Ten Reasons Why EO 47 is Defective in Form

Ten Reasons Why EO 47 is Defective in Form
 

1.     NO CONSULTATION PROCESS. Contrary to the characteristics of good governance, which primarily mandates decision-making processes to be participatory, consultative and inclusive, EO 47, which effectively abolished the Commission on Information and Communications Technology (CICT), was issued without consulting the stakeholders of the information and communications technology (ICT) sector. In fact, in their media pronouncements, even the Department of Science and Technology (DOST) claimed they were not also consulted about the move. The CICT, even out of courtesy and to allow a smooth transition from CICT’s 10 –year operation to DOST, was not also consulted and did not even have an idea about the existence of EO 47.
 
2.     THE PRESIDENT WAS BLINDED. The President, based on the chronology of events and the collation of facts, could have been blinded into signing EO 47. EO 47 was signed on June 23, 2011 as shown on its face. But a few days before that, the President appointed a new commissioner to the CICT to head the Human Capital Development (HCD) Group which was left vacant for about a year. Sources say when some personalities confronted the President about the fact that the new commissioner only stayed in office for a couple of days and lost his position by reason of EO 47, the President allegedly answered “let me check”. In addition, for the first time, Secretary Ivan Uy, chair of the CICT was invited to the cabinet meeting called by the President on June 29, 2011 and was even made to present the Philippine Digital Strategy 2011-2015 for more than half an hour. No one informed Secretary Uy that, six days of on June 23, 2011, his position was already scrapped. Although technically, EO 47 was made effective on July 6, 2011, upon its publication on that day in the Manila Bulletin. Decency dictates that you do not cause a person to work without being informed that his termination was already signed a week prior. This only shows that the President was not well-apprised of the contents of EO and its implications.
 
3.     NO BASIS FOR DOWNGRADING ICT. The abolition of the CICT has no basis. On the contrary for the last two years, all ICT stakeholders have been pushing for the upgrading of CICT to a department. This is supported on record by various supporting statements and petitions, written and verbal, in the records of the Senate and the House of Representatives where there are pending legislations seeking for the creation of a Department of Information and Communications Technology (DICT). Several government line agencies and departments have also been supporting the move, including the DOST, which just suddenly changed its position during the Joint Hearing on the DICT Bill called  by Senator Edgardo Angara, chair of the Senate Committee on Science and Technology and Representative Sigfrido Tinga, chair of House Committee on ICT. In fact, the National Economic Development Authority (NEDA) Philippine Development Plan (NEDA PDP) 2011-2016 which was recently approved by the President supported the creation of the DICT. All the major business organizations including the Philippine Chamber of Commerce and Industry and the Joint Foreign Chambers already came out with their statements supporting the creation of the DICT.
 
4.    THE TITLE WAS DELIBERATELY MISLEADING. EO 47 used the action words “reorganizing, renaming and transferring” CICT when in fact is serve to dissolve and abolish the CICT. The framing of the title itself has been made to hide the real intent of the executive order. When the President probably read EO 47 beginning with its title, he did not realize its real effect because the framers of EO 47 shielded the eyes of the President from seeing that it really is a piece of document that abolishes the CICT, the same CICT to which he appointed a new commissioner just a few days prior. All the positions of the commissioners and the chair of CICT where dissolved by reason of EO 47 – that in effect, is not synonymous to a re-organization much more so a renaming. The fact that the CICT is a cabinet-level commission directly under the Office of the President, while the office created by EO 47 is under the DOST – do not speak of a mere transfer. The ICT office that EO 47 created under DOST is going to be manned by an executive director. EO 47 effectively abolished the four efficient and operational groups with assigned commissioners under the CICT, namely the HCD, Infrastructure Management, Cyberservices and e-Governance.
 
