Monday, July 30, 2007

Education and economics

This is my column today. One sentence, the last one, got lost in transmission. I must have sent the wrong file. Anyway, I inserted back the missing (last) sentence in this post.


The buzz during the weekend was that National Economic Development Authority Chairman Romulo Neri is being moved from being the government’s chief economist to being the country’s education czar.

Exactly what government position Neri is assuming remains unclear as of this writing. If we are to believe the scuttlebutt, Neri is going to be named chairman of the Commission on Higher Education.

Neri’s transfer is an interesting development, particularly for those who are concerned with the general decline in the overall competitiveness of our human capital in general, and the gaping mismatch between the output of academic and the needs of industry, in particular. In fact, the mismatch has been cited as a major impetus in Neri’s transfer. At least two papers reported that Neri’s transfer is a tacit admission by government that we now have a major crisis in education; one that requires quick and sweeping reforms. Interesting, indeed.

Unfortunately, there is an incumbent chairman of the commission in the person of Carlito Puno, whose political fortunes have now become uncertain. Puno has come out saying that while he knows that he serves at the pleasure of the President, he is not open to accepting any government position other than being chairman of the commission. As expected, the potential controversy in this emerging human-interest drama threatens to upstage the more serious implications of the transfer. Sigh. But let’s ignore that drama and focus on the substantive issues engendered by Neri’s transfer.

For quite sometime now, I have been writing in this column about the problems of the country’s educational system. We at the People Management Association of the Philippines (formerly called the Personnel Management Association of the Philippines), the country’s premiere professional organization of human resource management practitioners (where I sit as director in charge for research this year), have been advocating a more integrated and proactive response to the problems.

The association has even called a tripartite summit involving academe, government, and industry last year. Addressing the problems of the educational system—and the mismatch—is of grave importance to us, as it should be in a country where human capital is the only sustainable resource left. But lest we be misunderstood again, it must be stressed that while the mismatch is a burning issue for us in the industry, who have even resorted to putting up our own corporate training programs to make graduates responsive to our needs, the overall long-term competitiveness of our human capital is a far more critical concern.

This is crucial because we’ve been seeing a lot of knee-jerk and rather badly thought-out responses supposedly crafted to appease industry and solve the mismatch such as imposing English as medium of instruction, focusing on vocational and technical courses, and in general, reducing the focus on liberal arts. These give industry a bad rap as people who are only concerned with short-term needs.

Once again: While we acknowledge that there are gaps in technical proficiency and in English proficiency, we are more concerned with the decline in general critical thinking skills which, if we really come to think about it, is also the domain of liberal arts training. (There are even studies that debunk the general belief that science, math, and technical skills are the keys to increasing the competitiveness of our human capital, but that is another column altogether). We are worried about the decline in initiative, creativity, entrepreneurship, decision-making, analytical thinking and other foundation skills.

This much is clear: We need to focus on developing our human capital in ways that enable them to use knowledge and skills across a wide spectrum of disciplines and requirements—not just technical and language proficiency—and in ways that enable them to contribute the best value to industry and the economy.

So assigning the country’s chief economist to solve the problems of the educational sector is a bold move. It must be noted that historically, political, cultural, and even religious considerations have always driven educational policies and reforms in our country rather than economic agenda, so Neri’s transfer seems a step in the right direction.

At the very least, it strengthens the link between education and economics; to be more specific, the causal relationship between human capital development and economic growth. It really is about time that we note the important role that human capital development plays in the national development agenda.

It is time that we acknowledge the reciprocal linkage between human capital development and economic growth. Economic growth provides the resources needed to sustain human capital development. (Of course, the matter of equal distribution of economic growth is integral to the premise, but that is again, another column—I told you the problems are complicated!).

On the other hand, human capital development provides the necessary competencies to sustain economic growth. However, human capital development is clearly insufficient without a sound economic framework. The way in which education contributes to economic growth is first of all a function of the economic policy environment. It is economic policies that determine how people can translate education into value. Otherwise, human capital development will simply increase the number of educated people who are unemployed.

All these make for a complicated chicken and egg situation when the matter of setting priorities comes into the picture, particularly for a country that suffers from both low human capital development and slow economic progress compared to our neighboring countries.

One way to get out of the mess is the development of a more integrated, proactive, and purposeful policy framework that takes into account the needs as well as the roles of industry, academe and government. In this light, Neri’s background as an economist and educator (he was professor at the Asian Institute of Management for a long time) should come in handy. But more critical is Neri’s experience in the workings of government bureaucracy.

Neri has already said that he would be coordinating with industry in resolving the problems of the educational system. Great. That’s a welcome development. However, if we are to be honest about it, the needs of industry have already been clearly articulated and academe is aware of them.

One problem is that academe is unable to respond to the problems because of rather tight controls imposed by the government bureaucratic setup which does not allow for flexibility. For example, many academic leaders have been very vocal about questioning the continuing relevance of the CHED, the very government institution that Neri is reportedly going to head.

So we come full circle: Can Neri do the job if he is heading the very institution that both industry and academe think is irrelevant?

Sunday, July 29, 2007

Senate investigation... again?

The senators still have to get started on doing what they are supposed to be doing - which, just in case many among us have forgotten, involve having to legislate laws - and newbie-senator Chiz Escudero has already called for a senate investigation on the government's move to address the impending power crisis. Yup, the first order of the day is an...investigation! A hearing!

Chiz suspects that some anomaly is afoot in the government's emergency purchase of coal to be used by the power plants that generate electricity for Luzon. His vigilance is admirable. But it might be better if he actually checks his sources and validates his suspicions first before opening his mouth on public television. My friends at Mirant Power Corporation in Sual (the plant that has been experiencing shortages in coal supply - since last year actually) told me that the situation is so bad frequent brownouts is not just a possibility but a certainty if the situation continues.

If the whole of Luzon suffers from recurring brown outs, will Chiz take personal responsibility? I doubt it.

