Capital Flight and the Continuing Poverty in our Country

(I owe this post and article to a Filipino friend who is now based in Canada. I did not post it immediately because I was hoping that local media would pick this up and reprint it. I don't know if media did pick it up and I missed their issue or maybe media decided that it was not worthy of print space at all. But I agree with my friend who is still very much concerned about what is happening in our country. Capital flight is a serious matter that perpetuates poverty and must be resolutely addressed and curtailed. I think President Aquino should rethink his slogan "Kung walang corrupt, walang mahirap". It is not just corruption that causes poverty but greed and legalized economic injustice as well.)

Corporate tax evasion undermines Philippines remittances

Money headed for international tax havens almost cancels out the $23 billion overseas workers contribute

Jonathan Manthorpe, Vancouver Sun

Published: Monday, December 19, 2011

The Philippines' army of 10 million overseas workers is renowned for the sup-port it gives the country's economy with remittances sent home and expected by the World Bank to reach $23 billion this year.

But a new report suggests that support is being substantially undermined by the illegal and illicit export of close to $15 billion a year by the Philippines' wealthiest corporate leaders.

This outflow, says the Washington-based research and advocacy organization Global Financial Integrity (GFI), is seriously affecting the Philip-pines capacity to develop its economy and infrastructure, and sustaining one of the worst disparities in Asia between the rich and the bulk of the population.

The GFI report published on Thursday looked at the decade from 2000 to 2009 and calculated that about $142 billion left the Philippines during that period.

"The study found that the majority of the illicit out-flow, $113.7 billion, is due to the mispricing of imported and exported goods," says the report.

Corporations and individuals have been smuggling money out of the country, usually to avoid taxes, by manipulating the price and quantity of exported goods.

The aim is to send more money abroad than is reported to government and then park the money in tax havens or overseas investments.

"This means that while the Philippines has seen significant outflows from corruption, bribery, and kickbacks, their biggest priority when addressing illicit capital flight should be to tackle trade-related tax evasion," says the report.

"We believe that the very real cost in human suffering and loss of life from tax evasion in the Philippines and elsewhere throughout the developing world, is massive."

If the GFI analysis is any-where near accurate the irony is profound.

The Philippines has enormous potential, but suffers from a political system and succession of administrations still steeped in the quasi-feudal culture of the Spanish colonial period.

At the same time, the Philippines has among the most literate and highly educated populations in Asia. But millions of Filipinos find it impossible to use their skills at home and are driven to find work abroad in order to support their families. This compulsion has led to the creation of an extraordinary sup-port network for the 10 million or more Filipinos working over-seas as domestic helpers and caregivers throughout North America, Europe, Asia and the Middle East. And at sea Filipinos are dominate members of the crews of merchant ships worldwide.

A World bank report at the beginning of this month estimated the overseas Filipinos will send home $23 billion this year. This is higher than the Philippines government estimates of $20.1 billion and, despite the global economic stagnation and uncertainty, seven per cent up on last year.

But while this army of Filipinos is supporting the home economy, the GFI report says this effort to spur prosperity and development is being undermined by the export of money by corporate leaders.

While the Philippines has seen substantial economic growth over the past decade, much of these gains have gone to relatively few people.

Income inequality has risen since 2000 and is among the worst in the region.

The movement of money out of the country by the wealthy "helps explain why despite economic growth, tax revenue as a percentage of gross domes-tic product has been declining since 1990," says the GFI report.

The report says the Philip-pines cannot solve its tax evasion problems by itself. The shadowy system of tax havens and loose accounting systems used by corporations and individuals to hide money abroad is international in nature.

"The international community, namely the G20 countries, needs to support new transparency measures such as country-by-country reporting so that multinational corporations will report revenues and costs for their network of subsidiaries in each individual country," says the report.

jmanthorpe@vancouversun.com

The C-6 Dike Road and the wounded lake

The C-6 Dike road is a straight and flat seven kilometer stretch that runs parallel to the newly built C-6 hi-way. What makes it special is that it hugs the Laguna de Bai Lake giving passersby - promenaders, joggers, bikers etc., a great view of the lake and its surroundings.

