POSTSCRIPT / September 3, 2006 / Sunday


Philippine STAR Columnist

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With his job undermined, Melo now pressured to quit

PREJUDGMENT: Former Supreme Court Justice Jose Melo means well and takes his job seriously as chairman of the presidential commission assigned to investigate the serial kidnapping and murder of pesky members of militant groups and the media.

But I think my poor cabalen now has no choice but to resign, after President Gloria Arroyo publicly absolved the military and the police — who have been linked to the extra-judicial executions and abductions — even before Melo could start working.

How can Melo now make credible conclusions and recommendations when no less than the President, who created the commission and appointed him, has cleared the military and the police in advance?

With the President’s prejudgment and the plan to enlist the police for the commission’s investigations, how can Melo make a conclusion adverse to the police or the President? Would the creature make a statement that could place its creator in bad light?

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BROKEN LOCKS: Air travelers in the United States are advised not to lock their check-in luggage. Personnel of the federal Transportation Security Administration inspecting bags may break the locks (if locked) to examine suspicious contents.

The passenger cannot hang around the security inspection area to lock his bags after inspection. So the luggage goes unlocked. A passenger may find later his lock destroyed, with some of his things showing or hanging out.

The new security procedures can leave bags vulnerable to spillage or even theft. But because TSA personnel see to the proper zipping up of inspected bags, checking in at US airports is generally not worrisome if one’s bag zippers are fail-safe.

While travelers bound for the Philippines feel their unlocked luggage is safe while in the US, they could be apprehensive of what might happen between the time the bags are unloaded at a Philippine airport and transferred to baggage claim.

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SOLUTION: If bags are not safe from pilferage at the Manila airport even when locked, what more if they are only zipped up but unlocked, or if their locks had been broken by TSA?

A solution is now available for those who want to keep their bags locked from the time they leave the house, through security inspection at a US airport, all the way to baggage claim in Manila.

There are now some special combination locks that are TSA-recognized. Airport security personnel in the US know how to open them without force. They close the locks after inspection.

I should tell interested travelers the brand of the locks (sold for $20 in pairs) and where to buy them, but that would be advertising. There is another model, for the same price, that has an indicator if it had been opened or tampered with.

The US manufacturer boasts of a guarantee that TSA personnel can and will open their locks properly. Anybody who complains of a broken lock gets a refund.

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NERI REJOINDER: Reacting to my Postscript of Aug. 24 that opened with “Seeing how millions still wallow in want and how neighboring countries have been galloping ahead of us, I wonder what guides the economic reforms being carried out by NEDA Director General Romulo Neri,” he emailed me saying among other things:

“I want to present the facts stripped of ideological rhetoric. During the past years, social spending fell due to the debt service burden, prompting this government to act. Debts had been piling up because public revenues were not enough to cover public expenditures. We thus embarked on tough fiscal reforms including the EVAT. The original target was to close the deficit by 2010. At the current rate of reforms, it will be closed by 2008. For example, the deficit target for 2006 is P125 billion; so far it is only P48.5 billion.

“The fiscal reforms are paying off, as the EVAT alone brings in an additional P75 billion a year. Consider the proposed P1.137 trillion budget for 2007. For the first time in six years, interest payments will fall, from P340 billion in 2006 to P318 billion in 2007. The share of the debt burden will slide to 28.8 percent of the budget from 36.2 percent in 2006. The budget for the Department of Education will be raised by 20 percent, the highest growth in history.

“Rating agencies and foreign investors have taken notice of the fiscal reforms. Rating upgrades resulted in a flood of foreign capital, complementing OFW inflows. Foreign direct investments rose by 65 percent in 2005. Foreign portfolio investments (e.g. stocks) in 2005 swelled to four times their level the previous year. All told, foreign exchange reserves reached an all-time high. The peso strengthened, from P56 to the US dollar to around P51 today.

“This has toughened the economy amid the global oil crunch. The benchmark Dubai oil used to cost $ 33.63 per barrel in 2004. As of Aug. 25, 2006, it is $ 67.05, or about double the 2004 level. And yet inflation has been moderate, at 7.0 percent this year, even below official projections. This is largely due to the strong peso. Formerly we would import oil at P56 per dollar; we now import it at only PhP51.

“The strong peso is one shock absorber, but there are others. High oil prices should depress household consumption, but this hasn’t happened. Consumption grew by 5.0 percent in the first quarter of 2005. Instead of falling, the rate rose to 5.1 percent a year after. The counter force is the immense flow of OFW remittances, also at an all-time high.

“The structure of the economy itself is changing as it is becoming more globalized. We were expecting 8 percent export growth in 2006. So far the rate is double that, at 16 percent. We were projecting a 10 percent rise in OFW inflows. The actual rate is already 15.4 percent. Then there is the phenomenon of business process outsourcing (BPO).

“Investment bank Goldman Sachs considers ‘impressive’ the development of BPO industries here. Further, ‘it is a $3 billion industry which is expected to reach $12 billion by end-decade and employ one million people It is clear that the Philippines is now very much on the global map for e-services outsourcing.’

“Formerly, the economy would average 3-4 percent growth. The band has risen to 5-6 percent, due to the economy’s increasing outward orientation. It is not weak but strong, for it is able to absorb global shocks, and compete in the global marketplace.

“Our position on minimum wage hikes is that they are best resolved at the factory level via collective bargaining. The employees, including the accountants, know best how much a company can afford to give. While a few companies can easily afford the P25 wage hike in Metro Manila, others will have to lay off workers, and some may even close shop. Imposing a one-size-fits-all policy is clumsy and may throw people out of their jobs. This is particularly true for small enterprises. The tripartite bodies are thus careful in setting the new rates.

“Finally, the change in definition for unemployment is not an attempt to fool the public. It only brings us in line with global standards. In the old definition, the unemployed were those not working and looking for work. In the international definition, the unemployed were those not working, and available for work, and looking for work.

“For example, a senior student enrolled in the current semester is beginning his job search now as he looks forward to graduation. He is not working and is looking for work. But he can’t be considered unemployed because he is not yet available for work during the said semester. That is only fair. Of the 88 countries running labor surveys, only 10 did not use the availability criterion: nine Latin American countries and the Philippines. The recent correction should result in more accurate statistics.

“The current unemployment rate hovers around 8 percent. The Ibon ‘job scarcity’ estimate cited by the column is 43 percent. According to the Ibon website, the latter includes those employed overseas. The reality is that people become OFWs due to much higher foreign pay rather than local desperation. In the United Kingdom, the starting pay for nurses is 18,698 pounds, equal to P1,815,373. Shall we pity the Filipina nurse abroad? Will a fair reader believe the 43 percent?

“The economy is not weak and vulnerable but solid and resilient. It is displaying respectable growth and is getting more competitive in the global arena. And yes, the tough fiscal reforms were worth it.”

(Readers who want to recall what I wrote in Postscript may visit and click the link to my Aug. 24 column.)

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(First published in the Philippine STAR of September 3, 2006)

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