Sunday, Apr 20th

Last update:02:35:07 PM GMT

Headlines:
You are here: FOP Articles Articles

Articles

Policy Initiatives toward Reclaiming Development in the Visayas (1)

E-mail Print PDF

Buenaventura B. Dargantes
Cheryl C. Batistel
Maria Aurora Teresita W. Tabada

For the past two years, the Development Round Table Series for the Visayas have held discussions in an effort to generate insights into the complex developmental issues affecting central Philippines.  The process was initiated in the context of Executive Order Number 561 that created the Central Philippines Super Region as tourism destination.

The decision to create the CPSR was based on 2006 statistics showing that 29 percent of foreign tourists came to the Bicol Region and Western, Central and Eastern Visayas, and to the provinces of Romblon, Palawan, Camiguin and Siargao Island because of their unique and lush natural wonders as well as their warm and friendly residents. The CPSR was then targeted for the development of physical infrastructure, human capital and so-called peaceful communities.  The main goal was to achieve economies of scale, synergies and complementation.

Other considerations in the selection of the CPSR as tourism zone were:  a) the accessibility of Cebu, through the Mactan-Cebu International Airport, the country’s second major international gateway, and being the base to over 80 percent of inter-island shipping capacity in the Philippines; b) the presence of geothermal power plants in Leyte that supply electricity to the national grids (despite unresolved controversies on the high energy costs in Eastern Visayas); c) the accessibility of Kalibo, Aklan with its direct flights from Incheon-Korea and Taipei, and the presence of Boracay, an internationally known white-sand island resort and; d) the cultural heritage of the region manifested in such festivals as the Sinulog in Cebu, the Ati-atihan in Kalibo, the Pintados in Tacloban, the Sandugo in Bohol, and the MassKara in Bacolod.

These factors were supposed to be enhanced by investments in infrastructure for intra-regional and extra-regional travel, and in social and environmental projects, all of which were presumed to eventually spur the development of micro, medium and small enterprises, agribusiness ventures and other job generating activities.  These projects were to include the construction and/or improvement of 16 airports,   17 Roll-On Roll-Off ports, seven road networks, and the South railway.

For energy reliability, the 20MW Nasulo Geothermal Power Plant in Negros and the 200MW Coal-Fired Power Plant in Cebu were approved for construction, while the geothermal power plants in Negros Oriental, Leyte, Albay, and Sorsogon were privatized.  The bio-ethanol corridor from San Carlos City in the north to the Tamlang Valley in the south of Negros was established.  Environmental programs included reforestation activities, the addition of eight Protected Areas (564,135 hectares) to the 22 existing ones (473,442 hectares), monitoring of water quality in 17 major beaches, extensions of advice to local governments and resort owners on the improvement of waste disposal systems, and the completion of geo-hazard mapping.

Even Higher Education Institutions have aligned their thrusts with the foregoing strategy by producing and training a workforce specialized in tourism management and services, natural resources management, geothermal engineering, maritime and aviation, horticulture, computer science and information technology, and construction-related courses. A few institutions conducted research on food processing, water and wastewater treatment, solid waste management, organic farming and crop production technologies, and biofuel development. Some even actively developed campuses as tourism destinations, promoted tour packages, promoted and supported livelihood programs, provided technical assistance in land use planning and watershed preservation, and went to the extent of promoting discipline and etiquette in dealing with tourists.

Despite the investments that were poured into these projects/activities, the usual deterrents to tourism in the Visayas have persisted.  These include poverty, environmentally-destructive economic activities, continuing threat of geological and meteorological extreme events, deteriorating state of water supply and lack of access to improved water and sanitation facilities.  Interestingly, PDP 2011-2016 continues to view the CPSR as a “Strategic Destination Area for Tourism” and has even recognized the contribution of community-based and ecotourism approaches to poverty reduction, protection of the environment and gender equality.

Challenges and Issues
While central Philippines is being promoted as tourism destination and infrastructure projects are being built to meet this goal, the region is experiencing poverty incidence higher than national average; agrarian reform cannot be fully realized in its provinces; extractive industries such as mining harm livelihoods and environment and; rural communities have become more vulnerable to disasters.

Persistent poverty
Poverty in the Visayas has contributed significantly to a net out-migration trend and has furthered fueled the insurgency in some areas. For some time now, the CPSR has been neglected by the national government, and, in the island of Samar, many residents feel that they have been betrayed by their local leaders, thereby giving the communist insurgency a foothold in the ‘70s and ‘80s, even up to the present.  Such feelings of neglect and betrayal could have stemmed from income inequality in Central and Eastern Visayas, which has always been higher than the national average.

Looking at government measures of poverty, the Bicol region, Eastern Visayas and Caraga reported high levels of poverty incidence in 2006.  Even Central Visayas showed an increase in poverty incidence between 2003 and 2006.  Meanwhile, Northern Samar joined the 10 poorest provinces in the country while seven of the 40 poorest municipalities in the country were from Samar.  As of 2007, 18 of the 20 nutritionally depressed municipalities in Eastern Visayas were from Samar and Northern Samar. The National Statistics and Coordination Board predicts that the probability of attaining the Millennium Development Goal to eradicate extreme poverty is low.

Access to land and productive resources
According to the PDP 2011-2016 lower poverty incidence is a result of higher access to employment opportunities and basic services. In the Visayas, however, poverty is traceable to the people’s loss of access to a basic means of production—land.  Beyond poverty, such loss is seen as pushing households to hunger, which often they experience in silence.  For example, huge tracts of land devoted to food crops are now being used for bio-fuels.  In the year 2008, 900 hectares in the Tamlang Valley of Negros Oriental and 700 hectares in Samar were converted into Jatropha estates.

In San Carlos City, Negros Occidental, the San Carlos Bioenergy Inc., the first sugarcane-based ethanol and co-generation plant in Southeast Asia funded by a PhP3-billion loan from the Development Bank of the Philippines, is expected to help wean the Philippines from imported fuels.  The projection was for it to produce 40 million liters of ethanol annually, or equivalent to 10 percent of Philippine requirements as stipulated in the Biofuels Act of 2006.  In addition, the project has been considered to be a climate change mitigation measure leading to the approval of carbon credit offsets under the Clean Development Mechanism.  Operation of the plant was also expected to benefit sugarcane farmers and growers by creating some 500 industrial jobs and by supporting 8000 year-round jobs for farmers.

