About time BSP charter is amended

August 1, 2014

Last July 3, the Bangko Sentral ng Pilipinas observed its 21st anniversary.  When  the architects of our legislature enacted R.A. 7653, which was signed into law by then President Fidel V. Ramos, they envisioned   “an independent central monetary authority”  that would “discharge its  mandated responsibilities concerning money, banking and credit”. R.A. 7653, defined  the primary objective of the Bangko Sentral as follows: “to maintain price stability conducive to a balanced and sustainable growth of the economy.” BSP was also tasked to“promote and maintain monetary stability and the convertibility of the peso. ” Over the years, BSP has performed its legal responsibilities well above  expectations. The awards conferred on Governor Amando M. Tetangco, Jr. (and even his predecessors Gabriel Singson and Rafael Buenaventura) and the BSP as an institution are a testament to how well the BSP has discharged its mandate. But 21 years later, the financial landscape has significantly changed. Even our legislative leaders acknowledge that “…the economic milieu in the Philippines has changed, globalization has increased the integration of financial markets and the scope of operations of financial institution has evolved.” With these in mind, both Speaker Feliciano Belmonte Jr. and Senate President Franklin Drilon have introduced proposed separate amendments to the BSP charter. It is additionally re-assuring that President Aquino has included the amendment of the BSP charter as one of the priority bills during the second regular session of the 16th Congress. In a nutshell, the proposed amendments seek to: 1.     Strengthen BSPs monetary stability function 2.     Strengthen BSPs financial stability function, and 3.     Strengthen BSPs corporate and financial viability. Space limitations do not allow me to tackle all of these proposed amendments in this article. So let me just focus on what I think should be the top priority. Foremost would be the proposed additional capitalization of the BSP of P150 billion, payable in three years. Under the 1993 charter, the BSP capitalization was supposed to be P50 billion. Unfortunately, the BSP had to subsist for a very long time  on the initial tranche of P10 billion released in 1993. It is to the credit of  President Aquino  that the short-fall of P40 billion was finally  fully paid. (I guess with a little prodding from Finance Secretary Cesar Purisima who sits in the Monetary Board as national government representative. ) The balance was paid up in four tranches as follows: P10 billion in 2011, P20 billion in 2012 and P10 billion in 2014. Hopefully, under the proposed amendment, the additional capitalization would be automatically appropriated yearly. Just last Thursday, the Monetary Board announced a 25 basis points increase in its policy interest rate. One need not be a financial wizard to estimate how much that would translate into in terms of interest expense of the BSP. And yet, the BSP, unlike a commercial bank, has to absorb huge interest expenses while it performs its mandate of stabilizing prices. Another important amendment is one that gives flexibility to the BSP to establish adequate loss allowances and create reserve buffers against future risks and contingencies. Also, it is important to put the BSP on equal footing with most international central banks by restoring  tax exemptions which the old Central Bank previously enjoyed. While they are at it, perhaps our legislators should also  consider a provision that will enable the BSP to develop regulations for the extension of financial facilities to Islamic banks. While there is a law which created the Amanah bank, the said law (and even subsequent laws such as the General Banking Law)  did not provide the legal framework for the existence of other Islamic banks. According to Atty. Arifa Ala of  the BSP, Islamic banking in the Philippines has a large market to serve. The Philippine has a sizeable Muslim population, most of whom live in unbanked areas. With peace in the horizon after the signing of the ground-breaking agreement between the national government and the Bangsamoro, Islamic banking could have renewed bright prospects.

