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EDITORIAL

DU30’s PCSO order underlines the meaning of ‘catharsis’

BY THE MANILA TIMES

AS if to illustrate what he meant when he spoke of the need for a catharsis in the nation’s public life
during his fourth State of the Nation Address (SONA), President Duterte on Friday unleashed the
equivalent of a thunderbolt on the operations of the Philippine Charity Sweepstakes Office (PCSO), to
the surprise of both the agency and the nation.

The announcement was unusually released. It skirted the normal channel of presidential
communications, via a briefing of the Malacañang press corps.

Instead, the announcement, described as “a special message,” was uploaded on the Facebook page of
the Presidential Communications Operations Office late Friday night.

In the message, the President himself announced:

“I have today ordered the closure, the stoppage of all gaming schemes… whatever nature, however
done, that got the franchises from the PCSO. The ground is massive corruption involving all, even the
courts who repeatedly issued injunctions to paralyze government and to allow corruption to thrive.”

President Duterte’s order could not have been more emphatic or sweeping. He used the term “closure”
and not a mere suspension of operations. He said “all,” not some, gaming operations.

The order did not cover an office that has escaped executive oversight because of the labyrinth of the
bureaucracy. It concerns an agency that is right within the Office of the President under its full
supervision and control.

What is perhaps most unsettling is the reason or reasons cited by the President for the closure order.

He placed the onus for the decision on “massive corruption, even a grand conspiracy” to cheat, rob and
defraud the public and the government.
The stink envelops all gaming activities of PCSO, including lotto, small town lottery (STL) and keno, and
other gaming schemes. It involves especially the licenses and franchises granted by the PCSO, which will
be fully stopped.

To highlight the urgency of his decision, DU30 said he could not allow corruption to thrive in the country.
He said with no little sadness:

“Wala ako magawa (I have no choice). I have to do it. I will not honor transactions that are clearly on the
side of scheming people. Puro dayaan lahat (It’s all cheating). At ‘yung mga kontrata ay parang (And the
contracts seem to be) crafted in favor of corruption, and to favor other corporations and people. I will
not allow it,” he added.

Accordingly, the President gave law enforcers 24 hours starting Saturday to stop PCSO games, which he
declared as illegal.

The President blamed the PCSO for his unexpected move: “Talagang hiningi ninyo. Sinabi ko na nga
walang corruption. Hinihingi talaga ninyo, ibigay ko sa inyo. (You asked for it. I already said no corruption.
You really asked for it, so I’ll give it to you).”

Duterte said he prefers to stop all forms of gambling in the country, but he would have to talk to
Congress about it.

Complying with the President’s order, Philippine National Police (PNP) Chief Oscar Albayalde led closure
operations on Saturday.

Albayalde also directed all police regional offices nationwide to launch a “massive crackdown” on illegal
gambling and arrest anyone who would continue engaging in illegal activities.

This is not the first time that DU30 has spoken of corruption at the PCSO. He once called it “the most
corrupt” agency.
The corruption has evidently risen to such an alarming level that the agency dares to legalize or facilitate
illegal gambling.

On this, the President is indignant:

“You know what they’re doing there? Jueteng has been merged with small town lottery. They have this
agreement with government that they would run this, they get a commission. But, as it turned out, they
trim it down. The government gets only 20 percent. Billions of pesos every day are pocketed,”

This is an abominable development that clearly had to be stopped.

The corrupt system in the PCSO may need more than a purgative. It may have to be cauterized like a
cancer.

EDITORIAL

Latest developments in sea dispute merit study


BY THE MANILA TIMES

JULY 30, 2019

HOME / OPINION / EDITORIAL / LATEST DEVELOPMENTS IN SEA DISPUTE MERIT STUDY

Philippine authorities should study closely two developments in the dispute over certain areas in the
South China Sea, namely: 1) the heightening of tensions between Vietnam and China over their
conflicting claims in the area, and 2) the rising interest of the United States Navy in maritime governance
over the disputed waters.

Vietnam on Thursday demanded the “immediate withdrawal” of a Chinese ship in a disputed area of the
waterway, Agence France Presse reported.

