BATU, Indonesia. Photo by Jes Aznar

Friday, December 17, 2010

Luang Prabang, Laos: A slice of heaven -- New Internationalist

Luang Prabang, Laos: A slice of heaven -- New Internationalist

The journey to Luang Prabang, Laos takes at least 18 hours on a slow-moving bus from Bangkok. There isn’t much to see on either side of the road except hectares and hectares of rice fields.

There’s nothing entertaining to watch, either, on the supposedly VIP bus from the Thai capital. Don’t go waiting for an English film or even a Western soap opera on television. Instead, one has to endure the Asian daytime shows – lesser versions of the famed Eat Bulaga, the Philippines’ longest longest-running daytime show – more than 20 years now and still counting.

When this is done, one’s ears will have to take in the blaring Asian music that is foreign to a Filipino.

The leg room is cramped and, if you’re unlucky, the guy from the other side of the aisle will sit like a king and stretch his dirty foot towards you.

When the bus finally reaches the Northern Bus Station in the Laos capital of Vientiane, one has to transfer to another bus to Luang Prabang.

I travelled with Filipino documentary photographer Jes Aznar. We took the 8 pm bus – a 10-hour bus ride on a rough zigzag terrain that will never, not for a second, be a straight path.

I hardly slept on the overnight bus because of this dizzying journey and many times wanted to just turn around – if only it was that easy.

But just when I was at my wit’s end, the bus finally stopped. We have arrived at our destination. The sun is out and the sky, now a perfect curtain of blue. The crisp morning air greeted us the moment we hopped off the bus.

And there, staring right in front of us, is a place nestled in the middle of rolling hills and mountains.

Groggy and sleep-deprived, we head to the centre to drink some warm coffee. I see saffron-robed Buddhist monks everywhere. They wake up even before the moon hides as they line up before locals and foreigners offering them alms.

I see pagodas glistening under the morning sun. I see naked children swimming in the Mekong River.

We walk a bit more and we see more of the village. Quaint French-style villas sit alongside traditional Lao architecture.

European backpackers are everywhere, savouring the village and everything that it has to offer. Old couples travelling together are testaments that real love can go on and on.

It is my first hour in Luang Prabang and I am overwhelmed. The place is majestic, breathing the freshest mountain air and tantalizing travellers with the most colourful street market, which sells everything from vegetables to elephant puppets.

The village that sleeps snuggly between the busy Mekong River and the quiet Nam Khan River is a patch of heaven on earth. Unbelievably charming.

The atmosphere is beguiling, with touches of the town’s French past dating back to the 19th and 20th centuries and traditional architecture, making it a Unesco World Heritage Site.

There’s a lot to see in this quaint village. One can stroll along the road by the Mekong River, enjoy the view of the sunset while sipping bottles of Beer Lao or rent a motorcycle or a bike and hop from one temple to another to hear Buddha whisper in your ears.

My favourite is the Wat That Chom Sii temple on Mount Phousi, situated 300 steps above the town centre. It offers a breathtaking view of the rest of Luang Prabang and surrounding villages as far as the eye can see.

The walk is tiring but the postcard view it offers will soothe aching muscles in an instant.

Here in Luang Prabang, you spend the Lao kip by the thousands. We exchanged 100 US dollars and we got 800,000 kip. I’ve never held that ‘much’ money in my whole life.

We celebrated with a 20,000-kip- dinner buffet – the cheapest street food buffet ever in real life – loads of vegetables, pasta, salads and fried rice. It is best to bring cash, as swiping would have additional surcharges.

Accommodation is affordable: air-conditioned inns with clean sheets range from $10 to $25 a night. There’s free coffee too and bananas that go with the price.

For adventure travellers with deep pockets, travel agencies offer three-to-four day adventure packages that include a visit to waterfalls some 30 kilometres away from the town centre, trekking, elephant riding and a visit to far flung handicraft villages.

Rest assured, however, that even without the adventure trips, strolling for days in Luang Prabang is feast enough for the senses.

Sabaidee! Sabaidee* indeed, from this patch of heaven in the uplands of Laos. Nothing can compare.

*Hello, good day!

Friday, December 10, 2010


Barangay Calanan, Tabuk, KALINGA - Half naked in a tattered red shirt, the woman is crying out in pain. There are no words. Just unexplained pangs of anguish. She wouldn't stop. This goes on and on. She is pointing to her swollen stomach. It is unbelievably huge, similar to the size of a woman nine months pregnant. But she is not. She is old, wrinkled and weary.

"She is a victim of witch craft," says Francis, a driver whose employer is also among the sick people here.

They call him Amang. He is the village faith healer. As with most faith healers in the Philippines, he "heals' with bare hands. Today is "healing" day. Villagers looked forward to this all week long. On this sunlit morning, there are at least a hundred people here outside a small house along the road not far from the center of town. A giant pastel colored umbrella hangs like a canopy above the throng of people -- the sick and kibitzers alike. The sick are waiting to be touched by Amang's hands.

Amang does his stuff. "Jesus is Lord" is plastered on his white shirt. He stands across the woman who is grimacing in pain. "Who are you?!" Amang shouts in the Kalinga dialect, addressing the bad spirits believed to have possessed the woman. The woman continues to scream in anguish. Amang pours water all over her body.

"Is it holy water?" I ask Francis.

"Yes it has been blessed by Amang."

Amang has healed hundreds, he says. Many others who have been touched by his hands remain sick but are not giving up.

"It's not just Amang. It's faith in God that can heal," says Francis.

I left the place wondering if the woman's pain will go ever go away with Amang's touch and buckets of blessed water. I wonder if tonight she will sleep soundly, her stomach back to normal and her weary body no longer in pain.

Learning from the monks of Laos

They wake up even before the sun rises, while backpackers in dingy hotel rooms are still in deep slumber after a night of eating and drinking. They pray and meditate.With heads bowed, they line up and receive alms from locals and foreigners -- sticky rice, banana, flowers -- anything that could help them survive.

