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ON THE OTHER HAND
Protecting her Flanks
By Antonio C. Abaya
Written on June 23, 2008
For the
Standard Today,
June 24 issue



President Arroyo must be throwing up her hands in mock despair, and she must be screaming to anyone within earshot that, �Ay naku. I am gone for less than 10 hours and, almost immediately, one ship with more than 700 people on board capsizes in a typhoon with practically no survivors.�

For someone who fervently believes that �the Lord put me here,� this tragic turn of events must have reinforced her feelings of indispensability, that without her physical presence, this country of 90 million would go to hell in a
kariton..

President Arroyo and her entourage took off from the Ninoy Aquino International Airport at about 10:30 pm, Saturday, June 21, for a 10-day visit to the US .

At about this time, the 23,800 ton ferry
Princess of the Stars, having weighed anchor at Manila port at 8:00 pm, must have been somewhere between the Batangas coast and Mindoro island, on its way to Cebu

Hours later, buffeted by heavy seas churned up by Typhoon �Frank�  the ship is said to have run aground and its engine to have died off Sibuyan Island . At about 5:00 am, Sunday morning, the crew sounded the �Abandon ship!� alarm and the ferry listed to port, capsized and sank, with its inverted  bow jutting up from the water.

At times like this, when the power is out and there is no TV, I instinctively reach for the radio to find out what is going on. I was able to tune in to 15 AM and 15 FM stations.

The FM stations were totally useless. They were all playing pop music as if there was no national emergency, with some obnoxious deejays actually making dumb and silly noises in an effort to sound funny.

Among the 15 AM stations, only four had any concept of public service as their staffs scrambled to get information from relevant offices like the weather bureau, the coast guard, the Red Cross, Meralco, etc to feed to their publics. These were dzRH, dzMM, dwIZ and Radio Veritas. Most of the rest were nonchalantly playing jungle music, two were airing religious programs. I stayed with dzRH.

It was on this station that I listened to the teleconference at around 10 am, between President Arroyo in San Francisco and the National Disaster Coordinating Council convened somewhere in Metro Manila.

President Arroyo was asking Admiral Querubin if his Coast Guard had issued a warning to all ships not to leave port because of the approaching typhoon. Yes, ma�am, we did. But why was the
Princess of the Stars allowed to sail? Because, ma�am, it is 23,800 tons.   So your warning was not directed to ALL ships and boats. It was, ma�am. But you just said that the Princess of the Stars was not warned to stay in port. Yes, ma�am. Why didn�t you tell that ship to seek shelter in Batangas port��

At this point, with the president�s voice going up in pitch and decibel, no doubt out of sheer frustration, media was told to leave the conference hall�

But why did President Arroyo leave for the US , in the first place, her third visit since 2001? Is she planning to seek shelter soon, just in case..?

According to media reports, President Arroyo is scheduled to have a two-hour meeting with President Bush at the Oval Office on June 24; a �possible meeting� with Sen. Barack Obama in Washington DC on June 25; and a scheduled lunch with Sen. John McCain on June 28 in New York.

There are other scheduled meetings in between, including lunch with permanent representatives to the UN to push for the nomination of Sen. Miriam Santiago to the International Court of Justice; with certain US senators to thank the US Senate for its support for Philippjne war veterans; with business and investment leaders, with Defense Secretary Robert Gates, Deputy Secretary of State John Negroponte, and one official from the Department Of Agriculture; with Warren Buffet, the richest man in the world; etc. She will also strike the bell at the New York Stock Exchange.
Inquirer, June 21).

But my sense is that the real purpose of the visit is the meetings with Bush, Obama and McCain. And she is meeting with these three to protect her flanks. Everything else is mere fluff.

The coordinator of this visit � San Francisco consul general (not Ambassador, as media describe him) Marciano Paynor, Jr. � says he did not see anything wrong with PGMA meeting McCain and Obama ahead of the presidential elections. He said that this was something done by every head of state or government. (
Inquirer, June 21)

Really? In the past 60 days, President Bush was visited by Israeli Prime Minister Ehud Olmert and British Prime Minister Gordon Brown. I do not recall either of them meeting with McCain or Obama or Hillary Clinton.

