Counter-SONA of Rep. Edcel C. Lagman

delivered on 29 July 2024

Mr. Speaker and Distinguished Colleagues.

It is regrettable that super typhoon Carina delayed the delivery of this Counter-SONA. However, its potential impact and real import have not been diluted.

The traditional Counter-SONA from the authentic opposition in the House of Representatives consists of two parts: First, concurrence, with reservations, with the major policy statements underscored by the President in his State of the Nation Address (SONA); and Second, a counterstatement of the established facts and documented data divergent from the President’s presentation, as well as alternative policy initiatives or recommendations.

I agree principally with the President’s pronouncements on the following:

1. “Effective today (July 22, 2024), all POGOs are banned.” This is immediate and without any exceptions;

2. “The Philippines cannot yield. The Philippines cannot waver.”

   These brave words are with respect to the Philippines’ upholding its sovereign and territorial rights over the West Philippine Sea, the resource-rich maritime areas within the Philippine Exclusive Economic Zone which have been recognized and awarded to the Philippines by the Permanent Court of Arbitration in 2016;

3. “Binabalikan at binubusisi nating muli ang EPIRA upang malaman kung angkop pa ba ito sa ating kasalukuyang sitwasyon, o napapanahon na, na ito ay amyendahan.” This pertains to the ills besetting the power sector exacerbated by the IPIRA; and

4. “Our bloodless war on dangerous drugs adheres, and will continue to adhere, to the established “8 Es” of an effective anti-illegal drugs strategy. Extermination was never one of them.” This is in contrast with the inordinately bloody war on illegal drugs by the Duterte administration.

 

POGO

 

With respect to the immediate stoppage of Philippine Offshore Gaming Operators (POGO) operations, it must be understood that by July 23, 2024 or the day after the SONA, no POGO operations shall be allowed. Consequently, the Philippine Amusements and Gaming Corporation (PAGCOR) is mandated to cancel immediately all POGO licenses and forthwith stop the operations of unlicensed POGO outlets. This ban is categorical and total. Again, without exceptions.

It is likewise understood that the Department of Foreign Affairs is directed to cancel all visas issued to Chinese nationals or other foreigners who are involved in POGO operations.

It is similarly understood that the Bureau of Internal Revenue and all agencies authorized to collect fees and taxes must collect all taxes and fees due from POGO operations as of July 22, 2024.

 

WEST PHILIPPINE SEA

 

With respect to the President’s unequivocal statement on the Philippines’ ownership of the maritime areas within the Philippines’ Exclusive Economic Zone, the President did not detail how the country would secure for the enforcement of the arbitral award it won in 2016. Apparently, the purely bilateral diplomatic discourse has failed to stop a recidivist aggressor.

On this issue, I renew my call that the Philippines must host a summit of all kindred nations supporting the arbitral award in favor of the Philippines of which there are so many, including G-7 countries, European Union member countries, and African States.

This would convey to China the worldwide support for the Philippines and prompt it to abandon its aggression and occupancy of Philippine territories in the West Philippine Sea. A collective worldwide voice for enforcement is louder and more effective than separate pronouncements of support. Calibrated economic sanctions can also be enforced against it by these kindred countries if China persists in not honoring the arbitral award.

 

EPIRA

 

At the proper time, the President must certify the urgency of a bill amending the EPIRA. He could also recommend beforehand what amendments the legislature should consider in reviewing the EPIRA.

But amending the EPIRA alone will not solve the power problem of the Philippines. It is incumbent on the administration to pursue the initiatives and reforms on the power sector which the President outlined in his SONA.

 

DRUG MENACE

 

The bloodless campaign against the drug menace is most welcome as a departure from the extremely violent and murderous war of the previous administration against illegal drugs. But in addition to a bloodless crusade against the drug menace, the present administration must be able to prosecute and convict once warranted the perpetrators of the extrajudicial killings committed during the previous administration’s drive against dangerous drugs. The test of a pacific anti-drug campaign is bringing to justice the past and present culprits.

No less than 6,000 cases of extrajudicial killings, mostly involving impoverished suspects, were committed according to the data from the Philippine National Police. This is not to mention the almost 30,000 cases recorded by human rights groups and non-government organizations.

A few convictions here and there will not suffice. Moreover, the principal perpetrator, instigator, and condoner of these extrajudicial killings must be brought before the proper Philippine judicial forum or be prosecuted by the ICC.