If he knows for a fact that some anomaly is happening, he does not need to conduct an investigation. All he needs to do is expose it and lambast it on public television. Unless of course he is not sure and wants to use the resources of the whole senate to conduct his witchhunt.

Again, I am not against anyone out to expose anomalies and graft and corruption. But we know that nothing has come out of any of the investigations conducted by the senate in the past . It was all for show.

I voted for Chiz against the advice of my friends. I hope I don't ever regret doing so.

Back from blog break

I apologize for taking a break from blogging without leaving an announcement.

Thank you to all those who emailed or texted to express their concern or left comments. I hope to be able to blog more regularly now that a major part of my backlog has been attended to.

Wednesday, July 25, 2007

Time to get to work

(This post is also ante-dated. I was on blog leave for two weeks)

I was at work when President Gloria Macapagal Arroyo delivered her seventh State-of-the-Nation Address before Congress last Monday. I had to content myself with listening to the President’s address on my cellular phone’s built-in radio while going about work.
Apparently, not many people bothered with what the President had to say in her annual address to the nation as well. Based on what I saw on the late night newscast, the number of protesters at Commonwealth Avenue was significantly less this year. Even the media coverage was significantly low key. (Incidentally, I noted a very welcome development this year. For a change, there was hardly any feature on the President’s attire. Not that I find it frivolous; just that an inordinate media attention was focused on this in the past as if the State-of-the-Nation Address was a fashion event.)
Aside from the usual nitpicking and sourgraping from the usual suspects, even the post-Sona comments were subdued. Most of the comments had to do with what the President did not mention in her Sona. I found this line of critique very amusing. The President’s address cannot possibly cover everything. She cannot possibly accommodate every person’s pet advocacy. The level of importance we attach to certain issues is dictated by our own subjective preferences.
So if we were to sit down to make a list of things the President did not mention in her Sona, I am afraid one week’s worth of listing will not be enough.
Which is why I will acknowledge my bias: I am a human resource management practitioner and for the longest time, I have been advocating that this government should acknowledge that our only source of lasting competitiveness is our people.
Most of our natural resources are going or are already gone. Technology and financial capital can be easily sourced today. What we have in vast quantities is knowledge. We should be focusing on developing our human capital because that’s the one major resource that we can leverage on.
Thus, I am elated though that for the first time in a State-of-the-Nation Address, human capital and knowledge were finally mentioned.
“In today’s global economy, knowledge is the greatest creator of wealth,” the President said. “We have spent more on human capital formation than at any time in past. Why? If the government of the people is not for the people, it is a mockery of democracy.”
While the President was delivering her address, I did a quick survey among people I know if anyone else was listening. It seemed no one else was. I called some friends in other offices to check if a radio or television was on and if there were people who were monitoring the events at the opening of Congress. The results were the same; some didn’t even know that it was that time of the year again.
I posted a query in one e-mail group, basically asking people to comment on the seeming general indifference to political events, in particular, to the State-of-the-Nation Address. I got some interesting reactions.
While there were some caustic comments about the irrelevance (“nothing new will be said”) or the hypocrisy (“it will just be a parade of peacocks strutting the latest fashion statements”) of the event, most of the comments were quite insightful.
The comments can be summed up in this reaction from a manager at a manufacturing plant in Laguna: “It’s not that we don’t care because we do. But we each have our jobs to do just as Congress and government have theirs. It is time to leave them alone and trust that they will do their jobs properly just as we expect them to leave us alone to do ours as well.”
And that, I think, is a valid reflection on the real state of the nation; in particular, the state of mind of a significant percentage of the Filipino people today.
I think it is safe to say that many among us are bone weary of the heated confrontations, the backbiting and squabbling, and the power struggle that’s been a constant fixture in our lives in the last few years.
After sending a very strong message with the results of the senatorial elections, I think that many among us do want to take a break from politics at this time to see what the government and our politicians will do in response to the message. I know I do. I haven’t been writing about politics lately because quite frankly, I think that at some point, our leaders must be allowed to do their jobs without columnists and critics looking over their shoulders all the time.
Call me naïve and gullible, but this administration has barely three years left. I think the President and her people are determined to make sure that she and her administration are remembered for some major achievements that counterbalances the negative impact of Hello Garci and other embarrassing controversies. It has helped, of course, that there has not been a major scandal directly involving the President or members of the First Family since the impeachment threat last year.
Thus, I agree that many people now want to leave government officials to focus on more constructive efforts toward fixing the problems of the country.
Thus, I do not share the disappointment that others feel toward the opposition senators who coalesced with administration senators to elect Senator Manny Villar as Senate president. I do not necessarily think that a senator’s independence is automatically compromised just because he or she has voted with a senator from the administration party. As our Supreme Court justices have proven, one can still be independent-minded even if one has been appointed to the post by the current President.
I think that this country has more serious problems than the political divisions in the Senate. It is about time that our senators stand for something bigger and loftier than their political squabbles.
So yes, to a certain extent, I agree with the President: It is time to get out of the way of each other’s work. Put another way, it is time to get some work done.

Monday, July 23, 2007

Breaking the silence

(Again, this post is ante-dated).

