Uniffors

I am sad that Jun Magsaysay and Risa Hontiveros didn’t make it to the Magic 12 but  I will be laughing through my tears when Migz Zubiri and Dick Gordon accuse Gringo Honasan of cheating them of their rightful place in the Senate. 

I am sad JV Ejercito made it but at the same time I’m happy he is at the tail-end. His brother Jinggoy is sad. Period. On a happier note, I can’t wait for the two Ejercitos to take opposing sides on an issue. JV and Jinggoy trying to show up each other, whoopie! Will JV call Jinggoy Honarable Kuya or will he address him in the manner he deserves? 

I think Risa Homtiveros made the fatal mistake of pegging her campaign on Nancy Binay. She should have focused on the other UNA candidates where her record on human rights, anti-corruption, and public service would have stood in stark contrast. But she didn’t. So the only imprint her attack on Nancy Binay left was that of a mestiza picking on a housemaid. I would suggest that she shoot her campaign strategist but hacking the idiot to pieces would be more satisfying.

Grace Poe bested three of the best disguised trapos in the business. I always thought Grace would be in the top six but becoming number one never crossed my mind. I love it. She was the most underestimated candidate, thought to lack brains and experience and knocked for riding on her father’s name and fame but she proved her mettle during debates and more than held up in penetrating one on one interviews. She showed that she is intelligent at the same time sensitive and her moral compass points true North. Give her a little time to settle in and she will become a gem in the Senate.

The election of Cayetano, Binay, Angara, Pimentel, Ejercito indicates that dynasty is a non-issue as far as voters are concerned. I hope the anti-dynasty crowd accepts the will of the voters instead of doubling their efforts to frustrate the will of the voters by lobbying for a law prohibiting people who happen to share the same bloodline from becoming public servants. Besides Leni Robredo won against a Villafuerte and Aga Muhlach looks like he will beat a Fuentebella. So anti-dynasts please show a little more faith in the wisdom of the common man.

The good showing of Team Patay proves that Team Buhay is dead. There is no Catholic vote if by Catholic vote you mean robots operated by bishops. There is no Iglesia ni Kristo vote either. But that proposition will be difficult to prove because the INC leadership does not announce its endorsement until the last poll of Pulse Asia and Social Weather Station is published. At any rate, the divergent approaches show the difference between the Catholic bishops and the INC bishops. The former do not pay attention to surveys. And that’s ironic because surveys tune in on the voice of the people which is supposedly the voice of God. Then again if those bishops listened to the voice of God to begin with, they will not meddle in secular politics.

The biggest losers are Enrile, Estrada, and Binay. UNA came in last. That shows they have no endorsement power if the candidate does not carry their surname and in the case of Enrile, he couldn’t even carry his own son. The good news is we are all winners. If I have to explain to you why we are all winners, then you are among the losers who believed that there was more to UNA than Enrile, Estrada, and Binay.

Two weeks before election and my list is done. Who are my senators? Secret. Because revealing my preferences might be taken as an endorsement and you and I know all too well that some endorsements can do more harm than good.

Let’s start with clerical endorsements, Team Buhay and the self-proclaimed pro-life Catholic vote movement. What do they want?

They want legislators who will oppose laws that do not strictly adhere to the teachings of the Catholic Church. They want a Congress that takes dictation from bishops who get their cues and orders from the Vatican. They want a republic where the CBCP (Catholic Bishops Conference of the Philippines) exercises veto power over laws and policies not aligned with Catholic doctrine.

Now here you are, a senatorial candidate who also opposes the RH (Reproductive Health) Law but not necessarily on the same doctrinal grounds as the so-called pro-lifers. You are against the RH law for a number of other reasons—maybe you believe the money for RH should be spent elsewhere or maybe you believe artificial contraceptives are unhealthy. Whatever. But your name has been included in the pro-life senatorial ticket and you are now identified with those who believe that what belongs to Caesar belongs to the Vatican. How will you fare with the overwhelming number of voters who believe otherwise? You could lose their vote. The bishops endorsed you and that marked you as a candidate obedient to their wishes. Some endorsements can do more harm than good.

Let’s go to secular endorsements. An endorsement from a politician with command votes is good but it can also be a liability. For example, Romeo Jalosjos is backing UNA in Zamboanga, his bailiwick. Will his endorsement help UNA with a national audience that only knows Jalosjos as the convicted child-rapist and pedophile that Gloria Arroyo pardoned? Jalosjos is not the only sketchy trapo supporting UNA. There are a dizzying number of them, all working for an overwhelming UNA victory. Why are trapos pinning their hopes on UNA?

In fairness to UNA, they claim they are also for Daang Matuwid. But the problem remains, there are too many crooked trapos endorsing them. UNA is the Trapos’ Choice. Some endorsements can do more harm than good.

Who are PNoy’s Reliable Candidates?
Filomeno S. Sta. Ana III

Manila Bulletin is not the first choice for a Philippine newspaper. It can be boring, and it suffers from its image of being associated with the pro-martial law brand of journalism. But being a humdrum paper also has an advantage: It reports without sensationalism, which the leading dailies are prone to. It thus pays to buy the Bulletin occasionally, particularly its Saturday edition, which includes a supplement of the erudite New York Times International Weekly.

The Bulletin’s 27 April 2013 edition has a well-written inside-page story written by Genalyn Kabiling titled “PNoy Seeks Reform Allies, Assistance.”

I like the writing style, which grabs the reader’s attention. Take the lead sentence: “He is not a superhero; he is human and needs all the help he can get.”

The non-superhero is PNoy. Indeed, PNoy cannot be compared to Iron Man although he and Tony Stark share the same traits of being drawn to attractive women and being moved to fight evil.

Good writing and a good story are anchored on the subject. The writer quotes PNoy lengthily:

“Hindi naman tayo superhero, at kahit kayod marino, wala [nang] tulog, wala pang kain at wala na rin bakasyon maski ano po ang gawin kung nag-iisa kukulangin ang lakas ko upang tugunan ang lahat ng minana nating problema, pati na ang dumarating pang mga pagsubok.”

And spicing his comment with humor, PNoy says: “Pakiusap ko lang ho huwag naman ninyo ipapasan sa akin mag-isa, at baka naman ho dumating ang panahon magkita tayo hindi na ninyo ako makilala dahil baka pareho na kami ni Bembol Roco. Idolo ko po iyon sa acting pero hindi sa hairstyle.”

Thus, PNoy asks the electorate to vote the Team PNoy candidates. PNoy needs more allies to advance and speed up the reforms for daang matuwid. The observation is that the second half of the administration is a difficult period for the Executive to have Congress pass controversial but necessary legislative reforms. The politicians in Congress tend to dismiss the presidency as already lame duck (a consequence of a weak party system and the prohibition of a second-term presidency). An antidote is to have an expanded and solid group of allies in Congress.

The surveys indicate that Team PNoy will win decisively. That’s good news. But here’s the rub: We are not sure that some of the winners from Team PNoy will become reliable allies for reforms.

The case of the passage of the sin tax law illustrates the predicament that PNoy faces. The sin tax is a good example of a hard reform that has long-term impact on the economy and on institutions. It can thus be a proxy of how politicians will behave when faced with a similar reform in the next Congress.

The Senate was able to ratify the bicameral conference bill on the sin tax, but only by eking out a one-vote majority. The sin tax reform was nearly lost because several senators who are considered PNoy’s allies did not show up for the vote or worse, opposed the bill.

Senators Alan Peter Cayetano and Loren Legarda (Team PNoy candidates who will surely win), Manuel Villar (the husband of Team PNoy candidate Cynthia Villar, who will likewise win) and TG Guingona (a Liberal Party stalwart) were absent during the crucial vote. And Senator Francis Escudero (another popular Team PNoy candidate) voted against the bill.

At the same time, the anti-reformers (again, using the sin tax as a representation) like Gringo Honasan and the son of Juan Ponce Enrile are threatening to barge into the winning column.

In short, PNoy’s fear that his “hair style” will completely become a Bembol Roco is real. To prevent that from happening, the voters must reject the likes of Honasan, Enrile, and Zubiri, and vote the most reliable reformers in Team PNoy. Further, the candidates belonging to Team PNoy who have a spotty record must show a pre-commitment that should literally tie them to PNoy’s reform agenda.

In Greek mythology, Ulysses made a pre-commitment by asking his crew to fill their ears with wax to make them deaf and bind him to the ship’s mast once they reached the land of the beautiful sirens. If not for this pre-commitment, Ulysses and company would have succumbed to the sirens’ naked beauty and alluring voices, but leading them to their decay and death.

Among criminals, having a tattoo of Sige-Sige or Oxo is a pre-commitment that they will stay forever with the gang.

PNoy can make a reasonable request to his former “crush,” Loren Legarda, to allow her foot to be chained in the Senate session hall whenever a crucial vote occurs, thus preventing a disappearing act. PNoy can also ask his friend Chiz to have one of his cheeks tattooed, with the lettering: “I luv Heart and PNoy.”

What is worrisome is that the most reliable allies of PNoy are trailing. They are Jun Magsaysay, Risa Hontiveros, and Jamby Madrigal.

Not only is Jun Magsaysay the real Magsaysay (not Mitos who is merely married to a Magsaysay and not necessarily a good Magsaysay) but more importantly, he has a solid track record as a politician in championing economic and political reforms. He is a friend of the farmers, a champion of agriculture. He was the key in exposing and condemning the fertilizer scam during the Gloria Arroyo regime.

Risa Hontiveros is the most progressive among the candidates. Her presence in the Senate will threaten its trapo culture.

And even though some might ridicule Jamby Madrigal as another Miriam Santiago, the fact is PNoy needs another Miriam Santiago type of politician who will be resolute and outspoken in fighting for the hard bills. And let it be known that Jamby, despite being a Madrigal is as left wing as Risa. She takes pride in having the DNA of her lolo, Pedro Abad Santos, the founder of the Philippine Socialist Party.

