The Deceit of Good Economics and Good Governance: YEAREND 2012

Birdtalk Economic and
Political Briefing
YEAREND 2012:
The Deceit of Good Economics
and Good Governance
January 10-11, 2013

U.P. School of Labor and Industrial Relations (UP SOLAIR)
UP Diliman, Quezon City
IBON Foundation
114 Timog Avenue
Quezon City 1103 Philippines
Tel. Nos: +63 2 927-7060 to 62
Fax: +63 2 929-2496
www.ibon.org
2 IBON Economic and Political Briefing  10-11 January 2013

T
he year 2012 ended with the Philippines seemingly moving forward on many counts.
There was rapid economic growth, record highs in the stock market and gross
international reserves (GIR), looming investment grade credit ratings, higher foreign
investment and increasing corporate profits. The political scene was also relatively steady
especially compared to the decade of turbulence during the previous Arroyo administration.
In particular the traditional political opposition was restrained and as yet unwilling to test
the administration’s perceived core of public support. There were also apparent advances
in some controversial pieces of legislation and, notably, even in the Moro armed conflict in
Mindanao.
Yet many things which were arguably more meaningful remained unchanged. Despite
supposed economic good news and a degree of political stability the majority of Filipinos still
faced record joblessness, stagnant earnings, rising prices and growing poverty. Domestic
manufacturing and agriculture continued their long-term decline. Corruption did not
measurably decrease and old disagreeable political ways continued such as in the run-up
to the 2013 mid-term election and even on the part of the administration. State-sponsored
human rights violations go on as does the militarist approach to the conflict with Maoist
rebels. If anything, there has been a marked regression in foreign policy with the Philippines
increasingly subordinated to the United States (US) agenda in the region.
The administration and its supporters have played up the onset of ‘good governance’ in
the country and supposed economic progress. However the two-and-a-half years so far of
profits without prosperity, persistence of undemocratic politics, and dearth of fundamental
pro-people reforms has affirmed the country’s duality: a Philippines for the rich and another
for the poor. There is still no development and economic gains are shallow or merely
financial and speculative. There has also not yet been anything approaching the major
changes needed to improve the country’s political system.
The signs instead are of an elite-dominated ruling system that is consolidating after the
weakening of its political institutions by another successful ouster movement in 2001 and by
nearly constant destabilization over the succeeding decade. Alarmingly for the status quo,
these created opportunities for progressive and even revolutionary forces in the country
to steadily advance. But the conditions for dissatisfaction and dissent remain and any
intensification in 2013, whether in the real economy or the political landscape, would easily
disrupt the current fragile stability.
IBON Economic and Political Briefing  10-11 January 2013 3

Aquino’s Faulty Economics
T he Aquino administration touted the 3rd quarter growth of the gross domestic product (GDP) as a sign
of a strong economy and called the Philippines the roaring lion of Asia. According to the Aquino
administration, the “spectacular” 7.1% growth along with the upgraded credit outlook and a booming stock
market reflect the success of its economic policies in leading the country to development.
In so far as development is concerned however, a high GDP growth is at least taken with a grain of
salt. Is this growth indeed a foundation for development? More importantly, is the majority of the
people benefiting from this growth by seeing improvement in their living condition and welfare? Close
examination reveals that the high economic growth in this period did not result in benefits to the average
Filipino. Instead, this was accomplished at the expense of smaller establishments and the Filipino working
class.
Further, 2012 saw the Aquino administration going implementing policies that are deemed necessary to
facilitate big business interests in the Philippine economy and heedless of the welfare of the poor majority.
The advancement of big business interests in utilities, social services, mining, land and oil and ensuring
developments in free trade deals is the key aspect of Aquino’s economic agenda for 2012.
Spectacular growth?
The Aquino government brandishes the 7.1% economic growth posted in the 3rd quarter of 2012,
the highest in Southeast Asia in that period, as a major accomplishment of its economic policies.
However, closures and retrenchments of small establishments, displacement of workers, and worsening
unemployment characterize the economy even as the profits of big corporations continue to increase.
From the expenditure side, growth was largely driven by government consumption which grew 12% in
the 3rd quarter 2012 from 8.9% in the same period the previous year. Another expenditure which drove
up growth was construction as part of capital formation which grew by 24.8%, from a contraction the
previous year. Exports grew by 6.9% from a contraction of 11.9%, but this was offset by the growth in
imports at 8.3 percent. (See Table 1)
Household consumption slowed down to 6.2% in 3rd quarter 2012 from 7.4% in the same period in 2011.
It slowed down for the first nine months from 6.3% in 2011 to 5.7% in 2012. Food expenditures including
non-alcoholic beverages decelerated and other areas of consumption had lower growth rates. On the other
hand, growth in spending for transport, housing, water, electricity, gas and other fuels, furnishing, and
household maintenance posted higher growth rates.
Investment in durable equipment contracted by 2.4% in 3rd quarter 2012 from 9.3% growth in the same
period in 2011. The declines in investment were noted in air transport, other miscellaneous durable
equipment, telecommunications and sound recording/reproducing equipment, other general and industrial
machines, and pumps and compressors.
Based on industrial origin, the GDP growth was mainly driven by construction, posting a growth of 24.3%
in the 3rd quarter of 2012 from plunging 8.8% in the same period the previous year. (See Table 2) Gross
value added (GVA) in both public and private construction grew double-digit in the 3rd quarter 2012. But
from 1st to 3rd quarter (Q1-Q3) 2012, it was public construction that drove the growth in construction,
recovering by 45.5% from 46.2% plunge in the same period the previous year. Private construction on the
other hand even slowed down from growing 8% in the first three quarters of 2011 to only 4.9% in the same
period in 2012.

Table 1. Gross National Income and Gross Domestic Product By Expenditure
st rd
Shares, Growth Rates, 1 -3 Quarter 2011 and 2012 (at constant
2000 prices; in %)
3rd Quarter 1st-3rd Quarter

Type of Expenditure
2011 2012 2011 2012
1. Household Final Consumption Expenditure 7.4 6.2 6.3 5.7

2. Government Consumption 8.9 12.0 (0.7) 12.6
3. Capital Formation 21.8 4.3 14.3 (6.0)
A. Fixed Capital 1.0 8.7 1.1 7.9
1. Construction (8.6) 24.8 (9.4) 12.6
2. Durable Equipment 9.3 (2.4) 10.2 5.0
3. Breeding Stock & Orchard Development (0.3) 2.8 0.6 2.1
4. Intellectual Property Products 9.1 6.0 11.8 15.2
4. Exports (11.9) 6.9 (3.1) 8.6
A. Exports of Goods (14.8) 6.7 (4.2) 8.1
B. Exports of Services 5.3 7.6 1.5 11.2
5. Less : Imports (1.8) 8.3 2.4 5.2
A. Imports of Goods (2.2) 8.0 4.0 3.7
B. Imports of Services (0.3) 9.6 (4.3) 12.2
Gross Domestic Product 3.2 7.1 3.9 6.5
Gross National Income 2.2 6.6 2.7 5.8
Source: National Statistical Coordination Board National Accounts of the Philippines
It may be recalled that the government allocated in 2012 an infrastructure budget worth Php142 billion,
25.6% higher than the infrastructure budget in 2011. (See Table 3) Still, government investment in
construction was not enough to attract foreign direct investment (FDI) in construction, which substantially
slowed down to 29% growth in January-September 2012 from 329% growth in the same period in 2011.
(See Table 4)
Aside from construction, the GDP growth was also driven by transportation, storage and communication
(TSC) which grew by 9%; trade and repair by 7%; financial intermediation by 8.3%; and real estate,
renting and business activities by 7.8 percent. On a year-on-year basis, TSC grew by 9.3% in Q1-Q3
2012, faster than 4.3% growth in the same period the previous year. Trade posted 7.5% growth in Q1-Q3
2012, up from 3.3% in the same period in 2011. Financial intermediation grew by 7.9 percent.
Overall, growth remains shallow, since the sectors credited for the growth are not domestically-grounded
production using domestic resources, thus gains go to foreign corporations. There is no broad-based local
learning of technological development. High growth sectors are also not maximized for employment
generation and despite being the highest growth in Southeast Asia it is not happening in the context of an
economy-wide capitalist production.
The construction sector which grew by 14.1% in Q1-Q3 2012 from a contraction of 11.9% in the same
period in 2011 was buoyed by increased business process outsourcing (BPO) activities and real estate
activities. Construction builds infrastructures that support economic development. It is of even more

Table 2. Gross National Income and Gross Domestic Product By Industry,
st rd
Growth Rates, 1 -3 Quarter 2011 and 2012 (at constant 2000 prices;
in %)
3rd Quarter 1st-3rd Quarter

Industry
2011 2012 2011 2012
1. Agriculture, Hunting, Forestry and Fishing 2.2 4.1 4.9 1.8

a. Agriculture and Forestry 4.3 5.1 7.3 2.8
b. Fishing (6.6) (0.6) (3.9) (2.4)
2. Industry Sector 0.1 8.1 1.8 6.3
a. Mining & Quarrying 4.1 (2.2) 13.8 (6.7)
b. Manufacturing 2.0 5.7 5.3 5.3
c. Construction (8.8) 24.3 (11.9) 14.1
d. Electricity, Gas and Water Supply 1.7 2.7 (0.1) 5.6
3. Service Sector 5.2 7.0 4.8 7.5
a. Transportation, Storage, and Communication 4.6 9.0 4.3 9.3
b. Trade and Repair of Motor Vehicles, Motorcycles,
4.5 7.0 3.3 7.5
Personal and Household Goods
c. Financial Intermediation 1.4 8.3 6.6 7.9
d. Real Estate, Renting & Business Activities 8.7 7.8 7.8 7.9
e. Public Administration & Defense:
0.7 4.3 (1.2) 2.5
Compulsory Social Security
f. Other Services 7.8 5.3 6.2 7.5
Gross Domestic Product 3.2 7.1 3.9 6.5
Gross National Income 2.2 6.6 2.7 5.8
Source: National Statistical Coordination Board National Accounts of the Philippines
Table 3. Budget of Infrastructure Projects Allotted by

the Aquino Government in 2012 By
Implementing Agency
Agency Budget (Php)
Department of Public Works and Highways 91.6 billion

Department of Agriculture 24.5 billion
Department of Agrarian Reform 3.3 billion
Department of Interior and Local Government 770.0 million
Department of Education 14.0 billion
Department of Transportation and Communication 7.2 billion
Pasig River Rehabilitation Commission 108.0 million
Autonomous Region of Muslim Mindanao 356.9 million
Total 141.8 billion
Source: Department of Budget and Management

importance, especially in the context of the Philippine economy, if construction builds national industries
e.g. chemicals, textile, and steel. But its current growth is not because of supporting industrialization
but only based on the boom in construction of facilities for the foreign capital-intensive and export-
oriented BPO sector, in particular, the building of more office spaces, and to a certain extent, residential
units.
According to the survey conducted by the National Statistics Office (NS0), the value of construction in
the 3rd quarter of 2012 was mainly driven by a 100% increase in the value of non-residential building
construction, from Php14.2 billion in 3rd quarter 2011 to Php28.2 billion in 3rd quarter 2012. Construction
of commercial buildings accounted for 71.2% of the total value of non-residential construction. Only 8.5%
of total value of construction is accounted for by industrial construction.
Also, industry players attribute the boom in real estate, renting and business activities to increased BPO
activities and remittances of overseas Filipino workers (OFWs). BPO activities are largely driven by FDI
in information and communication which increased by 411.8% in the first nine months of 2012 compared
to an increase of 59.5% in the same period the previous year. (See Table 4) The BPO industry is being
supported by the Aquino government with various subsidies and programs. The Aquino government is also
placing emphasis on the information communication technology (ICT) development of BPO instead of
research and development (R&D) to develop domestic industries.
As mentioned, industry players are also citing the spending of OFWs as one of the key factors in the real
estate boom as indicated by an increase of 61% in international sales in 2012. But OFW remittances have
been slowing down in recent years. Growth rate peaked in 2005 at 25% but is now only at 5.83% as of
October 2012. (See Chart 1)
The real estate boom is also significantly debt-driven. Bank exposure to real estate loans grew by 18.9%
in the first semester of 2012 compared to the same period in 2011. The exposure consisting of loans to
and securities from real estate players reached Php561.6 billion or the highest value recorded so far. The
increased real estate loans even prompted the Bangko Sentral ng Pilipinas (BSP) to be more stringent in
the reports of banks of the extent of their exposure to real estate loans vis-a-vis their loan portfolio.

