Business, Economics and Consulting

I admire the patience of the President.

P-Noy, as he now prefers to be called according to his newly-minted Press Secretary, bravely declared in his inauguration “wala ng wang-wang, wala ng counterflow”, and his statement was instantly picked up by a press ravenous for news bites.

In the succeeding days, we heard about how P-Noy was late for a presidential appointment after getting stuck in traffic, and how his Vice President brazenly disregarded his most recent popular statement by doing a counter-flow in a one-way street and ignoring stop signs. Still, P-Noy chose to forego the perks with being Number 1 in our country.

Like most ordinary citizens, I met the “no wang-wang” policy with glee. I have been a victim, numerous times, of bullies on the road who parted traffic like Moses parted the Red Sea, and who did so simply by being armed with that bleating, high-pitched siren that seemed more powerful than a God-given rod in Manila’s smoke belched streets. I was small fry – a mere speck – in the ocean teeming with big fish.

These self-styled VIPs, I told myself, often had a golf or masseuse appointment which they deemed more urgent than the daily grind I had to face as a mere taxpayer of the Philippines. Often I was livid, but at the same time I felt extremely powerless over the way these government officials and politicians ignored my own indignity of suffering through traffic that moved at a snail’s pace.

Today, I saw the stash of sirens being added to daily by Traffic Groups from all major cities in the Philippines. Except for official police mobiles and ambulances, the wang-wangs have gone silent indeed.

But I am still stuck in traffic.

As an urban planner, I realized yet again the universality of the basic principles of land transportation that have yet to be addressed ever since Ford mass produced the automobile: for traffic to flow smoothly, roads have to be of adequate size and condition, and the rate of flow should be commensurate to the number of vehicles taking that route from point A to point B.

I also realized, every single day, at how these commonsensical principles have consistently been ignored. And the indicator that I use is how long I am stuck in a convoy of vehicles that I don’t want to belong to – including an LPG delivery truck, two trisiboats with payongs, a mobile ice cream cart with matching jingle, one pick up truck, ten swerving jeepneys and two, extra-large sports utility vehicles that threaten to go from zero to sixty in five seconds as soon as the light turns green.

For the record, I do not mind at all if P-Noy uses a wang-wang. I sincerely believe a President has more important things to do than get stuck in traffic while the fate of the nation literally rests on his hands. However, if there is a necessity for someone of his stature to use a siren to keep his appointments, then it is also undeniable that there is something very wrong. What is wrong is the state of traffic congestion in the urban areas of our nation. Even the Davao situation is beginning to border on being unbearable.

We’ve seen how concerned agencies have jumped on Noynoy’s statement: it seems they’ve caught every vehicle with a wang-wang. So maybe the next logical step is for him to use his mandate and the eagerness of people to follow his orders to address what really needs to be fixed: the sorry state of our roads, the lack of discipline of most PUJ and taxi drivers and the seeming ineptitude of traffic enforcers who sometimes just look at violations rather than facilitate the flow of vehicles.

If we think of the President as a doctor, then he should be treating the illness and not the symptoms. Only then will we see the day when nobody, nobody needs to use a wang-wang to keep an appointment.

Feel free to send your comments to nic_agustin@yahoo.com.

On June 30, 2010, President-elect Benigno Simeon C. Aquino II was sworn in as the 15th President of the Republic. A day earlier, the PAGASA forecasted that it would be rainy that day but many defied the warning and still went to the Quirino Grandstand to witness the inauguration ceremony. The ceremony went well and the weather was cooperative – no rain, just a bit cloudy and humid. The extremes would have spoiled the whole event.

People from all walks of life joined the incoming President in Luneta for the event. Many came from the provinces, as far as Leyte and Tarlac. Some came all the way from California just to witness the victory of the person they have almightily supported during the campaigns.

It was the first time I witnessed a Presidential turn-over – from the ceremonial and traditional fetch by the incoming President of the outgoing President in Malacanang, to the last descent of the outgoing President from the stairs of Malacanang, to the joint ride of the 2 Presidents in the Presidential car with vehicle plate number 1, to the oath-taking of the incoming President, to the delivery of inaugural speech, to the military welcome at the Malacanang ground, and to his first official ascent to the Malacanang Hall as the new Head of the State.

The whole event could be described as poignant, touching, heartrending yet in good spirits and full of hope and promises. As the new President said in his speech, he never dreamt of being in such a position to lead people out of misery. All he wanted was a simple life and go through what simple and ordinary people experience every day. Before the death of his mother, former President Cory, I believe that President Noynoy was indeed a simple person with simple dreams and a simple lifestyle. He never figured quite prominently as a student, and even as a Congressman and a Senator. He was never controversial, neither was he popular and famous. Remove the Ninoy and Cory factors in his life, James Yap could easily become more popular than him. Yet, because of the turn of events or – as some people would call it - fate, he suddenly finds himself with the enormous and gargantuan task of leading a nation long abused, corrupted and exploited of its moral values, good conduct and vast resources.

President Noynoy must be so overwhelmed and could still be in awe as he now occupies the top post and faces the challenges – as well as the honor, bliss and ecstasy - that come with it. Yet, I know that he is not so naïve not to know what he is supposed to do with the country of which he has been called to serve. He knows the plight of the people - the sad realities that they have to tackle and the burden that each one carries each day. It sounds so familiar when he asked the crowd if they have experienced common specific unpleasant situations, and he added “ako rin” (me too) 3 times! He was just short of asking whether the crowd also experienced to swim in an ocean of garbage and to spend a christmas in the streets. But, of course, that’s another matter and he won’t be able to say “ako rin” (even if other people could, at least, pretentiously!). The point is that he said he knows by heart the problems that we all face – the wang-wang, the traffic lights, the counter flows, etc., but more importantly the inefficiencies in delivering services which were brought about by the mistakes, the shortcomings, and the excesses of past administrations.

President Noynoy did not pretend to have all the solutions to all the problems that we face as a nation, and he did acknowledge that he cannot do them alone. His motivation to do better is the trust given to him by the people, as he said “hindi ko sasayangin ang tiwalang ito na binigay niyo sa akin”. I never had a genuine admiration to President Noynoy but when he said this, I saw in him without daring to literally look at his face a simple man being transformed into a great leader. If he allows himself to be used by his Divine Creator to heal this nation and not by anybody else with their individual vested interests, and surround himself with trustworthy servants of the people, he would certainly be able to surpass the achievements of his mother and any of those who came before him, and much more, to make that democracy installed by former President Cory 24 years ago work for the betterment of this nation.

The ceremony was just an event. The inaugural speech could be just a whole set of words nicely and precisely put together to deliver an expression of gratitude for the votes, an articulation of the obvious, and a verbalization of what people always wanted to hear. Yet, June 30, 2010 ushered in a ray of hope for a brighter tomorrow. Getting rid of an unpopular – not necessarily inutile - administration brings in so much idealism and optimism. By consequence, President-elect Noynoy – simple as he is – unwittingly became the symbol of that hope. As he took this as an opportunity for him to prove that positive and desirable change could be effected in this nation, it should also be an opportunity for us to extend our unwavering support and do our own part to make such change happen.

Let’s not waste this chance; we have waited for it for several years. We continue to be vigilant and be active participants of such change.

We earnestly want that this hope to come alive.

Feel free to send your comments to nic_agustin@yahoo.com.

As I’ve said in my previous article, one of the missing links in our disaster risk management efforts is the involvement of the insurance market in ensuring faster recovery and reconstruction without necessary impinging more financial harms to victims of disasters, both for individuals and communities. Based on our experiences, poor victims – farmers, small and medium enterprises, and poor families – are left at their own to rebuild and restore their damaged physical assets. Even government’s destroyed infrastructure facilities suffer much from inadequate repair and maintenance assistance to the point that they pose abnormal and inefficient community and business operations for several months and even years after disasters.

While there are available calamity funds coming from the government, studies would show that the amounts available from these fund facilities are quite meager to match even just a quarter the total value of damage to properties, crops and production, and public facilities. For the damages caused by Typhoons Ondoy and Pepeng last year, for example, the available funds from all government and private sector sources of disaster risk financing could cover only 1.5 percent of total economic damages and about 3 percent of total public sector disaster recovery and reconstruction needs.

In times of disaster, the national government had always tried to provide for financial assistance to communities. The implication, however, is that with the scarce financial resources we have in our national coffer, disasters or catastrophic events would surely push up public spending beyond legislated budgetary ceilings which would result to higher public deficits and debts. When the national government extends financial support and assistance to localities and communities, it also exposes itself to greater and more significant financial risks given the enormous efforts required for physical, social and economic reconstruction and recovery.

Many developing countries have recognized the importance of an insurance mechanism as a critical factor in managing risks or natural hazards and disasters. The problem for these economies, like the Philippines, is that the insurance market only provides catastrophe or disaster insurance coverage to a few governments which could afford the high insurance premiums and where the degree of damage could easily be estimated and quantified or measured. Given these, obviously, the Philippines is not an easy target of the insurance market. Based on data from various studies, insurance penetration in the country has been very low, where non-life insurance premiums collected amount to only about less than a percent of our GDP.

A more pro-active and responsive means to transfer risk and to ensure immediate recovery after disasters is a laudable option. The cost of relief, rehabilitation and redevelopment should in fact be passed on to or spread among economic and financial agents other than the government or the affected and vulnerable individuals, enterprises and communities. These entities, which are on the ball for greater and more promising financial and economic opportunities to derive profits and benefits, are in a positive position to absorb such risks. Yet, the operations of these entities should not be limited to the Philippines alone or any similarly disaster-prone economies, otherwise, they would certainly be at the losing end. Perhaps an inter-country or cross-economy insurance cooperation is a mechanism that should be carefully considered. Within the Asian region, there are several countries with the same fate as the Philippines in terms of vulnerability to risks and disasters. This is just an ideal thought because in the real world, the challenge has always been the difficulty of getting the private sector involved, specifically the insurance industry, in sharing the risks of catastrophe and natural disasters.

There are few but excellent practices in the past from other countries which we could adopt as models. The government should initiate the effort to explore possibilities and create solutions to ensure faster means of post-disaster recovery. If played well, venturing into risk financing and insurance offers a great potential for good investment returns as well as to help secure and protect the country’s hard-earned development gains. A mechanism on how to go about it is a challenge that our financial and disaster risk managers have to face. Yet again, the leadership in the government should initiate this and make it a development priority.

Feel free to send your comments to nic_agustin@yahoo.com.

Erratum to the previous article Rainy season, La Lina and disasters, the fourth sentence in paragraph 6 should read: “These figures are a bit misleading; for example, typhoons Ondoy and Pepeng caused P206 billion (not million) in damages, or roughly 10 times the annual average.”