But when the government ordered an increase in the minimum wage, farmers were made to choose either to stop working or to increase wages but decrease the number of workdays.  They chose to work six days a week without an increase in wages, for which the cooperative was penalized when it did not implement the wage increase.  Regardless of this, by October 2010, the SCBI stopped producing ethanol, purportedly due to the failure of government to impose a 20 percent tariff on imported ethanol.  President Aquino, in a speech to Regional Economic Managers in Bacolod City, has highlighted the continuing government support for the production of bio-ethanol from sugarcane.

Even agrarian reform beneficiaries who followed government recommendations to produce crops for bio-fuels have reported receiving very little support from government agencies, including the DAR, in terms of legal services and economic development services.  On the aspect of legal services, a combination of high agency workload targets and the barrage of legal obstacles put in their way by landlords opposed to agrarian reform have prevented DAR personnel from effectively attending to the needs of ARBs.  The high agency workload targets were an offshoot of low fund allocation to hire an adequate number of field personnel who were sufficiently trained in providing legal and/or paralegal assistance.  So while DAR field personnel were pre-occupied with land tenure improvement responsibilities, they had to simultaneously fend-off harassment cases from landowners.  These coupled with physical and psychological threats, the DAR personnel (even those who were dedicated and idealistic) were only able to provide very limited legal support.  Eventually, ARBs had to obtain legal support from civil society organizations and/or private lawyers, which meant more expenses for the ARBs, who were already financially hard up.

ARBs could have benefited from technical and financial advice on the feasibility of their production systems, but in the absence of financial management skills to evaluate economic projections, they had to rely on their limited information as basis for making decisions.  ARBs also failed to gain economic benefits because such expenses as fees for the use of private lands where harvests need to pass.  Adequate infrastructure could have minimized these economic costs.

While PDP 2011-2016 has specified the provision of legal assistance to ARBs and the transformation of ARBs into viable entrepreneurs, the absence of legislation has resulted in incoherence in and non-convergence of the social, economic and environmental aspects of agrarian reform.  In the meantime, agrarian reform communities have to contend with continued fragmentation in the delivery of agricultural, agrarian and natural resources services.

Worse, there have also been cases when ARBs returned their lands to landowners, or rented these to investors, because they needed money for medical emergencies, for the education of their children, or for the payment of placement fees when they apply for work abroad. The policy to provide subsidies for biofuel instead of food production have led farmers to believe that agrarian reform and agriculture were no longer a major focus of government interventions.  This belief has been reinforced by the continued promotion of industrial mono-crop production of sugarcane to produce ethanol and of cassava for feeds instead of implementing capability building interventions.

Mining, land use conversions and environmental non-protection
ARBs are not able to use their lands to produce their food requirements due to exploration and mineral production activities, which government regulatory agencies and LGUs have permitted even if these were in prime agricultural lands. The Mineral Exploration Permits granted to the Nicua Mining Corporation and to the Strongbuilt Mining Development Corporation to undertake the Leyte Magnetite Project and the Leyte Ironsand Project respectively, in MacArthur, Leyte are two examples. Although the processing and approval of land conversion applications affecting rice lands considered as components of the Network of Protected Areas for Agricultural and Agro-industrial Development have been temporarily suspended, Nicua Mining Corporation managed to have its 2009 land conversion applications processed and approved.  The area devoted to rice production was reduced by 18 percent of the National Irrigation Authority serviced area of 276 hectares. This reduction affected 374 farmers and has resulted in a yield reduction of 924 MT of palay per year.  Moreover, the mining operations increased vulnerability to flooding, which in turn damaged crops worth PhP37 million.

Whether the reduction in rice yields resulted in farmers going hungry is yet to be documented; what has been reported was that those who still have lands to cultivate had to keep vigil over their newly harvested rice to ensure that these would not be stolen, purportedly by those who did not have anything to harvest anymore.  Tenants whose lands had been sold by the landowners had nowhere to earn a living, with only a few being hired by NMC.  Net income from rice farming could reach PhP5000 per month, an income level that is higher than what a laborer working at NMC for 22 days a month could earn.

Apparently, continued recognition of the dubious Mineral Exploration Permit granted to NMC does not conform to Pillar 1 of the “Payapa at Masaganang Pamayanan” program stated in PDP 2011-2016.  It stipulated macro-level interventions that will address threats to identity and marginalization, and that will contribute to resolution of conflicts arising from competing interests over natural resource.

The lack of congruence between tourism and environmental protection is exemplified in the case of the Central Panay Mountain Range.  As a key conservation site, and a known center of endemism, the CPMR is one of the world’s most critical biodiversity areas.  The Sibalom Natural Park, located within the CPMR, is home to many rare birds, amphibians, reptiles, mammals and plant species. The Maui-it Tipuluan watershed irrigates farms in the municipalities of Sibalom, San Jose, Hamtic, Belison and San Remegio.  Yet, despite its protected status, the SNP has been subjected to cutting of timber, gathering of non-timber forest products, hunting of wildlife, gemstone gathering and quarrying, invasion of exotic species and unregulated influx of tourists.

Another similar case is the Central Cebu Protected Landscape in Cebu, the center of commerce in the Visayas.  The Mananga Watershed and Forest Reserve and the Kot-kot Lusaran Watershed and Forest Reserve, which are components of the CCPL, have been declared as “critical” to the water supply of Metro Cebu, and home to many “highly threatened”endemic and indigenous species.  In 1999, the Sangguniang Panlungsod of Cebu City approved an ordinance creating the Trans-central Highway Commercial Strip, which reclassified 200 meters on both sides of the Trans-central Highway as a commercial zone.  The Trans-central Highway intensified urban expansion, migration, settlement, land speculation and commercial development in the CCPL, all of which have been encouraged by local governments, rural residents and landowners.  Urbanization contributed to a reduced recharge of the aquifers, leading to fears of water shortage in the near future.  Initial economic gains, however, have lured local governments to open up the watersheds to investors.