Where were you in 1981? That was the first time the symptoms of what would later be considered diagnostic of AIDS were discovered in the cities of New York and Los Angeles in the United States. I had just entered college then but I still vividly remember how the world reacted with revulsion and panic as the first pictures of people with a rare type of pneumonia (pneumocystis carinii pneumonia) and skin tumors called Kaposis’ sarcoma were shown on media.
The first media projection of HIV/AIDS was so gruesome it struck terror in the hearts of people. It led to stigmatization, particularly of those living with HIV/AIDS and the people who were vulnerable to it. HIV/AIDS became a dreaded disease. It still is.
It took three more years to isolate the virus that eventually got labeled as human immunodeficiency virus or HIV, and then another two more years before an antibody test was developed to detect it.
All throughout the last 35 years, a number of breakthroughs have been achieved insofar as developing drugs that would help keep the virus in check among people living with HIV/AIDS.
This included a treatment that packed three cocktail drugs in one pill (a major improvement from the time a person living with HIV/AIDS had to take 30-35 pills a day, quite a major struggle for anyone). Today, treatment that prolongs the onset of AIDS is readily available. People living with HIV/AIDS can live a long time without showing symptoms that they are living with the virus.
However, the long search for a cure or even a vaccine still seems a distant possibility. It may never happen. The best response to HIV/AIDS is still prevention.
Worse, the many social, cultural, even political and economic problems that impede a more effective response toward containing the spread of HIV/AIDS remain.
By any indication, 35 years is a long, long time. Many millions—some say a whole generation of people—have been lost to the global pandemic. The impact of the pandemic has been so widespread. In many parts of the world, including even among our neighboring countries, the current infection rates still number in the millions. Contrary to public perception, the infection rates haven’t showed signs of declining. Experts, in fact, say that the rate of new infections has started to climb again.
What has become more alarming is that the pattern of infection has now become more complicated. In the past, the spread of the virus was believed to be concentrated among what used to be called vulnerable groups—mainly those involved in sex work, injecting drug users, and men who have sex with other men. This is not true anymore. HIV/AIDS now affects everyone. For example, the infection rates among housewives of migrant workers have been noted to be increasing. And in what has become a major cause for alarm, infection rates in the country have been noted in certain occupational groups.
The HIV/AIDS situation in the Philippines has become more alarming today than it was say, 20 years ago when HIV/AIDS was still a topic worthy of screaming newspaper headlines that caused widespread panic. Very few remember Sarah Jane Salazar, Dolzura Cortez, and the other people living with HIV/AIDS who became the subject of so much public attention and even media exploitation. HIV/AIDS is hardly talked about anymore. Consequently, the resources for prevention and education programs have dwindled and many non-government organizations that implement HIV/AIDS prevention and education programs have started to close shop.
Many among us who are involved in HIV/AIDS prevention are undecided whether the prevalent apathy toward the issue is a blessing or a curse. On one hand, the resulting lack of sensationalized media coverage and public attention has somehow lessened the stigma attached to HIV/AIDS. At least we do not have to put up with false and often-irresponsible news reports, irrational calls for mandatory HIV testing, or even witch hunts and demand for isolation of those living with HIV/AIDS.
On the other hand, the almost total silence about HIV/AIDS is just as disturbing because it has created this false sense of security that the worst is over and that we have somehow stemmed the pandemic, which are farthest from the truth.
I hate to be alarmist about it, but the disturbing reality is that the country’s rate of infection has increased three-fold in recent years. The number of new infections in 2006 was the highest ever recorded in the whole history of surveillance efforts in the country.
HIV/AIDS is very much a major cause of concern for us Filipinos, maybe more so today than ever before.
This is why the prevailing culture of silence in the Philippines as far as HIV/AIDS is concerned, or about sexual behavior and injecting drug use for that matter, is very disturbing. By not talking about it, we seemed to have lapsed into this comfort zone that our situation is not as dire as that of other countries.
The vectors for infection in our country have become more pronounced. We continue to have millions of migrant workers who work abroad and are vulnerable to contracting the virus elsewhere. More than 30 percent of new infections involve overseas workers. We are seeing an increase in the number of injecting drug users right here in our country. Condom use and sex education are still unpopular, no thanks to the Church who continues to be vociferously against these. And like I said, there is hardly any money for prevention and education programs.
To illustrate, whenever I talk about my involvement in HIV/AIDS work, the most common reaction is that people ask if we still have people living with HIV/AIDS in our country. Many think that we don’t have cases of HIV infection anymore.
A friend told me that, at least, people are not reacting with horror and repulsion anymore. But then again, if we really come to think about it, apathy and indifference are probably just as insidious, probably more so in this case, as it leads people into thinking that it does not concern them; that HIV/AIDS is something that only happens to or concerns “others,” usually people who are less smarter or worse, in possession of lesser morals. As we all know, smarts and morals have nothing to do with it. It is about behavior. Anyone who practices unsafe sexual or injecting drug use behavior is vulnerable.
When we started the groundwork for “HIV/AIDS: Break the Silence,” a benefit concert for HIV/AIDS which happens tomorrow at 6 p.m. at the Rizal Commercial Banking Corp. Carlos P. Romulo Auditorium, we had high hopes that some support for the event would be forthcoming.
Thinking Cap, the events company that is helping us put up the concert, has told us that this is the very first time it has had major difficulties getting sponsors for an event. They were initially excited and thought that something as serious as HIV/AIDS would easily thaw the hearts of corporate donors or philanthropic individuals. Our worse fears may have just been validated: Very, very few are concerned about the HIV/AIDS situation in the country. Talking about HIV/AIDS today is like talking about life in Pluto.
It’s time to break the silence. Please join us and lend support to the cause of HIV/AIDS prevention in the country.

Wednesday, July 18, 2007

The real issue

(This post is ante-dated simply for the purpose of organizing the contents of this blog. I was on blog leave for two weeks)

