Monday, November 13, 2006

Second (Third?) Invasion - Japan in the Philippines

WHAT WE FILIPINOS SHOULD KNOW: In 1979, the late Professor Renato Constantino wrote a pamphlet entitled "The Second Invasion - Japan in the Philippines." He warned that increased Japanese presence should be a cause for concern.

Thanks to the Marcos Dictatorship which in 1973 signed the "Treaty of Amity, Commerce and Navigation" with Japan, Japanese businesses/transnationals have gained a strong foothold in our country. This treaty has efffectively and efficiently converted our homeland into Japan's garden (cheap agricultural products, fisheries and minerals, etc.) and R&R destination (sports and sexual entertainments); all at the expense of our native agriculture and industries; and thus livelihood of the natives.

With the exception of the late President Carlos P. Garcia who is known for his "Filipino First Policy," and shortening the Bases Agreement from 99 years to 25 years, all previous regimes since our "independence," have sold out to foreigners and thus continue to negate the long-term economic development, i.e. agricultural and industrial, of the homeland.
As mentioned in the following IBON article, Japan is bolstering its entrenchment in the homeland via the JPEPA.
The Japanese invasion is back again, getting much without firing a shot and at bargain basement price or "fire sale" for them and at a tremendous long-term cost to old and young Filipinos. All these, courtesy of mendicants and traitors --among the Filipino leadership-- to future generations of native Malay Filipinos.
"If the people are not completely free and happy, the fault will be entirely their own." - George Washington, shortly after the end of the American Revolution
“There is no literate population in the world that is poor; there is no illiterate population that is anything but poor.” – John Kenneth Galbraith (1908-2006)
“Nations, whose NATIONALISM is destroyed, are subject to ruin.” - Colonel Muhammar Qaddafi, 1942-, Libyan Political and Military Leader
"Upang maitindig natin ang bantayog ng ating lipunan, kailangang radikal nating baguhin hindi lamang ang ating mga institusyon kundi maging ang ating pag-iisip at pamumuhay. Kailangan ang rebolusyon, hindi lamang sa panlabas, kundi lalo na sa panloob!" --Apolinario Mabini, La Revolucion Filipina (1898)

Japan-RP Economic Pact Brings Dubious Gain

The agreement is biased towards the more powerful Japanese economic interests, so how can JPEPA be positive for the Philippines in terms of trade and investment?

IBON Features
Posted by Bulatlat

After negotiating away from public scrutiny for four years, the Japan-Philippines Economic Partnership Agreement (JPEPA) was signed at the Asia-Europe Meeting in Helsinki, Finland on Sept. 10, 2006.

Officials provide few details but it is reported that the agreement will cut import tariffs on industrial goods by 90 percent within 10 years and provide concessions for Japanese direct investment in the domestic automobile and electronics industries.

The Philippines will abolish tariffs on at least 60 percent of its steel imports from Japan. Tariffs on Japan-made cars will also be fully eliminated in 2010. In exchange, Japan will lower tariffs on Philippine bananas and pineapples, while the Philippines removes tariffs on Japanese grapes and pears. Japan will also supposedly allow a year-on-year quota of an unspecified number of Filipino nurses and caregivers. It had also been reported that the JPEPA would remove mutual restrictions on Japanese and Philippine investors, as well as prohibit performance requirements.

Both governments have already said that the agreement will be positive for both the Philippines and Japan in terms of trade and investment. But the pact is biased for the more powerful Japanese economic interests. Being an unequal agreement between unequal parties, the JPEPA will bring dubious gain to the local economy while severely limiting government's policy options to develop domestic industries.

Compromising economic protection
The biggest gainers of the JPEPA are Japanese investors who will keep setting up export enclaves in the Philippines that are not integrated with the domestic economy. They will continue to import most of their inputs and components, exploit fiscal incentives, stifle workers' rights to organize, and hire labor as cheap as they can get. The Philippines will also be foregoing millions in dollars in tariff revenues from Japanese imports.

Japan and the Philippines are such grossly unequal economies that nominally equal terms can never mean a "level playing field". The Japanese economy (US$4.4-trillion gross national income in 2004) is 50 times larger than the Philippines' and its gross domestic product per capita is 35 times larger. Japan accounts for some one-third of foreign investments (with a cumulative US$3.5 billion in Japanese investments 2003) in the Philippines and one-fifth of its external trade (with US$14.2 billion in total Japan-Philippines trade in 2004). And yet, for instance, the country's domestic industrial base has continued to deteriorate despite the majority of Japanese investments being in the manufacturing sector.

The Philippine government is compromising policy tools under the JPEPA that, ironically, Japan itself used heavily. The Japanese government greatly protected its domestic industries from the late 19th century until the early 1980s. Japan's industrial might in cars, trucks, shipbuilding, computers and consumer electronics was built up in through almost a century of sustained intervention and protection, especially in their early stages. Average weighted industrial tariffs reached as high as 30-40 percent. The Japanese government required technology transfers from U.S., French and UK investors, or brazenly pirated technology through so-called "reverse engineering." Government agencies were obliged to procure goods and services strictly from Japanese firms. Japanese technological and productive capacity would not have developed if not for these many decades of active state support.

