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.

CAP's Debacle

SPECIAL REPORT
CAP: From pre-need's poster boy to whipping boy
Daxim L. Lucas and Elizabeth L. Sanchez
Inquirer News Service

 

COLLEGE Assurance Plan Philippines Inc. (CAP) is the biggest and most successful pre-need firm in the country's history.

It is also well on its way to becoming one of the country's biggest corporate failures.

In its death throes, CAP threatens to drag down with it a multibillion-peso industry, more than 40 pre-need companies, and the financial fortunes of millions of clients who hinged their futures on the promise of guaranteed returns.

To be sure, the company has performed well in the past, having paid out an estimated P13.9 billion in tuition benefits since its inception in the early 1980s. But it has since fallen on hard times.

Once a symbol of financial security, CAP's flagship product--the "open-ended" educational plan, which guaranteed matriculation benefits regardless of future tuition hikes--has fallen into disrepute. Schools no longer accept company-issued checks as tuition payments. The firm is insolvent, and its top officials have recently been charged by regulators before the courts.

Critics of the pre-need industry--and an increasing number of dissatisfied clients--now believe that early success has transformed successful financial schemes into financial scams.

Early warning
One such critic is banker and financial reform advocate Evangeline Escobillo.

As an officer of the Actuarial Society of the Philippines (ASP), she said that CAP's troubles, along with that of the pre-need industry, were predicted as early as the mid-1990s.

"As actuaries, we could tell even back then that something was very wrong," she said in an interview last week. "We had a hunch."

Having dealt with the mathematical aspects of the insurance industry in the past, Escobillo and some ASP members volunteered to review the finances and accounting practices of the pre-need industry.

A close cousin of the insurance industry, the pre-need industry was then "red hot." The economy was beginning to take off in the 1990s, disposable income was rising, and clients were buying educational plans in droves. More importantly, the real estate industry was booming, and high returns on investment were becoming the norm.

Even during the boom times, Escobillo said a cursory examination of industry practices already revealed shocking weaknesses.

"These companies' business models were counting on annual returns of 18 percent," she said incredulously. "That was very optimistic. It was not sustainable."

More importantly, her group discovered that the entire pre-need industry was using aggressive accounting practices which understated liabilities and tended to present a rosier financial picture than warranted.

Many owners and top officials of pre-need firms were content to mimic CAP's practices, not realizing that they were fooling themselves and their clients, Escobillo explained.

"Everyone else adopted it," she said. "No one bothered to question the system."

Ticking time bombs
The financial troubles that have befallen at least three major pre-need firms since last year merely highlighted in very harsh terms that the old business model of "open-ended" plans was a disaster waiting to happen.

The Federation of Philippine Pre-Need Plan Companies (FPPC), the umbrella association of the country's more than 40 pre-need companies, now admits that their old business model was bound to fail.

An oversight committee formed by the Securities and Exchange Commission (SEC) last year to track the financial health of embattled CAP described the firm's products as ticking time bombs.

These open-ended plans had a hidden flaw: it committed the firm to a financial obligation that had no ceiling (a deregulated tuition environment) amid increasingly limited returns on investments.

How did this scheme evolve?

In 1980, lawyer and pre-need executive Enrique Sobrepe¤a Jr. formed CAP and introduced the education plan after realizing that savings of the average family were often insufficient to send children to school.

His business model capitalized on the dream of every Filipino family to send their children to college.

Packaged as an educational plan, CAP pooled plan holders' premium payments and, with the aid of trustee banks, invested them in high-yield assets and securities. The success of the scheme was contingent on CAP's investments appreciating faster than the cost of college education.

It worked-but only for a while.

By the mid-1990s, the industry's business model was coming under intense pressure as the government deregulated the tuition environment for colleges and universities. The outbreak of the 1997 East Asian financial crisis signaled a sea change for CAP and the rest of the industry.

According to Escobillo, many pre-need companies like CAP tried to cover their ballooning liabilities and benefit payouts by simply selling more educational plans.

"The proceeds from the new sales were used to service maturing obligations," she said. "This is how pyramiding scams operate."

As with fly-by-night pyramid scams, the financial house of cards was bound to collapse, leaving many clients holding the bag.

Dashed hopes
Pietro Azurin, an electrical engineer whose son is a sophomore at a prestigious university in Metro Manila, bought his CAP education plan in the 1980s for roughly P14,000.

Azurin said he latched on to a CAP agent's sales pitch: that the firm will take care of sending his child to a school of his choice. He felt that he was buying more than a contract. He was trying to ensure a good future for his son through education, especially when old age ends his earning capacity.

"Ngayon, sa araw na inaasahan mo, wala na. Kailangan mag-umpisa ulit (Now it's no longer there in your time of need. We need to start over)," Azurin said, admitting that ordinary plan holders like himself did not see the symptoms of the industry's near collapse coming.

Azurin has now borrowed money from loan sharks and friends to pay for his son's enrollment and mid-term exams, as schools clamp down on students who fall behind on tuition payments.

He also pins his hopes on a promissory note from CAP which has pledged to reimburse him and other plan holders by next month for the advances they made for their children's education.

"Sinabi nila sa amin na huwag kami bibitaw, na pahabain ang pasensya. Pero malapit na maubos ang pisi namin (They told us not to let go, to be patient. But we're almost at the end of our rope)," Azurin said.

He complains about being "dribbled" between CAP and the SEC after airing his complaint to both parties. For now, all he can do is wait, after the SEC made him and other plan holders sign a letter to the CAP president seeking an explanation for the firm's woes.

Like millions of other clients of CAP and other pre-need firms, Azurin wants to know what went wrong. He wants to know if regulators were negligent. He wants to know what he can do to recover his hard-earned money and to make the company with sweet-talking salesmen honor its obligations.

Power Rates Hike

As I See It : Napocor petitions for yet another rate hike

Neal H. Cruz
Inquirer News Service

WILL OUR MISERIES NEVER CEASE? AFTER the expanded value added tax-which, upon its implementation beginning this month, will trigger a chain-reaction of increases in the prices of practically everything-we will be hit by another wallop. The power rate will increase-again-as if it is not yet high enough.

While the whole nation's attention was riveted to the political crisis, the National Power Corp. took advantage of the distraction to petition the Energy Regulatory Commission for yet another 71-centavo rate increase. The ERC already granted, just late last year, a provisional authority to Napocor to increase its rates by an average of P.9798 per kWh. In this latest petition, the power firm refused to go into the details as to why it is asking for another increase. It just said the increase would cover the cost of "oil and other operating expenses" of the ailing state-run firm.

On top of the rate increase, Napocor also managed to quietly get another $400-million (more than P2 billion) foreign loan. Of this, $300 million was obtained through the issuance of six-year floating rate notes. The remaining $100 million, secured only last week, completed the financial package. The fresh borrowings are all guaranteed by the government. They will set back the privatization of Napocor as mandated by the Electric Power Industry Reform Act (Epira).

Napocor is already the biggest contributor to the national budget deficit. It is expected to incur another P31 billion in losses this year, in spite of the fact that the Philippines is already running neck and neck with Japan, Asia's richest nation, as the countries with the highest power rates in the region. The Philippine government has already absorbed P200 billion (repeat, billion) of Napocor's debts, pursuant to the Epira. Thus, the taxpayers will have to pay for Napocor's debts, old and new, on top of higher electricity rates.

But while the government is quick to implement the Epira provision absorbing Napocor's debts, it is very slow in implementing the provisions to privatize this biggest of the government's white elephants.

