BY ALEXANDER MARTIN REMOLLINO
Bulatlat
Vol. VIII, No. 6, March 9-15, 2008

Is a political climate marked by broad and widespread opposition to the ruling political clique damaging to the economy?

The country is on the brink of a political upheaval that could repeat the People Power uprisings of 1986 and 2001 – which ousted Ferdinand Marcos and Joseph “Erap” Estrada, respectively. Massive protest actions have taken place in the wake of revelations by Rodolfo “Jun” Lozada, a former government engineer, about corruption in the Arroyo administration – particularly anomalies in the National Broadband Network (NBN) deal between the Philippine government and China’s ZTE Corp.

The NBN project is a $329-million contract that aims to connect government agencies throughout the Philippines through the Internet.

Lozada, who was a technical consultant on the NBN deal between the Philippine government and China’s ZTE Corp., testified at recent Senate investigations on the controversial contract – confirming and adding detail to earlier allegations by Jose “Joey” de Venecia III, son of ousted House Speaker Jose de Venecia.

Lozada revealed in Senate investigations that the NBN deal was overpriced by $130 million.

He also disclosed that presidential spouse Jose Miguel “Mike” Arroyo was involved in backchannel negotiations on the NBN deal. He confirmed the involvement of former Commission on Elections (Comelec) chairman Benjamin Abalos in the contract, as well as his attempt to bribe the younger De Venecia, and Romulo Neri – who was director-general of the National Economic and Development Authority (NEDA) during negotiations on the project.

Besides this, Lozada also revealed that it is “standard practice” to overprice government contracts by 20 percent. He revealed that the NBN deal is just one of many overpriced government contracts, which he said include the NorthRail and SouthRail contracts, as well as the Cyber Education Project.

His revelations, together with previous attempts to silence him like his abduction allegedly by elements from the Presidential Security Group (PSG) and the Philippine National Police (PNP) with the assistance of airport security men upon his arrival from Hong Kong early last month, provoked public outrage and revived calls for Arroyo to resign from office.

In a radio interview on Feb. 23, President Gloria Macapagal-Arroyo said another People Power uprising would do harm to the economy.

‘Growth’ and stability

“In my personal assessment, the world embraced EDSA I in 1986; the world tolerated EDSA II in 2001; but the world will not forgive an EDSA III – instead it will condemn the Philippines as a fractious political system that is hopelessly unstable,” she said.

“What will happen is that foreign investors would not invest in the Philippines,” Arroyo pointed out. “How will we weather the difficulty (brought about by) the rise in crude oil prices in the world market?”

Arroyo has made much of the economic growth posted by the country under her administration. In a speech on Jan. 11, she said:

“Today, the Philippines is on a path to permanent economic growth and stability. We’ve created seven million new jobs in seven years… We’ve achieved 28 consecutive quarters of economic growth in the last seven years. And that’s something that even our neighbors cannot say. There were times during this 28 quarters that the… Singapore for instance, experienced negative growth and many of our neighbors and even the United States, there were quarters when they experienced negative growth.

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