They sleep in cramped quarters with just enough space for beds, clean sheets and some candles for prayers. They live simply, void of any excesses. Just the basics. Nothing else. Solitary, simple and silent. Nothing indulgently luxurious.

They are guided by the eight precepts:

"1) to abstain from taking life.2) to abstain from taking what is not given.3) to abstain from unchastity.4) to abstain from false speech.5) to abstain from intoxicants causing heedlessness.6)to abstain from untimely eating.7) to abstain from dancing, singing, music and unseemly shows, from wearing garlands, smartening with scents, and beautifying with perfumes.8) to abstain from the use of high and large luxurious couches."

Letters from Luang Prabang

It seemed like a never-ending cliff-hanging hell of a bus ride under the darkest sky and the thickest fog. I hardly slept on the overnight trip and did not for a second feel like a VIP on the supposedly "VIP" bus, no thanks to the Thai music blaring on the radio, cramped leg room and the combined stench of food and sweat.

But after more than ten hours up the rugged and mountainous zig-zag terrain, we finally reach Luang Prabang, Laos. And there, staring before my sleep-deprived body and soul is a patch of heaven on earth. I see a breathtaking, majestic land surrounded by mountains and rolling hills. Here, the air is crisp and the morning sky, now a clear curtain of blue. There is mixture of quaint French style villas and ethnic Asian homes on the side of the Mekong River. Food is good and the night market provides a welcome feast for the eyes.

Everybody says "Sawadee" --- perhaps, it's something like a hello. They smile. We smile back. Laid back yet vibrant.

Have I mentioned the Beer Lao? Good price and no hang-over but if you ever get one from the perfect Mojitos from Lao Lao Garden, you can wake up early in the morning and give some alms to monks in their orange robes. It's the perfect cure for any hangover or hang-up.

Jes captures everything with his lens -- from the golden Pagodas that shine under the glistening sun to the Lao Laos everywhere.

Beer Lao and Lao Coffee and the view of the sunset from the Mekong River -- ah, nothing can compare. Here, indeed, is a slice of heaven on earth.


Media Urges Government to Target Private Armies

Media Urges Government to Target Private Armies

A project for

Photo by Jes Aznar. As published at

Sunday, December 5, 2010

Jes. My dear Jes Aznar

We crossed borders. Ran out of money -- to the last centavo, peso, dollar, baht and kip. Argued with Lao policemen in the middle of the night, in a strange, dusty road leading to the Lao-Thai Friendship Bridge. Almost killed each other with the intensity of anger and love. Got stuck on the bus for more than 24 hours, up the zig-zag road to Luang Prabang. Braved the freezing aircon of the night bus back to Thailand. Endured the strange and blaring Lao music on a supposedly VIP bus. Got lost in a strange bus station, our first stop, with not a single sign in English. Played hide and seek in the Northern Bus Station in Vientiane. Fought more than half of the trip. Rented a problematic motorcycle. Got lured into getting a Lao massage only to end up like a bunch of greased roasted pork, with no comfort at all for our tired and aching bodies. Got smirked at by salesladies when we offered to swipe because we were out of cash. We walked for more than two hours searching for that mall in Bangkok. We went to the ends of the earth. To hell and back.

But we never left each other. It's a journey babe. A tough one, like the road to Luang Prabang but at the end of it, just like in the uplands of Laos, is a slice of heaven on earth.

Sabaidee, mahal.

Sunday, October 24, 2010

CALL for PHOTOS: The Ampatuan Massacre, a year of darkness without justice.

By Jes Aznar

We will never let this act of evil be forgotten.

The National Union of Journalists of the Philippines is calling on you to share your photos and images related to the November 23, 2009 Ampatuan Massacre. Selected images will be shown in a simultaneous photo exhibit in key cities nationwide on November, exactly one year after the gruesome massacre of innocent civilians in Ampatuan town in Maguindanao.

Kindly email your photos (high resolution jpg files) on or before October 28, 2010 to

Thursday, October 21, 2010

Thank you to the National Statistical Coordination Board (NSCB)

One fine morning. Thank you to the country's statisticians for this award.

thank you to Jonathan Cellona and Roy Domingo for the photos

Thursday, October 14, 2010

Tuesday, September 21, 2010

Saturday, September 18, 2010

Kim Komenich: Telling a never-ending story

Iris Gonzales for Starweek

MANILA, Philippines - Kim Komenich does not recall exactly how old he was when he was assigned to cover the years of the Marcos dictatorship, an assignment that earned him a Pulitzer.

“I must have been 26 or 28,” he says in a recent interview with STARweek.

However, more than 20 years after, Komenich still remembers every scene in that historic period that saw the end of the Marcos era. He still remembers the smell of the streets that he walked on, the deafening voices of protests against Marcos, the cabbies who helped him get from one coverage to another, the dark corners of Manila, the chaos of the upheaval and every individual he captured through his lenses during his assignment here.

Komenich covered the 1986 Philippine Revolution for the United States paper Examiner. For his coverage, Komenich won the 1987 Pulitzer Prize in Spot News Photography.

Years later, even after exploring the world as a newspaper photographer, landing in different war zones and finding himself moving from the camera to video, Komenich still considers his Philippine assignment unmatched.

More than earning the Pulitzer for his coverage, Komenich feels that the People Power revolution and the upheaval of the Filipino people during the Marcos years is the most important story he has ever covered.

“In terms of the most important story of my life, it’s this. That’s why I’m here. I want to find out some of those people and it’s a story. I’ve covered a lot of crazy situations after I covered the Philippines but this is the one that has the most heart. A country as a whole took a chance,” Komenich says.

He has often pondered on the magic of the late Corazon Aquino and how she took on the Goliath that was Ferdinand Marcos.

“I the United States who would that be? If the president of the US goes out in the streets, I don’t think that would happen,” says Komenich.

In his mind’s eye, Komenich still sees everything that he saw from behind his lens.

“People went out to the streets – people who ran a sari-sari store; people who were politicians; people who were millionaires; people who were lawyers; people who had stalls in Mabini; doctors; teachers. People were in the streets together. They were being tear-gassed together. It was one of the most impressive things I saw,” Komenich says.

