The peso's down, Mindanao projects stalled, but Pardo says that 'we'llovercome'

Finance Secretary Jose T. Pardo, long known as the Cabinet's foremost dispenser of "bottled sunshine", couldn't help but admit the bleakness of the present situation. But he didn't lose his patented grin when he promised that "things will be getting better."

In a candid speech and no-holds-barred open forum yesterday at the weekly breakfast-meeting of the Greenhills Walking Corporation, a "walkers-joggers-talkers" club, Pardo said that it's true that the Mindanao conflict and the "bombings" in Metro Manila have affected business confidence. He noted that the stock exchange registers "very low activity," original "foreign investment targets may not be achieved" and "some capital flight has been noted."

He added, however, that although the Philippine peso has weakened and interest rates have been pushed up, he expected the slide to be arrested shortly. (The peso plunged to P42.89 to the dollar yesterday morning and may yet erode to over P43). The Finance Secretary insisted that while the depreciation of the peso from the 1999 year-end level was 4.3 percent, this was consistent with the depreciation of other currencies in the region.

He pointed out that over the same five-month period, the Indonesian rupiah had depreciated by 14.51 percent; the Australian dollar by 12.88 percent; the Thai baht by 3.82 percent; the Singapore dollar by 3.52 percent; the Japanese yen by 4.12; and in Europe, the Euro by 10.59 percent; the British pound by 8.12 and the Swiss franc by 7.73 percent.

The drift of this argument, of course, is that misery loves company. The Filipino consumer, as human nature indicates, doesn't want to be miserable at all. Although Titoy Pardo called on his listeners "not to worry," since the crisis began with our gross international reserves at US$16 billion "and we haven't seen the need to draw of that yet," the situation is worrisome. Public perception and morale make all the difference.

But keep on smiling, Titoy! In times of adversity, we have pessimists galore, and one determined -- even stubborn -- optimist can yet help turn the tide.

Mindanao, as Pardo revealed, has been the biggest loser in these troubled times.

"Most of Mindanao is peaceful," he reminded us, "and, remember, we're speaking of an island twice the size of Taiwan -- but in the eyes of the world, and even in the eyes of our own people in Luzon and the Visayas, it appears that Mindanao is going up in flames."

For instance, in South Cotabato, a group of Singaporean investors who had prior arrangements with PMU SOCSKSARGEN to develop a 1,000-hectare plantation backed out when fighting and the "bombings" in the area flared up. Certain foreign-assisted projects like the Japanese-funded infrastructure programs under Tokyo's 23rd loan package earmarked for Maguindanao and North Cotabato have been halted completely.

Pardo disclosed that the Mindanao Business Council (MBC) estimates that losses due to the conflict in the first four months of this year have already amounted to P1 billion.

Pardo, who's the acknowledged head of an economic team which confers daily with the President, said that the government knows the Mindanao conflict has resulted in capital flight, a slowdown of commercial activities, lower agricultural production (since large tracts of land and farm-to-market arteries are affected), and, logically, the budget deficit will be affected depending on the duration and intensity of the conflict. Moreover, the situation will require increased military spending, he added.

"Gross development product (GDP)," he confessed, "could go down by 3 percent even in a quick and non-violent scenario if there is no growth in Mindanao."

He asserted that he "hoped" there would be a peace agreement with the Moro Islamic Liberation Front (MILF) if negotiations resume, but admitted that -- since he is not a member of the Cabinet Cluster E -- which oversees security and military matters, he cannot comment further on the issue. In his view, he averred, the root of the conflict in Mindanao is "economic in nature. People in Mindanao need food, shelter, jobs and economic opportunities."

This is where I disagree with Titoy. True enough, Mindanao needs massive economic development, the opening up of opportunities, and a realistic job-creation campaign: But these are solutions which can be implemented only if there is peace, law, and order. As long as there are powerful rebel forces in the field, and the MILF retain huge armed camps from which to operate with impunity, how can this elusive "peace" -- as demanded in escalating decibel count by some panicked politicians -- be achieved? If the government quits in mid-battle, then we're licked.

At this very minute, the world is witnessing the abject retreat of the Israeli defense forces from their so-called "security zone" in southern Lebanon. It's true that, to begin with, Israel had no right to occupy a vast swathe of Lebanese sovereign territory and keep it as a buffer zone for nine years through military means. However, with the Israel Defense Forces (IDF) pulling back in almost indecent haste and confusion -- why on earth was the turn-over not be accomplished in good order with Israel "returning" the area to the Lebanese government? -- the abrupt withdrawal can only be seen as an Israeli defeat.

The vacuum created by the unexpectedly helter-skelter evacuation of their camps and outposts by the Israeli military was instantly filled by jubilant Hezbollah and Amal Islamic guerrillas, who seized abandoned weapons and military equipment -- which they will soon certainly turn against Israel's sketchily-drawn northern border.

Oh, well. Israeli mothers, of course, are rejoicing that their sons conscripted to serve in the IDF in "dangerous" Southern Lebanon are "safe." But not for long. The Israelis, after too much bloodshed on both sides, have lost not merely "territory" but the initiative and the war of perception. As for their "allies" -- the Lebanese sneer at them as mercenaries -- in the demoralized and deserted "South Lebanese Army", those poor sods have been abandoned to shift for themselves, although the Israelis have offered those "who fear for their lives" temporary "citizenship" so they can evacuate their families to Israel. (sixty percent of the SLA were Muslims and 40 percent Christians).

No matter how you may cut it, it's surrender.

What about here?

Among those who attended and responded to questions at yesterday's forum in the Ristorante La Dolce Fontana were Miguel B. Varela, president of the Philippine Chamber of Commerce and Industry (PCCI), a position formerly held by Pardo in civilian life; Sergio Ortiz-Luis Jr., chairman of the Philippine Exporters' Confederation and chairman of ExportBank; Jimmy T. Tang, chairman and honorary president of the Federation of Filipino-Chinese Chambers of Commerce and Industry; Executive Director Edward S. Go of Global Bank and Dr. Antonio V. Arizabal who has been designated by the government to resuscitate the Mindanao Steel Corp. in Iligan, Lanao del Norte.

Varela declared that it is essential for business confidence to return that the police and armed forces ferret out and arrest the "bombers" and work out peace in Mindanao -- which, of course, is easier said than done. However, he expressed confidence in the bounce-back of our business and industry.

Tony Arizabal was concerned that foreign investors no longer considered investment in Mindanao steel desirable. But, after all, Tony, Iligan is much too close to the "war zone." Jimmy Tang revealed that the Filipino-Chinese chambers were raising a P100 million fund to help the families of soldiers who have died or were wounded in Mindanao.

We have to face it: We're involved in a "war" not of our choosing, no matter how this critics blame Erap for being a warmonger -- and even if TIME magazine has jumped into the fray to bash him some more. Being criticized and assailed is part of the job description of being President of a democratic Republic, unlike the leaders of dictatorships and totalitarian states where criticism and dissent are stifled. So, Erap has to endure "the slings and arrows of outrageous fortune."

Incidentally, it came as a complete surprise to me that I had been expected to speak at the recently-completed conference of the Philippine Press Institute. This is an invitation which reached me when I was in New York and I had replied to PPI Secretary-General Ermin Garcia Jr. that I would not be able to accept the speaking engagement since I would be out of the country at the time.

The topic which was discussed, I learned, was whether the press should be "developmental" or adversarial. That's just like asking: "Have you stopped beating your wife?" Of course the press should neither be developmental nor adversarial per se. The press must report the news and the truth, putting no color on its reporting one way or another. Opinion writers, editorial writers, and pundits, of course, give their personal opinions based on what they know, and identify these clearly as opinions. How conceited can journalists be if they claim that their role is to be "movers and shakers."

To be frank, seminars by journalists and editors tend to be self-serving. There's no secret to good and honest journalism. Just report the facts. Write about the W's --who, what, where, when -- and the H -- meaning, "how." That's the way it has been since the beginning. That's the way it should be.

ERRATUM -- In an earlier column, I erroneously referred to Khadaffy Janjalani as the son of the founder of the Abu Sayyaf, Abdulrajak Janjalani. Correction: He's the younger brother. Mea culpa.