And so, if we want to help PNoy save his hairline, let us get a pre-commitment from some of his not-so-reliable candidates, vote for the consistent ones who are trailing, and reject the incorrigibles like Honasan, Enrile, and Zubiri.

Bad day for athletes who transfer from one University Athletic Association of the Philippines (UAAP) member school to another. They will have to sit through the two-year residency requirement that the UAAP board of trustees imposed on them. Note that it is the UAAP board and not the receiving school that imposes residency on a transferee. That makes all the difference, as you will see.

One school representative to the UAAP board said,

“This is to protect the school that made efforts in recruitment… to protect the time spent on the athlete and to keep them in their alma mater.”

Another reasoned similarly,

“The new residency rule is to protect the league because we can’t allow other schools to pirate the best available homegrown players…We took everything into consideration and we’re not depriving anyone of their rights.”

Say what!?!

There are no guaranteed investments on this planet. An investment is always a gamble. There is no certainty that the recruited athlete will become a star even with all the coaching, training, financial and moral support from the school’s sports department, there is no assurance that the athlete will not suffer a career-ending injury in the course of playing for the school, there is no telling whether or not the athlete will lose interest in sports. Recruiting, training, and coaching an athlete is a gamble. No one pointed a gun at the school to force it to recruit a particular athlete. And so it must live with the risk of losing an athlete for one reason or another, especially to a more attractive team or school.

A UAAP-imposed residency requirement is a penalty on the athlete who chooses to transfer to another school. A school-imposed residency requirement is not a penalty, it provides a necessary period of adjustment to the transferee. I can still recall basketball games where some transferees were subjected to merciless booing and cries of traidor from their old alma mater every time they held the ball.

If a school wants to keep an athlete then it better make itself so attractive that its best athletes will never want to play for another school. Debt bondage is not the way to do it. Indenture is a practice that is totally unacceptable in a free and competitive society.

Why do I call the residency rule imposed by the UAAP a form of debt bondage?

The Princeton University website defines debt bondage as “an arrangement whereby a person is forced to pay off a loan with direct labor in place of currency, over an agreed or obscure period of time. When a debtor is tricked or trapped into working for very little or no pay, or when the value of their work is significantly greater than the original sum of money borrowed, some consider the arrangement to be a form of unfree labor or debt slavery.”

The “investment” the school made is the “loan” the athlete must pay off through direct labor i.e. playing for the school team. The period of time for working off the “debt” is open-ended because it is the school alone, through the UAAP, that decides when the debt is fully paid. The athlete may not have been tricked into signing on but with the new UAAP ruling he is now trapped by the school that originally recruited him. And look at what a Keifer Ravena may have “borrowed” from his school compared to the payback that the school got from him.

Let’s say the athlete was recruited to play for the high school team. Why does the athlete’s obligation extend to playing for the school’s varsity team? Why does the debt extend even beyond the school year that the athlete played, was the year’s debt not paid with direct labor? Do schools have the right to tell their athletes you will keep playing for us until we decide that our investment in you is fully paid? Read again the arguments of the UAAP board, tell me that their residency rule is not just another form of indenture, and I’ll lend you some money in exchange for your labor.

The UAAP’s new rule is meant to protect the investment of its member schools. Period. It has no interest in the welfare of the student athlete, in fact it punishes the exercise of the right to choose where to pursue higher education.

The UAAP would be wise to withdraw its residency rule before government steps in and does it for them. As Sen Pia Cayetano told the UAAP, “Sorry, but when rights are affected, [government] can step in to protect its citizens.” As it should.

The UAAP also claims the new rule is meant to maintain competitiveness. How can the practice of having indentured athletes maintain competitiveness? More importantly, why is the UAAP placing the burden of keeping the league competitive only on the players? Is it the athlete’s fault if one school is more attractive than another? The burden of keeping the league competitive is on the UAAP board of trustees, they shouldn’t earn their keep on the backs of student athletes.

The UAAP may have forgotten that the U in UAAP stands for universities. Likewise some universities may have forgotten that they are educational institutions to begin with and excellence in sports is only a part of their mission. Yes, trophies bring money that can be used for the improvement of the school in terms of teachers and facilities but sports departments are not ends in themselves. Education is the end that trophies serve and not the other way around. The sports department of schools, through the UAAP, cannot be allowed to dictate where student athletes go for their education.

Kim Jong-un built nuclear weapons and delivery systems, tested them, and now he says he will use them. Maybe Kim wants to see if nukes will live up to their reputation. Maybe he took seriously what humorist philosopher Jack Handy suggested many years ago, “Instead of building newer and larger weapons of mass destruction, I think mankind should try to get more use out of the ones we have”. Maybe he’s just kidding. Maybe he just wants Dennis Rodman and the NBA All Stars to come back. Who knows?