It is what he saw during those years that hasbrought Komenich back to Manila.

Landing on Philippine soil again, Komenich gets the sense that things are changing positively.

“I just get a sense that the country is moving on with its future,” he says.

He is now doing a documentary

, details of which he declined to divulge just yet, on how the lives of the people he encountered then has changed more than 20 years after.

Komenich believes that while his assignment may have ended, the story goes on.

“I want to know how their lives have changed and see whether things have gotten better. As someone who shoots documentary, that’s what I want to find out. It’s not like you want things to get better or you want things to get worse. You just want to tell the story. That’s the essence of a good documentary,” Komenich says.

It is because of this that Komenich took time off from his teaching profession.

“I’m teaching now. I get three months off. It’s off deadline so I can do what I want,” he says.

According to his biography posted on his website (, he worked as a staff photographer and editor for the San Francisco Chronicle from 2000 to 2009. He now works as an assistant professor at the San Jose State University in the US.

Photography has not ceased to amaze him and he believes that teaching is his way of “giving back.”

“For me, it’s always fascinating to do something and be paid to go witness something that other people will pay money to read...Everything I do with my camera is an attempt to tell a story,” he says.

Komenich believes he will keep on coming back to the Philippines, even after covering dozens of war zones and people’s uprisings in other countries.

This story, after all, is a never-ending one, he says.

Photographer-documentarist shows off his new gadgets. Photo by Jes Aznar (As printed in this Sunday's issue of Starweek)

Black and white photo of Corazon Aquino by Kim Komenich reposted from

Friday, September 10, 2010

Philippines to miss three of eight Millennium Development Goals - TH!NK ABOUT IT

Philippines to miss three of eight Millennium Development Goals - TH!NK ABOUT IT

MDG badge from

Reforming the Bureau of Internal Revenue: Dream or Reality?

By Iris Cecilia Gonzales

(A project for

Victoria Constantino (not her real name) runs a hardware business in Caloocan City.

There was a time, every tax-filing season when her bookkeeper would ask her for PhP 50,000 (USD 1,111).

The money was for the examiner of the Bureau of Internal Revenue (BIR) who was assigned to assess the income tax returns filed by Constantino’s company.

“If you don’t pay, the examiner will give you problems,” Constantino told the Philippine Public Transparency Reporting Project (PPTRP).

Once, Constantino threatened to report the examiner to her superiors. “Go ahead,” the BIR employee said unfazed. Constantino decided keep silent instead. The corrupt official had won.

“I decided to give in to his demands because I want to continue running my business,” she said.

At another time, Constantino recalls having to pay “grease money” just to have her company’s receipts and ledgers certified by the BIR as is required.

The “grease money” costs roughly PhP 500 (USD 11) per booklet of receipt or ledger."

"If you don't give anything, they will just sit on it," she said.

Constantino can only imagine how it is for bigger companies. “The amount of grease money must be bigger for conglomerates and large taxpayers,” she said.

The businesswoman added that she lives in hope for a reformed BIR and the day entrepreneurs in the Philippines both big and small can deal with an “honest and sincere” tax bureau.

Meeting of hopes

And such a bureau is exactly what new incoming BIR Commissioner Kim Henares has in mind.

It is a daunting task, she told PPRTP in an interview. However, Henares believes reforms are possible. She also justified her faith because she believes there are many of her colleagues in the bureau “who want to do good.”

Henares’ optimism comes from her previous experience of working in the agency having served as deputy commissioner from August 2003 to November 2005.

Now back as the new chief and “broom,” Henares has a lot of plans for the bureau.

Foremost among them is her declared promise that she will not ask employees to “moderate their greed” - as some of those in public life have urged, but to work instead to ensure that “every peso collected will go to the government as intended.”

Henares knows the critical importance of reforming the BIR.

Her agency, after all, accounts for 70 per cent of government revenues and with the government facing a widening budget gap that is projected to hit PhP 325 billion (USD 7.2 billion) this year ( (3.9 percent of gross domestic product) – the need for deep and lasting reform is now more urgent than ever.

As of end-July, the budget gap is already at PhP 229.4 billion (USD 5 billion) - already 70 percent of the full-year ceiling.

For the whole year, the BIR is tasked to collect PhP 860 billion (USD 19 billion). As of the end of July, the BIR collected only PhP 467.3 billion (USD 10.38 billion) - more than half – but that still leaves it needing to improve its rate for the remaining months if it still hopes to hit the target.

The problem

Benjamin Franklin famously stated that the only two certainties in life were death and taxes – and yet the system of self-assessment used in the Philippines combined with the legacy of poor and irregular enforcement has left many people trying to escape the latter as best they can.

“If people feel that they can get away with it they do so. So it’s really convincing people that they can’t get away with it –either this time or ever,” Henares told the PPTRP.

It’s a chicken and egg situation according to one official at the Department of Finance who told the PPTRP that BIR employees allow themselves to be corrupted by accepting – or demanding – “all kinds of perks” –from lavish dinners and lunches through to extravagant gifts and varying amounts of “grease money.”

The other key problem according to BIR’s new head is the padrino or patronage system here: “We are too smart and we have a culture of patronage. Whether people want to admit it or not, they make decisions based on who recommended them.”

And yet all this notwithstanding, Henares believes that BIR’s reputation can still be salvaged and the situation be reversed. “I am giving everyone a clean sheet of paper,” Henares said.

The reforms she now intends to put in place are those she hopes will convince people the Aquino administration is serious in its plan to collect what is rightfully owed irrespective of who they might be.

Since taking over on June 30, Henares has started laying out her plans for internal reforms, which she divides in two.

The most important for her is the so-called performance management system wherein staff know exactly what is expected of them.

“There will be a contract between BIR as an institution and individuals as employees stating what the performance indicators will be. For me, what’s important is that everyone’s contract will be related towards our goal,” she said.

“Everyone should be part and parcel of the need for reforms. They should feel that they are contributing to the goal,” Henares said.

