Regulatory capture

The Civil Aeronautics Board vehemently denied that it is under “regulatory capture.”

It demanded that the Senate hear its side on the the allegation by Sec. Romy Neri that it is under such state during his recent testimony over the ZTE scandal.

Well, if it is true that it is not in such straight jacket, I dare the CAB to declare its support to the “open skies” regime within 24 hours.

The proposal of Davao City for a pocket open skies has been gathering dust for the past four years at Malacanang due to the inaction and opposition of CAB. The application of Viva Macau to fly to Davao is also sleeping at the CAB for over a year now. About half a dozen other foreign airlines are likewise lining up at the closed doors of CAB waiting developments when they can fly to Davao.

The whole trouble with CAB is it equates the interest of some local carriers as the interest of the nation. It has been said many times that one key reason why Philippine tourism is a laggard is the lack of airline seats and yet CAB does not see this reality. It prefers not to level the playing field in its protectionist game at the expense of consumers, tourists and OFWs in particular.

I agree with Neri that it is a captured agency utilizing its regulatory powers to promote the selfish interest of the few.

(6:05 a.m.)


During the 14th City Council, I authored Davao City’s version of the national government’s One Town One Product (OTOP) campaign. We called it One City Ten Products program.

Davao is such a huge city, one of the largest in the world in terms of land area, that we have 11 political districts that are equivalent to towns. Thus we adopted the following products for the following districts:

Poblacion, Talomo, Agdao – durian product processing, handicrafts, e-services, meat product processing;

Buhangin, Bunawan, Paquibato – wood products, banana chips;

Toril, Tugbok, Calinan, Baguio, Marilog – fresh and processed vegetables, fresh and processed fruits, virgin coconut oil, ornamental plants

I am happy that the Department of Trade & Industry (DTI) is helping us in the implementation of this program. The problem with the local government is the absence of an office doing the task of the DTI.

Whereas almost all national agencies have their local counterparts, e.g. Department of Tourism, we have the City Tourism Operations Office, Department of Agriculture, we have the City Agriculturist Office, etc., we have no office that is the equivalent of DTI.

We have a Business Bureau that is purely regulatory, handling application for business permits. We have a one-stop investment promotion center that is just a mini-Board of Investments.

Thus, for the meantime, we have to depend a lot on DTI in helping us push for the OTOP in the city.

Last September 25-26, we conducted a stakeholders’ consultative meeting with the food industry. Next month, we will meet with the handicrafts and wood industry groups.

I am sure that with this initiative we shall be able to expand our Davao Branding System, which I likewise authored during the previous City Council, with more accredited producers and products among our MSMEs.

(4:20 a.m.)

Golden day

Today is my birthday, my golden day in my golden year. Yup I am 50 years old today!

Glad that this day is devoted as Bloggers Against Abuse Day.

My wish: Stop the abuses and liberty for the people of Myanmar.

Incidentally, today is also the founding anniversary of the National League for Democracy, the party led by Aung San Suu Kyi.

Rising of the seas

I gave a privilege speech at the City Council yesterday on the rising of the seas as a result of climate change. Please read it at my pbwiki.

I closed the speech with: The world leaders are currently doing their jobs in New York; we should do ours here. Now! 

(2:57 a.m.)

$68 million question

I have not read Jarius Bondoc’s column yesterday until this morning.

He wrote “[Secretary Romy Neri] told me on that morning of Apr. 20 and several other times that not only a Comelec official but an influential businessman too was inordinately lobbying for ZTE Corp. The businessman allegedly was responsible for the sudden rise of the ZTE tag price to $330 million days before the signing, when its original offer in Dec. to Feb. was $262 million. What was the $68-million difference for, I asked in subsequent talks. Romy said the businessman was assigned to raise campaign funds for an administration party during the last election.”

Proves my suspicion correct that dirty money from China funded the administration in the last election. I am curious how much of this went to administration candidates in Davao City.