Nurturing the reading habit

July 25, 2014

President Manuel L. Quezon once proclaimed that “the reading of good books or the printed page is one of the most effective methods of bringing enlightenment within the reach of the largest possible number of people, and of promoting the cause of popular culture with its tremendous social benefits”.   He further added that “it is desirable that the task of arousing a widespread interest in the reading of good books be recognized as a highly patriotic duty as well as a privilege”.   With these words, Quezon designated in 1936 the last week of November of every year as National Book Week.   Also cognizant of the need to inculcate the reading habit,  especially among the young, the Philippine Board of Books for Young People (PBBY) organized, starting in 1984,  The National Children’s Book Day.   PBBY chose the third Tuesday of July  and every year thereafter to celebrate the event. The period holds special significance because it was in   July 1889  that  Dr. Jose Rizal’s children’s story  “The Monkey and The Turtle” saw print in Trubner’s Oriental Record in London.   Meaningful commemorative events and programs have been held in the past during both National Book Week and National Children’s Book Day.  Schools, especially private institutions, normally hold any or a combination of the following activities: mini-book fair, story telling, book hunting, book design contests, poster making contests, trivia games.   The most recent celebration of National Children’s Book Day featured, among others,  school group visits to Museo Pambata, a book fair, workshop for librarians,  and recognition of award-winning writers as well as illustrators of children’s books.   Supermart chain SM hosted story-reading events both in MOA and in its provincial outlets.   All these are well and good. Considering, however, the tremendous importance of reading as a key to individual and national development, the holding of such events should really be a year-round undertaking.   Incidentally, Muntinlupa City, headed by Mayor Jaime R. Fresnedi, launched during Muntinlupa Cityhood Day last March 1, a mass reading event participated in by more than 19,000 students, parents and teachers. The participants read books while forming a huge human flag at Filinvest Corporate City.  In the process, Muntinlupa City reportedly broke the world record for adults reading to children in a single location.   The need to inculcate the habit of reading becomes especially imperative with the advent and tremendous developments in broadcast and in the film industry which tend to convert many, especially the young, into passive learners.   The National Statistics Office (NS0) declared in 2010 an increase of  “the number of people who can read and write in any  language or dialect in the Philippines compared to 10 years ago.”   The Census of Population and Housing (CPH) showed that of 71.5 million individuals who are 10 years old and above, 97.5 per cent or 69.8 million were literate or could read and write.   NSO also ranked the different regions, with NCR enjoying the highest literacy rate.   I suspect, however, that the figures do not reflect the actual reading capabilities of those surveyed.   The Organization of Economic Cooperation and Development (OECD) has categorized reading abilities into 5 levels, as follows:   “Level 1 – Very poor literacy skills “Level 2 – Has capacity to deal only with simple, clear material involving uncomplicated task. “Level 3 – Adequate to cope with the demands of everyday life and working in an advanced society. “Levels 4 and 5 – Strong skills. Individuals at these levels can process information of a complex and demanding nature.”   Despite the advance status of its member countries, however,  OECD predicts that by 2031, “47 per cent of adults (aged 16 and over) will continue to have low literacy skills below Level 3.”   Clearly, more needs to be done in order to raise our reading skills on a national scale. The battle has to be waged both in the homes and in the classrooms. In both arenas, the young must be given the proper learning environment  and the proper facilities to give them a good start.   That will be quite a challenge for parents, teachers and the community.  

Diabetics of the world, unite!