Table 4. Net Foreign Direct Investment (BOP Concept*) By Industry/Sector, January-
September 2011 and 2012
Levels (million US$) Growth Rate (%)

Sector Jan-Sept Jan-Sept
p p
2011 2012 2011 2012
Total Equity 150.0 1,200.0 122.9 700.0

Agriculture, Forestry and Fishing 3.7 0.7 114.7 (81.3)
Mining and Quarrying (244.6) 29.5 (628.7) 112.1
Manufacturing 74.6 1,000.1 109.0 1,239.9
Electricity, Gas, Steam and Airconditioning Supply 1.2 (38.9) 107.0 (3,437.3)
Water Supply; Sewerage, Waste Management and
0.0 1.2 0.0 0.0
Remediation Activities
Construction 4.4 5.7 328.7 29.4
Wholesale and Retail Trade; Repair of Motor
16.1 83.4 (3.0) 417.7
Vehicles and Motorcycles
Transportation and Storage 0.4 (10.0) (95.2) (2,772.0)
Accommodation and Food Service Activities 1.5 1.4 (68.7) (6.7)
Information and Communication 3.7 18.9 59.5 411.8
Financial and Insurance Activities 179.9 (1.4) 523.1 (100.8)
Real Estate Activities 77.8 96.5 (47.9) 24.1
Professional, Scientific and Technical Activities 20.8 0.5 0.0 (97.8)
Administrative and Support Service Activities 4.0 0.2 2,016.3 (94.7)
Public Administration and Defense; Compulsory
0.0 0.0 0.0 0.0
Social Security
Education 0.9 0.2 116.2 (73.9)
Human Health and Social Work Activities 0.0 (13.2) 0.0 (36,625.3)
Arts, Entertainment and Recreation 3.4 1.1 (24.7) (69.0)
Other Service Activities 0.9 0.0 (83.6) (100.0)
Activities of Households as Employers;
Undifferentiated Goods-and-Services-Producing 0.0 0.0 0.0 0.0
Activities of Households for Own Use
Activities of Extraterritorial Organizations and Bodies 0.0 0.0 0.0 0.0
1
Others N. E. C. 1.4 24.1 (45.6) 1,656.1
Reinvested Earnings 277.0 121.0 95.1 (56.3)
Other Capital 355.0 (228.0) (71.7) (164.2)
Total 782.0 1,093.0 5.7 39.8
* - BOP Net FDI flows refer to non-residents' equity capital placements less non-resident withdrawals + reinvested
earnings + net other capital.
p
- preliminary
1
- Covers non-residents investments in non-banks sourced from the Cross-Border Transactions Survey and in local
banks; sectoral/industry breakdown statistics are not available.
Totals may not add up due to rounding.
Note: The DES-BSP shifted to using as basis the 2009 Philippine Standard Industrial Classification (PSIC) instead of
the old 1994 PSIC starting with the January 2011 report.
Source: Bangko Sentral ng Pilipinas

Most of the growing economic sectors are also driven by foreign capital and debt while the more
significant sectors of manufacturing and agriculture remain sluggish. Manufacturing grew 5.7% in 3rd
quarter 2012. From Q1 to Q3, its growth rate stayed at 5.3% in 2012 as it was in 2011. Agriculture
continued its slowdown in Q1-Q3 to only 1.8% growth from 4.9% in the same period in 2011.
Manufacturing and agriculture are already in their lowest contribution to the economy. Agriculture
accounted for only 10.7% of the GDP in the first three quarters of 2012, which is already its smallest
contribution in history. Manufacturing’s share today, on the other hand, is already as low as its share in the
1950s, registered at 21.8% of the GDP as of the first three quarters of 2012.
The benefits from the growth in manufacturing also end up mostly to foreign corporations. Of the total
gross revenues of transnational corporations (TNCs) in 2011, 68% was accounted for by manufacturing
TNCs. The share of TNCs in manufacturing increased from 60% in 2010 to 62% in 2011. (See Table 5)
Overall, 36.3% of combined gross revenues of top 1,000 corporations are accounted for by TNCs.
Table 5. Gross Revenues of TNCs Among the Top 1,000

Corporations in the Philippines, 2010-2011
Growth Rate
Indicator 2010 2011
(%)
Amount (Php)
Total TNCs 2,496.8 2,989.5 19.7
Of which --
Manufacturing 1,721.1 2,027.2 17.8
Total Top 1,000 6,924.6 8,245.2 19.1
Of which --
Manufacturing 2,869.6 3,283.6 14.4
As percentage of (%)
Total TNCs
36.1 36.3 0.6
as % of Total Top 1,000
Manufacturing TNCs
60.0 61.7 2.9
as % of Total Manufacturing
Manufacturing TNCs
68.9 67.8 (1.6)
as % of Total TNCs
Source: Business World Top 1000 Corporations in the Philippines (Vols. 25-26)
Growth is also not translating to job creation, which is one indicator if growth is indeed deep and broad-
based. There is weak job generation in construction, real estate, TSC, and financial intermediation – the
sectors that are supposed to be driving the hyped economic growth. Jobs in construction are short-term
while job generation in real estate has a weak multiplier effect. There is also threat of slowdown in this
sector because of slowing OFW remittances.
Growth in the so-called bright sectors including accommodation and food, public administration, and arts,
entertainment and recreation failed to offset the job losses in all the other sectors in the economy especially
in agriculture, manufacturing, wholesale and retail trade, activities of households as employers, and other
community, social and personal services. (See Table 6)

Growing sectors are also ironically having high numbers of jobs lost. For example, wholesale and retail
trade grew by 7% in 3rd quarter 2012 but job losses in October 2012 reached 728,000. Manufacturing also
despite growing faster in the 3rd quarter recorded 45,000 job losses in the same period. Real estate also
recorded 59,300 job losses; financial and insurance activities recorded 15,000 job losses and agriculture
recorded 694,200 job losses. (See Table 6)
Table 6. Employed Persons by Major Industry Group, October 2011 and 2012
(in thousands)
Employed Persons Increase/

Major Industry Group b
Oct 2011 Oct 2012 a (Decrease)
Total Employed 38,550 37,668 (882)

Agriculture 12,861 12,167 (694)
Agriculture and Forestry 11,373 10,735 (638)
Fishing 1,488 1,394 (94)
Industry 5,608 5,726 118
Mining and Quarrying 226 264 38
Manufacturing 3,171 3,126 (45)
Electricity, Gas and Water 1 143 151 8
Construction 2,068 2,185 117
Services 20,082 19,813 (269)
Wholesale and Retail; Repair of Motor Vehicles and
7,772 7,044 (728)
Motorcycles
Transport, Storage and Communication 2 2,799 3,013 214
Hotels and Restaurants 3 1,206 1,356 150
Financial Intermediation 4 467 452 (15)
Real Estate, Renting and Business Activities 5 1,340 1,281 (59)
Public Administration and Defense Compulsory Social
1,840 1,959 119
Security
Education 1,190 1,205 15
Health and Social Work 6 460 414 (46)
Other Community, Social and Personal Service Activities;
3,006 3,013 7
and Private Households with Employed Persons 7
Activities of Extraterritorial Organizations and Bodies 2 - (2)
a
- October 2012 Labor Force Survey (LFS) only supplied for the percentage share by industry. The
calculations for absolute numbers was done by IBON.
b
- Beginning January 2012, the LFS uses the 2009 Philippine Standard Industrial Classification (PSIC) for
the estimates of employed persons by industry group. For the purpose of comparison, the 2012
preliminary LFS estimates are grouped as closely to industry groups according to the 1994 PSIC which
is used for the 2011 LFS estimates. Below are the said industry groups used and grouped:
1
- "Electricity, Gas, Steam and Airconditioning Supply" and "Water Supply, Sewerage, Waste
Management and Remediation Activities"
2
- "Transportation and Storage" and "Information and Communication"
3
- "Accommodation and Food Service Activities"
4
- "Financial and Insurance Activities"
5
- "Real Estate Activities", "Professional, Scientific and Technical Studies" and "Administrative and
Support Services"
6
- "Human Health and Social Work Activities"
7
- "Arts, Entertainment and Recreation", "Other Service Activities" and "Activities of Households as
Employers; Undifferentiated Goods and Service-producing Activities of Households for Own Use"
Source: National Statistics Office October 2012 Labor Force Survey

So, what is spectacular about the growth? The Aquino government is also hyping the recent credit
upgrades, strong peso, record-high stock market index, record-high gross international reserves (GIR), and
increased investments. These are signs of good economics, according to the Aquino government, and of
strengthened macroeconomic fundamentals and good governance. The Aquino government equates these
to development.

The indicators that matter – unemployment, poverty, and real incomes – however, are not mentioned.
Credit upgrades simply measure the country’s ability to pay and do not have anything to do with
development. The GIR meanwhile indicates that the economy has the currency to pay for imports and
other transactions involving foreign currency. A strong stock market and strong peso are reflective of hot
money inflows due to foreign capital’s search for profitable short-term opportunities amid sluggish US,
European and Japanese economies. Moreover, in stock market trading, gains only accrue to the listed,
usually big, corporations and stockholders. Lastly, foreign investments are not actually bullish; the US$1.1
billion foreign investment in January-September 2012 was much lower than the annual average of US$2.2
billion in 2005-2009 or the annual average of US$1.6 billion in 2000-2009.

Most of all, even historically these indicators have never been relevant to the county’s real development
in terms of developing agriculture, national industry, job generation, and poverty reduction. These are
meaningless indicators to the average Filipino, as they do not translate to an improvement in livelihood
and welfare. The possibility of lower interest rates on foreign loans for instance has never been seen as
an indicator that the government would spend more money for social services. During former President
Arroyo’s time, credit rating agencies also gave the Philippines a stable outlook after she signed the new
rates for the value-added tax and in the midst of record-high unemployment, poverty incidence, and social
unrest.
Displacement
Workers’ retrenchments belie the alleged spectacular growth. There were 19,162 workers displaced in
the first nine months of 2012 in establishments reporting to have closed down or laid off workers due to
economic reasons. Of these, 74.4% were in the services sector, ironically mostly in the growth sectors.
Four out of 10 were in wholesale and retail trade and manufacturing while three out of 10 were in real
estate, renting and business. (See Table 7)
Joblessness
Despite the record-high growth, unemployment rate and the absolute number of jobless people increased.
Officially reported unemployment rate was 6.8% in October 2012, higher than the 6.4% recorded in the
same period the previous year. There was an additional 120,000 for a total of 2.76 million jobless Filipinos
in October 2012. (See Table 8) The annual average number of unemployed also to 2.833 million in 2012
even as the unemployment rate stayed the same as in 2011.
IBON estimates, accounting for presumed discouraged workers as part of the labor force (instead of
removing them, as the official methodology goes) pegs the number of unemployed at 4.422 million in
2012 or an additional 1.59 million from official figures. This means an unemployment rate of 10.5%,
which bolsters the longest sustained record-high unemployment in the country’s history.
For the first time since January 2008, according to the Department of Labor and Employment (DOLE),
the labor force has contracted, with the labor force participation rate going down from 66.3% in October
2011 to 63.9% in October 2012 despite increase in the potential labor force (population 15 years and over)
from 62.2 million to 63.3 million. The biggest decrease in participation rate, from 50.1% in October 2011
to only 45.8% in October 2012, came from the youngest age group (15-24 years old). But there is no

Table 7. Number of Displaced Workers by Establishments Resorting to Permanent
Closure and Retrenchment Due To Economic Reasons By Industry,
p
January-September 2012
Total Number of
Displaced Workers
Due to
Due to
Industry Percent Reduction of
Closure
Total Distribution Workforce
(%)
Total 19,162 100.0 2,321 16,841

Agriculture, Fishery and Forestry 64 0.3 7 57
Agriculture, Hunting and Forestry 64 0.3 7 57
Fishing - - - -
Industry 4,847 25.3 895 3,952
Mining and Quarrying 244 1.3 92 152
Manufacturing 4,107 21.4 538 3,569
Electricity, Gas and Water 109 0.6 - 109
Construction 387 2.0 265 122
Services 14,251 74.4 1,419 12,832
Wholesale and Retail Trade 3,930 20.5 396 3,534
Hotels and Restaurants 1,040 5.4 312 728
Transport, Storage and Communications 1,449 7.6 36 1,413
Financial Intermediation 574 3.0 76 498
Real Estate, Renting and Business
6,599 34.4 552 6,047
Activities
Public Administration and Defense - - - -
Education 345 1.8 - 345
Health and Social Work 113 0.6 43 70
Other Community, Social and Personal
201 1.0 4 197
Services
p
- preliminary
Source: Bureau of Labor and Employment Statistics
significant increase in the net enrolment ratio in secondary education for example that may explain this
phenomenon.
Youth unemployment is also high at 15.4%, higher than previous year’s 14% and more than twice the
national average. The biggest percentage of the unemployed are high-school educated individuals at 45.4%
of total unemployed, which increased from 44.7% in October 2011.
Underemployment improved slightly but remained high at 19%, claiming 7.16 million people in October
2012, from 19.1% in October 2011. Among the employed, on the other hand, five out of 10, or 16.85
million people, are in poor quality work (self-employed, working in private household, and work without
pay in farm or family-owned business).

