estrada morally, if not legally. Unlike Cory Aquino who strode in the front lines in the fight against Marcos, Ms Arroyo hid under the bed, to use the late Louie Beltran's famous phrase. The second is that she promised not to run, which needs no further comment. And the third is that she won the elections. "Hello, Garci" proves otherwise. That phrase, which encapsulates a whole constellation of meaning, will not go away; it will hang on Ms Arroyo's head throughout her life, or rule. Which is probably one and the same: She can no longer live without power, a thing she shares with Marcos, or even surpasses him in, which bodes apocalypse for this country.

That, quite incidentally, makes her worse than Marcos. Marcos at least got voted into office twice, the first when he beat her father, Diosdado, and the second when he beat Serge Osmeña's father, Sergio Jr. Marcos was still president when he declared martial law, albeit one whose term was ending at the end of the following year and he was constitutionally barred from running again. The wonder of it, as I've said before, is that we've been brought to this living hell today by someone who was never elected president of this country.

Marcos had no right to rule after 1973. Ms Arroyo had no right to rule -- legally as well as morally -- after May last year. Their rule was/is a lie.

For those who keep asking whether Arroyo can, or will, declare martial law, wonder no more. She has declared martial law, if unofficially, if a thinly veiled version of it. The bottom line there is: Martial law was a palace coup. Arroyo's continued existence is a palace coup.

Both rules were/are overwhelmingly unpopular. Their methods of enforcing their palace coups vary in some parts but are the same in others. Marcos used two things to prop up his rule. The first was naked force, in the form of the military. The second was law, or the kind of law based on its letter and not on its spirit. Indeed, the kind of law where the letter kills the spirit. Marcos himself was a lawyer and relied on legalism to give the most illegal, or illegitimate, act a veneer of justifiability. Marcos had the executive, the legislature, and the judiciary in his pocket. Ms Arroyo has the executive, or what remains of her Cabinet, the House of Representatives if not the entire Congress, and the judiciary in her pocket. Marcos was the law unto himself, Ms Arroyo is the law unto herself.

There is a precedent for the House of Representatives killing the impeachment bill, which is the Constitutional Convention approving Marcos' Constitution. Marcos re-convoked the Con-Con immediately after martial law (the pre-martial one had proven intractable) and its delegates promptly yielded to his wishes. The only difference is that Marcos relied more on the stick than on the carrot to make the Con-Con give him what he wanted. Ms Arroyo relied more on the carrot than on the stick to make the House give her what she wanted. She just bought them all to hell. Or most of them, my thanks go to those who stood their ground, amid the swirl of greed around them.

Marcos' illegitimate rule (after martial law) was essentially mob rule hiding under the mask of legality. He and Imelda pretty much did as they pleased, backed up by a cabal of generals, cronies and petty bureaucrats drunk with power, but with the courts to clean up after them. Ms Arroyo's illegitimate rule (after May 2004) is essentially mob rule hiding under the mask of legality. Arroyo and Jose Pidal pretty much do as they please, backed up by a cabal of generals, cronies and chimpanzees in striped suits, also called congressmen, drunk with power, but with the Firm to clean up after them. You now even have Pidal crowing that the way Pacquiao TKOed Velasquez was the way the House TKOed the impeachment bid. Like I said, drunk with power.

But the biggest similarity of all lies in the character of Marcos and Ms Arroyo themselves. I recall something I wrote last year before the elections in reply to a pro-Arroyo voter who complained bitterly about my comparing Ms Arroyo to Marcos. Surely, she said, I knew in my heart that wasn't true. Surely, I replied, I knew in my heart it was so. Today, surely, I know in every part of my anatomy it is absolutely so. We do not end this now, we will not see the end of Ms Arroyo, not even after 2010.

We will also not see the end of decent Filipinos dying from sheer apoplexy.

Will the real GMA please stand up?

‘On VAT, will the real GMA please stand up?’

The Senate “will waste no time” in considering any
House resolution that will seek the deferment of the
imposition of the value added tax on oil and power,
Sen. Ralph Recto made this assurance today.

“Tax bills must originate from the House. Once they
will send it to the Senate, our action will be
prompt,” Recto, chair of the Senate ways and means
committee, said.

Defer till  end 2006 ?  

Recto said the Senate may even propose a longer
deferment period, “not just until June 30 next year as
proposed in a House resolution, but even to end of
2006 or to middle of 2007.”  