At any rate, what were once considered empty threats are now being taken seriously by US Defense Secretary Chuck Hagel. He announced the deployment of a missile defense system in Guam, “They have nuclear capacity now, they have missile delivery capacity now. We take those threats seriously, we have to take those threats seriously.”

The question now is how to get North Korea off its war footing. In order to do that one must first go beyond the caricature of Kim Jong-un as the crazy boy dictator of a hermit kingdom.

The Atlantic, an American weekly that has maintained its intellectual integrity and credibility for over a hundred years, enumerated five myths about North Korea, myths that get in the way of understanding what makes North Korea “tick”, myths that can lead to simplified analysis and its sorry consequences.

What are those myths?

First, the young Kim and his team are crazy. He is not. They are not. Kim’s response to the new sanctions imposed on his country following its latest weapons tests plus the US-Sokor war games is the logical reaction of any leader whose country’s peace with a neighboring country is held together only by an armistice, not a peace treaty. Furthermore, North Korea is surrounded by allies of South Korea, what is Kim supposed to say or do about what’s happening? He can surrender or defend his country, what would a rational leader do?

Two, North Korea is a failed state. It is not.

The Atlantic, “It came close to being a failed state during the 1990s because of mass starvation. But Pyongyang weathered that storm…The economy has stabilized and even improved. Despite sanctions, trade has expanded significantly, not just with China but also with South and Southeast Asia, Africa, and Europe to the point where the North may have even enjoyed a current account surplus in 2011.”

North Korea, the Atlantic adds, is not comparable to developed countries but “it fits in if compared to developing countries in Asia, Africa and Latin America.” (See also CIA World Factbook to see North Korea’s ranking compared to other states.)

Three, North Korea is a hermit kingdom. It is not. It may not have much to do with the US but it engages not only illicit arms trades with other countries, it also has legitimate business transactions with the rest of the world.

The Atlantic, “Did you know that North Korea sends hundreds of students overseas for educational and business training? Thousands of North Koreans work in China, in Mongolia where they produce goods for popular British clothing brands, in Kuwait where they work on construction projects, and in Russia where they labor in logging camps. A North Korean construction company is currently completing a museum near Cambodia’s famed Angkor temples featuring computer-generated simulations of the ancient monuments. Inside North Korea, just to give a few examples, the information technology sector is an outsourcing destination for other countries, even developing software and apps for the iPhone. Pyongyang’s sophisticated cartoon industry is reported to have been involved in the production of “The Lion King.” The German Kempinski group has been hired to operate Pyongyang’s largest hotel expected to open this spring. And residents and visitors to Pyongyang can now find Viennese coffee at the appropriately named “Viennese Coffee Restaurant.” Of course, North Korea is not an integral part of the international community, but neither is it a “hermit kingdom.””

Four, North Korea cheats on agreements. The short answer is “yes and no.” It cheats when it can. That’s pretty much what every other country guided by national interest would do.

Finally, there’s the myth that China is North Korea’s puppet master. It is not.

The Atlantic, “There are important limits on what China can and cannot do. Having influence is one thing, being the North’s puppet-master another. Hundreds of years of bad history between Korea and China, plus decades of dealing with a giant communist neighbor have taught the North how to manipulate China. Moreover, Beijing may be unhappy with the North’s bad behavior. But it cannot just throw Pyongyang to the American and South Korean wolves since maintaining quiet, stable borders to facilitate its own economic development is a critical priority.”

A realistic appraisal of Kim Jong-un is the first step towards a peaceful outcome to the impassé. Kim is not a cartoon character. He is a real person with nuclear weapons at his disposal. A nuclear exchange between North Korea and the US could lead to a bigger war. An errant missile could be interpreted by another country as aggression. Who knows who else will join the fray for whatever reason once nuclear missiles start flying?

Over the Holy Week, Presidential spokesman Edwin Lacierda announced that the president was going to study Justice Secretary Leila de Lima’s legal brief on the Sabah claim.

According to De Lima the main considerations of her legal brief are, “Is the claim strong or not and should it be pursued before an appropriate tribunal, and what are the options in light of the current situation?”

Obviously, President Aquino has not abandoned the Philippine government’s claim of sovereignty over Sabah. And he will be looking for the best peaceful way to pursue the claim.

The president does not have to spend too much time on the De Lima report. He can just go ahead and file the claim before the UN and declare that the Philippines will accept unconditionally whatever decision the UN makes. Let a credible third party decide who is right. That will put an end to all the internal squabbling over the legitimacy of our sovereignty claim. (The property claim of the Kiram’s is a private matter separate from our sovereignty claim. One should not conflate the two into one issue.)

Media also reported that Lacierda announced the possibility of hiring a foreign law firm to handle the Sabah claim. That would be a big mistake. Okay, the government uses private lawyers, foreign or local, whenever needed but in this particular case hiring foreign lawyers in lieu of natives will only lead to more controversies and all sorts of jingoist criticisms from saber-rattling patriots.

The correct course of action will be to ask all those patriotic native lawyers who have been vociferously claiming that our sovereignty claim is strong to represent us. Let them present the case in court and not in the media.