I ran under the opposition Liberal Party and aligned with the local Hugpong-PDP-Laban group of Mayor Rody Duterte. We did not receive campaign funds from the administration party. But some of my colleagues ran under Lakas headed in the city by then Majority Leader Prospero Nograles.

I hope some Senators would raise this issue when Neri appears at the Senate on Wednesday.

(7:14 a.m.)

ZTE and the May polls

The suspension of the national broadband network deal with ZTE proves that something is terribly wrong with it. Suspending it, however, will not actually solve the problem.

Congress and the Supreme Court should all the more probe the anomalous deal.

The bribe money for the transaction was quoted as high as $180 million. I suspect part of this went to the administration’s election kitty last May.

Hence, I propose that legislators pursue the investigation including this angle that foreign money were spent in the last poll campaign contrary to our election laws.

Pro-Malacanang senators elected last May – Ed Angara, Joker Arroyo and Miggy Zubiri – should be concerned that the money “donated” to them by the administration could be dirty and may have come from China.

(6:48 a.m)

Not capital flight?

For the first six months of the year, Pinoy companies invested $1.8 billion abroad, compared with the whole year’s total direct foreign investment targets of $1.7 billion.

For the 2nd quarter alone, the total outflows amounted to $2.46 billion!

In the same quarter last year, there was net inflows of $594 million. In a sense, we lost a total of more than $3 billion in this three-month period alone, characterized as it was by the messy elections.

And yet, monetary authorities do not call this capital flight!

With the ZTE scandal, expect confidence in the country to plummet some more. Even the state insurance firm GSIS is now lining up to invest $1 billion abroad rather than in the super-regions of you-know-who.

(6:54 a.m.)

4-way test at Philippine parliament

One key feature of a parliamentary form is the fusion of the legislative and executive branches of government.

Well, that finally happened yesterday at the Senate.

Almost the entire cabinet showed up to rahrah for their colleagues implicated in the ZTE scandal.

Of course, on orders of ma’am.

Which reminded me of the Rotary’s Four-Way Test:

Is it the Truth? – Tutuo bang me transaction na naman tayo?

Is it Fair to all concerned? – Lahat ba tayo kasali dyan?

Will it build Goodwill and better Friendships? – Wala bang masasagasaan dyan?

Will it be Beneficial to all concerned? – Magkano akin dyan?

Obviously the ZTE deal did not pass all the tests. Me nasagasaan!

(6:05 a.m.)

What’s next?

Very intriguing!

After the Erap conviction, people asked “Who’s next?”

I have little doubt who is on the mind of many.

Well, after yesterday’s Senate probe on the ZTE scandal, the Philippine Star has a roadmap on “What Next?

And with this accompanying toon:

I have no doubt who is tainted with the letter E!


(4:37 a.m.)

Most profitable firms

The combined earnings of firms listed at the stock exchange during the first half of the year skyrocketed to P148.75 billion from last year’s P105.2 billion. That’s a whooping 41.4 percent increase!

How come when lowly workers ask for a raise, companies always claim they are losing? Ha, ha, ha!

Here they are – the ten most profitable firms in the country:

1. PLDT (with Smart) – P17 billion;

2. Ayala Corp – P11.49 billion;

3. San Miguel Corp – P7.87 billion;

4. Globe Telecom (a unit of Ayala) – P6.42 billion;

5. PAL Holdings – P6.32 billion;

6. SM Investment Corp -P5.87 billion;

7. Bank of PI (a unit of Ayala) – P5.71 billion;

8. PNOC-EDC – P4.22 billion;

9. JG Summit – P3.84 billion;

10. Metrobank – P3.695 billion;

Please note of a combined Ayala Corp group’s earnings of over P23 billion in six months making it actually the most profitable business outfit in the land! They’re earning roughly P4 billion a month, topping the Gokongwei’s 6-month profits, or Davao City’s own annual budget of over P3 billion.

(5:43 a.m.)

Software freedom day

My hats off to the organizers of the Software Freedom Day in Davao City yesterday.