“Some of my colleagues are, in fact, asking: ‘Why not
December 2006, instead of June 2006? Some are taking
the position that the nine-month reprieve until June
is short,’” he said.

Recto said nobody can predict that oil prices will go
down in June next year. “What gives those who were not
able to predict that oil prices will rise to this
level now the confidence to say that oil prices will
go down nine months from today?”

Recto admitted that “there’s even a bloc in the Senate
that wants to do away with any VAT increase, a
position that we will have to contend with, and if
such becomes the majority opinion, must be respected.”


Bill , not a resolution

Recto said legal experts in the Senate have expressed
reservations as to whether a simple resolution can
stop the effectivity of components of the new VAT law.

“Others contend that it should be a bill considering
the fact that the new VAT law cuts or scraps the
excise tax on certain types of fuel as well as the
franchise tax on electricity.  If we will just defer
VAT on these products without correspondingly
postponing the cut on the excise tax, the result will
be a revenue loss for the government,” he said.

Make up your mind

This, as Recto urged President Arroyo to make up her
mind whether she wants the imposition of VAT or not,
“following her confusing statements in New York where
she see-sawed between VAT rejection and VAT
affection.”

“To stop this guessing game, the President should
certify the passage of a law deferring the
implementation of VAT, if that is what she wants,”
Recto said.

“Congress is finding a hard time deciphering
Malacanang’s message on VAT. It seems that it has one
message for the market, which is to stick to VAT, and
one for the masses, which is to junk it,” he said.    
                                                     
                                         

“Will the real GMA please stand up?” he said.        
                                                     


GMA boys for VAT on power, oil  

This as Recto belied President Arroyo’s statement that
the administration did not push for a VAT on power and
fuel.

Recto said Senate records would bear the fact all the
presentations of the Cabinet men she sent to the
Senate declared the administration’s preference “for a
higher and a wider VAT, meaning they want all the
exemptions lifted and at the same time increase the
rate.”

“It’s on record. They were never shy in asking for a
VAT on power and oil, and to raise the current VAT
rate on covered goods and services to 12 percent,
simultaneously.  Under oath, they pleaded for these.
Their direct testimonies on these matters fill seven
pages,” he said.  (see attached Chronology of Events)

“For months we were pestered to pass this measure.
When we tried to temper their proposal we were given
all kinds of warning, including a doomsday scenario
for the country,” he said.

House wanted it, too

Recto likewise disputed reports that applying the VAT
on power and fuel was not in the House bill that was
sent to the Senate.

“Albeit on a lower rate, the House version imposed a
VAT on fuel and power. It is incorrect to say that the
House did not even contemplate on including the two on
the VAT net,” he said.

GMA veto  

Recto said the President could have selectively vetoed
the VAT bill when it was brought to her table for
signature if she was not comfortable with them.

“She had that power. She could have excised provisions
she found objectionable. After all, this was her bill.
This was not passed upon the insistence or the
initiative of the House or the Senate. We passed this
grudgingly,” he said.

Senate as scapegoat  

Recto believes that the Senate is “being set up as a
scapegoat for VAT, when what it only did is  to lessen
its impact on consumers.”

“Taxation is not a higher-is-better game. When it
comes to taxes, we do not outbid the executive. The
role of the legislature is to temper, to limit the
taxing appetite of the executive,” he said.

“A tax measure is always an administration measure,
acted on the behest of the executive which will, after
all, enjoy the collections. The VAT was passed based
on the specs given by the administration,” he said.

“This VAT is the administration’s baby. But now
they’re disowning it, denying it parentage. They’re
giving it up for adoption,” Recto said.

Pre-Need Scams

SPECIAL REPORT
Pyramid scams thrive in pre-need industry
Daxim L. Lucas and Elizabeth L. Sanchez
Inquirer News Service

(Second of a series)

SENATOR Manuel Roxas II believes that it is almost impossible to distinguish some pre-need firms like College Assurance Plan Philippines Inc. (CAP) from companies engaging in pyramid scams.

Having waged a campaign against pyramiding and "Ponzi" schemes when he was secretary of trade and industry, Roxas knows whence he speaks.

"Some pre-need firms are basically pyramid operations," said the lawmaker, who won public office on a consumer advocacy platform. "The bulk of fees paid by new subscribers are used to pay company obligations that are coming due."