Where does the money go? Here is only one example: A joint congressional panel investigating Napocor found out last year that thousands of Napocor officials and employees were paid a total of about P12 billion in retirement packages in preparation for the firm's auction sale.

Of the amount, P119.4 million was given to 25 executives and senior officers. After getting their generous retirement benefits, these top management executives were then re-hired at similarly fabulous salaries.

How can the government ask the people to pay higher taxes when it is squandering Napocor's dwindling funds to graft and corruption, in bribes to congressmen and mercenary witnesses, and for the expenses of camp followers made to travel abroad just to clap during GMA's speeches?

Why the government is giving priority to Napocor's fresh borrowings rather than to its privatization, as provided by the Epira law, is still a mystery. Privatization will, in fact, help the government raise the funds needed to pay Napocor's debts and reduce government borrowings as well as the tax burden on Filipinos. Privatization is one way to stop the financial hemorrhage brought about by new borrowings and to arrest the government's worsening fiscal condition.

New borrowings, on the other hand, will add to the already unmanageable debt burden. Who in his right mind will buy Napocor with its gargantuan debts?

Adding insult to injury is the jubilation of the Bangko Sentral over the new borrowings, when it should be sorry for them. Why? The latest borrowings, the Bangko Sentral boasted, "boosted the country's gross international reserves to an all-time high of $17.852 billion!" Adding more to our debt burden, that's something to be proud of?

Budget Secretary Romulo Neri, the guy who has started refusing to sign checks because there are no more cash to cover them, was more circumspect when he correctly pointed out that Napocor's debt is taking its toll on the government's fiscal position, with the bulk of government expenditures during the first seven months of this year going to interest payments alone. The bitter truth is, the government has no clear picture of what to do with the ballooning budget deficit and foreign debts. And Napocor is already the biggest single contributor to this deficit.

The Philippine government is already in a debt spiral-borrowing more to fund interest payments alone-not even the principal of maturing loans-thus making our national debt bigger and bigger, with no sign of how and when the spiral will end. This is the straight path down to bankruptcy.

The government's solution is simplicity itself: squeeze more taxes out of the people. But the Filipinos, among the poorest people in the world, have no more to give. They can't even afford their daily bread; where will they get the taxes to pay the government? They will be like the goose that lays the golden egg, which the greedy giant forced to lay more and more golden eggs so that it died.

I think Congress, which has the power of oversight on these borrowings, should look into the picture again and see where the money is going or has gone. It is imperative that Congress look into this mess because the executive branch has shown that it cannot stop the financial hemorrhage but, in fact, contributes to it. Just look at GMA's latest secret deal-the Venable lobby contract that will cost the taxpayers another P4 million a month, another expense they can no longer afford.

Who knows how many of these secret deals are still out there undiscovered?

PAL Blues

Public Lives : Surviving PAL country

Randy David randolf@pacific.net.ph
Inquirer News Service

OUR COUNTRY IS AN AIRCRAFT, AND ITS NAME is Philippine Airlines. We are its patient passengers. This plane is long-delayed for a host of reasons-a bomb threat from nowhere, a malfunctioning engine that has seen better days, chaotic procedures, and a crew that is too timid and too uncaring to explain the situation to the passengers.

I did not realize how uncannily close this parallelism was until I took PR 812 from Davao to Manila the other day. The flight was supposed to leave Davao at 2:15 p.m. on Sept. 16. It was able to take off only at 8:50 a.m. the following day, Sept. 17. The passengers were mostly teachers, priests and nuns who attended a convention of Catholic schools. I flew into Davao the previous day for a lecture at the University of the Philippines in Mindanao. I thought of squeezing in some birdwatching while there, and so I had myself re-booked for a mid-day flight the following day. It was a mistake.

Twenty minutes after boarding should have begun, a voice in the PA system curtly announced that further security procedures needed to be conducted. The plane was pulled away from the airport terminal. The cargo bins were towed to the tarmac and their contents spread out on the cement floor. From the large glass panes of the waiting lounge of the new airport, we spotted a couple of sniff dogs that were put to work. It meant only one thing-they were looking for bombs. But this caused hardly any alarm, only mild grumbling over a possibly long delay.

One of the dogs appeared to stage its own revolt. As it was led to an endless line of cartons containing the durian fruit, the dog suddenly broke loose from its trainer and circled the whole cargo over and over like a horse gone mad. We all laughed and took vicarious delight in this amazing act of rebellion. Later, passengers with checked-in baggage were asked to go down to the tarmac to identify their baggage and to drag it to the cargo bins. Two small vans shuttled back and forth to ferry the passengers. I was pleasantly surprised by the extraordinary serenity with which my fellow passengers complied with this task.

Finally, at almost 6 p.m., boarding was announced. Before this, no PAL personnel bothered to show up at the waiting lounge; neither was there any explanation offered by anyone for the extended delay. Inside the plane, more bad news awaited us. One of the plane's engines failed to start. At around 7:30 p.m., we were asked to return to the airport lounge to wait for further instructions. No such instructions came. Some passengers decided to withdraw from the flight, and asked that their baggage be off-loaded. It was supper time. This was a nation left to fend for itself.

At 9 p.m., a re-boarding was announced. Patiently, we all made a line for the door. Everyone was either calling or texting someone who was waiting at the Manila terminal. I had run out of battery charge and all I could manage was a short message to Karina, my wife, telling her that I would miss the birthday dinner for our daughter Kara. This wasn't as bad, I said, as missing a connecting flight to San Francisco or to Dubai where some passengers were headed. She was all praise for my seeming patience and coolness. At 10 p.m., the captain announced that the same problem with the engine had recurred.

At that point, more people decided to leave the plane. They saw the engine malfunction as a bad omen. Once more, cargo was off-loaded from the plane. Snack packets containing peanuts and some jello were distributed. This was our dinner. Seeing this meager fare, one passenger opened a large box of pastries and shared the goodies with everyone. Another passenger offered a gallon of rare durian ice cream. It is funny and heart-warming. Abandoned by their leaders, Pinoys take stock of what they have and share it.

At a little before 11 p.m., Captain Rocha announced that the plane was all right and it was safe to fly, but that the baggage of those who were quitting the flight had to be unloaded. This was taking time. We were told that the PAL terminal in Manila would already be closed by the time we landed. There was no choice but to abort the flight. All the baggage had to be off-loaded and collected by the passengers. The same plane would leave at 7:30 the next morning.

That was when I began to lose my cool. I sought out and confronted the PAL manager in Davao, a Mr. Arturo Balaga. Unknown to many of us, he was in his office all this time, but not once did he bother to come out to explain the situation to the passengers. He said that PAL could not offer accommodation because all hotels were fully booked. However, he said PAL would reimburse those who would find a place to stay for the night. It was almost midnight.

Weary from the long wait, children began to fret and the elderly were moving around in a daze, wondering where they might deposit their suitcases and fruit boxes. One of the passengers, the writer Sylvia Marfori, approached passengers to ask if they needed a bed for the night, offering to put them up in her own home. She gathered more than a dozen people, myself included. She called up a friend of hers, Min Ponce-Millan, and asked her to accommodate more people in her apartelle. That's how we survived PAL's deceitful negligence.

The PAL manager had lied to us; some passengers found vacant rooms in various hotels. But many slept with no blankets in the cold iron benches of the waiting lounge. PAL's in-flight crews are its saving grace, but the indifference of management cancels everything they do. I found new friends on this trip, and discovered a trait that makes this nation survive despite its leaders-the instinct for generosity of its people.

School Droputs

Posted by Yvonne Chua 
PCIJ

HARD times have forced more than half a million high school students and 336,000 post-secondary students to quit school this year, according to Pulse Asia's July 2005 nationwide survey.

