Why are the Monsods so anti-Constitutional Reform?

monsodscrazy

Winnie Monsod was being preposterous when she chided those individuals who rejected posts in Duterte’s cabinet because of the paltry pay.

To paraphrase her, she said that they should not even be thinking about their salaries because it’s a great time to participate in the country’s strong economic growth.

Which probably means, Monsod is an out-of-touch romantic, or worse, a scholar who has lost all credibility by engaging in motherhood statements and vacuous platitudes rather than sober arguments supported by a solid framework of data as befitting an economist of her renown.

It’s no different from saying that OFWs should not have just sought their fortunes abroad and just meekly accepted measly salaries which can barely support their families because doing so would be “unpatriotic.”

This attitude is unfortunately prevalent among Filipinos whether highly educated or ignorant, where emotional arguments prevail over pragmatic and realistic ones. Given the broken and ubernationalistic educational system that we have, it’s natural for many uninformed Filipinos to spout garbage such as “protectionism protects Filipino enterprises but only temporarily so they can compete later” or that “without 60/40 our country will be bought by foreigners” or “the Philippines belong only to Filipinos” when prodded about this topic.

Compare that to what practical Singapore did when it pegged its ministers and bureaucrats’ salaries to the private sector’s rates to ensure that the best minds would join the Singaporean government (and unsurprisingly SG’s government tops almost all international metrics). More importantly, Singapore has had zero qualms at all in allowing FDIs to arrive in the tiny island country in droves because it wanted jobs for its people.

This poor reasoning probably also accounts for her and her spouse’s excuses not to support lifting the protectionist restrictions in the 1987 Constitution, citing among many things that Japan and South Korea didn’t need FDIs (while ignoring that these countries are special cases, or how FDIs transformed Hong Kong and Singapore, or how British investments laid the ground for later American economic dominance) and that human capital, lack of infrastructure, transparency, a good regulatory framework, etc., are more important. [1]

No one’s arguing against these factors, but opening barriers on FDIs will actually give more incentives for government to address these issues since it will be pressured by foreign investors who will be trying to come in once these restrictions are gone.

Foreign investors themselves are saying that the main problem of the Philippines in attracting investments lies with the protectionist clauses in the Constitution. Sir Richard Branson, the multibillionaire founder of the Virgin group of companies, has said that the Philippines must open up so more investors can come, and that protectionism does not benefit consumers but only the businesses insulated from competition. [2]

And what’s even more curious is that many of the Monsods’ colleagues in the UP Department of Economics do not agree with their conclusions. Gerardo Sicat, another UP economist and former head of NEDA, argues rightly that foreign restrictions have to go, while not forgetting to mention that infrastructure (among other things) has to be improved as well. [3]

But some of the excuses from Christian Monsod are: FDIs help, but not too much, or many industries are virtually allowed anyway, or that quality of the investment, not quantity, must be the focus.

Now, even if these conditions were true, then why oppose the proposed lifting of the restrictions anyway? Why do a lot of foreign investors specifically state that the ownership caps dissuaded them from setting up shop in the country? And most importantly, why not allow foreign businesses to come here with full ownership of their interests, and let the jungle rule of competition weed out the bad from the good?

Is this even an argument coming from an economist? This is basic economics! There is no need for an intellectual of equal or greater caliber like Prof. Sicat to elucidate the obvious! Now this is what you call “palusot”!

And what about quality? How would it be measured? Heck, even LKY proudly stated that he and his team warmly welcomed a mothball factory to be built in Singapore!

[1] Charter Change: the 2014 Version

[2] Virgin Group’s Branson says Philippines should relax foreign ownership caps

[3] Foreign ownership limits hinder Philippine growth potential

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About the Author

louis gerardLouis Gerard Del Rosario is an avid reader. He is also an active Constitutional Reform advocate within the CoRRECT™ Movement, becoming even more active after a pro-Constitutional Reform candidate won in the recent election. (This article started off as a status update on FB.)