In the case of CAP -- in a scheme mimicked by many industry players -- Roxas said only 10 percent of clients' subscription fees are deposited in trust funds for the first two years of the policy. These funds supposedly are managed by independent trustee banks.

Over the next five years, only 50 percent of clients' payments are deposited with the trustee banks. Everything that is not deposited as trust funds are used for the firm's operating expenses.

"Whatever isn't deposited is used to pay off maturing liabilities of the older policy holders," Roxas said. "This is using OPM [other people's money]. This is really the definition of 'kiting.'"

To remedy this situation, Roxas has filed a bill aimed at better regulating the pre-need industry and defining accounting standards that are all too loosely interpreted by companies to cook their books.

Is accounting really killing the pre-need industry?

CAP seems to think so. It has been the most vocal among pre-need firms about how the new set of rules adopted by the Securities and Exchange Commission (SEC) is hurting its business.

In its petition for rehabilitation filed with the Makati Regional Trial Court, CAP claimed that after operating its business for the past two decades, the industry found itself in a bind after the SEC suddenly changed its regulatory guidelines governing pre-need companies. This was aggravated by a regime of uncontrolled tuition fee increases brought about by government deregulation in the early 1990s.

CAP argued that the tighter accounting policies "came about after serious and manifest attempts" failed to place the pre-need industry under the jurisdiction of the Insurance Commission through legislation.

CAP claimed that what added salt to the wound was the imposition of the Pre-Need Uniform Chart of Accounts (PNUCA) in 2002 as a standard for accounting and reporting of finances and liabilities for pre-need companies.

With the PNUCA in place, pre-need educational and pension plans were no longer treated as investment contracts but as insurance contracts, subject to the Actuarial Reserve Liability (ARL) scheme.

The ARL requires pre-need firms to have reserves as of a present cut-off date to match future liabilities in all existing and lapsed plans.

CAP argued that plans do not mature simultaneously in the immediate future. It added that change of rules -- without proper notice and consultation, it claimed -- in the middle of the game made it nearly impossible for a pre-need firm to meet SEC's requirements.

Worse, CAP's dealer's license and permit to sell were suspended last year due to what it claimed was a "theoretical" trust fund deficiency that was due to the application of the PNUCA.

"It is the insurance companies that largely benefited from the strict impositions of the SEC on pre-need companies like CAP," the company said in its court filing. "Why would a genuine Filipino invention like educational pre-need be allowed to suffer or be extinguished when it has helped fulfill thousands of parents' dreams to send their children to college?"

CAP argued that the SEC should have applied the International Accounting Standards 39, which classifies pre-need education and pension products as investments. PNUCA, it claimed, was patterned after accounting rules for insurance companies.

Much ado over ARL

Much ado has been made over the Actuarial Reserve Liability, a fundamental calculation that takes a snapshot of a pre-need company's liabilities to plan holders at a given point in time.

Some pre-need firms have blamed the ARL for reflecting a supposed weakness in their ability to pay plan holders. CAP, for one, has strongly assailed the calculation, saying it is not a reliable estimate.

The ARL is the present value of projected future liabilities of a pre-need company as determined by an expert called an actuary. The estimate is based on a "discount rate" that must not exceed 80 percent of the interest rate for the longest maturing Philippine government security traded over the previous three months.

The main indicator of a pre-need company's financial health is a comparison of its trust fund versus its ARL. If the ARL is greater than the trust fund assets of a pre-need firm, it means the company does not have enough assets today to answer for the future value of its plan holder liabilities. In theory, the firm is headed toward bankruptcy.

Roberto Manabat, the Securities and Exchange Commission's general accountant, explains that pre-need companies, in their contract with plan holders, promise to pay benefits in the future.

Under present accounting practices, pre-need companies record income as they collect premiums," Manabat said. "For proper matching, the build up of the ARL should be expensed. If no ARL is recognized, the income that may ultimately be issued as dividends to stockholders will be overstated."

While some pre-need firms point out that the ARL is an unreliable estimate, Manabat said, a lot of figures in any company's financial statements are estimates and still provide the best insight to its health.

Philippine Dream

Youngblood : European lessons

Theresa A. O. Esteban
Inquirer News Service

I LEFT Manila in October 2004 to study in Europe for one year. I was excited about the trip since it was the first time I would be living alone, without my mom and dad, my siblings and my dogs.