Disaster risk and climate-related vulnerability of communities
The completion of the geo-hazard mapping exercise which aims to support the tourism thrust will not change the fact that the Philippine Fault traverses the Bicol region, Eastern Visayas and Caraga.  As these areas get around 200-300mm of rainfall per month from June to January, the geologic characteristics of these regions combined with their meteorological conditions have increased the hazards of flooding and landslides.  Although barangay officials and community leaders actively seek information pertaining to local floods and landslides, share information and experiences, and consult municipal and provincial officials, very few actually got information from the project on “Hazard Mapping and Assessment for Effective Community-based Disaster Risk Management.”  Some barangay LGUs in Bicol were even made to pay up to PhP45,000 to get four copies of geo-referenced maps showing areas vulnerable to geo-hazards.

Unfortunately, PDP 2011-2016 focuses on engineering and infrastructure solutions to reduce the adverse effects of flooding.  Understandably, LGU initiatives in disaster preparedness, mitigation, relief or risk management have been similarly focused on flood control structures, drainage and sewerage systems, evacuation centers, relocation sites and housing projects.  Very little attention has been given to watershed and forest protection, and to climate-resilient livelihood systems.

Flood control and drainage structures range in design from sophisticated river channel improvements to simple gabion piles along critical river junctures.  More expensive structures tended to generate more confidence in people living near high-risk zones.  Locally-funded projects, on the other hand, were mainly seen as off-the-shelf designs, which usually did not include site-specific peculiarities based on on-site assessments of risks.  Although local officials concede that high volumes of run-off can inundate low-lying areas especially during periods of high tide, they have faith that improved drainage can minimize flooding damage.

In an effort to relocate people living in high-risk areas, LGUs have encountered difficulties such as finding safe sites for human settlements, mustering resources for the acquisition of identified sites, mobilizing scarce human, physical and financial resources for site development, coordinating with donors, facilitating the provision of electricity, water and transportation, and identifying beneficiaries.  Moreover, the relocation of households from high risk areas usually comes with restrictions in the implementation of traditional (usually land-based) livelihood activities.  As most livelihood projects involve the development of new skills among the beneficiaries, and of new enterprises, there is a pressing need to conduct in-depth analysis of livelihood systems.  Better still will be initiatives to design production systems that are resilient to natural disasters.

Policy Recommendations
Whereas LGUs can thoroughly review their respective programs on land use and food security, and determine alternative land uses that can provide compatible resource-use option (including tourism), national government agencies such as the DENR, DAR, DA, and NIA need to re-align their respective roles in the issuance of resource use permits, while ensuring that no violations get committed to the detriment of communities. To arrive at such a critical balance in the determination of alternative land uses, LGUs and communities need to come up with a good analysis of land use potentials as starting points in the design of land use optimization and/or productivity improvement programs.

If tourism eventually emerges to be a compatible resource-use option, LGUs should be provided ample assistance for them to address their erstwhile mandate “to promulgate appropriate ordinances and local legislations pertaining to the maintenance of tourist facilities and attractions, as well as regulation and supervision of business concessions… [and] to provide local incentives for tourism investments, preserve cultural heritage, and promote sustainable tourism practices and management.”  This mandate has been sidelined with the adoption of Tourism Economic Zones as “the main vehicle for focused development at a local level within priority destinations” wherein a Tourist Enterprise Zone Authority was responsible for managing the overall zone development policy and strategy.

Under this framework, tourism development makes LGUs mere participants in the process.  LGUs that found showcase value in their resource endowments persisted in their initiatives in eco-tourism and agro-tourism.  Scant attention has been given to socio-cultural and historical heritage as potential tourism attractions.  Unavoidably, this will require the technical support of the National Historical Institute and the National Museum, especially in the search for a Visayan identity as well as in reclaiming developmental initiatives despite the geographic diversity and social complexity that occasions the Visayas. n

Abbreviations

ARBs Agrarian Reform Beneficiaries

CPSR Central Philippines Super Region

CCPL Central Cebu Protected Landscape

CDM Clean Development Mechanism

CPMR Central Panay Mountain Range

DA Department of Agriculture

DAR Department of Agrarian Reform

DENR Department of Environment and Natural Resources

DBP Development Bank of the Philippines

HEIs Nasulo Geothermal Power Plant

LGUs Local Government Units

MCIA Mactan-Cebu International Airport

MDG Millennium Development Goal

NIA National Irrigation Administration

NMC Nicua Mining Corporation

NPAAD Network of Protected Areas for Agricultural and Agro-industrial Development

PAMANA Payapa at Masaganang Pamayanan

SCBI San Carlos Bioenergy Inc.

SNP Sibalom National Park

RoRo Roll-On Roll-Off

TEZs Tourism Economic Zones

TEZA Tourist Enterprise Zone Authority

 

 


[1] This paper is an abridged version of a full paper with the same title and written by members of the DRTS Visayas TWG as part of the DRTS Integrative Process.

 

JPEPA: Anatomy of a (Bad) Trade Deal How the Philippine government negotiated the controversial economic agreement with Japan

E-mail Print PDF

Examining the trade negotiation process

The Development Roundtable Series Thematic Working Group on Trade and Industrial Policy decided in 2008 as part of its efforts to deepen the discourse and develop concrete recommendations on trade and industrial policy to examine trade policy making in the context of international trade negotiations. Furthermore, the on-going debates in the Senate on JPEPA also provided additional impetus to the research.

The overall objective of the study is to determine how the Philippines conducts trade negotiations and how the government pursues national trade and development interests through various international negotiations for free trade and economic partnership agreements.

The Japan-Philippines Economic Partnership Agreement was an easy choice for the case study. JPEPA was the very first bilateral FTA entered into by the Philippines and as such how the deal was negotiated had set the precedent for future bilateral FTA negotiations. While the Senate ratified JPEPA with a majority vote, the deliberations exposed how the Executive did such a poor job negotiating the deal with Japan, fuelling early on calls for renegotiation of the agreement.

Results of the Study: The JPEPA Process
On October 8, 2008, with a majority vote of 16-4, the Philippine Senate ratified the Japan-Philippines Economic Partnership Agreement thus paving the way for the implementation of the controversial trade and investments deal with Japan.

The JPEPA negotiations went through at least five major stages of negotiations.

Political and Economic Dialogue -was the exploratory stage of the process. The highlight of this stage was the series of high level political meetings between the leaders of Japan and the Philippines that took place between 2002 and 2003. These high level meetings provided the political push for the negotiations and gave broad indication of the political and economic motivations of both parties; their level of commitment; and how the mechanism and architecture of the whole negotiations process were defined.

