The 25 Year Cycle of PhilHealth Corruption

This week the Senate has been holding hearings about alleged corruption within PhilHealth. Many things have come to light such as the existence of a "mafia" which has been stealing billions from the taxpayers. These mafiosi have even been named.

https://www.cnnphilippines.com/news/2019/8/14/PhilHealth-mafia-members.html

A former official of the Philippine Health Insurance Corp. (PhilHealth) on Wednesday bared the names of the members of the alleged “mafia” in the state health insurer. 

On the prodding of Senate Minority Leader Franklin Drilon during a Senate probe on purported anomalies in the agency, former PhilHealth board member Roberto Salvador named five regional vice presidents and a sacked regional vice president as alleged members of the supposed mafia: 

PhilHealth Vice President for Region IV-B Paolo Johann Perez

PhilHealth Vice President for Region VII William Chavez

PhilHealth Vice President for Region X Masiding Alonto Jr.

PhilHealth Vice President for Region XII Dennis Adre

PhilHealth Vice President for ARMM Khaliquzzaman Macabato

Former PhilHealth Vice President for Region XII Miriam Grace Pamonag 

Salvador also alleged that PhilHealth’s assistant corporate secretary, Valerie Hollero, and its legal officer, Jelbert Calicto, are part of the group, dubbed as the “Mindanao bloc.”

PhilHealth President Morales vowed before the Senate that he would dismantle this mafia.

https://news.abs-cbn.com/news/08/26/19/philhealth-chief-vows-to-dismantle-mafia

The head of the Philippine Health Insurance Corporation vowed Monday to "dismantle" the alleged "mafia" within the state-run health insurance firm. 

PhilHealth President Ricardo Morales said executives tagged as "mafia" members have already been reshuffled and an internal investigation is also underway. 

"If there is a mafia, I will dismantle that mafia. That is one of my initiatives," Morales told ANC's Headstart.

If you haven't noticed both of those articles are from last year!

What is happening in the Senate now is a repetition of an unending cycle of allegations, investigations, suspensions, everyone forgetting as time passes, and business as usual stealing billions in PhilHealth. Contrary to Morales' vow to dismantle the PhilHealth mafia every person named is STILL listed as an Executive Officer on PhilHealth's website. The mafia was never dismantled and a year later we read the following:

https://newsinfo.inquirer.net/1320271/morales-tags-2-mindanao-philhealth-execs-having-inordinate-influence-within-agency-i-cant-move-them

The two executives have “inordinate influence” and “dictate” how the agency is run, according to Morales. 

Sen. Risa Hontiveros asked Morales if he could identify the officials 

“At least two ma’am: Alonto and Macabato because I could not move them,” Morales said.

Is there a mafia or not? Who is in it? How are they able to continue to defraud the nation? Those are questions I am not going to answer. It appears not even those making the accusations can give a definite answer.

Obviously there is corruption happening within PhilHealth and it has been this way since 1995 when PhilHealth was founded. Those perpetrating the corruption are not just insiders but also doctors and hospitals. From 2011 we read:

https://web.archive.org/web/20111016070511/http://asiancorrespondent.com/55816/bogus-claims-haunt-philhealth/

For many years you’ve been paying your Philhealth dues, and so has your company. But that money may have been misused to finance bankrupt hospitals and fatten doctors’ salaries. 

As early as four years ago, a scandal hit the Philippine Health Insurance Corp., which confirmed allegations that some private hospitals and doctors have been defrauding the state-run health insurer. 

In her testimony before a 2007 congressional hearing, Dr. Madeleine Valera, Philhealth vice president for health finance policy, said that since 1995, Philhealth had lost as much as P4 billion due to fraudulent claims. 

The anecdotes behind these claims are both tragic and true. In Iloilo, one eye doctor claimed to have performed 2, 071 eye surgeries in one year, for a total of P16 million in professional fees that he collected from Philhealth in 2006. When a Philhealth inspection team visited a hospital in Davao City, it caught janitors in hospital beds pretending to be Philhealth-accredited patients. 

Today, various estimates show that Philhealth is still losing up to P500 million annually due to bogus claims. This amount can already cover additional 500,000 indigent families under a sponsored program scheme. 

The continued abuse of the funds is also behind the limited coverage for new entrants to the labor force, since a new employee will have to contribute for at least nine months within the year of confinement before he or she could be entitled to benefits. 

The problem persists because of government’s failure to prosecute any of the players involved in the scam.

While some hospitals, such as the Our Lady of Mercy Specialty Hospital in Bacolod and the General Santos Doctors Hospital in General Santos City, had been fined or suspended, the truth is no one has been jailed for the crime. Weighed down by manpower problems and lack of political will, Philhealth could only implement stop-gap measures to stop the bleeding, such as random inspections and a stricter evaluation of claims.

Lack of political will and only implementing stop-gap measures to stop the bleeding rather then aggressive prosecuting those who commit fraud. Why not? Could it be because some PhilHealth executives are colluding with doctors and hospitals to commit fraud? The DOJ says that is exactly the case.

https://newsinfo.inquirer.net/1322072/2-resource-persons-reveal-fraudulent-schemes-inside-philhealth-by-its-employees-in-collusion-with-doctors-banks

“The individuals (who requested anonymity) informed the Task Force of the different fraudulent schemes allegedly employed through the years by PhilHealth officers and employees, both at its main office and regional offices, in collusion with some doctors and hospitals, and even banks which act as remittance centers,” DOJ Undersecretary and spokesman Markk Perete said in a statement on Saturday. 

Such schemes include the payment of false or fraudulent claims against PhilHealth, the malversation of premiums, as well as the exploitation of “some unscrupulous personalities” of the case rate system and the interim reimbursement mechanism, among others. 

