The Venable scandal
In 2006, there was also a national scandal over the secret contract signed by former president Gloria Macapagal-Arroyo’s National Security Advisor Norberto Gonzales with the law firm and lobbyist, Venable LLP in Washington.
In the said contract, the Arroyo government secured the services of Venable to gather support within the US for charter change in the Philippines.It was revealed that the $900,000-per-year contract was being paid by a secret, private source.Investigations were launched by the Senate Blue Ribbon Committee and Gonzales was placed under detention for refusing to reveal the source of financing. Under pressure from the public, Arroyo was forced to cancel the contract.
Charter change is economic suicide
In Congress, lawmakers from Gabriela Women’s Party continue to oppose moves to amend the charter, saying that allowing multinationals and foreign investors free rein to own and operate key industries is “economic suicide.”
” It is tantamount to a total sell out of our economy.Removing nationalist economic provisions in the 1987 Constitution will result to the unhampered plunder of resources and the unregulated extraction and repatriation of profits,” said GWP Representative Luz Ilagan as the House of Representatives Committee on Constitutional amendments continues to tackle House Resolution 10. The said resolution calls on the two houses of congress to constitute themselves into a constituent assembly to propose amendments to the 1987 Constitution’s economic provisions.
Misamis Oriental Rep. Leo Ocampos is pushing for amendments on at least six economic provisions:
• the lifting of the 60-40 equity rule and allowing foreigners to own 100 percent of public utilities in the telecommunications, power and other sectors;
• allowing foreigners to own 100 percent of residential houses and land;
• allowing foreigners 100-percent ownership of commercial and industrial lands;
• opening up the practice of professions such as doctors, engineers, architects, lawyers and others under the “reciprocity rule;”
• opening up foreign investments in media entities; and
• opening up foreign investments in educational institutions.
The Gabriela solon said legislators would do well to study and learn from our experience with the Malampaya gas contractors who have yet to pay P53 billion ( $1.1 billion) in unpaid taxes from 2003 to 2009 even as they made billions in profits. She also said mining companies responsible for the wanton rampage of mineral resources have remitted a meager P2 billion ($43.3 million) in paid-up investments as of 2007.
“For several decades now, even with these restrictions in place, foreign investors and multinationals repatriated billions of dollars in profits without any real and substantial contribution to the domestic economy and social development,” said Ilagan.
“We do not need charter change to achieve economic development. Addressing the country’s stunted economic growth, unemployment and poverty need not rely on foreign investments. The domestic economy should instead be strengthen by giving agriculture and local industries much needed budgetary and system support,” she said.
No to foreign ownership in mining Industry
Ilagan also said allowing 100 percent foreign ownership over mining corporations in the country will worsen the destruction of the country’s environment and the communities of indigenous peoples.
Charter change proponents want to amend Article XII, Section 2 of the charter which covers the “exploration, development and utilization of natural resources.” It states that “the State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations with at least 60 per cent of whose capital is owned by such citizens.”
“Indigenous communities have been the direct victims of these mining operations. Since the approval of the Mining Act of 1995, thousands of hectares of ancestral lands have been subject to desecration. Foreign mining companies and multinationals have been causing the devastation of indigenous territories and mining communities with unhampered mining exploration and operations,” she said.
Ilagan insisted that any move to amend the Constitution, especially its protectionist provisions will worsen already massive plunder of mining resources.
“Even with this provision in place, many mining multinationals have found ways to go around it, making billions of dollars in profits at the expense of our natural resources. Removing the protectionist provisions in the Constitution will undoubtedly open the floodgates to total destruction.” 
BS Aquino went to London recently. News sources say this foreign trip cost P87 million but was worth it because Aquino attracted investments worth $2.5B.
Here’s the spin from Aquino’s Biased Stupifying-Completely Bullshit Network – ABS-CBN
The multi-billion-dollar investments were pledges of businessmen from both UK and US, he said.
Half of the total investment pledges came from Rolls-Royce, Asea Gaz Asia Ltd. and commodities trading giant Glencore, owner of the Philippine Associated Smelting and Refining Corp. (PASAR), all of which are based in the UK.
Glencore plans to expand its smelting capacity by investing $600 million while Gaz Asia eyes partnership with Aboitiz Equity as well as investment of $150 million to develop plants that will convert organic waste materials into liquid bio methane.
For its part, Rolls Royce has signed a P280-million service contract with the Gokongwei-owned Cebu Pacific for the purchase and service of new airplane engines.
The other half of the $2.5-billion investment pledges came from US-based businesses.