Its length makes it one of the longest and largest public open spaces in Metro Manila.


The north side entry is at Brgy. Napindan, at the foot of the Taytay-Taguig bridge which is the easternmost bridge spanning the Pasig River.

(Although the C-6 hi way is a relatively newly built road, it immediately fell into a bad state of disrepair after being opened to the public that it has become an ordeal for motorists to pass through it. Who could be responsible for this and why does it take the authorities such a long time to have this road repaired? )


(The end of the Pasig as seen from the Taytay-Taguig C-6 Bridge. I don't know if they have named this bridge in honor of somebody yet. On the other side of the bridge is the Laguna de Bai Lake)

(The south side ends in Bicutan.)



The interesting thing about going through the dike road is that one encounters different sights and environment all throughout its length.


A portion of the dike road - ang matuwid pero lubak lubak na daan.


A talahib lined portion of the road giving the passerby a feeling of suddenly losing the city and being transported to some far away place.



One time, I even came across this strange bubble that blocked my path. On examination, I learned that it came from the pumping station as a by product of some water treatment activity.


But of course, what I like most about the place is the view of the lake, its immediate surroundings and the various activities it has spawned.
A duck farm that sprang on the shore side as the lake water receded.



a view of the expansive lake


a portion of the lake over run with water lilies



a path cleared for boats



more boats waiting for imaginative use - think gondolas, think tourism. 'Will it not be more fun?


This is not just a house but a restaurant. The house specialty is lugaw.

But the view is not all pretty though. Sadly, in spite of the lake's great beauty and potential to enrich our lives, I see its slow dying from the hands of the people who stand to benefit most from its preservation.


a part of the trail turned into a garbage dump. According to the LLDA website, the Laguna de Bai Lake is now being tapped as water source by Manila Water and Maynilad. If this is so, how can we allow this to happen?


a part of the lake being reclaimed. This is like killing the goose that lays the golden egg.

It is really very sad to see this happen and be able to do nothing. It is for this reason that I am proposing to our government that this place be recognized as a protected area and turned into a national park.

This park can be named the Liwasang Matuwid na Daan and be maintained through public support. What government has to do is to mobilize and maintain this support.

I am hoping that people who will read this post will support this proposal and do what they can to achieve this.

We have a chance to turn the C-6 dike road into a treasure that can be a source of pride for all our people. Or we can remain indifferent and do nothing as our precious lake degrades and dies before our eyes.

If this happens, this will be truly a tragedy. And we the people will be the victims and at the same time the villains.

Welcome to the Philifuns

I have no doubt that the Department of Tourism had very carefully thought about this new slogan.

But I have just one question:

If it is really more fun in the Philippines, why do Filipinos want to leave their country in droves?

Can rape be ok? I blame the media

I don't think I am a judgmental person and I even thought I had a wide tolerance for ideas that do not coincide with mine. But the other night I almost stormed out of a conversation I was having with a driver of an FX vehicle while on the way to Ortigas.

At first the driver was just complaining about life's difficulties. To be polite, I nodded in agreement and even expressed my fear of future increases in the prices of basic goods and services. Encouraged by my response, he then went on to express his unsolicited views of things which made me wonder where he got his information and ideas.

First he blamed former President Cory Aquino and her supporters for being responsible for the high cost of electricity today because she "gave" back MERALCO to the Lopezes. For him it was only right that then President Marcos confiscated MERALCO from the Lopezes because according to him the latter owed the former dictator a huge amount that they could not pay back.

I knew right then that our conversation was going nowhere so I cut back on my chit chat and simply grunted an interjection of "is that so?" from time to time.

From there he proceeded to tell me of his time in Kuwait working as a waiter in a Japanese military base. He told me of the time when Iraq invaded Kuwait and the atrocities he witnessed committed by the invading Iraqi soldiers.