Japan’s ASEAN outlook

What was apparent at this point was that Japan had a clearer perspective of its goals and intentions in pursuing the FTA negotiations.  In his speech in Malacañang, then Japanese Prime Minister Junichiro Koizumi highlighted the strategic and historic relationship between Japan and ASEAN and defined what he called his “new diplomatic vision” for East Asia where he referred to ASEAN as the “core of the region”.[2] The main agenda of Japan was clearly to have a deal with ASEAN.  Even the reference to the Japan-Philippines Partnership Program, a framework for improved economic and political relations between the two countries that encompassed JPEPA, was made in the context of strengthening coordinated efforts for greater regional stability.

Having secured the nod from the Philippines and the rest of ASEAN, Japan went full steam in trying to actualize these commitments in a series of formal and informal meetings.

By 2002, following a visit by then President Gloria Macapagal Arroyo to Japan, her first since expressing support to Japan’s proposal for an ASEAN-wide economic agreement, a working group on JPEPA composed of representatives from concerned government agencies of both parties was formed. The task of the working group was to study the possible content, substance, and the coverage of a mutually beneficial economic partnership between the two countries, including the possibility of forming a free trade agreement. [3]

It was evident even at this early stage that both parties were eyeing an ambitious agreement that would cover other areas such as services, investments, human resources development and other forms of economic cooperation.[4] Through five meetings of the Working Group—four in Manila and once in Tokyo—between October 2002 and July 2003, both parties tossed around proposals for possible elements of the agreement.  Among the proposals discussed early on was access to Japan’s labor market particularly in the fields of nursing and caregiving. An initial obstacle identified was the language issue. This was later resolved through proposals for the establishment of Nippongo language schools or centers.

By April 2003, with strong indication from the Working Group of the common desire of both parties to proceed, separate independent studies to assess the sustainable impact of JPEPA were initiated.

Research Utilizing their respective national research units or centers, the two governments then initiated researches that examined a whole gamut of issues surrounding the terms and nature of trade and economic partnership between the two parties. The main aim of the national researches was to determine and assess aggressive and defensive interests of both countries, which would form part of the country’s negotiating agenda.

Two things were relevant for the Philippines in terms of the process of defining its national negotiating agenda. The first was the formation of the Philippine Coordinating Committee on JPEPA to coordinate and consolidate the efforts of the various national government agencies in putting together our national agenda and to define our negotiating framework; the second was the JPEPA Research Project of the Philippine Institute of Development Studies.

Philippine Coordinating Committee on JPEPA

Executive Order 213 established the Philippine Coordinating Committee[5] to study the feasibility of JPEPA. The PCC is an interagency committee co-chaired by the Undersecretary for International Economic Relations of the Department of Foreign Affairs and the Undersecretary for International Trade of the Department of Trade and Industry. The PCC was tasked to represent the country in meetings, consultations and negotiations, the formulation of the recommended Philippine positions; to conduct consultations with other government agencies and private sector representatives (as necessary); and to draft a proposed framework for JPEPA and its Implementing Agreements (IA).

PIDS Studies

From June to December 2003, the Philippine Institute for Development Studies[6] initiated a research project to study the feasibility and desirability of JPEPA. The overall aim of the project was to address the fundamental question should the Philippines enter into a Japan-RP Economic Partnership Agreement? PIDS proposed to answer this question by conducting specific researches guided by the basic principles of first, the Philippines’ agenda and reform objectives, and second, the issue of multilateralism versus bilateralism.

The feasibility of JPEPA was judged by the PIDS studies against the principal objectives of reforms defined as (1) global competitiveness, (2) sustainable growth, (3) efficiency in allocation and (4) poverty alleviation. According to PIDS, “If within the proposed economic partnership these objectives of reform are workable, then there should be no impediment in entering into such kind of agreement.”[7]

A total of seventeen (17) research projects were undertaken under the Japan-Philippines Economic Partnership Research Project. Two (2) were impact analysis on the whole economy, nine (9) were analyses on specific sectors and concerns (agriculture, manufacturing, services trade, tourism, movement of natural persons) and six (6) were special studies on such topics as Japanese ODA, rules of origin, and human resource development among others. (Please refer to annex for summary of recommendations)

At least 14 out of these 17 studies were prepared for, or in coordination with, the Philippine APEC Study Center Network [8] and PIDS.  At least seven (7) of these studies were funded by the Japan International Cooperation Agency and at least four (4) were funded through the Ministry of Economy, Trade and Industry of Japan.[9]

A report of the Joint Coordinating Team[10] cited the PIDS conclusion that the JPEPA would provide positive impact both on the Philippine economy and on poverty reduction on the whole, while the impact would be different among sectors.  The studies also pointed the need for adjustment measures to maximize benefits of JPEPA, including mutual recognition, the promotion of movement of natural persons between the two countries and various cooperation programs.

The Japanese studies[11] on the other hand projected positive but very minimal effects on Japan’s GDP of 0.01-0.03 % (Kawasaki) and 1.7-3.03% increase for Philippine GDP in the long run.[12]

Formal Negotiations- The start of the formal process, where both parties presented their proposals, which ideally would form part of a draft negotiating text or mandate.  Both parties went through all the provisions of the proposed agreement with the objective of arriving at a common consensus. The formal negotiations were usually undertaken by senior level ministers.

Very little information on what transpired in the formal negotiating sessions has been made available to the public. We do know that the formal sessions commenced in February 2004 and had at least eight (8) formal sessions in Manila and Tokyo from February- October 2004. These sessions were then followed by at least three working level sessions in Manila from November 2004 to February 2005.[13] What followed next were consultations/hearings on tariffs, the completion of the text, legal review and processes leading to mutual acceptance of the text, completion of other legal requirements and the joint signing of JPEPA by leaders of both parties.[14]

From a copy of the working draft of the text dated April 2003 however which showed markings/changes proposed by the Philippine government we can surmise critical defensive and aggressive interests of the Philippines. Comparing these changes against the final text reveal the extent to which the Philippine proposals were adopted in the final text.

Key Observations

§  The working draft shows that the Japan-Singapore Economic Partnership Agreement was used as a template. A chapter on IPR even had the word Singapore in it.

§  The Philippines was really aiming for an agreement that spelled out more technical assistance and cooperation with Japan.