There are a couple of questions I want to throw into the current melee regarding Republic Act 9372 also known as the Human Securities Act of 2007, more commonly referred to as the anti-terror law.
Where were all these people now raising a ruckus when the bill was still being deliberated in the House of Representatives and the Senate?
I know that we were all preoccupied with the mid-term elections, but then again, if we come to think about it, that’s hardly an excuse—the election campaign would have been a perfect opportunity to discuss the issue. It would have been opportune to make lawmakers accountable for the passage of the bill.
It is disconcerting to note that what is being passed off as “debate” (I am highlighting the word debate because I will go back to it later in this piece) over the provisions of the anti-terror law is happening only now—months after the bill was passed. The uproar only started a couple of weeks back when the July 15 implementation date loomed in the picture. It came to a boil when the Catholic bishops asked for a deferment in the implementation of the law. As usual, the bishops spoke too late.
The deliberations made during the passage of the bill were quite lengthy and exhaustive. A lot of amendments, insertions, and revisions were made, including changing the title of the bill from anti-terror to Human Securities Act (which, by the way, makes it sound like we are country engaged in trading people as commodities. But then again, we have millions of migrant Filipino workers. Perhaps it is serendipity).
But why didn’t these people speak up during the legislative hearings and there registered their objections and reservations formally?
I am not asking these questions to spite the people who are only raising their objections now. I am merely pointing out that causes can be better served with some strategic thinking and a more proactive attitude. I am only reminding everyone that there are processes, like those for recalling a law, involved in a democracy. Unfortunately, we’ve gotten used to the mob mentality of effecting changes in our country. When we don’t like something, we just demand that it be thrown out without regard for processes and yes, costs.
It would have been great if this whole debate were done when the law was still being deliberated in Congress. More people would have been enlightened and this country would not have spent as much resources on a law that supposedly endangers our civil liberties.
But then again, raising points at legislative hearings does not invite as much media attention compared to shouting in Mendiola or pontificating on television. Could it be that this is what the current melee is really about—inviting media attention and trying to sustain public interest at a time when most people seemed resign to accept the status quo?
And then there’s the scuttlebutt that all these are simply preparatory activities leading toward major political actions.
Where was media the whole time that the bill was still in Congress? It would have been great if media called our attention to the bill then. And while we are at it, how come media projection of the issue is still about personalities (who are opposed) and the infighting (what people are doing or showing to show their opposition to or defense of the law) rather than on the truths and myths about the law?
Which brings me to another question: Where are the legislators who authored, co-authored, voted for or against the law? These are the people who should be answering our questions and enlightening us right now since they were the ones who introduced this law on our lives in the first place. In their stead, we are forced to make do with some incoherent military factotum, hopelessly ill-prepared to argue with more seasoned and better trained (in the art of political discourse) militants.
Incidentally, why can’t our military authorities work on their media skills so that they come across as more persuasive and amiable?
It is also disconcerting to witness legislators doing a Pontius Pilate all over again. They voted to enact the bill into law and yet have the temerity to turn around and ask for its recall because of the anticipated public backlash. Some of our leaders really think nothing of sacrificing principles at the altar of popularity.
I also want to ask: How come the rhetoric being used in something as specific as opposition to the anti-terror law hue very closely to the usual political opposition discourse? I caught some of those opposed to the law on a television show recently and I was floored down with the rather obvious and forced effort to string together all the issues that have bedeviled this administration.
I can understand the anti-imperialist stance of the leftists. I will even make allowances for their anti-United States rhetoric. We know that it is primarily an ideological issue for these people.
But for crying out loud, stringing together the Joseph Estrada case, Hello Garci, the elections in Maguindanao, political dynasties, jueteng, etc. while debating on the anti-terror law is absurd. These are important issues, but they are not directly relevant to the debate. Unless, of course, the main idea is really to indict the administration at all costs and at every opportunity. In which case, let’s cut this pretense of having a debate at all.
Given the tenor of the ongoing discussion on the anti-terror law, one conclusion is inevitable. The issue is not so much about the Human Security Act per se since we know that the law is actually a watered-down version of what other countries have.
The main issue is trust. Many people just do not trust that this administration has full control over the military at this time. Many people simply do not trust this administration, period. Given the abysmal failure of this administration to curb military abuses and to put a halt to extra-judicial killings, the distrust is understandable.

Monday, July 16, 2007

Investigating the investigators

(This post is ante-dated simply for the sake of organizing the contents of this blog. I was on blog leave for sometime)

I knew it was just a matter of time before someone with enough grit and gumption rises to the challenge of taking on certain television shows and their almighty hidden cameras. It took quite sometime, but somebody finally did. And I think it is all for the best.
Last week, the Pasay City regional trial court granted the petition for preliminary injunction filed by Prosecutor John Giselher Imperial against GMA-7’s television show “Imbestigador.” The court stopped the airing of an episode showing the arrest of the prosecutor over an alleged extortion complaint.
According to a news item that was published in this paper last Thursday, the court stopped the airing of the episode in question since “the airing of the video segment that tends to make petitioner liable for the crime with which he is charged, now pending investigation at the Department of Justice, will immediately cause him and his office irreparable damage in the form of public distrust, ridicule and humiliation.”
As many of us know, the television show “Imbestigador” has become quite noted (or notorious, depending on one’s opinion on the matter) for exposing various alleged nefarious activities committed by individuals, mostly government employees. Favorite topics are controversial and lascivious activities. Another show on ABS-CBN, “XXX,” provides stiff competition by doing exactly the same thing on the same time slot on the same day.
These shows essentially follow the same tried and tested format. Acting on alleged complaints, they mount entrapment operations with the help of police authorities, which are then fully documented using hidden cameras. Since television cameras document the whole operation, everyone performs “cinematically.”
A friend who is privy to how these things work admits that they are not beyond “directing” behaviors of all those involved for the sake of better coverage. It’s first and foremost a television show that competes for ratings and it can’t afford to show footages of people with their backs toward the camera or police operatives acting papatay-patay (lethargic). So there is frenetic action, some slapping of faces, and even exchanging of prurient language.
Let me categorically declare that I am not against these television shows per se. I think these shows do serve a purpose. I agree that vigilance is not necessarily a bad thing especially in a social setting where there is just too much abuse of power. These shows provide a very potent alternative to the downtrodden in their struggle for justice, particularly since we all know that the justice system in this country can be very lopsided in favor of those with connections and resources.
However, we must also come to terms with the fact that too much zeal results in excesses. And very often, these excesses have to do with violations of the civil liberties of the accused.
I know. Most of us feel uncomfortable when discussing the rights of alleged criminals. However, we must remember that the whole justice system is based on this most basic assumption: Everyone is presumed innocent until proven guilty and only the courts can declare guilt. Yes, even alleged criminals have rights. And the fact that the crimes that they are accused of are still to be proven in the proper court entitles these suspects to some rights.
Unfortunately, this is glossed over when we watch an hour’s worth of these shows. The editorializing that accompanies these shows leaves no doubt as to the guilt of the accused. In fact, I have watched episodes of these shows where the hosts come out directly declaring the guilt of the accused and condemning them openly as the worst kind of scoundrels on the face of the earth. The accused are called unsavory names and hung on the bar of public opinion. In short, they are not simply exposed. They are judged.
And, lest we forget, television is a cruel medium. Even if one is proven innocent in the end, the damage to one’s reputation cannot be repaired anymore after it has been ripped to shreds on public television.
These shows get away with it because most would rather suffer in silence and hide behind their shame rather than risk being ridiculed all over again. Who in his or her mind would dare come out to invite further scrutiny and have their identities and faces splashed on public television after they have been exposed as rogues and criminals?
I don’t know about you, but I find something wrong in a situation where television shows package themselves as arbiters of fairness and power and yet wantonly violate the same tenets that they are supposed to be upholding. It is so Machiavellian for comfort, this belief that the end justifies the means.
It doesn’t help that most of the people who are headlined on these shows are often powerless and disempowered to begin with. Perhaps because of the salacious nature of the cases involved, these shows have made all forms and variations of sex work their favorite target. These shows have a propensity to expose sex scandals. They make it their mission to initiate raids of sex dens, bars and other places where sex work allegedly happens.
I am not saying that they should not do these. But I find something wrong in the way they tend to focus on the sex workers rather than on the people who run or patronize these places to begin with. More often than not, it is the faces and naked bodies of the sex workers that are paraded on television rather than those of the people who prostitute them in the first place. By doing so, these shows victimize the victims many times over.
These shows justify what they do under the name of public service. Like I said, it is very difficult to find fault with vigilance over complaints and issues such as corruption, crime, and other kinds of wrongdoing.
When someone has met injustice and can’t find redress the normal way because the perpetrator of the dastardly act is in possession of certain powers such as political connection or economic power, it is somehow reassuring that a viable option remains, in this case, going to Mike Enriquez, the Tulfo brothers, or the guys at “XXX.” They are more than happy to accommodate especially if the case has all the accouterments of human drama that makes for an exciting television show episode.
So if not anything else, it is about time that we have a serious discussion on the ethics of the medium. Not because we want to turn the tables around and investigate the investigators. We need to do so because it is about time that we define the limits of the medium. For surely, no one in this country, not even television shows and their hosts, are omnipotent enough to be allowed to act as accuser and judge at the same time. It is incongruous that people who pontificate about the need to protect civil liberties are allowed to trample upon them in the first place.
We rile about violations of political civil liberties but turn a blind eye to other forms of civil liberties.