The resource persons, Perete added, also exposed the “abuses and flaws” in PhilHealth’s legal department and information technology (IT) office which allegedly made the proliferation of the schemes possible.

Enter Duterte in 2016 and his strong political will.  Surely he will not allow corruption to flourish within PhilHealth. So said former PhilHealth President Roy Ferrer.

https://www.philhealth.gov.ph/news/2019/no_mafia.php#gsc.tab=0

"No mafia can survive in the Philippine Health Insurance Corporation (PhilHealth) under the watch of Philippine President Rodrigo Roa Duterte." Thus declared PhilHealth acting president and CEO Dr. Roy Ferrer, laughing off the imagined fears of a former PhilHealth staff working with the past administration. 

Dr. Ferrer scored a certain Minguita Padilla, erstwhile head executive staff of a former Health Secretary under the government of former President Benigno Simeon C. Aquino. "The loser's mind and defeatist attitude of Ms. Padilla cite ‘a culture of fear' in PhilHealth, but that was the PhilHealth of the past," Ferrer pointed out, "and such fear and trembling no longer exist in the present PhilHealth and under the strong government of President Duterte." 

In a fast-breaking development, President Duterte was quoted by a television network saying, "I do not have the slightest doubt on the integrity and honesty of PhilHealth President Roy Ferrer," in the midst of this controversy particularly related to the wrongdoing of a health center that had abused and misused PhilHealth benefits. 

"Ms. Padilla, who served a former Health Secretary (who figured prominently in the Dengvaxia mess), harks back to a weak-kneed and feeble government before the robust Presidency of my Boss, Rody Duterte," Ferrer said. "So when Ms Padilla spoke about the impotence and helplessness of the earlier PhilHealth leadership, she is referring to a thing of the past," Ferrer added. 

Acting PhilHealth President Ferrer said that the present PhilHealth Board members were appointed by President Duterte, and our President's principled stand and courageous stance have rubbed off on every Board member and, added Ferrer, "No members shrinks from the challenge to cleanse PhilHealth of shenanigans. 

"Our top management executives who are directly under me are loyal to the higher ground principles and policies of a PhilHealth, and no villainous mafia member can survive within their ranks," Ferrer emphasized.

This statement reads like a bad joke in the light of all the corruption which continues to come to light. Roy Ferrer himself was accused of corruption and forced to resign in order to give PhilHealth a clean slate and new start!

https://www.pna.gov.ph/articles/1071990

He said that although Duterte still believes in the integrity of PhilHealth Acting President and Chief Executive Officer Roy Ferrer and members of the Board, he felt that their resignation would give the state-run social health insurance firm a clean slate. 

“While the Chief Executive reiterated his trust to - and has no doubt about - the integrity of PhilHealth Acting President and CEO Dr. Roy Ferrer, as well as the members of the board, he however demanded for their courtesy resignation in order for the corporation to have a clean slate absent any taint of irregularity in rendering services as well as implementing pertinent policies on health, including the Universal Health Care Act,” Panelo said in a statement.

Funny that Duterte demanded Ferrer's resignation while all the executives named as part of the mafia remain in their positions at PhilHealth. Also funny that Ferrer, along with several others tagged in the WellMed dialysis center scandal, are back in their positions of power as if nothing happened. Ferrer was appointed as Assistant Secretary of the DOH.

http://archive.is/KwFKR

The former acting President of Philippine Health Insurance Corporation (PhilHealth) was appointed by President Rodrigo Duterte as one of the assistant secretaries of the Department of Health (DOH). 

Roy Ferrer was included in the list of presidential appointees released on Monday. 

He, along with other PhilHealth board members, was asked by Duterte to submit his courtesy resignation in June 2019, in the wake of alleged fraudulent insurance claims involving nonexistent kidney treatments. 

Ferrer was asked to resign due to command responsibility. Duterte, however, vouched for his integrity and honesty.

Four others who were charged in the scam but not forced to resign were recently given promotions.

https://cebudailynews.inquirer.net/319717/4-officials-tagged-in-alleged-philhealth-scam-get-promotion

At least four officials of Philippine Health Insurance Corp. (PhilHealth) were promoted less than a year after being implicated in the WellMed dialysis scam, according to a document obtained by the Inquirer on Friday. 

Based on PhilHealth Corporate Memorandum No. 2020-0037, Cheryl Peña, Dr. Rizza Majella Herrera, Dr. Bernadette Lico and lawyer Recto Panti were promoted to department manager III on May 18. Their promotion, along with four other officials, was approved by the state insurance firm’s board of directors on May 14.

All this is to say that the cycle continues at PhilHealth. Allegations, charges, nothing. And that is how it has been for 25 years!  Again from 2011:

https://web.archive.org/web/20111009083140/http://asiancorrespondent.com/55886/philippines-how-to-cure-philhealth’s-woes/

Philhealth officials in Region 12 said their conviction rate in administrative complaints has been minimal compared to the volume of cases that they have investigated. Not a single criminal case has been filed against any health care provider in the region or any of the doctors involved in fraudulent claims. 

Connections with the powerful, lack of witnesses, safety concerns, and conniving Philhealth officers—all these contribute to the continued plundering of Philhealth. 

Philhealth officials in Region 12 said their conviction rate in administrative complaints has been minimal compared to the volume of cases that they have investigated. Not a single criminal case has been filed against any health care provider in the region or any of the doctors involved in fraudulent claims.

That article goes more in depth into some of the problems within PhilHealth. The corruption runs deep and there are many and various reasons. From political intervention to lack of manpower there are many things wrong with PhilHealth and contrary to the PACC six months will not be enough to fix 25 years of corruption.

https://newsinfo.inquirer.net/1320572/only-6-months-needed-to-rid-philhealth-of-corruption-pacc-commissioner

(That is possible. I don’t believe it cannot be done in six months. You put the right system, the right people, and do the right thing, in six months it will be improved.) 

