10 OCTOBER 2007

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by ALECKS P. PABICO

HE IS known by many Filipinos as the author of that economics textbook with the blue cover, but once upon a time Gerardo P. Sicat was the head of a powerful government agency that took care of preparing and coordinating the country’s socioeconomic and development plans. In fact, back then, the National Economic and Development Authority (NEDA) was very powerful, particularly given its oversight function with respect to the plans of government agencies. Though by protocol, the NEDA director general was not a member of the Cabinet, the position was of Cabinet rank and the NEDA chief was even regarded as a primus inter pares (first among equals).



A COMPROMISED NEDA. Romulo Neri (right), with acting director general Augusto Santos [photo courtesy of NEDA]
NEDA was created by then President Ferdinand Marcos in 1972 by merging the Presidential Economic Staff (PES) and the National Economic Council (NEC). Sicat, who was appointed by Marcos as NEC chairperson in 1970, served as the newly organized NEDA's first director general. Recalled Benjamin Turiano, who joined NEDA at about the same time as Sicat and is now a director there: “That was the time when NEDA really had so much clout, when it was looked up to by the Cabinet.”

But Sicat was eased out of the agency in 1981, and moved to the Philippine National Bank to become its chairperson and president (during which he also wrote that ubiquitous textbook that has been used by millions of students). Apparently, the Palace had been displeased with his criticisms of the economic directions being taken at the time, as well as with his having too seriously pushed for a liberalized economy. Yet another reason for Sicat’s sudden change of workplace was because then First Lady Imelda Marcos, as minister of human settlements, had already began bulldozing her way through the bureaucracy; her pet building projects, for instance, were no longer coursed through NEDA for evaluation and approval.

Today the now 72-year-old Sicat — along with other NEDA chiefs who came after him — is seeing a similar deed being done to the country’s premier social and economic development planning and policy coordinating body. And again a powerful woman is in the picture: no less than the president herself, Gloria Macapagal Arroyo, although as things stand, it is not that clear what role she has played in driving NEDA to — as Solita ‘Winnie’ Monsod describes it — “its lowest point.”

Monsod served in the reorganized agency from February 1986 to May 1989 under the first post-Marcos government of Corazon Aquino. At a forum last week at the University of the Philippines, she, Sicat, Cayetano Paderanga, Felipe Medalla, Cielito Habito, and Dante Canlas agreed that, essentially, what the recent revelations by another former NEDA chief, Romulo Neri, boiled down to is that the agency’s independence and integrity have been compromised. At the very least, it seems that under Arroyo, NEDA and its director general are again being sidelined, if not marginalized, on matters that fall within their mandate, particularly seen as being less important in relation to the president's economic team — which consists of the secretaries of the Department of Finance (DoF), Department of Trade and Industry (DTI), and Department of Budget and Management (DBM).

NERI AND A 'WEAK' NEDA
Neri had testified at one of last month’s Senate hearings on the scrapped National Broadband Network project that he approved a $329-million deal that had the Department of Transportation and Communications (DOTC) hastily signing a supply contract awarded to Zhong Xing Telecommunications Equipment Limited (ZTE) Corporation last April in Hainan, China. The contract, he said, was covered by a yet-to-be perfected executive agreement with the Chinese government.

Neri, however, also testified that he had done so even after he was offered a P200-million bribe by Commission on Elections (Comelec) chairperson Benjamin Abalos Sr. in exchange for approving the project in favor of ZTE. Neri said he flatly rejected the bribe and reported the incident to the president. (Abalos, who has since resigned as Comelec head, said Neri was lying about the alleged bribe.)

Neri invoked the executive privilege when grilled by senators about the extent of Arroyo’s involvement in approving the NBN deal. But he did recall a November 2006 NEDA board meeting when Arroyo had made it clear that the government broadband project should comply with the following conditions:

  • that it be established along a build-operate-transfer (BOT) or similar undertaking using private funding
  • that there should be no government subsidies
  • that there should be no "take or pay" conditionalities and instead be a "pay for use" facility.

All of which were, interestingly enough, absent in the deal that Neri gave the go-signal to. Neri, though, painted a picture of a rather “weak” NEDA in his testimony. While the agency assesses project viability and consistency with the country's long-term development goals, he said it is not the one that chooses suppliers. "We approve the project,” he said, “and the implementing agency in turn goes around and finds out what is the best way to implement the project that NEDA approved, whether it's a BOT or, in this case, a government-to-government undertaking."

Neri even acknowledged that the NEDA staff didn't have the capability to verify the project cost or the savings from such an undertaking, "though the staff tried to verify these through the Internet." He likewise explained the decision to eventually approve the project as naturally resulting from the collegial character of the NEDA-Investment Coordinating Committee (ICC), and that he was only one of its members. It is the NEDA-ICC that evaluates the fiscal, monetary, and balance of payment implications of major national projects.

It was a description of NEDA that left the likes of Sicat quite aghast. At the recent UP forum, Sicat insisted that NEDA is "not an ordinary government agency." The 1987 Constitution even mandated it to be a constitutional body, although the lack of an enabling law means it has yet to become one in fact.

Monsod, for her part, was particularly resentful of how Neri has distanced himself from the NBN deal. She pointed out that NEDA has everything to do with the country's development projects. "In principle,” she said, the approval of projects depends on the president, the leadership of the director general, and the NEDA staff."

If a project is bad, Monsod said, the NEDA director general is "morally constrained to tell the president." She adds that under the circumstances, resignation would have been the better option for Neri, who has since been transferred to the Commission on Higher Education, which he now chairs.

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Copyright © 2007 All rights reserved.
PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM