Monday, December 07, 2009

The Unintended Brilliant Legal Strategy

The Philippine government placed Maguindanao, a province in Mindanao, Philippines under Martial Law. The public has been generally supportive of this aggressive military action as a proportionate response to the massacre of more than 60 people in broad daylight. Martial Law has been in effect only for two days and the government has unearthed, literally, in various places, dozens of high powered firearms, thousands of ammunition and machine guns. The biggest problem of the government though is justifying the imminent danger of rebellion. This is because the government chose the "Martial Law" option. I suggested the "Doctrine of Equivalent Action" instead. (Read my blog on this topic). The government is set to file rebellion charges, separate of the charges of murder. We must note that direct evidence is always the problem in criminal prosecution. It is not far out to say that the government has no strong direct evidence linking to the Ampatuans although the circumstantial evidence is overwhelming. Enter Martial Law. I have realized that the government has a very powerful brilliant legal strategy on hand. The gathering of evidence using search warrants are tedious because it requires "personal" hands-on knowledge of the applicant for the warrant before the courts issue warrants. This procedural due process is obviously inefficient and inadequate but then efficiency and due process are usually contrapuntal. With the advent of Martial Law, however, there is a dramatic strategy that is available to the government. Under the cloak of Martial Law, any gathering of evidence that would been illegal, are suddenly, legal, as a consequence. There is speed, efficiency, universality of scope. The illegally gathered evidence are now legal and can be used in the courts of law. And since rebellion, which is a political crime, and murder, which is a crime against persons, are being prosecuted separately and independently, then failure in the prosecution of the former crime does not automatically mean failure in the prosecution of murder. What is the brilliant strategy I am referring to? The brilliant strategy is using the mantle of Martial Law to illegally gather evidence but instead of prosecuting them under political crimes, the suspects are charged with the ordinary crimes of murder. Thus, Martial Law is used to gather evidence and but the evidence is used to prosecute for murder under ordinary courts using ordinary criminal procedure. This avoids any political cloud because the procedure is definite and clear: prosecution of murder under the rules of criminal procedure. A brilliant strategy, indeed, and the government is commendable for this legal strategy. But are they that brilliant to have the foresight to think that far ahead? Or is it the unintended consequence? Or maybe, it is the Street Strategist seeing what everybody else has seen and thinking what nobody else has thought? --

"Constitutional Expert" and the "Street Strategist"

What is the difference between the "Constitutional Expert" and the "Street Strategist?" 1. Here, constitutional expert Fr. Joaquin Bernas discusses the options of GMA 2. While the Constitutional Expert is groping for specific actions, here, the Street Strategist goes a step further and immediately works out a political strategy for GMA, on top of legal analysis Enjoy.

The Strategy of Equivalent Action

The Maguindanao massacre in Mindanao was the worst public display of barbarism in recent Philippine history.

Even during the entire Martial Law regime, no such public display of massacre happened. (The massacres of over 50 people in one sitting during Martial Law could have been done in private, though.)

Given the situation, ordinary police action using ordinary rules of police engagement would have been inefficient, ineffective, inadequate.

After all, barbaric and systematic gunning down of innocent women and weaponless journalists being made to kneel before being shot goes beyond the usual commission of crimes.

The crimes were committed without fear of the law. That was the unique element of the massacre.

There was premeditation, planning, and engineering during the commission of the massacre and in the subsequent attempt to hide the evidence using heavy equipment to crush vehicles and bullet-ridden bodies into layers of soil.

Without fear of the law!

Thus, the enraged public needed an action, a very aggressive police action to arrest the suspects and to dismantle their huge private murderous army and eventually to exact vengeance and justice.

The police action that the public needed is similar to Martial Law.

Thus, from my viewpoint, we needed a "police action" that can give us a "similar" force and efficiency of a "Martial Law."

I call this the "doctrine of equivalent action."

The hitherto "unnamed, unidentified undefined" desired action is a police action, meaning it is an executive action by the chief executive, acting as a chief executive. This desired police action is, therefore, a civil action exercised by the chief executive in his/her capacity as head of the civilian government.

