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BSP’s prevarications DIE HARD III Herman Tiu Laurel 07/11/2011

Monday, July 11, 2011

BSP’s prevarications

Herman Tiu Laurel
The Bangko Sentral ng Pilipinas (BSP), through one of its officers, issued a letter-to-the-editor last July 6 in response to my “RP wasting $30-billion fund” column of July 1. That article triggered one of the highest positive feedbacks ever to my e-mail inbox. Indeed, the response was unanimous: Readers agreed with our position that at least half (or $30 billion) of our international reserves should be freed up and put to good use since not only I but several others, like former National Economic Development Authority (Neda) chief Romulo Neri, believe it to be not just necessary but even legal under IMF rules. In fact, another supporter of this position with whom we had lengthy consultations on this some years ago is former National Treasurer Norma Lasala.

Last Saturday, I went to a Tomas Morato restaurant to attend a briefing with Butch Junia, former Mayor Jun Simon, and law professor Alan Paguia on the latest Energy Regulatory Commission (ERC) dismissal of Commission on Audit (CoA) findings pointing to Meralco (Manila Electric Co.) overcharging in 2004 and 2007 that amount to some P7 billion. It was there that a Kapihan was also being held, diverting my colleagues into becoming its panelists as well.

Among the featured guests was the same BSP official who responded to our column. He was the first to speak. After heaping effusive praise for ratings agencies, such as Fitch and Moody’s, in upgrading the Philippines to just below investment grade, which he said is something to crow about, he ended his statements with a very aggressive pitch for more taxes, insisting that the Philippines is being left behind by Singapore, Thailand, and Malaysia because of our low taxes.

Let’s put these ratings agencies in the proper perspective. Consider this RJR online business report: “…a US Senate committee examining the reasons behind the crisis… concluded that Moody’s and Standard and Poor’s, the world’s two most prominent ratings agencies… (triggered) the global financial crisis in 2008… (by continuing) to give top ratings to mortgage-backed securities months after the housing market started to collapse…” It added, “neither company had a financial incentive to assign tougher credit ratings to the very securities that for a short while increased their revenues, boosted their stock prices, and expanded their executive compensation.”

From The Huffington Post’s “SEC Threatens Credit Rating Agencies with Fraud Charges” story, we have another confirmation that official moves have begun “against Moody’s Investors Services over its ratings of risky investments that led to the financial crisis.”

More recently from Peninsula News, we learn of “European politicians (accusing) credit rating agencies… of anti-European bias after Moody’s downgrade of Portugal ’s debt… (with EU Commission President José Manuel Barroso saying) ‘It seems strange that there is not a single rating agency coming from Europe. It shows there may be some bias in the markets…’ (joined by) German Finance Minister Wolfgang Schäuble (calling) for limits to be placed on the rating agencies’ ‘oligopoly.’”

China also views these western ratings firms with deep trepidation, which is why it set up its own ratings agency, Dagong. From China.org.cn (July 9, 2011): “China ’s own sovereign credit rating report… (comes) at a time when many complain (that) Moody’s, Standard and Poor’s and Fitch were partly to blame for the recent global financial crisis.” It further quoted Dagong chairman Guan Jianzhong as saying “that the current Western-led rating system ‘provides incorrect credit-rating information.’”

Back here, the problem with these so-called “upgrades” which the BSP official attending the Kapihan so enthused over is that the sources — the ratings agencies themselves — formulate their assertions on the basis of their own agenda which often is, as in the case of the Philippines, one that is contrary to the interest of the people. This is a fundamental point.

The BSP, in following these ratings agencies’ agenda by trumpeting their claims, is merely taking Filipinos for a ride. The real agenda of the ratings agencies and the financial mafia they serve is to make the Philippines take on more debt, which is being made much easier by the ratings upgrade. This is despite the fact that the Philippines actually now has the internal resources (and lots of it) to pay off such debt and/or fund its own development — something that BSP officials such as Diwa Guinigundo are not saying.

Coming from Guinigundo himself, our 2011 international reserves of $69 billion already cover 12 months of imports even while the IMF requires only three months, and as Philippine foreign debt stands at P60 billion. Guinigundo justifies the costly (interest, opportunity costs, dollar depreciation) idling of 75 percent, or $45 billion, of RP’ reserves as a safety measure against finicky financial markets. Is this sane while the country continues to take on new debt? Philippine debt rose by $788 million in 2010 and debt stock grew by more than 9.2 percent, or $5 billion, by end of 2010.

Meanwhile, despite Guinigundo’s claim in his letter that “…the BSP does not own (the Special Deposit Account or SDA) and therefore, it is hardly a ‘disposable’ fund kept idle,” others, such as Marvin Fausto, president of the Trust Officers Association of the Philippines contend otherwise. Fausto, in fact, said on Nov. 3, 2010, “(the money parked in SDA facilities) should instead be channeled to funding needs, like in infrastructure projects. We need investments. (The money in SDAs) is enough to spur (further) growth.”