Among them are: GN Power Limited, which plans to put up two 300-megawatt coal plants in Bataan worth $1 billion; Underwriters Laboratories Inc. which will invest in a global technology research center in Manila.
Citigroup and USAid, meanwhile, have proposed a mobile financial inclusion program aimed at bringing the benefits of mobile banking to the rural areas.
“These numbers mean more jobs and more food on the table for Filipinos. At the same time, our friendship with the US and UK bore fruit in terms of economic gains,” he said.
What’s missing here?
Aquino had to go to UK to help convince UK investors to partner or go into joint venture with Aboitiz, Gokongwei and the merry men and goodfellas who line up the rosters of the Makati Bastard Business Club.
Note further that this is the only way these UK businesses can do business in the Philippines because the constitution restricts them to only 40% equity – AND requires a joint venture partner who MUST be a Filipino national. As stipulated in Article 12 – National Patrimony of the 1987 Philippine Constitution:
Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities.
Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.
Note further that the Philippines is the only country in Asia that explicitly contains economic restrictions in its constitution.
Thus , to get those investments – Aquino had to undergo a “hard sell”. In advertising a hard sell is an advertisement or campaign that uses a more direct, forceful, and overt sales message. In Pinoy terms – it’s called “Pakapalan ng mukha” because people aren’t budging.
The hard sell approach is used when the “soft sell” isn’t getting any bites. A soft sell is an advertisement or campaign that uses a more subtle, casual, or friendly sales message.
Here’s the thing – our ASEAN neighbors don’t have to do a “hard sell” in order to attract investors. Take for instance Singapore – and a sprinkling of the magnates who have VOLUNTARILY moved into the city state:
AUSTRALIAN coal magnate Nathan Tinkler, Australia’s wealthiest person under the age of 40, will relocate to Singapore, joining a notable list of other foreign tycoons moving to the affluent city-state. A spokesman for the 36-year-old Mr Tinkler confirmed his move and said that while he would be bringing his wife and four children to Singapore to be closer to some of his key investors, the operations of his investments would remain in Australia. According to Forbes magazine, Mr. Tinkler is Australia’s 26th-richest person, with a net worth of US$825 million in 2012.
New Zealand billionaire Richard Chandler relocated to Singapore in 2008
US investor Jim Rogers set up shop in the city-state in 2007.
Malaysian citizen Ong Beng Seng and his wife, Christina, whose wealth almost doubled to $1.9 billion as shares of their U.K. fashion house, Mulberry, soared.
In 2011, billionaire Facebook co-founder Eduardo Saverin relinquished his U.S. citizenship and joined nearly 1,800 other Americans to do it last year — up from 235 in 2008. Saverin, 30, a Brazil-born resident of Singapore who helped launch Facebook with his Harvard schoolmate Mark Zuckerberg, reportedly renounced his U.S. citizenship in September before the company announced its planned initial public offering of stock. Owning an estimated 4 percent of Facebook, he stands to make $4 billion when it goes public.
Did Singapore’s Prime Minister need to spend taxpayers’ money in order to convince each of these tycoons to set up shop in Singapore. Obviously NO!!!!
Did Singapore’s Prime Minister need to talk to these tycoons and convince them to go into a joint venture with Singaporean nationals, provided further that the foreign equity be limited to 40% only? Obviously NO!!!!
Here’s more – Aquino was boasting a year on year GDP growth of 6.5% – guess what, Singapore grew by 10%!
– the Ministry of Trade and Industry said that the economy grew 10% in the January-March period compared with the previous quarter, revising an earlier estimate of 9.9% expansion released last month.
Singapore’s “soft sell” netted more tycoons opting to do business, even live permanently in Singapore.
In contrast, Philippines “hard sell” has to waste tax money and force foreign investors to partner with Aquino’s cronies.
The Philippines competitive strategy has remained unchanged while its neighbors continue to improve on removing barriers to investments and trade.
If we recall, a competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.
So what gives? What competitive strategy is the Philippines pursuing such that it only captured 2% of all FDI that went to ASEAN?
Our neighbors are competing on labor costs, infrastructure costs AND the regulatory framework (aka ease of doing business). Filipinos compete on the basis of price or a cost-focus strategy while our competitors focus on differentiation having already beaten the Philippines in terms of cost.
Having open economies, free trade and free markets provides our competitors the flexibility and vibrancy to respond to market signals quickly. In contrast the Philippines and Filipinos needs to have government “study” the matter, deliberate it in Congress and see if it “protects” the welfare of Filipinos, then there’s the rallies from the left. The Filipinos launch the product by the time the product’s lifecycle has matured – welfare state, corporatist, protectionist policies and “Filipino time” is a heady cocktail.