He studied literature at the University of Santo Tomas.

How does Federalism work?

Federalism-Melbourne

The Royal Exhibition Centre in Melbourne — site of the first Federal Parliament of Australia, a perfect example of a country that uses a Federal-Parliamentary System.

Of all the most important systemic and fundamental constitutional reforms that must be implemented in order to improve the Philippines, Federalism is the reform that has the most solid support among most ordinary Filipinos. Particularly in the Visayas-Mindanao and even in the Solid North, Bicol, and Muslim Mindanao regions, Federalism is widely appreciated and understood even by ordinary plebeians and proletarians to be of utmost urgency in order to fix the Philippines.

Sadly, there are members of the Philippine Elite who tend to be stubborn and uninformed. They are articulate and eloquent so they are able to pretend to be “in-the-know” by obfuscating the issues with their sophistry and casuistry and are dangerously able to convince other people to become just as ignorant and as anti-reform as they are. For instance, the Monsods – Christian and Winnie Monsod – have repeatedly over the years continued to keep mouthing a lie that some people have unfortunately mistaken to be true. This lie is that “Federalism will empower Warlords and Political Dynasties.”

winnie-christian

The Monsod couple: Picture it now, and see just how, the lies and deceit gained a little more power…

Give us a break, Monsods!

Feudalism is what empowers Warlords and Political Dynasties! Not Federalism!

And Feudalism results from having a lousy economic system that favors only a small narrow elite to the detriment of the majority of the people in society who remain poor and economically disadvantaged because the economic system does not create enough opportunities for upward socio-economic mobility. The current pro-oligarch 1987 Constitution and its anti-FDI restrictions which keep job-creating foreign investors and international companies out is largely to blame for why jobs are so scarce, poor and unemployed Filipinos are the norm, why comfortable Filipinos are so few, and why most ordinary Filipinos need to work abroad as OFW’s just to be able to earn decent wages for them to live decent lives. Warlords and Dynasties emerge when so many people are poor and only a few people usually from the same family are rich enough to run for office. Warlordism happens when most people are so poor that they are forced to ask assistance from the rich warlords in exchange for services and allegiance.

In short, Warlords and Dynasties are an economic issue, not a political one.

Do you know how autonomy works? Within the context of parents and kids, it works like this… If you want to be more “independent and autonomous” and retain your own earnings and do whatever you want, then you leave your parents’ home and you cannot ask allowances from them anymore. If you remain dependent on your parents, then you have to follow their rules. You cannot do whatever you want.

Check out this analogy:

familyanalogyUnder Federalism, regions will be forced to sink or swim. Warlord-types and political dynasties will no longer have the ability to pass the buck to the national government and blame it for why their region is poor. Under Federalism, a region will remain poor if its leaders are lousy and unable to set up pro-business economic policies that will create more than enough employment opportunities and economic opportunities for the people. “Warlords” will not be able to rely on monetary subsidies from the national government because Federalism will force them to be “on their own” in terms of their economic management. There will no longer be a mega-pork barrel like the PDAF under Federalism.

All that the national government (to be referred to under Federalism as “the federal government”) will directly handle is National Defense, National Law Enforcement, Foreign Affairs and National Diplomacy, the National Judiciary (Supreme Court), Minting Money and Coinage, Currency Management, and a few national regulations and coordination of a few other issues such as Education, Food and Drug certification and other similar issues at the national level.

Bringing in businesses, attracting investors – local and foreign, however, will be handled by the region-states. The direct implementation of Education policies will also be handled by the region-states. Essentially, the regions will be given the necessary powers to be able to handle all these concerns by themselves according to how they best see fit. A region may decide that they prefer to emphasize English language proficiency over that of Tagalog, partly because they don’t really use Tagalog as their local language and that English is more advantageous to them economically and in dealing with tourists. Whatever that is, a region may do what it thinks is best in terms of making them much more competitive economically.