Among the things he witnessed was the rape of Kuwait women done openly on the streets and which he watched with his companions from their place of hiding.

My mistake was to ask if he knew of Filipinas having been raped. He said he did not personally witness any but he was sure there had been such rapes that happened in other cities.

What jolted me though was his comment that Filipinas who were raped were "lucky" because they were amply compensated by the Kuwait government for their ordeal and they became rich. He also said that those Filipinas probably did not mind what happened to them as what they experienced might have satisfied their natural urges as well.

I could not believe what I was hearing. I told him that rape is a horrible ordeal and that I don't think there is any amount that can compensate for it. There were other women passengers in the FX and I felt ashamed that I was in that kind of conversation with the driver. I just shut up and thought of just getting off the vehicle and walk the rest of my way to my destination. As I was late for my appointment though, I just decided to sit it out and tried to change our topic.

Reflecting on this incident, I was reminded that he was not the only man on the street that I had talked to with very strange ideas although his was especially repugnant. I once witnessed two people debating whether clouds can be higher than the moon. I also talked to a former seaman who believed that in the old days, trees can bear different kinds of fruits and that there were islands with caves that open and close which are used by sea pirates to hide their ships and loot.

The question in my mind was how many people think like these trio of crackpots(?) and how can adult Filipinos get to have such kind of thinking?

As I try to answer this question, I can only blame media for their failure to help upgrade and develop the quality of our minds. The big three broadcast media use the news to pursue profit and not to properly inform and educate the viewers. Thus in their attempt to attract viewership that will translate into ad revenues, they draw no line between items of public interest and showbiz entertainment. They focus on the sensational instead of the intellectual. They do not distinguish fact from fiction such as when they feature seers and fortune tellers speaking as authorities in their supernatural field.

In their greedy pursuit of profit, media has seriously damaged our mental infrastructure. We should not let them go on with this anymore.

Firecracker injuries

(Poisoning the air we breath as a way to celebrate the New Year? photo taken from internet)


Every year the government through the Department of Health never fails to remind people to be careful in using firecrackers especially the prohibited ones- but always to no avail.

Given the number of injured, maimed or killed every year plus the untold harm to the environment caused by the release of toxic and noxious gases from exploding firecrackers, it is time that the Department of Health and even the Department of Natural Resources call for a total ban in the use of all pyrotechnics.

What government should do is not just to warn people about the dangers of firecrackers but to educate the people on why firecrackers should go.

Part of the task of weaning people from this deeply entrenched practice is to explore alternatives or to create new rituals to greet the New Year. There are already areas in the country that have done this such as in Davao or in some barangays where people have opted for a communal Noche Buena.

All those opposed to the use of firecrackers such as members of environmental or animal welfare organizations should help the government in this effort.

And the time to act is now, not only towards the end of the year.

On a related matter, I find it outrageous that most of the time when news reporters feature people injured by firecrackers, especially the illegal ones, they focus on the pain and financial difficulty of the victims but not on how they came in contact with the illegal fireworks and whether anything was done to apprehend the culprits who sold or used them that led to their accident.

This year, more than twenty people were reported killed by stray bullets. Those who fire their guns in the air to celebrate anything are criminals and have no place in a free society. I hope government does its best to apprehend these people.

That which has happened...

(Sendong aftermath, photo taken from internet)

The New Year is a time to hope. It gives us a chance to make a new beginning and a chance to do things right.

It was indeed a great tragedy that typhoon Sendong visited our country towards the end of this year and wrought so much death and destruction. But it was not Sendong who cut the logs that angrily wiped out communities. It was not Sendong who ignored the warning of scientists about the danger of living on geohazard areas.

While we have no way of escaping from the fury of Mother Nature, we certainly can temper her destructive wrath. That is if we learn our lessons and do the right things.

That which has happened is a warning. To forget it is guilt. (Karl Jaspers, German philosopher)