Wednesday, July 11, 2007

Oversubscription hurts small investors

This is my column today. The update: The Phoenix IPO was listed today at the stock exchange. The offer price was P9.80, and the listing price was P14.50 which automatically gave those who were able to buy shares a yield of P4.70 per share. That's a whopping 52% profit in two weeks' time. I empathize with those whose applications were accepted two weeks ago only to be told last Monday that their applications were rejected. As if it was not enough that the funds were already with Banco de Oro for two weeks, they had the gall to issue crossed checks that they refused to uncross. This means that investors will have to wait another three days before they can get back their money. What a scam!

I was going to write about something else today but something urgent and troubling came up. As of this writing, I have already received six irate calls and eight angry text messages from friends and acquaintances. All of them are in uproar over the unexpected and sudden twist of events related to the initial public offering of Phoenix Petroleum Philippines Inc.

They were shocked when they found out that that their application for shares for the Phoenix IPO was rejected—this, after they had gone through all the trouble applying for the shares and worse, after they had paid for these shares in advance. To be blunt about it, they were royally kicked in the posterior. The issue was oversubscribed four times. In short, Banco de Oro, the underwriter of the Phoenix IPO, accepted a quadruple more applicants than what was required.
A raffle was conducted to choose who among the thousands who applied for, and already paid for the Phoenix IPO shares, would receive their shares. They released the names of the lucky applicants yesterday. The names were not even arranged alphabetically—one had to wade through 40 pages to find out if one were indeed given the shares. Either the people behind the mess were really pressed for time that they felt basic courtesies can be dispensed with, or that’s really how condescending they’ve become to local small investors. There are many things wrong with what happened. But let’s bear with a little backgrounder here.

Last Monday, I wrote in this space about the mad rush to buy IPOs. I particularly singled out three IPOs that are making waves in the local stock market. These are Phoenix Petroleum, Aboitiz Power Corp., and GMA Network Inc.

The whole point of the stock market is to democratize ownership of listed companies; it is supposed to provide opportunities to ordinary citizens to own shares of stocks of certain companies. For this reason, a certain percentage of shares of IPOs, usually 10 percent, is allocated to local small investors.

If one really thinks about it, the 10-percent allocation for retail investors is ludicrous. It is another way of saying that our regulatory bodies and the companies doing IPOs think that local small investors comprise an insignificant market. And now, with what happened to the Phoenix IPO, the whole thing has become insulting as well.

As I said in my last column, many Filipinos have been enticed to invest money on IPOs because of the hype created by the bull run in the local stock market. The overwhelming success of the recent IPOs has also contributed to the mad rush to gobble up available IPOs. People see it as an opportunity to ride the so-called economic turnaround being crowed about by this administration.

Thus, when the Phoenix IPO became available at Banco de Oro branches, there was a scramble among local small investors for the shares.

When my friends and I went to a Banco de Oro branch to buy Phoenix IPO shares, we balked at the very long queue and the rather arduous process involved, including having to present a stock transfer form already signed by one’s appointed broker. This meant that one had to go to a broker first to get a sign-off before going to the bank branch. That meant visiting two offices and waiting in line at both.

We decided the aggravation of having to wait three to four hours to get 2,000 shares, which was the limit for local small investors, was not worth it. We backed out. We hoped we could get some shares through our stockbrokers. Of course, many of us did not get any shares from that source either—the demand was just so high and there were not enough shares to go around.

But many of my friends and students did go through the rigmarole of buying the Phoenix IPO through the local small investor channel. They took a leave from work, opened accounts at an authorized stockbroker house, trudged to a Banco de Oro branch, waited in line for hours, submitted two government-issued identification cards, and paid for the shares with their hard-earned savings.