President Arroyo has been trying to meet with Bush for years. In the APEC Summits in Hanoi and Sydney, her press people talked about 20-minute one-on-ones with George W, which were either cancelled by the Americans or reduced to a seven-minute �pull-over� photo-op, meaning, I presume, that he was pulled over on his way to or from the men�s room.

In February 2006, on the 20th anniversary of Edsa I People Power �Revolution�, it was suddenly announced that she was leaving for Washington to address the American Press Club (APC), but then, just as suddenly, her trip was cancelled. (See my article
GMA to the USA, Feb. 12, 2006)

My interpretation of this little mystery was: Malacanang�s PR retainer in Washington DC was able to wangle the speech invitation from the APC, a poorer cousin of the prestigious National Press Club With this speech invitation, the White House was asked for a meeting with Bush, since GMA was going to be in Washington anyway.. When the White House said no, the speech date with APC was cancelled.  

President Arroyo is not the favorite �ally� of the Americans that she may think she is, after she withdrew the 51 Filipino policemen from the Coalition of the Willing in Iraq in 2004, and after she signed an agreement with Beijing for the joint exploration for oil in the Spratlys, also in 2004. In 2005, Vice-President Dick Cheney is said to have started moves to remove her from power, starting with the Hello Garci tapes, which, according to my information, were made possible by the US National Security Agency or NSA.

The Americans could not have grown fonder of her after the aborted, corruption-ridden ZTE broadband contract in 2007, which would have given the Chinese total and instant knowledge of all decisions of the Philippine government, including sensitive ones such as on the positioning  of US troops and intel assets in Mindanao , Sulu, and Basilan. How could she have been so na�ve as to be unaware of the consequences of her actions?

President Arroyo obviously wants to personally explain to Bush (and his successor) why she did what she has done. And perhaps sound them out on a possible declaration of martial law if and when it becomes necessary in 2009 or 2010, given the deteriorating global situation. Or a possible asylum in San Francisco , just in case. But two hours?

Philippine leaders should shed their inferiority complex and realize that their true weight on the world stage is measured, not by the ability of their gofers to pull over the American president from the men�s room for a seven-minute photo-op, but by the calibre of those who come and seek an audience with them.

And in the past 60 days, who have come calling in Malacanang? The president of Palau (pop. 20,800 at low tide). And the King of Lesotho, who took along three of his 15 wives. Perhaps he thought his fellow polygamist Erap was still president of the Philippines . *****.

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Reactions to "Protecting her Flanks"
'Powering Down the Philippine Economy'
'Muslim Poverty and Rebellion'
'Behind also in Science-Tech'




Tony:          This was supposed to be the pride of the Filipinos, their president in First World stage. If only she has more substance than drama. Oh, well, she's president
and Filipinos deserve her. If not, why is she still in power?

Dan Jimenez, (by email), June 25, 2008

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Dear Tony,
Some say the real reason is for President Arroyo's family and her junketing congressmen, senators, and cabinet members to watch the Pacquiao-Diaz boxing match at the ring side.

When we will ever have responsible leaders who truly love the Philippines and fellow Filipinos?     More power to you, Tony.

Hector Tarrazona, (by email), June 25, 2008

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When I first read that GMA was set to go on another junket to the USA, I asked myself why. I, of course, didn't buy the usual crap laid out by her spin meisters.

After a little reflection, I came to the same nasty suspicion you wrote about: getting the Big White Father to approve her declaration of martial law.

Face it, what options does she have? She can not exit quietly, given all the crimes she has committed. There is the Putin ploy of course, but getting the necessary changes in the constitution could be problematic. With the cooperation of the generals, who have as much to lose  as she does, who can stop her?

Alex Menez, (by email), June 25, 2008

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Hi Tony,
This article of yours becomes clear to us now. Truly she is protecting her flanks.
But, the irony is, how many Filipinos understand this?
BTW. Those more than 60 entourage with her are probably scouting also to protect their turf just in case. Thanks and more power.

Bert Celera, (by email), June 25, 2008

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" The FM stations were totally useless. They were all playing pop music as if there was no national emergency, with some obnoxious deejays actually making dumb and silly noises in an effort to sound funny.
Xxxx

"And in the past 60 days, who have come calling in Malacanang? The president of Palau (pop. 20,800 at low tide). And the King of Lesotho, who took along three of his 15 wives. Perhaps he thought his fellow polygamist Erap was still president of the Philippines"


Ha, ha, ha!  Gee whiz, man, this is what I like with Antonio Abaya, his distinctive natural humor.

Mortz Ortigoza, (by email),  Dagupan City,  June 25, 2008

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Dear Tony,
The typhoon disaster is a blessing in disguise for PGMA in coming to the U.S. for an official visit with President George Bush.  She would certainly ask for more financial assistance in behalf of the ferry disaster victims.  The question now  is:  Will any money PGMA gets in coming to the U.S. for financial aid ever benefit the victims in this new catastrophic ferry episode? Or will it only feed the grafters that surround her administration? 

Last year, PGMA was given by the U.S. the sum of $21 million USD precisely to fight government graft in her government.  After her government received the money, Transparency International even degraded further her government as the most corrupt democracy in Asia.  Where did that $21 million USD go?  Just asking.

Marlowe Camello, (by email), Homeland, CA, June 25, 2008

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Nice one!

AL Leonidas, (by email), June 25, 2008

PS:  As to the broadcasting companies here, majority at the time of the Princess of the Star crisis are plain idiots! There should be a national day of mourning and GMA should cut short her trip.  She should also report her trip to the people since that is a publicly funded trip

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Mr. Antonio C Abaya,         As your avid reader, I would like to share this article about GMA's recent visit to the Oval Office titled: Bush To Filipino President: "I Am Reminded of the Great Talent of the -- of our Philippine-Americans When I Eat Dinner at the White House" and Bush jokes about the White House chef.

Read in part:
...welcoming Philippine President Gloria Macapagal Arroyo to the White House, President Bush couldn't resist getting in a joke about his chef.
First, said Bush, "I want to tell you how proud I am to be the president of a nation that -- in which there's a lot of Philippine Americans.  They love America and they love their heritage."

Second, he continued, "I am reminded of the great talent of the -- of our Philippine Americans when I eat dinner at the White House.... And the chef is a great person and a really good cook, by the way, Madam President."

Arroyo thanked Bush for the compliment,  and for  the offer to send two assets the Philippines need desperately now: U.S. Navy ships  to help with ferry rescue, and rice to feed a country suffering a rice shortage.

"We're happy to do it," said Bush. "We want to help our friends in a time of need."

Links here:
http://www.huffingtonpost.com/2008/06/24/bush-to-filipino-presiden_n_108985.html
     
http://latimesblogs.latimes.com/presidentbush/2008/06/bush-jokes-abou.html

President George W Bush's frequent tussles with English are countless and  legendary that nothing shocks me anymore. Nincompoopery aside, Bush has an axe to grin ever since the Philippine President Gloria Macapagal-Arroyo withdrew her troops  from Iraq ( one of the first among  the Coalition of the Willing members  to do so) not to mention  the increasing role  China plays  in today's  Philippine economy  notably , the signing of  Joint Oil/Gas Exploration Project in Spratleys Island with the Chinese.  We all know how this W  from Texas reacts  when OIL is mentioned, don't we? He instantly becomes a Wartime President running with scissors. We should all know, after all,  we've  suffered and continue to suffer  those  consequences  to this day.Your opinion on this , Mr Abaya, will be appreciated.     Thanks.

John Lee, (by email), June 25, 2008

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Hi Tony,        This sea tragedy is a repetition of the past last Nov.21,1983, Dona Cassandra of Carlos Gothong Lines owned by the Carlos Gothong Family  and the Sulpicio Lines is owned by Supicio Go brother of Carlos Gothong, The ill fated Dona Cassandra sunked off the coast between Cebu and Bohol sailing from Nasipit, Butuan and my mother Eppie Alcala Garay was one of the passengers who died on that sea tragedy

It was a very painful and traumatic experience because we became orphans as my mother was a widow at that time. Cause of that sea tragedy was overloading of passengers and a storm signal and yet the boat was still allowed to sail. In spite of the warning. Hope this will be another wake=up call for the coast guard to be consistent in not allowing passenger ship to depart when there is a storm signal and when it is overloaded, to protect the riding public from future catastrophe. May you share this email to others so they will be aware of the dangers of sea travel. The laxity of rules governing sea travel.

Gerry Garay, (by email), Clermont, Florida, June 27, 2008

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Hi Tony.     To ensure that most if not all people in the path of a typhoon will be informed about it, it would be best to pass a law requiring radio and TV stations in the vicinity of all affected areas to continuously get info from PAGASA and regularly broadcast info to the public about the location, signal no., path, etc. of the typhoon.

Government TV and radio stations can be required to broadcast it more frequently compared to the privately-owned ones. To ensure that one can easily tune in to at least one TV or radio station that is broadcasting up-to-date info about a typhoon, all stations should be given different staggered schedules for the typhoon broadcasting. Example is shown below.

Station Broadcasting time Ex. if broadcasting is to be made every 30 minutes

A at the hour 8:00, 8:30, 9:00, 9:30, 10:00, 10:30, 11:00, 11:30 �
B 5 minutes after the hour 8:05, 8:35, 9:05, 9:35, 10:05, 10:35, 11:05, 11:35 �
C 10 minutes after the hour 8:10, 8:40, 9:10, 9:40, 10:10, 10:40, 11:10, 11:40 �
D 15 minutes after the hour 8:15, 8:45, 9:15, 9:45, 10:15, 10:45, 11:15, 11:45 �

The higher the signal no., the more frequent the broadcast should be made. At the expected highest signal no. (is it no. 3?), some government TV and radio stations (near the area where the typhoon is expected to pass) should
broadcast continuously until the typhoon has passed the area and the signal no. has gone down to a 2 or 1. (A few TV and radio stations do a continuous coverage of very important events; a strong typhoon is no less important). The rest can be required to broadcast say every 15 minutes.

At signal no. 2, all stations may be required to broadcast say every 30 minutes.

At signal no. 1, all stations may be required to broadcast say every hour.

If these were done, the ferry Princess of the Stars tragedy would most likely have been prevented even if its crew was negligent or ignorant about the path and strength of the typhoon as one or more of its passengers would have been informed via text (assuming that there are cell sites near the path of the ferry) by their relatives about the typhoon or one could have called the company (Sulpicio Line?) about the problem.

These will also be useful not only to transport companies but also to people who have travel plans. By having an up-to-date info about the weather, one may just decide to cancel one's scheduled trip (whether it is by car, bus, boat or plane) avoiding the risks and at the least avoiding wasting one's time and money.

Nars Silverio, (by email), June 27, 2008

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I find the criticism of the presence of the Ronald Reagan in Philippines waters for the purpose of assisting with recovery operations from the sinking of the ferry rather odd. You may recall the extensive involvement of a similar naval group in recovery operations in Indonesia after the tsunami disaster. F-18's are indeed combat aircraft and are limited to search and photography functions in such an operation, however, U.S. aircraft carriers and their support ships have helicopters, cargo aircraft, anti-submarine and anti-aviation electronics aircraft that were and are most useful in such conditions.

As well, carrier groups are very well equipped to support shore based and ship borne medical, logistical and communications operations. A single combat construction battalion (Seabees) can restore road infrastructure so fast and well as to leave a Filipino politician in fear for his job at the next election. Note the response of the population and subsequent loud praise of American military infrastructure efforts by the Muslim leaders in Sulu last year.

John Long, (by email), Seattle, Washington, June 27, 2008

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Considering that there is an economic crisis, Gloria Arroyo should live-up to her slogan splattered all over the land that, "GMA CARES". She even ordered the issuance of several directives regarding cost saving and yet she does not lead by example.

As I write this, decomposing bodies from the shipwreck are being buried in the area where they have been drifted because the local government has no money for body bags and transportation. In yesterday's news, the DSWD was asking for 50 million pesos. If there is money, the government could have used all the aircrafts and ships at its disposal and even hire from private companies for search and rescue operations as well as transporting of cadavers to one designated place where families can gather to identify and claim the bodies of their love ones. These problems by the way are only for the Sulpicio Lines vessel tragedy. My mom's province of Iloilo has been devastated in lives and property including wiping out farm lands and fish pens. Same true happened to many other provinces directly and indirectly affected by typhoon Frank.

So, while Gloria Arroyo's slogan says GMA cares, GMA is enjoying the comfort and luxury of life at the  Waldorf Astoria Hotel in New York right now. I think it is called HYPOCRISY!

Come to think about it, GMA really "CARES", SHE CARES FOR HERSELF AND HER FAMILY. Gloria Arroyo is probably abiding by the teaching of the bible that says "Charity begins at home".

It is no wonder that even Gloria Arrovo's two close advisers, Romulo Neri and Joey Salceda have described her as "evil" and "lucky bitch".

I was taught that TRUTH  is the FOUNDATION OF EVERY VIRTUE and since Gloria Arroyo has most of the time been lying to her teeth on issues affecting her governance,
respect and trust she does not deserve!

Narciso Limsiaco Ner, (by email), Irvine, CA, June 27, 2008

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The Naked Empress Palace couturiers designed a special dress for the Empress on the occasion of a huge parade. To begin with they prepared elegant posters which say that: I did not cheat during the 2004 elections, nor did Garci and the generals; I am not a plunderer nor am I a protector of any; I am not a smuggler, nor is anyone's protector; I am not a murderer, nor do I cause anyone's death or disappearance; I do not go on extravagant junkets with my lap dogs and their families because my people needs my presence in their hour of distress; I am a good economist. The economic fundamentals I have set up are sound and that is what makes the economy grow and grow; It's not true that my administration's profligate ways are propped up only by FCW remittances, loans, privatization, EVAT, Generals and Judges; It's not true either, that long queues for rice and checks are caused by necessity and desperation. It's just that the poor are too lazy to do anything else.

They are actually jumping up and down with joy at my generosity. They're dying to vote for my bets come 2010; After 2010, I will not be made to pay for my misdeeds because I never did anything wrong. They reasoned out that lies repeated over and over again become the truth. They sewed the posters together into a kind of mosaic cloth that brings to fore the messages in the posters. While at work on the materials, they talked to the Palace courtiers and convinced them to take turns whispering into the Empress' ears that: You did not cheat during the 2004 elections, nor did Garci and the Generals; You are not a plunderer nor are you a protector of any; You are not a smuggler, nor is anyone's protector; You are not a murderer, nor did you cause anyone's death or disappearance; You do not go on extravagant junkets with your lap dogs and their families because your people needs your presence in their hour of distress; You are a good economist. The economic fundamentals you have set up are sound and that is what makes the economy grow and grow; It's not true that your administration's profligate ways are propped up only by FCW remittances, loans, privatization, EVAT, the Generals and Judges; It's not true either, that long queues for rice and checks are caused by necessity and desperation.

It's just that the poor are too lazy to do anything else. They are actually jumping up and down with joy at your generosity. They're dying to vote for your bets come 2010; After 2010, you will not be made to pay for your misdeeds because you never did anything wrong. Thusly, the team conditioned the mind of the Empress. They reasoned out that lies repeated over and over again become the truth. When D-day came, the planners themselves were just a bit surprised by the Empress' reaction to the dress. She showed so much pleasure at seeing the dress and could hardly wait to put it on. They succeeded so well in conditioning their master that she failed to see through the dress.