The President must also cause the investigation of 727 alleged killings related to the current administration’s campaign against illegal drugs as of July 15, 2024. According to the Dahas Project of the UP Third World Studies Center, 41.27% or 300 of these killings were perpetrated by elements of the Philippine National Police and other agents of the State.

I also agree with the President’s recognition of the following concerns and problems besetting his administration and the country, which are basically the same ills which confronted previous administrations, particularly on the: economy, poverty, inflation, agriculture and food security, education, healthcare, employment, and housing.

He should also have included the protection and promotion of human rights and the Philippine recognition of the jurisdiction of the International Criminal Court over former President Rodrigo Duterte’s alleged crimes against humanity in the wake of his ruthless rampage against illegal drugs.

 

THE PHILIPPINE ECONOMY

 

No less than the President is not that much elated or extremely excited about the projection of a Philippine GNP growth of 6-7% in 2024 as the best growth performing country in the ASEAN and second in the entire Asia.

He confessed that, “The hard lesson of this last year has made it very clear that whatever current data proudly bannering our country as among the best-performing in Asia, means nothing to a Filipino, who is confronted by the price of rice at 45 to 65 pesos per kilo.”

Festering Inflation

Inflation is an assault on the purchasing power of the peso. It means a lower volume of goods and services purchased for the same budget. Alternatively, it means a higher budget is required for the purchase of the same volume of goods and services.

The purchasing power of a wage or income earned is eroded by inflation, resulting in a worker’s real wage or income becoming lower than his nominal wage or income, the amount he actually receives. Hence, the incessant demand for an increase in the nominal minimum wage. 

Virtually all recent Pulse Asia surveys point to inflation as the number one concern of Filipinos. In June 2023, 63% of Filipinos surveyed identified inflation as the most pressing issue. In June 2024, the proportion grew to 72%.

The Pulse Asia survey, it may be noted, also reveals that seven out of 10 Filipinos are not satisfied with the administration’s handling of the inflation problem. 

Inflation must be tamed not by statistics but in real terms like increasing production to reduce food inflation which is presently at a high of 6.1% as of June 2024.

Income Inequality

It is imperative to take a closer look at the state of income distribution in the country and the associated issues of poverty, income, and employment. They are pivotal in the acquisition by Filipinos of a better quality of life - education, health care, and housing.

The conventional measure of income distribution is the Gini index, a number between zero and 100, with zero indicating perfect equality and 100 indicating perfect inequality. In 2021, the Philippines had a Gini index of 40.7, sharing with Malaysia the dishonor of having the worst inequality among all ASEAN countries.

Another income inequality indicator in the Philippines is that, according to a 2022 World Bank report, the richest 1% in the country controls 17% of the national income while the poorer half of the population share 14%. This means that the top 1% of Filipinos earn more than all of the poorer 50% taken together.

In the strong words of Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand, “The Philippines aims to become a middle-class society free of poverty by 2040, but we know from global experience that no country has managed to make this transition while maintaining high levels of inequality.”

Decreasing income inequality basically entails raising the earning power of the poor.

With higher incomes, they can have their children better nourished, better sheltered, and better educated. These millions of children will become productive members of society and thus greatly contribute to the country’s GDP. So much potential human capital cannot be actualized if the poor are kept poor. And the inter-generational repercussions of poverty are appalling.

Poverty is not solved or reduced by ayuda assistance which are merely stop-gap or emergency measures, if not outright dole outs. It in fact promotes mendicancy which is an affront on human dignity.

The government must truly and continuously embark on providing to the poor and marginalized domestic employment opportunities, quality education and skills development, livelihood support, and accessible and cheap credit facilities to bail them out of poverty.

 

PERSISTENT MASS POVERTY

 

In its so-called Infographics, the Philippine Statistics Authority (PSA) website shows first semester poverty incidence among the population to be 22.4% in 2023 and 21.1% in 2018. It also shows poverty incidence among families to be 16.4% in 2023 and 16.2% in 2018. In both cases, the administration failed to bring down poverty to the pre-pandemic 2018 level.

A second survey was subsequently conducted in the second semester of 2023 to give the full year poverty picture.

Only the PSA can explain the marked improvement in poverty incidence among the population from 22.4% in the first semester of 2023 to 15.5% for full year 2023, and among families from 16.4% to 10.9%. How did the second semester figures far outweigh first semester figures in so short a time?