Table 8. Key Labor Force Indicators, October 2011 and 2012, and Average 2011 and 2012
Officially Reported a IBON Estimates b

Indicator
Oct 2011 Oct 2012 p 2011 2012 p 2011 2012
Levels (thousands)
Total 15 years old and over 62,164 63,253 61,882 62,976 61,882 62,976
Labor Force 41,194 40,431 40,006 40,455 41,554 42,007
Employed 38,550 37,668 37,192 37,622 37,192 37,622
Underemployed 7,381 7,158 7,163 7,512 7,163 7,512
Unemployed 2,644 2,763 2,814 2,833 4,374 4,422
Not in the Labor Force 20,970 22,822 21,876 22,521 20,328 20,969
Rates (%)
Participation Rate 66.3 63.9 64.6 64.2 67.2 66.7
Employment Rate 93.6 93.2 93.0 93.0 89.5 89.5
Underemployment Rate 19.1 19.0 19.3 20.0 19.3 20.0
Unemployment Rate 6.4 6.8 7.0 7.0 10.5 10.5
Note: Totals may not add due to rounding.

a
- Based on revised LFS definitions in used since April 2005 (official data based on old definition unavailable).
b
- Figures according to the old LFS unemployment definition since 2008 are unavailable even from the National Statistics Office so
IBON makes rough estimates for the purposes of comparison. This is done by computing substitute labor force participation
rates (LFPR) where changes in official reported annual average LFPR are applied to the LFPR in 2007 that was still computed
using the old labor force (and correspondingly unemployment) definition.
p
- preliminary
Source: National Statistics Office Labor Force Survey
Bankruptcy of small businesses
Amid the 7.1% growth, small establishments have been reporting more closures and retrenchment.
In January to September 2012, there were 829 establishments with 99 and below employees and 623
establishments with 100 and above employees, which reported closures and/or retrenchment. Of 102
establishments reporting closures, 97 were establishments with 99 and below employees. (See Table 9)
High profits for big business
Amid higher unemployment and bankruptcy for smaller establishments, big business posted increase in
profits. Data from the Philippine Stock Exchange (PSE) shows that the combined net incomes of listed
firms grew 18% to Php377.12 billion in January to September 2012 from Php319.97 billion in the same
period the previous year.
Sectoral incomes of companies listed in the PSE from January to September 2012 posted increase in all
sectors except mining and oil. For example, property sector’s consolidated income increased by 9.5%
in the first half because of increased real estate sales and improved rent revenues from newly opened
malls. The 36.6% jump of the net profit of financial sector on the other hand was due to securities trading.
Holdings firms saw an increase of net profit by 25.9 percent.
The listed corporations in these sectors are dominated by just a few families: Sy (SM Prime Holdings, SM
Development Corp., SM Investments Corp., Banco de Oro Unibank); Aboitiz (Aboitiz Equity Ventures);

Table 9. Establishments Resorting to Permanent Closure and
Retrenchment Due To Economic Reasons By
p
Employment Size, January-September 2012
Total Number of
Establishments
Resorted Resorted to
Employment Size to Reduction of
Percent
Closure Workforce
Total Distribution
(%)
a
Total 1,452 100.0 102 1,351
99 Workers or Less 829 57.1 97 732
Less than 20 workers 336 23.1 78 258
20-49 255 17.6 13 242
50-99 238 16.4 6 232
100 Workers or More 623 42.9 5 619
100-199 200 13.8 2 198
200-299 97 6.7 2 95
300-399 46 3.2 1 45
400-499 31 2.1 0 31
500-599 24 1.7 0 25
600 or more workers 225 15.5 0 225
p
- preliminary
a
- Details may not add up to total due to multiple reporting.
Source: Bureau of Labor and Employment Statistics
Gokongwei (Robinsons Land Corp., JG Summit Holdings); and Ayala (Ayala Land, Ayala Corp., Bank of
the Philippine Islands).
The biggest corporations in the Philippines also saw their income and profitability grew more than it did
during the previous administration. From 2010-2011, the top 1,000 corporations gained an average annual
income of Php780.02 billion compared to an average of Php421 billion annually during the previous
administration. The profitability of big business under the Aquino administration is also higher at an
average of 11.1% annually. (See Table 10)
Table 10. Average Annual Corporate Earnings and

Profitability of Top 1,000 Corporations in
the Philippines, 2001-2009 and 2010-2011
Gross
Net Income Profitability
Period Revenues
(billion Php) (%)
(billion Php)
2001-2009 5,041.5 421.0 7.8

2010-2011 7,584.9 780.0 11.1
Source: Business World Top 1000 Corporations in the Philippines

(Vols. 15-26)

The growth in corporate profits also far outpaced the growth in workers’ wages. The average daily basic
pay in agriculture for example increased by only 4% in 2010-2011, but the estimated daily net income of
top 1,000 corporations in agriculture went up by 821 percent. Such was also the case with the so-called
growth sectors (except TCS): electricity, gas and water; wholesale and retail trade; and real estate, renting
and business activities. (See Table 11)
Note also that in May 2012, the International Labor Organization (ILO) ranked the average monthly wages
in the Philippines as the third lowest among 72 countries in the world, at US$279 (or some Php11,700).
Philippine wages only surpassed average wages received in Tajikistan and Pakistan.
Table 11. Average Daily Basic Pay and Estimated Daily Net Income of Top 1,000 Corporations in the Philippines of
Selected Industry Groups By Industry Group, 2010-2011
Average Daily Basic Pay a Estimated Daily Net Income of Top 1,000 Corporations b, c
Industry Group
2010 (Php) 2011 (Php) Change (%) 2010 (Php) 2011 (Php) Change (%)
Agriculture, Hunting and Forestry, and Fishing 152.01 158.20 4.1 735,890.4 6,775,342.5 820.7
Mining and Quarrying 252.78 262.36 3.8 89,030,137.0 208,663,013.7 134.4
Manufacturing 310.57 316.49 1.9 456,446,575.3 450,643,835.6 (1.3)
Electricity, Gas and Water Supply 1 491.10 542.45 10.5 300,315,068.5 459,772,602.7 53.1
Construction 285.08 296.93 4.2 14,978,082.2 13,252,054.8 (11.5)
Wholesale and Retail Trade, Repair of Motor
274.54 275.81 0.5 60,800,000.0 67,534,246.6 11.1
Vehicles and Personal and Household Goods
Transport, Storage and Communication 2 385.83 396.90 2.9 368,597,260.3 147,309,589.0 (60.0)
Hotels and Restaurants 3 280.76 280.08 (0.2) 18,358,904.1 29,509,589.0 60.7
Financial Intermediation 4 529.99 528.57 (0.3) 675,495,890.4 646,416,438.4 (4.3)
Real Estate, Renting and Business Activities 5 456.61 475.41 4.1 122,257,534.2 149,671,232.9 22.4
Public Administration and Defense; Compulsory
449.68 498.10 10.8 23,945,205.5 102,164,383.6 326.7
Social Security
Education 566.97 618.53 9.1 4,578,082.2 5,416,438.4 18.3
Health and Social Work 6 464.53 470.50 1.3 3,339,726.0 4,139,726.0 24.0
a
- Average daily basic pay data excludes those paid on commission basis, honorarium and boundary as in the case of jeepney/bus/tricycle. Basic pay - pay for normal
time prior to deduction of social security contributions, witholding taxes etc. It excludes allowances, bonuses, commissions, overtime pay, benefits in kind etc.
b
- For the purpose of comparison, the industry groups of the top 1,000 corporations were grouped according to the industry groups used for the average daily basic
pay of wage and salary workers. Below are the said industry groups used and grouped:
1
- "Electricity, Gas, Steam and Air Conditioning Supply" and "Water Supply; Sewerage, Waste Management and Remediation Activities"
2
- "Transport and Storage" and "Information and Communication"
3
- "Accomodation and Food Service"
4
- "Financial and Insurance Activities"
5
- "Real Estate", "Professional, Scientific and Technical Activities" and "Administrative and Support Service Activities"
6
- "Human Health and Social Work Activities"
c
- Figures for the estimated daily net income are based on the annual net income figures of the top 1,000 corporations divided by 261 days or the total number of
working days in a year based on a standard 5-day workweek.
Sources: Bureau of Labor and Employment Statistics Current Labor Statistics (January 2013) for the average daily basic pay and Business World Top 1000
Corporations in the Philippines (Vols. 25-26) for the net income of top 1,000 corporations
PPPs and privatization
Intensified privatization is the cornerstone of the Aquino government’s economic program, and this
is being done through public-private partnerships (PPP). The country saw in the past year how the
government focused its efforts to advance PPP and its requisites by allocating the resources for it and
instituting necessary mechanisms and laws that would facilitate it. International financial institutions (IFIs)
such as the Asian Development Bank (ADB) have also been proactive in groundbreaking PPP. The sectors
prioritized for privatization and PPP projects this year however are crucial for the people who on the other
hand are still reeling from the negative effects of privatization efforts by past administrations.

Water
The Aquino government is set to make the corporate takeover of water more extensive and complete by
privatizing the water resource itself through PPP projects and by privatizing the water districts.
The public has borne the price of water privatization in the Philippines since the Metropolitan Waterworks
and Sewerage System (MWSS) was privatized in 1997 to the tune of US$7 billion, one of the first and
biggest privatization deals at that time. The privatization of the MWSS was the result of a World Bank
proposal in order for the water agency to pay its debts and also its involvement in the whole privatization
process. The water supply for Metro Manila was sold to big corporations and their partners, which were
global giant water and energy transnational corporations: Ayala Corp. and the British United Utilities/
Bechtel and Benpres Holdings and the French Suez Lyonnaise des Eaux (Ondeo). The privatization deal
allowed the two concessionaires to run a vital service like a commercial operation through a pricing
mechanism.
Water privatization has allowed water supply provision in Metro Manila to be run for profit. Since
water privatization, water rates soared by as much as 1,000 percent. (See Chart 2) The average tariff of
Maynilad Water Services Inc. (MWSI) has jumped from Php4.96 per cubic meter when it first took over
the MWSS’s west zone service area to Php32.92 in 2012. During the same period, Manila Water Company
(MWCI) which services the east zone hiked its average tariff from Php2.32 per cubic meter to Php27.44.
Metro Manila’s water rates are among the highest in the region, just behind Singapore, Jakarta and Cebu
according to a 2011 survey of the Japan External Trade Organization.

Both MWSI and MWCI have announced another water rate hike starting January 2013. It will affect 13
million people in Metro Manila and nearby provinces. The MWSS-Regulatory Office allowed the two
water concessionaires to reflect a 3.2% adjustment in Consumer Price Index (CPI) on their basic charge.
For the common Maynilad and Manila water consumers or those with a monthly consumption of 30 cubic
meters, their monthly bill will increase by Php22.52 and Php6, respectively.
Still, Metro Manila has a lot of families with no access to safe water. According to the latest survey of the
government, there were 204,036 families in the National Capital Region (NCR) who did not have access
to safe water in 2008, an increase of 2,919 from 1997 or 15 years after MWSS was privatized.
Bidding for the Angat Hydroelectric Power Plant (HEPP) and other water supply resource projects across
the country has also been approved under the Aquino administration, which signals its long-term direction
in privatization. Because of public disapproval regarding its planned sale, the Aquino government placed
the Angat HEPP as a priority PPP project. Under PPP, the private partner will be rehabilitating, operating
and maintaining two turbines. Angat Dam, aside from its power generation component, has the strategic
role of supplying Metro Manila’s water and irrigation in nearby provinces. If the power generation
component is operated for profit, this will compromise the supply and access to water of residents of Metro
Manila and nearby provinces.
The development of new water supply sources is also being placed under PPP. Planned PPP water resource
projects water include the New Centennial Water Supply Source Project, which will develop a new source
of water supply for Metro Manila, and the Bulacan Bulk Water Supply Project for the nearby province of
Bulacan.
The proposed Senate Bill (SB) 2997 creates new agencies to govern, administer and supervise water
allocation, distribution and rationalization. The proponents deny that SB 2997 is indeed privatization of the
water districts, but it is designed to allow and encourage the Local Water Utilities Administration (LWUA)
and local government units (LGUs) to open up to private sector through joint ventures.
IFIs are very much involved in providing technical assistance and loans to implement PPP in the
Philippines. A financial fund under the PPP Center to support PPP projects has been set up in 2012. The
Project Development Monitoring Fund has an initial allocation of Php550 million from the national
government and three IFIs, namely Canadian International Development Agency (CIDA), ADB and
Australian Aid (AusAid).
Power
The average Filipino consumer continues to bear the effects of the privatization of the electric power
sector. After the previous administration had virtually privatized the entire energy sector and integrated
the cost of privatization in electric power rates, the Aquino government is continuing to pass on the costs
of stranded debts (SD) and stranded contract costs (SCC) to the consumers. The Power Sector Assets and
Liabilities Management (PSALM), which is in charge of privatizing government-owned power plants,
is now pushing to collect its share of the universal charge (UC) to pay for the cost of SD and SCC the
government incurred when it entered into privatization deals with private power producers.
On June 28, 2011, PSALM filed a petition with the Energy Regulatory Commission (ERC) to collect a
UC-SD of Php0.0313 per kilowatt-hour (kWh) and UC-SCC of Php0.3666 per kWh to pay off the SD and
SCC amounting to Php65.02 billion and Php74.3 billion, respectively. PSALM wants an immediate final
decision to its petition to start collecting the UC-SD/SCC in 2013.