There were those who found the process annoying and frustrating. Why can’t we make the process simpler and more efficient so that local investors don’t have to suffer unnecessary aggravation? But then again, we are Filipinos; we have a very high threshold for pain and abuse. We willingly submit to the inefficiency of our systems.

Besides, many got their 2,000 shares and that was more than enough consolation for them. Many of my students were overjoyed to have gotten one foot into the stock market. They started counting their profits before the Phoenix IPO could be listed in the market.
The listing of the Phoenix IPO happens today. But those whose applications for the IPO were rejected will not be cheering the event. They are probably still too angry. In fact many among them may have been completely turned off and may have already sworn not to get involved in the stock market anymore. I know some people who have.

Why did it take that long for the people behind the Phoenix IPO to figure out that the issue was already four times oversubscribed? Why did they continue to accept applications to buy shares of the Phoenix IPO—and receive payments for them—when the issue was already oversubscribed? Why did they only make the announcement two days before the listing of the IPO?

These questions are deeply troubling, particularly at a time when information systems are already sophisticated enough to monitor these things. If only 3,625,000 IPO shares were available for local small investors, it doesn’t take a genius to figure out that they could only accommodate 1,812 investors at 2,000 shares each. The most basic spreadsheet software can churn up the database needed to monitor 1,812 investors. Heck, one actually does not need a computer to count 1,812. It can be done manually.

They could have put in place a first-come first-serve policy in buying the IPO. They could have stopped accepting applications and giving false hopes to investors, many of them first-time investors in the market.

More importantly, they could have stopped accepting payments for the shares that were not forthcoming to begin with. The money stayed with them for two weeks. We’re talking hundreds of millions of pesos here that presumably became part of their pool of funds for investment purposes. Let’s cut this crap at being polite and call a spade a dirty shovel—they already made money out of the funds. There is much a financial institution can do in two weeks with hundreds of millions of pesos.

And now, the people behind the Phoenix IPO can’t even deign to have the refund checks delivered to the rejected applicants. They did not even apologize for the debacle. They have simply issued a terse announcement saying that “for the LSI applicants whose names do not appear in the list, the refund checks shall be made available…” as if investors are dumb driven cattle who have nothing better to do with their time than travel all the way to Ortigas to pick up their money after someone has made quick profits out of them.

And there’s more bad news in the offing. The scuttlebutt is that the same thing happened to the Aboitiz Power Corp. IPO. The rumor is that the offer is even more oversubscribed than the Phoenix IPO.

Shouldn’t local regulators look into this scam?

Monday, July 09, 2007

Mad rush to buy IPOs

"I GIVE up!

A friend threw in the towel last Friday out of exasperation and frustration. Like many other people I know, he has been trying to buy some shares of the three current hot tickets in the Philippine stock market: The initial public offerings of Phoenix Petroleum Philippines Inc., Aboitiz Power Corp., and GMA Network Inc. He called everyone he knew has access to these shares, wheedled and practically begged just to be able to get some shares. He didn’t get any.

Trying to buy shares of these IPOs has been like attempting to get through King Arthur’s proverbial gauntlet.

The problem is that many people, particularly first-time investors in the local stock market, just do not understand how investing in the stock market works, particularly concerning IPOs. Most think that it is as easy as opening a time deposit account in a bank—one walks into a bank, fills out some forms, hands in the money—and presto, one begins counting profits. Unfortunately, it’s not really as easy as it sounds. But then again, when has making profits been so easy?

To begin with, the demand for IPOs today is so great. It seems there is just too much liquidity in the system that the demand is clearly exceeding the supply. There are also a number of regulatory requirements that need to be satisfied. For example, one has to prove that one is not laundering dirty money. I know that this whole anti-money laundering thing sound ridiculous to ordinary mortals like us who do not have access to grand corruption schemes. Still, we all have to do our share to make the global financial system clean.

Anyway. The much-celebrated bull run of the local stock market—it is now one of the best-performing stock markets in the world, outperforming even some of the more established bourses in the world—is attracting many first-time investors who are enticed by the promise of quick returns on their investments.

Many people are buoyed by the success story of the Philippine National Reinsurance IPO a couple of weeks back. The offer price for Philnare was P3.80 per share. That price skyrocketed to a high of P5 in a few days’ time. A number of people obviously made some money there and this has created a bandwagon effect.

Assuming one was able to get his hands on the Philnare offer at P3.80 and sold it at the current price of P4.40, this easily translates into a 16-percent yield in a few weeks’ time. This is a big deal when one considers that the interest rate for time deposit is less than 8 percent per annum.

The going rate for savings accounts is even less, hovering at about 2 percent per annum. At the rate interest rates are falling due to a very liquid financial situation, there are people out there who are submitting a doomsday scenario when depositors would even have to pay banks to keep their money in their vaults. A 15-30 percent yield in a few weeks’ time is nothing to sneer at.

It’s definitely a great investment proposition. The problem is that IPOs are difficult to get and like I said, there is a limit to how many shares one can buy. Of course, one can invest anytime in the stock market without having to buy IPOs. But IPOs offer a more direct line to a quick profit so most are hedging their fortunes on them.

It’s too late now to buy shares of the Phoenix and Aboitiz IPOs as these are already scheduled for listing in the stock market soon. Phoenix shares (offer price: P9.80) will be listed in the market on July 11 while Aboitiz (offer price: P5.20) goes up on July 16. The window period for small investors has already expired.

But the listing of the GMA IPO does not happen until the end of July and small investors can still buy shares. The problem is that the GMA offer has put a cap for small investors at a maximum of 1,000 shares per investor. The relatively low ceiling is supposedly designed to spread the ownership of the shares to as many people as possible. Too bad not very many people would be willing to suffer queuing up and submitting to a rather stringent process just to buy 1,000 worth of shares.