For lack of better term, for the moment, I will call this police action as the "Martial Law equivalent action" or simple "Equivalent Action" or simply, "EA."

The action should not be a military action being exercised by the President acting as commander-in-chief of a military organization. It should not be a Martial Law action.

Thus, I make a distinction between the "military action" which is "Martial Law" on one hand, and the "police action" which I call as "Equivalent Action", on the other.

Why the distinction?

The "Equivalent Action" is a civil, police action which does not require the elements of "invasion, rebellion, or imminent danger thereof." It is not a political decision, rather a management decision. It does not expire over a fixed period but subsists until the resolution of the case and the attainment of the objective of exacting justice.

On the other hand, "Martial Law" is a military action. It requires the elements of "invasion or rebellion." It is a political decision in addition to being a military strategy decision because it has to satisfy constitutional requirements. It expires over a fixed period although a subservient congress can extend it indefinitely.

So far, the legal community is divided on the basis of the phrase "invasion or rebellion." Some are in favor of the martial law, some are not.

However, the frustrated, enraged general public are almost unanimous: this is the way the government should handle the barbarians at the gate, the mindless savages who massacred helpless women, journalists and civilians with heartless premeditation and callous engineering. Without fear of the law, without fear of punishment, without fear of vengeance.

As we can see, the public having seen the barbaric massacre supports the Martial Law action ignored the legalities of the term "Martial Law."

The public, therefore, desires the "Equivalent Action", the civil police action that attains the objectives of justice and vengeance without the requirements of "invasion, rebellion, or imminent danger thereof."

What does this mean?

The people are satisfied with the results of the action, not the actual terminology being used.

So here is a tip for GMA and future dictators.

It is within the means of a management decision of a civilian organization, the means of an executive decision of a civilian government to enforce an "aggressive police action" without the need of imposing martial law.

Avoid the term "Martial Law." Don't use it.

Remember, when for the first time in modern Philippine history, the government used the term "State of Rebellion?" The Supreme Court declared that such declaration of "State of Rebellion" was a "political question" beyond the ambit of the Supreme Court.

GMA could repeat the same strategy.

Invent a new term, use this term as the basis of an aggressive police action, and let the lawyers debate the implication of the term in the courts.

The President does not even have to invoke actual "invasion or rebellion."

Because the new term is "unnamed, unidentified, and undefined," the vagueness and the doubt will have to be resolved in favor of "political question", beyond the ambit of the Supreme Court.

Will this result in creeping Martial Law for the entire country? Like the story of the slowly boiled frog?

Ordinarily, that's what extrapolation is all about.

However, there is the fallacy of extrapolation. We cannot just assume extrapolation.

There is always an asymptote. For the Philippines, the people have realized that Martial Law cannot just be imposed in the entire country, again, without them rising against it. Their previous experience with Martial Law gives us a reasonable basis to say that the people have an asymptote of their tolerance for it.

Just because Martial Law has been imposed in Maguindanao with many of the public supporting it does not automatically mean that the same public will support Martial Law imposed in the entire country.

This leaves the Chief Executive about two years of breathing space.

The people do not want "Martial Law", but they want the "Equivalent Action."

And, consequently, I could be the first detainee of the "Equivalent Action."

1. Strategy vs. tactics.
This article discusses the Strategy of the Equivalent Action, and leaves the tactics with respect to habeas corpus, rebellion as a political crime, etc as another subject.

2. This is an exercise in thought; and does not reflect my political beliefs)

Thursday, December 03, 2009

An Economic Strategy for the Presidentiable

I have been busy compiling a set of talking points, ideas, facts and figures that should be useful for a presidential candidate who thinks that the economy is a serious factor in running the country. While I don't intend to circulate this to the general public, I am writing this down to communicate to a future policy maker some ideas that economists and politicians have overlooked.