Customers saw more power rate hikes in 2012. Meralco, the biggest electric power distributor in the
Philippines, hiked its distribution (by Php0.17 per kWh), supply (by Php0.05 per kWh), and metering
charges (Php1.57 per customer and Php0.03 per kWh) in July, or an increase of Php48 per month for
Meralco charges alone. The system loss charge, which increased almost monthly in 2012, is still to be
passed on to consumers.
In addition, Meralco is increasing its rates almost every month supposedly to reflect higher generation and
transmission costs. Meralco increased generation charges seven times in 2012, with an increase of as much
as 9% in May. In the latest rate hike in October, Meralco increased its power rates supposedly because of
higher generation, transmission and other pass-through costs. It increased its generation charge by Php0.10
in October, hiking it to Php5.50 per kWh or an increase of up to Php24 for customers consuming up to 200
kWh per month.
Mass Transport
The impending fare increase in the rail transport system in Metro Manila is another example of how the
government guarantees the profits of private investors over public welfare.
The Aquino administration has laid down the integration and expansion plans for the Light Rail Transit
(LRT) and Metro Rail Transit (MRT) lines under flagship PPP projects. The government is bidding out
the operation and maintenance of the LRT and MRT. It is planning to extend the LRT 1 North extension
to complete the LRT-MRT loop, the MRT-7 line, the MRT-8 line (East Rail), the Line 2-East Extension,
and the LRT Line 1-South Extension. The completion of the MRT-LRT loop including additional stations
is being contracted by DM Consunji (DMCI) and the Lopez-owned First Balfour. The MRT 7 on the other
hand is being undertaken by the Japanese corporation Marubeni-DMCI consortium with an engineering,
procurement and construction contract with San Miguel Corporation’s Universal LRT.
In order to push through with the privatization and to make the projects more financially viable and
attractive to foreign investors and their local counterpart, the Aquino government has been pushing for
a fare hike. The government also claimed that the LRT and MRT are not earning enough to cover its
obligations. The Department of Transportation and Communication (DOTC) in 2012 floated an average
increase of Php10 for both LRT and MRT.
It may be recalled that the government claims to be losing money over the MRT, but this is because of
the 15% return on investment that it has to pay to Metro Rail Transit Corp. (Metro Rail), a consortium of
Ayala Land Inc. and Fil-Estate Management under its build-operate-transfer (BOT) contract, an earlier
form of PPP. The government pays equity rental payment, maintenance costs, guaranteed debt payments
and other expenses to Metro Rail. The amount that the MRT does not earn is covered by subsidies under
the annual budget. In 2010, for example, government’s MRT obligations was Php8.52 billion but 76% of
the obligation was made up of guaranteed debts and debt payments. Without the onerous provisions of the
deal e.g. guaranteed profits and debt payments, revenue from fares can cover the cost of maintenance and
personnel expenses.
Health
One of the Aquino government’s banner privatization program is PPPs in the health sector. Last October,
the ADB and the United National Economic Commission for Europe (UNECE) held a conference of
government agencies, diplomats and business entities in order to study more investment opportunities to
implement PPPs in the health sector. The ADB is also providing technical assistance, which is funded by
the Japanese government to promote various models of PPPs in health, develop incentives for investors,
and develop capacity for implementing PPPs both in the national and local levels.

In 2012, the Aquino government rolled out the PPP flagship projects in health and started the bidding
process for the Philippine Orthopedic Center (POC) to be sold to investors and converted into a “premier”
bone center. About 90% of patients in the POC are indigents who are treated for free.
Big businesses have already expressed interest in PPPs. For example Manuel Pangilinan, whose Metro
Pacific Investments already owns majority of Makati Medical Center and has signed for the privatization
of Rizal Medical Center, has already expressed interest to buy and operate POC.
Privatization of health under President Aquino takes various forms and levels: hospital corporatization;
PPP projects in core services; PPP projects in non-core services (such as laboratory and nutrition for
tertiary hospitals); PPP projects in peripheral operations (such as laundry); conversion of public health
facilities for other purposes; and outright sale of hospitals, among others. The Aquino government in its
2020 Health Financing Strategy has made it clear that eventually the government will not anymore fund
public hospitals, thus making the hospitals earn on their own in order to deliver ‘health services’.
During the 2013 health budget hearing, the Aquino government made clear that the corporatization of
Department of Health (DOH) hospitals is “to facilitate fiscal autonomy” and as means for public hospitals
to enter into PPP arrangements. There is a pending bill in the House of Representatives (HOR), House
Bill (HB) 6069, which aims to corporatize 26 public hospitals. According to DOH data, 12 out of the 26
hospitals already have proposed or ongoing PPP projects.
Impacts of ongoing privatization are already manifesting in various ways: a) fewer charity beds, b) user-
fees e.g. required deposit to avail of service, c) rate hikes etc. In the National Kidney and Transplant
Institute-Hemodialysis Center Fresenius Medical Center, the rate for a dialysis session went up from
Php3,000 per session in 2011 to Php3,500 at present. The “no pay, no hook policy” has also become the
norm. At the Lung Center of the Philippines, health workers from the Alliance of Health Workers (AHW)
report that a Php10,000 deposit is required before a patient can be admitted and rendered health care.
Meanwhile, the POC already increased laboratory fees from 62.5% to 212.2 percent.
Subversion of land reform
Land distribution remained slow in 2012, including the resolution of the case of Hacienda Luisita (HLI)
that is owned by President Aquino’s family, considering that 2013 is supposed to be the last year of the
already extended Comprehensive Agrarian Reform Program (CARP).
Based on the monthly average of land distribution of the post-Marcos administrations, the Aquino
government distributed land the least. From July 2010 to September 2012, it distributed only 14,942
hectares of land per month. Even at that rate, 65.5% of what was distributed under his administration was
owned by the government (publicly-alienable and disposable) and not by big landlords. (See Table 12)
The CARP-Extension with Reforms (CARPER) is already way behind schedule, and President Aquino
announced in June 2012 that he would complete land distribution in 2014. But as it is, by the end of 2012,
the CARPER was still five years behind schedule. The Department of Budget and Management (DBM)
even cut down a proposed Php30-billion budget for land distribution to Php18 billion and removed another
Php4.9 billion in technical support and credits for 2013.

Table 12. Total Land Distribution Accomplishment Per Administration, July 1987-September 2012 (in hectares)
Land Type and Aquino Ramos Estrada Arroyo Aquino

Mode of Acquisition Jul 1987-Jun 1992 Jul 1992-Jun 1998 Jul 1998-Dec 2000 Jan 2001-Jun 2010 Jul 2010-Sept 2012
Department of Agrarian Reform 848,515 1,900,039 333,389 1,031,403 243,823

Privately-owned Land (PAL) 471,621 955,243 228,622 709,214 103,759
Operation Land Transfer (OLT) 358,915 142,847 18,708 40,079 8,597
Government Financial Institutions (GFI) 22,938 105,498 11,906 26,330 2,312
Voluntary Offer to Sell (VOS) 55,079 257,373 76,896 219,383 17,767
Compulsory Acquisition (CA) 13,952 120,828 47,767 105,080 19,256
Voluntary Land Transfer (VLT) 20,737 328,697 73,345 318,339 55,827
Non-PAL 376,894 944,796 104,767 322,190 140,064
Settlement Areas 208,792 356,763 35,276 104,749 39,646
Landed Estates 25,781 41,201 971 2,125 246
Government-owned Lands/
142,321 546,832 68,520 215,318 100,172
Kilusang Kabuhayan at Kaunlaran (GOL/KKK)
Department of Environment and Natural

874,139 862,461 447,572 942,024 159,604
Resources
Public Alienable & Disposable Lands 539,086 489,069 113,383 942,024 159,604
Integrated Social Forestry/Community Based
335,053 373,392 334,189 - -
Forest Management (ISF/CBFM) Areas
Total 1,722,654 2,752,500 780,961 1,973,427 403,427
Land Distribution
28,711 38,229 26,032 17,311 14,942
Average Per Month
Sources: Presidential Agrarian Reform Council and Department of Agrarian Reform
The HLI is a clear case of the deliberate pace of delivering social justice to the tillers. No land distribution
has occurred yet since the Supreme Court (SC) finally decided in November 2011 to distribute the
land. President Aquino, in behalf of the Aquino-Cojuangco clan even demanded just compensation for
distributing HLI. The Department of Agrarian Reform (DAR) also refused to acknowledge the original
list of 6,296 farmworker beneficiaries, which the SC acknowledged, including farmers who struggled
against the stock distribution option or SDO. Instead, it came up with its own list of 8,550 “potential
beneficiaries”, which included farmers not working inside HLI, and put on provisional status some of
farmworker beneficiaries in the original list. The DAR also required the legitimate farmer beneficiaries to
come up with additional papers. Included in the DAR list are the Aquino and Cojuangco families’ farm
hands, golf-course employees, and household help.
Land grabbing cases have become rampant. In Hacienda Carmenchica, Pontevedra, Negros Occidental,
farmers were prevented to occupy the land already awarded to them by the government - more or less
500 hectares of farmland, which is part of more than 800 hectares of sugar lands that are in the control of
national politicians.
In other parts of Negros Occidental, cases of non-distribution of land have not been resolved. Farmers of
Hacienda Canticbil and Hacienda Angelita in the municipality of La Castellana are still kept from claiming
96 and 182 hectares of land, respectively. Moreover, there are 100 hectares undistributed in Hacienda
Tilangkay-Dako, 300 hectares in Hacienda Socorro, Bacolod, and 191 hectares in Grande Arroyo. In
Davao Oriental, 244 hectares of land covered by Hacienda Bitoon and 285 hectares covered by Hacienda
Bitanagan are still being withheld from the farmers.
In Quezon province, the land reform cases involving coconut plantations of landlords in the province such
as Hacienda Reyes in San Andres, San Francisco and Buenavista in Bondoc Peninsula covering 3,500

hectares are still unresolved. Other undistributed lands are those being held by James Murray with 6,000
hectares in San Francisco, and Eduardo Danding Cojuangco with 2,000 hectares under Southern Luzon
Coconut Oil Mill in Mulanay which has been allegedly bought with the controversial coco levy funds.
The Aquino government has attracted foreign corporations to invest in agribusiness. In 2012, it offered
some 44,000 hectares of land in Bukidnon to private companies for pineapple plantation and processing.
Among those that expressed interest to acquire lands were Pan-American agribusiness transnational
corporation (TNC) Del Monte Phils. and MD Davao Agri Ventures Inc., a subsidiary of Marsman-
Drysdale Agribusiness Holding, one of the largest agribusiness TNCs in the Philippines. Small farmers in
barangays Butong, Merangiran, San Jose, Salawagan, Mibantang, Sta. Cruz, Kiburiao, and Puntian – all in
the municipality of Quezon, Bukidnon will be affected by the project.
The Aquino government is also pushing for the development of the Aurora Pacific Economic Zone and
Freeport Authority (APECO) by allotting Php353.5 million in the 2013 national government budget, the
sixth year that APECO received subsidies (totaling Php830.8 million) despite the unresolved land grabbing
and displacement issues. Some 1,086 farming and fishing families including 5,430 individuals belonging
to the Agta/Dumagat indigenous group will be displaced by further developing APECO.
In the midst of land grabbing, the HOR passed the National Land Use and Management Act of the
Philippines, one of the priority bills of the Aquino administration since the first State of the Nation Address
(SONA), which seeks to reclassify land into four uses in a comprehensive manner, both nationally and
locally. It is silent however on pending land grabbing and land distribution cases but creates opportunities
for opening up vast last frontier areas for foreign investment.
Finally, the nearly three-decade-long case of the coco levy fund seemed to have reached a conclusion in
2012. The SC decided with finality that the Php56.5 billion funds collected from coconut farmers from
1972 to 1981 (and in some parts of the country, even beyond the time when the levy was stopped legally),
supposedly for the development of the coconut industry and the coconut farmers, but was used by Danding
Cojuangco to acquire business assets, was the property of the State. However, instead of distributing the
fund to the farmers, the Aquino administration has reactivated the Presidential Task Force on the Coconut
Levy Fund (PTCLF) to finalize a program on how to manage the fund but without representation from
small coconut farmers. The PTCLF plans to utilize part of the recovered coco levy, or Php11 billion of
the fund for four programs, including: the development of agro-enterprise business endeavors; financing
for land tenure improvement (LTI) under the CARPER; and partly financing the implementation of the
social protection program Pantawid Pamilyang Pilipino Program (4Ps). But these programs have regular
government allocations already.
Labor woes
President Aquino gave a Php20 increase in wages in May and a Php10 increase in November in the NCR.
However, the minimum wage of Php456 has been eroded by inflation and its real value is only Php363.64
compared to 2006 prices. Real wage in the NCR has been flattening out. (See Chart 3)
The minimum wage, the minimal increases notwithstanding, is far from what is needed by a family of six
in the NCR to live decently. According to IBON estimates, a family of six in the NCR needed Php1,033
every day in November to have decent shelter, food, clothing, and a small amount of savings and money
for leisure. But the Php456 minimum wage only comprises 44% of decent living costs, and a family would
still need an additional Php577 to cover decent standards. (See Chart 3)
Instead of granting a truly substantial wage increase, however, President Aquino is implementing a
wage system that removes government hand in implementing minimum wages and places the power to

capitalists to determine how much workers are entitled to receive. The two-tier wage system mandates a
floor wage which is lower than the already low minimum wages to be set by the regional wage boards and
allows corporate management to determine the “productivity allowance” that workers may receive based
on an “agreement” of the management and the employees.
The new wage system was first implemented through DOLE Wage Order 15 in May 2012 in Region
IV-A (CALABARZON) which hosts many of the country’s export processing zones. It will be fully
implemented in 2013. Since May, 16 companies have been implementing the productivity-based pay.
The Ecumenical Institute for Labor and Economic Reforms (EILER) reported that the Php337 minimum
wage in CALABARZON has been cut by 25% and a floor wage to Php255 has been set. Workers can
avail of the productivity-based allowance of Php12.50, subject to the decision of a firm-based productivity
committee. According to EILER, the wage order in CALABARZON granted pay hikes from Php2 to
Php90 but only for workers earning below Php255.
It may be observed that the two-tier wage system was implemented after the Joint Foreign Chambers of
Commerce released a statement in May 2012 that wages in the Philippines were not competitive and that
“relentless” wage hikes have led to actual and potential jobs lost including benefits and better working
conditions for workers. In the joint report, Arangkada, by the DOLE and the Joint Foreign Chambers of
Commerce in September 2012, they affirmed that through the two-tier wage system, corporations would
be able to increase their profits, which however shall come at the expense of the workers.