Fed So in a nutshell, here’s how Federalism works:
 
Federalism will allow the achievement-oriented regions who choose good leaders to set up really good economic policies that will attract lots and lots of investors to come to their region. More investors and businesses coming in means more jobs for the people. This means more people earning salaries, which means more people paying income taxes. More companies in the region also means more corporate taxes. More income taxes + more corporate taxes, plus more consumption taxes when people spend means more tax revenue for the regional government, which means more funds for the government for improving the infrastructure, improving the salaries of government workers to have quality people and greater efficiency, improving education, improving schools, school equipment, teachers’ salaries, etc. The region will become rich. The leaders of the region can also decide on paying decent official salaries for themselves to avoid needing to go through the corruption “kick-back” route. Overall, the well-run region develops and people in that region live better lives.
 
The lousy regions with lousy leaders will be left behind — temporarily — because the lousy leaders make lousy economic policies and no new businesses and investors come in and economic activity is weak, tax collection is low, there are no infrastructure projects, etc, the people of those left-behind regions will complain “why are these other regions doing very well and prospering while we are stagnating?”
 
Then the people will observe that the progressive regions have good leaders and good pro-business policies, etc… They will demand these from their leaders and the leaders who do not comply will be voted out and replaced.  Or perhaps the people and the businesses will leave and transfer to the more progressive regions. In fact, regions will compete against each other to attract the best and brightest Filipinos to come and resettle in their areas. Their first order of business is to try to attract their own people who left for Metro Manila lego ago when opportunities were scarce. With Federalism, the different region-states will do their best to attract their own people to return to their hometowns, bringing skills, know-how, and money to invest and live there, and contribute to the local economy.
 
Under Federalism, regions will no longer receive dole-outs and subsidies from the national government so the lousy politicians will have nothing to steal and enrich themselves when the people (taxpayers) and companies/business leave and transfer to better regions as a result of their mismanagement. (This is the trade-off of the regions not sending most of their money to the national government and retaining most of their own earnings within their region.)
 
Ultimately the inter-regional competition forces the leaders and in the regions to shape up and learn the best practices of the best regions. If there are regions that are doing well, other regions will emulate the best practices that the successful regions are doing.
The leaders cannot be sitting pretty because they will no longer receive PDAF/pork barrel and other subsidies from the national government under Federalism. Under Federalism, the regions themselves must generate the income that they will use to fund their own operational costs.

Now this needs to be emphasized:
 
Federalism cannot be done alone as a single “reform.” There are two other reforms that need to accompany it in order for it to work properly.
Firstly, for Federalism to work well in the Philippines we need to allow foreign investors to easily come in. No more idiotic 60/40 and other nationally-defined restrictions in the Constitution. Delete them all!
 
Remove them from the Constitution, remove them from national legislation.
 
Let the federalized regions determine by themselves if they want to restrict FDI from coming in.
 
Chances are very high that the best-run regions will be very open to foreign direct investors. The ones who are serious about job creation will allow FDI to freely flow in and thus will zoom up economically, while the ones run by idiots will try to restrict FDI and they will end up stagnating and staying poor. The disparity will be glaring and the people in the poorer regions will complain: “Why can the other regions succeed? Why are our leaders so incapable of making the right economic choices?” And then they get them booted out and replaced.
 
Ultimately, good leaders will emerge even in the poorer regions later on. The people from the poorer regions will not tolerate mediocrity after getting so fed up with mediocrity and seeing that other regions are able to improve.