Monday, October 12, 2009

Books by the Street Strategist

Once in a while I get emails asking how many books I have written etc. Here is the answer. And the table of contents, and the order mechanism is found at “The Misadventures of the Street Strategist” Strategy Myopia (Vol. 1) Identity Paradox (Vol. 2) Absolute Freedom (Vol. 3) Famous Man (Vol. 4) Seventh Sense (Vol. 5) Intellectual History (Vol. 6) Portrait of the Street Strategist as Bar Examiner (Vol. 7) Certiorari Conundrum (Vol. 8) The Thaumaturge: Confessions of a Hong Kong Trader (Vol. 9) Hyperwage Theory (Vol. 10) The Perfection of Contracts (Vol. 11) Thinking Time (Vol. 12) The Last Days of Urban Bank (Vol. 13) The Lost Marcos (Vol. 14)

Saturday, September 26, 2009

Nobel Prize and Poverty

Nobel Prizes should be awarded for originality of ideas. A professor may be very famous because of his expertise on Keynesian economics but that alone should not qualify for a Nobel. Give him a summa cum laude, if ever. The award in this case should go to Keynes and not to the person who has mastered Keynesian economics? Furthermore, the award should be given to something that is not very obvious almost everyone knows it. The Agency Problem for example is an "obvious" idea. Not worth a Nobel. The pricing of options in Black-Scholes is an example of a Nobel idea. Recently, the ones making rounds in the global crisis today is Keynesian. Govt intervention via pump priming methods are Keynesian. That is a good economic theory. (There was no Nobel yet in 1936, only in 1969) In our internet times, the people are so rich, they have forgotten about poverty in the poor countries. The embarrassing black eye of the economic theories today is the rising poverty and the absence of a specific solution to poverty. If you read the textbooks, the solution to poverty is education. But what about the people, the greater number of the populations who are just workers with no education? They are the general rule, they are not the exceptions. Are they hopeless? They cannot get the education that will make them richer. The greater number of the people will always be poor, and as a group, they will always be there even if some member of the group will go up the economic ladder via education. What is the solution to the poorest of the poor who will be domestic helpers for life? Telling them to educates themselves is giving them a solution for the few, not the many. This must be addressed by economics. There is wealth in this world but the distribution is very inequitable and this is demonstrated in Third World countries. Poverty will always be there but there must be a wholesale way to reduce it. Why is it that being poor in a First World country is still desired by people from Third World countries? Engineers in Third World countries go the First World countries to work as dishwashers. Teachers do the same and work are domestic helpers. This is a reality that so far has not been addressed by economic theory. Enter Hyperwage Theory.

Monday, September 21, 2009

The Accounting Wizard Revisited

This was originally published in 2002. The Accounting Wizard, itself, was published on Aug 18, 1999 (ten years ago!!)

In which the Street Strategist revisits his accounting invention

The Accounting Wizard Revisited


n 500 years, the teaching of accounting has not changed considerably but this paper seeks to revolutionize that, by attempting to explain accounting to non-accountants in 30 minutes. In this paper, the three basic financial statements namely, the balance sheet, the income statement and the statement of cash flows, are presented in a very simple and intuitive manner. The conceptual approach to understanding debits and credits used in this paper has been described by certified public accountants as very original and useful. Finally, the author invents six codes, not found in accounting books, showing what transactions are to be debited and credited. Written in a conversational style, by a non-accountant for non-accountants, this paper describes the personal travails of the author in learning accounting and how he invented the six codes.”

This was the abstract of the paper I presented at an international conference sometime ago.

I asked a friend to drive me over to the conference hall. Throughout the ride I repeatedly told him I was anxious how many delegates are going to attend my presentation given the simultaneous sessions. It would be embarrassing if there were less than ten. This conference was not about finance, accounting, or investment banking. It was the largest conference on the electricity industry in the Pacific Rim held every two years, attended by the major players from Europe and the USA peddling their latest technologies.

The vanishing award

Scheduled at the most unholy hour of 12:00 noon, my presentation suffered minor problems. As expected I only prepared the previous night and therefore unlike other presenters who used the multimedia room for practice, I didn’t even know the proper controls of the notebook computer I used.