Victor Abola, senior economist at the University of Asia and the Pacific, whom I seldom agree with but do in this case, has also said that SDAs are a “waste of resources” and the “BSP should lower interest rates for SDAs to free up more funds, from the present 4 percent to 3 percent.” I was prevented from cross-examining Guinigundo at that Kapihan only because the host probably feared that I would put his guest on the spot. Well, now he is.

(Tune in to Radyo OpinYon, Monday to Friday, 5 to 6 p.m., and Sulo ng Pilipino, Monday, Wednesday, and Friday, 6 to 7 p.m. on 1098AM; Talk News TV with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable Channel 8, on “Head-to-Head vs Coconut Oligarchs”; visit http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com for our articles plus TV and radio archives)

(Reprinted with permission from Mr. Herman Tiu-Laurel)

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/commentary/20110711com5.html

Pointless battle for opinion EDITORIAL 07/11/2011

Pointless battle for opinion

Click to enlarge
It appears that the Catholic Bishops’ Conference of the Philippines (CBCP) is now bearing its full weight on the Hacienda Luisita issue making for an interesting tug of war on public opinion with Noynoy after the Philippine Charity Sweepstakes Office (PCSO) scandal and the intransigence from both camps over the controversial Reproductive Health (RH) bill, which started the friction between both.

The charges raised by the new PCSO appointees of Noynoy on the seven bishops were unprecedented and the Church is raising the ugly possibility of a campaign to erode the credibility of the institution with the revelations not that many Filipinos still believe on the infallibility of the men of the cloth..... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/commentary/20110711com1.html

The mystery of fake travel papers FRONTLINE Ninez Cacho-Olivares 07/11/2011

The mystery of fake travel papers

Ninez Cacho-Olivares
Ping Lacson insists that the travel document he had traveled with to return to the Philippines after a year living the life of a fugitive is authentic, a direct contrast to what the Department of Foreign Affairs (DFA), the government agency that would certainly know whether the papers are authentic or faked.

The DFA had already come out openly to state that Lacson’s travel document was a fake, mainly because the numbered document Lacson claims he had, granted him by a Philippine consulate which neither he, nor the immigration chief in Cebu who had met him and gave him and his arrival special treatment, is still with the DFA, and has not been issued as yet.

The DFA also said it had checked with various Philippine consulates, Macao, Xiamen and Hong Kong and not one had issued the travel documents for Lacson. Moreover, the numbered document Lacson claimed he had, is still with the DFA..... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/commentary/20110711com2.html

From trainee suicide bomber to new life in Pakistan focus 07/11/2011

From trainee suicide bomber to new life in Pakistan


BARIKOT — Young Hazarat Bilal says he feels lucky to be embarking on a new life after escaping the clutches of the Taliban in the pristine surroundings of Pakistan’s Swat valley.

Just over a year ago, he says he fled a Taliban prison in Chuprial, 40 kilometers northwest of Mingora, the district’s main town.

Today, he tells journalists invited to inspect an army program to “de-radicalize” brainwashed youth, his hero is all-round cricketing star Shahid Afridi, and not Osama bin Laden.

The 24-year-old is one of hundreds, potentially thousands of youth who were kidnapped or handed over by their families to train as suicide bombers or Taliban fighters in northwest Pakistan..... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/commentary/20110711com3.html

Killjoy C.R.O.S.S.R.O.A.D.S Jonathan De la Cruz 07/11/2011


Jonathan De la Cruz
What a killjoy! This is what many of my pro-P-Noy friends exclaimed after being told that the World Bank just declared that the Philippines continues to experience one of the worst cases of poverty in the Asia-Pacific region.

In its Philippine Quarterly Update, the World Bank reported that poverty in urban areas was “worsening rapidly” due to increased population and lower incomes. Coming as it did right after Palace spokesmen trumpeted a March SWS survey advising that the incidence of hunger in the country dropped during the survey period with one million hungry mouths getting off the rolls, this bank advisory immediately doused cold water on an incipient triumphalist run.

Said the World Bank: “Poverty and especially poverty dynamics, in the Philippines remains worse than its neighbors. Spatially, poverty remains highly concentrated in the rural areas and in terms of sectors, households that rely on agricultural income are significantly more likely to be poor than other households... From 2006 to 2009, poverty in urban areas increased more rapidly, became more severe and contributed more to the continuous increase in poverty. Across regions, 10 out of 17 administrative regions experienced an increase in poverty incidence... Despite a more resilient economy, some 2.4 million Filipinos became poor from 2003 to 2006 and 1 million more from 2006 to 2009.”.... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/commentary/20110711com4.html

US observers urge poll code overhaul 07/11/2011

US observers urge poll code overhaul

The government should overhaul the country’s Omnibus Election Code to develop a single, comprehensive electoral law that fully considers and integrates provisions for automation, US-based observers of the 2010 computerized elections recommended in a recent report on the conduct of the polls last year.

The international election observation mission identified with former US President Jimmy Carter, nevertheless, cited the Commission on Elections (Comelec) and its private partner Smartmatic-Total Information Management Corp. for their “hard work” in conducting the country’s first-ever automated voting last year that was “marked by relatively high public confidence and trust on the use of the optical mark recognition technology.”