At the parade itself, the Empress came out proudly, with head high and chest out. She wasn't a bit surprised to hear the people loudly hailing her up. She did not notice the heavily armed men that menacingly mingled with the crowd, put up there by the courtiers as a kind of back up or insurance in case the spectators see things differently. The parade went well enough until a boy, not knowing any better, suddenly came up front and exclaimed, "Look, papa, the Empress is naked." Aghast, the Empress looked to his courtiers for explanation. "What's the boy saying?" He asked. "What boy?" The head courtier asked. The boy was nowhere to be found, nor was he ever heard from. The parade went on unimpeded. As the parade pass by though, beyond the hearing of the Empress' men, a truth spreads from quivering lips, "Howsoever you cloth yourself with lies, you shall remain naked." The eerie parade goes on to this day because the subjects are the bravest and brightest men on Earth.

Eustaquio Joven, (by email), July 02, 2008

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Behind also in Science-Tech

Next week DOST and NAST will again celebrate S&T week. DOST is also celebrating its 50th year and the NAST is on its 30th Annual Scientific Meeting. But through these years, as I have shown in previous articles, no less than 10 (now 12) Asian countries have left us behind in science & technology and national progress. Our S&T performance has hardly improved in 1981 to 1995; and this poor performance would have continued if not for the publication increase from UP in the last 10 years.

The basic cause of our failure to move forward is poor evaluation of research performance (recall the essentials of the development -- research, science, and technology, where research is the basic component). DOST and NAST continue to rely on peer review or personal judgment, when we don't have enough experts in science and social sciences, or scientists, to do the job. Most of those evaluating such performance in the country lack research publications as sole or lead author in peer-reviewed international journals (simply defined as those covered in Science Citation Index or Social Science Citation Index).

For example, "Silliman U Wins CHEd Best Research Award" is the title of a news report (Inquirer, 3 Feb 2007). It says, the evaluation committee is composed of the following: Emil Javier (President of NAST and National Chair of AGHAM), Saturnino Ocampo Jr (CHED commisioner), Filimon Uriarte Jr. (Academician, NAST), Fortunato de la Pena (DOST Usec), and Mario Lamberte (USAID).

Note that the evaluation is at the highest levels of our research enterprise, yet none of those in the panel is a scientist as defined above. How then do they evaluate research output?

Similarly, The DOST's "50 great men and women of science" selected in connection with its 50th Anniversary are mostly nonscientists (
http://www.science.upd.edu.ph/index.php?option=com_content&task=view&id=196&Itemid=1). How could it be possible that those in the panel simply didn't know what "men or women of science" mean when they made their own criteria of selection? Worse, could they have not known that they were making a mockery of the process? I wonder how our true scientists in the list feel being honored with such company.

I would like again to call on our scientists to do something about our problems in science, first by studying carefully their basic causes under Philippine context. (For example, is peer review, which is a common practice in developed countries, good for us?) Then they should know the consequences or symptoms of poor RP science to society. And this will lead them to our poor children still suffering from malnutrition or dying of hunger and disease.

What the above is saying is that it is one thing to be a scientist and another to be a literate scientist. As one physicist says, "How can we have science literacy without literate scientists?"

Perhaps it is appropriate to quote (while thinking of RP science) from Bruce Alberts, the new editor-in-chief of Science, "Why did I accept this position? In many ways I see it as an extension of my 12 years as president of the U.S. National Academy of Sciences (NAS). . . . I soon became painfully aware of the many opportunities to spread science and scientific ways of thinking that are being missed--in our failure to teach science as inquiry to most students, in our overly narrow definition of scientific careers in universities, and in the inadequate recognition of the truly international nature of science" (Science 319:1307, 2008).

