The Power and the Money

Philippine economy watch

  The latest figures indicate that the Philippine economy has started to shrink.  Truth be told, I'm surprised that it took so long.  The Philippines may be relatively less dependent on exports, but 38% of your economy is still 38% of your economy.  Meanwhile, the country is highly dependent on remittances sent home.  Latin American countries have seen such inflows plummet.  In the P.I., though, they've held up. 

Luckily for the Philippines, there isn't too much evidence that the place suffers from the strictures of emerging-market Keynesianism.  The yields on Philippine bonds rose at the bad economic news, presumably on anticipation of more government debt issues to combat the downturn, but only by 5 basis points.  That really is not a lot.  So, not much sign of crowding-out so far.

The peso fell, but that's probably a good thing.  It's good because it gives exports a filip and increases the domestic value of remittances.  It's bad because as of 2007 the Philippines owed to foreigners $23 billion in debt securities and $40 billion in other debts. 

We will see how it shakes out. 

A curious reaction to the Mexican flu

  “The Philippines’ health department urged people to avoid kissing and hugging in public.”

This led a colleague to ask me, “Is kissing and hugging in private somehow safer?????”

Senates

  There is a debate going on downblog over the United States Senate. 

Let's take a brief tour of Senates around the hemisphere.  (To which we'll include the Philippines, due to its political history.)  The American example set in 1787 proved very influential, particularly for the larger nations of América.  Did their adoption of an upper house with equal representation for federal subunits make sense?  Did they keep it? 

Argentina:  The Argentine senate gives each province three senators.  That's obviously undemocratic.  Argentina, however, has a historical justification for the practice.  Like the United States, the Argentine Republic began as a federation of independent states.  Unlike the United States, the states that formed the Argentine Republic had very little autonomous political history; most had been created from city councils that simply declared independence in the wake of the political chaos that enveloped South America after 1808.  After a great deal of civil war, including the loss of Bolivia, Paraguay, and Uruguay, provincial forces decisively defeated Buenos Aires in 1852.  A convention that excluded representatives of Buenos Aires hammered out a constitution the next year.  That same constitution has remained in effect since then, at least juridically. 

The convention accepted equal provincial representation in the Senate in order to limit Buenos Aires's dominance.  It also had senators elected for nine-year terms by state legislatures and required them to be able to show a minimum annual income of 2,000 pesos.  (That's approximately US$67,000 today in terms of purchasing power.)  Thankfully, later amendments got rid of those latter features, but equal representation remains.  In short, while there isn't really any good reason to keep the apportionment of the Argentine senate, the institution has deep roots in Argentine political history.  The resemblance to the U.S. case is quite strong.

Brazil:  The senate of the Federal Republic of Brazil gives three senators to each state.  The historical roots of this institution, however, are rather shallower than in Argentina or the United States.  The 19th-century Imperial senate did not provide equal representation for the provinces.  When the empire fell to a military coup in 1889, the new leaders had to find ways to convince provincial elites to support the new government.  One of the ways that they did so was to provide the provincial governments with equal representation in the upper house, in open imitation of the American example.  (In fact, the constitution of 1891 named the country the United States of Brazil.)  Brazil has gone through multiple constitutions since then, but the institution of the Senate has remained.  Unfortunately. 

Mexico:  The constitutions of 1824, 1857, and 1917 all granted equal senate representation to each state.  There was never much historical justification for doing so, other than imitation of the United States.  (Mexican states gained much autonomy during the 19th century, and several declared independence, but that came about after the end of Spanish rule.)  Since the country's governments rarely ruled by the constitution, however, legal stipulations didn't matter.  Under Porfirio Díaz, for example, all legislative votes were unanimous after 1893.  Nor did senators necessarily come from their putative state.  Under those circumstances, the number of senators per state didn't make a difference.  The Revolution didn't change that.  Under President Álvaro Obregón, for example, recalcitrant legislators were often shot.  Then came the creation of the PRI, with its iron-lock over politics, and ‘nuff said.  Constitutional stipulations didn't become more important than party rules until the 1997 midterm election. 

Mexico, however, is now ruled by a democratic government, and the constitutional rules matter a lot.  As part of the transition to democracy, Mexican politicians amended the constitution in 1993 and 1996.  In theory, the reforms granted each state four senators, up from two.  In practice, the reforms created an upper house selected by a weak form of proportional representation.  The winning party in each state receives two seats.  The runner-up receives one.  The remaining 25% of senate seats are then allocated to each party in proportion to their popular vote share.  In effect, the Mexico's current senate keeps the form of equal representation for each state while abandoning much (but not quite all) of the substance. 

The Philippines:  The Philippine Autonomy Act of 1916 created a 24-person senate.  The act grouped the country's 50 provinces into 12 districts, each of which received two senators.  The 1935 constitution of the Philippine Commonwealth dumped that crazy system, but selected something even crazier in its place:   at-large Senate elections.  That is, every voter writes in 12 names.  The top 12 vote-getters then become senators for six years.  The exercise is repeated every three years, making for a total of 24 senators.  The 1987 constitution of the Philippine Republic retains the feature.