Mining
The Aquino government finally released its mining policy, Executive Order (EO) 79, as one of its priorities
in 2012. EO 79 ensures that the government gets a rationalized revenue-sharing scheme from allowing its
mineral resources to be exploited by the private sector and foreign corporations. However, since EO 79
suspended the granting of mining permits (except exploration permits) pending the legislation of revenue-
sharing scheme, the mining industry became lackluster. Output as well as investment plunged in 2012. The
Implementing Rules and Regulation of EO 79 was suspended in September 2012.
At any rate, the approval and extension of exploration permits continued in 2012. (See Table 13) Most
of government incentives are given during exploration stage. In addition, the government allowed the
commencement in November of the financial and technical assistance agreement (a mining permit) of
Australian company OceanaGold Corp. in Didipio, Nueva Vizcaya even if there are pending legal issues
and community disapproval.
Table 13. Mineral Exploration Permits Approved/Extended in 2012
Exploration Number of Approval Expiry

Mining Company Location Mineral
Permit Number Hectares Date Date
Royalco Phis. Inc. (formerly EP-II-000014 Kasibu, Nueva 4,786.8 03/19/12 03/19/14 Gold, Copper
Oxiana Phils., Inc.) (First Renewal) Vizcaya
Northern Horizon Exploration EP-2010-001-I Quirino, Ilocos Sur 2,349.0 04/18/12 04/18/14 Gold, copper
and Mining Corp (First Renewal)
Philco Mining Corp. EP 000002-09- New Bataan, 2,139.4 01/04/12 01/04/14 Copper, gold, zinc
XI (Renewal) Compostela Valley and other associated
mineral deposits
Epochina Mining Corporation EP-011-09-XII Bagumbayan, 3,908.5 01/18/12 01/18/14 Copper, gold, zinc
Sultan Kudarat and other associated
mineral deposits
MRL Gold Phils., Inc. EP-IVA-009 Lobo and San 4,999.5 04/13/12 04/13/14 Gold, Copper and
Juan, Batangas other associated
mineral deposits
Ronquillo Mining Corp. EP-II-00015 Batong, Labang, 1,308.8 05/16/12 05/16/14 Gold
Ilagan, Isabela
Mt. Mogan Resources and EP-VIII-OMR- Offshore areas of 15,781.6 06/22/12 02/22/14 Magnetite and other
11-2009 Tanauan, Tolosa, associated mineral
Dulag, Mayorga, deposits
MacArthur and
Abuyog, Leyte
Development Corporation EP-VIII-OMR- Offshore area of Magnetite and other
12-2009 Tacloban City, Leyte associated mineral
and Basey and deposits
Marabut, Samar
Source: Mines and Geosciences Bureau
Communities continue to feel the impacts of liberalized mining, on livelihood, environment, health
and well-being, and lives. Philex Mining spilled 20 million metric tons of mine tailings and sediments,
the biggest volume of mine spill in history, from its tailings pond in Itogon, Benguet into the various
waterways from August to November 2012. It made the 2.5- kilometer Balog Creek biologically dead,
according to the result of an environmental impact mission by the scientists and environmentalists of
Samahan ng Nagtataguyod ng Agham at Teknolohiya Para sa Sambayanan (AGHAM). Gold panning and
fishing by the locals have been affected.

Oil
The Aquino government created the independent body, Oil Price Review Committee (IOPRC), in 2012,
which released its findings in July stating that the prices of oil and other petroleum products are not
overpriced. The IOPRC study failed to look into whether the oil firms engaged in transfer pricing where,
by setting the ‘transfer price’ of goods and services from the mother corporation to its subsidiary, profits
are effectively transferred to the mother corporation and not reflected in the books of the subsidiary –
thereby underreporting profits in the Philippines, for instance. By the end of 2012, prices of the socially-
sensitive diesel were 12-17% higher compared to yearend 2011 while one tank of the household fuel LPG
was Php16 to Php99 higher per tank compared to 2011 prices. (See Table 14)
Table 14. Oil Price Movement and Price Range By Petroleum

Product, 2011-2012
Number of Price Range as of End of Year

Petroleum Oil Price Movements (Php)
Product
2011 2012 2011 2012
Gasoline 46 41 47.79 - 55.70 39.50 - 42.45

(29 hikes, (19 hikes,
17 rollbacks) 22 rollbacks)
Diesel 42 39 42.54 - 46.13 47.60 - 53.95
(25 hikes, (18 hikes,
17 rollbacks) 21 rollbacks)
Liquefied 12 12 654.00 - 715.00 670.00 - 814.00
Petroleum (5 hikes, (8 hikes,
Gas (LPG) 7 rollbacks) 4 rollbacks)
Source: Department of Energy Oil Monitor
Free Trade Deals
Advanced capitalist countries are still grappling with the global capitalist crisis and have turned to the
basics of forging free trade agreements (FTA) especially with underdeveloped countries in order to expand
markets. In the domestic front, the US government for example, after bailing out its biggest corporations
and banks in 2009 and implementing cuts in health spending, it passed a law that stops the US from
falling off its “fiscal cliff” through among others allowing payroll taxes for the majority to increase while
maintaining tax breaks for many of the wealthiest Americans (and raising taxes only for the super-richest
0.5% who would not even feel these). It is also considering more spending cuts and tax increases in the
near future.
Overseas, the US government is aggressively expanding its free trade bloc in the Asia-Pacific through the
Trans-Pacific Partnership Agreement (TPPA), which is rapidly expanding, and the US–ASEAN Expanded
Economic Engagement (E3) initiative. The E3 initiative which was agreed on at the US-ASEAN leaders’
meeting in November involves creating concrete steps to facilitate freer trade by simplifying customs
procedure, joint development of ICT principles, joint development of investment principles, and creating
uniformity in work standards and practices especially in small and medium enterprises and environment.
Even without development in the proposed US-RP FTA, the E3 initiative will facilitate more lopsided
trade deals between the Philippines and the US and will open up two strategic sectors in the Philippine
economy: communication and small and medium enterprise.

The European Union (EU), on the other hand, dealing with a huge sovereign debt problem and worsening
economic crisis, has this year inked free trade deals with two Latin American countries and started talks
with the Philippine government for the prospects of an EU-RP FTA. The Aquino government has already
begun actively doing the consultations in order to proceed with the negotiations. In February, talks
between the two governments were stalled as the Philippines wanted to consult with big business in the
Philippines first before proceeding with the negotiations. The Aquino government is committed to making
necessary structural changes in order for the negotiations to move forward. It is currently on second round
of the consultations with the business sector, especially big business involved in the tuna trade and other
agricultural products. With agricultural products as the primary export of the Philippines to the EU, it will
be the big commercial fishers who would gain, which however shall again be at the expense of the small
fisherfolk.
Conclusion
The Aquino administration seems to have emerged from 2012, despite the lack of meaningful reforms and
the emptiness of its good governance platform, as more solid in managing the economy. Its claim of “good
economics”, however, is bolstered only by financial and speculative gains that fail to conceal people’s
harsher economic conditions. The so-called spectacular growth has only revealed that such growth has
been achieved by elitist and pro-foreign neoliberal policies and at the expense of the toiling people.
‘Good economics’ has also heightened inequality between the growing profits of a few and the growing
bankruptcy of small business and poverty of the majority.

The Aquino government’s optimism about “maintaining high growth” in 2013 shall be as short-term as its
seeming stability in dealing with the country’s chronic crisis. The global economic crisis is intensifying
and shall continue to impact adversely on economies such as the Philippines, to which the Aquino
government has only responded with more and harsher globalization policies. Without reversing from such
policy direction, growth is unsustainable and development and meaningful changes shall remain elusive.
Malfunctioning democracy
T he Aquino administration consolidated its political position in 2012 – it successfully neutralized

former president Arroyo and her political allies, gained the support of foreign and domestic big
business, maintained a core public following, and solidified its backing from the United States (US). This
was achieved in time for the May 2013 mid-term elections and corresponding maneuvering towards the
2016 national elections.
Yet the administration has continued to be undermined by the absence of real reforms and tangible
economic progress. Illusory financial and speculative gains were hyped but still could not detract from the
larger reality of increasingly harsh economic conditions on the ground. Even the banner anti-corruption
campaign has been criticized as using executive power for partisan purposes and affirming rather than
remedying elite abuse of the country’s political institutions. Dissatisfaction thus continued to spread while
social unrest, which State repression has never been able to put down, kept growing.
The midterm elections signal the start of preparations for the next change of government in 2016 where the
Aquino faction of the elite will seek to stay in power while contenders will seek to replace it. Old-school
politicking will likely become more obvious and foster public realization that there have not been any steps
toward real political change. The ruling coalition will maximize its advantages but it is not assured that it
will come out of the elections much more consolidated or strengthened.

Public disapproval in any case can only grow as joblessness and poverty worsen, as the inequity of only
a few growing wealthier becomes more glaring, and as further economic good news are pre-empted by
the lingering global crisis. The unintended consequences of the Philippines’ complicity in the growing
US military presence in the region also cannot be dismissed lightly. The coming year could then see the
beginning of the end of this period of relative political stability as the problems of an unreformed system,
of a malfunctioning democracy, come to the fore.
Seeking political stability
The Aquino administration consolidated control of the various branches of government in 2012 and kept
factional conflicts in check. After a tentative start to its term it regrouped and used its electoral legitimacy
and momentum of popular support to secure its political position.
Overcoming initial hesitation it eventually mounted bold counterattacks against its most immediate
political opponent Gloria Macapagal-Arroyo, former president and now representative of Pampanga
province, and her allies. The frontal defiance of the Supreme Court which culminated in the successful
removal of Chief Justice Renato Corona in the first semester of 2012 effectively eliminated Rep.
Arroyo’s highest-level and most strategically critical political ally (complementing the earlier removal
of Ombudsman Merceditas Gutierrez). Since the Arroyo camp does not otherwise command any support
among the general public it is now a politically spent force.
Pres. Aquino broke Supreme Court tradition on seniority and appointed Ma. Lourdes Sereno as chief
justice. Notwithstanding the apparent bias of Pres. Aquino for the new chief justice the Supreme Court
does not appear particularly intimidated with calculated absences by justices during her oath-taking
and flag ceremonies, the en banc revoking her order opening a Regional Court Administration Office
in Cebu City without authority from the en banc, and questions publicly raised about her railroading
the appointment of the high court’s spokesman and chief of its public information office. Chief Justice
Sereno’s independence from the administration is still to be tested.
Rep. Arroyo was released on bail in July when the court decided that the vote-rigging case against her
was weak but then re-arrested in October on charges of corruption related to the alleged misuse of Php366
million in Philippine Charity Sweepstakes Office (PCSO) funds between 2008 and 2010; she remains
under hospital custody. Former trade minister Roberto V. Ongpin in turn was accused for alleged behest
loans in what has been speculated to be a maneuver on the finances of Arroyo and at least one other
prominent political family for whom Ongpin purportedly fronts. This has already resulted in the freezing
of some 100 of Ongpin’s bank accounts in 20 banks and financial institutions.
A perceived selectivity in Pres. Aquino’s anti-corruption drive has raised criticisms that these are more
attacks against political opponents than a genuine thrust for accountability and the rule of law. By 2012
the administration visibly demonstrated its willingness to use not just line agencies but also Congress
and such as the Anti-Money Laundering Council (AMLC) for partisan political purposes. The heavy-
handedness especially by an administration that avows good governance and reform has reinforced the
persistent problem of State powers and institutions being used for narrow political purposes. In any case,
this political muscle-flexing coupled with Pres. Aquino’s degree of steady popular support has seemed to
keep the traditional political opposition uncharacteristically restrained.
The Aquino administration has also been systematic in building up its image as a government that
breaks the country’s tradition of corrupt and elite government, is concerned about the poor, and delivers
economic results. In many ways it deftly exploited the public frustration and yearning for good news
that accumulated under the previous Arroyo administration. Government propagandists played up
every possible positive development no matter how insignificant while downplaying negative trends

no matter how consequential. The president himself even publicly berated media outfits that he saw as
uncooperative. This image-building has been important to shore up his administration’s legitimacy.
The anti-Arroyo campaign is the main basis for claims that the administration was serious in cracking
down on corruption. The massive multi-billion high-profile short-term conditional cash transfer (CCT)
scheme under the Pantawid Pamilyang Pilipino Program (4Ps) – costing Php44.3 billion just in 2013 and
claiming to eventually reach over four million beneficiary households – in turn is the main basis for the
administration to project a concern for the poor. Poverty is so widespread that every government has to
establish some kind of anti-poverty credentials.
The administration built up its public image with the help of key supporters. Hundreds of civil society
groups, including some that were previously critical of government, were enlisted as active partners
in administration anti-corruption and anti-poverty programs at the national and local levels. For their
part, international agencies such as the World Bank and the Asian Development Bank (ADB) hailed the
administration’s efforts at good governance and 4Ps, which they partially fund, as notable successes. Even
sections of big foreign and domestic business repeatedly commended the new administration.
The recent series of flattering economic indicators in particular has had positive political effects in terms of
image-building. Although illusory gains only remotely related to the working people’s daily lives they still
boosted Pres. Aquino’s efforts to attract foreign investors and appeased otherwise restive sections of the
upper and middle classes.
The administration’s support meanwhile for the landmark reproductive health law enacted in December
was welcome – the law is a constructive step that reflects growing appreciation of women’s concerns and
indicating progress on the vital issue of maternal and reproductive health care. Yet while it is a long-
overdue measure that is mostly positive on its own terms, it is appropriate to put it into perspective as still
needing wider social and economic reforms to fully achieve its desired results especially for poor women.
The Aquino administration moreover sought to preclude dissent from the Armed Forces of the Philippines
(AFP) by pouring funds into it. In December it signed the Revised AFP Modernization Act which
allocates a budget of Php75 billion for the first five years of its implementation as well as extends the
modernization program for another 15 years. This initial five-year modernization budget is more than
double the cumulative Php33.6 billion over fifteen years under the previous Ramos, Estrada and Arroyo
administrations. The initial acquisition list includes 25 aircraft, eight helicopters, a frigate, light weaponry,
ammunition and other equipment for the air force, navy and army.
The military budget is already dramatically higher than under the previous administration. From Php91.5
billion in 2010 it increased to Php101.5 billion (2011), Php113.1 billion (2012), and then Php120.3 (2013)
– or a 31% increase in just three years. The administration has also taken the military’s preferred tough
line with the Communist Party of the Philippines-New People’s Army (CPP-NPA) of intensified military
offensives astride belligerence on peace negotiations. Clandestine military factions apparently remain but
are still quiet for now.
Seeking US support
Political counter-attacks, image-building and relying on a mercenary tradition of the AFP have their
limitations though, so Pres. Aquino has most of all endeavored to get the full support of the US, one of
the most significant if somewhat concealed influences on Philippine politics. Explicit US endorsement
of a sitting administration sends strong signals to major reactionary political forces – the international
community, foreign investors, domestic big business, middle class intellectuals, churches, civil society, and
the military and police hierarchy.

The administration is conscious of how US interference and patronage have been decisive in the past:
supporting then later disapproving of Marcos leading to EDSA 1 in 1986, likewise with Estrada leading to
EDSA 2 in 2001, and then similarly with Arroyo although culminating instead in an electoral transition to
Aquino himself in 2010.
The Aquino administration will be distinguished for ushering in a new era of a greater US military
presence in the country and of more formal mechanisms for US intervention in domestic economic and
political matters. The US government sees the Philippines as a key link in the evolving US foreign policy
‘pivot’ or ‘rebalancing’ toward Asia and has actively been rebuilding the country as a client state whose
policies it can significantly influence (discussed more extensively in previous Birdtalk briefing papers:
January 2011, July 2011, January 2012, and July 2012). While this ‘pivot’ was only declared last year the
US military presence in the country and interference in domestic affairs has actually been steadily growing
in the decade since 2002 and the start of the US’s so-called war on terror.
Nevertheless the series of high-level visits and exchanges between US and Philippine officials in 2012
is unmatched since at least the closing of the US bases in 1992. There was the official working visit of
Pres. Aquino to the US including a meeting with US Pres. Barack Obama (June), the first ever “Two-Plus-
Two” Ministerial Consultations in Washington between the respective foreign and defense secretaries
(April), two Bilateral Strategic Dialogues (Washington in January, Manila in December), and visits to the
Philippines of the US Chairman of the Joint Chiefs of Staff (June), Pacific Command chief (July), Deputy
US Trade Representative (February), the most senior Republican senator (October), and a congressional
delegation (January).
The Aquino administration last year agreed to a wider and virtually permanent US military presence
in the country under the euphemism of a ‘temporary rotating’ presence. It agreed to more deployments
of increased numbers of US troops for exercises, repairs, resupply, and relief operations. This is on top
of some 600-700 US troops that have already been ‘temporarily’ deployed in the country for a decade
particularly in Southern Mindanao.
The number of military ship visits (i.e. aircraft carriers, submarines, destroyers and assault ships) has
dramatically increased especially to strategically important Subic Bay but also to other ports such as
Manila Bay and in Cebu. Among others these have already included many nuclear-powered and -armed
attack submarines and the supercarrier USS George Washington. AFP chief General Jesse Dellosa reported
port calls and emergency repair stops at Subic Bay increased by 30% in 2012 from the previous year.
In October senior US and Philippine military officials confirmed that Subic Bay, once the US’s largest
overseas naval base, will have a much larger role in US Pacific Fleet deployments in the coming years.
Earlier in June, then US defense secretary Leon Panetta declared that the US will shift the bulk of its
naval fleet to the Pacific by 2020 as part of its new strategic focus on Asia. Subic’s deep water port can
accommodate the range of US naval ships and assets so the US Navy is setting up a maintenance, repair
and logistics hub there.
The US will also be transferring forward deployed supplies and logistics from Afghanistan to the
Philippines (and Singapore) – meaning pre-positioning of war material starting with innocuous tents,
blankets and generators ostensibly for humanitarian assistance and disaster relief operations but also
for use in other military missions. The US also asked for access to some half a dozen civilian airfields
around the country for its fighters, transports and spy planes to use for repairs, refueling and temporary
deployment. Among those planned for deployment in the country on a ‘temporary rotating basis’ are P-3C
Orion long-range surveillance planes, Global Hawk drones, and advanced littoral combat ships.
The Aquino administration is playing up the military and other assistance the country receives from the
US – reportedly US$2 billion from 1999-2011, aside from over US$111 million more in 2012 including

US$43.2 million under the Partnership for Growth (PFG) program. US Foreign Military Financing
(FMF) for 2012 was more than doubled from an initial allocation of US$14.6 million to US$30 million.
The country also received its second decommissioned US Coast Guard ship last year. The US military
further announced that it planned to provide a powerful land-based radar and develop a National Coast
Watch Center ostensibly to improve security in the West Philippine Sea (South China Sea). This military
aid is portrayed as developing Philippine defense capabilities but is more fundamentally about further
developing the AFP and the Philippines as a subordinate link in US military force projection in the region.
The closer ties between the US and the Philippines under the Aquino administration have serious
implications for the Philippines. The country is becoming complicit to the US’s often violent foreign
policy which has already made the US unpopular and even a target of attack by aggrieved peoples
worldwide. The US invokes ‘universal values’ of freedom and democracy but its foreign policy decisions
in just the last decade have already cost the lives of some 750,000 civilians in Iraq, Afghanistan, Pakistan,
Libya, Somalia, Yemen, Algeria and other countries. The US methodically uses embargoes, blockades and
outright military action – including through remotely-controlled drones or direct attacks, bombings and
invasion – to advance its geopolitical ends.
The US is also increasing its direct and indirect influence over Philippine policy-making. There will be
sustained pressure to implement neoliberal policies that open up the economy and are biased against
national social and economic development. This is already taking place under the expansive PFG which is
pushing charter change, investment liberalization, legal and judicial reforms, and fiscal reforms. It is also
significant that the US has a long record of opposing the emergence of democratic alternatives in countries
around the world and will likely do so in the Philippines as well, if the time comes.
The Philippines’ room to maneuver on foreign policy issues will be constrained such as in the current
territorial disputes in the oil- and gas-rich West Philippine Sea (South China Sea) which is already
emerging as the most significant international military flashpoint in Southeast Asia. As it is, the Philippine
position is becoming framed according to US parameters such as unduly stressing military rather than
diplomatic aspects and pushing for a multilateral approach to open the way for an indirect role by the US
in the dispute. These unnecessarily raise tensions although in a way that conveniently serves US interests
for a greater military and diplomatic presence in the region.
Less than three years into its term, the Aquino administration is already notable for reversing the historic
decision to close the US bases in 1992 and for greatly accelerating the loss of the country’s sovereignty
vis-à-vis the US, its former colonial master and current neocolonial patron.
Advancing elite interests
The relative political stability achieved was not used to advance a genuinely reformist agenda but rather
merely became more favorable conditions for foreign investors and domestic big business to make
commercial and speculative profits. This has benefited financial and speculative interests – such as in the
stock market, banking and finance, and real estate – and contributed to building elite consensus in support
of the Aquino administration.
Last year for instance did not see the administration reverse any of the government’s long-discredited
neoliberal globalization policies benefiting mainly foreign, elite and reactionary interests. Indeed, it
is even ironic that one of the most important factors for the fiscal turnaround last year that prompted
positive assessments from ratings agencies and foreign creditors is the regressive higher value-added tax
(VAT) imposed by the vilified Arroyo administration and continued by Pres. Aquino. The administration
also retained the range of incentives for foreign investors even if these are at the expense of national
development.

The Aquino administration is to some degree able to project itself as clean, opposed to corruption, and
sympathetic to the people. It used this positive image to push further pro-elite measures such as higher
taxes (on alcohol and tobacco) and greater privatization of health and education.
Yet there is already speculation that the infrastructure-heavy public-private partnership (PPP) program is
stalling less due to a determined effort at transparency but rather due to the difficulties of apportioning
contracts between competing corporate interests. Investors publicly hail the government’s PPP program
but informally express concerns about the regularity of biddings and security of contracts.
For instance the year ended with a controversial Department of Transportation and Communication
(DOTC) bidding rule for the Php10 billion Cebu airport terminal PPP that apparently favored the Ayala-
Aboitiz consortium over the San Miguel conglomerate. The DOTC disqualified bidders with a stake in
airport transport in the country such as San Miguel Corporation (SMC) which recently acquired a 49%
interest in flag carrier Philippine Airlines. The Aquino administration last year also allowed separate
proposals by Metro Pacific Investments Corp. and SMC subsidiary Citra Metro Manila Tollways Corp.
for expressways (reportedly costing Php45 billion) linking the North Luzon Expressway and South Luzon
Expressway that in being redundant will result in higher tolls for road users.
The Aquino administration in 2012 started laying the groundwork for a renewed push for charter change.
The US has long sought the removal of the 1987 Constitution’s nationalist economic provisions – most
recently in the course of drawing up economic proposals under the PFG – as well as of prohibitions on
foreign military forces and bases in the country. These items have heightened importance for the US
given its economic crisis and strategic pivot towards Asia. Coupled with the perception of a president
uninterested in extending his term, the likelihood of a determined charter change offensive anytime after
the 2013 elections is then very strong.
Various foreign and domestic elite interests are already converging on charter change, which makes
effective people’s opposition all the more vital. The Senate President and Speaker of the House both
asserted that changing the charter’s economic provisions would pave the way for progress and publicly
pushed for charter change including conducting Congressional roadshows. Foreign chambers of commerce
and domestic big business groups issued statements calling for the same. Even the Catholic Bishops’
Conference of the Philippines (CBCP) declared its openness to amending the Constitution.
The Supreme Court has been instrumental in blocking several charter change moves since the Ramos
administration in the 1990s. The new chief justice however has a background of supporting ‘free market’
policies of globalization and charter change in particular. Chief Justice Sereno chaired the Estrada-era
Steering Committee of the Preparatory Commission on Constitutional Reform which proposed charter
change. She has also been legal counsel of the pro-globalization World Trade Organization (WTO)
appellate body secretariat as well as consultant of the World Bank and United States Agency for
International Development (USAID), albeit for judicial reforms rather than economic concerns.
It is also not impossible that public enthusiasm for a final peace deal with the Moro Islamic Liberation
Front (MILF) will be exploited as another reason for charter change. It is officially said that MILF
demands can be met even without charter change but this implies drastically reduced demands from
previous positions that the MILF may in practice not really be amenable to. Resolving the Moro armed
conflict may then also be raised as an additional justification.
Struggles and repression
The administration has been supportive of the inequitable status quo on key issues, and the corresponding
negative impact on people’s welfare drives a strong undercurrent of dissatisfaction and popular protest.

There is for instance a disproportionate concern with competitiveness rankings and credit ratings which
are justified as requisites for national economic progress but are really only relevant to short-sighted
profit-seeking by big business. This concern however translates into keeping labor costs low through
wage repression and avoiding protection for Filipino enterprises which resulted in growing income gaps,
worsening inequality and small enterprises closing. It also means increasing revenues through a regressive
tax system that burdens the poorest rather than taxing big corporations and rich families, such as through
the VAT and the new sin tax law passed last year.
On the other hand the Aquino administration has also failed to take the side of farmers and workers on
their vital concerns. Poor land distribution accomplishment in 2012 gives the Aquino administration the
dubious distinction of distributing the least land among the five administrations spanning the current
agrarian reform program started in 1987 – stirring peasant protests not just in the iconic Hacienda Luisita
but elsewhere across the country in Luzon, Visayas and Mindanao.
Farmers waged local struggles in Pangasinan, Nueva Ecija, Bulacan, Batangas, Capiz and Bukidnon
(land-grabbing), Isabela (bioethanol project) and Misamis Oriental (palm oil plantation), rose against the
encroachment of mining on their land and the destruction of their livelihoods in Batangas and Negros
provinces, and opposed militarization. The Kilusang Magbubukid ng Pilipinas (KMP) also held regional
consultations culminating in a national summit to campaign for the distribution of coco levy funds worth
some Php57 billion (possibly as much as Php80 billion) to coconut farmers instead of being used by the
Aquino administration for its preferred projects.
Pres. Aquino personally rejected calls for a Php125 across-the-board wage hike on Labor Day, echoing
and even amplifying standard illogical arguments raised by business groups. In 2012 the administration
also started implementing the two-tier wage system, beginning in the Calabarzon region, essentially aimed
at legalizing further wage repression in favor of capitalist enterprises. Workers such as with the Kilusang
May Uno (KMU) correspondingly launched protest actions against these policies – including the largest
May 1 Labor Day rally in recent years – as well as strikes in at least a dozen enterprises. The Center
for Trade Union and Human Rights (CTUHR) monitored 142 incidents of economic rights violations
involving 7,342 workers, more than half of whose victims involved violations of the right to form unions;
there were also 26 incidents of civil and political rights violations with 196 victims, mainly threats,
harassment and intimidation.
Such protests by grassroots movements are independent of vacillating middle forces or reactionary
politicians. Aside from being important for belying the administration’s good governance and pro-people
posturing they are among the most important sources of political momentum for long-term fundamental
change in the country.
After nearly three years the Aquino administration has still not departed from previous governments’
use of political repression against mass-based protests and movements. The independent human rights
group Karapatan monitored continuing extrajudicial killings (EJKs) and enforced disappearances last year
bringing the total so far to 132 EJKs and 12 disappearances under the Aquino administration, covering the
period July 2010 to November 2012. The total number of political prisoners also continues to rise with
398 documented political prisoners including 123 arrested under the Aquino presidency. Karapatan also
monitored 72 cases of torture and at least 467 victims of illegal arrest with or without detention.
In November the administration created an inter-agency “superbody” to investigate EJKs, disappearances,