The BIR currently has 12,000 staff headed by Henares and six deputy commissioners – one each for the Information Systems Group; the Legal and Inspection Group; Operations; Resource Management; Special Concerns and Tax Reforms.

One critical area is the audit system –when BIR staff move in to examine a company’s books. A ranking official from the Department of Finance (DOF) - the parent agency of the BIR, say rampant corruption happens there.

“A lot of things can happen there,” says the official whose job it is to monitor BIR operations at the DOF level. She declined to be named because of the sensitivity of the issue.

Auditing happens at random. Officially, a BIR examiner audits a company’s books if he or she suspects that the company may be dodging its tax obligations.

However, the Finance official said the examiner could also choose to audit the company simply to harass the owner - especially if he thinks they have the capacity to pay a substantial amount of “grease money.”

Explaining the audit process, Wendell Ganhinhin, senior tax manager at the auditing firm Punongbayan & Araullo said that the purpose of an audit and investigation is to uncover violations against and non-compliance with laws and regulations.

“In the process, even compliant and law abiding taxpayers have to go through an ordeal to prove their innocence if they are under suspicion,” says Ganhinhin.

With the burden of proof generally resting on the taxpayer, long hours and many resources often need to be devoted to refuting findings of discrepancies.

He also maintains that there could be inefficiencies in the audit approach and the lack of necessary tools, such as computers, databases and online references which prolong the process.

“Hence, the audit period becomes a long agonizing process, which some taxpayers describe as a dreaded nightmare that they would not wish to experience again,” he said.

It is because of this that the taxpayer sometimes chooses to ‘settle’ or enter into ‘under the table’ deals with the examiner to make “things easier for his business,” the Finance official explains.

Henares told the PPTRP that she was well aware of the problem.

“We will have tighter internal control,” she said and cited the fact that if an examiner conducts an audit of a certain company he should be made to account for what he did and why.

“So for example, if you issue a Letter of Audit (LOA), before you move to another assignment, you should clear your LOA. You should be able to account for that,” she said.

“It should be supported by a docket. Everything should be there. These include the assessment notice and final assessment notice to support what the examiner did. It should be properly monitored,” she said.

More importantly, Henares says the examiners will be asked to defend their audit. “It’s like a thesis defense. We will ask: 'This is the assessment you made initially and your final assessment is this way but payments went down.' Why is it like that? Or why did it take too long? Why did it take two years?”

She also plans to have more audits during her term.

“Not everyone gets audited. It’s random but I think that every taxpayer should be audited at least once in their life,” Henares said.

Another area where corruption takes place is in the issuance of exemptions for existing tax regulation.

This is in the area of the BIR’s Legal and Enforcement Group.

The Finance official interviewed by PPTRP said that for the legal department to issue an exemption, the so-called “grease money” could run in “millions of pesos" because the exemption would effectively save the company a substantial amount in yearly payments.

Henares also plans to strictly implement the BIR’s Code of Ethics, which includes provisions that prevent employees and officials from accepting simple or lavish gifts for whatever occasion from individual and corporate taxpayers.

Under the Code, they will have to resist invitations to dine out as the guest of ‘clients’.

There will also be regular “rigodons” or shifts in assignments among revenue district officers, examiners and other field employees to prevent over familiarity with companies under their jurisdiction.

Henares said this would also provide for more efficient operations as the capacity of the BIR personnel would be matched with or suited for the tasks.

“You pace people based on their capacity,” she explains.

She will also support the regular lifestyle checks conducted by the Department of Finance by the BIR and Bureau of Customs officials and employees.

Quoting anti-corruption guru Robert Klitgaard, Henares said the anti-corruption drive launched by former BIR Commissioner Efren Plana during the 1970s has helped to set patterns of expected behavior.

Henares adds that she will lobby for the agency’s removal from the Salary Standardization Law so as to provide key incentives to staff.

“I’ve said that we should be removed from the Salary Standardization Law,” she said. As a profit center, the BIR also deserves the retention of a fixed percentage of its collection as its operating budget, she said.

“This is necessary so that our people won’t have to make abono. Right now they have to buy their own printer and they have to buy their own ink,” she complained.

Henares says that she also plans to introduce a new data system in the BIR. “It’s important that you reform the process and you back it up with an efficient information technology system.”

Bigger budget

And yet such reforms will demand a much bigger budget.

Henares’ predecessor, former BIR chief Joel Tan-Torres says that the lack of resources remains a major problem for the agency.

“The BIR’s manpower remains practically at the same level as the situation over 20 years ago when it had just over 10,000 personnel,” Tan-Torres told PPTRP.

He noted that the BIR’s operation budget lags behind comparable tax administration offices in the Asia-Pacific region: BIR budget is less than 1 per cent of its tax collections,

“This lack of resources substantially hinders the BIR’s effort to handle the ever increasing tasks and responsibilities,” Tan-Torres said.

Henares, nonetheless, remains optimistic that the reforms would be implemented.

Employees interviewed by the PPTRP are giving Henares a “honeymoon” period.

“We’ve known her. She is not new to us. I believe that for as long as the reforms are doable, we can do it,” said an employee who declined to be named.

Another official said Henares is known as “strict” and “straight” so people will have no choice but to follow that.

Finance Secretary Cesar Purisima, in an interview with PPTRP, said that if there were no corruption, the government would have more funds to get people out of poverty.

“We are serious in our efforts to curb smuggling and corruption,” he said.

With the government in dire need of revenues for social services such as public health and education, Filipinos will be keeping a tight watch on what happens at the BIR in the weeks and months ahead. Philippine Public Transparency Reporting Project

(The author is a finance beat reporter of the Philippine Star and a blogger. She is also a director of the Economic Journalists Association of the Philippines. Photo by Jes Aznar)

Saturday, August 28, 2010

My interview with the country's internal revenue chief

BIR Commissioner, Kim Henares: LOVE (of country) and TAXES | The Philippine Star Other STAR Sections Starweek Magazine

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MANILA, Philippines - Kim Jacinto-Henares has assigned herself a daunting task.