Businesses are willing to pay higher rates for premium talent which can drive revenue – thus “high” labor costs isn’t an insurmountable barrier.
The bogeyman of the Philippine government for its failure to attract investments is “corruption”. Let me tell you about Russia – despite political risk and tales of corruption, investors remain interested in—or at least curious about—investment opportunities in Russia.
Let me ask you this – how can we attract investments when our laws barely allow foreign investors to participate in the first place?
It’s the economic policy STUPID!
Remove the 60/40 restrictions on foreign equity. Remove the need for foreign investors to have a partner who must be a Filipino national. The decision to go into a joint venture with a Filipino national MUST be left to the discretion of the investor and not as a compulsory piece of legislation.
By keeping foreign investors out – and limiting them to businesses where they can’t own 100% – Aquino kepts jobs and food on the table from Filipinos. It is a conclusion which is supported by fresh empirical data – notably the recent SWS survey that showed the biggest increases yet – in joblessness, poverty, and hunger.
The results prompted BS Aquino to ask SWS to explain the results given his “efforts”. What an effin dumbass – it’s the other way around – you, Noynoy – yes YOU – have lots of explaining to do. But obviously it hasn’t gotten through his thick skull and peanut brain. BS Aquino’s exhortations to Pinoys about gaining freedom from poverty and corruption is the height of callousness considering that it his corporatist protectionist welfare state policies that perpetuate the highest income inequality in Southeast Asia.
It’s not surprising that the Oust PNoy movement was launched recently. C’mon people – you shouldn’t have voted for him in the first place – DUMBASSES! But really – better late than never – WHAT TOOK YOU SO LONG? If and when it does happen it will bring a sense of irony and poetic justice – BS Aquino ousted by real people power. But I digress.
So Aquino “attracted” investments? A grovelling hard sell isn’t attraction – that’s desperation.
The Philippines 15th congress is pushing for rationalization of fiscal incentives that government grants business entities. That’s too little, too late. Our neighbors in ASEAN have fiscal incentives, too – AND they have something better – they don’t restrict foreign equity to 40% – nor do they require that foreign investors partner with Filipino nationals.
Here’s another retarded Filipino mindset – ““Foreign investors don’t mind paying taxes but are scared of unstable conditionalities,” according to Valenzuela City Rep. Magi Gunigundo. Obviously this moron of a congressman has not heard about French investors rushing out of France and into Belgium due to France’ tax rates of 75%! Or of Facebook co-founder Saverin moving to Singapore because of the absence of capital gains tax.
As pointed out by the Guide Me Singapore website:
Investors turn to Singapore for establishing their operations for several reasons. The ease of setting up and operating businesses is a prime motivator. Another central determinant is Singapore’s tax regime – well-known for its attractive corporate and personal tax rates, tax relief measures, absence of capital gains tax, one-tier tax system, and extensive double tax treaties.
Singapore’s economy is characterized by economic openness, free trade and free markets. It is the diametric opposite of the Philippine economy – protected, regulated trade, protected markets.
The website Mongabay.com summarizes the investment policy framework of Singapore below:
* the government abolished all currency exchange controls
* Singaporean residents (individuals and corporations) were free to move funds, import capital, or repatriate profits without restriction
* Likewise, trade regulations were minimal.
* Import duties applied only to a few items (automobiles, alcohol, petroleum, and tobacco), and licenses were required only for imports originating from a few Eastern bloc countries.
* There were no export duties.
* There was no capital gains tax.
* Special incentives existed for foreigners, including concessionary tax arrangements for some nonresidents, relief from double taxation, and permission to buy commercial and certain residential property.
* In 1985 extensive tax reductions were introduced to reduce business costs.
BS Aquino’s talk on freedom, people power, and independence rings hollow – not when Filipinos are shackled to political dynasties, limited choices, and personal liberties ran roughshod over by its own political-economic elite.
We don’t have to go far to find out what attracting investments and investors really means – check out the billionaires and magnates right next door – in Singapore.
http://antipinoy.com/aquinos-foreign-trip-attracted-investments-so-what/
The Philippine sycophant media has been bragging recently about the 72% growth in FDI – which in absolute terms is $850M. The basis of comparison was based on the Philippines year on year performance. Then like a blinding flash of the obvious – I had to ask and I wondered what the performance of our ASEAN neighbors were?
So what if the Philippines had 72% growth in FDI? On first glance it will appear impressive. But you have to dig deeper.
The Philippine economy takes 2 steps forward, say from Point B to Point C (FVR’s time, Arroyo’s Time).