Thus, the hungry attendees which included Europeans and Americans in addition to the Pacific Rim delegates failed to see my slides for about 10 minutes. I had to improvise my talk.

The panelist introduced me quickly as I only had about five sentences of biodata. While I was at the podium but before I could speak, the panelist made an unexpected comment – that my paper was very good and provided a new and easy way to learn accounting and that indeed you can learn accounting in 30 minutes.

I smiled. Many of the seated delegates smiled, too, at the amusing slogan of learning accounting in half an hour. That caught their attention.

Then the panelist said something that shocked me: “By the way, I tried to nominate the author of this paper for an accounting award for young professionals because of this paper, The Accounting Wizard, but I realized that the award was given only to CPAs.”

Great. That was no ordinary endorsement. Here was this panelist who is the CFO of the largest corporation by assets in the country, who thinks that my paper was worth an award. And I didn’t even realize the panelist recognized me at all.

Wait, if the paper contributes to the understanding of basic accounting, and deserves recognition, in the judgment of an expert in the field, why disqualify it because of the non-affiliation of the author? The situation was probably similar to John Nash writing a paper on economics (game theory) when he, in fact, was a mathematician; and that the Econometrics Society debated against electing him a fellow.

Indeed, come to think of it: If the author was in fact a CPA he could never have written that paper in the first place because CPAs follow the teaching style of the textbooks.

This paper turned the textbook around, squeezed out the six basic codes in the same manner as Euclid reduced geometry to only basic five postulates

In other words, the paper could only have been devised by a non-CPA and yet the paper itself is worthy of recognition by CPAs. Yet, it cannot be recognized because it was written by a non-CPA. There must be a catch somewhere.


Given the problems with the slides, I was not able to present smoothly, and under time pressure I was not able to finish the presentation. The audience laughed a few times during my impromptu comments such as “Look at this illustration here, look carefully because CPAs don’t understand this.”

As I finished my presentation, I beamed a big smile. I exceeded my targeted audience of ten. The room was SRO and I estimated about 120 delegates. Earlier sessions did not even fill up the seats.

Again, this proves something. If rules are bent to accommodate a new idea, it might pay off. Bear in mind, that this was a conference on power systems and the organizers accommodated a crazy idea.

Later that night, while I was in a corner waiting for actress-singer Pops Fernandez and singer Lani Misalucha to entertain the delegates, a man approached me. “Your presentation was very good. We enjoyed it.” It turned out he was one of the high ranking treasury officials of the largest private utility in the country, who sat throughout my presentation. I found out from other people that most of those who attended my presentation were actually CPAs and finance officers. They were probably curious about the nerve of a non-CPA attempting to revolutionize the intuitive approach to accounting.

Unexpected feedback

The Accounting Wizard first appeared on print on August 18, 1999. It was intended to be an exercise in introducing a fresh insight into accounting, an exercise in amusement. It was never intended to be useful.

Unlike Strategy Myopia, the feedback was unexpectedly astonishing. I mean, with Myopia, I expected some kind of positive feedback because of the novelty of the concept. But with Accounting Wizard, I did not even expect BusinessWorld to publish it, telling the broadsheet that I wrote this for the benefit of my friends who are going into MBA but since I had already written it, it’s up to the editors to accept or reject it.

And the most astonishing event of all: The CPAs who were at the top of their fields were the one who fully appreciated the utility of the invention of the Street Strategist’s Six Codes.

Here was the letter that probably represents the CPAs typical reaction:

“Dear Sir:

Your Strategy Myopia and Accounting Wizard articles are very good, concise, layman friendly and down-to-earth! I am a CPA (married to another, much smarter CPA) and working for an energy company. I confess that the brevity and wit displayed in Accounting Wizard was superior to the already brilliant teaching skills of my Auditing professor, Mr. Rustico Murillo of L.C. Diaz & Co.

I passed the Accounting Wizard piece to our Corplan staff (most of whom are industrial engineers yet are quite capable of generating long-term financial projections and interpreting the results for our management). I have to admit, you boiled the whole accounting essence (4 semesters worth) in your piece. (Should be required reading for students).