DabaweGNU, USEP FOSS Club and Kaiban.

The attendance at the whole day FOSS fair at the University of Southeastern Philippines (USEP) was beyond their expectations. Students from several schools in the city as well as IT professionals, representatives from government, NGOs and business jampacked the Social Hall of the university to watch demos and listen to presentations.

Online on a big screen were simultaneous events at the University of the Philippines in Manila and in Vietnam.

I spoke briefly in behalf of the city government. The city’s contribution to the worldwide movement for FOSS augurs well to our efforts to position the city as an ICT hub.

Sinag in solar car race

Oil prices jumped again to new highs yesterday. For the nth time we are again jolted to our senses on the urgent need to find alternatives to fossil fuel.

When I founded the Davao Green EAGLES (Energy Alternatives for Green Living and Economic Sustainability) in October 2005 (no offense for the pun to both Ateneo and La Salle), I thought people were resolved already in starting to give up on fossil fuel as it skyrocketed over $70 per barrel. Well, oil now costs more than $80 and the more we should accelerate finding and using alternative energy.

Unfortunately, we are slow on acting with no less than the national government having little political will except on the passage of the Biofuels Act.

Yet, there are plenty of other alternatives we should work on such as biomass, solar, wind, geothermal, etc.

I am particularly elated that finally on its 20th edition, a Philippine team is entered in the world famous World Solar Car Challenge in Australia on October 21-28. Our entry is the Sinag solar car from the Dela Salle University.

A Davaoeno, Isidro “Ingco” Marfori, is among the members of the team. He is the youngest son of our family friends Ding and Sylvia Marfori.

I wrote about this solar car race in my blog last year when Iran, an oil producing nation, took part in the race except that their vehicle got lost in the transit from Iran via Dubai.

A team from Latin America is also taking part for the first time. An entry by Chilean students is called Eolian which is made of wood, solar panels and an electric motor.

A 1996 movie, Race the Sun, immortalized the inspiring participation of the US team from Hawaii during the 1990 solar car race Down Under.

Update September 22 – Comment from visitor led us to this site on the South African Solar Car race in 2008. 

Business Mirror

My stand on the special economic zone at Mt Apo is the subject of today’s editorial at the national broadsheet Business Mirror –Another haphazardly conceived “incentive.”

(11:31 a.m.)


Guilty or not, I believe Erap has long been acquitted by the people.

In the first election after his ouster, his wife and son won Senate seats in 2001.

In 2004, his close friend FPJ won as President except that “The King” was cheated of his rightful place at the Palace.

In 2007, the Filipino voters again went with Erap’s opposition group which clobbered the administration slate.

This voter behavior is backed up by the recent SWS September 3 Report on perception on Erap’s “involvement in corrupt practices” with 66 percent “Not believing” and 27 percent opining that he is “Definitely not corrupt.”

(7:32 a.m.)

Ecozone in Mt. Apo?

With direct foreign investments down 16% during the first half of the year, the national government is devising new schemes to attract more business.

This particular idea is absurd.

Upon arrival in Davao City from the APEC Summit Down Under yesterday, the President signed an Executive Order declaring geothermal areas in the country as “special economic zones.” Through this, government expects to attract power-intensive industries like, prominently mentioned was electronics, but I personally suspect, mining.

One of these geothermal areas is Mt. Apo, which is a sacred place; far from any airport and seaport, not to count the peace and order problem.

Who would locate in such a place?

Moreover, this EO runs counter to environmental laws, preservation of lumad culture and in conflict with ancentral domain claims by cultural communities in the area.

Malacanang should rethink this strategy. The day the EO was signed in Davao, the Mayor of Kidapawan was invited to attend a seminar in Yosemite Park in California on natural park conservation and the Regional Development Council of Southern Mindanao affirming its resolution for the preservation of Mt. Apo Protected Areas (Mindanao Daily Mirror).

Here is a clear case of the right hand of government not knowing what the left hand is doing.

(7:37 a.m.)