§  The Philippines wanted minimal ambition on areas of IPR, government procurement and competition opting to just define these as areas of technical assistance and cooperation. Unfortunately, the chapters on IPR, Government Procurement and Competition in the final text defined concrete commitments already define concrete and ambitious commitments on protection and liberalization of these areas, respectively.

§  Another aggressive interest is in movement of natural persons which pertains to interest in labor market access. Indeed we see a substantial difference between the working draft and the final text in MNP. The MNP chapter is more defined outlining specific commitments particularly on market access for technology experts and healthcare workers, and spelling out requirements and procedures. The chapter is also more specific in terms of defining limits to coverage. The final text clearly states that MNP covers only professional (including nurses and caregivers) and that the chapter shall not apply to measures regarding nationality or citizenship, or residence or employment on a permanent basis. (Chapter 9. Article 108 (2) of the JPEPA Final Text)

Executive concurrence- Once a consensus is reached and the negotiations have ended, the draft consensus text is then goes back to the principals for concurrence.  The main highlight of this stage is the formal and political process of signing the text of the agreement.

According to the official press statement from the Ministry of Foreign Affairs of Japan, “on September 8 2006, the Government of Japan reached a cabinet decision to sign an agreement between the Government of Japan and the Government of the Philippines for an economic partnership, the Japan-Philippines Economic Partnership Agreement (JPEPA). Based on this decision, the Prime Minister of Japan, Mr. Junichiro Koizumi, and the President of the Philippines, Ms. Gloria Macapagal-Arroyo, will sign the JPEPA, the Implementing Agreement, and the Joint Statement at the upcoming Japan-Philippines summit in Helsinki, Finland.”[15]

The signing of JPEPA in Helsinki was a top priority of then Philippine President Gloria Macapagal Arroyo who flew to the Finnish capital to attend the Asia-Europe Summit.

Senate ratification- The signed agreements then undergo a respective process of ratification. In the case of the Philippines, ratification of an international agreement or treaty is done by the Senate of the Philippines. In the case of Japan, international trade agreements are ratified by the Japanese Diet.

JPEPA was officially transmitted to the Senate on August 17, 2007.  To prepare for this process the Philippine government created through Administrative Order 198 an interagency task force for JPEPA Senate ratification. The multi-agency JPEPA task force was tasked to put forward to the Senate the benefits, advantages and opportunities to the Philippine economy of a bilateral agreement with Japan.[16]

Hearings on JPEPA were first conducted by the Committee on Trade and Commerce chaired by Senator Manuel Roxas II in November 2006 before joint hearings of the Committees of Trade and Commerce and Foreign Relations were conducted under the leadership of Senator Miriam Santiago. Santiago conducted a total of nine hearings from September to December 2007 with each hearing focusing on specific issues (economics, environment, movement of natural person, constitutional issues, and agriculture).

The committee report calling for “conditional concurrence” was completed by April 2008. Santiago however backtracked and deferred her sponsorship speech on JPEPA opting to secure a side agreement with Japan first. The side agreement was secured in late August 2008. The agreement was ratified by the Senate in October 2008.

 

Summary of Main Points

Examining the JPEPA process raised a number of issues and concerns which could then be the anchor of recommendations for reforms in the trade negotiation process in the Philippines.

Defining the National Agenda

The starting point of any negotiating framework whether for trade or any other international agreement that the government negotiates on behalf of its people, should be a coherent national agenda that embodies the Filipino people’s interest in the negotiations.  In the case of JPEPA, at least three elements were instrumental in how the Philippine government defined the national interest in the negotiations:  (1) Using the Japan-Singapore Economic Partnership Agreement as the template; (2) Commitment of the Philippines to the WTO-plus agenda for comprehensive and ambitious FTA; and (3) the recommendations from the PIDS studies and inputs from the National Government Agencies.

Clearly, the bias was towards a comprehensive and ambitious agreement with Japan. There was really no open and transparent process of defining a national negotiating agenda that involved the participation of all the stakeholders.

While the government recognized the area of research as an area of strength for the Philippines, a number of issues and concerns should be levied against the JPEPA studies.

The JPEPA research project of PIDS was clearly guided by a trade policy that is supportive of a more liberal regime for trade and investment.  These studies were conducted after a political decision at the highest level has already been made to not just proceed but see the negotiations through, thereby raising the question of the real role of these studies. Were the studies meant to provide empirical basis for decisions on whether to proceed with the negotiations or not or were meant simply to provide the justification for decisions that have already been made?

And lastly, how independent are these studies? Of particular concern with the JPEPA researches is the extent of Japanese influence both directly (through funding) and indirectly (through the framework of addressing what Japan needs rather than what the Philippines wants) into the outcomes of the researches.

Lack of Transparency and Peoples Participation

While the government claimed transparency in the negotiations with a “structured, step-by-step negotiations process consisting of both formal and informal meetings, extensive consultation and public hearings, including attendance in hearings called by the House of Representatives,”[17] critics rightly point out the non-disclosure of the text during the negotiations process and the absence of a clear mechanism for people’s participation as clear indicators of a democracy deficit in the JPEPA process.  The PCC is mandated to conduct consultations with private sector representatives but only as it deems necessary. The conduct of sector specific consultations became the discretion of the lead national government agencies. No effective mechanisms were put in place to check and temper government’s ambitious agenda putting into serious question whether the final agreement is in fact in our national interest.

Lack of Coherence and Poor Coordination

A number of procedural issues were also evident in the process. Because this was the Philippines first bilateral agreement of this nature and scope, the process was largely ad hoc. Inter-agency task forces were created specific for JPEPA alone. The formulation of specific chapters was delegated to specific national government agencies with the PCC mandated to bring all of these together into a coherent national agenda.

Another major concern is whether or not due diligence was exercised by the Philippine government in negotiating the agreement. In at least two major instances- the inclusion of toxic wastes in the list of trade-able goods, and the legal and constitutional review process- it was shown how concerns that were raised early on as part of the process of finalizing the text by national government agencies and by the legal review panel were either not considered or considered but later set aside in the final deliberations.

Sadly, the lack of access to official negotiating documents and minutes of these negotiations, and the unwillingness of the Philippine government to disclose information effectively leave the public in the dark, depriving us of the opportunity to learn from past mistakes and correct flaws and limitations in the trade negotiation process.