Then it takes takes 3 steps backward from Point C to Point A (Erap’s time, BS Aquino’s time).
Then when the economy move from Point A back to Point B or halfway between B and C, the Philippines economic managers trumpet this impressive “growth”.
Meanwhile, during the same time period our neighbors have moved from Point A to Point B to Point C to Points D and E and beyond. Thus, their growth numbers may not be as impressive as 72% BUT in absolute terms – they are way past Points A, B, and C – the band where the Philippines merely oscillates.
So, when Aquino and the Philippines brag about the 72% growth – they are just talking about moving from Point A to Point B.
Flashbacks of BS Aquino’s campaign promises about meaningful statistics anyone?
For short – percentages can be misleading and will need to be cross referenced against the absolute figures. Singapore’s FDI data for Q1 2012 was not available so I will just stick to the Philippines, Vietnam, Malaysia, Indonesia, and Thailand.
When Vietnam talks about its 0.8% dip or when Indonesia mentions its 30% growth – it will appear that the Philippines outperformed Vietnam, Malaysia and Indonesia. But, in absolute terms, nothing can be farther from the truth as shown in the chart and table below.
Philippines vs Vietnam
Vietnam’s 0.8% dip in FDI still resulted in $2.5B – an amount which is greater than the $850M of the Philippines – nearly THREE TIMES of the PHL.
Philippines vs Indonesia
Indonesia’s 30% growth still resulted in $5.6B – still greater than the $850M of BS Aquino’s Failippines – 6.6 times or nearly 7 times bigger than PHL FDI
Philippines vs Malaysia
Malaysia only had 15.38% increase in FDI.A total of RM7.5 billion in foreign direct investment (FDI) for the first quarter of the year, or 2.3billion U.S. dollars – 2.7 times bigger than the FDI which went to PHL
Philippines vs Thailand
Here’s another one to blow BS Aquino’s socks off – Thailand’s FDI grew by 106% during the same period Q1 2012. Thailand’s BOI recorded 231.1 billion baht or $7.3B – that’s 8.67 or roughly NINE TIMES bigger than PHL’s $850M.
Philippines vs Malaysia, Indonesia, Thailand and Vietnam.
The total FDI that went to these five countries was $18.55B. Of the total, the Philippines recieved 5%, Vietnam – 13%; Indonesia – 30%; Malaysia – 12% – Thailand at 39%. The Philippines was the only country with single digit share of FDI – everyone else had double digits!
The 72% growth in FDI of the Philippines does not hold much water when during the same period, the country only captured 5% of the total FDI that went to Philippines, Malaysia, Indonesia, Thailand and Vietnam.
This is not the time to be bragging. This is the time to identify and eliminate the investment policies which keeps the Philippines to a single digit share of total FDI that goes to ASEAN.
http://antipinoy.com/phl-inbound-fdi-increased-by-850m-in-q1-2012-so-what/
http://articles.chicagotribune.com/2012-04-22/news/sns-rt-indonesia-economyinvestment-update-1l3e8fk55z-20120422_1_foreign-direct-investment-rupiah-new-investment, Accessed 06/13/2012
http://thailand-business-news.com/investment/37796-investment-applications-in-thailand-grew-106-in-q1-2012-boi#.T9iQucFdiNc, Accessed 06/13/2012
http://www.reuters.com/article/2012/03/26/vietnam-economy-fdi-idUSL3E8EQ1YW20120326, Accessed 06/13/2012
http://www.mmail.com.my/story/malaysia-attracts-rm75-bln-fdi-q1, Accessed 06/13/2012
Kung ang Pilipinas ay hindi kahanay sa Globalization trade baka pwede pa’ng tanggapin ang 60/40 share at manatili sa pangkasalukuyan. Peru dahil sa mahigpit ang competition wala na talgang magagawa ang pilipinas kundi tanggapin ang hatol ng dayuhan kesa itapon ang libo libong Flilipino sa ibang bansa. Banana republic pa rin tayu dahil sa pro oligarch na contituion nato.
The present constitution was placed to protect the interests of the oligarchy. By liberalizing the economy, there would be competition among capitalists, thus ending oligarchical monopolies (i.e Meralco on the energy sector). Prices would go down and everyone would end up happy. Agriculturally, foreign investments would put the lands north of Luzon into good use.
Kapag nanaig ang foreign investors, sila ang yayaman. Kapag, hindi nagkaroon ng charter change oligarch ang patuloy na yayaman.
Walang panalo ang mahirap sa usapin na yan. Usapan lang yan ng pro-Oligarchy at pro-Foreign Investment. Sa huli, ang mahirap ay mananatiling mahirap.