Belgica reiterated that some government and private institutions have been offering their information technology solutions to PhilHealth for free, even as PhilHealth seeks a proposed P2.1-billion IT project to stem fraud and scams devised by some corrupt personnel. 

(They should use the IT solutions being offered for free and the IT system will be cleansed. There will be a validation mechanism, and there will be no upcasing, fake documents, and fake claims. In six months, they can fix that at no expense.) 

The anti-corruption official made this remark after PhilHealth president and chief executive officer Ricardo Morales admitted during a Senate hearing Tuesday that “fraud has always been in the system as it has always been in all similar health systems in the world.” 

Morales added that the problem in PhilHealth can take at least three years to solve.

Six months, three years, new IT system, fire all the corrupt executives, it all seems so simple but it's not. At this late date PhilHealth is an unwieldily monster. It is out of control. And this is the bureaucracy tasked with implementing universal healthcare!

Strangely enough some actually put faith in the government to investigate this mess. As if their investigations will bear any fruit and end in prosecutions and jail time.

https://twitter.com/iskonglasalista/status/1293141697111527424

Joke's on this guy! The cycle of corruption at PhilHealth will continue. How many government bodies need to be investigating PhilHealth anyway? 

Iglesia Ni Cristo Tree Planting: An Unbelievable Waste of Taxpayer's Money

In August 2017 I wrote about Iglesia Ni Cristo's tree planting activity. I followed up on that six months and then a whole year later documenting that it turned out to be a complete failure with all the saplings dying. I thought those posts were the end of the matter. I was wrong. 

If you are unaware the INC regularly plants trees in their communities. They boast about it on their website.

https://iglesianicristo.net/our-programs/

Tree-planting activities and clean-up drives form part of the Church Of Christ’s ongoing program on environmental protection and preservation.

The intention is good but the follow up tends to be poor and in this case nonexistent. At six months the saplings were mostly dead though some were hanging on. A year later basically everything was dead. Now two years later the whole area is being dug up to house squatters.  It has become a reclamation area.

What these photos show is a backhoe carving out roads and men digging drainage ditches. This is the area where the INC planted their trees. While I was taking photos one man approached me and I asked him if he knew that the INC planted trees there three years ago. He said yes. I asked if he saved any of the trees. He pointed way into the distance to two trees and indicated that those were the last remaining trees.

I thought it was interesting that the person I talked with knew about the INC tree planting in 2017 because you can't tell saplings were ever planted in that areas just by looking. But he was very wrong about the trees. Those trees in the distance are not trees planted by INC. Their tree planting looked like this:

Seeing this new development I had to get a statement from the local INC. This is not an official statement but it is what I was told.

I was told the tree planting was ultimately a waste. I was told the Department of Agriculture donated  1,500 trees for the INC to plant at taxpayer expense! I was told that they had planted trees before in a area that is also now being ripped up for construction. I was told the Mayor was present at the tree planting in 2017.

I was also told it was the city which is in charge of the reclamation project. That means the Mayor either forgot about the trees or is willingly ripping up the work of the INC! Or maybe he knows the tree planting was a waste because nobody tended to the saplings.

It also means the Department of Agriculture wasted taxpayer's money by giving the INC free saplings which ultimately died due to their negligence. How many more free saplings has the DOA donated to the INC which have ended up dead? How much more taxpayer money is being wasted on the INC?

Electrical Pole Fires Persist

Here is a great article from Iloilo's Panay News.

https://www.panaynews.net/pole-fires-persist-bfp-iloilo-city-records-five-more-during-holiday-season/

Electricity pole fires persist in this southern city. During the holidays there were five such incidents from Dec. 23, 2019 to Jan. 2, 2020 and according to the Bureau of Fire Protection (BFP) the poles belonged to Panay Electric Co. (PECO) whose power distribution franchise expired on Jan. 19, 2019 yet. 

All of these electricity pole fires happened at night, according to the BFP. Fortunately there were no reported injuries or deaths.

Yeah fortunately! Just the possibility of serious injuries and deaths as the electrical lines burn and transformers maybe explode. Why do you think this is happening? Can you guess? I bet you can!

Two months ago the Energy Regulatory Commission (ERC) conducted an investigation on the series of pole fires here upon the prodding of Mayor Jerry Treñas who had expressed concern over the possible threat to public safety of “inadequately-maintained lines, power outages and hazardous electric posts.” 

The ERC eventually came out with its findings: PECO’s protective devices were not properly rated and designed, some of its poles were leaning and in unsafe positions, and that some electricity meters were clustered and installed in an Elevated Metering Center without securing prior ERC approval.

The "possible threat" to public safety? "Possible?" Sounds like we are in the realm of actuality now. And all because of inadequately maintained lines and hazardous electric posts as well as leaning poles, inadequately maintained lines, and clustered electricity meters. Like this from Bacolod?

Or how about like this from Iloilo?

Bacolod and Iloilo are the same when it comes to danger from the electrical grid and I suspect every other city and barangay in this nation is as well.

Let's continue the story. If you are not aware the story is that PECO lost it's right to provide power to Iloilo. This has actually led to murder! Here are my comments from a year ago when this occurred.

https://newsinfo.inquirer.net/1070389/killing-of-anti-peco-bid-critic-councilors-bodyguards-arrested

Two bodyguards of an Iloilo City councilor were arrested at the Iloilo City Hall on Monday for the killing of the councilor’s estranged first cousin who had accused him of orchestrating a fake signature campaign against the city’s electric distributor. 