torture and other grave rights violations. Human rights advocates however have questioned its credibility
for including the defense secretary, AFP chief of staff, and Philippine National Police (PNP) director
general or the highest officials of state security forces seen as responsible for these rights violations. In
any case the government will be hard-pressed to explain how yet another committee can resolve the long-
standing problem of impunity and no perpetrators being arrested, prosecuted and convicted. Infamous

rights violator Gen. Jovito Palparan for instance remains at large allegedly with the backing of supporters
in the AFP.
The current administration’s human rights rhetoric and democratic posturing paradoxically even creates a
dangerous situation. The corruption, cronyism and widely-perceived illegitimacy of the previous Arroyo
administration were factors in making sections of the reactionary elite and middle class concerned about
human rights violations (HRVs) and, at least on this matter, even sympathetic to Leftist forces. The ruling
classes, business, church and even media however have greater support for Pres. Aquino than for former
president Arroyo and on this account may then be less so inclined. Lamentably, Pres. Aquino himself
in October articulated that the way to frame HRVs is to understand these as mere products of “Leftist
propaganda”.
Human rights advocates on the other hand welcomed the enactment in December of the Anti-Enforced
Disappearance Law and challenged the Aquino government to file charges against the state forces
responsible for over 200 disappearances in the last decade. The law is the result of a long campaign by
relatives of desaparecidos, human rights groups, and people’s organizations. It will be important to see
the law’s impact while military counterinsurgency policy and practice still reportedly contain elements of
political repression directed against civilians.
The Cybercrime Prevention Act of 2012 also took effect in October covering a wide range of computer-
related crimes, but with critics most concerned about its provisions related to libel. The law liberally
conceives libel to cover the range of on-line and other electronic communication-related activities of
individuals with the result that writers and sharers of items deemed libelous could face exorbitant fines
and even imprisonment. After an outcry the Supreme Court suspended the law for 120 days to consider
petitions and hear oral arguments.
The 2013 mid-term elections
The 2013 mid-term elections are important for presidential and other political ambitions in 2016. Last year
already saw strains develop within the ruling coalition as the presumed rivals for the presidency, Vice-
president Jejomar Binay (PDP-Laban) and Interior Secretary Manuel “Mar” Roxas III (Liberal Party, LP),
and their allies started their respective positioning and counter-maneuvering; Sen. Ferdinand “Bongbong”
R. Marcos (Nacionalista Party, NP), Jr. is also widely seen to be seeking the presidency.
The divisions developing are not yet serious but the mid-term elections will test the Aquino
administration’s consolidation. There is a lot of room for traditional politics to come into play with the
elections deciding 18,022 national and local positions: 12 senators, 229 district members of HOR, party-
list representatives, 162 governors and vice governors, 3,268 mayors and vice mayors, and thousands of
members of local legislatures and councils.
The ruling LP-led coalition is looking to strengthen its dominant position in Congress and to weaken
opponents especially at the local levels. Any headway that the contending United Nationalist Alliance
(UNA) is able to make will be directly at the expense of Aquino’s LP and lay the basis for growing
contradictions in the last three years of the administration. The senate race in particular will be closely
watched.
The formidable Liberal Coalition backed up by administration resources and machinery includes the
LP, NP, Nationalist People’s Alliance (NPC), Laban ng Demokratikong Pilipino (LDP), and erstwhile
marginalized party-list group Akbayan. Its senatorial slate includes: Paolo Benigno “Bam” Aquino IV,
Ma. Ana Consuelo “Jamby” Madrigal-Valade, and Ramon Magsaysay, Jr. (LP); Alan Peter Cayetano,
Antonio Trillanes IV, and Cynthia Villar (NP); Loren Legarda (NPC); Juan Edgardo “Sonny” Angara

(LDP); Aquilino Martin “Koko” Pimentel III (PDP-Laban); Risa Hontiveros-Baraquel (Akbayan); and
independents Francis “Chiz” Escudero and Mary Grace Poe-Llamanzares. The slate conspicuously
includes candidates from camps contending the 2010 presidential elections – Aquino, Madrigal and Villar.
UNA in turn is composed of just two national parties – PDP-Laban of Vice-president Binay and the Pwersa
ng Masang Pilipino (PMP) of former president Joseph Estrada – and is relying on local alliances to deliver
votes for its national candidates. Its slate includes: Ma. Lourdes Nancy Binay, Margarita “Tingting”
Cojuangco and Ma. Milagros “Mitos” Magsaysay (PDP-Laban); Joseph Victor “JV” Ejercito, Ernesto
Maceda and Juan Miguel Zubiri (PMP); Juan Ponce Enrile, Jr. and Legarda (NPC); Richard Gordon
(Bagumbayan-VNP); and independents Gregorio Honasan, Escudero and Poe-Llamanzares.
The only other noteworthy senatorial ticket is the Makabayan Coalition which includes Bayan Muna party-
list representative Teddy Casiño and five guest candidates: Legarda (NPC), Pimentel III (PDP-Laban),
Villar (NP), and independents Escudero and Poe-Llamanzares. The coalition is composed of progressive
political parties Bayan Muna, Anakpawis, Gabriela Women’s Party, ACT Teachers’ Party-list, Katribu
Party-list, Migrante Party-list, Courage Party-list, Akap Bata Party-list, Piston Party-list and Kalikasan
Party-list.
Neither of the two major coalitions has revealed their policy program if elected although UNA was quick
to say, albeit in general terms, that it supported the administration’s policies. At the very least this could
imply that a winning Senate slate dominated by these coalitions will not result in any changes to current
conservative and pro-elite policies. In contrast the Makabayan candidates agreed on and publicized a
wide-ranging platform of taxation and pricing reform, wage and salary hikes, higher budgets for social
services, pro-people mining policies, environmental protection, support for Filipino enterprises, agrarian
reform, review of foreign debt servicing, review of unequal international treaties and agreements, an
end to extrajudicial killings and enforced disappearances, repealing or amending the Cybercrime Law,
resumption of peace talks between the government and the NDFP, and others.
The LP-led coalition is coming strong into the May 2013 elections with vast government resources at its
disposal and upon the administration’s political consolidation in its first two-and-a-half years. These give
it confidence that it will retain its dominance in Congress and, perhaps to a lesser degree, the Senate. As
it is there are 92 LP members in Congress, followed by NPC with 49, Lakas-remnant NUP with 34, and
NP with 24; formerly ruling party Lakas meanwhile is much-diminished with defections reducing the 106
winning Lakas-Kampi candidates in 2010 to around 20. Out of the total 287 House members, the Majority
Bloc has a substantial 255 or so lawmakers versus only about 25 in the Minority Bloc and perhaps a few
independents.
Nonetheless the Aquino administration is slowly having to deal with its exaggerated claims of political
reform and disillusionment among its middle class and other supporters is steadily increasing. Any
noticeable decline in public and political support will just increase the opportunity for the political
opposition to begin counter-maneuvering with a view to 2016.
It remains to be seen how much advantage the historical aura of EDSA People Power and social
movement-cum-democratic rhetoric gives the Liberal Coalition over the tested populism of UNA.
Both camps are in any case already wielding fine-tuned techniques in trapo politics backed up by vast
accumulated wealth and electoral war-chests. The reactionary elite consensus built by Aquino has tried
to isolate the mainstream Left but its proven nationwide mass base still makes it the most formidable
ideological challenge to elite electoral politics in the country.

Unrelenting traditional politics
The Aquino administration does not have a political reform agenda beyond its anti-corruption rhetoric
and last year confirmed this with scant movement against traditional political practices much less the
domination of entrenched elites. The administration coalition itself has been accused of patronage politics
and wielding political largesse.
The LP has grown by un-discriminatingly accepting new members following Pres. Aquino’s ascent to the
presidency, for instance doubling the number of LP members in Congress from the original 44 winning
candidates to the current 92. Defections are normal upon presidential election results with lawmakers
gravitating towards the chief executive to assure their pork barrel funds. This logic has been confirmed
with the Aquino administration visibly denying pork barrel funds to its opposition, including progressive
party-list groups, while dispensing this liberally to its allies. The 2013 budget has also been criticized for
being an ‘election budget’ with anywhere from Php100-300 billion pesos in vague, redundant or otherwise
suspicious items.
The run-up to the 2013 elections has already seen allegedly politically-motivated attacks in non-LP allied
but electorally-critical provinces – against Pangasinan governor Amado Espino (NPC) who is going up
against Hernani Braganza (LP), and against incumbent Cebu governor Gwendolyn Garcia whose brother,
Pablo John Garcia, is running against Hilario Davide III (LP). Espino is being investigated for alleged
jueteng links while Garcia is facing suspension for an administrative case. Pangasinan (1.51 million
registered voters in 2010) and Cebu (1.43 million) are respectively the fourth and fifth most vote-rich
provinces in the country. They are however the two vote-richest provinces that the LP-led coalition is
contesting. The equity of the incumbent rule was applied in Negros Occidental (1.58 million voters) and
Bulacan (1.52 million) while Cavite (1.52 million) was declared a ‘free zone’ by agreement of the LP and
NP national leadership.
There is also no indication of any measures against traditional forms of fraud including vote-buying,
coercing voters with violence, ballot substitution and pre-shading, and padding of voters lists. At the
same time policy studies group Center for People’s Empowerment in Governance (CenPEG) warns of the
specter of automation-related electoral fraud because of unresolved vulnerabilities and irregularities in the
system dating from the 2010 elections.
The elite character of Philippine politics manifested in two interrelated ways in 2012. First is the elite
domination of the upcoming elections which remain skewed towards political dynasties and otherwise
wealthy politicians. The 2013 elections sees familiar political clans at the national and local levels:
Aquino, Angara, Binay, Cayetano, Cojuangco, Enrile, Escudero, Ejercito/Estrada, Gordon, Marcos,
Madrigal, Magsaysay, Pimentel, Villar, Zubiri, Ampatuan, Cua, Defensor, Duterte, Dy, Garcia, Joson,
Ortega, Pineda, Singson, Umali, and others. It has been alleged that less than 200 families dominate
Philippine politics. CenPEG has reported that 68% of congressmen and 80% of senators come from
political families while 94% of provinces have political dynasties.
The party-list system meanwhile remains subverted and a weak mechanism for democratizing politics in
allowing traditional and wealthy politicians and non-marginalized groups to participate. Such unqualified
groups can account for half to up to three-fourths of the 79 party-list groups accredited by the Commission
on Elections (Comelec) to run in 2013.
Second, there is intra-elite accommodation, compromise and indecisiveness. This was underscored with
how the Presidential Commission on Good Government (PCGG) in 2012 prepared for its proposal to
wind-down operations and transfer these to the justice and finance departments and which it formally
raised at the start of 2013. This is while the Marcoses and their cronies retain their ill-gotten wealth with
over half of their supposedly US$10 billion ill-gotten fortune still unrecovered. If the PCGG’s closure

pushes through it will be with the Marcoses still denying any wrongdoing and, despite numerous criminal
and civil cases filed against them, none of the heirs or cronies successfully prosecuted for plundering
government funds. On the contrary, the Marcoses have regained and consolidated their political base with
a senator (reportedly aiming for the presidency), congresswoman, and governorship.
On the other hand the single most concrete legislative measure that the Aquino administration could have
taken to possibly initiate ripples of change remains stalled. A Freedom of Information (FOI) law giving
citizens undiluted and meaningful access to government papers, documents and record would be a tangible
step towards institutionalizing a mechanism to check State abuses. Pres. Aquino pledged to back the bill
during his campaign but the LP-dominated Congress has successfully delayed the bill for the last two-and-
a-half years.
The year 2012 thus ended with the various advantage of the ruling classes vis-à-vis the democratic classes
intact and elite political rule in the country affirmed. A level of stability has also been reached which will
likely remain so in the short-term barring a yet unforeseen radical rupture in the political scene around the
2013 mid-term elections until 2016.
Unresolved armed conflict
The Aquino administration had a breakthrough in its drive for political stability with the signing in October
of a preliminary US-supported deal with the MILF. The so-called framework agreement brings the peace
process with the country’s largest Moro armed group forward. A corresponding final peace deal will be
very consequential in pertaining to one of two major armed conflicts in the country as well as in covering
provinces rich in fertile agricultural land, minerals and hydrocarbon energy resources.
More details about the corresponding new political entity called Bangsamoro, power- and wealth-
sharing, and putting down of arms were due in December but did not materialize upon difficulties on
these contentious issues. Still, the Aquino government and the MILF publicly expressed optimism about
the complex task of setting up a self-governing Bangsamoro homeland – including the formation of a
Transition Commission, passage of a Bangsamoro Basic Law and ratification via a plebiscite, creation of a
Bangsamoro Transition Authority, and ultimately formation of the autonomous Bangsamoro government.
The MILF conceded secession or an independent state for a more limited form of self-governance under
the agreement so it remains to be seen how far the root causes of the Mindanao conflict will be addressed.
Further progress in the talks may however still not necessarily mean an end to the Moro armed conflict
and there is still a tendency for instability even amid the glow of a final peace deal. There are already at
least two breakaway groups from the MILF: the Bangsamoro Islamic Freedom Movement (BIFM) of
Ameril Umbra Kato and another group led by the brother of the late MILF founder Hashim Salamat.
Moro National Liberation Front (MNLF) chairman Nur Misuari and other leaders have also denounced the
framework agreement as “irrelevant” and not solving the decades-old rebellion in Mindanao. There could
also be local and national politicians reluctant to cede power to the Bangsamoro authority.
Fighting with the CPP-NPA meanwhile threatens to escalate with the Maoist forces declaring that their
armed struggle will advance and amid government belligerence to pursue more meaningful peace
negotiations. The CPP recently announced “substantial progress” in moving “from the strategic defensive
to the strategic stalemate” citing more than 100 guerrilla fronts increasing to 180 fronts with 25,000 red
fighters “in the next few years”. This is while the military on the other hand declared dozens of provinces
nationwide supposedly ‘insurgency-free’.
At any rate the number of armed confrontations between the NPA and government forces monitored by
IBON shows these increasing from 90 incidents in 2001, to 172 incidents in 2006, and 347 incidents in
2011. (See Annex) The number of incidents decreased slightly in 2012 to 323 likely due to a CPP-NPA