It’s just like why we Overseas Filipino Workers generally tend to be pro-reform. We are exposed to other countries. Especially those of us who work in Singapore and Malaysia. We see with our own eyes countries that are in the same climate-zone, countries that have people that are not too different from ourselves, countries that back in the 1950’s were poor just like the Philippines – in fact we had a lot more going for us back then…
 
We have seen that it is possible for these other countries to succeed and move up and we ask “What’s keeping the Philippines from progressing?” We observe, we learn. We see that they have set up systems that work and have set up policies that are pro-business and meritocratic. No, they aren’t perfect societies, but they are clearly much more successful than we are. So we demand these reforms. This is why we OFW’s overwhelmingly voted for President-elect Duterte. We saw that he was the only candidate who was pushing for the same things that made all these other countries successful. We OFW’s overwhelmingly rejected the representatives of the lousy status quo.
 
Which brings me to the next point… If we need to boot out lousy leaders quickly and reward good leaders, how do we do that?
 
That’s why the second reform in support of Federalism requires that we put parliamentary systems in place!
 
At the National (Federal level) and at the Regional/State level.
 
Yes, at the state/region level they will need to have “mini-parliaments” just like in all Federal-Parliamentary countries. Canada’s provinces have provincial parliaments. Australia’s and Malaysia’s states have state assemblies. All are run as normal parliamentary systems where they also have no confidence votes and the ability for parties to instantly boot out non-performing top leaders.

In such a situation, if a region-state has lousy leadership, then the people can lobby their local state representatives for each state-district to replace the Chief Minister/Premier of the state/region. Or they can lobby them to call for new elections.

Whatever happens, with parliamentary systems set up at the state/regional level, the citizens of each region/state can more easily punish lousy leaders and reward good leaders with a continuation in office.

(It is also true that Parliamentary Systems are – ceteris paribus – less prone to corruption.)

And at the local levels, towns/municipalities/cities, there should be a shift to the parliamentary-like “Council-Manager System” which is much more responsive and accountable. It’s a mini-version of the parliamentary system at the local level.

(Click here to watch the documentary on the Council-Manager System)

We need more and more people to understand why Federalism is important and why (a) removing the 60/40 and all other anti-FDI restrictions and (b) using parliamentary systems at ALL levels is the way to go.

We at the CoRRECT™ Movement do not believe in having people just simply saying yes to these reforms. We strongly insist that each and every Filipino learn and understand what all these reforms are all about and why they are necessary so that they can explain these reforms to their friends and family members and convince them of why we all need these reforms. People who learn the details about how these reforms work and why they are necessary are much more likely to be able defend them when the reforms are unfairly attacked by naysayers. So let’s all learn!

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About the Author

orion

Orion Pérez Dumdum comes from an IT background and analyzes systems the way they should be: logically and objectively.

Being an Overseas Filipino Worker himself, he has seen firsthand how the dearth of investment – both local and foreign – is the cause of the high unemployment and underemployment that exists in the Philippines as well as the low salaries earned by people who do have jobs.Being Cebuano (half-Cebuano, half-Tagalog), and having lived in Cebu, he is a staunch supporter of Federalism.

Having lived in progressive countries which use parliamentary systems, Orion has seen first hand the difference in the quality of discussions and debates of both systems, finding that while discussions in the Philippines are mostly filled with polemical sophistry often focused on trivial and petty concerns, discussions and debates in the Parliamentary-based countries he’s lived in have often focused on the most practical and most important points.

Orion first achieved fame as one of the most remembered and most impressive among the winners of the popular RPN-9 Quiz Show “Battle of the Brains”, and got a piece he wrote – “The Parable of the Mountain Bike” – featured in Bob Ong’s first bestselling compilation of essays “Bakit Baligtad Magbasa ng Libro ang mga Pilipino?” He is also a semi-professional Stand-up Comedian who won first place in the 2014 Magners Singapore International Comedy Festival Best New Act Competition and is the January 2016 Comedy Central Comedian of the Month. He is the principal co-founder of the CoRRECT™ Movement to spearhead the campaign to inform the Filipino Public about the urgent need for Constitutional Reform & Rectification for Economic Competitiveness & Transformation.

What if we were Parliamentary back in 2009?