She wants, with an infectious idealism pushing her, to correct 106 years of wrong practices in and wrong impressions of the Bureau of Internal Revenue (BIR), the government’s main revenue agency.

“You have to correct 106 years of wrong impression. If I’m able to do that in three months, then I would say I’m pretty successful,” Henares tells STARweek.

Henares is the new chief of the BIR, perceived as one of the most corrupt agencies of government. An accountant and a lawyer, the US-educated Henares acknowledges that her task is enormous and challenging.

“I’m very realistic. I know that before I see an uptick, we will see a downtick. It’s hard. It’s like rearing a child. You have to show people that you are serious,” she says in a soft but clear voice, her graciousness belying the steel that undergirds her convictions.

Henares knows how difficult it can be because she is not new to the BIR, having stayed in the revenue service from August 2003 to November 2005. During such period, she held the position of Deputy Commissioner of the Special Concerns Group and office-in-charge of the Large Taxpayers Service.

She finished her Bachelor of Science in Commerce major in Accounting degree at the De La Salle University and was admitted as a Certified Public Accountant (CPA) in 1981. She is also a lawyer, graduating Second Honor Medal from the Ateneo de Manila University.

Her education also includes a Master of Laws degree major in International and Comparative Law from Georgetown University in Washington DC.

Prior to the BIR, Henares worked as a tax lawyer at SGV & Co., was a partner at the Yap Jacinto Jacob Law Office, vice-president for corporate and legal affairs of ING Bank, governor of the Board of Investments and Senior Private Sector Development Specialist for the World Bank Group.

It is her previous experience in the agency that convinced Henares that she could contribute to the government.

“My experience in the BIR was a very nice experience. It was a very fulfilling experience. This previous experience encouraged me to come back. The impression that the BIR people left me were good impressions,” she says.

More importantly, she says that her objective and the objective of her superiors – President Benigno Aquino III and Finance Secretary Cesar Purisima – are the same.

“Whenever I go into a job, the most important thing is that the objectives of my superior and mine are the same,” she explains.

This objective – the focus of all their actions for the next six years – is to collect the revenues that rightfully belong to the government so that it would be able to provide the required services to the people. Every peso, she says, would go to state coffers where it belongs.

“I’m also idealistic. My feeling is that I can contribute. If not for love of country, I wouldn’t be here,” she admits.

Henares is racing against time to put the proper systems in place, but she believes that six years is enough time to do it.

“The single biggest problem of the BIR is that we are so intelligent. If people feel they can get away with it, they do so. But there is also an upside to that. If they feel they can’t get away with it, they won’t. So it’s really convincing people that they cannot get away with it this time – and forever more,” she says.

As such, her general plans for the BIR are to implement existing tax laws strictly, to implement internal reforms and to put in place a new data and filing system for the entire BIR.

She is also giving erring taxpayers a sort of amnesty or a chance to settle their obligations before she brings the full force of her office on them.

“For those who have not filed the correct return, they can still file,” Henares says.

The agency is now drafting a resolution that would detail the terms of the program, which includes abating surcharges or penalties.

In terms of putting up a new system, Henares says she hopes to see this in place in the next two years.

“What I want is for the whole process to be an integrated system such as when the taxpayer gives us a tax return, it would be as close to an electronic data form as possible. As much as possible, data would be lodged by the taxpayers themselves in electronic data form so that we would not have to spend too much time and effort in converting it into electronic data form. So in that instance, we can easily match it,” she explains.

The BIR will also be working with other sectors for data sharing. These include the Bureau of Customs, the National Statistics Office and the various local government units.

There are limitations to the BIR’s access to information because of the Bank Secrecy Law, but Henares hopes that someday, in a better Philippines, the agency would also have enough access to personal records such as that of the Anti-Money Laundering Council.

All these plans notwithstanding, Henares believes the path of reforms is not easy, with the Philippines mired in patronage politics or the padrino system.

Not even two months into her new job, Henares says it is as hard as she imagined.

“I imagined it to be hard work. I put a lot of pressure on myself also so I want to put the reforms in place in a much shorter timetable,” she says, also admitting that she does not intend to “cling to this job,” maybe not even staying on for the whole six years of the Aquino administration if she can finish what she set out to do before 2016.

With her new job, Henares now has to wake up earlier than usual.

“I have to wake up a lot earlier because I have to be here (at the BIR head office in Quezon City) at 8 a.m. Sometimes, I have to be at a (television or radio) studio at 7 a.m.,” she shares.

Nevertheless, Henares, who celebrated her 50th birthday recently, tries to leave Sundays for hearth and home, with husband businessman Dan Henares. “I try as much as possible to leave Sundays free and to make sure that Sundays are devoted to family.”

She and her husband, a car and motorcycle enthusiast, enjoy driving around the country or going out of town.

“He likes cars so we drive around in a convertible,” she reveals.

Henares is such a low-profile person that not many people know that she is Chinese-Filipino, or that she likes to do stuff that, in her own words, are “not very feminine.”

“I like doing house work but of a different kind – carpentry, plumbing, painting. Before, when I was studying in the US, I was thinking of buying an old house and repairing it. It’s not feminine stuff but that’s me. People say Leos are very mechanical,” she says. In fact, she and her husband, whom she’s known for 25 years, like to tinker with cars and motorcycles.

What she still has to get used to is having bodyguards following her around, even to the grocery. President Aquino has assigned members of the Presidential Security Group to keep a tight watch on her.

Henares, nevertheless, does not mind this adjustment because she wants to be able to contribute to the country’s development.

“I believe that it’s a make or break time for the Philippines. It’s either we make it or we break it. We should take this opportunity and we should give it our 101 percent. All of us should help. That’s the reason I took the job.”

Friday, August 13, 2010

The problem with the National Food Authority....(a project for

Poor Economics, Corruption in Rice Procurement Continue to Waste People’s Money

By Iris Cecilia C. Gonzales

During his first State of the Nation Address last month, President Benigno Aquino III spent almost five minutes talking about the National Food Authority (NFA), the state-owned grains agency.