In contrast, the Philippines does not even have a national industrial program that it can use to negotiate over its industrial trade policy. Like the past administrations, the Arroyo government cannot expect to achieve a level playing field with only a foreign investments-driven medium term plan that targets tourism and business process outsourcing projects as sources of "economic growth."

Dangerous step
The far-reaching JPEPA is also the dangerous first step towards complete government renunciation of developing the Philippine economy. What little public information there is about JPEPA indicates about a dozen areas for liberalization that collectively go far beyond anything proposed even in the currently dormant World Trade Organization (WTO). These include: the elimination or reduction of tariffs on industrial products and agriculture, forestry and fishery products; liberalization of services sectors such as construction, outsourcing, air transport, health-related and social services, tourism and travel-related services, maritime transport services, telecommunications and banking; national treatment, Most Favored Nation treatment and performance requirement prohibitions; and supposedly easier entry of qualified Filipino nurses and certified caregivers.

The JPEPA also includes various provisions on: Government Procurement, Competition Policy, Intellectual Property, Dispute Avoidance and Settlement, Improvement of the Business Environment, Mutual Recognition and Bilateral Cooperation.

As the country's first full-fledged bilateral free trade agreement (FTA), the benchmark it sets for liberalization will determine the shape of all FTAs to come, including the continuation of the stalled WTO talks. If the Philippine government sets high trade and investment liberalization standards in JPEPA then it will be obliged to also give these to partners in subsequent FTAs lest it be accused of discrimination. The country's negotiating position in all subsequent trade and investment agreements will be gravely undermined. The end result of the JPEPA and other such agreements will be to shut the door to real domestic industrial growth and economic progress.

The government is also treating our health professionals and caregivers as mere commodities when it touts the "quotas" supposedly being given by Japan for these jobs as a good thing. The reality is that these mostly women health workers and caregivers will bear the burden of overcoming formidable language, certification and even racist and patriarchal barriers-- considering that Japan's young population have already expressed concerns over their government's offer to open up sectors for foreign employment. Because of its desperation for quick sources of foreign exchange, the Philippine government is placing the burden on the cheap export of skilled Filipinos. It should instead focus on creating the strong domestic economy that will create opportunities for Filipinos at home.

The Philippine government affirms its commitment to the destructive policies of neoliberal globalization. Instead of using the collapse of the WTO Doha Round talks as an opportunity to rethink its commitment to neoliberal globalization, it is giving up its sovereignty piecemeal on a country-by-country basis through bilateral and regional economic agreements.

Japan, on the other hand, makes further headway in consolidating Southeast Asia as a source of cheap agricultural, mineral and other raw materials for Japan as well as a captive market for Japanese industrial goods. Aside from the Philippines, Japan has already signed or is negotiating FTAs with Singapore, Malaysia, Indonesia, Brunei and Vietnam.

IBON Features / Posted by Bulatlat

© 2006 Bulatlat ■ Alipato Media Center
Permission is granted to reprint or redistribute this article, provided its author/s and Bulatlat are properly credited and notified.


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Anonymous said...

Follow their example, since they were totally in ruin after the war. The difference between the Japs and Filipinos is that they're more concentrated for their nations wellbeing, unlike the Philippines there's too much corruption and self promotion that renders the economy helpless.It may sound a bit unreal but hey it's happening.

Anonymous said...

The provisions in JPEPA are clearly skewed in favor of Japan.

The disadvantage to the Phils can be readly deduced in the market access of goods. A simple comparison of the monetary value of the Philippine products (pinapple, mango, etc. which range in few hundred or thousand of metric tons) - roughly valued at no more than US $2M! - given tariff quota by Japan vis-a-vis Japan products coming in to the Phils with quota, particularly steel, under "tariff quota and preferential treatment" at 0% customs duty, which is 175,000 metric tons for 1st year of effectivity (187,500 MTs for second, 200,000 for third )- assuming US$500/MT, it will have an aggregate conservativel value of US$87.5M!

This "tariff quota and preferential treatment" was imprudently granted by Phil govt in favor of Japan as Japan has competitive advantage in this product. Japan has not given similar concession much less such "preferential treatment" with the same or much greater volume for Phil products.

More surprisingly, JPEPA would allow Japan's "factory ships" to fish in Phils EEZs, anywhere in the Phils(to target Phil tuna's of course!) without proper accounting of their catch as the same will be shipped directly to Japan. I'm sure our tuna fishing industry are well aware of the implications of this concession by Phils under the rules of origin of JPEPA, which grants national treatment to Japanese fishing entities as if they own Phils EEZs. My best estimate is that, within 3 years, our tuna fishing industry will lose their market in Japan once Japan would able to source from their own factory ships the tunas coming from Phils EEZs. Phil tuna companies, will most likely face bankruptcy, retrenchment including those ancillary suppliers/supporting the local industry. I hope it wont happen, if it will, it will be irreversible. The Phil govt will not reimburse the industry losers for even a single cent.