In addition, 168,000 elementary students did not enroll this year, the poll showed.

Lack of money for school expenses (40 percent) and tuition (35 percent) were the chief reasons given for leaving school.  Twenty-nine percent cited the student's refusal to study as reason as well.

PCIJ earlier reported that the dropout problem in high school was especially alarming among boys.

Pulse Asia, which polled 1,200 adults, also found that the controversy surrounding educational plans has resulted in the public's mistrust of pre-need firms.

About 70 percent of families that still don't own a plan say they won't buy one even if they had the money. Of this group, 41 percent say pre-need companies can't be depended on to honor the provisions.

Big pre-need companies like the College Assurance Plan and Pacific Plans have failed to pay many planholders, especially those owning traditional plans, their full benefits.

Pulse Asia said only a tenth of households have at least one family member who has or had an education plan.

 Read Pulse Asia's full report.

Marcos Legacy

Viewpoint : Fire sale

Juan Mercado
Inquirer News Service

"NOT FOR SALE!"

Ilocos Norte Rep. Imee Marcos tacked that shingle on her tattered crusader's credentials after she skipped to Singapore to avoid the impeachment vote. This "failure of judgment" stemmed from love for mother, she murmured.

Marcos reasonably notes that Imelda backs President Gloria Macapagal-Arroyo. Right, greater love than this no woman has than to mortgage a congressional vote to bury dear old dad in Libingan ng mga Bayani [Heroes' Cemetery].

"Not for Sale" is also her mama's slogan. The former first lady told BBC she'd sue a cash-strapped regime if it auctioned an estimated $10 million (P560 million) worth of jewelry. These were seized from the Marcoses after People Power I sent them scampering to Hawaiian exile. "Some are family heirlooms," she explained to The Independent. "I'm praying for their return."

That may put calluses on Madame's knees. Three batches of precious stones were seized. One batch was recovered in Malacañang. Worth $9 million, the Roumeliotes collection was seized in March 1986 from a fleeing Greek national. US customs officers impounded jewels in "32 to 34 Louis Vuitton cases" when the Marcoses disembarked in Honolulu.

Current plans set an auction in Geneva this November, the peak season for jewelry sales there, or May 2006. But experts from Christie's and Sotheby's auction houses are due to assess the stones stashed in the vaults of the central bank.

The trove includes a Persian-style necklace studded with more than 100 carats of pink and canary diamonds. Another bracelet, crafted by Bulgari, has a 30.7-carat stone embedded in the center. That is appraised at $800,000.

"The government has not shown any proof the funds used to purchase them were ill-gotten," Imelda protested to Reuters. But the Presidential Commission on Good Government scoffs that the Supreme Court has upheld the seizures.

"'Tis plate of rare device and jewels / Of rich and exquisite form, their values great, /And I am something curious, being strange / To have them in sale stowage," Shakespeare notes in "The Comedy of Errors."

As in other Imelda sallies, there'll be varied reactions to this fire sale. That's guaranteed by what former Prime Minister Lee Kwan Yew called, in his memoirs "The Singapore Story," the Marcoses' "penchant for flamboyant frivolity in a country of desperate poverty."

Filipinos have "a soft forgiving culture," he wrote. "Only in the Philippines could a leader like Ferdinand Marcos, who pillaged his country for 20 years, still be considered for a national [hero's] burial."

"Imelda had a penchant for luxury," Lee adds. "When they visited Singapore, they came in two DC-8s, his and hers... Like Hollywood melodrama, these could have happened only in the Philippines."

"Even the devil can participate in the auction," says Presidential Commission on Good Government (PCGG) Commissioner Ricardo Abcede. "She can bid for the jewels in an open market."

The PCGG, in fact, under the late graft-buster Haydee Yorac, won a Supreme Court decision that saw $683 million, squirreled in Marcos shell foundations abroad, returned to the national treasury.

Others will recall Supreme Court decisions that found disparity between the declared income of the Marcos couple and their properties. Some will dust off the old martial law wisecrack: "Imelda is into the mining industry. This is mine. That is mine. All is mine."

This controversy reminds me of the time I drove a United Nations colleague from the Termini in central Rome to Leonardo da Vinci Airport. As International Labor Organization economist Lim Lin Lean buckled herself, she cracked, "I didn't know you Filipinos were that rich!"

Seeing the puzzled look on my face, she explained. In her spare time, she gawked through the jewelry displays at Bulgari. Suddenly, store employees began shooing everybody out.

"It was your first lady, Imelda Marcos, who was shopping. Proletariats like us were locked out," she laughed.

"Well, diamonds are a woman's best friend," I weakly countered.

"Those of us in the cheaper sets are told to clap. The rest rattle their jewelry." But this is farce that sears. The yardstick for man's worth is measured in carats, not in his God-given nature.

"Next to a spirit of discernment, the rarest things in the world, are diamonds and pearls," Jean de la Bruyere once wrote.

Shaped by Ignatian discernment, held by Japanese captors and afflicted by World War II shortages, this Jesuit seminarian wrote about the carat-less wealth. Here are excerpts from the 1943 (?) "Jewels of the Pauper" written by Horacio de la Costa, SJ:

"We are a remarkably poor people ... even in riches of the spirit… No Shakespeare, no Cervantes has yet been born among us to touch, with immortality, that in our landscape, in our customs, which is most vital, most original, most ourselves....

"But this pauper, among the nations of the earth, hides two jewels in her rags. One of them is our music. We are one people when we sing....

"We are again one people when we pray. This is our other treasure: our faith. It gives somehow to our little uneventful days a kind of splendor, as though touched by a King....

"These are the bands that bind us together. These are the soul that makes us one... As long as there remains one mother to sing a lullaby and one priest to offer God to God, this nation may be conquered, trampled upon, enslaved, but it cannot perish. Like the sun that dies every evening, it will rise again from the dead."

Arangkada for September 14, 2005

 

       LACSON SUSPEK?

 

Si Sen. Panfilo Lacson ang usa sa tulo ka opisyal sa gobyerno sa Pilipinas nga gipasanginlang maoy nakadawat sa sekretong mga dokumento nga nakuha sa giingong pagpangespiya sa duha ka Pinoy nga naposasan ug nakiha na sa Federal Bureau of Investigation. Silang Michael Ray Aquino, 39, batabata ni Lacson, ug FBI analyst Leandro Aragoncillo, 46, naturalized US citizen, giingong nasakpan nga nagpayuhot og classified nga mga dokumento sa FBI labot sa krisis sa politika sa Pilipinas.

Si Aragoncillo nasakpan sa modernong teknolohiya sa paniktik sa FBI nga nipasa sa sekretong mga dokumento ngadto ni Aquino gikan sa Pebrero hangtod sa Agosto ning tuiga, kanus-a nisulbong pag-ayo ang Gloriagate scandal sa Pilipinas, pinaagi sa text messages sa cellphone ug e-mail messages pinaagi sa Hotmail ug Yahoo.

-o0o-

Wa ilha ang tulo ka opisyal sa Pilipinas nga napadad-an sa classified nga mga dokumento. Pero gidudahan nga ang mga dokumento maoy tinubdan sa pagbisto ni Lacson ug sa ubang lider sa oposisyon nga ang US government mas unang nahibawo kay sa atong mga politiko sa giingong panag-istorya sa telepono nilang Presidente Arroyo ug kanhi Comelec Commissioner Virgilio Garcillano.