ceasefire declared in the Davao region in the aftermath of Typhoon Pablo (lasting 29 days) and another
nationwide after a special meeting between the National Democratic Front of the Philippines (NDFP) and
Philippine government (lasting 27 days).
The peace talks with the NDFP remain stalled. The Philippine government (GPH) is possibly emboldened
to keep pursuing a military solution because of its initial agreement with the MILF – and corresponding
prospects of redeploying troops from Moro to Communist areas – and with US commitments of increased
material and operational support for the AFP. For its part the NDFP has declared continuing openness
to resume talks on the substantive agenda of comprehensive social and economic reforms if the GPH
recognizes prior agreements including pertaining to the release of abducted NDFP peace consultants. The
NDFP had previously proposed an abbreviated fast-track agreement but which Pres. Aquino rejected.
Informal backroom talks and special meetings nonetheless continue towards achieving a breakthrough that
will give long-missing momentum to the formal talks, perhaps akin to the impetus in the MILF-GPH talks
after the historic meeting between Pres. Aquino and MILF chair Al Haj Murad Ebrahim in 2011.
2013: Flashpoints and directions
T he Aquino administration is approaching its mid-term still with little to show in terms of remedying
the country’s malfunctioning democracy, instituting far-reaching reform and realizing a more
progressive vision for the country. Consequently a number of factors can develop to upset the current
relative stability.
Most of all there is the problem of massive unresolved poverty which is a constant source of social
and economic unrest. In this regard possible high expectations due to the administration’s growth hype
could backfire upon a deeper global economic slump or domestic downturn. There are also shorter-term
flashpoints: repressed political rivalries could erupt around the May 2013 elections on any number of
issues, a renewed push for charter change could yet be divisive despite administration efforts to build
consensus, the MILF-GPH peace process could become very controversial with discord among Moro
groups or even between the parties to the peace deal, and military tensions could rapidly escalate in the
disputed waters of the West Philippine Sea (South China Sea).
Progressive forces made strides in challenging rigid Philippine political institutions in the late 1990s and
early 2000s. These advances were strong enough to alarm reactionary elite interests and prompted them
to rally, despite their factional interests, to defend the status quo. This converged with the US’s increased
strategic pivot to Asia where the Philippines plays a key role and for which the US requires a reliable
client state in place. This is the context for the emergence of the US-backed Aquino administration and its
being built up as a democratic and reformist government responsive to the people’s clamor for change. It
serves to divert or defuse these challenges while still exercising the option to use force when necessary,
though obscuring this underneath a democratic façade.
Under these circumstances the locus of struggle for genuinely democratic pro-people governance in the
country all the more shifts to the counter-current of social and mass movements at the grassroots. Indeed
even the radical revolutionary forces in the countryside objectively provide additional impetus in this
regard. These are the most potent expressions of the unrelenting demand and compulsion for structural
change in Philippine society.

Annex
Armed Confrontations Between the NPA and Government Forces Under the Aquino Administration, July 2010-December 2012
Number of Dead Wounded Captured

Date
Incidents NPA AFP/PNP/CAFGU Civilian NPA AFP/PNP/CAFGU Civilian NPA AFP/PNP/CAFGU Civilian
2010 Jul-Dec 142 43 171 21 1 7 127 13 25 4 25 8

2
2011 Jan-Jun 171 47 194 9 22 145 6 24 6 13 9
2011 Jul-Dec 176 61 179 53 39 187 15 6 16 6 12 10
4
2012 Jan-Jun 197 98 179 18 24 188 14 34 1 21 11
5 7
2012 Jul-Dec 126 45 145 2 25 121 45 15 0 36 12
Total 812 294 868 55 117 768 93 114 17 107
AFP - Armed Forces of the Philippines NDFP - National Democratic Front of the Philippines
CAFGU - Citizens Armed Forces Geographical Unit NPA - New People's Army
PNP - Philippine National Police
1
- These include seven (7) civilians branded by the AFP as NPA members: four (4) in Mobo, Masbate on September 7 and three (3) in Catanauan, Quezon on December 1.
There are also three (3) civilians that the AFP claimed to have been caught in crossfire during an alleged encounter in Kananga, Leyte on November 15.
2
- These include two (2) civilians branded by the AFP as NPA members: a Bayan Muna member on February 25; and local resident in Agusan del Sur who was also claimed
by the AFP as a child warrior.
3
- These include a local peasant leader that the AFP has branded as an NPA member in Arakan, North Cotabato; he was killed on October 20.
4
- These include ten (10) civilians branded by the AFP as NPA members: two (2) local hunters in Bgy Ilayang Atungay, Magdalena, Laguna on February 16, one of which is a
15-year old boy; a local farmer (killed were also his two sons aged 7 and 10 years old) in Bgy Malaya, Labo, Camarines Norte on February 25; three (3) locals in San
Francisco, Quezon on April 12; a 17-year old young woman in Lopez, Quezon on April 29; a local youth in Pio Duran, Albay on April 30; a local in Bgy Palma, Kibawe,
Bukidnon on May 8; and a local peasant in Bgy Palale, Bulan, Sorsogon on June 17.
5
- These are a farmer and a 16-year old teenager allegedly mistaken by the AFP as NPA members, shot in Sitio Sinalkuha, Bgy Telepaz, Columbio, Sultan Kudarat on
September 29.
6
- These include a Lumad woman allegedly mistaken by the AFP as an NPA member; she was shot in Cabadbaran, Agusan del Norte on September 10.
7
- These include a 19-year old teenager allegedly forced by the AFP to admit to being an NPA member after being violently beaten on November 5 in Bgy San Isidro,
Compostela Valley.
8
- These are civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: a farmer resident of Calbiga, Samar on August; two (2) farmers in
Ilocos Sur on September 12; three (3) members of Pagkakaisa’t Ugnayan ng mga Manggagawa sa Laguna in Lumban, Laguna on October 5; four (4) activists in Daet,
Camarines Norte on November 10, known as "Daet 4"; five (5) local residents in Malapatan, Sarangani on December 14; and ten (10) students of Polytechnic University of
the Philippines (PUP) in Bgy San Andres, San Narciso, Quezon on December 28. Fourteen of these civilians were reportedly released by the AFP when the said
allegations were not substantiated, namely the Daet 4 and the 10 PUP students.
9
- These include civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: two (2) farmer residents of Sitio Tambulang, Bgy Danwata,
Malita, Davao del Sur on February 27; a member of Karapatan on March 1; three (3) local residents of Bgy Kiling, Alfonso Lista, Ifugao on May 24; and three (3) children
from San Agustin, Surigao del Sur on June 26. There are also two (2) consultants of the NDFP for the ongoing peace talks with the Philippine government and two (2)
activists.
10
- These include civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: a local Aggay tribe leader in San Agustin, Surigao del Sur on
July 23; an Agta youth in Burdeos, Quezon on August 5; a local resident of Paquibato district, Davao City on September 21; five (5) local residents in various barangays in
Ilocos Sur on September 23-26; and three (3) locals, two (2) of which are female minors, in Antipolo City on December 25.
11
- These include 17 civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: a local in Bgy Calawis, Antipolo City on the 3rd week of
January; two (2) members of Kalipunan ng Damayang Mahihirap (KADAMAY) in Bgy Maitim, Bay, Laguna on February 7; two (2) locals in Bgy Tibagon, Pantukan,
Compostela Valley on March 8; five (5) activists in Bgy Sto Nino, Sta Rosa, Nueva Ecija on March 8; three (3) local minors in Bgy Pansoy, San Andres, Quezon on March
28; a 16-year old boy in Bgy New Visayas, Trento, Agusan del Sur on May 7; and two (2) cattle farmworkers in Bgy Lag-it, Tayasan, Negros Oriental on May 28. There
was also the rearrest of a NDFP consultant in Inopacan, Leyte on May 2.
12
- These include individual civilians illegally detained by the AFP and reportedly forced to admit to being NPA members: a farmer in Sitio Sinalkuha, Bgy Telepaz, Columbio,
Sultan Kudarat on September 29; two (2) civilians in Mandaue City, Cebu on October 5; a security guard, his wife & two (2) companions in Aurora Blvd, Quezon City on
October 5; five (5) farmers in Mulanay, Quezon on December 21; a local of Bgy Tuyod, Manjuyod, Negros Oriental on December 25; and a member of Alliance Concerned
Teachers (ACT) in Bagumbayan, Tuguegarao City on December 28. The following, on the other hand, were illegally detained by the AFP and reportedly forced to admit to
being supporters of the NPA: three (3) locals in Bgy San Lorenzo, Prosperidad, Agusan del Sur on August 28; and19 alleged locals, three (3) of which are minors, in Bgy
San Agustin, Isabela, Negros Occidental on December 13.
Source: Various publications monitored by IBON Databank


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Birdtalk Economic and

January 10-11, 2013

2 IBON Economic and Political Briefing  10-11 January 2013

IBON Economic and Political Briefing  10-11 January 2013 3

4 IBON Economic and Political Briefing  10-11 January 2013

3rd Quarter 1st-3rd Quarter

1. Household Final Consumption Expenditure 7.4 6.2 6.3 5.7

Source: National Statistical Coordination Board National Accounts of the Philippines

IBON Economic and Political Briefing  10-11 January 2013 5

3rd Quarter 1st-3rd Quarter

1. Agriculture, Hunting, Forestry and Fishing 2.2 4.1 4.9 1.8

Source: National Statistical Coordination Board National Accounts of the Philippines

Table 3. Budget of Infrastructure Projects Allotted by

Agency Budget (Php)

Department of Public Works and Highways 91.6 billion

Source: Department of Budget and Management

6 IBON Economic and Political Briefing  10-11 January 2013

IBON Economic and Political Briefing  10-11 January 2013 7

Levels (million US$) Growth Rate (%)

Total Equity 150.0 1,200.0 122.9 700.0

8 IBON Economic and Political Briefing  10-11 January 2013

Table 5. Gross Revenues of TNCs Among the Top 1,000

IBON Economic and Political Briefing  10-11 January 2013 9

Employed Persons Increase/

Total Employed 38,550 37,668 (882)

10 IBON Economic and Political Briefing  10-11 January 2013

IBON Economic and Political Briefing  10-11 January 2013 11

Total 19,162 100.0 2,321 16,841

12 IBON Economic and Political Briefing  10-11 January 2013

Officially Reported a IBON Estimates b

Note: Totals may not add due to rounding.

Bankruptcy of small businesses

High profits for big business

IBON Economic and Political Briefing  10-11 January 2013 13

Table 10. Average Annual Corporate Earnings and

2001-2009 5,041.5 421.0 7.8

Source: Business World Top 1000 Corporations in the Philippines

14 IBON Economic and Political Briefing  10-11 January 2013

PPPs and privatization

IBON Economic and Political Briefing  10-11 January 2013 15

16 IBON Economic and Political Briefing  10-11 January 2013

IBON Economic and Political Briefing  10-11 January 2013 17

18 IBON Economic and Political Briefing  10-11 January 2013

Subversion of land reform

IBON Economic and Political Briefing  10-11 January 2013 19

Land Type and Aquino Ramos Estrada Arroyo Aquino

Department of Agrarian Reform 848,515 1,900,039 333,389 1,031,403 243,823

Department of Environment and Natural

Sources: Presidential Agrarian Reform Council and Department of Agrarian Reform

20 IBON Economic and Political Briefing  10-11 January 2013

IBON Economic and Political Briefing  10-11 January 2013 21

22 IBON Economic and Political Briefing  10-11 January 2013

Table 13. Mineral Exploration Permits Approved/Extended in 2012

Exploration Number of Approval Expiry

Source: Mines and Geosciences Bureau

IBON Economic and Political Briefing  10-11 January 2013 23

Table 14. Oil Price Movement and Price Range By Petroleum

Number of Price Range as of End of Year

Gasoline 46 41 47.79 - 55.70 39.50 - 42.45

Free Trade Deals

24 IBON Economic and Political Briefing  10-11 January 2013

T he Aquino administration consolidated its political position in 2012 – it successfully neutralized