Just last week, Beijing issued a call for Hanoi to respect its claims to the resource-rich region — which
has historically also been contested by Taiwan, the Philippines, Malaysia and Brunei.

Hanoi said it had sent several messages to Beijing insisting that a Chinese survey ship vacate its waters.

“Vietnam has had several appropriate diplomatic exchanges … requesting immediate withdrawal from
Vietnam’s exclusive economic zone,” a foreign ministry spokesman was quoted as telling the media.

“Vietnam resolutely and persistently protects our sovereign rights… by peaceful means on the basis of
international laws,” Le Thi Thu Hang added.

Beijing invokes its so-called nine-dash line to justify its actions in the waterway. It previously built up
artificial islands, as well as installed airstrips and military equipment in the region. The line runs as far as
2,000 kilometers from the Chinese mainland to within a few hundred kilometers of the Philippines,
Malaysia and Vietnam.
In 2014, Beijing moved an oil rig into waters claimed by Hanoi, sparking deadly, anti-China protests
across Vietnam.

On July 20, 2019, the US expressed concern over reports that China was hampering other countries’ oil
and gas activities in the South China Sea and accused Beijing of acting like a bully.

The US has long called for freedom of navigation in the South China Sea, and on Thursday said it sailed a
warship through the Taiwan Strait.

The US Coast guard also registered its presence in the disputed waters to model maritime governance,
according to its commandant.

Adm. Karl Shultz, commandant of the US Coast Guard, said their operations in the area have surged upon
the request of the Indo-Pacific commander under the US Department of Defense. The US Coast Guard
deployed its cutters USCGC Bertholf and USCGC Stratton to the region from January to mid-June.

“What we think we bring is appropriate behavior,” Schultz was quoted as saying in a telephone briefing
Tuesday. He added that the presence of their ships in the region sought to reinforce a free and open
rules-based mindset.

Beijing has increased the number of its ships in the South China Sea. Hundreds of Chinese vessels,
believed to be part of its maritime militia, have been swarming Subi Reef, which is 12 nautical miles from
Philippine-controlled Pag-asa Island.

These developments raise the possibility of conflict in the region.


In the past, Vietnam and China came to blows over their competing claims to the Paracel. In the Battle of
the Paracel Islands in January 1974, the People’s Republic of China expelled the South Vietnamese from
the Islands. South Vietnam’s claim to the islands was inherited by the Socialist Republic of Vietnam,
which has ruled all of Vietnam since 1976.

There is an enormous difference between the approaches employed by Vietnam and the Philippines to
the dispute.

Vietnam has demanded China’s withdrawal of its vessels from the area. It seeks mainly to assert its rights
under the United Nations Convention on the Law of the Sea (Unclos).

The Philippine approach has swung between President Benigno S. Aquino 3rd’s policy of challenging
China’s claim through the Court of Arbitration at the Hague, to a conciliatory policy under President
Rodrigo Duterte.

With President Aquino, it was a matter of asserting sovereignty over the so-called West Philippine Sea.
With President Duterte, it is more a matter of asserting the country’s rights to its exclusive economic
zone (EEZ) under the Unclos.

Vietnam, China and the Philippines are all signatories to the convention. Talks should start from this
reality.

EDITORIAL

Rice Tariffication Act should be reviewed

BY THE MANILA TIMES


JULY 31, 2019

HOME / OPINION / EDITORIAL / RICE TARIFFICATION ACT SHOULD BE REVIEWED

THE Rice Tariffication Act (RA 11203) was implemented in February this year amid optimism that it would
stabilize the supply and price of the country’s staple grain. It is, however, becoming increasingly clear
that this law is having serious negative effects on the domestic rice sector, and must be reviewed before
its unintended consequences for Philippine rice farmers, millers and distributors become grave.

The Rice Tariffication Act was conceived as a replacement for the 1969-vintage framework that put rice
imports under the control of the government through the National Food Authority (NFA).