Samang mga dokumento ang gitoohang tinubdan sa kasayuran sa kaandam sa FBI pag-authenticate sa Garci tapes atubangan sa pagkuwestiyon sa Malakanyang sa katinuod sa recording. Pero sa kapulihay wa na manghilabot ang FBI kay ang oposisyon ug ang Malakanyang niuna pagdangop sa ubang mga eksperto sa Australia, New Jersey ug Texas.

Si Lacson man o dili ang utok sa nabulilyasong operasyon klarong gitumong ni sa paglili sa mga kasayuran nga nahipos sa FBI nga posibleng maka-influencia sa administrasyon ni US Pres. George Bush Jr. pagbakwi sa suporta parang Pres. Arroyo.

-o0o-

Silang Aquino ug Aragoncillo gipriso nga way piyansa. Matod ni US Attorney Christopher J. Christie samtang ang pagpangespiya wa mahilambigit sa terorismo, tinud-on pagukod ang mga dinakpan kay ang ilang krimen nakabuslot sa nasudnong seguridad sa US.

Nasakpan si Aragoncillo sa FBI dihang iyang gikumbinser ang mga opisyal sa imigrasyon paglugway sa visa ni Aquino nga dugay nang napupos. Human gi-alerto sa imigrasyon, gilusad dayon sa FBI ang audit sa computer activities ni Aragoncillo. Nagduda si Christie nga si Aragoncillo klarong nanguwarta ug nisuporta sa pamolitika sa mga nibayad sa iyang serbisyo.

-o0o-

Bisan wa pang mga dokumento sa FBI, naklarong managlahi ang baruganan sa mga opisyal sa US tungod sa pagsaway sa mga opisyal sa US embassy sa Manila batok sa Malakanyang bisan kon ang opisyal nga baruganan sa Washington mao ang pagsuporta ni Presidente Arroyo.

Pero kay wa man kabuylo ang pagpresentar sa mga ebidensiya sa giingong pagtikas sa niaging eleksiyon ginamit ang payola sa jueteng, wa dasiga sa US ang kampanya pagpalagpot ni Arroyo sa palasyo. [30]  leo_lastimosa@abs-cbn.com

Oil Smuggling

Fuel smuggling costing gov't P9.5B a year Michelle V. RemoInquirer News Service
THE Department of Finance and the Bureau of Customs have estimated that the government has been losing about P9.5 billion in revenues a year due to fuel smuggling, Finance Secretary Margarito Teves said.
Of the amount, P7 billion are in the form of lost excise taxes and P2.5 billion in uncollected import duties, Teves said.
"While the Bureau of Customs has apprehended suspected fuel smugglers, the lack of incontrovertible evidence has made it difficult for them to confiscate the products or prosecute the offenders," he said.
Caltex Philippines Inc., at a recent forum on the VAT Reform Law, earlier raised its concern over the growing number of fuel smugglers, which it said were directly competing with their legitimate oil dealers.
The finance department and the customs bureau have come up with a strategy that would help detect whether fuel sold in the market was smuggled, Teves said.
They have signed a memorandum of agreement with the Philippine Institute of Petroleum (PIP), a private sector organization, that will help the government implement a chemical technology in detecting smuggled fuel, he said.
With the chemical technology, authorities will use a certain chemical to mark fuel whose taxes and duties have been paid by the importers.
Under the government's anti-smuggling plan, customs authorities would regularly check the market to monitor sale of fuel. When a fuel does not contain the chemical markings, then they would have reason to suspect that the product was smuggled, the Department of Finance said in the statement.
Aside from addressing fuel smuggling, Customs Commissioner Alexander Arevalo earlier said the bureau had also tapped the assistance of courier service companies FedEx, UPS and DHL to help combat smuggling of other products.
The three companies will serve as third-party informants to help the Bureau of Customs detect smuggled items, Arevalo said. In particular, the couriers, from point of departure, will inform the bureau of the contents of the products they will deliver to the Philippines, he said. With INQ7.net

RPN, IBC For Sale

RPN-9, IBC-13 to be sold jointly Michelle V. RemoInquirer News Service
THE government is studying various options for the privatization of state-owned television stations, with the possibility of jointly selling Radio Philippines Network Inc. (RPN) Channel 9 and Intercontinental Broadcasting Network (IBC) Channel 13, Finance Undersecretary Jay Singson, who is in charge of the government's privatization program, said Monday.
The interagency Privatization Council has decided to offer for re-bidding the financial advisory services for the privatization of RPN-9 so that the service package can include IBC-13, Singson said.
"The financial adviser would suggest whether it would be best to sell the two stations separately or jointly," he told reporters.
The government had declared CLSA Exchange Capital as winning bidder six other advisory firms at the bidding on June 27 for the financial advisory contract for the privatization of RPN-9.
Singson said the bidding process would have to be done again because the government wanted to include IBC-13 in the package, and CLSA had agreed with the decision and had expressed intention to join in a bidding again.
Other bidders at the previous auction were BPI Capital Corp.; Ernst & Young; KPMG, Laya, Mananghaya & Co.; PCI Capital Corp.; PricewaterhouseCoopers; and Punongbayan Araullo.
Singson said the privatization of RPN-9 and IBC-13 would be pushed to next year but the new bidding of the contract would be held before the end of this year.
Reportedly interested in buying RPN-9 are Manuel Pangilinan, chairman of Philippine Long Distance Telephone Co.; Solar Sports of businessman Wilson Tieng; and Mike Velarde, leader of the Catholic charismatic group El Shaddai.

HK's Disney Opens

Disney opens its first theme park in China

Agence France-Presse

HONG KONG -- Disney officially opened its newest theme park in Hong Kong by Chinese Vice President Zeng Qinghong Monday, marking its first step into the lucrative China market.

Some 2,500 dignitaries and guests were on hand, including Hong Kong leader Donald Tsang, Walt Disney Company CEO Michael Eisner and company president Robert Iger.

The ceremony opening the three-billion US dollar park kicked off with a traditional Chinese lion dance in the forecourt of Sleeping Beauty Castle.

The Hong Kong government, which chipped in 1.8 billion Hong Kong dollars of the construction cost and owns a half-share of equity in the project, is hoping the park will spur local tourism and bring in more than 100 billion dollars over the next 40 years.

RP Exports

 

China gives Philippine exports a lift

By Francisco Alcuaz Jr. Bloomberg News

MANILA Philippine exports grew in July at the fastest pace in six months as overseas sales of electronics revived and shipments to China increased threefold.

 

Shipments to China climbed to $567.6 million from $188.9 million, the National Statistics Office said Friday in Manila, bringing them into the range of the Philippines' two biggest markets: Japan at $598.1 million and the United States at $567.6 million. Sales to Japan were flat. Shipments to the United States dropped 23 percent.

 

Overseas sales rose 11.4 percent to $3.46 billion, the Statistics Office said. That compares with 1 percent increases in May and June and was the biggest gain since January's 15.2 percent rise.

 

Rising exports may help President Gloria Macapagal Arroyo's government improve growth in a country where a third of the population lives on less than 60 U.S. cents a day and where more revenue is needed to curb debt that swallows a third of state spending on interest payments alone. Exports make up two-fifths of the $85 billion Philippine economy.

 

"This may help put us back on track as far as the economy is concerned," said Emma Pante, an economist at Rizal Commercial Banking in Manila. "We're benefiting from demand China cannot meet."

 

But the recovery in exports growth may be "shaky" because it is not based on improved competitiveness, Pante said.

 

Arroyo's government says growth may slow this year to less than its minimum 5.3 percent target, from 6.1 percent in 2004, in part because higher prices of crude oil have raised local energy prices, damping demand for some products and services. The Philippines imports almost all of its fuel. The Asian Development Bank cut its 2005 growth estimate for the Philippines last week to 4.7 percent from 5 percent.