I just have a simple request. Why not do a sequel to Accounting Wizard, but this time focus on the common financial ratios that everybody encounters. You know, the Liquidity, Debt-Structure & P/E indices that the so-called finance literate mumble all day but which they could not simplify for the common folks.

Your piece would really clear all the clouds and mystique on finance, and make more people really comfortable with their gut instincts.

All the best for you! More power!

Robert Punsalan

CORPLAN Coordinator

PNOC Energy Development Corporation”

For accountants, too?

Even the CPA organization in Saudi Arabia joined the fray by serializing the article in its newsletter, which seems ironic because the target readers are all CPAs.

From their gazette: “Starting with this issue, we are reproducing (with permission) as attachment a number of articles written by the Street Strategist for the BusinessWorld. These articles are very relevant to our profession, and could be good subjects of our future CPE seminars. But what makes these articles quite different is the informal and very friendly style of the writer in presenting the subject – entertaining. We will give them all to you along with future issues of the Gazette. For the starter, we are attaching "The Accounting Wizard: How to become one in 30 minutes" where it's quoted "The secret to understanding debits and credits is not to understand them at all.”

Lawyers and all

Wait, even the lawyers jumped into the fire:

“I'm a lawyer, member of Syquia Law Offices, and I enjoyed reading your article. Translating your practical accounting techniques to real problem situations, I have a problem for you to solve…” and she went on to describe a property deal.

I replied that her situation was not an accounting one and I suggest using legal principles to apply to her case, although unfavorable to her case.

The lawyer replied: “Thank you for your advice/reply, I was just asking for an equitable formula applying sound accounting principles. By the way, you sound like a lawyer, too.”

Sound like a lawyer? There must be a punch line somewhere.

“Thanks very much for the wonderful article on being an accounting wizard. Helped me brush up on my Accounting 123,” wrote a lawyer –CPA.


On the other hand, the investment bankers were having a field day reading and distributing the Accounting Wizard worldwide.

“Brilliant: probably picked up more in ten minutes worth of reading than one year’s worth of studying from textbooks,” said James Tan of Pesaka Jardine Fleming.

“This is an excellent summary of general accounting principals. However, this seems to me how I learned accounting, 25+ years ago. Does this greatly differ from the early lessons in traditional accounting education? Also, for what purpose are you teaching accounting? That is, in what sense does one become an accounting wizard? To pass an introductory accounting course? To pass the CPA or CFA exam? Do bookkeeping? Analyze financial statements for credit or equity analysis? This looks like, to me, the key issue -- not discussed in your article. Accounting differs from art appreciation, in that I would not learn it for its own sake,” wrote Larry Kummer, CFA, Senior Portfolio Manager, Portfolio Management Program, PaineWebber, USA.

I think the reader missed the point of the intuitive approach of the article which addresses the different frame of mind of non-accountants facing accounting for the first time.


“I find the article very useful especially to share with my colleagues, highlighting the few areas of balance sheet, income statement and cashflow for a trip back to basic in an area made out to be complicated at times. Thanks and keep up the good work,” wrote Jerry Yeoh, Head of Debt Markets, HSBC, Malaysia


“This is most interesting. I graduated with an accounting major believing that accounting is just a bunch of nonsense (and still do). How do I explain accounting to non-accountants? That's a problem that I face constantly, for I cannot even explain it to myself. While still holding on to my belief that accounting is nonsense - supported by academics in accounting theory - and a waste of resources, the article has given me some interesting insights on how to explain accounting concepts to others who need to subject themselves to it. Thank you,” wrote Kai Weng Ho, Treasury Officer, Singapore Telecommunications.

“Hi, It’s straight after lunch and I thought I finally found something that can dramatically change my life and enhance my career prospects perhaps. I am very keen to get my hands on your 101 sure ways to be accounting savvy notes. Thank you very much,” Low Horng Han, Investment Analyst, Singapore.