Unlike the first semester survey results, the full year results show poverty incidence among the population and among families to be better than the pre-pandemic 2018 levels. 

The administration is then shown to be succeeding in its poverty reduction objective.

What is most interesting is that the new results were released on July 22, 2024, the day of the SONA. Is this statistical reality or perfidy to buttress the SONA’s data? The PSA must be called to explain the vast differences in data.

Nonetheless, the poorest families are in agriculture. Poverty incidence is highest among fisherfolk and farmers at 30.6% and 30%, respectively.

The Social Weather Stations (SWS), a private group, does self-rated poverty surveys. The Quarterly Poverty Surveys by the SWS alarmingly revealed that in June 2024 no less than 58% of families surveyed rated themselves poor, up by 12 points from 46% obtained in a similar survey conducted by SWS in March 2024. This means that the number of Filipinos who rated their families as poor has reached its highest in 16 years. 

According to the polling firm, the latest self-rated poverty results translate into an estimated 16 million poor Filipinos in June 2024, up from 12.9 million families in March 2024. 

Self-rated poverty was highest in Mindanao at 71%, followed by the Visayas at 67%, balance Luzon at 52%, and Metro Manila at 39%. 

The latest survey also found that self-rated “food poverty” or the rating based on the food they eat also reached its highest since 2008 from 33% in March 2024 it went up to 46% in June 2024 – the highest rate since the 49% obtained in June 2008. 

Hunger is the ugly face of poverty.

In the second quarter of 2024, the face was not only ugly. It was gruesome.

The latest SWS survey revealed that in the last quarter, 17.6% of Filipino families experienced hunger at least once in the last three months, the highest hunger rate endured by the country since the height of the pandemic in September 2020, when the hunger rate was 30.7%.

Growling stomachs must be heard by government leaders especially those here in Metro Manila where the hunger rate is highest at 20%.

SWS classifies hunger to be moderate if it was experienced once or a few times in the last three months, and severe if it was experienced often or always. 

It may also be sadly noted that the 4.9% severe hunger rate, like the total hunger rate, was likewise the highest rate since September 2020.

The hunger trends are worrisome. From 14.2% in the first quarter of 2024, the hunger rate climbed to 17.6% in the following quarter. While moderate hunger rate changed little, the severe hunger rate more than doubled from 2% in the first quarter of 2024 to 4.9% in the second quarter.

There is obviously severe hunger for immediate government attention and action. 

Disaster Vulnerability of the Poor

Even in the realm of climate change, poverty prominently figures. The 2024 Intergovernmental Panel on Climate Change (IPCC) Assessment Report underscores that poverty exacerbates disaster vulnerability and that climate change will spawn a “new poor”.

The recent typhoon Carina-enhanced southwest monsoon that inundated NCR and several localities across the country is another wake-up call on the government to formulate and implement a holistic national plan on risk management and adaptation strategies. This should include relevant policy reforms in infrastructure particularly flood control, agriculture and food security, housing and evacuation, public health and sanitation to effectively protect specially the poor who are most vulnerable to extreme weather events. 

Debt Trap

The Philippines continues to be consigned to a deeper debt trap. As of May 2024, the total debt stock stood at P15.347 trillion, consisting of P10.442 trillion in domestic debt and P4.905 trillion in external debt.

Every year the country is forced to incur additional debts not only to plug the budget deficit but also to make principal payments on our existing debt.

In 2023 the government spent P5.336 trillion which exceeded total tax and non-tax revenue of P3.824 trillion. Hence, creating a P1.512 trillion budget deficit.

We borrowed P2.071 trillion not only to extinguish the deficit but also to make principal payments on our gargantuan national debt.

Part of the P5.336 trillion expenditure was P628.333 billion for interest payment on our debt (not including the principal amortization of P975.278-B which is automatically appropriated pursuant to Presidential Decree No. 1177, which has not been repealed), a hefty amount that could have been rechanneled to the construction of more classrooms and the hiring of more health workers.

Having had budget deficit for decades, we have perennially endured the double jeopardy of the ballooning of our debt stock and the crowding out of social and economic services in the national budget by debt servicing.

We may minimize budget deficits by raising revenue and/or reducing expenditure.