July 18, 2014

As a certified member of media (“me diabetes”) and as a “dual citizen” (Filipino citizen and  senior citizen), I  have always followed with interest any news which pertains to  my medical inheritance. ( My diabetic condition was  “inherited” from both parents.)   It goes without saying that I have also religiously followed the advice of my physician, Dra. Thelma D. Crisostomo of Makati Med.   For these reasons, at 69, I would describe myself as fairly healthy despite  my type 2 diabetes which, unless Dra. Crisostomo says otherwise,  has been under control for the last few years.   Diabetes is a condition that is not to be taken lightly. Both my parents succumbed to diabetes complications.  Some friends much younger than myself have already  expired but not after suffering debilitating amputations and blindness.   Both the World Health Organization and the International Diabetic Federation more or less agree on the following statistics:   -Globally, as of 2013, an estimated 382 million people have diabetes, with type 2 diabetes making up about 90% of the cases. -This is equal to 8.3% of the adults population, with equal rates in both women and men. -Worldwide in 2012 and 2013 diabetes resulted in 1.5 to 5.1 million deaths per year, making it the 8th leading cause of death. -Diabetes overall at least doubles the risk of death. -The number of people with diabetes is expected to rise to 592 million by 2035. -The economic costs of diabetes globally was estimated in 2013 at $548 billion and in the United States in 2012 at $245 billion. Dr. Susan Yu-Gan, a diabetes specialist and a  past president of Diabetes Philippines, had the following findings: -Every 10 seconds, one person dies due to diabetes-related complications.   -Diabetes is now the biggest single cause of amputation, stroke, blindness and end-stage kidney failure.   -More than half of all deaths from diabetes result from cardiovascular disease, including heart attack and stroke.             -One out of every five Filipinos could potentially have diabetes mellitus or           pre-diabetes.   Countries have begun to take concerted action against diabetes. Cognizant that diabetes has become pandemic, the United Nations passed a resolution  in 2006 designating November 14 of every year as World Diabetes Day.   It would be of interest to note, that Mexico,  which has the highest incidence of diabetes among 34 OECD member countries, will soon implement a restriction on the advertisement of  sugared beverages and sweets.  A recent BBC report quoted the Mexican Health Ministry as saying that 40 per cent of commercials for soft drinks, confectionary and chocolates will soon disappear from TV. With the above in mind, I needed little persuasion to follow a regimen prescribed by  Dra. Crisostomo: proper medication, healthy diet, plenty of exercise and keeping the weight down. To these, I would add sufficient sleep. With my recent retirement from the Monetary Board, I now have the chance to follow the regimen more strictly especially the exercise part. Freed from regular time schedules, I can now spend a little more time walking/jogging or swimming on alternate days.   As for diet, I follow the rule: Everything in moderation. But no cigarettes and  no sugared drinks.   Lately, I have also been more inclined to a diet of  fish, fresh fruits and vegetables. I “tweak” my carb intake depending on whether I am above or below my desired weight.   As for sleep, I try to sleep a minimum of 7 hours. Lights out by 10 p.m. so I can walk/jog by 5 a.m.   To all my media friends, we can DOH it (as Secretary Juan Flavier once proclaimed). But we have to start now.   Diabetics of the world, unite!