That scheme had clearly become unworkable; rice prices to consumers increased sharply at times,
farmers were perpetually unhappy about low farmgate prices, supplies were often unstable, and the NFA
itself racked financial losses. Something needed to be done, and RA 11203 appeared to be the solution.

Under the Rice Tariffication Act, unlimited rice importation by private traders is allowed, provided of
course that they secure the necessary permits and pay the proper duties. The tariff rates are set at 35
percent for rice sourced from Asean countries, 40 percent for rice from outside the Asean up to a total of
350,000 metric tons, and 180 percent for imports beyond that volume. The 350,000 metric ton figure is
the minimum access volume (MAV), the amount of rice the Philippines must allow to be imported
annually under World Trade Organization (WTO) rules.

The Rice Tariffication Act also created a P10-billion Rice Competitiveness Enhancement Fund (RCEF) to
help domestic rice farmers improve their productivity.

The fund, which is financed by the tariffs collected from rice imports, provides P5 billion for machinery
and equipment through the Philippine Center for Postharvest Development and Mechanization
(PHilMech); P3 billion in high-yielding seeds through the Philippine Rice Research Institute (PhilRice); and
P1 billion for credit and P1 billion in training through the Agricultural Training Institute.
The expected results of liberalizing rice imports were that the increased volume of imports would boost
supply and keep overall rice prices reasonable from a consumer standpoint. Meanwhile, the tariff-
funded support for the domestic rice sector would improve its yield and quality, so that it could be sold
at a competitive price, higher than the prices farmers were earning previously, and slightly lower or
equal to the prices of imported rice.

Six months into the new import scheme, however, those reasonable-sounding expectations are not
being realized.

According to the Bureau of Customs, 1.5 million metric tons of imported rice has entered the country
since implementation of RA 11203. This has stabilized consumer supply and prices, and has provided
enough additional revenue to completely fund the RCEF program, but has had a disastrous effect on the
domestic rice sector. Prices for unmilled rice are far below pre-tariff levels — in some provinces, they
have fallen to as low as P12 per kilogram, which is roughly half the previous price — and as much as 40
percent of the country’s milling capacity has been idled.

One fix that has been proposed is to implement an emergency tariff, something which is allowed under
WTO rules, to give price support to local farmers for a period of time by making imported rice much
more expensive. That would be at best a stopgap measure, however, one that does not address the
underlying problem and simply shifts the economic burden from farmers to consumers.

In spite of appearing to be a good idea at the outset, the results of six months of testing have shown that
the Rice Tariffication Act is hurting rather than helping Filipino farmers. It is imperative that the
administration and Congress review the measure and determine what changes must be made to
improve its outcomes.
EDITORIAL

LandBank needs to update the President on its programs better

BY THE MANILA TIMES

JULY 25, 2019


HOME / OPINION / EDITORIAL / LANDBANK NEEDS TO UPDATE THE PRESIDENT ON ITS PROGRAMS
BETTER

The Land Bank of the Philippines (LandBank), among the government agencies singled out for criticism
by President Rodrigo Duterte during his fourth State of the Nation Address on Monday, perhaps
deserved it the least. Duterte’s observations were not completely without justification, but a review of
the facts suggests that the bank has not strayed so far from its mandate.

In his speech Monday, Duterte criticized LandBank for being “marred in so many commercial
transactions.”

“You know you’re called LandBank, but you are now the number one commercial bank in the Philippines.
What the heck is happening to you? You are supposed to finance agricultural enterprises and endeavors.
Bakit wala (Why is there none)?” Duterte said.

“LandBank should go back to land. Bumalik kayo (Go back to your mandate) and that is to help the
farmers. You better decide on that, I will give you until the end of July to give me a plan or else, I will ask
Congress to reconfigure you,” Duterte said.

Government-owned LandBank can be technically defined as a commercial bank in spite of its mandate to
focus on the agrarian sector, simply because there is no better conventional categorization for it. In point
of fact, however, it is not the number one bank in the Philippines, but the third largest.

The bank’s website shows that as of May 20, it had P1.89 trillion in assets. The Bangko Sentral ng
Pilipinas ranks it the third largest, trailing Banco de Oro and Metropolitan Bank and Trust Co. by a
considerable margin.