If increasing tax rates is painful to everyone, steps will have to be taken to widen and enlarge the tax base by simultaneously maximizing economic growth and reducing poverty and income inequality. Tax collection efficiency must be further enhanced. Expenditures will be reduced by eliminating corruption in all places and by the optimal use of financial resources by government agencies.

Peso Depreciation       

A peso depreciation cuts both ways.

It is bad for importers but good for exporters; it is bad for a family buying mostly imported goods but good for a family receiving remittances from relatives abroad; and it is bad for external debt servicing but it is good for Bureau of Customs collections.

The exchange rate on July 22, 2024, was P58.348 to the dollar. The average rate and the highest rate in 2024 are P57.066 and P58.951 to the dollar, respectively. The highest rate in the past two years - at P59.23 to the dollar - was in fact on September 27, 2022. Today, the exchange rate is still problematic at 58.35, which is higher than the 58.335 weekly average in the previous week.

Bangko Sentral Governor Eli Remolona says it is not the case that the peso is weak. The dollar is simply strong because of high US interest rate.

Whatever mechanism the BSP will undertake to bolster the peso, what is incontrovertible is for every instance of a peso depreciation to the dollar, it is axiomatic that we need to produce more pesos to buy a dollar for debt service. In other words, paying our debt will become even more expensive.

Feeble Quality of Life

What Filipinos see and feel is the yawning gap between the quality of life of the rich and powerful and that of the poor and underprivileged.

In 2024, NUMBEO, the “World’s Largest Database of User-Contributed Data About Cities and Countries Worldwide” which “provides current and timely information on world living conditions” revealed in its midyear report on the Quality-of-Life Index (QOLI) that out of 83 countries, the Philippines ranks 76^th with an index of 90.8 or 128.5 points lower than Luxembourg’s 209.3 as the top country.

In its report on “The Philippines’ Human Capital Review: Investing in the Early Years to Boost Human Potential”, the World Bank exhorts the Philippines to invest in human capital notably between ages 0 and 10 years at which age level, one out of four children are stunted, and only 40% of 3- to 4-year-olds are in preschools and nine out of 10 by age 10 are unable to read and understand short age-appropriate text or a learning poverty rate of 90%. No wonder the country’s human capital index (HCI) at 0.52 trails behind Indonesia’s 0.54, Malaysia and Thailand’s 0.61, and Vietnam’s 0.69.

In the 2022 Sustainable Development Report, the Philippines ranked 95th out of 163 countries working toward achieving the 17 Sustainable Development Goals (SDGs). Hence, according to the Sustainable Development Solutions Network Philippines (SDSN Philippines), “...much has to be achieved in institutional transformation, policy development, community engagement, and sustainable education in order to resolve social, economic, and environmental issues that have long afflicted the Filipino people, most notably the poor and the marginalized”. 

 

UNEMPLOYED VS. EMPLOYED

 

The more crucial indicator of the state of the economy are the rates of unemployment and underemployment, not the percentage of manpower employed which are based on variables measuring a person’s employment status, which include working for a day in a week as being employed.

Accordingly, it is a flawed presentation in the SONA to emphasize that 95.9% are employed and relegating to oblivion the 4.1% unemployed which translates to 2.11 million out-of-job Filipinos and the 9.9% underemployed which amounts to 4.82 million Filipinos.

The right to work, being a human right, if the private and public sectors cannot provide decent jobs to almost 7 million unemployed and underemployed Filipinos, it is the obligation of the government, as an employer of last resort to provide jobs for them.

The UN Special Rapporteur on extreme poverty and human rights proposed the adoption by government of “employment guarantees as a tool in the fight against poverty.”

I will not burden you, my Distinguished Colleagues, with a lengthy Counter-SONA. I will elaborate further on the issues of agriculture and food security, education, healthcare, climate change, housing, and human rights in subsequent sequels to this Counter-SONA.

Let me momentarily end by saying that no less than the President himself has acknowledged that we are not off the hook in resolving our principal national problems.

As far as the genuine and independent opposition is concerned, we will critically collaborate with the administration in seeking and legislating measures that will effectively address these national problems, particularly in elevating the social and economic status of the marginalized and disadvantaged Filipinos.

However, we shall continue to be the guardian of constitutionalism and the rule of law, a vettor of administration policies, and a sounding board of the people’s dissent, desolation and discontent.

Thank you, Mr. Speaker and Distinguished Colleagues.