Mercedes had accused her cousin, the councilor, of being among those behind the gathering of fake signatures against Panay Electric Co. (Peco). 

The councilor, chair of the council’s committee on public utilities, was among the critics of Peco opposed to the renewal of its distribution franchise, which would expire on Jan. 19.

This is a potentially huge story with all the hallmarks of Philippine politics: corruption, family infighting, conspiracy, and murder. Someone wants PECO out so they can put their own company in and profit from raising electricity costs. Now a lady who was exposing this corruption of which her cousin was the alleged mastermind is dead. But no one cares. There is no P50 million reward and the lady is a nobody. Just another story to bury along with her body.

Now let's continue the story from the present.

PECO was then ordered to explain these which ERC considered as operational lapses. 

Franchise-less for almost a year now, PECO is operating merely by virtue of a provisional Certificate of Public Convenience and Necessity (CPCN) issued by ERC. 

Congress refused to extend PECO’s franchise due to numerous consumer complaints arising from its ageing distribution system, including leaning electric poles, spaghetti-like hanging electricity lines, overbilling, and unprofessional handling of consumer complaints. 

Congress instead granted MORE Electric and Power Corp. (MORE Power) a 25-year power distribution franchise. There is, however, a two-year transition period to ensure uninterrupted service to consumers, thus the CPCN to PECO. 

According to Iloilo City fire marshal Christopher Regencia, of the 461 fire incidents recorded here in 2019, nearly half or 218 cases were pole fires. The rest were structural fires (121), rubbish fires (37), and vehicular fires (nine), among others. 

The reasons for these police fire incidents were dilapidated and ageing wooden poles and electrical wires and overloaded transformers of the 95 years old power utility PECO, according to the BFP. 

The tolerance of illegal connections or “jumper” was also a culprit to the fires caused by faulty electrical connections, it added. 

BFP clarified that only electrical cables could cause fires and not telephone or cable TV wires, contrary to PECO’s justification.

PECO is out because they are incompetent. Great. But guess what? When they leave those 95 year old power lines, electrical poles, and meter boxes will STILL be in place! So what is the point? Who cares if PECO is out or if they are penalised if the whole electrical system in Iloilo is not revamped in a major way? Does MORE Power have the money and the manpower to do that job?  Call me a skeptic but I seriously doubt it.

Celebrating Failure By Declaring Bacolod City The Best Performing City In Western Visayas.

It's official.  The DILG has declared Bacolod City the best performing city in the Western Visayas.

https://www.pna.gov.ph/articles/1087855

The City of Bacolod continues its winning streak after being named as the “Best Performing LGU (Local Government Unit)-City Category in Western Visayas” by the Department of the Interior and Local Government (DILG) for 2019. 

“This proves the efficiency and responsiveness of government machinery and the vibrancy of the economy and the city in general,” the mayor said in a statement on Tuesday night. 

Aside from being the champion in Best in Performing City Category, Bacolod also received five special awards in the five areas of governance. 

These included champion in Excellence in Local Legislation, Excellence in Administrative Governance, and Excellence in Environmental Governance as well as first runner-up in Excellence in Social Governance and Excellence in Economic Governance. 

The EXCELL awards were among the top honors received by Bacolod this year, after being recognized as the Top Philippine Model City 2019 by The Manila Times in September, and recipient of the Seal of Good Local Governance Award for 2019, also from the DILG in November. 

“This is an exceptional year. The awards and recognitions bestowed upon our city have been most inspiring,” Leonardia said.

Bacolod has also been declared the best performing Highly Urbanised City or HUC in the Western Visayas.

https://www.pna.gov.ph/articles/1088922

On Monday, this city was recognized for topping two out of the four pillars -- Economic Dynamism and Infrastructure -- in the 3rd Recognition Ceremony for Competitive Local Government Units (LGUs) held at Hotel del Rio in Iloilo City. 

Mayor Evelio Leonardia, who was represented by Vice Mayor El Cid Familiaran in receiving the awards, said in a statement the recognition shows that Bacolod has an environment conducive for businesses to grow. 

“Our efforts to make the city business-friendly are now reaping fruits,” he added. 

Bacolod and Iloilo competed in the same category, being the only two HUCs in Western Visayas.

It's not much of a contest when there are only two competitors. 

These awards really say nothing about the city itself. Bacolod City is in bad shape but despite this they have been able to snag quite a lot of companies willing to invest in the city.  Ayala mall opened last year, 888 expanded a few years ago, Mega World is building a huge mini city downtown as well as housing developments outside of town. Truly there is a lot of growth and it seems to be malls! As if Bacolod needs more malls.  And all of this growth is despite all the faults of Bacolod.

What faults you ask?  How about all the flooding which happens every single year. No matter how much construction happens the city continues to flood. The fact that Bacolod does not enforce R.A. 9003, the garbage law, has a lot to do with this. 

http://www.visayandailystar.com/2019/May/27/topstory5.htm

Clogged drainage systems due to garbage caused flooding along Lacson Street and other part of Bacolod City during a heavy downpour last week, Bacolod Rep. Greg Gasataya said yesterday.  

Gasataya said that because of the garbage, flood waters cannot flow down the drain. But when the garbage was removed, the water on the streets started to flow down the drainage system.  

He said he requested the DPWH to continue its declogging operations of the drainage systems to prevent flooding. 

The DPWH has been working all over the city with flood projects. Just last year Gasataya said flooding would be a thing of the past because of the big project along Lacson.

https://watchmendailyjournal.com/2018/07/07/gasataya-flooded-main-roads-will-thing-past/

Bacolod City lone district Rep. Greg Gasataya yesterday affirmed flooding along the city’s main roads will “soon be a thing of the past,” attributing his projection to the ongoing flood control project along Lacson Street.