Thousands watch the cortege of former President Cory Aquino along Sucat road in Paranaque City.   MANNY MARCELO/PHOTO

Thousands watch the cortege of former President Cory Aquino along Sucat road in Parañaque City. MANNY MARCELO/PHOTO

An insightful CoRRECTor, Louis Gerard del Rosario wrote a very good status update:

Yes, a parliamentary system is a hard sell to many Filipinos, because it does not allow direct election of the head of government (the prime minister or PM).

But I think there is a space for the Filipinos’ insistence of a directly elected chief executive in a future parliamentary system by allowing direct elections for a ceremonial president, who would simply become the head of state (in the current system, the president is both head of state and government). This way, even if the Filipino obsession with personalities was not suppressed immediately, it would instead be diverted into another purpose, and thus, far from being a liability for its caprice, would become a positive contribution to political stability.

To understand the merits of this suggestion, look at this hypothetical reimagining of the 2010 elections, which takes place in a unicameral parliamentary Philippines:

It is 2009, GMA is the PM and will lead her party, Lakas, in elections next year. The LP under Mar Roxas will contest the elections, hoping to beat Lakas, which is unpopular, and form the next government. Presidential elections are also scheduled next year for the next ceremonial leader of the country. (Note: parliamentary republics often separate their presidential elections from the parliamentary ones, so the former would not distract voters from the latter. This scenario is simply for the purpose of argument.)

Cory Aquino dies, a much respected icon of democracy and freedom. A strong movement formed by multiple sectors begins to convince Noynoy Aquino to run for president. Aquino, being a member of LP, has to sever his ties from the party to qualify for the presidency, as presidents are expected to be impartial and transcend politics. The LP unofficially and quietly supports their former party member.

Noynoy wins the 2010 presidency, while Mar Roxas who remains the leader of the LP wins the elections for his party, and later forms the government as the PM. GMA resigns the Lakas leadership.

A closer analysis of this hypothetical scenario reveals that it’s basically a win-win situation for everyone:

1. Filipinos would be able to express their People Power nostalgia and personality worship by voting for Noynoy in a non-political position.

2. Noynoy, being above politics and not really expected to govern the country, would never have the chance to be incompetent and divisive. More importantly, the Aquino reputation that he embodied would not be tainted and thus not become a cause for division and alienation among Filipinos. This also means that the majority would not rethink Martial Law.

3. Mar Roxas would remain the leader of the LP and have the chance to lead the Philippines as PM. He would not need to sacrifice his political ambitions for the sake of nostalgia, because that sentiment was channeled in the presidential elections instead.

4. Everything ceteris paribus, that would mean less chance of things such as the HK Tourist Bus hostage tragedy happening.

5. GMA, an unpopular leader, would be peacefully removed from power. Since the same happened in actual history anyway, the importance of this point is appreciated in the years before the election, when there would have been hardly any calls for a revolution or an impeachment (impossible), because she could have easily been removed either through a no confidence motion in parliament or a coup by her own party.

From our assessment of how things may have turned out, who knows, maybe under a Parliamentary System, former President Gloria Macapagal-Arroyo might not have been as villified and demonized the same way she was had she been a Prime Minister, because ultimately, in a Parliamentary System, most of the focus would have been on her Government’s policies, programs, and her party’s platforms, not on her person.

If we are to actually look at it objectively, many of the legislators who joined the Liberal Party to cause it to have its majority were actually originally members of GMA’s Lakas-CMD-Kampi party/coalition bloc. Under a Parliamentary System, they wouldn’t have jumped over to the LP and it may very well have meant that GMA might have actually remained on as Prime Minister and wouldn’t have been unfairly villified. Mar might have become the Leader of the Opposition, and had Noynoy won as ceremonial figurehead president as a result of Tita Cory’s death in 2009, Noynoy wouldn’t have been able to wrongly influence or block all kinds of other reforms that we so desperately need to put in place. There wouldn’t have also been a PDAF or such a scandal in the first place.

Things would have really turned out differently.