The Palace could scour media, get the names of all the lawyers who gave media a legal opinion on the legality of our claim and invite them to form a team to represent the country. Sila ang mga nagmamarunong eh di sila ang humarap sa hukuman.

If they lose, they will have no one to blame except themselves. If they win then good for all of us. Doubly good that it was Filipino legal minds that won. Either way the legal squabbling, all the know it all punditry, and all the beating of war drums will stop.

What if Malaysia refuses to submit to the jurisdiction of an international tribunal? Then that’s for the international tribunal to decide once we submit our case.

This Sabah business has to end. Once and for all, sooner rather than later. File the case, submit to the court’s decision whatever it may be, and move on. We should busy ourselves with building a nation, not dreaming of lost kingdoms.

For the first time ever, the Philippines becomes an investment grade country. Thanks to the ever-underestimated Pres. Benigno S. Aquino.

From Fitch Ratings:

Fitch Upgrades Philippines to Investment Grade; Outlook Stable Ratings Endorsement Policy
27 Mar 2013 2:32 AM (EDT)
Fitch Ratings-Hong Kong-27 March 2013: Fitch Ratings upgraded the Philippines’ Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BBB-’ from ‘BB+’. The Long-Term Local-Currency IDR has been upgraded to ‘BBB’ from ‘BBB-’. The Outlooks on both ratings are Stable. The agency has also upgraded the Country Ceiling to ‘BBB’ from ‘BBB-’ and the Short-Term Foreign-Currency IDR to ‘F3′ from ‘B’.
Key Rating Drivers

The upgrade of Philippines’ sovereign ratings reflects the following factors:

-The Philippines’ sovereign external balance sheet is considered strong relative to ‘A’ range peers, let alone ‘BB’ and ‘BBB’ category medians. A persistent current account surplus (CAS), underpinned by remittance inflows, has led to the emergence of a net external creditor position worth 12% of GDP by end-2012, up from 6% at end-2010. Remittance inflows were worth 8% of GDP in 2012 and proved resilient even through the shock of the global financial crisis. Fitch expects a rising import bill stemming from strong domestic demand to lead to a narrower CAS and to stabilise the net external creditor position at a strong level through to 2014.

-The Philippine economy has been resilient, expanding 6.6% in 2012 amid a weak global economic backdrop. Strong domestic demand drove this outturn. Fitch expects GDP growth of 5.5% in 2013. The Philippines has experienced stronger and less volatile growth than its ‘BBB’ peers over the past five years.

-Improvements in fiscal management begun under President Arroyo have made general government debt dynamics more resilient to shocks. Strong economic growth and moderate budget deficits have brought the general government (GG) debt/GDP ratio in line with the ‘BBB’ median. The sovereign has taken advantage of generally favourable funding conditions to lengthen the average maturity of GG debt to 10.7 years by end-2012 from 6.6 years at end-2008. The foreign currency share of GG debt has fallen to 47% from 53% over the same period.

-Favourable macroeconomic outturns have been supported in Fitch’s view by a strong policy-making framework. Bangko Sentral ng Pilipinas’ (BSP) inflation management track record and proactive use of macro-prudential measures to limit the potential emergence of macroeconomic and financial imbalances is supportive of the credit profile. Inflation has been in line with ‘BBB’ peers on average over the past five years.

-Governance standards, as measured in international indices such as the World Bank’s framework, remain weaker than ‘BBB’ range norms but are not inconsistent with a ‘BBB-’ rating as a number of sovereigns in this rating category fare worse than the Philippines. Governance reform has been a centrepiece of the Aquino administration’s policy efforts. Entrenching these reforms by 2016 is a policy priority of the government.

-The Philippines’ average income is low (USD2,600 versus ‘BBB’ range median of USD10,300 in 2012), although this measure does not account directly for the significant support to living standards from remittance inflows. The country’s level of human development (as measured in the United Nations Development Programme’s index) is less of an outlier against ‘BBB’ range peers.

-The Philippines had a low fiscal revenue take of 18.3% of GDP in 2012, compared with a ‘BBB’ range median of 32.3%. This limits the fiscal scope to achieve the government’s ambition of raising public investment. The recent introduction of a “sin tax”, against stiff political opposition, will likely lead to some increment in revenues and underlines the administration’s commitment to strengthening the revenue base.

Rating Sensitivities

The main factors that could lead to a positive rating action, individually or collectively, are:
-Sustained strong GDP growth that narrows income and development differentials with ‘BBB’ range peers. An uplift in the investment rate that enhances growth prospects without the emergence of macroeconomic imbalances.
-Broadening of the fiscal revenue base, as well as further improvements in the structure of the Philippine sovereign debt stock.

The main factors that could lead to a negative rating action, individually or collectively, are:
-A reversal of reform measures and deterioration in governance standards.
-Sustained fiscal slippage, leading to a higher fiscal debt burden.
-Deterioration in monetary policy management that allows the economy to overheat.
-Instability in the banking sector, leading to a crystallisation of contingent liabilities on the sovereign balance sheet.