All the flood control pipes in the world will do no good if they are clogged with garbage and Bacolod City is awash in garbage like any other city in the Philippines. So it's pretty baffling that the city won an award for Excellence in Environmental Governance. I have written at length about my issues with the Bacolod sanitation department. Fact is the city does not enforce the garbage law, R.A. 9003.

The flooding is not just limited to the streets. Here are picture of SM Mall flooded on November 26th, 2019.

https://www.facebook.com/460300044369831/photos/a.580803205652847/952407561825741/?type=3&theater

https://www.facebook.com/460300044369831/photos/a.580803205652847/952407515159079/?type=3&theater

https://www.facebook.com/460300044369831/photos/a.580803205652847/952407511825746/?type=3&theater

I'm sure SM being flooded is good for business right?

Another issue plaguing Bacolod City is the infrastructure. In particular traffic lights. They are not always on. Many times they are off and you are lucky if a traffic enforcer is there to direct traffic.

The situation pictured above was complete chaos. No lights. No enforcer. On December 9th there were multiple locations where the traffic lights were not working.

The traffic lights should never go off and yet with alarming regularity they do.  How is that good governance? What is the city doing to keep the traffic flowing? It would seem they are dragging their feet. 

Persistent flooding despite the seemingly continual road work and the traffic lights regularly not functioning are just two real problems with Bacolod City which the city says they are addressing but reality tells us they are not.  Finally let's not forget that Mayor Bing Leonardia has been indicted by the Ombudsman.

https://www.sunstar.com.ph/article/1804959

THE Office of the Ombudsman has found a probable cause to file criminal complaints against Bacolod City Mayor Evelio Leonardia and two others in relation to the P49-million cash advances of fuel in 2008. 

The decision dated September 26, 2018 was signed by Graft Investigator and Prosecutor Officer II Carl Vincent Sasuman and was approved by Ombudsman Samuel Martires on March 1, 2019.  

The complainant was the Field Investigation Office, Office of the Ombudsman-Visayas and it was originally filed by Sara Esguerra, Othello Ramos and two others in 2009. 

For his part, City Legal Officer Joselito Bayatan said that as early as May 6, they heard some reports that Batapa-Segue will be calling for a press conference with Puentevella. 

"Personally, I'm so excited because I thought that it will be a press conference of her platform of government because we've never heard or see her platform but, it turns out that she calls for a press conference to be a 'mongerer'," he said. 

Bayatan pointed out that this is more of political desperate move of Batapa-Sigue, and she is just looking for issues. 

"She should rather call for a press conference, since the election time is fast approaching, for her platform of government and she should not appear to be among the 'mongerer'," Bayatan said. 

He said they never take this case as an issue, adding that it is an order of the Ombudsman and it has a long way to go. 

Bayatan noted that they can still file a motion for reconsideration or they can go even further in the Supreme Court because nothing is final. 

Bayatan said this issue cannot affect the political campaign of Mayor Leonardia because the people of Bacolod always look on the performance of the mayor. 

"He's a working mayor and for sure, the people had seen the merit of the mayor's performance. We don't worry about this case and we never even considered it as an issue. Ombudsman case is common to a performer," he said.

City Legal Officer Bayatan brushed off this revelation when it was made earlier this year by Leonardia's opponent in the mayoral race. He called her desperate and that she was just looking for issues. As if being charged with graft to the tune of P49 million is not an issue! While he has not been convicted and the case likely won't be resolved for years the fact that the mayor has been indicted ought to be a concern for everyone.

What is really happening behind the scenes in the government? Last time I was at City Hall you could see in each office that people were sitting idle playing with their phones. Economic growth is good but for who? For Ayala and Mega World certainly. For the people? Well they need a city that won't flood when it rains and traffic lights that work more than they need a new mall.

More Philippine Political Cartoons: The Philippine National Bank Scandal

The Philippines perennially suffers from the same problems and there is no better way to prove that than by looking to the past. This selection from Philippine Political Cartoons documents the Philippine National Bank (PNB) scandal of the early 1920s which resulted in its near collapse. This was due to massive corruption. To put it very simply once a Filipino was installed as director of the PNB he eviscerated the bank to enrich his friends.

The near collapse of the Philippine National Bank (PNB) in the early 1920s, as illustrated in the next six cartoons, was the great scandal of the American period. By the time it was over, the PNB's first Filipino president was in prison, the country's leading politicians were tarred by association and Philippine independence had been delayed by 10 if not 20 years 

Founded in February 1916 with a capital of ₱20 million, the PNB was given a vague charter to serve as both government depository and national development bank, a near fatal combination for the Philippine economy. Riding the crest of Governor-General Harrison's "Filipinization" program, Nacionalista Party leaders Sergio Osmeña and Manuel Quezon planned the bank as a bold entrepreneurial venture to promote Filipino business. The PNB's establishment coincided with the World War I boom in commodities which sae Philippine exports double and total banking volume increase five fold from ₱63 million in 1913 to ₱399 million in 1918.

As a pioneering institution, the PNB faced enormous staffing problems. The first president , Dr. H. Parker Wills, a U.S. Federal Reserve official and a friend of Quezon's wanted to proceed cautiously by increasing  loan  portfolio gradually in step with the capabilities of the Filipino staff. When the banks. senior Filipino appointees rebelled against his conservatism, Wills resigned and returned home after less than a year. The second president, Samuel Ferguson, was a lonely clerk who gained office through Governor Harrison's injudicious patronage. After his forced resignation for gross incompetence in less than a year, Speaker Osemña arranged the appointment of General Venancio Concepcion, a political crony with no banking experience of any kind. 