The day I arrived in Rotterdam, I immediately felt at home. It was so very much like the Makati or Ortigas business districts that I thought I wouldn't feel anything different. But while Rotterdam is one of those busy cities bustling with activity during the day, unlike Manila where the night likewise becomes as busy, it finitely goes to sleep. Although there are clubs, bars and pubs, it is not the same as either Makati or Manila's Malate district at night. Makati, Malate, Timog Avenue and the Libis area come alive at 9 p.m. when the happy hour begins and throb with life until the wee hours of morning.

Studying abroad is a true test of one's character, faith and stamina. I came to Holland wearing rose-colored glasses. Seeing some things for the first time, being thrown into a diverse mix of culture and values, especially in my international course, which has 74 students of 26 different nationalities and 101 extreme personalities, I said to myself this was going to be a great learning experience.

I studied in a school that also had American students. When I went to graduate school, I had German, Nepalese and Italian classmates. My mom trains and teaches foreign students, and I grew up meeting her students in functions and gatherings. As an adult, I have worked with Aussies, Americans, Kiwis, Britons and Germans. The first Dutch friend I had was a guy who worked with my mom in a training seminar for Indian participants. He wore funny Sesame Street socks and he gave me a pair. So, I thought that it would not make any difference if I had so many people of different nationalities for classmates.

I have a strong faith and I am levelheaded, but when St. Augustine said that man is innately good, he had not heard about our class.

My first three months was a roller-coaster ride. I got homesick from time to time, but I amused myself by going out with friends and attending parties whenever I could. Since I have had a sheltered life, I learned to trust other people and believed everyone to be my friend.

But soon the differences started to kick in. At first I thought that their seemingly brusque manner had to do with the language. But after three months, I knew it was more than that. When I started to complain to friend, who happens to be a priest, he told me the honeymoon was over.

Until then I didn't know that like snakes, people molt. I am quite tolerant. For a time, I tried to put to good use my training in psychology in an effort to understand them. The exercise led me to realize where they were coming from, but that still did not justify their actions and attitude toward other people. I became convinced that the problem was not being caused by their inability to carry on a proper discourse but by some basic character defect. We have colleagues who are not really very refined in their language but still they don't sound insolent. And so I said goodbye to tolerance.

I don't regret coming here. I love Holland. It is a beautiful country and the Dutch (or most of them, anyway) are a nice and kind people. I have two great Dutch friends with whom I can discuss almost anything, and I know a Dutch family I can always rely on. I am greatly indebted to the Dutch government for giving me the opportunity to study here.

In the past months, I have learned more about life and people. I have learned that sincerity does not always get repaid, and that the only person you can really count on is yourself.

I have also learned that friends should be carefully chosen. It is hard when you get hurt by so-called friends while you are away from home and you do not have a shoulder to cry on. But if you do find friends, take care of them and love them for they can be surrogate family.

Finally, I have learned to fight back. Asians are said to be submissive. There may be some truth to that, given the many centuries we had been colonized. But sometimes other people mistake our warmth and politeness for submissiveness. It is hard for us to be brutally frank, since we don't want to hurt other people's feelings. But when push comes to shove, we know how to fight back.

Certainly absence has made my heart grow fonder of Manila and the Philippines in general. Understanding my colleagues' behavior and where they are coming from has made me realize how lucky I am to grow up in a happy and peace-loving society. I feel proud when colleagues and professors from different countries refer to our People Power revolution as a true example of an empowered society and a peaceful revolution.

Studying in a different country has made me appreciate more my culture and my upbringing. I don't need to be loud and rude to assert myself. I know what I am capable of achieving. The society where I come from has already given me the opportunity to enrich myself as a person and as a professional. It has already given me security.

Studying in Holland has also made me feel proud of being Asian, seeing how my Asian colleagues can be so good and artistic in their presentations, how fast they can calculate financial and economic stuff, how good they are with computers, and most especially how good they are as friends.

Living in Holland has also made me dream of the time when the Philippines will become another Asian tiger. Holland had humble beginnings, but is now wealthier than many of its bigger neighbors. Maybe the Philippines cannot leap right away to the status of an Asian tiger, but we can be one of Southeast Asia's more progressive countries.

My stay here has given me the opportunity to work on a development project in the Philippines. I have very high hopes that my project will work and that I will finally realize my dream of helping the country that I love.

My experiences so far have left me with a bittersweet taste, but they were still very enriching.

Theresa A. O. Esteban, 28, is a student in urban planning and is enrolled at Erasmus Universiteit Rotterdam, the Netherlands.