On the other hand, 70 percent of the total tranche of the GMA IPO is allocated for foreign investors. Of the 30 percent shares remaining, 20 percent is allocated to trading partners. Only 10 percent is allocated to local small investors. It doesn’t make sense, particularly since GMA claims to be a network for the Filipino people. I am sure that GMA Network can come up with a justification for this gaping imbalance in the allocation of shares, but until then, we just have to seethe at the crumbs Filipinos are being offered.

The offer price for GMA is yet to be decided on July 16, but the announced price range of the offer would be between P7.50 to P8.50 per share. The following projection is purely speculative and please do not take my word for it. I am simply trying to illustrate why there’s a mad rush to buy the initial offer. But assuming that one buys 1,000 shares at P8 pesos and the price of the stock goes up to P12 in a couple of weeks’ time, one expects to get a yield of 50 percent in a few weeks’ time. Again, please remember that this projection is speculative. I am not an investment adviser.

They say the GMA IPO will be the hottest this year. In the words of a friend of mine who is a stockbroker, it’s guaranteed to be patok (sure bet). GMA Network Inc. just happens to be the market leader in the industry and is supposed to be the most profitable among the local media networks.

In case one wants to get into the bandwagon and intends to submit himself or herself to the process, one has to make a personal appearance at any of the authorized underwriters of the GMA IPO. One can log on to www.pse.org.ph to get a list of these underwriters (Banco de Oro branches have always been an underwriter for the recent IPOs so if you are near a Banco de Oro branch you are lucky). Some stockbrokers such as Abacus Securities Corp. are also authorized to issue shares to local small investors.

One has to bring two government identification cards (passport, drivers’ license, GSIS or SSS ID), accomplish an application form, and appoint a broker for the transaction. The price offer will still be decided next week. Please remember that the limit for local small investors is 1,000 shares only. This means that local small investors can invest only up to a maximum of about P8,500.

Saturday, July 07, 2007

And the mudslinging continues

This was my column last Wednesday, July 4. Sorry, late post again. It's a long story. The good news is that am recovering. Thanks to all who expressed concern.

“Cheat.” “Walang delicadeza.” “Loose cannon.” “Immature.”

These are just some of the colorful language disgorged recently by people who are supposed to be exemplars of outstanding citizenship and good manners, people who are supposed to be leaders of national stature.

Senator Antonio Trillanes called Migz Zubiri a “cheat.” Zubiri responded by calling Trillanes a “loose cannon” and “immature.” Senator Aquilino Pimentel called Commission on Elections Chairman Benjamin Abalos “walang delicadeza.” Like I said, these are just a sampling of the more interesting repartee that all of us have been witness to recently.

The exchanges of accusations and denunciations remind one of classic Filipino movies—the ones where the main characters spew dialogs that have been crafted more for cinematic reasons than for anything else. A friend of mine is a little less generous and likened the verbal diarrhea to fishwives engaging in a very public tussle.

Whatever it is, it is very embarrassing because quite frankly, it’s really like the kettle calling the pot black.

Trillanes may think that his 11 million votes already give him license to pontificate and swagger in public, but it doesn’t give him the right to be obnoxious. His 11 million votes do not erase the fact that he staged a failed mutiny, held hostage a number of people, planted bombs at a major shopping complex, and in general derailed the economy. I doubt if everyone agrees that being a cheat is a graver offense than the charges leveled against him.

Trillanes is living up to the palaban image that got him elected in the first place. He even managed to bring into the fray other senators by calling them hypocrites and challenging them to undergo a lie detector test to validate their supposed objectivity on the GMA impeachment issue. Do these statements make him a loose cannon? To be able to render a fair judgment, one has to analyze where the accusation is coming from.

Miguel Zubiri spewed quite a mouthful in reaction to Trillanes’ tirade. Aside from calling Trillanes a “loose cannon,” he also called him “immature.” Among many things, he threatened a rain of lawsuits. Yeah right, as if a few more frivolous lawsuits would make a difference to a man who is already neck deep in rebellion and more serious cases.

Instead of obfuscating and threatening, Zubiri would do better if he answers the accusations directly. I think that he would make a good senator and I happen to think that his record as a congressman is admirable. But it wouldn’t be right for him to assume the 12th slot as senator under very questionable circumstances. This is not to say that Trillanes is right, just that the whole thing is enough to make anyone uncomfortable.

Let’s face it, the result of the elections in Maguindanao (if there really were elections in that province to begin with) is highly suspicious. One has to be really naïve to believe Lintang Bedol’s lame attempts at subterfuge.

The administration already lost the senatorial elections. It would be in its best interest to just concede gracefully. There are more important things to attend to. My best guess is that if this administration is able to sustain the momentum in the economic front, it would be able to win into its side even the most recalcitrant senator. For crying out loud, the Philippine stock market is enjoying a bull run and there is a mad scramble for shares of companies doing their initial public offerings. (Many people I know have been trying to get shares of the Phoenix IPO, but it seems the offer is already way oversubscribed.)

Besides, the administration already controls the House of Representatives. This makes the threat of an impeachment already a foregone conclusion.

Zubiri should just answer accusations directly. He should be reminded of the adage “people who live in glass houses should not throw stones at others.”

Which brings us to the father and son tag team also known as Senator Aquilino Pimentel and his senator-aspirant son Koko Pimentel. I have already said this before but I will say it again: It breaks my heart to see the elder Pimentel ending his political career as a bitter old man and stage father.

I have no love lost for the Abaloses of this world, but this shoot-now-ask-questions-later strategy in exposing alleged irregular conduct of public officials is so very annoying. For a while there, many among us were scandalized that the Comelec chairman would be so indiscreet and foolhardy as to actually have dinner with the Zubiris while the contest for the 12th senatorial slot is up in the air.

But it turns out that no such thing happened after all. And yet, the Pimentels are still at it, vainly trying to put together a story out of nothing. As I said, I have no love lost for the Comelec chief, but this recent political gambit by the Pimentels only fortify the perception that they are traditional politicians who will do anything and everything, even lie brazenly and make false accusations, just to get what they want.

Of course, the sight of a father and son fighting tooth and nail to be able to sit next to each other in the Senate is also very disturbing.