“Hi, Accounting Wizard. I was interested in this article to see if it had a good explanation of debits and credits from the point of view of books of first entry, general ledger. I haven't finished reading it yet (busy times!) but it seems the article is intended to describe how financial statements work and it seems to do this pretty well” wrote Dermot Joyce, Fund Manager, ILEX high yield Fund London


“Could you please send me the Accounting Wizard article. I would like to pass it on to a few comrades?” wrote Brad Kowieski Business Development Associate, The Heck Group, Rhinelander, WI USA


“This could provide insights that would be useful for my next CFA exam. Thanks,” Michael Garcia, Senior Financial Analyst, General Motors European Regional Treasury Center, Brussels, Belgium.

Investment bankers

Overall, I guess more than 200 executives worldwide contacted me regarding this article. They represent the biggest banks and brokerages. While I cannot name them all, there were several director level executives who read and asked copies of the article including John Milton, CEO, ABN Amro Equities, Hungary; Terence Wright, President, Wright & Co. England; Michael Greenall, Chief Representative BNP Paribas Peregrine Malaysia; Robert Appleby, Managing Partner, Asia Debt Management Hong Kong. Kj Kim, Managing Director, Bbk Capital Partners, Seoul; Robert Mclaughlin, Director, Cantor Fitzgerald, Hong Kong; Anant Patel Managing Director, Bear Stearns London; George Johnston, Director, Barclays Capital, London; Mark Fuchs, Director, CSFB Securities Thailand; Antonio Klapkam, Director, ABN AMRO Brazil; and Spencer White, Director, Merrill Lynch, Taiwan.

Training and Seminars

Thank you for your article. Your article is good and simplify all the things; How about training? I thought that it is still useful beside the simple knowledge that you have offered. I'm come from Indonesia; I have experience in my job about 15 years doing various kind of analysis for the company from accounting and strategies. Thank you very much for your article. Regards,” wrote Heru Maliksyah, Taspen.

“Please let me know if there is a paper or presentation on this topic available. Thanks,” wrote Yangki Kim of Tellus Advisors.

I have been thinking of conducting the Accounting Wizard Seminar as I hinted in the original article but I’m waiting for a good company to use as guinea pig.

The accounting expert

Once in while some readers, most recently a banker, tell me that they have memorized my codes and it helped them understand accounting better. I guess to I have to agree with them because exactly it helped me. An MBA student in Kuala Lumpur passed it around the campus. A fund manager in California said it refreshed his rusty accounting done 20 years ago.

Then the accounting experts, like the CFO of the largest company who wanted to nominate the article for an award, found the Accounting Wizard very helpful.

And then there’s one more expert. He is the moderator of biz.comp.accounting internet newsgroup. He is a tax lawyer who has won oral arguments in the US Supreme Court. His accounting and tax consultancy is famous. And he contacted me asking permission to publish the Accounting Wizard on their website and to be given to his clients. This expert must have been convinced that paper was the easiest manner to introduce accounting to his clients.

I replied that he can use the article for non-commercial purposes only. I mentioned that if he gives the article as a handout in one of their seminars, or when he gives it to a client, that is already considered commercial use. He did not come back to me.

Anyway, I know it’s been another boring ride with me today. But for me the Accounting Wizard is one proof that you don’t have to trust the experts right away, that no matter how deeper a topic is studied, there may still be other ways to solve the problem.

In the case of the Accounting Wizard, it is a culmination of years of embarrassing incompetence and failure to understand accounting the way accountants teach them. The simplicity – not the complexity – of the article is deceiving. It looks very simple now that the complexity has been eliminated.

There must be a lesson here somewhere: Do not copy the way experts think, rather discover your own capacity to think. If you fail, you can always go back and follow the experts. The most important thing is to think.

(Thads Bentulan, April 4, 2002)

* * * * * t * * * * *

Wednesday, September 16, 2009

Administration candidate: Gilbert Teodoro (Gibo Teodoro & Street Strategist)

Today, Sept 16, 2009, Lakas-Kampi chose bar topnotcher Gilbert Teodoro as presidential candidate....

way back in time... 9 years ago...


Hoping to discuss issues with Thads
Gilberto C. Teodoro, Jr. November 5, 2002

I really enjoyed your column on the Juan Luna auction just as I have always enjoyed reading your past columns.