This mission led by the Carter Center, which is a global peace and health advocacy nongovernment organization based in Atlanta, Georgia, observed in its 70-page final report on last year’s Philippine elections that “results transmission was generally successful, with Comelec and the technology vendor working in concert to provide necessary assistance to poll workers through written instructions expert assistance, and a national call center.”.... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/headlines/20110711hed2.html

GMA, Uriarte hard to pin down for plunder over PCSO mess By Angie M. Rosales 07/11/2011


GMA, Uriarte hard to pin down for plunder over PCSO mess

By Angie M. Rosales 07/11/2011

Pursuing plunder charges against former President and now Pampanga Rep. Gloria Arroyo along with her alleged close associate, Philippine Charity Sweepstakes Office (PCSO) vice chairman and general manager Rosario Uriarte, will be futile due to lack of evidence despite the supposed exposés on the misuse of funds made by officials appointed by President Aquino in the state lottery agency and the most that can be levelled against both is malversation of public funds.

Sen. Francis Escudero yesterday pointed out the apparent lack of evidence to prove “personal gains” on the part of Arroyo and Uriarte in the use of the charity funds of PCSO, the total of which allegedly amounted to P325 million.

Senate blue ribbon committee chairman Sen.Teofisto Guingona III had raised the possibility of filing plunder charges against Arroyo and Uriarte since the alleged diverted PCSO funds totaled more than P50 million but Escudero said that exceeding the amount does not automatically result in a plunder case..... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/headlines/20110711hed1.html

MILF appoints Al-Haq as spokesman By Mario J. Mallari 07/11/2011

MILF appoints Al-Haq as spokesman

By Mario J. Mallari 07/11/2011

The Central Committee of the Moro Islamic Liberation Front (MILF) has named a new military spokesman after the sacking of Eid Kabalu for actively seeking appointment as officer-in-charge of the Autonomous Region in Muslim Mindanao (ARMM).

In a statement posted over the MILF official website, the secessionist group announced the appointment of Von Al-Haq as new spokesman of the Bangsamoro Islamic Armed Forces (BIAF).

Al-Haq was the erstwhile chairman of the MILF’s Coordinating Committee on Cessation of Hostilities (CCCH) in the ongoing peace negotiations with the government..... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/nation/20110711nat5.html

RP Embassy in US makes representations for Pinoy teachers in Maryland 07/11/2011

RP Embassy in US makes representations for Pinoy teachers in Maryland

The Philippine Embassy in Washington said it will make representations with the US government to seek better protection for Filipino teachers and hopefully retain the employment of at least 500 of them who may be out of job soon due to a hiring restriction imposed by the state of Maryland.

According to the embassy, teaching jobs for Filipinos may be adversely affected as the Prince George’s County Public School where they work can no longer afford to pay their salaries..... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/nation/20110711nat3.html

Atienza files raps vs Lim, Moreno, 35 others 07/11/2011

Atienza files raps vs Lim, Moreno, 35 others

Multiple criminal and administrative charges were filed before the Ombudsman against Manila Mayor Alfredo Lim, Vice Mayor Francisco “Isko Moreno” Domagoso, two top city executives and 33 councilors for the approval of an ordinance granting tax exemptions to a highly profitable telecommunications company.

The complaints for grave abuse of authority, ignorance of the law, dishonesty and grave misconduct, violation of Republic Act 6713 and 3019, and violation of their oath of office were filed July 4, 2011 by former Environment Secretary Jose Atienza Jr., barangay chairmen Ricardo Aguinaldo, Jorge Limqueco, Romeo Castro, Benedicto Marcelino, Randolf Sy; former barangay chairmen Villano Osorio, Mariano Ponce, Francisco Blanco and businesswoman Emily Mayie Monzon.

The complainants stressed in their criminal and administrative charges that the granting of franchise and real property tax exemptions to Smart Information Technologies Inc. or Smart through City Ordinance 8229 on April 19, 2011 deprived the city government of multi-million pesos in annual income which could have been used for the delivery of improved basic services to Manileños. They added the ordinance is illegal because it was approved without the required conduct of public hearings as provided for under the Local Government Code..... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/metro/20110711met4.html

Advertising group urged to police own ranks 07/11/2011

Advertising group urged to police own ranks

Amid the recent controversy involving indecent billboards on Edsa, members of the House of Representatives yesterday urged the Outdoor Advertising Association of the Philippines to police their ranks and remove all offensive and inappropriate billboards.

According to San Juan Rep. Joseph Victor “JV” Ejercito said the giant billboards featuring scantily clad men and women are a distraction to motorists.

“Too many billboards of men in briefs are an affront to public decency,” Ejercito said.

Leyte Rep. Ferdinand Martin Romualdez, for his part, said the billboards contribute to the erosion of the country’s moral fiber..... MORE

SourceThe Daily Tribune

URL: http://www.tribuneonline.org/metro/20110711met3.html

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