This very public and very bitter fight among people who are supposed to be leaders of national statute underscore the state of politics in our country. It’s ugly. It’s personal.

It’s been 51 days since the mid-term elections and we’re still not done with the counting and the mudslinging. No wonder more and more people are getting sick and tired of it all. I think people were more concerned as to who would emerge as the big winner in “Pinoy Big Brother Season 2” than who gets to sit as the 12th senator.

***

My column last Monday (Defrauding health maintenance organizations) produced quite a number of e-mails and text messages from people who reported that they too have had the same experience. They were all overcharged, or in some cases, charged twice or thrice for the same medication or medical procedure. It would be easy to attribute the whole thing to human error. But there’s just too many cases involved. It seems overcharging patients is the norm among hospitals, especially if one is using an HMO card.

Tuesday, July 03, 2007

Defrauding HMOs

This was my column yesterday, July 2.

Do hospitals deliberately pad the medical bills of patients who avail of hospitalization using their Health Maintenance Organization cards?

I expect a surfeit of righteous indignation and an avalanche of denials from hospitals and medical practitioners. They are welcome to show proof that this is not happening and I would be very happy to be proven wrong. Unfortunately for them, I am speaking from experience. And as we all know, a man with an experience is never ever at the mercy of a man with an argument.

This issue has been whispered about for quite some time now except that as far as we know, no one has come forward to actually make a direct accusation. Most everyone I know who has been hospitalized and who used a health card had a story to tell about how he or she has been charged extra for medicine or medical procedures that were not actually given or performed on him/ her. There’s always an excess vial of drug, an additional bedpan, or whatever else inserted into the bill.

Just this year, a friend who was hospitalized for a serious condition told me that when she checked her bill prior to being discharged, she noted that the drug dosages reflected in her bill were overstated. It was only when she complained that the hospital made the necessary correction. She wondered what would have happened if she did not check her bill. And to think she only bothered because she wanted to ensure that the balance in her HMO limit would be enough to cover the cost of follow-through medication and treatment.

The same situation happened to an officemate who was confined early this year in another hospital. Like I said, this issue of padded bills particularly when one is using HMO cards had been cropping up more regularly lately and had been the topic of hushed discussions in many circles.

Thus, many among us in the human resource management profession have taken to advising employees who avail of medical benefits using their HMO cards to check and recheck their medical bills before being discharged from a hospital. We know that very few actually do.

To begin with, understanding medical bills is almost as arduous as reading a doctor’s prescription. It requires some knowledge about drug dosages, medical procedures, etc.

In addition, unless one underwent a really terrible experience while being treated, it is difficult to turn around and accuse one’s healers of corruption. One does not want to come across as ungrateful to the very people who saved one’s life. Besides, fraud is farthest from one’s mind at a time when one just wants to go home and escape the antiseptic smell and claustrophobic ambience of hospitals. One just simply wants to get out of there.

If one were paying for the bill, going through it with a sieve and a fine-toothed comb would be expected. But HMO cards free cardholders from having to shell out money for their hospitalization needs. And when the medical bill does not make a major dent on the card benefit limits, checking every single item in the bill just seems like a tedious and unnecessary process. Very few do it. The attitude is “I’m not paying for it anyway.” Or worse, “It is about time HMOs pay up since they earn so much from all those unused premia.”

Whether HMOs make profits or lose money is irrelevant. It is a business. More importantly, it is in the insurance business. Thus, some make money and some don’t. Some lose money on a particular year and then make a killing on another year.


But it is wrong to assume that increased utilization of medical benefits through HMOs do not eventually have an impact on employee cardholders or on the companies who pay for the premiums. Any increase in utilization automatically raises the premium in the succeeding year. And more importantly, any utilization reduces one’s personal medical benefits under the plan so the available balance for succeeding treatments become less and less. The possibility that one eventually pays up for medical costs beyond the prescribed limit becomes higher.
Let me now share the personal experience that triggered this piece. I was hospitalized last week (yes, again, and I am praying hard it would be the last in a while) and underwent emergency surgery for an infection. Part of the treatment regimen was heavy doses of antibiotics.

I was cleared for discharge Thursday evening so we expected our bills to be processed early morning of Friday so we could leave before the cut-off time and avoid being charged another day for room and board. I was prepped up, dressed, and ready to go at 8 a.m. By 9 a.m., the nurses said the papers would be ready in a few minutes. By 10 a.m., my sister could no longer bear the waiting time and decided to take matters into her hands.

She marched into the billing section and demanded to be shown the final bill. Because my sister happened to be a nurse, she decided to check the bill. To her horror, she discovered that the total dosage of antibiotics that was supposed to have been pumped into my body, and which was being charged to my HMO, was three times more than what an ordinary mortal would be able to take. It was either of two things. Either there was an overdose or there was something wrong with the bill.

The hospital people initially insisted on the veracity of the dosages. But when my sister revealed that she was a nurse and insisted that there was no way anybody would be able to tolerate triple the maximum dosage of higher generation antibiotics for four days, that’s when they decided to check.

It turns out the bill was padded with seven additional vials of antibiotics, each vial costing almost P3,000. That comes to about P21,000. And that was just the antibiotics. There were other things on the list including urinals and other supplies that were not used. The mini uproar over the bill delayed my discharge to 11 a.m. To add insult to injury, the hospital had the temerity to still charge me an additional half-day room and board.

During the whole dispute over the bill, the nurses and the administrative clerks kept on reminding us that I was using a HMO card and that I was not going to shell out any amount from my own pocket. At one point, the billing clerk actually asked my sister directly why she was being so punctilious about the items in the bill when my HMO was paying for it anyway. I had to call my HMO and ask them to intervene.


It is possible that what happened to me was a fluke. The hospital would most likely put the blame on the nurses and accuse them of negligence in the performance of their duties, particularly in ordering and accounting for medicine, or in documenting usage of medical supplies and procedures. But my gut feel says otherwise. I have the feeling that there is institutional and systemic carelessness when it comes to charging medical costs to HMOs.