During Concepsion's term (1918-20), the PNB broke all banking procedures to shower Filipino farmers and traders with limitless loan facilities. Although Concepcion later defended his policy as national development, most large loans went to Nacionalista Party allies and cronies. PNB directors also extend huge sums to their own companies, a crime for which Concepcion was later convicted and others should have been. 

Investigations in 1921 to 1923 discovered a remarkable level of incompetence, corruption and mismanagement which had brought the bank to the brink of collapse. By transferring $37.7 million of the $49 million gold reserve fund to Manila for lending, the PNB destroyed the peso's backing and weakened its value by 12 percent. IN 1919 an auditor found the bank had no central accounts, has miscalculated its reserves by ₱22.3 million and had a discrepancy of ₱5 million in foreign exchange ledgers. The bank's Shanghai branch manager, an American, later took bribes from the city's Chinese speculators and lost some ₱12 million in currency transactions. 

Most of the PNB losses came from the mismanagement and corruption its domestic alone accounts. Under General Concpecion's direction, the PNB made liberal loans to the sugar, coconut and hemp industries without sufficient collateral on the assumption that wartime boom prices would last forever. When prices inevitably collapsed in 1920, traders and planters pleaded poverty and left the PNB holding a vast sum in long term loans, By 1921 the bank had $82 million in outstanding loans and only $46 million in deposits. 

The greatest controversy surrounded the large loans PNB directors made to their own companies. Although it only had an authorised borrowing capacity of ₱3.5 million, Concepcion extended ₱20 million in credit to the Philippine Vegetable Oil Company while simultaneously holding a major bloc of stock in his own name. By 1920 the coconut oil company was hopelessly indebted and close to bankruptcy. Similarly, PNB director Vicente Madrigal and Ramon Fernandez, leading Nacionalista supporters, sat in board meetings that approved of ₱1.2 million to their own companies for hemp trading, a clear violation of PNB regulations. Allegations about the Fernandez loans were leaked to the press when he ran as a Nacionalista Party candidate against Juan Sumulong in the special Senate election in October 1923. The revelations prompted editorial cartoons showing Fernandez being crucified by Quezon and Osmeña (cartoon 1); bribing the two leaders with Vicente Madrigal (cartoon 2); and being milked by the two leaders while Governor-Genral Wood stands guard on a PNB vault (cartoon 3). 

Ultimately, the PNB scandals brought about Leonard Wood's appointment as a Governor-General in 1921 with a mandate for strict control over the PNB and Filipino national enterprise.

Philippine Political Cartoons pg 320-321

The resultant appointment of Leonard Wood as Governor-General is an important event to note. Leonard Wood and Cameron Forbes conducted a fact finding mission in 1920 to ascertain whether or not the Philippines was fit for independence. Known as the Wood-Forbes Mission the report they filed recommended against independence. Despite praise for much of the progress Filipinos had been making in their drive toward free government and independence they also mentioned the PNB scandal writing the following:

The story of the Philippine National Bank is one of the most unfortunate and darkest pages in Philippine history.  

A man presumed to be expereinced in banking was brought from the United States and took the first presidency which he held a short time. An American inexperienced in baking was then put in charge, and up in his death a Filipino also without banking experience became president, The result of all this has been a series of banking losses estimated by the insular auditor to reach the sever totaled $22,500,000. A Partner of Messrs. Haskin & Sells, certified public accountatns of New York, after a careful examination of the bank makes the following comment 

Our examination ths far reveal the fac that the bank has been operated during almost the enitre period of its existence prior to the appointent of Mr. Wlson as manager in violation of every principle which prudence, intelligence, or even honesty dictate.

As a result of these findings, charges have been filed agaisnt General Concepcion, a former president of the bank.

http://www.archive.org/details/reportofgovernor1921phil

Filipinos were very angry at this negative report from Woods-Forbes and the House of Representatives issued a rebuttal dubbed the "Filipino Appeal for Freedom" arguing for independence. Here is their response to the section about the PNB.

The Philippine National Bank, much to the displeasure of competitive institutions already in the field, was organized. From a modest beginning the bank grew rapidly during prosperous times. But the depression following the war caught the bank unprepared for such emergencies. Naturally the people of the Philippine Islands deeply regret that the institution could not escape the effects of world-wide financial disturbance. 

As to the present condition of the bank, the Wood-Forbes mission report says '*** the affairs of the bank are in a fair way to be put on a sound footing."

http://www.archive.org/details/filipinoappealfo00phil 

That is a very dishonest citation from the Woods-Forbes report completely white-washing the corruption in the PNB which involved the government!  Here is the quote in full from the Woods-Forbes Mission report:

The government became alarmed at the seriousness of the situation and secured the services of an experiences banking man from the United States, under whose conservative guidance the affairs of the bank are in a fair way to be put on a sound footing. But a large part of the assestes of the bank have been loaned to concerns which will be unable to repay for many years - very largely in sugar centrals and coconut oil factories. These loans were made in excessive amounts during the period of boom prices; and minimum precatuin in regard to security was taken, with the result that the bank allowed its reserves to run down much lower than required by law, is unable to meet its current obligations, has has to as other banks not to press for the redemption of its notes, and has further has to ask time for payment of its obligations to many banks in Shanghai representing many countries, a list of which is attached, to whom it owes large sums of money as a result of losses incurred in specualtion in exchange transactions.

The Nacionalista Party wasn't about to take responsibility for the near collapse of the PNB which intimately involved them. Interestingly there is not a word about this major scandal on the PNB's Wikipedia entry.  

But enough with the history lesson and now for the cartoons.