Should priests be allowed to marry? Part 4

July 4, 2014

In three previous articles, we asked the question whether priests should be allowed to marry or not?  We said that for most  of early Church history, celibacy was optional. We also quoted Pope Francis who  recently said that celibacy is not  dogma and that Church policy on the matter could change.   Readers continued to ask why celibacy has become the accepted practice in the Catholic Church  despite the absence of a clear and unequivocal biblical mandate.   I promised the readers (including former Foreign Affairs Secretary Bert Romulo) that I will try to get back to them.  After reading through Church historical materials (principally online), I  was able to piece together the following chronological explanation.     The idea of  celibacy may have been inspired by St. Paul who wrote of the advantages which celibacy allowed a man in serving the Lord.  Early Church theologians like Saint Augustine of Hippo and Origen likewise advocated celibacy for practical reasons.   In 306 , the earliest statute on celibacy was promulgated in the Council of Elvira in Spain. Canon 43 mandated that “a priest who sleeps with his wife the night before Mass will lose his job.”   In 385, Siricius left his wife in order to become pope. Thereafter, Pope Siricius decreed that priests may no longer sleep with their wives.   In 401, St. Augustine wrote: “Nothing is so powerful in drawing the spirit of a man downwards as the caresses of a woman.”     In 567,  the Council of Tours decreed that “any cleric found in bed with his wife would be excommunicated for a year and reduced to a lay state.”   Just a few years later, however, Pope Pelagius II  decreed leniency. His policy was not to bother married priests “as long as they did not hand over church property to wives or children.”   Two centuries later, St. Boniface reported that in Germany almost no bishop or priest was celibate.   But then came the reformer Pope Gregory VII,  known as Hildebrand before becoming Pope.  He was pontiff from 1073 to 1085.  He distinguished himself for his strong stands on the following:  1.  Investiture Controversy ( where Gregory VII successfully asserted  the authority of the Pope, over that of the Holy Roman Empire monarch,  to install powerful local church officials)  2. simony (sale of Church offices)  and  3. clerical celibacy.   Gregory VII strongly supported clerical celibacy on the following grounds: 1. as an ascetic ideal  2. on hierarchical grounds  3. other grounds.   Gregory VII asserted that “ Celibacy was an essential part of his ascetic ideal as a priest of God, who must be superior to carnal passions and frailties, wholly devoted to the interests of the Church, distracted by no earthly cares, separated from his fellow-men, and commanding their reverence by angelic purity.”   He further declared that he “could not free the Church from the rule of the laity unless the priests were freed from their wives.”   “A married clergy is connected with the world by social ties, and concerned for the support of the family; an unmarried clergy is independent, has no home and aim but the Church, and protects the pope like a standing army.”   Another motive for opposing clerical marriage “was to prevent the danger of a hereditary caste which might appropriate ecclesiastical property to private uses and impoverish the Church.”   Observers during that period noted that:  “The power of the confessional, which is one of the pillars of the priesthood, came to the aid of celibacy. Women are reluctant to entrust their secrets to a priest who is a husband and father of a family.”   Gregory VII had just humbled the Holy Roman Emperor   during the Investiture Controversy. In its aftermath, one can therefore imagine the power and influence of Gregory VII over the rest of the clergy.   Gregory VII’s  pronouncements became the basis of the First Lateran Council which was convened by Pope Calixtus in 1123 as well as the Second Lateran Council which confirmed the former’s decrees.   Canon 21 of the First Lateran Council decreed: “We absolutely forbid priests, deacons, sub-deacons and monks to have concubines or to contract marriage. We decree…that marriages already contracted by such persons must be dissolved and that the persons be condemned to do penance.”   Canon 3 also decreed: “We absolutely forbid priests, deacons, and sub-deacons to associate with concubines and women, or to live with women other than such as the Nicene Council…. for reasons of necessity permitted, namely, the mother, sister, or aunt, or any such person concerning whom no suspicion could arise.”   The rest, as they say, is history.  

Human trafficking in the Philippines

June 27, 2014

Almost buried in the avalanche of media reports about the pork barrel investigations was the recent release of a US State Department report on human trafficking worldwide.   While in its most common form, human trafficking involves sexual slavery, the term encompasses a wider range of exploitation such as for purposes of forced labor (eg., employment in sweat shop factories or syndicated begging) extraction of organs and tissues, providing spouses in the context of forced marriages, and enlistment of children soldiers.   According to the State Department,  more than twenty million worldwide have been victims of human trafficking.  Meanwhile,  the  International Labor Organization (ILO) estimates that the human trafficking industry generates 32 billion dollars yearly,  roughly half of which is generated  in industrialized countries  while approximately a third is generated in  Asia.   On the Philippines, the State Department Report made the following observations:   -Forced labor and sex trafficking of men, women and children in the Philippines remain a significant problem.   -Incidence of trafficking of men and boys is increasing.   -Women and children from rural communities, areas affected by disaster or conflict, and impoverished urban centers are subjected to domestic servitude, forced begging, forced labor in small factories and sex trafficking.   -Men are subjected to forced labor and debt bondage in agriculture, including on sugar cane plantations, and in fishing and other maritime industries.   On a brighter note, the report mentioned an increase of conviction of trafficking offenders from 25 in 2012 to 31 in 2013.   As a result, the Philippines  retained its Tier Two classification in terms of compliance with anti-human trafficking standards.   Tier Two includes countries which do not comply with minimum standards but are making significant efforts to do so. The Philippines is grouped with Brunei, Indonesia, Singapore and Vietnam.   In lower categories are Cambodia, Laos, and Myanmar (Tier Two Watch List) and Malaysia and Thailand (Tier Three).   The classification prompted Justice Secretary Leila de Lima to proclaim that the “country remains a leader in Southeast Asian Region in fighting human trafficking.”   But Columban Father Shay Cullen, who has made it his life’s work preventing the abuse of women and children at the hands of human traffickers, is not impressed.   Fr. Cullen co-founded PREDA which provides preventative education, community development, livelihood development for many uneducated and poor in the Philippines.   In a recent newspaper column, Fr. Cullen took a dig at the lackluster performance of law enforcers and the judiciary in going after human traffickers.   “Trafficking in persons is so rampant; corruption is widespread so the suspects seldom get arrested or convicted due to incompetent or corrupt prosecutors and judges and police.   “While most of the judiciary can be said to be fairly just and honest, not all prosecute or convict because of bribery.   “Despite the brave face of government claiming to  have an increase in conviction, it is dismal.   “That is why the Philippines is still on the 2nd level of notoriety of the US Trafficking in Persons report.”   In 2007, government  and NGO estimates placed the number of women trafficked at between 300,000 to 400,000.  The number of children trafficked ranged from 60,000 to 100,000.   Given such shocking numbers, which cover only sex-related trafficking, I am inclined to agree with Fr. Cullen’s observation.