If a Filipino can come to the US and work as a Doctor, Attorney, etc then citizens of foreign countries should be able to do the same. Same thing with owning land and a house. A Filipino can come to the US and buy land and a house and own it outright. Maybe the US and other countries should take a look at this and treat Filipinos the same way the Filipinos treat foreigners.
Your constitution does you a disservice. All it does is ensure the monopoly of wealth for the various rich families and keeps the country and general populous poor.
Your farmers grow rice using a method that was probably around 1000 years a go an the loss of crop is estimated to be around 25%. I recently lived in the Philippines and on 2 occasions attempted to start businesses that employed Filipinos but having being ripped off on both occasions to the tune of $500,000.00. I gave up and came home. I may return to the Philippines to live but I will never invest 1 cent there without 100% ownership of my investment.
Unless you put your false pride behind you, you will wind up being the poor man of Asia.
Foreign investment if allowed will bring prosperity to the people by creating jobs and teaching those employees world class skills, who intern will start there own enterprises that will be world class and 100% Filipino owned. Look at the Singaporean, Malaysian models, now embraced by Indonesia.
I was once told by a congressman that any politician who doesn’t have the backing of one of the families has no hope of gaining a seat in parliament.
The bottom line is you can’t stay as you are, either you will fix this problem and become prosperous or you will maintain the current constitution and become even poorer.
Your call.
Kung tutuusin nga, mas maganda ang serbisyo at trato mg mga malalaking foreign companies kaysa sa mga Pilipinong companies. If you could imaging if they abolish the 60/40 provision…let say giant store such as WALMARKT decided to open up many branches all over the Philippines, just imaging how much jobs could generate to millions of Filipinos.
SM Shoe Mart has no choice but to complete…. Imagine if CNN, or FOX news decided to come here…how the hell could ABS-CBN compete? Its very simple…more competition…more jobs…better service to all citizens.
Haw. Mabuti ng comment ka. Pero tanungin kita. Kung pumasok ang mga dayuhan para meron kompetisyon sa telecom industry ng Pinas at maging 50 cents per text message, sa halip na 1 peso, sino sa tingin mo ang tututol sa pagpasok ng dayuhan? Ang sagot ko: mga kapitalistang Pilipino!
Isang tanong pa. Kung pumasok ang kapitalistang dayuhan at mag karoon ng mas maraming trabaho, sino sa tingin mo ang tutol dito? Sagot ko: mga kapitalistang Pilipino! Obvious diba? Dahil pag pumasok ang mga “foreigner” na bisnes, mag kakaroon ng kompetisyon sa pagbigay ng trabaho.
Kaya, Haw. Huwag mo sisihin ang mga “komyunista” sa bagay na ito.
Dapat ba pumasok ang “foreigner” sa Pilipinas? OK lang sa akin kung tama para sa mga manggagawa na Pinoy. Hindi OK sa akin kung ang mangyayari ay lalabas lang kayamanan ng Pilipinas katulad ng minahan o katulad ng trabaho ng manggagawa. Kung makikinabang ay mga Pinoy, walang pagkakaiba kung sino man ang makapagbibigay nito! At alam mo, sa tutuo, ang dapat mangyari ay mapunta sa mga trabahador lahat ng kayamanan dahil sila ang gumagawa ng mga bagay na nagbibigay ng pagunlad sa mundo!
Tanggalin ang 60/40 oligarchy protectionist clause sa Constitution. Nagdudulot lang ito ng kahirapan at walang trabaho ng mga Pilipino. Wala kaming pakealam kung foreigner ang boss namin basta meron kaming trabaho. Mawawala na ang OFW kapag 100% ownership ang mga dayuhan. Hindi na masisira ang maraming pamilya dahil hindi na nilang kailangang humiwalay at pumunta ng ibang bansa para magtrabaho. IMBES NA TAYO ANG PUPUNTA SA IBANG BANSA PARA MAGTRABAHO, IBANG BANSA ANG PUPUNTA SA ATIN PARA BIGYAN TAYO NG TRABAHO!! Mga komunista gaya ng BAYAN, PAMALAKAYA ay mga traydor ng ating bansa. Ayaw tayong bigyan ng trabaho para guminhawa ang ating bayan.
ok lang ang direct foreign investments under strict provision that workers get as much pay as their counterparts in the corporations’ home countries and that they conduct their business exactly the way they conduct their businesses in their home countries.
but to do things (ugly) they cannot freely do in their home countries? that’s a big no no in the Philippines and the rest of the developing countries.
kahangalan, sariling bansa ng mga pilipino may ibang makikinabang at magmamay-ari na mga banyaga.