 

Electronics exports rose 14 percent to $2.29 billion. That followed declines in the previous two months and a 1 percent increase in the first six.

 

Arthur Young, president of the chip maker PSi Technologies, estimated that Philippine electronic exports will grow 7 percent this year, driven by worldwide demand for mobile phones, flat-screen televisions, iPod-like music devices and new versions of video game consoles. Philippine companies make chips that go into these products.

 

" I don't see killer applications in the market today, but there are a lot of new products like the new Xbox and PlayStation," Young said. "There are new opportunities for driving growth. The second half will be better than the first."

 

Young said first-half growth had been dragged down by Toshiba's transfer to China of its local notebook operation, which produced two million computers a year.

 

Growth may also falter if rising crude oil prices slows world economies, Young said.

People Power

Analysis : A judgment of guilt based on perception

Amando Doronila
Inquirer News Service

THE DISMISSAL of the three impeachment complaints against President Gloria Macapagal-Arroyo by the House committee on justice has rekindled the dying embers of the street-driven movement demanding her resignation.

Following the junking of the complaints, a broad coalition, calling itself Bukluran para sa Katotohanan, or Coalition for Truth, intensified street marches in an attempt to put pressure on the plenary of the House of Representatives that was in the midst of deciding what to do with the quashed complaints and whether to endorse any one of the complaints or a consolidated version to the Senate.

In a march to the Batasan [Legislature complex] yesterday, the coalition, led by former President Corazon Aquino, among others, tried to show it was not a spent force and was now gaining adherents among a wide assortment of organizations, with disparate political and ideological tendencies to back their move to oust Ms Arroyo, either through impeachment or other means, not excluding extra-constitutional means, such as another people power.

Aquino took pains to explain that the march of several thousands was "to show support" for the congressmen signing the complaint. The intensified street action appeared to have been intended to give heart to other congressmen to join the pro-impeachment movement whose fast track had been blocked by the numbers of the administration majority in the House.

Since the filing of the complaints in June and July, the opposition had encountered difficulty in winning the critical support that would bring the number of signatories to the 79 needed to send the case to the Senate. While the proponents of impeachment in the House have failed to collect the 79 signatures, they have succeeded in getting crowds out in the street, where the battle over the ouster of Ms Arroyo has now shifted. One possible explanation for their failure to secure the required number of signatures is that for two months and until yesterday, it was not clear what complaint would be endorsed to the Senate, considering that each of the three complaints contained different sets of charges.

As legal authorities have pointed out, the first complaint filed by lawyer Oliver Lozano alleged, among other things, that the President had been silent about the wiretapped conversations with Election Commissioner Virgilio Garcillano and such silence amounted to "a betrayal of public trust"; and that she lied when she confessed to "a lapse in judgment" when she talked over the telephone with Garcillano about election results.

Fr. Joaquin Bernas, S.J. cited an attempt by the opposition to reinforce and amend the Lozano complaint with accusations of impeding the administration of justice, of concealing ownership of property contrary to law, of tax evasion, of acquiescing in the killing of political dissenters, of approving contracts "disadvantageous to the Republic." This shotgun blast led to the blurring of the focus of the complaint. The omnibus nature of the complaints undermined the main issue raised by the Coalition for Truth seeking the President's ouster for allegedly "stealing" the 2004 elections.

Those driving the movement to oust Ms Arroyo are not clear about what wrong she had committed to warrant her dismissal, either through an impeachment trial or through people power.

Before the people power advocates can win wider public support for their oust-Arroyo movement, they have to stop insulting the intelligence of the public with their ambiguous definition of truth. For example, a group belonging to the Coalition of Truth, the Black and White Movement, said, "We have to make a judgment (on election cheating) on the information available to us -- the transcript of the Garci tapes, the testimony, the maneuverings of both the opposition and the administration, and the political developments as these unfold before us."

This statement was made before any complaint, with a bill of particulars and articles of impeachment, has been sent to the Senate. In other words, judgment on cheating has already been made on the basis of perception rather than on verified evidence reached through a methodical and rigorous process that is provided by an impeachment trial. It is this perception that is fueling the movement to shift the resolution of the crisis to the streets.

It is very dangerous for the members of the Black and White Movement to declare that they "believe the issues surrounding the presidency and the impeachment complaint are as clear as Black and White. There are no shades of gray when it comes to the Truth."

Truth has as many sides as there are to a controversy. This movement imposes its own version of truth arrived at arbitrarily without scrutinizing allegations and controverting them with other facts. This notion of making judgment on right or wrong based on unverified facts, which those sitting in judgment would like to believe, has a notorious history. It has been the foundation of obscurantism and the cradle of the most cruel and deplorable witch-hunts in history, including the Holy Inquisition, the Salem witch trials and the anti-communist hysteria of the McCarthy era.

Maybe it might be a good idea for those trying to incite another people to pause and ask why the accusations against the regime have not provoked the outrage they seek to bring down an intensely reviled regime. Maybe their unilateral version of the truth is not shared by a large enough segment of the public, which has reacted tepidly to calls for mass mobilization.

Oil Prices Soar

Oil, power costs to rise 6.4% with new VAT law

Inquirer News Service

OIL prices will further increase by an average of 6.4 percent when the expanded value-added tax (VAT) law takes effect, Department of Finance officials said Tuesday.

The Supreme Court recently declared the new VAT law, which removes exemptions of certain sectors, including oil and electricity, as constitutional. Opponents of the law are expected to ask the court for reconsideration, pending which the court's temporary restraining order on implementation of the law stays in force.

Finance officials are hopeful the court will lift the restraining order before the end of the month.

The officials said government simulations based on oil prices as of Monday showed the price of unleaded gasoline would rise P2.76 or 8.3 percent when the VAT is applied.

Electricity prices are expected to inch up 6.0 percent, they said.

The price of regular gasoline will go up P2.23 or 6.9 percent, diesel by P0.72 or 2.3 percent, kerosene by P1.87 or 6.0 percent, bunker fuel by P1.31 or 6.5 percent, and liquefied petroleum gas (LPG) by P30.97 or 7.8 percent, they added.

RVAT, the name preferred by the Department of Finance to identify the new VAT law, has been suspended following complaints raised by opposition lawmakers and petroleum dealers.

The expanded VAT law gives President Gloria Macapagal-Arroyo conditional authority to raise the VAT rate to 12 percent, from the present 10 percent, in January.

The law also removes exemptions of medical and certain other services. With INQ7.

More Debts

Gov't to borrow P532B next year; debt P3.9 trillion in June

Inquirer News Service

THE NATIONAL government will borrow P531.6 billion next year from local and foreign creditors to finance spending requirements and pay maturing debts that cannot be covered by revenues, Finance Secretary Margarito Teves said.

Next year's borrowings will be 58 percent (P310.2 billion) domestic and 42 percent (P221.4 billion) foreign, he said.

The Department of Finance has adopted a policy of borrowing more locally to lessen foreign exchange risks.

The Bureau of Treasury meanwhile said the national government's outstanding debt reached P3.89 trillion at end-June, of which P1.86 trillion was to foreign creditors.

With a national population of 85.2 million, the debt amounts to P45,699 per person.

Domestic debts were down P1.6 billion or 1.3 percent from end-May, following net redemptions of government securities.

Foreign debts increased by 29.82 billion pesos, the Treasury said. It said the depreciation of the peso against the US dollar resulted in an increase of P55 billion in the foreign debt, but net repayments and the appreciation of other foreign currencies against the US dollar reduced the foreign debt by P8 billion and P17 billion, respectively.