Key Assumptions

The ratings and Outlooks are sensitive to a number of assumptions.

The agency assumes the Aquino administration will persist with its fiscal, governance and social reform agenda.

Fitch estimates trend GDP growth for the Philippines in a range of 5%-5.5%.

The ratings incorporate an assumption that the Philippines is not hit by a severe economic or financial shock sufficient to cause a significant contraction in GDP and trigger stress in the financial system. Fitch assumes that there is no materialisation of severe risks to global financial stability that could impact emerging market economies, such as a breakup of the euro zone or a severe economic crisis in China.

Contact:

Primary Analyst
Philip McNicholas
Director
+852 2263 9891
Fitch (Hong Kong) Ltd
2801, Tower Two, Lippo Centre
89 Queensway, Hong Kong

Secondary Analyst
Andrew Colquhoun
Senior Director
+852 2263 9938

Committee Chairperson
David Riley
Managing Director
+44 20 3530 1175

Media Relations: Wai Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com.

Additional information is available on www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable criteria, ‘Sovereign Rating Criteria’, dated 13 August 2012, are available at www.fitchratings.com.

Applicable Criteria and Related Research
Sovereign Rating Methodology

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

No one really knows why Ms. Kristel Tejada killed herself. She left a suicide note. But it was cryptic.

“Mahal na mahal ko ang pamilya ko. At lahat din ng iba pang nagmamahal sa akin. Di ko lang talaga rin kinaya. Sana mapatawad at ipagdasal niyo ko. Salamat sa lahat magkikita pa ulit tayo. Sorry pero kailangan ko lang talagang gawin to (I love my family very much, and all those who love me. I just could not take it anymore. I hope that they will forgive me and pray for me. Thank you for everything and we will see each other again. Sorry but I really need to do this). Tandaan (Remember) : Without true love, we’re nothing.”

It is quite clear that Ms. Tejada’s suicide note made no mention of her tuition problems. But that did not stop student activists and leftist groups from blaming the UP financial assistance program, rising tuition fees, lack of budget for state universities and colleges, and the rich for oppressing the poor. That did not stop them from going on a rampage, defacing the walls of UP Manila, burning desks and chairs in PUP.

They had it all figured out – financial problems caused her suicide, the system killed her – even before all the facts were in.

But if it were true that she killed herself because the “system” drove her to it, then how come there are not more suicides among poor UP students? Don’t those activists realize that by attributing her suicide to her tuition problems they are implying that all those other students similarly situated are stronger than she was?

Of course they do but they are not going to let anything get in the way of their ideology and political agenda. If the suicide can be twisted to inflame class war, to bring about their great proletarian revolution, then they are not going to let that opportunity pass.

The fact is there could have been another reason for the suicide. But activists dismissed all other possible reasons outright because it would not sit right.

Bill Clinton once summarized the problem of ideologues, “the problem with any ideology is that it gives the answer before you look at the evidence. So you have to mold the evidence to get the answer that you’ve already decided you’ve got to have.”

And so the ideologues attacked the system without ascertaining first if the system was directly responsible for Kristel’s suicide. By so doing they belittled her character, she unlike the others was too weak to cope with the system.

They mocked her. They mock the dead. They used a dead girl’s mouth to convey their message. They turned her coffin into a prop. They turned her suicide into a weapon against the system they despise, into a tool to advance their great proletarian revolution. What assholes!

Ms. Kristel Tejada deserves more than just being turned into a tool. Let her rest in peace. Let her family grieve with some dignity.

“White smoke means a Pope has been elected. Black smoke means a Pope has not been elected. Or the Sistine Chapel is on fire.” – Philip Gilmore

The Papal election is the Holy Spirit’s show. God the Father and His son, Jesus, are limited to supporting roles in this drama. Cardinals chant  “Veni, Creator Spiritus” imploring the intervention of the Holy Spirit to help them elect the right Pope.  So the questions that naturally arise among inquisitive minds are, why is the Holy Spirit taking so long to intervene and why so many rounds of voting?

There are several theories to this mystery. 

The long wait could indicate that the Holy Spirit is having a hard time making up His mind. Or maybe He has made up His mind but He is enjoying being at center stage for a change so He is playing out the drama for as long as He can, hopefully all the way up to Easter when Jesus, by tradition, gets to hog the spotlight again. 

Or maybe He has already spoken but no one can hear Him. Because He speaks too softly and cannot be heard above the din of whispers for this or that papabile.  It’s also possible the Cardinals are really hard of hearing. They have not heard the screams of the victims of sexual abuse, right? Then again maybe the Cardinals hear Him loud and clear but they won’t listen. 

But why won’t they listen?

Maybe the Cardinals don’t believe it’s Him talking to them. Or maybe they think they know everything there is to know already. Or maybe they know it’s Him talking but they don’t care because they are papabile and they know that once elected Pope they can communicate directly with God the Father so why waste time on the Third Person in the Trinity. But there could be a simpler explanation:  Cardinals don’t heed disembodied voices because they don’t believe in ghosts. 