Your columns are not only well-researched and well-reasoned but they are presented in an easily digestible manner.

What struck me in your column today was your point about the vicious cycle whereby we Filipinos demand a service ex- power and the airport terminal and then try to get out of the consequences in what we feel is a bad bargain through the courts or through other agencies of the government. You also pointed out the fact that government remains indifferent in the first instance and then only reacts when foreigners get our assets after going through all the legalities for that matter. To me this is a case of crab mentality which is still endemic in our society, particularly in government. It is also the main reason for the inability of our national leaders to succeed.

Our legal and political system, to my mind, rather than discarding this trait actually reinforces it by allowing politics and public pressure to enter legitimate transactions and bargains. Foreign communities shall never regard us as worthwhile if we cannot present ourselves as a fair and reliable counterparty in economic transactions.

I think I've said enough for now, I just sensed from your column today that you feel the same way I do about government and our society.

I look forward to reading more of your columns in the future and I do hope we get to meet and discuss these issues.


Rep. 1'st District Tarlac

House of Representatives

N218 Batasang Pambansa

Monday, August 31, 2009

Affordability Index

Back in 1995, the two basic ideas that led me to follow the economic theory that later came to be called Hyperwage Theory. First, it is non-linear relationship between wage levels and price levels. Meaning, doubling wages does not automatically result in doubling of prices. Second, the previous concept of comparing prices across nations was defective. The popular one was the Big Mac index by The Economist magazine. Hyperwage Theory was first discussed discussed on ABS-CBN radio in 2005 for two consecutive days in Leo Lastimosa's Arangkada program, and subsequently published in 2005 in BusinessWorld for 33 weeks. After it was published, the Hyperwage Theor e-book was distributed to tens of thousands via email, to Europe, Africa, Asia and North America practically all regions. The thousands who forwarded the e-book to all in their address books helped propagate the idea of Hyperwage Theory. What I came to call as Bentulan Affordability Index, for lack of a better term to identify it, during my forums on Hyperwage Theory has not been done before as basis of comparison. The said affordability index was published in 2005. The Big Mac index was not adequate enough to explain why the so-called cheap countries are poor. I contacted Penn World Tables who did not have any such index as the Bentulan Affordability Index. In my Hyperwage Book, I refuted the value of the World Bank's Purchasing Power Parity. So I made my own,and these tables are found in the Hyperwage book in 2005. The ebook was sent to all contacts and theirs, including banks, economic institutions, and many others worldwide. In 2006, one year later, UBS camed out with a revised report this time showing the Bentulan Affordability Index (labor-hours, or labor-minutes) to compare the cost of living worldwide. This month, UBS came out with their 2009 update. I am glad, finally, the never before mentioned index has been adopted into the mainstream economics. The Nobel Prize should be around the corner.

Friday, May 22, 2009

What do we know about Obama?

Hmmm... The best Obama website on the web I've found are: FAQ on Obama Biography of Obama by category Atty Orly's Crusade with the US Courts Read them so that you will have another viewpoint of what you actually know about Obama.

Thursday, May 21, 2009

Alec Baldwin, Satire, and Reality

Another shot at the Filipino this time by Alec Baldwin on David Letterman's show. I prefer Jay Leno's show because Letterman is very obnoxious even for a satirical talk show like his. So Baldwin's comments are nothing compared to what Letterman has said about Pres. George W. Bush, for example. And the "mail-order" Filipina bride has SOME basis in reality --- exactly why the Philippines has enacted an anti-mail-bride law. After two weeks, this thing will be forgotten. In the meantime, the Philippine government allows Filipinas to work like modern day economic slaves at P2,000 per month (yes US$40) or even less. And don't forget, the Philippines imports about 42% of its economy therefore, the prices of at least 42% of our economy reflect the world market price, and even higher because we need to pay the VAT, import duties, transportation, and profit of the importer. And don't tell me, the other non-imported component of our economy do not reflect the cost of the other imported items found in a particular product or service? If you are a bakery operator and your equipment is imported, and your flour is imported, and the electricity you use has imported coal or crude oil, and the computer you use is imported, and the cellphone you use is imported, don't tell me you are not going to include those imported factors in your pricing of your domestic product, the pan de sal? We should focus our energies on what matters most. Is it Alec Baldwin in a satirical show, or is it the purchasing power of the domestic helpers? Think.