The debt figure does not include contingent liabilities, composed mainly of government guarantees, which rose to P612 billion in June from P604 billion in May, mainly as a result of the peso's depreciation.

The peso fell to 56.05 to the dollar at end-June from 54.40 to the dollar at end-May. With INQ7.net

National Tombstone

Sense and Sensibility : You gotta be kidding!

Bambi Harper
Inquirer News Service

SOME time last week, an article appeared in the press that Manila Hotel Corp. had agreed to buy the equity of Fraport AG and two other investors in the Philippine International Air Terminals Co. Inc. (Piatco), the builder of the new terminal. The German firm was reported to be willing to sell for $200 million, half of what it originally wanted (maybe anything, just to get rid of us). And it wasn't only the Germans who want out but the Singaporeans and the Japanese who are selling for a mere $30 million. The corporation allegedly still has outstanding debts with the Government Service Insurance System from the sale of the historic hotel, but it doesn't seem to bother GSIS president Winston Garcia. After all, it's GSIS money, not his.

In case you're not familiar with or have forgotten our economic misadventures and mismanaged finances, let me refresh your memory. Some 13 years ago, the government put the Manila Hotel on the block. The winning bid was submitted by the Malaysian group Renong Berhad in partnership with Sheraton. Lo and behold, the Supreme Court had a bout of galloping patriotism and overturned the winning bid and gave it to Emilio Yap, owner of the Manila Bulletin, on the grounds that patrimony should remain in Filipino hands. In one fell swoop, Chief Justice Andres Narvasa and his Court dealt a fatal blow to government credibility and foreign investment. The real losers in all these shenanigans were, of course, the Filipino people but it wasn't as though any of their leaders gave a hoot. For those of us who saw the Manila Hotel when it was the jewel in the crown of hotels in the country, to see it today transformed into a sleazy "panciteria" [noodle shop] smelling of stale smoke, redolent of vinyl placemats and varnished plywood paneling is to realize the Filipino people has been had. Because the hotel actually belonged to them and it wasn't up to the Narvasa Court to give it to Fu Manchu's descendent who had zilch experience in running hotels, much less a five-star one.

This was meant as a showcase of Filipino culture with Ming martabans in the lobby and beautiful huge tropical floral arrangements. The jars have now been replaced by schlock -- gold painted containers (remember this is supposed to be good luck in the owner's culture) plus a fake, kitschy copy of an Amorsolo right beside an original. A bombastically huge plastic Kodak image of the hotel is displayed prominently for its sando-clad guests to stand in front to have their pictures taken. The once elegant lobby sofas have been re-upholstered with a seedy, dark, cheap material that a friend described as the "Taiwan special," suggesting it was bought on sale and looks it.

The Manila Hotel was once the place to be seen in much the same way as the Four Seasons anywhere or the Ritz in Madrid or the George V in Paris. It could stand the comparison. Today it stands neck to neck with that other Yap hotel, Prince, and some others on Raon Street and Quezon Avenue. We were sold down the tube, guys, and as usual you don't hear anyone protesting. Are we to believe that if a property is considered "patrimonial," (a) it can be sold and (b) the interiors are a free-for-all and the owner can do whatever his tastelessness declares? Because if that's the case, Rizal Park can likewise be sold and Lito Atienza can lease the front of the boulevard fronting Malate Church to SM Shoemart to put up a mall, forevermore blocking the view of the sunset.

I once tried to explain to a government official that the people need to have something to be proud about ("puedeng ipagmalaki"), something we could brag about for being world-class. Well, we had it and we trashed it, thanks to Narvasa. Of course, any number of politicians may have had a hand in the decision to overturn Malaysia's bid in favor of the owner of the Manila Bulletin, which explains a lot of things otherwise incomprehensible.

Part of the terms was that Yap was supposed to infuse P600 million to refurbish the hotel. Where? Most of what he has built and remodeled has been depressing, ugly, brutal and spiritually degrading. There's that dreadful joke of a dreary centennial building where, for P2,000 a plate, we were served paella, salad, fish and spaghetti lumped all together in one plate. That's elegant? That's worthy of patrimony?

The depths to which we have sunk can be measured by the shabbiness and total tastelessness of the whole complex. Would you believe using varnished plywood for paneling in a hotel once advertised in Town & Country as the place to stay in Manila and where government today has the temerity to house its VIP guests? "Talagang wala na tayong hiya" [We have lost all shame]."

The catastrophe that is the Champagne Room with its imitation Louie XIV (or is it XV or XVI?) décor more suited to Sioctong than to Perrier-Jouet breaks your heart. Its lifelessness is frightening. Is this what happens in a marriage of poverty and corruption?

The final, inescapable fact is that the Manila Hotel may be the biggest tombstone to Filipino heritage yet. It may supersede the empty lot where the Jai-Alai building once stood and the derelict Army & Navy Club, no thanks to government officials.

But, just when you think the worst has befallen us, think again. Ladies and Gentlemen of this suffering nation, we are now being told that the only international airport terminal built in this country in the past 40 years at a cost of hundreds of millions of dollars is now going to be owned by the same nightmarish, destructive group running the Manila Hotel.

There is scant refuge from the disorder in our national life. Sen. Richard Gordon, with his endorsement, now seems to be saying, "Hey, you nation of morons, this is all you deserve."

GOCCs Ultimatum

DOF whips GOCCs into shape
Michelle V. Remo
Inquirer News Service

THE DEPARTMENT of Finance is set to come out with performance contracts that will force heavily losing government-owned and -controlled corporations (GOOCs) to shape up.

Failure to comply with the contracts would mean dissolution or privatization for the GOCCs, the DOF said.

Finance Secretary Margarito "Gary" Teves said the DOF was looking at implementing the performance contracts for 2006.

He is hoping that the contracts will result in a marked improvement in the financial standing of the state-owned firms, especially the distressed ones.

Teves said GOCCs would be classified into three types depending on their mandates: profit-oriented, cost-centered, and service centered state-owned companies. Their classification will determine the type of contract they will have to observe.

He said the GOCCs, established for the purpose of generating revenues for the government, would be assessed based on the profit they earned, while the rest would be evaluated based on the fulfillment of their mandates.

"We [DOF and concerned GOCCs] have to mutually agree on the objectives," Teves told reporters. "If they don't perform according to the contracts, then they could be phased out or sold."

The finance chief said the DOF would initially come up with contracts for the 14 monitored GOCCs.

These are National Power Corp., National Electrification Administration, Local Water Utilities Administration, Metropolitan Waterworks and Sewerage System, Home Guarantee Corp., National Housing Authority, Light Rail Transit Authority, Philippine National Oil Co., National Irrigation Administration, National Development Co., Philippine Ports Authority, Philippine Economic Zone Authority, Philippine National Railways and National Food Authority.

For this year, the 14 monitored GOCCs are expected to post a combined budget deficit of P42.5 billion this year. Although still a deficit, the figure is already a significant improvement from the actual budget gap of P90.7 billion recorded in 2004.

The DOF earlier said the expected improvement in the fiscal standing of the state-owned firms was due to the sale of some of the assets of Napocor, which accounted for the bulk of the combined deficits last year. The DOF likewise cited this year the relatively lower interest rate, which served to trim down the cost of debt servicing by the GOCCs.

At present, the GOCCs are being reviewed for possible rationalization of their organizational setup.

Officials from the DOF and the Department of Budget and Management met last week to continue discussing the rationalization plan.

The rationalization plan is in accordance with the issuance of Executive Order No. 366.