Solar power at last

June 26, 2014

Solar power is practically unlimited (except of course when the sun goes down) but solar energy can be stored. With proper energy storage, nighttime power requirements (which are usually less than daytime requirements) can reasonably be met.     And unlike power from fossil sources, solar power does not contribute to the degradation of the environment.   A friend of mine  who has had a hand in packaging some of the existing power plants in the country, gave the following explanation.  On the part of the power producers, there is not much incentive to switch to solar at this time because they are still amortizing their investments in existing plants.   On the part of the consumer,  over-all cost of solar power  is still  higher compared to traditional sources.   It is true, my low-profile friend said, that the cost of photovoltaic cells, the main component in solar power generation, has gone down by 40 per cent compared to 5 years ago.  But it is the cost  of transmission and distribution that brings the total cost up.   But what if the transmission and distribution charges are eliminated?   Then the equation turns in favor of solar power, he said. When that happens, solar power will really be much much cheaper.   With this in mind, it was with much pleasure that I read a recent article: “A power plant on every roof”  by my friend, Doris Dumlao, who writes for the other No. 1 newspaper. In Facebook terms, I found the article too good not to Like, Comment, Share.   Doris reported on a new power project, modest but which could  be a possible game changer. Doris was referring to the 700-kilowatt  rooftop solar system installed atop Central Mall Binan by Solar Philippines.   Solar Philippines is headed by  21-year old Leandro Leviste, son of Senator Loren Legarda.   Doris reported that no less than Energy Secretary was very impressed with the project. “Solar technology is already tried and tested. The problem has been the business model and this is the first company to get it right,” Doris quotes Petilla as saying.   What makes it the right business model?   From day one, the mall owner is guaranteed savings. Cost is lower than Meralco rates because the cost of transmission and distribution has been eliminated.   In an interview with GMA News, Petilla explained:   “As an simple example, the cost of electricity from a coal plant can run up to P5.50 per kilowatt hour, plus P6.50 for distribution and transmission, which amounts to P12.00. If you install solar panels on your rooftop, you will only spend P9.00 per kilowatt hour for generation and no cost for distribution or transmission. This already saves you up to P3 per kilowatt hour.”   Front end expenses on the part of the project owner have been likewise eliminated, thanks to an innovative financing scheme arranged by Leviste with Bank of PI.   The project fully maximizes the use of the mall rooftop which otherwise would not have been put to productive use.   The same business model offers a lot of promise to other mall developers. In fact, SM already has similar and bigger projects in the pipeline, also with Solar Philippines.  Let us hope that eventually the same advantages can be offered to interested residential owners.   In the meantime, may I say to Mr. Leandro Leviste and others engaged in similar solarification endeavors: More Power!


Subscribe Now!

Receive email updates from Business Week.