An Anarchy of Families

An Anarchy of Families is a book of essays about the political families who rule the Philippines. Compiled by historian Alfred McCoy this book attempts to peer behind the doors of the cutthroat and warring oligarchs who run the show in this country.

An Anarchy of Families

I have not read this book but I have read the preface which is available online. Click the link under the cover to read it yourself. In the span of 16 pages Professor McCoy gives a brief overview of the families who dominate the country and how they were able to amass vast amounts of wealth and power. How did this happen? By controlling rents which allowed them to gain a monopoly on certain markets.

From the extant literature on the Philippine state, two key elements seem to have contributed most directly to the formation of these powerful political families: the rise of “rents” as a significant share of the nation’s economy and the emergence of the independent Republic as a problematic postcolonial state. Simply put, rents—restrictive state licenses that allow holders to gain a monopoly or oligopoly over a particular market—have served to strengthen a few fortunate families at the expense of both economic growth and government revenues. As John Sidel put it so succinctly, “State formation in the Philippines . . . permitted the survival of private, personal control over the instruments of coercion and taxation.” 

Professor McCoy writes that the United States' introduction of electoral democracy

created a new class of provincial politicians and a national legislature that opened state resources for privatization by established and emerging families, which knitted themselves, during the middle decades of the twentieth century, into a national oligarchy.

He also posits that a weak central state has contributed to the oligarchs ability to plunder the country with impunity.

Surveying the nations of Southeast Asia for a point of comparison, the Philippines combines four aspects in ways that others do not—rival elite families, a weak central state, a hybrid capitalism, and a protracted experience of elections. Although the Philippines has had powerful elites for over two centuries, it has never enjoyed the aristocratic lineage or bureaucratic support found elsewhere in Southeast Asia—introducing an element of conflict, even volatility, into this continuity. In contrast to Thailand’s strong monarchy or Indonesia’s bureaucratic elites, the Philippine state has remained weak and incapable of controlling the powerful families that plunder its assets, rule its provinces, and contend for control of national politics.

After discussing the historical origins of the oligarchy through the decades prior to and after the establishment of independence Professor McCoy turns his pen to the post-Marcos era and the election of Cory Aquino. He characterises the Republic before Marcos as relying on the three G's of guns, gold, and goons while crony capitalism was the main feature during the Marcos regime.  The forces which have dominated the post-Marcos era he terms as the four C's continuity, criminality, Chinese, and celebrity.

Professor McCoy writes that the presidency of Cory Aquino, despite the mandate of change, was only a continuation of the oligarchy.

The element of elite continuity was soon evident in the administration of Marcos’s rival and successor, Cory Aquino. Amid the high political drama of Marcos’s flight into exile, President Aquino took power in February 1986 with contradictory political agendas—a mandate for change and a personal plan for restoring the status quo ante Marcos. Mindful of the abuses of the Marcos era, Aquino’s Constitutional Commission adopted articles designed to break, for all time, the influence of “political dynasties” through both universal term limits and a specific prohibition on relatives “within the fourth civil degree of the President” holding any public office. 

Despite these aspirations, in her first year as president Aquino restored both provincial dynasties to political office and Manila’s oligarchs to control of leading corporations. During her presidency, the media, ignoring her elite background, made much of her rise from housewife to chief executive. Born in 1933 into the powerful Cojuangco family, Corazon Cojuangco led a secluded life at religious schools until 1954 when she married Benigno “Ninoy” Aquino, Jr., scion of the rival political family in her home province of Tarlac. Showing the significance of his union, President Ramon Magsaysay was principal sponsor at their wedding mass and Salvador “Doy” Laurel, the groom’s closest friend and the bride’s future vice president, was veil sponsor. From her father, Cory inherited both substantial wealth and provincial power. From her husband she acquired the aura of associa- tion with the nation’s most charismatic leader. Through these family ties, she was related to nine other oligarchic families, including the Antonio Cojuangcos, who owned the nation’s telephone monopoly; the Yabuts, who dominated Makati City; the Tanjuatcos, who combined an industrial conglomerate with political office; and the Oretas, who fused real estate dealing and local politics in suburban Malabon.

That a housewife named Cory should move into Malacañang Palace was remarkable. That a Cojuangco married to an Aquino should become president was not. 

During her term not only were many elite families restored to power in Congress but Aquino also restored corporations to the old oligarchy many of whom where her family and friends.

More broadly, by the end of Aquino’s term in 1992 the restored Congress was virtual congeries of elite families, with 32 percent of the representatives children of established politicians and 15 percent “third- or fourth-generation politicians.”

Paralleling this restoration of elite families, President Aquino returned expropriated corporations to Manila’s old oligarchy—many of them relatives, classmates, compadres, and close friends. To cite the best-known example, the Lopez family, which had suffered exile, expropriation, and imprisonment under martial law, flew back to Manila after Marcos’s fall to reclaim its corporations—the Manila Electrical Company (Meralco), the Manila Chronicle, and TV Channel 2. In the struggle between a dictator and a single family, the family had survived and the dictator had not, an indication of how deeply this oligarchy is embedded in Philippine society.

Discussing crime he says the criminal syndicates made

Manila a metropolis, akin to Shanghai in the 1930s or Havana in the 1950s, where criminal bosses exercised enormous influence.

The police protected the illegal juenteng lottery which raked in billions and filled the pockets of many politicians giving crime bosses considerable influence and direct access to the President during the terms of Estrada and Arroyo.

Moving onto the Chinese he says

Manila’s Chinese emerged in the post–Marcos era as powerful entrepreneurs who had a pressing need to become involved, for the first time, in Philippine politics.

McCoy discusses the ascendancy of the Chinese in business and concludes by surmising that their influence will only continue to grow through intermarriage with Filipino oligarchical families.