Carabao Milk

PCCI pushes increased carabao milk production
Ronnel W. Domingo
Inquirer News Service

THE COUNTRY'S biggest business group is pushing for the increased production of carabao milk to help reduce the country's dependence on imported dairy products.

Donald G. Dee, president of the Philippine Chamber of Commerce and Industry, said the group was looking at successful milk production campaigns in India, Pakistan and China that can be replicated in the country.

"The continued rise of our import bill against export earnings is expected considering the minimal resources government has in promoting export businesses," Dee said.

"We must increase our exports to or step up production of items that take up significant parts of imports such as dairy products," he said.

The PCCI chief said some P497 million worth of milk was shipped in from abroad in 2004.

Government data show that in the past decade, imports of fresh milk was growing at a rate of 28 percent a year while domestic production was generally declining, although there was growth of up to 6 percent yearly in certain years.

Dee said the private sector was also pushing for the establishment of a body that would facilitate lending to small and medium businesses by maximizing a lending fund that has grown to P5.5 billion.

He said the government has shown that there were ample supply of funds for small businesses but that the problem was how to make it easy for entrepreneurs to secure loans.

Dee said efforts were under way to put up a Micro, Small and Medium Enterprises Surety Fund with an initial P1 billion from the World Bank's Industrial Guarantee and Loan Fund.

He said the government, through the IGLF, could work with a public sector-initiated SME Development Center, which would manage the P1-billion MSME Surety Fund.

"The objective is to increase availability and effectiveness of risk capital to SMEs," he said. "The fund will provide guarantee for SMEs with little or no collateral but have strong cash flows."

According to the Institute for Development and Econometric Analysis Inc., an Asian Development Bank study made in 2003 showed that the biggest constraint in existing lending programs for SMEs was that loan decisions depended on collateral such as land.

Cayetano Paderanga, who heads IDEA Inc., added that other past studies suggest that SMEs could not avail of available funds because loan requirements were too difficult to comply with.

"With the MSME Surety Fund, we can make it easy for prospective milk producers to secure loans for buying carabaos that are bred to yield more milk than the average cattle," Dee said.

Price War

GLOBE, PLDT OFFERING 5 TO 10 US CENTS/MINUTE
Price war shifts to overseas call rates
Clarissa S. Batino
Inquirer News Service

LOCAL telecom giants are bringing the price war to a higher level-their overseas call rates.

Philippine Long Distance Telephone Co. said it would offer an international long distance rate of as low as 10 US cents a minute to all its DSL subscribers starting Sept. 15. This would be equivalent to about P5.60 a minute at current exchange rates.

But Globe Telecom Inc. and its wholly owned subsidiary Innove Communications Inc. said they could bring down their IDD rates to as low as 5 US cents a minute after they secured the approval of the National Telecommunications Commission last week.

The standard IDD rate is 40 US cents a minute. Globe had cut its overseas call rate to 20 US cents a minute starting on the fifth minute under its ongoing promo. Sun Cellular is offering a similar 20 US cents-a-minute deal.

Butch Jimenez, head of PLDT's retail division, said the public should expect more price and product innovations from PLDT. "We intend to remain the leading player in the telecom industry by offering innovative service packages whenever new technology arises."

Not to be outdone, Globe assistant vice president Froilan Castelo said the recent NTC approval would allow his company to charge an even lower rate than what the competitors were offering.

"The NTC now allows us to charge as low as 5 US cents a minute on IDD. This will benefit our customers as we intend to give them more value for their money," Castelo said.

"We want to give our DSL subscribers better value for their money by offering attractive IDD rates," Jimenez said. Short for Digital Subscriber Line, DSL is PLDT's brand for its high-speed Internet product, which is now being used by about 70,000 customers.

Dubbed as PLDT ID-DSL, the new deal allows all DSL subscribers to avail themselves of IDD rates for as low as 10 US cents a minute.

Subscribers, however, have to pay a service fee of P50 a month. Starting Sept. 12, PLDT will also start charging P20 a month for those who would avail themselves of the P10 per local call promo.

DSL subscribers with Plans 2500 and up will enjoy a rate of 10 US cents a minute while subscribers with Plans 1995 and below will enjoy a rate of 15 US cents a minute.

Jimenez said the rates would be 62 to 75 percent cheaper against the 40 US cents a minute.

To offset any negative impact on its overseas revenues, Jimenez said PLDT would aggressively pursue DSL connections and upgrades.

"These new IDD rates bundled with our DSL subscriptions will drive more people to hook up to our broadband service. Also, we see some of those in Plan 1995 and below upgrading their plan to 2500 and above," he said.

DSL subscribers who want an even lower rate than 10 US cents can get PLDT's VoicePad service. This is a PC-to-phone service where DSL subscribers just need to log on to the PLDT myPad website and use the soft dialer from that site to call overseas for as low as 8 US cents a minute.

Tough competition had been bringing down telecom prices, according to NTC Chair Ronald Solis, saying these innovative deals were benefiting consumers.

Sun Cellular, which set off a price war in October 2004 when it launched its unlimited, within-network 24/7 pricing, started offering its Daylite Call and Text Unlimited.

With the new deal, Sun Cellular will charge a peso for every minute of within-network calls from 6 p.m. to a minute before midnight. But from midnight to a minute before 6 a.m., calls within Sun Cellular network will remain unlimited. Within-network text messaging will remain free all day long. Sun's 24/7 promo remains in effect even with these new offerings.

Globe is offering a new Celebrate promo that charges only P10 for every three-minute call and P15 for unlimited texting for 24 hours. Globe's nonstop, within-network text promo is also available for P25 for two days and P50 for five days.

PLDT had confined its P10-a-call promo strictly within the PLDT fixed-line network of 2.1 million subscribers.

CAP Takeover

SEC's plans for CAP put on hold
Elizabeth L. Sanchez
Inquirer News Service

THE CREATION of a management committee that will take over the troubled pre-need firm College Assurance Plan Philippines Inc. may be put on hold after the company filed for rehabilitation with a local court last week.

An official of the Securities and Exchange Commission said however that CAP's rehabilitation plan would not prevent the SEC from exercising its regulatory powers such as imposing sanctions on the company for perceived violations.

CAP earlier told the Makati Regional Trial Court that there was a need for the immediate suspension of payment of all claims against the company.

CAP officials explained that they decided to go to court to keep its business going. They said that this was the only way they could discharge their obligations to their plan holders.

CAP officials also said that they were forced to make the legal turn when the SEC threat to take over management became imminent.

CAP officials are afraid that the takeover will lead to the liquidation of the pre-need firm.

"In deference to the proceedings in court, we may [hold off] the appointment of a management committee," SEC commission secretary Gerard Lukban said. "Any effort on our part may be rendered academic."

Lukban explained that once a company filed for rehabilitation, the court would usually appoint a receiver to implement the rehabilitation plan.

"The receiver is also appointed to safeguard the assets ... of creditors or, in this case, the plan holders," Lukban said. "This is the same goal we want to achieve if and when we create a management committee."

CAP has admitted that it will be unable to service its debts falling due. CAP also said that it has more liabilities than assets.

CAP has proposed under an eight-year business development plan to build up its capital to P8.36 billion, and its trust fund to P14.36 billion.

United Against Glo

The Long View : Unity is the only choice

Manuel L. Quezon III
Inquirer News Service

TO DIVIDE, and thus conquer: that is the objective of the administration. To unite, and thus be impregnable: that is the challenge of the times.

A broad coalition of forces is heeding that challenge. The coalition was symbolized by Cory Aquino and Susan Roces' coming together in prayer last Friday night. It has a name: "Bukluran para sa Katotohanan." Its statement of principles will be released today.

Does the broad coalition represent only opportunism, desperation and naked ambition? To reflect on this question is to miss the essential point. This isn't about those arrayed against the President. This is about the President. The President showed cunning when she dared anyone who is without sin to cast the first stone, as Jesus did to the people who were about to stone to death a woman accused of adultery.

What the President forgot is that she is not the Christ. She is in the position of the woman accused of adultery. The closest that we can come to a stand-in for Christ is not the president of a secular state, but the Catholic bishops who said, "if she is accused of adultery, let the charges be investigated." They did not say, "No, she did not commit adultery," or "No, we are morally convinced no adultery took place." They said: "There are too many disturbing details in the allegations, and so some sort of human justice must take its course."

What did the country get? No form of human justice. No truth commission, and quite possibly, no impeachment. What it got, instead, is the woman accused of adultery proclaiming that all are adulterers, which is beside the point.

You would think she never went to school. In school, you can break the rules many times, even cheat many times, but once you get caught, it is irrelevant if the entire class broke the rules with you, or cheated with you, because you're the one who has been caught. You're the one who gets punished. As it is for being caught cutting class, or copying notes, so it is for adultery and any conceivable sin-including the sins that are in a class of their own, because only presidents can commit them.

It boggles the mind that someone accused of committing adultery against the nation-for after all, a president, some say, is wedded to the country-should now be proclaiming that everyone is an adulterer, and even suggesting that adultery be decriminalized. The price of adultery is supposed to be an annulment or divorce. It is not supposed to result in a coronation, much less the transformation of the state into a world-class bordello, which is what the move to institute Charter change is meant to do. But to do so is to be unfair to whores; it reduces all politics to the level of prostitution, where it may be now, but where it ought not to remain. Furthermore, to do so makes certain that politics never rises above the level of whoring, without taking into account that the ones agitating for the prostitutes' rights are not the prostitutes themselves but the pimps. For even if you say that the people are a bunch of whores, what has driven them and keeps them in prostitution? The pimps. It is the pimps who make a whore out of the public for the pleasure of vested interests.

This whole political crisis is about change and a fundamental reality about our society (which thrives on open secrets, but which reserves a curious kind of fury for those caught doing what everyone knew they were doing all along). Is it unfair? The President thinks so; but it is very Filipino.

We all have dirty linen, and no one wants them exposed. But once exposed, they must be washed, and some sort of redemption must be achieved. The religious-minded can reflect on the fact that Jesus kept company with tax collectors and prostitutes, but he was the Christ and his objective was to show no one was beyond redemption. In a political crisis, such as the one taking place, the President has refused to acknowledge culpability and defied every attempt to clear her name. Her supporters say, it is because those prosecuting her are as dirty as she is, or that their objective is not to clear the President's name but to topple her from power.

They forget that it requires neither sainthood nor good character or intentions to be a prosecutor and pursue a prosecution. There are accusations of sanctimoniousness and false piety all around, to be sure. But who, in our government, is expected to be the exemplar of secular virtues, or at the very least, the kind of leadership unafraid to be challenged? Who, of our leaders, must be imbued with a firm and unflinching faith and confidence in the people? Only the President of the Philippines has that burden and responsibility.

The President not only confuses herself with Christ; she thinks she is living in biblical times. The President's supporters see red flags, the faces of disreputable politicians, the lack of teeth in the ranks of the protesting poor, the inability of the clergy to undertake a crusade, the defection of some of the President's own people, and see a motley group of the disgruntled. They should see, instead, a grave crisis in the legitimacy of the President and in the society she exemplifies. She was given so much, and did so little; she could have led so well, instead she leads so badly; she could have given the country hope, but she had so little faith in her people and herself that she has done, and is doing, things that have brought her to the level of the worst of our past leaders. She continues to fatally divide her people. As Oliver Cromwell said to the Long Parliament, "You have sat too long for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go!"

Marcoleta Unmasked

Posted by Luz Rimban 
PCIJ

THE "Hello, Garci" controversy and the impeachment process have exposed the seamy side of party-list politics and showed how supposed representatives of the marginal sectors of society may have been eaten up by what they themselves call "dirty politics." 

Wednesday night, ABS-CBN reporter Aladin Bacolodan interviewed ex-Alagad party-list representative Diogenes Osabel, a former friend of impeachment-complaint-endorser Rep. Rodante Marcoleta. In that story, Osabel's main contention was that the party had expelled Marcoleta last year for failing to share congressional funding with Alagad and for refusing to consult with his party-list colleagues on vital issues. The expulsion, Osabel says, stripped Marcoleta of the right to sit as member of Congress and to endorse the first impeachment complaint. 

Osabel also added to what former social welfare secretary Dinky Soliman revealed on Tuesday: that it was the Arroyo administration that put Marcoleta up to it as part of a "grand conspiracy" to thwart a genuine impeachment process.

In an interview with PCIJ, Osabel alleged that Marcoleta's close ties to the administration began when the party first filed a case before the Commission on Elections months ago, asking the poll body to revoke Marcoleta's nomination as party list rep.  The Comelec's second division has washed its hands of the issue, saying it was the House of Representatives Electoral Tribunal that had jurisdiction over the case, now on appeal at the Comelec.

Osabel alleges that this was how Marcoleta may have developed close ties with Garci himself, Comelec Commissioner Virgilio Garcillano, and with Presidential Political Affairs Adviser Gabriel Claudio. With a case pending before the Comelec and placed in a vulnerable position of possibly losing his seat, Marcoleta may have struck a deal with the administration.  (In a subsequent talk with PCIJ, Osabel clarified he was not aware of any friendship between Garcillano and Marcoleta.)

"This guy (Marcoleta) would do anything to survive," Osabel said.

Not true, according to Marcoleta, who denies he and Garci are friends. In fact, Marcoleta told PCIJ, it was Comelec Commissioner Mehol Sadain and not Garci who handled the Comelec case. "I know them (Comelec commissioners) by name only. As for Garcillano, ngayon ko lang nakita yun with this Garci tapes controversy (The first time I saw Garcillano was in connection with the Garci tapes controversy)," Marcoleta said.

Marcoleta has tossed back the accusations to Osabel, a friend of Soliman and former official of the Presidential Commission for the Urban Poor, who Marcoleta claims has hung on to power,  refused to give up the party presidency for the past seven years and was actually the one disowned by Alagad. What's more, Marcoleta said, there's a reason ABS-CBN gave Osabel airtime. Marcoleta cites a House resolution his erstwhile partymate Osabel filed in 2000 asking the water utility office MWSS to help bail out Maynilad water, a company that like ABS-CBN is owned by the influential Lopez family.

(Osabel also clarified in a later phone conversation with PCIJ that many members of Congress signed that resolution because "they were aware of Maynilad's problems at that time. The resolution sought to stop the financial hemorrahage the company which was then implementing the pro-poor Tubig Bayan in our communities.")

Osabel, however, insists that the point is Marcoleta's role in the impeachment process. If indeed Marcoleta was not a pawn of the administration, why did he not cast a vote in favor of the "sufficiency in form and substance" of the original impeachment complaint?

Osabel asks: Why did Marcoleta allow the majority to dismiss the original Lozano complaint, the very complaint that he endorsed on June 29?  What did Marcoleta do to defend what to civil society was the "legal, proper and peaceful" manner of resolving the political crisis?

Once upon a time, all of them—Marcoleta, Osabel and Soliman—were on one side of the fence, counting themselves part of civil society. These days civil society has been wracked by dissension and power struggles. Some of its members have gone their separate ways and are far from civil.