5.     REGRESSIVE AND RUNS OPPOSITE TO THE DEVELOPMENT OF THE ICT SECTOR BASED ON A HISTORICAL TIMELINE.  EO 47 runs counter and opposite to the direction of ICT development based on the history of the ICT sector in the Philippines and the previous presidential policies that impact on the growth of the sector. In 1994, with EO No. 190 of Fidel V. Ramos, created the National Information Technology Council (NITC) with the rationale that no single department such as the DOST can contain the full extent of the ICT sector. With EO No. 264, Joseph Ejercito Estrada established the Information Technology And Electronic Commerce Council (ITECC) from the merger of the National Information Technology Council (NITC) and the Electronic Commerce Promotion Council (ECPC). Both presidents made it their responsibility to chair the said councils. In consideration of the other responsibilities of the president and at the same time the importance of ICT development, Gloria Macapagal-Arroyo, with EO No. 269 created the CICT, a cabinet-level agency in transition to a department and placed the CICT directly under the Office of the President. Notable to mention is that it is in fact the DTI and DOTC and not the DOST that played major roles in the councils which were forerunners of CICT. But today, EO 47, despite the upward trend of the ICT bodies through the years by reason of presidential policies, was given little value and remanded a a concern to be handled by a mere office and run by an executive director.
 
6.    GLARING FORMAL ERROR. Instead of “By Authority of the President”, Paquito Ochoa signed EO 47 under the term “By The President”. Without the name of the President indicated in EO 47 before the name of Mr. Ochoa and with the signature of the President appearing on the side without any name, EO 47 being an executive legislation is not entirely without flaw and is open to a lot of surmises and interpretations as to what really took place when the President signed the said document, which harmless as some people may want to depict, but will in fact bring with major complications and repercussions in the ICT sector.
 
7.    NOT CONSISTENT WITH THE PRESIDENT’S PRINCIPLE OF “KAYO ANG BOSS KO”. The President and the Liberal Party in its primer defines governance as the relationship between civil society and the state, between the rulers and the ruled, the government and the governed. It is the process of making collective decisions, a task in which government may not play a leading, or even any role. In this view, government is taken as the instrument, while the process for governing involves governance. Good governance rests upon the principles of transparency, accountability, openness, and the rule of law. The process by which EO 47 was issued is an anathema to the persona and party of the President and is therefore believed to be not his own making.
 
8.     A DISRUPTIVE POLICY. EO 47 did not take into consideration the need for at least a smooth transition between the CICT and the ICT office under the DOST.  EO 47’s provision that it becomes effective immediately without the benefit of even just a short period for CICT and all its stakeholders in the private sector to wind up, draw a lot of suspicions as to why the urgency. For DOST to have just started consulting and appeasing all the organizations and to have retained some top-level CICT officials for purposes of a three-month transition is clearly a hindsight. If EO 47 was done in good faith, the three-month period could have been done without suspending CICT operations in the meantime.
 
9.     AN OPPRESSIVE POLICY. EO 47 now ties the hands most of the ICT organizations and institutions, leaving them with no choice but to accept the policy or otherwise earn government’s wrath and no longer enjoy government’s favor. EO 47 puts everyone on a “take it or leave it situation” considering the degree of passion and commitment many ICT stakeholders devote upon the sector. The temperament of the ICT sector is one which believes that the less trouble, the less argument, the less conflict with government is the best case scenario to ensure that the industry is not affected. The ICT sector is now forced to adopt the “business as usual” attitude. Various corners in fact, as a coping mechanism to the blow of EO 47, repeat in their minds the principle of “less dependence in government”, “we have done it without government anyway” and the so-called “private sector-led ICT industry”. At the end of the day, no matter how much we pretend that everything is normal, we know deep inside, something bad just happened.
 
10. CONTRARY TO MANY EXISTING LAWS. As of this writing, some researchers are still working of a list of international commitments and treaties that the Philippine Government has entered into with the CICT as implementing agency, since it is said that there are many. In the meantime, the pending data privacy law and the cybercrime law provide that the CICT is going to enforce it. That will have to go back to square one.  
--
Best Regards,

Atty. Jocelle Batapa-Sigue
Chair, National ICT Confederation of the Philippines (NICP)
Suite 201 Terra Bldg. Galo-Gatuslao Sts. Bacolod City 6100