The only polity that I can imagine justifiably imitating the United States, Argentine Republic, and Federal Republic of Brazil in the 21st century is the European Union.  Then again, I may suffer from a lack of imagination.

Policy of Attraction, part 2

  The Philippines came under American military rule in 1898.  In 1902, Congress authorized a civilian government known as the Philippine Commission, which ruled the place until the Philippine Autonomy Act of 1916. 

 

By the admittedly low standards of colonial governments, the Philippine Commission ran the islands rather well.  It spent heavily on infrastructure and education.  It purchased rice overseas during shortages and sold it at subsidized prices.  It ran a wide array of public enterprises, including a credit system.  It even ran an agricultural research program that managed to double crop yields. 

How did it pay for this?  By taxing the Philippines quite highly by contemporary standards.  Strangely, an entire literature has developed around the idea that the Commission government undertaxed the Philippines.  That literature simply happens to be wrong.    

Policy of Attraction, part 1

Here's something I didn't realize:  in 1932, Manuel Quezon and Sergio Osmeña privately asked a rather surprised President Hoover to veto an independence bill that they had publicly supported. 

As best as I can reconstruct it, it was a combination of the nativist reaction to the Watsonville Riots of 1930 and pressure from the sugar and dairy lobbies what led to the approval of the Philippine Independence Act of 1934.  Quezon got Hoover to veto the first independence bill, but Congress overrode him.  Quezon then managed to get the Philippine legislature to reject the bill, but Congress (and FDR) made it clear that independence was barrelling down the pike no matter what.  Quezon succeeded in convincing Congress to rewrite the provisions involving the retention of military bases, which gave him enough political cover to cut his losses and declare victory.  The Commonwealth of the Philippines came into existence the next year, with the Republic of the Philippines followed along in 1946.

Congress immediately cut the number of Filipinos allowed to come to the United States from unlimited to 50 per year.  (That's right, fifty.)  It also started offering Filipinos free passage home in 1935, but that wasn't very successful.  You've got to love the reason given in the linked article. 

Ironically, the U.S. reconsidered the Act's trade provisions (allowing Philippine products tariff-free entry until 1954 instead of 1939, albeit subject to a quota, and giving them preferential access until 1974) and the Philippines changed its mind on U.S. bases. (which infamously remained a huge presence on Luzon until 1991). 

I can shake the suspiscion that it's too bad that the U.S. couldn't decide on a permanent form of what both sides called "dominion status" back in the 1920s.  A permanent relationship along the lines of the Compacts of Free Association would, I think, have served both countries well, much better than the temporary and unequal arrangements that actually emerged, and then faded away.

Counterarguments and commentary are, of course, welcome.

It’s not all nanas

By request, a short post is coming on the Philippine government’s efforts to encourage emigration.  But first, a short post dispelling a very potent myth, particularly among people who have spent time in Singapore or Hong Kong:

Most Philippine emigrants are highly-skilled.  The “nana” is not representative.  This is not to say that domestic workers don’t make up a significant part of Filipino emigration.  It is to say, and I want to repeat this, that they are not representative of Overseas Filipino Workers.

As of 2004, 35 percent of  “temporary” Filipino migrant workers held a professional qualification. Another quarter worked in manufacturing.  That left 38 percent in the service sector. 

Of those, 58%, or 22 percent of the total, worked as domestic help. 

Permanent Filipino emigration is harder to track, since the emigrants don’t qualify for the many benefits that the Filipino government provides to its temporary migrants.  That said, the vast majority of the permanent emigrants go to the United States under the family-reunification laws, and the Philippine government tracks who they are.  In 2003, 51 percent of permanent migrants (excluding children, housewives, and the retired) fell into one of the following occupation categories: professional, technical, managerial, executive, or administrative.  All of the above require a degree. 

In short, overseas Filipinos aren’t just domestic workers.  Rather, they’re mostly nurses, teachers, doctors, pilots, accountants, managers, and engineers. 

In other words, the brain drain is very real. 

Chillaxing on the volcano, or, the end of empires

Another repost from the HDTD archives, this one from 2006:

I am sitting on a cliff overlooking a volcano sticking out of a lake, and contemplating the end of empires.

One of the reasons for that is the fact that I am being serenaded by a three-man band in mariachi suits singing an off-key rendition of “La Bamba.” Is there an image that better captures the colonial history of the Philippine Islands?

Why yes, there is:

The United States is probably the only other country on the planet in which you might find an “eatería.”

Anyway, I am contemplating the end of empires, in this case America’s empire in the Philippines.

Balikbayan blogging, redux

  I have been frantically trying to put the finishing touches on a paper about the Philippines, co-authored with Lakshmi Iyer.  Last week we presented it at a conference in Venice (Italy, not Los Angeles) and it’s almost ready to go.