How is the Star Science column addressing these concerns? For example, are the articles of Ed Padlan on science literacy educating the public to be science literate? Are they helping train our graduate students to do research properly?
Ed is a highly published scientist in international peer-reviewed journals.
                                                                                 
Let me remind again our scientists, particularly the members of NAST, with the following: "Scientists who mute their voices to avoid irritating colleagues do not help the overall science program" (Dan Koshland, editor-in chief emeritus of Science). Who else are to blame for the presence on non-scientist members and officers of our national science academy?

This challenge is aimed at being able to say that our NAST will be like the US National Academy of Sciences where, "Membership in the NAS is a widely recognized sign of excellence in scientific research" (PNAS 102: 7405-7406, 2005). This is only the first step.

Then the NAST will be like the academy of sciences elsewhere in the world where, "such bodies serve to sustain excellence within the scientific community itself, to foster informed public discourse on science-related issues and to provide policy-makers with sound advice on these issues, encouraging rational decision-making" (Nature 450: 762, 2007. Editorial).

I think with such changes in the NAST, the DOST will be able to improve its ways of science administration. An important result of which is for scientific knowledge to provide the raw materials for generating technologies, for improving education, and rational decision-making. Then we can look forward to catching up with neighbor countries that have left us behind. One indicator will be fewer children dying of hunger and disease. Isn't this reason enough why you are doing or have done research? *****

Flor Lacanilao, (by email), July 06, 2008



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Muslim Poverty and Rebellion

One need not be a 'rocket scientist" to know that one of the reasons that is prolonging the Muslim rebellion in southern Philippines is poverty. Gloria Arroyo has been bragging of her concern for the Mindanaons and the money spent supposedly for the development of the island. Last week, this immoral and illigitimate president went to Davao City for the formal opening of a newly constructed bridge in the city which was also timed with the caucus/ meeting of her political party. Muslim leaders from ARMM as well as from the different Muslim provinces and towns were handed money by Gloria Arroyo purportedly for their respective constituents. But the question is, will the money even trickle down to the people?

Narciso Limsiaco Ner, (by email), Irvine, CA, June 23, 2008

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Powering Down the Philippine Economy

By GREG RUSHFORD

FROM TODAY'S WALL STREET JOURNAL ASIA

June 26, 2008

Philippine President Gloria Arroyo took a whirlwind tour of the U.S. this week. At every stop, she boasted that her country's economy is on the move, having enjoyed an impressive 7% growth rate last year. Tomorrow in New York, Ms. Arroyo will woo well-heeled potential investors at a $5,000-a-table luncheon at the Waldorf-Astoria, where she is expected to give an upbeat presentation on Philippine infrastructure financing and ongoing privatization efforts.

Ms. Arroyo's boasts ring hollow, however, given her country's inhospitable climate for foreign investment. Four decades ago, the Philippine economy was the second strongest in Asia, after Japan. Today, it's been outpaced by South Korea, Hong Kong, Taiwan and also by every other country in Southeast Asia -- save the likes of Burma, Cambodia and Laos. Last year, Vietnam attracted $15 billion in foreign direct investments, compared to the Philippines' $2.5 billion. Even worse, Ms. Arroyo and her political allies back in Manila don't seem to care that they are sending signals that would cause any potential investor to cringe.

Take the most recent bungle: the liberalization of the notoriously inefficient Philippine energy sector. In 2001, a newly sworn-in President Arroyo signed legislation calling for at least 70% of the government-owned National Power Corporation, known as Napocor -- long one of the country's worst symbols of inefficiency and corruption -- to be privatized. Even though Ms. Arroyo's administration has dragged its feet in following through with the reforms, the Electric Power Industry Reform Act of 2001 is working, albeit slowly.

Today, slightly more than 40% of Napocor is privately owned. In April, America's AES Corporation completed a $930 million purchase from the government of a 660-megawatt coal-fired thermal power plant in Zambales Province in Luzon. Currently, seven interested foreign bidders -- including AES, France's Alstom, Marubeni Corp., and a subsidiary of Korea Electric and Power Co., according to news reports -- have been invited to compete for Napocor's 620 megawatt power plant in Limay. Those bids should be in by the end of July. By year's end, the reform act's goal of privatizing at least 70% of Napocor could be realized.