Morning Brief: 11 July 2011

BSP official says inflation likely to peak this quarter INFLATION will likely peak this quarter, breaching 5% in some months due to mounting oil prices and base effects, but full-year result will still come in within the 3-5% target, a central bank official said.“It will peak this quarter,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo told reporters on Friday. “It could be a base effect... or because of the increase in petroleum prices.” Asked whether the rise in consumer prices would go beyond the 3-5% target for this year, Mr. Guinigundo said: “It is difficult to rule that out...” He added, however, that “the year-wide average inflation for 2011 and 2012 will likely be within the 3-5% inflation target.” “[O]ur inflation expectation for 2011 lies closer to the mid-point, but still in the upper band,” Mr. Guinigundo said. Inflation actually hit 5.2% in June using a new data series that uses 2006 as a base year. Using the previous series which uses 2000 prices, inflation hit 4.6%, the highest in 26 months. Government statisticians will issue two sets of data up to the end of the year. The results prompted central bank officials to say that further monetary tightening should not be ruled out, a view Mr. Guinigundo reiterated. “The broad indication it is very difficult to rule out further shocks and therefore potential for tigthening, because the upward risks are still dominant,” he said. Manila one of the cheapest cities to live in PRICE HIKES notwithstanding, Manila remains one of the cheapest cities to live in, according to an economic research group. Manila is among the 10 cities with the lowest cost of living, the Economist Intelligence Unit (EIU) said, out of the 140 cities included in its“Worldwide Cost of Living 2011” report released last month. Manila is tied with Dhaka, Bangladesh for 124th place (62 cost of living index points), up from last year’s 128th place (56 points). The EIU used New York as the base city with index set at 100 points. The in-house research unit of the Economist analyzes the point-of-sale prices of 160 products and services for the biennial report, which is published in June and December. In the latest round, Tokyo in Japan was found to be the most expensive city to live in (161 points), followed by Oslo, Norway; Osaka and Kobe, Japan; Paris, France; Zurich, Switzerland; Sydney and Melbourne in Australia; Frankfurt, Germany; Geneva, Switzerland; and Singapore. Karachi in Pakistan, meanwhile, is the cheapest city, “with a cost of living level at less than one-half of that of New York and one-third of that of Tokyo,” the report said. Joining Karachi, Manila and Dhaka in the list of cheapest cities were Panama City, Panama; Algiers, Algeria; Jeddah, Saudi Arabia; New Delhi, India; Tehran, Iran; Mumbai, India; and Tunis, Tunisia. “There are two major reasons why a city’s cost-of-living index will change over time: exchange rate movement and price movement,” the EIU said. “Since a common currency is required in making a comparative calculation, all local prices are converted into US dollars, which emphasizes the role of currency movement. If, for example, a currency strengthens or inflation pushes up the price of goods, the relative cost of living in that country will also rise,” the research group explained. The EIU gave a 25% weight to the category shopping basket, 19.5% to transport, 18% to recreation and entertainment, and 13% to clothing. The remaining percentage was divided among alcoholic beverages, household supplies, personal care, tobacco, utilities and domestic help. Asked to comment on the EIU report, National Competitiveness Council co-chairman Guillermo M. Luz said, “The survey results will help the government in attracting more people to relocate and live here in Manila... and I believe that aside from enjoying a cheaper cost of living, they [expatriates] enjoy the quality of life our country offers.” “Manila has been a good-value-for-money city,” Mr. Luz added. University of Asia and the Pacific economist Victor A. Abola said, “Compared with other Southeast Asian cities, Manila offers cheaper household help or services for expatriates and cheaper food items.” “Inflation rates were seen inching up for the past months, but not exceptionally high, which could be one of the reasons for a slightly higher cost of living in Manila,” he added. -- Daniel Anne Nepomuceno-Rodriguez