How, Aquino wondered, could the NFA have incurred billions in debts and in effect wasted taxpayers’ money?

Furthermore, Aquino asked why the NFA had to import so much rice or way beyond the country’s needs?

The answer is not so simple. The problem stems from poor economics and corruption in the system.

New Finance Secretary Cesar Purisima, in an interview with the Philippine Public Transparency Reporting Project, recognizes this and believes that such practices should not continue because it will only bleed state coffers dry.

“There is a problem with the policy (surrounding NFA). There’s no reason why we should allow that to continue happening,” Purisima said.

To understand the problem, one needs to look into the mandate and the structure of NFA, the government agency tasked to ensure the food security of the country and the stability of supply and price of the staple grain-rice or palay.

In terms of food security, NFA needs to be able to respond within 48 hours to meet rice requirements in the event of a natural calamity or emergency that impacts rice growing or distribution.

It should also be able to restore or maintain supply at prices immediately prior to the calamity or emergency within two weeks.

In the area(s) affected, the NFA should be able to keep retail prices at reasonable levels for consumers as well as farm-gate prices to enable farmers get a reasonable return on their crop.

Because of these two mandates of the agency, it has been incurring billions of debts. It also leaves it open to abuse or corruption.

The NFA started as the National Grains Authority, created through President Decree No. 4 dated September 26, 1972 with the mission of promoting the integrated growth and development of the grains industry covering rice, corn, feed grains and other grains.

In 1981, the government reconstituted the NGA into what is now the NFA, in effect widening the agency’s social responsibilities and commodity coverage to include food. Presidential Decree (PD) No. 1770 was issued which reconstituted the NGA into what is now the NFA.

Food security

Today, NFA performs the functions of ensuring food security of the country and the stability of supply and price of the staple grain-rice through various activities and strategies, which include procurement of rice paddy from individual farmers, buffer stocking, dispersal of paddy and milled rice to strategic locations and distribution of the staple grain to various marketing outlets at appropriate times of the year.

These initiatives are meant to stabilize prices of rice in the local market and ensure steady supply during times of calamity or emergencies. However, to be able to keep doing this, the NFA has had to keep selling rice at reasonable prices even if it was bought at a high price.

Essentially, because of the problem of rice in the world market, NFA ends up buying high and selling low to make it affordable to Filipinos. In 2009, for instance, the government shelled out a whopping PhP 40.8 billion (USD 907 million) to import 1.5 million metric tons of rice from Vietnam, according to the 2009 annual report of the NFA.

So while consumers get affordable rice, it comes at a very high cost for the government. It pushes the country’s fiscal position to a tipping point, according to Purisima.

It is this heavy importation of rice by NFA that Aquino highlighted during his speech. He claimed it was a crime for the Arroyo government to buy 900,000 metric tons of rice in 2004 even though just 117,000 metric tons were needed.

 He alleged this was repeated in 2007 when 1.827 million metric tons of rice were imported to fill up a supply gap of just 589,000 tons.

 "Hindi ba krimen ito?" (Isn't this a crime?) Aquino asked.

Aside from receiving money from the government to import rice, the NFA also relies heavily on state coffers for guarantee for its loans as well as tax subsidies.

In 2009, according its annual report, NFA secured PhP 20 billion (USD 444.4 million) in guarantee from the national government for its short-term loans. This guarantee allowed the grains’ agency to secure additional credit lines from various banks.

These loans are necessary for the agency to continue fulfilling its mandate to buy rice high and sell low. In 2008, for instance, when there was a shortage of rice in the market, the NFA was selling rice at PhP 18.25 (less than a dollar) per kilo when the cost of rice was already at PhP 32 to PhP 35 per kilo.

At present, NFA is selling rice at PhP 25 per kilo which is still well below the real cost of rice which is PhP 32 to PhP 35 per kilo.

Outstanding obligations ;

As of end-May 2010, NFA has total outstanding obligations of PhP 171 billion (USD 3.8 billion), comprising of short-term and long-term loans as well as the debt papers it issued to refinance existing debts and to fund operations.

Last year, the NFA successfully raised PhP 9 billion (USD 200 million) from the sale of 10-year bonds --proceeds of which would be used for its refinancing requirements and operations for 2010.

Aside from this, NFA also availed of PhP 17.703 billion (USD 393.4 million) in tax subsidy for its importation of rice and corn. The subsidy comes in the form of the so-called Tax Expenditure Fund (TEF), which is essentially non-cash.

The TEF is a subsidy released by the Department of Budget and Management (DBM) to government-owned and controlled corporations and state-run companies such as the NFA mainly to settle customs duties and other taxes arising from the importation of goods.

While there is no actual cash involved here, it still does mean revenue losses for the government. If state-owned agencies were able to pay in cash for their duties, the national government would have earned more.

The huge amount of money that NFA gets from the national government illustrates the poor economics of NFA.

Prone to corruption

Finance Undersecretary for Privatization John Philip Sevilla said that the mandates of some government-owned and controlled corporations including the NFA are really problematic.

“Some state-owned agencies such as the NFA are created in such a way that they are effectively bound to lose money,” Sevilla lamented.

The poor structure and system have also made the NFA prone to corruption.

Critics of the government’s rice procurement program have been vocal about the need to overhaul NFA’s operations. Just last March, then opposition Rep. Teofisto Guingona III of Bukidnon claimed that so-called “crocodiles” or corrupt government officials are raking in millions of dollars in commissions on rice importations.

Guingona, now a newly-elected senator, questioned why the government had to increase rice imports even before experts could ascertain the extent of damage to farming caused by the El Niño dry spell.

He was referring to the 2.45 million metric tons of rice that NFA had planned to import for this year.

The lawmaker claimed that corruption happens when government officials rake in money from commissions given by rice sellers.

Rice traders interviewed for this article declined to be identified because of the sensitivity of the matter confirmed this.

For example, said one rice trader, if a foreign rice supplier sells rice to the Philippines, they can connive with NFA officials by shipping, say, lower quality rice or different from what was declared on paper.

On paper, the supplier can declare that it has exported 1 million metric tons of rice that includes broken grain of 10 percent. In rice shipments, broken grain is usually included but is considered of inferior quality compared to the whole grain.

In reality, however, the shipment of 1 million metric tons may include broken grain of up to 40 per cent.

The seller will then give officials of the NFA “commissions” for the “savings” earned from such an arrangement, the rice trader told PPTRP.

Corruption is allegedly so rampant and innate in the system that even officials of the Bureau of Customs – who are supposed to inspect the goods – agree to the arrangement for a share in the commission.

“There is a huge budget for importation so they (NFA officials) take advantage of this,” said the rice trader.

Transparency in NFA

In an interview with this writer, NFA spokesperson Rex Estoperez denied the allegations and stressed that procedures on rice procurement have always been fair and done in the most transparent manner.

“We go through the process,” he said.

He said that the Philippines continues to import because it does not want a repeat of the rice crisis in 2008.

“We need to import more because we don’t want a repeat of 2008. Why do we need more, because it is better to have more. Our preparation is always forward-looking,” he said.

He also said that any decision to import -- when to import and how much to import -- is done by the Interagency Committee on Cereals. Aside from the NFA, members of this committee are the Department of Agriculture, the National Irrigation Administration, the Department of Trade and Industry (DTI) and the National Economic and Development Authority (NEDA).

The Department of Science and Technology-Philippine Atmospheric, Geophysical Astronomical Services Administration (DOST-PAGASA) is also a member of this committee because of the need to assess the weather conditions.

“The decision to import is based on statistical data and surveys provided by the Bureau of agricultural Statistics (BAS) related to palay production for the year, the projected beginning rice inventory for the following year, and daily and historical annual rice consumption requirement,” Estoperez said.

He said that for the 2010 rice importation, the damage on the country’s palay production by the successive typhoons during the 2009 main harvest and the projected El Niño effect on agricultural crops this year were given consideration. The role of the NFA is solely to facilitate the importation.

Furthermore, Estoperez maintained the agency abides by the provisions of Republic Act 9184 or the Government Procurement Act.

“In keeping with RA 9184 provisions, the volumes of rice to be imported are being published ahead of time along with the scheduled pre-bidding and bidding proper,” he said, adding that the group also invites observers to the bidding.

These observers include representatives from the Commission on Audit, the Procurement Transparency Board that includes members from the Catholic Bishops’ Conference of the Philippines (CBCP), the civil society, farmers and non-government organizations.

“The media also covers the scheduled pre-bidding and bidding proper,” he said.

Nonetheless, the fact remains that because of excessive importation, the Philippines is “swimming in rice” and that some are currently rotting in warehouses, according to current NFA administration Angelito Banayo.

The Commission on Audit (COA), in its 2009 audit report on the NFA, has recommended a major re-examination of NFA’s operations.

“We recommended that management re-examine the practice in the light of the issue of conversion which diverts NFA rice to be sold as commercial rice. It gives opportunities for rice traders to purchase large volume of low priced NFA rice and to sell them later as commercial rice at a much higher price,” the COA said.

With all these problems in importation and NFA’s money-losing operations, the government concedes that a long-term solution to the problem is necessary.

NFA’s Estoperez said it is high time for Congress to overhaul the NFA and revisit its mandate.

“We have to amend. Our mandate is buy high and sell low. Ideally, we should just be for buffer stocking and as a regulator of traders. We shouldn’t be importing anymore. We will import but only for buffer stocking,” he said.

As such, he said, the long-term solution is to revisit, revise and amend the mandate of the NFA.

“Let’s leave it to the private sector to import,” Estoperez said.

In a separate interview, Finance Undersecretary Jeremias Paul Jr., who is tasked to oversee the operations of state-owned agencies such as the NFA said the agency’s functions should be separated.

“The regulatory and proprietary functions should be separated,” Paul said. He added that importation should be left to the private sector.

While this could raise the prices of rice in the market, Paul said this wouldn’t necessarily be the case because when there is competition, prices would go down.

Nonetheless, he said the government should opt to have a “targeted cash transfer system for the poor” to subsidize their costs in buying rice. This would be similar to the conditional cash transfer system put in place by the Department of Social Welfare and Development (DSWD).

Amendments to the NFA charter however remain pending in Congress to this day.

Overhauling NFA

Government sources said lawmakers, especially populist ones, are afraid to touch on the issue of the NFA because rice is a “political issue with social costs.”

The pending bills aim to strengthen the NFA by transforming it into two separate entities: the National Food Corporation (NFC) and the Food Development and Regulatory Administration (FDRA).

According to the proposals submitted to the Committees on Government Reorganization, on Government Enterprises and Privatization and on Agriculture and Food, “the NFC shall be primarily responsible for managing the government rice buffer stock, while the FDRA shall discharge the regulatory and research and development functions in relation to national food security objectives.”

Quirino Rep. Junie Cua who authored one of the pending measures said that the NFA is experiencing financial difficulties which necessitate its restructuring to make it more viable.

The lawmaker also stressed the need to rationalize the function of the NFA as it is undertaking activities which are better performed by other government bodies citing as an example the agency’s activity of selling rice at prices below market level.

Finance department’s Paul said the government is stepping up measures to overhaul NFA but needs the help of Congress for the charter amendments.

And Budget Secretary Florencio Abad said there is now an interagency committee which includes members from the Department of Agriculture, Department of Budget and Management and the Department of Finance that is now studying how best to overhaul the NFA.

Initial proposals, Abad said, include separating the different functions of the NFA and limiting these to warehousing and regulatory functions.

This would enable the government to reduce the budget given to NFA.

The role to import would then be left with the private sector but this would be regulated by the NFA. All these plans are now being thoroughly studied by the interagency committee. Abad said that what can be done is to re-channel the subsidy provided by the NFA to the public.

“What we want is a more targeted subsidy because right now, under the present set-up, it’s a general subsidy. We want to direct these subsidies to indigents. Right now, only 27 per cent of the poor benefit from the present set-up,” Abad said. He said the plan is to give rice subsidies under the government Conditional Cash Transfer Program directly to the poor.