Role of Congress and the issue of oversight

In early 2005, a number of civil society groups and trade networks were already raising their concerns on JPEPA.[18] In Congress, a House Resolution calling for an inquiry on JPEPA, led to Congressional hearings conducted under the House Special Committee on Globalization.[19] To a large extent, the congressional hearings on JPEPA became the main platform for public debate on the proposed deal. These hearings compelled the DTI to provide updates on the negotiations to Congress and an opportunity for groups critical of JPEPA to present their positions.

The Congressional hearings however failed to compel the Executive to provide Congress with a copy of the negotiating text, which remained inaccessible to public scrutiny until the deal was signed in 2006. In December 2005, Akbayan et al filed a petition before the Supreme Court to compel the government to publicly disclose the full text of JPEPA. The Supreme Court however ruled in July 2008 against the petition for disclosure and found in favour of the exercise of Executive privilege in the case of JPEPA.[20]

The Supreme Court decision on JPEPA does not invalidate however the need for oversight on deals entered into by the Executive especially because of their far reaching implications on development.

Ways Forward

With the Philippines and ASEAN engaged in a number of FTA negotiations there is an urgent need to get our act together fast to establish a more systematic, coherent, participatory and more critical process of defining our national trade policy and industrial policy.

Assessment and review of Philippine Trade Policy

We should start with an honest to goodness assessment of Philippine trade policy and how our adherence to this policy has impacted on development.  We should also examine the way the Philippine government works within ASEAN.  There should also be closer coordination in ASEAN not just in terms of the ASEAN-wide FTAs that are being negotiated but in relation to the bilateral efforts of its Member states as well.

The role of Congress in trade negotiations is another area that must be re-examined seriously in light of the JPEPA experience. Congress could play a crucial role in addressing the issue of oversight particularly in light of the Supreme Court Decision upholding the use of executive privilege in the JPEPA negotiations.

Philippine Trade Representative Office

There are proposals in Congress for the creation of the Philippine Trade Representative Office, which could pave the way for a more coherent trade negotiating agenda and a more coordinated and systematic way of negotiations where inputs from academic and research institutions, from private sector, and from civil society organizations and social movements are [21]heard and integrated into the national agenda.   The PTRO could also institutionalize public consultations, making them mandatory rather than discretionary on the part of the national government agencies.

Freedom of Information Act

An important element of participation is access to information. The passage of the Freedom of Information Act is an important step towards ensuring that people have access to crucial documents including copies of the negotiating texts and become informed participants in the negotiating process.

Postscript: Towards a Unified National Trade Strategy
A recent welcome development is the “One Country, One Voice” initiative of the Department of Trade and Industry which aims to “institutionalize stakeholder participation towards a unified trade strategy” through a series of national and sub-national, multi-sectoral consultations.[22]

Speaking at the launch of the initiative, Adrian Cristobal, Jr., Undersecretary for International Trade of the DTI, outlined the basic principles that have guided government in crafting trade policy and negotiating positions. These include the primacy of the Constitution over statutes and international agreements, the importance of public participation, transparency and accountability, and the leadership role of government in making strategic decisions that balance sectoral interests.

Cristobal added that “there are lessons we have learned from the past, and there are lessons to be learned from others. We will need to prepare ourselves with rational empirical research, be attuned to stakeholder views and needs, and bring more coherence in inter-governmental policymaking.[23] n

 

 

 

 

Acronyms

APEC Asia Pacific Economic Cooperation

ASEAN Association of Southeast Asian Nations

AO Administrative Order

DTI Department of Trade and Industry

FTA Free Trade Agreements

GDP Gross Domestic Product

IPR Intellectual Property Rights

JPEPA Japan-Philippines Economic Partnership Agreement

MNP Movement of natural persons

NGA National government agencies

ODA Overseas Development Aid

PIDS Philippine Institute of Development Studies

PCC Philippine Coordinating Committee

PTRO Philippine Trade Representative Office

WTO World Trade Organization

 


[1] This article is an abridged version of a full paper on JPEPA with the same title. The paper examines the Philippine trade negotiation process, specifically the negotiation process which resulted to JPEPA. The paper is a result of the Development Roundtable Series Integrative Process and is set to be published this year.

[2] http://www.mofa.go.jp/region/asia-paci/pmv0201/philippine.html

[3] Japan-Philippines Economic Partnership Agreement Joint Coordinating Team Report. December 2003

[4] ibid

[5] E.O 213: Creation of a Philippine Coordinating Committee to Study the Feasibility of JPEPA. 28 May 2003.

[6] PIDS is a policy research institution attached to the National Economic Development Authority (NEDA) created by virtue of Presidential Decree 1201 in 1977.

[7] Toward a Philippines-Japan Economic Partnership. PIDS Research Proposal

[8] PASCN created by virtue of Administrative Order No. 303 which was issued on 23 November 1996

[9] PIDS Project Monitoring and Information System (http://psd.pids.gov.ph/)

[10] The Joint Coordinating Committee (JCT) was created in 2003 to usher in the new stage of the negotiations.

[11] Kawasaki; 2003 ; and Urata and Kiyota 2003

[12] As cited in the JCT Report. December 2003

[13] presentation made by DTI Undersecretary Tomas Aquino in a Forum on JPEPA organized by the Stop the New Round Coalition. 25 February 2005

[14] ibid

[15] Press Statement from Ministry of Foreign Affairs (MOFA) of Japan. http://www.mofa.go.jp/announce/announce/2006/9/0908.html last accessed 14 May 2011.

[16] Administrative Order (AO) 198. September 2007

[17] DTI presentation to the Senate Committee on Trade and Commerce. November 2006.

[18] The Stop the New Round Coalition and the Fair Trade Alliance were already monitoring and issuing statements on JPEPA as early as 2004. These two groups eventually participated in the Congressional Hearings that followed in 2005

[19] Cong. Lorenzo R. Tanada III and Cong. Aguja jointly filed House Resolution No. 551 on 25 January 2005, calling for an inquiry into the bilateral trade agreements currently being egotiated by the Philippine government, particularly the JPEPA

[20] Supreme Court decision (G.R. No. 170516) promulgated July 16 2008.

[22] Speech of DTI Undersecretary Adrian Cristobal at the launch of the One County, One Voice initiative. 4 May 2011. Accessed at  http://dti.gov.ph/uploads/DownloadableForms/one%20Country,%20One%20Voice%20 Opening% 20Speech .pdf. last visited 15 July 2011.