If Phil economic development is the primary concern of JPEPA, Japan should have granted similar "preferential treatment" to Phil products by granting similar volume, and of equivalent value, such as 175,000 MTs of tuna, sugar, coco oil, where Phils has clear advantage over Japan. But Japan is afraid to do so at it will immediately cripple their tuna fishing or sugar industry. Phil govt dont think the same way, they just want access in Japan for 400 nurses/caregivers in exchange for any concession!

What we really got is a bad deal for Filipino people and local industries!

By granting this preferential treatment on Japan steel and their producers, sad to say, our Phil negotiators abandoned their primordial task of protecting local steel producers, an industry, crucial to Phil industrialization.

Certainly, JPEPA is unfair and unjust!

Anonymous said...

Just to let you know that this JPEPA is also being opposed by Japanese taxpayers themselves. You may think that Japanese in the Philippines will have an edge over Filipinos, but we think otherwise. The truth is a lot many of them do not even deal with native Filipinos but with naturalized Filipino-Chinese who in the long run actually end up cheating them.

The treaty is now being criticized by the opposition and discussed at the Japanese Diet in response to complaints filed by concerned Japanese NGOs and taxpayers.

Just my yen's worth.
Yuko Takei in Tokyo

Anonymous said...

Hi Bert:

Nice to hear from you again.

The People's Power government sincerely believes that
we can produce an economic miracle in our country and
solve all our woes through the expedience of free
trade. They have ignored the fact that we actually had
free trade from 1521 to 1935 and briefly again, from
1945 to 1960. Far from producing wealth to our nation,
free trade has only produced resentment of Filipinos
against foreigners -- nothing more or less. It has not
made our country rich, contrary to the promise of the
proponents of free trade to nations who will practice

In spite of the overwhelming historical evidence to
the contrary, the politicians of the People's Power
government believed the promises of the Ricardian
advocates of free trade that this system of economic
management will solve all the economic woes of the

The Ricardian doctrine of free trade was laid down by
David Ricardo in his epic book, "Principles of
Political Economy," published in 1817. The book is
considered the Bible of Ricardian Economic School of
free trade. The Ricardian Economic School of free
trade is a cultic sect of economics, since the
followers unabashedly allude to David Ricardo as the
main theoretician of this school of free trade, in as
much as the Marxist allude to Karl Marx as the main
theoretician of Marxist school of economics.

The "Principles of Political Economy," written by
David Ricardo, has been assailed by numerous writers
as giving only a one side presentation of the
complexities of international trade. In spite of these
reasonable criticisms, many economists were attracted
to the doctrines of David Ricardo even to the extent
of declaring him the Supreme Pontiff of this economic
doctrine in the same way Karl Marx was declared the
Supreme Pontiff of Marxism by its fanatic adherents.

Unfortunately, the politicians of our People's Power
government were mesmerized by these doctrines,
although none of them has openly declared David
Ricardo as the new Supreme Pontiff of Philippine
economics, to avoid the charge of Filipino
nationalists that they are the mere puppets of

It appears that our People's Power politicians are the
diametrical opposite of the New People's Army. Our
People's Power politicians declare David Ricardo to be
their Pontiff while the New People's Army declare Mao
Tse Tung and Karl Marx to be their Pontiff -- all of
these are foreigners. Sad to say, we do not have any
home grown economic philosophy. Hilarion M. Henares
challenged Filipino economists to come our with a
native economic theory that takes into account local
circumstances and not to be beholden to foreign
economic theoreticians who are speaking more of the
development of their own countries. That is why I am
so happy that you are contributing to the development
of this home grown Filipino economic philosophy by
caring to share your ideas with anybody who would

The Arroyo administration sincerely believes that the
Ricardian doctrine of free trade is the answer to all
our economic woes. This is the reason why Pres. Arroyo
signed a free trade agreement between our country and

The only way to convince the Arroyo administration
about the serious error in economic policy that our
government is committing is to allow her to try the
Ricardian doctrine of free trade in her
administration. Recently on TV, Pres. Arroyo and her
cabinet announced that we will be the next economic
tiger in Asia. The only thing good about this
statement is that many Filipinos are not contented
with the average growth rate of between 5 to 6 per
cent that our traditional politicians has been
offering our countrymen in economic management. By an
economic tiger, we mean that our growth rate would be
an average of 10 per cent a year. I sincerely doubt
whether these projections would come true. The best
that our politicians could offer our countrymen is 5
per cent a year growth rate and the Arroyo
administration has achieved that. The Aquino, Ramos
and Estrada administrations failed to meet even the 5
per cent growth rate.

Thank you for sending me your newsletter.

Very truly yours,


Anonymous said...

The Japanese miracle was a mirage. What actually happened was that they still had $100 Billion in loot from theri plunder of Asian countries back in World War II that they shared with the US in exchange for not prosecuting it's War criminals which technically should've also included the Emperor Hirohito himself. Even though they did hang Yamashita they never punished all the other generals that were left in Japan. This loot enabled them to rebuild their economy rapidly not to mention all the technical help that the American and Australian engineers provided them after the war.