8 OUT OF 10 METRO MANILANS BELIEVE ARROYO WON’T DELIVER ON SONA PROMISES

As Pres. Gloria Arroyo prepares for the State of the Nation Address (SONA) on Monday, latest survey results show that majority of Metro Manila residents believe she will not carry out the promises she will make in her SONA speech.

According to the July 2008 results of the IBON survey, 83.3% of residents in the National Capital Region believe that the government will not deliver on the commitments that Pres. Arroyo will make in her SONA. Only 5.9% said yes.

The special survey was done across NCR on July 12-13 among 371 respondents. It has a margin of error of plus or minus three percent.

Below is the tabulation of results of the respondents’ perception on Pres. Arroyo’s upcoming SONA.

Do you believe that the government will deliver on the commitments PGMA will deliver in her SONA?
Yes	22	5.93
No	311	83.83
Don’t Know	37	9.97
No answer	1	0.27
TOTAL	371	100.00

LIVELIHOOD WORSE TODAY, SAYS MOST FILIPINOS

More Filipinos feel that their livelihood worsened compared to the previous quarter, according to the latest results of the nationwide survey conducted by research group IBON Foundation.

The April 2008 nationwide survey shows that the number of Filipinos who said that their livelihood worsened grew significantly from 46.3% in January 2008 to 64.3% in April. Those who answered that their livelihood got better fell from 6.1% in January to 4.4% in the latest survey.

Asked if their family’s income is enough for their needs, 71% of the respondents said that it is not enough, an increase of almost 10 percentage points from January 2008.

The latest IBON survey was conducted across various sectors nationwide with 1,495 respondents from April 7 to 16. The survey used multi-stage probability sampling and has a margin of error of plus or minus three percent.

Below is the tabulation of results of respondents’ perception of their livelihood and income.

How is your livelihood today compared to a year ago?

	January 2008		April 2008
	Frequency	Percentage	Frequency	Percentage
Better	92	6.12	66	4.41
Same	686	45.64	449	30.03
Worse	696	46.31	962	64.35
Don’t know	21	1.40	14	0.94
No answer	8	0.53	4	0.27
Total	1,503	100.00	1,495	100.00

Is your family’s income enough for its needs?

January 2008		April 2008
	Frequency	Percentage	Frequency	Percentage
More than enough	13	0.86	25	1.67
Enough	543	36.13	380	25.42
Not Enough	928	61.74	1,069	71.51
Don’t know	13	0.86	19	1.27
No answer	6	0.40	2	0.13
Total	1,503	100.00	1,495	100.00

RP, ASEAN NATIONS NOW POWERLESS TO PROTECT OWN ECONOMY WITH JAPAN-ASEAN TRADE PACT

A recently-signed free trade agreement between Japan and the Association of Southeast Asian Nations (ASEAN) would grant Japanese corporations unhampered access to the region’s markets, prohibiting ASEAN members to protect their own economy while allowing Japan to protect its domestic advantages. According to IBON research head Sonny Africa, the signing of the Agreement on Comprehensive Economic Partnership among ASEAN members and Japan (AJCEP) is another step toward Japan ‘s plan for an overarching economi c p artnership agreement with the countries of East Asia . The agreement would allow Japanese corporations to take advantage of ASEAN markets, labor and natural resources. “The Japan-ASEAN trade pact is part of Japan ‘s campaign to cement its economi c p ower across the region,” said Africa . He noted that Chapter 2, Article 15 of the AJCEP calls for each party to the agreement to accord “national treatment” to the goods of the other parties in accordance with Article III of the General Agreement on Tariffs and Trade (GATT). This means that ASEAN countries must treat imported products from Japan the same as their locally-made products. He warned that this provision prevents the Philippines and other developing ASEAN countries from using trade barriers, such as tariffs, as policy tools for economic development. Like the experience of countries who liberalized prematurely, the pact could stifle the growth of many domestic industries in ASEAN nations as they are overwhelmed by a flood of cheap imports from Japan . Under this unfair deal, ASEAN countries will be prevented from using the same protectionist policies that Japan itself used early in its economic development and may find themselves ultimately reduced to being sources of cheap labor and mineral and agricultural resources.

SURVEY SHOWS MOST FILIPINOS NOT AWARE OF JPEPA

While the Senate continues to conduct hearings on the Japan-Philippines Economic Partnership Agreement

(JPEPA) as part of the ratification process, results of IBON’s latest nationwide survey show that the public awareness of the pact is very low, despite being signed last year.

However, those who were aware of the JPEPA believe that the Senate should not ratify the controversial free trade pact.

Out of the 36.8% of respondents who were aware of the JPEPA, 73.7% said they were aware that the agreement is currently before the Senate for ratification. Of these, 55.7% said they were not in favor of the ratification of the JPEPA.

The IBON October 2007 survey was conducted across various sectors nationwide from October 1 to 9 and has a margin of error of plus or minus three percent.

On the JPEPA
Do you know that there is an agreement between the governments of Japan and the Philippines called the Japan-Philippines Economic Partnership Agreement or JPEPA that intends to liberalize trade, service and investment?
	October 2007
	Frequency	Percentage
Yes	551	36.78
No	944	63.02
No answer	3	0.20
Total	1,498	100.00
Do you know that the JPEPA is now for ratification at the Senate?
	October 2007
	Frequency	Percentage
Yes	406	73.68
No	143	25.95
No answer	2	0.36
Total	551	100.00
Are you in favor of the ratification of JPEPA?
	October 2007
	Frequency	Percentage
Yes	153	37.68
No	226	55.67
Don’t know	23	5.67
No answer	4	0.99
Total	406	100.00

FREE TRADE PACTS WITH CHINA, JAPAN TO FURTHER WEAKEN RP ECONOMY

Philippine trade deals with Japan and China , which President Gloria Arroyo recently urged Association of Southeast Asian Nations (ASEAN) members to act on, will further weaken the country’s already damaged domestic economy.

According to IBON research head Sonny Africa, any benefits the Philippines may gain from a pact with these economies are doubtful while more liberalization will further weaken the local agriculture and industry sectors.

Taking alone the ASEAN Free Trade Agreement’s Common Effective Preferential Treatment (CEPT) scheme as an example, the Philippines’ average applied preferential tariff rate as of 2001 is only 3.87%, lower than the 6.7% average applied tariff rate under the World Trade Organization. Roughly 99% of the country’s tariff lines are already included in the CEPT scheme.

Tariff reduction under the CEPT scheme allowed cheap imported vegetables from the US , Australia , New Zealand , the Netherlands , Singapore and China to flood the Philippine market, growing from 42,000 metric tons in 1995 to 115,000 MT in 2000. More liberal import policies also resulted in thousands of metric tons more smuggled into the country.

The petrochemical, cement, steel, garments/textile, footwear and ceramics/tiles industries have also felt the adverse effects of liberalization. For example, many footwear manufacturers, overwhelmed by cheap imports from China , have now become mere assemblers of imported shoe parts or shifted to trading. Shoe industry workers have thus been laid off or forced to go on rotation status.

Meanwhile, Africa pointed out, the country’s attempts to penetrate the markets of these major economies are uncertain. The government is banking on electronics, which is considered as one of the economy’s “strengths” due to export revenues from this sector. Electronics products are also the country’s top exports to China and Japan , which on the other hand are among the Philippines ’ top ten trading partners.

But electronics components are also among the country’s top imports from these countries, reflecting the inherent lack of technology to support production and the assembly-type nature of the industry.

According to Africa , the motivation of China and Japan in pushing for regional free-trade initiatives is their rivalry for economic leadership in the region. As an underdeveloped country, the Philippines should not seek to fruitlessly “compete” in the free trade arena but rather to undertake initiatives that would protect and develop its agricultural and industry sectors for the benefit of its people, Africa said.

MOST FILIPINOS DON’T BELIEVE ECONOMY IS IMPROVING

In her State of the Nation Address (SONA), President Gloria Macapagal-Arroyo claimed that the economy was on the upswing. But results of the latest IBON Survey show that most Filipinos do not believe that the economy is getting better.

According to IBON’s July 2007 nationwide survey, 80% of 1,488 respondents believed that there was no truth to government’s pronouncement that the economy has improved. 11% said that they believe the economy is getting better, while 8% were uncertain.

The IBON July 2007 survey was conducted across various sectors nationwide from July 2 to 13 to find out the people’s perception of the economy, their income and livelihood, government performance, and other pressing issues.

The survey has a margin of error of plus or minus three percent. (end)

Below is the tabulation of the results of the respondents’ perception of President Arroyo’s statement that the economy is improving.

In your opinion, is there truth to the government’s pronouncement that the economy has improved?

July 2007

Frequency      Percentage

Yes               164                11.02

No                1,196             80.38

* For the full results of the IBON July 2007 Survey, please e-mail us at media@ibon.org or contact us at Tel. 927-6986. The results will also be available online at www.ibon.org starting tomorrow, July 28

ARROYO SUCCESSOR FACES EMPTY GOVERNMENT COFFERS

Instead of reaping the so-called harvest from her programs, Pres. Arroyo’s successor faces empty government coffers as her administration desperately sells off the few remaining state assets in a bid to maintain the illusion of fiscal stability, according to independent think-tank IBON Foundation.

The Arroyo government is clearly running out of major assets to dispose to make up for revenue shortfalls, according to IBON research head Sonny Africa. After government’s planned disposals this year of its stakes in San Miguel Corp., the Philippine National Oil Corp.-Energy Development Corporation and the Manila Electric Company, among the only remaining major assets for disposal are its stakes in TV stations RPN-9 and IBC-13 and the Al-Amanah Islamic Investment Bank of the Philippines as well as the rights and equity in the Philippine Postal Corporation, he said. What would be left after big-ticket items are sold would be mainly minor assets such as various parcels of land, buildings and various pieces of equipment.

Although government revenues increased by an average of 14% since 2003, if the added income boost from the fire sale of assets and the implementation of the reformed value-added tax in 2006 is not taken into account, revenues would have increased by an annual average of only 11.7 percent. This means that instead of showing any real growth, such revenue gains have only tracked the annual average gross domestic product growth over the same period as measured in current prices.

The situation has even taken a turn for the worse in 2007, Africa said. In the first half of the year, revenues without privatization income grew a scant 2.9% compared to the same period last year. This compares very unfavorably with GNP growth of 11.6%, again measured at current prices, in the first quarter of 2007.

This has significant implications for the Arroyo administration, Africa noted. For one, Arroyo will likely be unable to fund the ambitious infrastructure program outlined in her SONA. This will undermine her support with foreign investors and the local business elite who are the main beneficiaries of the infrastructure projects. A bankrupt government will also be unable to buy the support of political allies. And, most significantly, Arroyo will most likely be forced to resort to new taxes and cuts in social services spending to win back the support of the economic elites. This will heighten the widespread dissatisfaction of Filipinos who are already suffering from worsening joblessness and poverty, he said.

Although Arroyo at least admitted her widespread popularity in her SONA, she continues to mislead the people about the true state of the nation. “The harvest her successor will reap will be bitter: a faltering local economy, pervasive poverty and a bankrupt government,” Africa said.

ARROYO’S SONA BETRAYS ADMINISTRATION’S LACK OF VISION

President Gloria Macapagal-Arroyo’s State of the Nation Address (SONA) once again betrays her lack of vision towards building a modern economy and giving the country a better future, according to independent think-tank IBON Foundation.

IBON research head Sonny Africa said Arroyo’s enumeration of innumerable details in her SONA aim to give the illusion that her administration has accomplished much, while diverting attention from the bigger picture of unprecedented joblessness and economic decay. He pointed out that the jobs created from 2001 to 2006 were mainly in domestic household help or unpaid

family work in the agriculture sector.

Meanwhile, thousands of manufacturing jobs were lost and millions of Filipinos are still either looking for work or, if employed, seeking more work in order to earn more.

The Arroyo government’s adherence to free trade policies has further placed the country’s agriculture and industry on the road to decline, Africa said. Thus, instead of a country of producers, the Philippines is becoming a nation that sells its labor cheaply to foreign investors and its agricultural and mineral resources to whichever transnational corporation bids the highest to government. The decay of local agriculture and industry is further underscored by her singling out of call centers as one of the country’s strengths and her call for the country to move up the value chain in business process outsourcing.

Africa also pointed out that the fiscal crisis still remains despite so-called reforms. The government has only been able to reduce the runaway deficit through severe cuts in spending for social services such as education and health and the implementation of taxes such as the reformed value-added tax. But even these have not been enough to address the crisis

and the only thing maintaining the illusion of stability is government’s desperate privatization of its remaining assets. In the near term, Filipinos also face further cuts in social services spending and new taxes so that government can continue to service its debts and make up for lost revenue from corruption and trade liberalization, Africa added.

The country also continues to suffer from severe income inequities, despite the government’s claims of six years of unbroken growth, as foreign and local elite sectors continue to prosper even as the majority of Filipinos continue to suffer daily from poverty, joblessness and despair. For these tens of millions of poor Filipinos, the SONA will only send the message that the government serves these few sectors rather than the interests of the majority of the Filipino people, Africa said .

If Pres. Arroyo had the interests of the Filipino people genuinely in mind, she would use her SONA to outline a vision in which the country’s agriculture sector would be freed from its backwardness, and an industrial sector that has developed genuine Filipino manufacturing. These are vital for a modern economy that is able to secure the livelihoods and welfare of millions of families, and are urgent if the Philippines is to overcome widespread poverty, achieve sustained and rapid economic growth and attain genuine economic independence.

Filipinos need a government with truly visionary leadership that is honest about the state of the nation and boldly takes the steps needed to build a Philippines for the Filipino people.  Unfortunately, Pres. Arroyo’s SONA betrays an administration that provides neither, said Africa .