[23] ibid

Hunger and Food Insecurity in the Mindanao Food Basket: Confronting the challenge of policy reform for agricultural productivity

E-mail Print PDF

Salvador H. Feranil
Rogelio Abdulrahman G. Teves

Context

Hunger is widespread and continues to persist in this country.  In 2008, the Social Weather Stations survey showed an alarming 23.7 percent of households reporting hunger, or not having anything to eat at least once in the three months prior to the survey.  This translated to more or less 20 million hungry Filipinos who could not afford to buy decent food for their meals during that period.   Among different island-regions in the country, Mindanao was reported to have the highest incidence at 33.7 percent, or roughly seven million of more than 21.5 million Mindanaoans suffered from hunger.  Despite government's claims that food and agricultural production has improved through the years, the country continues to be confronted with problems in feeding its people. 

Foreign Policy and the Visiting Forces Agreement

E-mail Print PDF

Atty. Corazon Fabros

Context of the TWG process

The Working Group had its beginnings in January 2006, with an initial core group of organizations involved mostly in peace and security issues at a period when the Arroyo government’s policy on the deployment of Filipino humanitarian personnel in Iraq was being challenged and the conditions of overseas Filipino workers deployed in that country was an urgent issue. It was after the hostage taking of Filipino driver, Angelo dela Cruz, by a group of Iraqis demanding the withdrawal of foreign troops who were part of the Coalition of the Willing.  Our experience out of the Iraq Solidarity Campaign which called for Filipino troops’ withdrawal in Iraq pushed us to find clarity on what Philippine foreign policy should be.

This was also the time when the TWG got involved with the rape case of Nicole within the premises of the former US military bases in Subic where the accused were US military personnel. The Nicole Case certainly raised important questions on the Visiting Forces Agreement. The US government denied the Philippine government’s request for custody of the accused soldiers added fuel to the movement calling for the abrogation or renegotiation of the accord with the US. These events should be seen in the context of the entire Philippine foreign policy, and as symptoms of broader issues relating to US military presence and to the pursuit of national interest.

In February 2006, the TWG on Foreign Policy held its first roundtable discussion called “Reviewing Critical Issues in Philippine Foreign and Security Policies: Towards and Assessment of the Visiting Forces Agreement with Prof. Roland Simbulan as main resource person. (See table below for other activities and projects that the TWG has undertaken)

The highlights of the discussions during that critical roundtable are as follows:

  • There are political and legal realities that a movement for genuine democratic, principled Philippine foreign policy must confront, but the most important realization is that as long as our leaders’ colonial mentality remains, there can never be a foreign policy that is truly reflective of the Filipino people’s interests.
  • The Visiting Forces Agreement has an impact on the resolution of the conflict in Mindanao. The VFA runs counter to the state’s pronouncements of seeking a just and peaceful resolution to the Mindanao problem.
  • Genuine peace in Mindanao can be achieved only when the historical injustices committed not only by the Americans but also by the successive Philippine governments against the Bangsa Moro people have been addressed.
  • There is clear evidence that contrary to the supposed provisions in the VFA and the government’s public pronouncements, American troops have been active in military operations against the Moro Islamic Liberation Front.
  • Globalization continues to influence the formulation of Philippine foreign policy. The formulation of an alternative, genuinely sovereign and democratic Philippine foreign policy lies in the reconstitution of our social structures. As long as the present social structures remain we will never have a foreign policy that is immune to the demands and interests of global capital.

In sum, this is how the TWG defines the principles that underpin the foreign policy it is advocating for:

Democratic: To redefine “national interest” as the collective interest of the Filipino people. With foreign policy often reserved as the exclusive concern of technocrats, diplomats, the military and business sectors, there is need to assert broader people’s participation in the formulation of the country’s foreign policy.

Principled: Foreign policy should address issues in terms of their economic and geo-strategic benefits as well as in terms of moral, legal, ethical considerations.

Independent:  It will not just be anchored on continuing the decades-long military alliance with the United States.

Strategic:  The promotion of alternative foreign policy is seen as part of a bigger goal to resolve perennial social-economic and political problems and to achieve global peace, development and social justice.

Priorities of the TWG and Emerging Issues
The Foreign Policy Research 2 which should have been completed at the end of 2010 would have been subjected to an RTD process to provide clarity on Post-EDSA foreign policy prescriptions and trends. Understanding the processes by which foreign policy is currently decided will help us identify key spaces for advocating alternative foreign policy.  In light of the limitation brought about by the non-completion of the research, there might be a need to pursue an alternative method to complete the project (using the Outline adopted). Needless to say, it has to be pursued as soon as possible, whatever method shall be used. It can be a series of Focus Group Discussions with resource persons. The documentation of these processes will then be the basis for a write-up of policy prescription and trends, analyses and recommendations.

Related to discussions on the presence of foreign military troops in the Philippines especially in Mindanao, relevant issues like Humanitarian Aid and Operations in Mindanao, UN Resolution on Responsibility to Protect, Right to Self Determination are subject matters that need to be better understood within Philippine context, though these issues interplay with what’s happening in other parts of the world. There is need to determine and analyze the objectives, directions and impact of these international tools in the long term.

In terms of defense and security, we need to look at the vintage Mutual Defense Treaty which is often cited by the Philippine government as the legal basis for more current agreements such as Visiting Forces Agreement 1 and 2, Mutual Logistics Support Agreement and Securities Engagement Board. In particular the SEB (a post 9-11 agreement) addresses non-traditional concerns including terrorism, transnational crimes, disasters and the threat of a pandemic outbreak.  It complements the Mutual Defense Board that focuses on cooperation against traditional or conventional threats such as an external armed attack envisioned under the 1951 Mutual Defense Treaty. These agreements have to be scrutinized to ensure that Philippine territorial integrity is not sacrificed.

This TWG has been limited to issues relating to defense and security and on related concerns such as military and defense agreements with the United States. The current focus is far from what has been expected from it when the DRTS started and far from what it had set to accomplish in the beginning.  Constraining factors are also the composition and engagements of the organizations involved in the process. To a big extent, the delays in the completion of the Philippine Foreign Policy Research (envisioned to provide the historical context, content and direction) has slowed down and limited its RTD processes and engagement.  The focus now should be a clear Alternative Foreign Policy for the Philippines in this post Arroyo government period and which should now be an agenda for legislation.

Despite these limitations, the TWG on Foreign Policy has provided the space for brainstorming and cooperation among different organizations within Stop the War Coalition; for the creation of  the Citizens Peace Watch (a core of organizations here in Luzon and Mindanao that have been engaged in Fact Finding Missions, Monitoring and  Trainings in Human Rights and Documentation) that produced a valuable document which was used for lobby in Congress during Senate hearings and investigations  on the continuing military presence of US troops and the Visiting Forces Agreement. This document also helped popularize the issue in media.

The main challenge now that the TWG places before the Aquino presidency is the Visiting Forces Agreement. President Aquino has commissioned a Committee that would review the VFA and has promised to release the findings early this year.  No report has been released so far.

Here are our hard questions for the President:

Will the president have the political will to demand US responsibility for the toxic contamination of the former base lands at Clark and Subic?

Will this government uphold the Philippine Constitutional provision on foreign troops, nuclear weapons and military bases?

Will this government adopt a foreign policy that is democratic, principled, independent and strategic?

Table: Issues taken up by the TWG on Foreign Policy:

Issues RTD/Meeting/Forum Resolutions/Projects adopted/Results
Visiting Forces Agreement Reviewing Critical Issues in Philippine Foreign and Security Policies: Towards an Assessment of the Visiting Forces AgreementFeb. 13, 2006 Towards and Alternative Foreign Policy content of the WG direction
ASEAN, US and China Between Two Poles: ASEAN’s Relations with the United states and ChinaNov. 6, 2006 Preparation for the ASEAN Summit in Cebu and Asean Civil Society Conference. 
Philippines and ASEAN The Philippines and ASEAN: Towards and an Alternative RegionalismNov. 22, 2006 This forum serves as the culmination of the DRTS series of fora on the ASEAN in time for beginning the ASEAN summit.
Foreign Policy Research Part 1 – Philippine Foreign Policy (historical context)Part 2 – Philippine foreign Policy  (to provide a clear grasp of Post-EDSA foreign policy prescriptions and trends and a good understanding of the processes by which foreign policy is currently decided in order to identify key spaces for advocating alternative foreign policy ) Part 1 – Edited for possible publicationPart 2 – Outline only and unfinished write-up
Alternative Foreign Policy Call for Organizational/ Network-wide Position Papers on Foreign Policy Issues.*Themes taken up:  Alliance with the US; Relations with Europe, Australia, Japan (JPEPA); Relations with rising powers (Brazil, Russia, India, China); ASEAN, Regional Democracy, HR, Regional Integration, Regional Peace and Security; Relations with Global South; Relations with Multi-lateral institutions; Migration and overseas work; Mindanao; Terrorism Focus Group Discussions conducted by the KPD networks/sectoral organizations nationwide; FGDs with Partido Manggagawa teams
Current State of the U.S. Military Presence in the Philippines Herbert Docena introduced Focus on the Global South’s Special Report “’At the Door of All the East’: The Philippines in United States Military Strategy” that documents how and why the US has been re-establishing its presence in the PhilippinesDec. 18, 2007 *Provided the empetus to form the Citizen’s Peace Watch (to monitor and document the presence and activities of US troops in Mindanao and in other places in the country.*Fact-Finding Missions to Zamboanga-Sulu; Central Mindanao; Follow Up Zambo-Sulu*Monitors’ Trainings (in CL; NCR/ST, Zambo/Sulu; Cotabato)*FFM Report have been a useful document at Senate Hearings and Investigations on presence of US troops in Mindanao in proving that US has established military basing in the Phils; that US is involved in actual combat operations in the country; that Us military has complicity with the Phil. Military in “actual combat”; that US is conducting operations outside the control of the Phil. Govt. and military; that US military’s so-called humanitarian projects are mere cover for military operations that do not benefit the local population on a long term; that US basing and intervention in the Phils is contributing to insecurity and leading to an escalation in conflict
Understanding Mindanao Series (1, 2, 3, 4)
  1. History of Minoritization of Indigenous People of Mindanao
  2. Historical context and Mindanao situationer
  3. RIDO and other means of Settling conflict
  4. Peace Process, MOA- AD and alternatives
Materials on MindanaoProvided in-depth research findings and information on Mindanao and served as venue for democratic, participatory dialogue and exchange towards mutual understanding and coherent, collective and concerted Action
Implications of Post-Bush US Foreign Policy in the Philippines (on East Asia and South East Asia on implications of Post-Bush US Foreign Policy in the Philippines and in the Region) “Change You Can Believe In?Implications of Post-Bush US Foreign Policy in the Philippines”Forum with Prof. Robinson  
China “Dragon on the Rise: The Implication of China’s Assent to Power”Forum with Prof. Peter Kwong CSO Forum under the DDARP
Good Bye Bush, Hello Obama Critique on Bush and projections on possibilities under Obama  

 

Acronyms

 

ASEAN Association of Southeast Asian Nations

DDARP Deconstructing Discourse and Activist Retooling Program

FFM Fact finding mission

JPEPA Japan-Philippine Economic Partnership Agreement

MOA-AD Memorandum of Understanding on Ancestral Domain

RTD Roundtable

SEB Securities Exchange Board

TWG Thematic Working Group

US United States

VFA Visiting Forces Agreement

 

EPIRA at Ten: Failed Assumptions and Unfulfilled Promises

E-mail Print PDF

Rep. Lorenzo “Erin” R. Tañada III
Atty. Nepomuceno Malaluan

On 8 June 2011, the Electric Power Industry Reform Act or EPIRA marked the 10th year since it was approved into law. EPIRA was a landmark measure, mandating the radical restructuring of the electricity industry from one dominated by the government sector (in generation and transmission) to a fully privatized industry.

In brief, EPIRA required the government-owned National Power Corporation to privatize its generation and transmission assets, IPP contracts, and all other disposable assets, excepting only those associated with missionary electrification in off-grid areas (called Small Power Utilities Group or SPUG). The privatization was to be done through a liquidating corporation, the Power Sector Assets and Liabilities Management Corporation. Outside of a transition role in the privatization process, EPIRA left government with only the planning and regulatory functions through the Department of Energy and the Energy Regulatory Commission.

Page 3 of 23