Gentle mind agreement
Okay, boss, the hot political issue this side of the West Philippine Sea is this EDCA—the Enhanced Defense Cooperation Agreement between the Philippines and the United States—but the guys down here in my barangay are asking only one question: What is in it for them?
As everybody knows, except perhaps some of our pork-loving lawmakers, the EDCA would allow US troops to use Philippine military bases by, for instance, building new facilities and structures, which would enable the US military to do what is known in EDCA parlance as “prepositioning.”
Now, would it make life better for the guys down here in my barangay?
Well, for one, the agreement mandates the US military to give priority to Philippine suppliers for all the goods and services needed in those US-built facilities, which surely would benefit businesses here that ultimately would mean more jobs and perhaps even better pays. And we all know that the US government always allots hundreds of billions of dollars to the US military!
Anyway, perhaps the most direct impact of the EDCA to the guys down here had something to do with the so-called quick response to disasters and calamities—you know, earthquakes and tsunamis, and supertyphoons like the nasty Yolanda. From what I gathered, the negotiators of EDCA—headed by Defense Undersecretary Pio Batino for the Philippine side—went through eight rounds of talks, even spanning the whole of two years, precisely to work on the terms.
It seemed that some gentle minds, rather aggressive violent macho types, really prevailed in the crafting of the agreement, which was evident in what the ERCA termed as “humanitarian assistance and disaster response,” or HADR, being one of its main features. That would simply enable the government, particularly the Armed Forces of the Philippines, to provide rescue and relief operations in times of calamities—whether natural or man-made—even in far away godforsaken places anywhere in the Philippines.
The super-killer Yolanda already taught us that “quick response,” particularly from the government, meaning, the military, could spell the difference between life and death for thousands of people in the calamity areas. Thus under the EDCA, at least based on the claims of the negotiators, such “quick response” would be less problematic because the agreement would allow—here is that term again—the “prepositioning” of equipment and supplies for humanitarian assistance and disaster relief.
The EDCA would definitely reinforce this thing called “prepositioning” because of its unique provision that would allow the US military to spend its own millions to put up structures in military camps here, which the US military could then use for 10 years, after which the Philippine government would take full possession.
With the EDCA being like any land-use business agreement, what seemed to be firmly objectionable in it?
Well, Senate Minority Leader Alan Peter Cayetano, who is said to be setting an eye on 2016, reportedly wanted to go over the EDCA with a fine-toothed comb, threatening to scrutinize its “every single letter and punctuation mark.” It seemed that, to a number of our beloved senators, the EDCA sounded like a “treaty”—and not just an agreement—and so it would need to pass through the Senate, the policy-making body of the Philippine government.
On the other hand, the Aquino (Part II) administration insisted that the EDCA was not a “treaty,” which by definition is a “political” agreement, thus still needing the partisan insights and political wisdom from politicos like our beloved senators, plus perhaps a good deal of pork releases.
Anyway, Sen. Miriam Defensor Santiago also went mad over the fact that the leaders of the two countries, namely our leader Benigno Simeon (aka BS) and US President Barrack Obama, did not sign the agreement, which to her perhaps devalued it. OK, Philippine Defense Secretary Voltaire Gazmin and US Ambassador Philip Goldberg signed the EDCA during the Obama state visit here, meaning, the US president was already in the country and yet he did not sign it together with our leader BS.
Still, from where we sit, it did not look to be a permanent agreement. As we all know, the EDCA would be valid for only 10 years, after which the US military would have to give up everything that the US military would set up in Philippine military bases. It is similar to a contract. Also, I am not sure that the leader of any government would want to trumpet something in which his government would be giving away tons of money for facilities and supplies for the benefit of another government.
In the end, all those would point to something intangible that would be good for the guys down here in my barangay—you know, the sense of security that the agreement would provide to the Philippines in these times of worry this side of the West Philippine Sea.
Methinks it would be good for business. Really, boss, it is all about security. Let me quote Cebu Business Club president Gordon Alan Joseph: “A more secure country can focus on strengthening its economy and providing more jobs for Filipinos.”
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According to reports, the country’s flag carrier Philippine Airlines reported comprehensive losses of about $230 million as of the third quarter of 2013, which surely brought out some mean speculations and remarks in business circles, particularly in those not exactly friendly to the main stockholders of PAL, namely, Lucio Tan and the San Miguel groups.
From what I gathered, PAL incurred such an horrific loss—even just on paper, meaning, its cash flow was still very much healthy—because of the one-time expense of some $261 million to cover the retirement of its aging fleet of aircraft. Based on the business model that PAL adopted when the San Miguel group acquired 49 percent last year, its “turnaround strategy” should include what the airline called “fleet modernization.”
And that was why PAL swallowed the $261 million one-off expense. It really wanted to rid itself of the old fleet that wasted truckloads of fuel, following the trend among international airlines all over the world. In 1990, those airlines started to gather data for what they called “fuel efficiency index.” The good news is that, based on the index, the world airline industry today is posting fuel efficiency index that is almost double the index about 24 years ago.
And why is fuel efficiency a big deal in the airline business. Well, nowadays fuel accounts for more than 30 percent of the operating costs of airlines—in general. It was only 17 percent just about 10 years ago. In other words, the international airline industry has been going bonkers over fuel efficiency for more than 20 years now, yielding some concrete results in the process, although fuel costs kept on eating into their operating incomes.
And yet our very own PAL is doing this fuel efficiency thing quite late, although PAL management said they were still confident that the airline would end this year with a more efficient fleet planning program, mainly due to its various new aircraft.
PAL president and COO Ramon S. Ang, who is also vice chair of the San Miguel group, said that 2013 was a “clean-up year” for PAL. “We went through the costly yet necessary fleet renewal process.” In other words, the flag carrier PAL will soon own one of Asia’s youngest fleet—estimated at an average 3.5 years old. And not many airline in these parts can claim such an advantage.