But will Manila allow that to happen? Last December, the Arroyo administration announced that it wanted to amend the reform act by Christmas, to ensure that the government would retain control of at least 50% of Napocor. Hardly for the first time, the government in Manila was reminding foreign investors that the economic goal posts could be moved in the late innings. In the House of Representatives, the antireform legislation's chief sponsor is the chairman of the energy committee, Rep. Juan Miguel "Mikey" Arroyo, the president's son.

When the heads of the Joint Foreign Chambers of Commerce protested the roll-back of Napocor's privatization in a May 27 letter to Ms. Arroyo, the president's allies in the senate exploded in nationalistic outrage. Summoned to a June 6 hearing, Hubert D'Aboville, the French president of the European Chamber of Commerce, tried to speak on behalf of the foreign chambers, whose members hail from the U.S., Korea, Japan, Australia, Canada and New Zealand. Mr. D'Aboville prepared testimony that pointed to the "negative consequences" of amending the privatization law and thus dampening confidence among the foreign investment community (a view enthusiastically shared by the more enlightened members of the Philippine business community in the influential Makati Business Club). But Mr. D'Aboville was not allowed to present his testimony.

My goodness, get out of this country if you can't live with us," Sen. Juan Ponce-Enrile told Mr. D'Aboville, who has lived in the Philippines for 31 years and is married to a Filipina. Added another presidential ally, Sen. Miriam Defensor-Santiago, "You may not continue. You do not determine what you can say or not say. I determine."

Unembarrassed by such a display of legislative intemperance, Ms. Arroyo has brought Sen. Santiago with her to New York, where the president is lobbying the United Nations to give her a seat on the International Court of Justice. Asked by reporters right after the hearing if the senators' June 6 bullying of the foreign businessman had been inappropriate, presidential spokesman Ignacio Bunye said he didn't think so. A few days later, Ms. Arroyo -- possibly having been informed that several European ambassadors were prepared to file a formal diplomatic protest -- came out with a statement thanking foreign investors for being part of her country's "success."

Ms. Arroyo has argued that government control of power plants is a more efficient way of keeping electricity prices down than private competitors who will compete in the marketplace -- surely a strange argument from a woman who has a doctorate in economics. Making matters worse, her administration is engaged in a separate but equally embarrassing power struggle for control of the board of directors of the Philippines' largest private electricity distributor, the Manila Electric Co. The company is controlled by the powerful Lopez family, one of the Philippines' most enduring oligarchies. In addition, the Philippine government holds a 30% stake and is represented on the board.

To be sure, there is a case that could be made that Meralco, which controls some 70% of electricity on the big island of Luzon, is a monopoly that should be subjected to the pressures of real market competition. But the political intensity of the Arroyo administration's personal attacks on the Lopez family suggests -- especially to watching foreigners -- that an agenda is at work that goes beyond economics. Specifically, the fight between Ms. Arroyo's family and the Lopez business empire seems to personify the latest example of feuding family clans that have long been a major source of the Philippines's economic and political fragility. In the early 1960s, when Ms. Arroyo's father, Diosdado Macapagal, was president, he also tried to wrest control of Meralco from the Lopez family.

Ms. Arroyo needs to understand that when Manila promises to open up major sectors of the economy to reforms that would foster real competition, those promises should not be broken. This would seem to be especially relevant, considering that economic projections warn that the Philippine electricity sector could, in the next several years, face more of the blackouts that crippled economic growth in the late 1980s.

The president might also reflect upon the plans of Alstom, the power company from France that is reported to be interested in the current bidding process to buy Napocor's Limay power plant. If the Philippine government continues to delay this ongoing bidding process, Alstom has choices. Late last year, as Ms. Arroyo's government announced its legislative priority to roll back the power sector's reform process, Alstom Hydro announced that it would build Southeast Asia's largest hydro power plant -- in Son La, Vietnam.*****

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