This way, the NFA no longer has to sell rice in the domestic market at prices lower than the cost of importing it.

“Definitely because of the tight fiscal position of the government, we cannot allow the present situation to continue,” Abad said.

The Aquino administration has inherited a budget gap of PhP 196.7 billion (USD 4.3 billion) in the first six months of the year, 28.2 percent more than the PhP 153.4 billion (USD 3.4 billion) budget deficit recorded in the same period last year. The six-month figure is PhP 51.6 billion (USD 1.1 billion) higher than the programmed ceiling of PhP 145.2 billion (USD 3.2 billion) for the period.

In the meantime, as the government continues to subsidize the money-losing operations of the NFA, the grains agency would continue to put pressure on the country’s already fragile fiscal position. Philippine Public Transparency Reporting Project


Saturday, July 24, 2010

Thanks to my Philippine Star family

STAR writer wins blogging competition
(The Philippine Star) Updated July 25, 2010 12:00 AM Comments (0) View comments
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MANILA, Philippines - The Philippine STAR’s Iris Cecilia Gonzales, who covers public finance, won in the THINK3: Developing World blogging competition organized by the Netherlands-based European Journalism Centre (EJC).

She is the only Asian and the only Filipino to win in round one of the competition, out of roughly 100 bloggers from around the world. She and eight other bloggers have been awarded a 7-day reporting expedition to Kuala Lumpur, Malaysia next month.

The TH!NKers will participate in a conference on the transformation of journalism and development reporting practices and they will travel the area to experience what development reporters do every day.

“These winners have been selected because of their overwhelming contribution to the project and for the quality of their work. These bloggers, and their work over the last 3 months of the competition has resulted in an unbelievable assortment of thought provoking posts on this platform,” the EJC said.

For more information, visit

Wednesday, July 7, 2010

Philippine public schools: not so public after all. - TH!NK ABOUT IT

Philippine public schools: not so public after all. - TH!NK ABOUT IT

METRO MANILA, Philippines - It is 10 pm in Manila. There is a bright yellow moon glistening above the almost empty roads of the metropolis. It is Sunday, the only day in the week when there are no classes and no work.

Little boys and girls are usually sleeping soundly by this time, tucked under cottony sheets or simply in the arms of their mommies and daddies, preparing for another big day in school the next day.

But there is no reprieve for Christine and Ferlin, 11 and 13 years old, from sorting out trash outside restaurants, massage parlors and other establishments that are usually filled to the brim on Sundays.

In this late hour, the two girls are wading through heaps of trash to find whatever stuff they can recycle and sell to junk shops for up to $2 on good days. The meager amount, they would still have to divide between them.

On not-so-good days, they get only $1, which they would still need to half in two.

“We’re looking for anything we can sell – cardboard, cans, plastic containers or paper,” said Christine, her thin hands smudged with dirt and soot.

Like most children whose parents have no jobs, Christine and Ferlin both need to earn extra money so they can spend for the numerous miscellaneous fees that public schools in the Philippines charge their students.

In principle, students should be able to study for free in public schools in the Philippines, numbering to 37,607 elementary schools and 5,359 secondary schools as of end-2009.

However, parents of students who send their children to public schools usually end up deferring the enrollment because of the various miscellaneous fees slapped by the schools.

Christine and Ferlin are neighbors in Krus-na-Ligas, a small lower-to-middle income community in Quezon City.

On this particular night, I chanced upon them in a dark corner filled with trash, outside a commercial establishment, 30 minutes away from where they live.

They spend three to four nights a week scouting nearby streets and villages for recyclable crap they can sell to junk shops.

This is necessary, they said, because their parents have no incomes to fund the miscellaneous fees that their schools charge.

The miscellaneous fees usually collected by public schools consist of PTA (Parents-Teachers Association) fee, school paper contribution and student government fund. The fees can go as high as roughly $20 a year.

The fees can cost a little less than $3 per single requirement.

It is no wonder that some students are dropping out of school.

A recent study of the Department of Education shows that for every 100 students who enroll in the 1st grade, 33 drop out before reaching Grade 5 and 31 out of 100 high school freshmen drop out before reaching their senior year, according to Congressman Raymond Palatino of the Kabataan Party-list group, a sectoral group.

He said that the trend for the past ten years show that for every 10 pupils who enroll in grade school, only 7 graduate.

“Government statistics show that for the past years there was a steady increase in total school enrollment. True. But there were also an increasing proportion of elementary school-age children who remained out of school, based on the most recent Philippine assessment report on the Millennium Development Goals,” Palatino said in his first privileged speech in Congress in May 2009.

Furthermore, he said, in school year 2005-2006, almost 65 percent of six-year old children did not begin their primary education on time. The cohort survival rate was placed at 76 percent in 2001 but it went down to 70 percent in 2006. The completion rate was 75 percent in 2001 but it also went down to 68 percent in the same period. The drop-out rate and repetition rate also deteriorated in the same report.

With this stark reality, it is no wonder that the Philippines is likely to miss MDG 2 which is to achieve universal primary education.

As I noted in my previous post, the goal is to bring the net enrollment ratio in primary education to a full 100 percent by 2015 from 84.8 percent in 2007.

“Similarly, the proportion of pupils starting from grade 1 who reached grade 6 is still at 75.3 percent as of 2007 when the goal is to bring this to a full 100 percent of the population by 2015. Furthermore, the country's primary completion rate is still 73.1 percent as of 2007 when the goal is to bring this to 100 percent by 2015,” according to my previous post.

It is a quiet Sunday evening. Christine and Ferlin should both be in bed. But they can’t just yet. Instead, they will have to wait until their sacks are filled with recyclable trash which they will try to sell to junk shops the next day, just before they leave for school.

Somewhere, buried underneath these heaps of garbage are their dreams of a better future. Christine hopes to become a nurse someday. Ferlin wants to be a teacher.

Photo by Jes Aznar