It his discussion of the last C, celebrity, that is most poignant especially considering the trajectory Philippine politics has taken in the decade since this preface was written in 2009.

With the weakening of patronage networks, national elections have become more genuine expressions of the popular will, allowing pop culture icons to parlay their celebrity into successful campaigns for both the Senate and the presidency. Just as land, lineage, and erudition were once credentials for joining the national elite, so now a good jump shot or a telegenic personality seems to be an equally valid qualification. 

Once a forum for statesman distinguished in law and politics, the Senate, elected nationally, has become a collection of basketball players, television personalities, movie stars, and failed coup plotters. During the 1990s, two former basketball stars, Freddie Webb and Robert Jaworski, were elected to the Senate solely on name recognition in this hoop-crazed nation. By 2008, six among the twenty-four senators had won office through celebrity—three as former film and television stars (Loren Legarda, Lito Lapid, and Ramon Revilla, Jr.) and three for notoriety in their military service (Gregorio Honasan, Panfilo Lacson, and Antonio Trillanes IV). Similarly, in 1998 Joseph Estrada was the first, though probably not the last, movie star elected to the presidency. Indeed, only three years after his ouster the action star Fernando “Ronnie” Poe, Jr., challenged Gloria Arroyo for the presidency and might well have won without the systematic fraud that assured her reelection. 

Ultimately, the blending of crime and celebrity in ways seemingly ephemeral yet somehow substantial is slowly changing the country’s political culture and the character of its ruling elite. Just as the once august Senate has become an odd collection of criminals, media celebrities, sports stars, and coup plotters, so the presidential palace has lost its luster. In an earlier generation, the ambitious used celebrity to gain access to the presidential palace, but now some would use the palace to achieve celebrity. While President Cory Aquino held office with the propriety and privacy that marked the old elite, her daughter made the palace a stage on which shed her identity as Ms. Kristina Bernadette Cojuangco Aquino and become instead “Kris Aquino”—the star of blood-soaked slasher films, the queen of gossip on daytime TV, and the object of fan-magazine fascination for her succession of steamy affairs with basketball players and action stars, replete with sexually transmitted disease, encounter sex, and babies legitimate or illegitimate. 

Through the sum of such change, the oligarchy is no longer comprised of austere aristocrats such as Manuel Elizalde, Sr., Oscar Ledesma, or Eugenio Lopez, Sr., and is instead becoming an eclectic collection of gambling bosses, media stars, smugglers, telecom rent seekers, real estate wheeler-dealers, and Chinese taipans. It is by no means clear whether this changing elite is a manifestation of dynamism akin to, say, that of India or instability comparable to, say, that of Colombia. 

He concludes by noting the dynamic nature of the Filipino oligarchy which is always adapting in a bid to retain their hold on power.

In conclusion, there can be no conclusion to the ever-changing history of such a dynamic social stratum. Looking back over the past two hundred years, the Filipino elite, both provincial dynasties and the national oligarchy, has changed con- stantly in both composition and character. Looking forward twenty years, it seems likely that this oligarchy will adapt to maintain its sole defining attribute— the continuity of control over the Philippine economy and society. 

The persistence of oligarchic power is, moreover, made possible by both negative and positive factors, that is, not only the active pursuit of power by elite families but also the relative weakness of countervailing social forces. Instead of insulating the state from oligarchic influence, the judiciary is often compromised by corruption or political pressure. Adding to the oligarchy’s political influence, the traditional role of the middle class as an insulating factor between the elite and the masses has been diminished by a complex of socioeconomic forces.

McCoy also notes that the oligarchy has ultimately done very little for the common people.

Confusing charity with philanthropy, the country’s oligarchy has failed to transfer significant capital to the public sector in ways that would create educational and cultural institutions accessible to the middle class. While America’s Gilded Age industrialists, for example, cleansed their money by means of philanthropy, building public libraries and private universities, the Filipino oligarchs have not developed the habit, producing relatively small public institutions incapable of sustaining a larger, more lively middle class. Many members of the elite publicize their generosity in granting a few scholarships, Teodoro Yangco in an earlier era, Lucio Tan today. But this is an insignificant share of their assets, far from real philanthropy.

McCoy's analysis and conclusions are compelling especially in the light of what we read in the newspapers every day. Legarda, Revilla, and Lapid, who are named above as having won seats in the Senate because of their celebrity, have recently returned to the Senate on that same basis. Lapid being a star of Ang Probinsyano and Revilla being acquitted of plunder only to dance on TV to the delight of the masses. Panfilo Lacson, who is a man not without controversy, is also back in the Senate which only serves to prove the Senate is a revolving door of twelve years in, three years out, repeat.

The current Senate also has a comedian, Tito Sotto, as its President. With boxer Manny Pacquiao moving easily from sports star to Representative to Senator it would not be a surprise if he landed the Presidency. Duterte has vouched for him in that role.

Aside from celebrities cronies of the President have also made it into the Senate most notably Bato and Go both who ran and were elected solely because of their connection to Duterte. Surprisingly though the oligarchy did see a shake up when Osmeña in Cebu, Estrada in Manila, and Eusebio in Pasig City all lost their seats to newcomers though Sotto, who won in Pasig, comes from a long established political family.

For all his attempts to make himself appear to be a common man President Duterte comes from a political family as well. Vicente Duterte, his father, was Governor of Davao from 1959-1965.  The Duterte children are following in the family tradition with daughter Sara being Mayor of Davao and son Paolo now a member of the House. There are many who hope Sara will follow her father into the Presidency.

For all the hate they receive from the people political dynasties are too deeply entrenched to ever be pried apart from the Philippine political system. This list of families proves just how true that is. Is it any wonder that a law banning dynasties continues to be dead in the water?