You probably think those theories are preposterous and border on blasphemy. I do. But let’s face it, the Catholic Church has serious problems. 

Europe and America are losing Catholics faster than Asia, Africa, and South America are winning converts. Consequently, the Church needs a Pope with a better evangelization strategy than spreading the Good News through Tweeter and Facebook. Besides, it’s the message and the messengers more than the medium that needs tweaking. A change in the dress code might also help.

Secondly, the Church has to address the women problem. The majority of its faithful are women and yet the Church won’t allow women to become priests. Why? The Church owes women a more plausible explanation than Jesus reserved the priesthood for men and a more christian response than “go find something else to do”. 

There is the problem of sexual abuse as well. It is not a new problem, it has been around from the very beginning. And it cannot be solved by public relations gimmicks like transparency or turning over offending priests to the criminal justice system. 

The Church must analyze whatever it is that is causing the behavior. It cannot simply point to Original Sin as the root cause because ultimately everything goes back to that, at least as far as the Catholic explanation for human weakness goes. The Church does not have to go to the ultimate cause, it can look at intermediate causes. 

It can study the asymmetrical power relationship between priests and the faithful. Power is an aphrodisiac for both priests and the laity. Maybe sexual desire cannot be eliminated but a readjustment of power relationships could transform sexual abuse to mutual consent, except in cases of pedophilia which is not exclusive to priests and is best left to behavioral scientists. 

Since sexual desire cannot be eradicated, the Church will probably have to reconsider its ban on marriage for priests. That would entail doing a scientific study on homosexuality. The findings may shake the moral foundations of the Church but if it survived Galileo and Darwin it can certainly survive finding out that God also made homosexuals. Either way, allowing both heterosexual and same sex marriages for priests will bring up the problem of infidelity. It will also bring home the issue of safe sex and contraceptives.

Oh well, that’s why Pope Benedict said “I’m too old for this, I quit”. 

“I would rather have a country run like hell by Filipinos than a country run like heaven by the Americans, because however bad a Filipino government might be, we can always change it.” – Pres. Manuel L. Quezon

I offended a number of people with my article last week, “Sabah is about self-determination, not historic title.” I was called a lying bastard, a traitor siding with Malaysia, a bourgoise reactionary, a sip-sip, a coward, and a yellow zombie, among other names. I was also accused of looking for a job in Malacañang and cherry-picking documents. All of that because I said the principle of self-determination, citing the non-binding opinion of a judge in the International Court of Justice, overrides historic title.

A whole system of beliefs rests on the primacy of historic titles. I came along to remind believers that political evolution had overtaken their religion and consequently the Kiram translation of an agreement between a sultan and a couple of British businessmen was now of secondary importance. Tsk-tsk, cluck-cluck. He committed heresy, let’s burn him at the stake.

But I love the heat from a burning stake.

I stand by what I wrote. The principle of self-determination overrides historic title. And it is not only the non-binding opinion of one judge in the ICJ that supports my view. I also have the United Nations Charter and a couple of international covenants to back me up.

Chapter 1, Article 1 of the UN Charter states the purposes and principles of the organization. Number two among those purposes is “To develop friendly relations among nations based on respect for the principle of equal rights and self-determination of peoples, and to take other appropriate measures to strengthen universal peace.“

Self-determination is also addressed in more specific language in Article 1 of both the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights.

“All peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development.”

The universal acceptance of the principle of self-determination signaled the end of the colonial age and the supremacy of historic title over the sovereign will of a people. Dozens of colonies in Africa, Asia, and the Middle East gained independence using the language of self-determination.

To argue that historic title overrides self-determination is to de-legitimize all independence movements. It is to say that people have no right to determine their political status, that they have no right to write their own story.

In 1898, Spain sold the Philippines to the United States. Those two countries took it upon themselves to decide the fate of a people that already won their independence. Filipinos had a constitution, a flag, an anthem, an army, and a government exercising sovereignty over territory. The only thing they lacked was international recognition. It was not given to them. It was given instead to the Treaty of Paris between Spain and the United States.

That is why, if you visit the Tomb of the Unknown Soldier in Arlington Cemetery in Virginia, USA, you will see that the Philippine-American War is referred to as the Philippine Insurrection. Because as far as the Americans are concerned it was not a war between two independent states, it was merely a rebellion by people that they had purchased from Spain.

In America’s eyes, the Treaty of Paris was America’s historic title to the Philippines and the Filipino peoples’ act of self-determination, that of winning a war of independence against Spain, counted for naught.

Would you accept the Treaty of Paris as a legitimate argument against the martyrs who sacrificed their lives to keep the hard-won independence of Filipinos from Spain? Would you honor America’s historic title over your forefathers’ act of self-determination?