Two years ago, I blogged a bit about a trip to the Philippines, during which I bought my lovely wife her engagement ring.  (Thank you, Carlos, for telling me where to go.)  I repost the first one in that series below.

Nuestro presidente

Soon, very soon, this fellow will be out of our hair.  That time, however, is not yet.  And so we get such classics of diplomacy as the following:

Reaction quote from a “Philippine-American,” Carlos Yu:  “I don't deny the capacity — I'm not bad myself — but it's certainly not the thing that comes to mind. Like great German stand-up.”

Poor Gloria Arroyo, needing to sit through that and smile. 

Leyendo los archivos en la madre patria

I’ll try to keep up the slack while Doug’s in Germany this holiday season.  This one goes out to Carlos’s paternal grandparents. 

The Republic of the Philippines is unique in Asia in how well it’s assimilated it’s Chinese population.   Chinese-Filipinos have served their country in every position from private to President of the Republic, and nobody seriously questions their Filipino-ness.  As a result, for all their communal solidarity Chinese-Filipinos consider themselves Filipino first, Chinese-Filipino a rather distant second, and Chinese-Chinese not at all.  (I have a sneaking suspiscion that future Chinese governments will find themselves unpleasantly surprised by that fact.)  This didn’t happen in Burma or Thailand or Vietnam or Malaysia or Indonesia. 

So why did it happen in the Philippines, and what does any of this have to do with the madre patria? 

Amma and I were in Sevilla because I was looking for tax and budget data on the Spanish Philippines.  The first place to look for that is the Archivo de Indias.  You can see the main building behind the beautiful woman in the above photo.  The reading room is across the street behind the main building:  look for the sand-colored edifice to the right of this group of Sevillano pedestrians.

In 1864, Madrid decided to modernize the Philippines’ tax system.  Since specific taxes laid on Chinese generated about 7 percent of the islands’ revenue, the Crown commissioned some fascinating reports before deciding on the specifics of the reform.  Extracts below the fold:

Nostalgia, or lack thereof, Part 3

So I'm here reading the Congressional debates about the annexation of the Philippines.  Man, Senator Hoar really ripped Senator Beveridge a new one.  "Have you read the Declaration of Independence, sir?  Allow me to remind you."  And Carlos will be proud that his people's representative, Senator John Spooner, proceeded to call Beveridge's economic justifications of American rule "base and sordid." 

But that's not why I'm here.  I'm here to ask a question that I've asked before, but who's answer I've forgotten:

WTF happened to baseball in the Philippines?  It's gone, disappeared, nada, se fué, totally driven out by ... basketball.  How and why did that happen???

From the Country that Brought You the Katipunan

The city of Jeddah, in Saudi Arabia, commissioned a great deal of public art.  The sculptures are more-or-less abstract, quite playful, and rather weird.

When I was last there, after a very luxurious trip across the country, I was thoroughly sick of being wined-and-dined.  Since Jeddah is one of the few places where a vaguely Arab-looking man in Western clothes can walk around unnoticed, that's what I proceeded to do.  That led to an impromptu basketball game with a group of Filipino expats. I automatically blurted out "Kumusta-ka!" when their car pulled up in front of me as I watched other people toss a ball around on some public courts, and an invitation to play naturally followed.

So when they told me that the below sculpture had, in fact, been designed by a Filipino, I was not surprised.  I have also been unable to stop laughing.

And a close up:

Brought to you by the country that named its first independence movement the "KKK."  I am not surprised, and I am still laughing. 

Manila Cha-Cha

I want to discuss my meeting with two remarkable 80-something men, members of the Philippines’ own “greatest generation”: Washington SyCip and Bienvenido Tan. The two of them encapsulate modern Philippine history.  Plus, they've got some great stories.

Let’s start with Mr. SyCip. Anyone visiting the Philippines is told to go see Wash. Go see Wash. In my case, it was Michael Chen who told us to go see Wash. So we went to go see Wash.

Back in Batangas

HDTD's man in the Philippines, Noel Maurer, continues guest-blogging, this time on the effects of the medical brain drain on the Philippines. (This might be of interest to our new Armenian readers. Welcome! Compare! Contrast! We're all in this together.)

On Wednesday I spoke to Dr. Maria Lorenzo, a prominent researcher at the Philippine National Institutes of Health. The PNIH is located in an old shambling colonial era building, which in the Philippines means the Depression or thereabouts: 1930, not the nineteenth century. The facilities are rather run down. The research they do there, however, is excellent.

One of the Philippines big worries is the loss of skilled personnel, particularly in health care. Health care workers make up only about a quarter of all skilled emigrants, but that’s the only statistic about the outflux that isn't impressive.

There are roughly 200,000 practicing doctors and 300,000 registered nurses in the Philippines. Compare those numbers to the approximately 130,000 nurses (many of whom had trained as doctors) who work abroad.