Earnings take center stage NEW YORK (CNNMoney) -- After spending two months focused largely on the state of the U.S. economy, investors will get a chance to turn their eyes back to Corporate America this week.Several key companies will report their results for the second quarter this week, with investors getting profit reports from Dow members Alcoa (AA, Fortune 500) on Monday followed by JPMorgan Chase (JPM, Fortune 500) on Thursday. Citigroup (C,Fortune 500) and Google (GOOG, Fortune 500), among others, are also on tap to release their latest sales and earnings. "This is where we can get down to the fundamentals of this market and finally see how companies are actually doing in this economy," said Jack Ablin, chief investment officer at Harris Private Bank. While only a dozen or so of the S&P 500 components are reporting this week, Alcoa, Google and JPMorgan are among the biggest names in their respective industries and tend to be good, broad indicators of how companies are expected to perform, Ablin said. Expectations for this quarter's profits have become more subdued as of late as analysts and investors continue to worry about the health of the economy. The Labor Department reported Friday that employers created only 18,000 jobs in June, far less than what economists had expected. Stocks dropped Friday on the jobs news but still finished the week with gains. While this quarter's results will be closely watched, strategists said the market will be listening even more closely to the outlooks that companies give for the third quarter and remainder of the year. "I'm going to be looking at economic-cyclical companies and particularly commodity-sensitive companies to see if companies have been able to keep productivity and profit margins high, despite higher commodity costs," said Liz Ann Sonders, chief market strategist with Charles Schwab.  Sonders said she remains optimistic about how companies did in the second quarter, saying that she believes the signs of an economic slowdown are more tied to the Japanese earthquake and bad weather in the U.S. earlier this year. "The macroeconomic concerns have turned into microeconomic concerns about companies, and I don't think it's really justified," Sonders said. Outside of earnings, investors will have several economic reports to digest this week, including June retail sales figures as well as the closely-watched inflation readings on producer and consumer prices. On the Docket Monday -- Second-quarter earnings reports kick off in earnest after Monday's closing bell with results from Dow component Alcoa. The aluminum company is expected to have earned 32 cents per share. There is no economic data scheduled for release on Monday. Tuesday -- Investors will get the U.S. trade balance figures for May in the morning. Economists surveyed by Briefing.com expect the U.S. posted a $44 billion trade deficit in May, slightly wider than the $43.7 billion deficit for April. Minutes from the Federal Reserve's Federal Open Market Committee meeting from June are also due out in the afternoon. Wednesday -- The Energy Department's weekly oil inventories report comes out in the morning. Fed chairman Ben Bernanke will also begin his semiannual testimony to Congress about monetary policy and the economy on Wednesday. Bernanke will appear before the Committee on Financial Services of the House of Representatives. In earnings, fast food company Yum! Brands (YUM, Fortune 500) as well as hotel chain Marriott (MAR, Fortune 500) will report their earnings after the closing bell. Thursday -- JPMorgan Chase reports its second-quarter results before Thursday's opening bell, with analysts expecting the commercial banking giant to have earned $1.21 a share according to Thomson Reuters. There are several economic reports out Thursday morning. The Labor Department will issue its weekly jobless claims report and its June producer price index report, also known as wholesale inflation. The Commerce Department issues its reports on June retail sales as well. Economists forecast that weekly jobless claims held mostly steady at 419,000 claims, up 1,000 from last week. Retail sales are expected to fall 0.2% for June and the producer price index is expected to fall 0.3%. Bernanke's testimony to Congress continues, with the Fed chairman appearing before the Senate's Committee on Banking, Housing, and Urban Affairs. After the bell, Internet search giant Google will report its quarterly results. Analysts expect that Google earned $7.86 a share. Friday -- The Labor Department releases its June consumer price index data, the nation's most common read of inflation, in the morning. Economists are looking for CPI to fall 0.1% versus the 0.2% rise reported in May. Investors will also get June industrial production figures, the July reading on the University of Michigan consumer sentiment index and the Empire State Manufacturing Index. Citigroup and toy maker Mattel (MAT, Fortune 500) are slated to report their latest quarterly results in the morning as well.

Crude Oil Falls for a Second Day in New York as U.S. Jobless Rate Climbs Oil declined for a second day in New York as investors bet that rising unemployment in the U.S. indicated that fuel demand may falter in the world’s biggest crude-consuming nation.Futures slipped as much as 0.5 percent after the Labor Department said July 8 that U.S. employers last month added the fewest workers in nine months and the unemployment rate rose to 9.2 percent, the highest this year. A report this week may show U.S. retailers probably stagnated in June. Crude for August delivery fell as much as 47 cents to $95.73 a barrel in electronic trading on the New York Mercantile Exchange, and was at $95.93 at 8:50 a.m. Sydney time. The contract dropped $2.47, or 2.5 percent, to $96.20 on July 8. Prices are 28 percent higher the past year. Brent oil for August settlement declined 56 cents, or 0.5 percent, to $117.77 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $21.92 to U.S. futures. The difference reached a record $22.29 on June 15. U.S. payrolls increased by 18,000 in June, Labor Department data showed July 8. The median estimate in a Bloomberg News survey called for a gain of 105,000. A Commerce Department report on July 14 may show an unchanged reading in purchases in June after a 0.2 percent May decrease, according to the median forecast in a Bloomberg News survey.

Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com 

BDO UNIBANK INC. 

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher 
(632) 858-3001 

Statement by IT-BPO Industry Associations on Executive Order 47 and the Department of ICT Bill

Statement by IT-BPO Industry Associations on
Executive Order 47 and the Department of ICT Bill

Manila, July 8, 2011

The undersigned associations, representing the Information Technology-Business Process Outsourcing (IT-BPO) industry, have always worked closely with the Philippine government and its key agencies, such as the Department of Trade & Industry and its attached agencies (e.g. the Board of Investments, and the Philippine Economic Zone Authority), the Department of Education, the Commission on Higher Education, the Technical Education & Skills Development Authority and the Department of Finance  to ensure the sustained rapid development of the IT-BPO industry and the creation of high-paying, value-added jobs for Filipinos.

We have also worked very closely with the Commission on Information & Communications Technology (CICT), which has been one of our industry’s staunchest supporters and has sponsored and funded many of our key initiatives, including our IT-BPO Road Map 2011-2016, which charts the course for our industry’s growth from $8.9 billion in revenues and 525,000 employees in 2010 to a target of $25 billion in revenues and 1.3 million in 2016. It has also been our partner in our Next Wave Cities strategy to attract IT-BPO investment to provincial areas of the Philippines where jobs are desperately needed, and has organized regional ICT councils to empower local governments and enhance regional cities’ ability to draw industry locators.

We were therefore surprised when we learned of Executive Order 47 (EO 47), a presidential directive which renamed CICT as the Information and Communications Technology Office  (ICTO), placed it under the supervision of the Department of Science and Technology (DOST), reoriented its functions, and directed that it be headed by a still-to-be named Executive Director with the rank of an undersecretary, instead of its current Chairman, Secretary Ivan Uy, who has the rank of cabinet secretary and has been very effective as an advocate of our industry.

We were disappointed that EO 47 was issued without the benefit of extensive stakeholder consultation, as we believe that this would have been highly beneficial to the development and execution of public policy on the key ICT sector.

We call upon our government to engage in deeper collaborative dialogue with all stakeholders before undertaking further major reforms that critically affect our sector. Unless we strengthen our Public-Private Partnership with the government, we will have great difficulty achieving our goal of generating hundreds of thousands of new jobs in the next few years.

We are pleased and encouraged that DOST Secretary Mario Montejo has made the commitment that the ICTO will continue to support the initiatives the IT-BPO industry developed with CICT. We encourage him to involve individuals with deep experience with our industry in the leadership of the ICTO, including those from CICT. We also call on him to further clarify to all stakeholders his plans for the ICTO, particularly with regards to the Philippine Digital Strategy, which CICT launched last month after extensive consultation with, and support from, our industry and other stakeholders. For our part, we will continue to work closely with government, including DOST and ICTO, to achieve the industry’s full potential.

Finally, we believe that the ICT sector is so critical to enhancing our national competitiveness and accelerating economic development that it merits even greater focus from the government, and the creation of a full department of government. Accordingly, we are continuing our long-standing support for the Department on ICT (DICT) Bill, whose authors are led by led by Senate Science and Technology Committee Chair Sen. Edgardo Angara and House ICT Committee Chairman Cong. Freddie Tinga. We believe that further elevating the government’s prioritization of the ICT sector through the creation of a DICT will increase the ability of ICT to ensure the success not just of the IT-BPO industry, but of the entire nation.

Signed by:

Animation Council of the Philippines, Inc. (ACPI)

Business Processing Association of the Philippines (BPAP)

Contact Center Association of the Philippines (CCAP)

Gaming Development Association of the Philippines (GDAP)

Health Information Management Outsourcing Association of the Philippines (HIMOAP)

Philippine Software Industry Association (PSIA)