LandBank is, of course, not free from troubles. In the wake of the financial collapse of Hanjin Heavy
Industries Philippines’ Subic Bay shipyard in January, it was revealed that LandBank had $85 million in
loan exposure to the troubled shipbuilder.
The bank has also been pursuing a so far unsuccessful effort to take control of fixed-income market
operator Philippine Dealing System Holdings Corp. (PDSHC), an initiative of Finance Secretary Carlos
Dominguez 3rd, who also serves as LandBank’s chairman.

Dominguez has defended the planned takeover of PDHSC as being in line with the government’s capital
markets development program in that it would encourage more bond issues. The Finance chief also
suggested that it would be imprudent to not make the most of the bank’s enormous financial assets.

“The size of the resources of the bank as the main depository of government accounts makes it
necessary for them to deploy their funds to commercial and industrial projects, as well as agriculture
projects,” Dominguez said.

In spite of this, LandBank cannot be said to have neglected its mandate to serve the agrarian sector. In
the first quarter of this year, LandBank loaned about P172 billion to agricultural borrowers, about 24
percent of its total loan portfolio. It is among the few, if not the only major bank to regularly comply with
the legally-mandated threshold of 10 percent. In addition, the bank has set aside a further P5 billion in
available financing for agrarian reform beneficiaries this year.

There is certainly much to gain and nothing to lose by closely reviewing the performance of the
LandBank, and finding ways in which it can better carry out its mandate. But it is far from failing to do so
now, especially given that the Secretaries of Finance, Agriculture, Labor and Agrarian Reform are among
the bank’s directors. The bank just needs to communicate better and coordinate more closely with the
office of the President on how it has been executing its mandate.
EDITORIAL

LandBank needs to update the President on its programs better

BY THE MANILA TIMES

JULY 25, 2019

HOME / OPINION / EDITORIAL / LANDBANK NEEDS TO UPDATE THE PRESIDENT ON ITS PROGRAMS
BETTER
The Land Bank of the Philippines (LandBank), among the government agencies singled out for criticism
by President Rodrigo Duterte during his fourth State of the Nation Address on Monday, perhaps
deserved it the least. Duterte’s observations were not completely without justification, but a review of
the facts suggests that the bank has not strayed so far from its mandate.

In his speech Monday, Duterte criticized LandBank for being “marred in so many commercial
transactions.”

“You know you’re called LandBank, but you are now the number one commercial bank in the Philippines.
What the heck is happening to you? You are supposed to finance agricultural enterprises and endeavors.
Bakit wala (Why is there none)?” Duterte said.

“LandBank should go back to land. Bumalik kayo (Go back to your mandate) and that is to help the
farmers. You better decide on that, I will give you until the end of July to give me a plan or else, I will ask
Congress to reconfigure you,” Duterte said.

Government-owned LandBank can be technically defined as a commercial bank in spite of its mandate to
focus on the agrarian sector, simply because there is no better conventional categorization for it. In point
of fact, however, it is not the number one bank in the Philippines, but the third largest.

The bank’s website shows that as of May 20, it had P1.89 trillion in assets. The Bangko Sentral ng
Pilipinas ranks it the third largest, trailing Banco de Oro and Metropolitan Bank and Trust Co. by a
considerable margin.

LandBank is, of course, not free from troubles. In the wake of the financial collapse of Hanjin Heavy
Industries Philippines’ Subic Bay shipyard in January, it was revealed that LandBank had $85 million in
loan exposure to the troubled shipbuilder.
The bank has also been pursuing a so far unsuccessful effort to take control of fixed-income market
operator Philippine Dealing System Holdings Corp. (PDSHC), an initiative of Finance Secretary Carlos
Dominguez 3rd, who also serves as LandBank’s chairman.

Dominguez has defended the planned takeover of PDHSC as being in line with the government’s capital
markets development program in that it would encourage more bond issues. The Finance chief also
suggested that it would be imprudent to not make the most of the bank’s enormous financial assets.

“The size of the resources of the bank as the main depository of government accounts makes it
necessary for them to deploy their funds to commercial and industrial projects, as well as agriculture
projects,” Dominguez said.

In spite of this, LandBank cannot be said to have neglected its mandate to serve the agrarian sector. In
the first quarter of this year, LandBank loaned about P172 billion to agricultural borrowers, about 24
percent of its total loan portfolio. It is among the few, if not the only major bank to regularly comply with
the legally-mandated threshold of 10 percent. In addition, the bank has set aside a further P5 billion in
available financing for agrarian reform beneficiaries this year.

There is certainly much to gain and nothing to lose by closely reviewing the performance of the
LandBank, and finding ways in which it can better carry out its mandate. But it is far from failing to do so
now, especially given that the Secretaries of Finance, Agriculture, Labor and Agrarian Reform are among
the bank’s directors. The bank just needs to communicate better and coordinate more closely with the
office of the President on how it has been executing its mandate.
EDITORIAL

A stern warning for bureaucrats

BY THE MANILA TIMES

JULY 24, 2019

HOME / OPINION / EDITORIAL / A STERN WARNING FOR BUREAUCRATS

Halfway through his six-year term, the nation must have grown accustomed to President Rodrigo
Duterte’s exaggerated way of expressing his thoughts and intentions. In his fourth State of the Nation
Address (SONA) on Monday, his threat to “kill” five major government agencies if they do not quickly
improve their services delivered a chilling effect on the parties concerned enough to take it seriously,
even as the Congress audience oriented with this presidential tone of warning dismissed it tentatively
with a muffled chuckle.

The President was lamenting the lack of improvement in the public services performed by some agencies
in spite of the recent implementation of the Ease of Doing Business Act (Republic Act 11032), and singled
out the LTO (Land Transportation Office), SSS (Social Security System), BIR (Bureau of Internal Revenue),
LRA (Land Registration Authority) and Pag-IBIG (Home Development Mutual Fund).

“‘Pag ‘di niyo ginawa ‘yan, papatayin ko kayo talaga. (If you do not do that [improve your performance], I
will really kill you),” Duterte warned the erring agencies.

The warning came amid Duterte’s comments on the Ease of Doing Business Act, which he called “a
landmark legislation that will improve service delivery and fight corruption.”

RA 11032, which is formally known as the “Ease of Doing Business and Efficient Government Services
Delivery Act,” mandates standard processing times for applications and transactions with the
government. Simple transactions are now required to be completed within three working days; complex
transactions within seven working days; and highly technical transactions within 20 working days.

The law also imposes stiff penalties against government officials and workers who fail to adhere to the
standards: A six-month suspension on the first offense; and a maximum of six years in jail, a fine of
between P500,000 and P2 million, and termination of retirement benefits on the second.

It is safe to assume that the President did not literally mean that he would abolish enormous and
critically vital agencies such as the BIR, SSS and the LTO, and we would not agree with him if that was
what he actually intended. But as a warning for these agencies to shape up, the manner in which it was
said imparted the forcefulness needed to make the responsible officials take it seriously.

President Duterte accurately tapped into public frustration with his remarks, because the agencies he
singled out are among those that provoke the most complaints about slow, indifferent service and
confusing procedures. Their lack of efficiency affects not only individual citizens, but businesses as well,
and can stretch what should be relatively simple processes measured in hours or days into weeks or
months.
While it may not be something that most of his audience recognized at the time, President Duterte’s
threat to “kill” the offending agencies may have been more than just another example of his sometimes
coarse way of expressing his thoughts. Whether intended or not, targeting these particular agencies with
his criticism serves as a very strong message of support for any agency’s efforts to meet the standards of
the Ease of Doing Business Law. If large agencies such as the BIR or SSS can conform, other less
complicated offices surely can as well, and will be anxious to do so quickly to avoid being similarly
exposed and embarrassed by the President.

We, along with the President and the rest of the country, will be watching with great interest to see how
the agencies on the receiving end of the public rebuke will respond, and expect that they will take
immediate steps to improve their services.

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