Today, we want to elevate our claim to Sabah to the ICJ. We believe that Manila and Kuala Lumpur have the right to let the ICJ decide on the conflicting claims over the language of a business contract and consequently to determine the fate of more than a million Sabahans, an autonomous people that voluntarily joined Malaysia nearly half a century ago. That would be resurrecting the age of colonies – it is the Treaty of Paris reloaded – two capitals, Manila and Kuala Lumpur, deciding the destiny of a people not even invited to sit at the table. Tama ba ‘yan?

It has been said that the findings of both the Cobold Commission and the UN Secretary General regarding the express wishes of the people of Sabah prior to its joining Malaysia were questionable. That may have been true. At the time. But whatever chicanery may have happened then has been overtaken by time and events. By reality.

Sabahans have voted in numerous elections since Sabah joined Malaysia. Sabahans have been paying taxes. There are two Sabahans holding important portfolios in the cabinet of Malaysian Prime Minister Razak. If Sabahans were unhappy about joining Malaysia, they had fifty years to make their dissatisfaction known.

But where is the Sabah secessionist movement? Where is the Sabah for province of the Philippines movement? Where is the “we want to be subjects of the Sultan of Sulu” movement? And is there a problem with hundreds of thousands of illegal Sabahans in the Philippines or is the problem that of Filipino illegals in Sabah?

So I guess Sabahans are satisfied and happy to be in Sabah and Malaysian. Why can’t we respect that? Why do we want to wipe the smile off their faces with a historic title claim, turn them into Filipinos by judicial fiat instead of popular will? Why do we think it’s righteous to have a “Sabahans be damned as long as we get what we believe is ours” religion?

We can wave our historic title in the Sabahans’ faces until our arms fall off but if the Sabahans will not accept our sovereignty there is not much we can do about it. So my unsolicited advice is, rather than elevate our claim to the ICJ and possibly get a favorable judgment that may require military muscle to enforce, let us just convince the Sabahans that it’s more fun in the Philippines. That way maybe Sabah will ask to become a province of the Philippines.

There’s a difference between the Sabah claim and the claim to the Spratleys and Panatag. Sabah has been inhabited for thousands of years. The Spratleys became inhabited only after disputes over their ownership occurred. Meanwhile, Panatag awaits inhabitants. In Sabah, inhabitants have the right to exercise self-determination. In the Spratleys, the decisions of inhabitants are made by their home governments. In Panatag, the right of self-determination has yet to be extended to birds, fishes, and corrals.

In other words, whereas the South China Sea claims can be settled through historic titles, conventions on the laws of the sea and exclusive economic zones and all that, the Sabah claim can only be settled with the consent of the Sabahans. Our Constitution and our baselines laws have as much legitimacy as China’s nine-dash line map when it involves territory where there are people who have the universally recognized right to self-determination.

Let’s sort things out further.

It is wrong to say that Sabah is ours because Malaysia is paying us rent. Malaysia is not paying us rent. It is paying rent to the Kirams. The money goes to their bank account. It does not go to our bank account or to the government’s coffers.

Maybe the so-called rent payments are proof that the Kirams own Sabah but it’s a stretch to say that because Malaysia pays rent to the Kirams it is proof that the Philippines also owns Sabah. 

If the Kirams do own Sabah and they believe they are not being compensated enough – their ancestor did not have the foresight to include an escalation clause in his lease agreement with the Brits – then they should spend their own money for lawyers to press their case; because all the proceeds will go to them if they get an upward adjustment of rentals.

Not a single centavo will go to the Philippine government or to you. The Philippine government won’t even be able to collect taxes on the income from rent if the payments to the Kirams are made in Malaysia. So what right do the Kirams have to demand that the Philippine government lawyer for them?

The de kahon answer to that rhetorical question is to point out that the government has a duty to stand by all citizens. Okay. Let’s say your uncle decides to live in Monte Carlo. He buys property there. After some time he decides he’s had enough of the high life. He authorizes his Monte Carlo lawyer to take care of his property. His lawyer cheats him. He loses his palace. Should the Philippine government spend taxpayers’ money to help your uncle recover his palace or should he spend his own money for a lawyer?

I suppose if the government is duty-bound to lawyer and spend taxpayers’ money for the Kirams’ property in Sabah then the government must likewise lawyer and spend taxpayers’ money for your uncle’s palace in Monte Carlo, right? Maybe you are okay with dipping into your savings and paying for your uncle’s bad business decision but do you believe the entire country should pay for it? Do you think it’s right for taxes to be spent that way? Maybe your uncle should change his name to Kiram. That way he will get blind public support demanding that government place its reputation and resources – both manpower and money – for his personal property claim.

I say let Mr. Kiram that self-proclaimed Sultan of Sulu spend his own money to fix his rental problems with Malaysia. And, as far as the Philippine government’s claim of sovereignty over Sabah is concerned, it is not for Manila, Kuala Lumpur, or the ICJ to decide the fate of Sabahans. That decision belongs to the Sabahans. By right. As a human right.

The principle of self-determination of peoples is the new paradigm. It replaced colonialism and humanity is better for it. Why bring back the dark age of colonial imperium?