Wednesday, May 20, 2009

Are Third World countries paying more?

Are Third World countries paying more for First World products using their Third World salaries? The Hyperwage book shows many comparisons. On a more practical level here are current prices of laptops from an authorized dealer who is one of the low-cost sellers in Golden Shopping Arcade in Hong Kong. Compare their prices to the prices you pay in your country (and by the way, does your country offer the OLD phased out models?) The website gives the specs in English, and the price in HK$.

Saturday, May 02, 2009

Hyperwage Theory is 7 Years Old Today

The idea for Hyperwage Theory came to me sometime in 1995 when I was working among US and British expatriates in Hong Kong and was assigned to several world capitals (New York, London, etc) as a result. The central idea of course is Purchasing Power to the lowest worker. However, at the time, I did not have the full backing of economic principles to back up my discovery. Since then I have read many textbooks and history of economics with the eye of somebody going against conventional economic wisdom. The first time I wrote about Hyperwage Theory (it was not called Hyperwage Theory then) was on May 2, 2002 in my BusinessWorld column. That was the Part 1. Therefore, officially, Hyperwage Theory is 7 years old today. However, part 2 was actually written in 2005 (three years after Part 1). It was in Part 2 that I settled on the name Hyperwage Theory. I actually wanted to call it "High Purchasing Power Theory" but this phrase was too wieldy, too long, too generic, and lacking the originality of an freshly invented word. And people will be referring to it as HPPT Theory? I settled on Hyperwage Theory although this term alone scares away first time readers. I figured, Hyperwage is a controversial term, but, hey, I invented it and its catchy and short. Part 1 by itself is self-contained, it described the theory and principles behind the theory. It should prove to be self-evident. Part 2 and the series was serialized for 33 weeks (whew!) in 2005 and the series was the detailed explanation of the basic tenets mentioned in Part 1. For all intents and purposes, the economic policy makers and the government executives were exposed to Hyperwage Theory in 2005 (four years ago). Hyperwage Theory made the term "purchasing power" fashionable, and I am happy that I achieved my first goal with my theory, and that is "awareness." And you can read so many accounts purporting to debunk Hyperwage Theory but look at their arguments: Do they stand on solid ground or are they just repeating the ideas of the authors of textbooks. And why do Third World people still line up at US embassies looking for that golden visa if not in search of Hyperwage? As long as they cannot answer you that with common sense, don't easily believe those detractors. They are not saying anything new, they are repeating the same economic ideas that have perpetrated and actually worsened the poverty conditions in Thirld World countries. Keep these in mind as your read the articles of the opponents of Hyperwage. (But remember, the government and the politicians have started to catch on: Purchasing Power is not a popular soundbite for them. Isn't that a signal, they are beginning to see the value of Hyperwage Theory?) Now, Hyperwage Theory has become a byword, (the butt of jokes), and Purchasing Power is the economic jargon of the times. Have you heard about "consuming power", "spending powers" "buying power" spoken by the senators, congressmen and economic advisers to the President? Before 2005, purchasing power was hardly a word, they uttered. Now, that they have dipped their feet in the pool, are they ready for US$1.50 per hour (or P20,000 per month) salary for the domestic helpers? Whatsoever you do to the least of your workers, you do unto the economy.

Thursday, April 23, 2009

Just another discrimination incident against Pinoys

Another day in paradise. Read above for a typical discrimination incident in HKG. The short term solution is complaint against such discrimination. The long term solution is to start the work towards uplifting the purchasing power of the ordinary minimum wage worker so that our professionals do not have to work as maids in other countries.

Wednesday, April 22, 2009

After Chip Tsao, What Now?

After Chip Tsao, What now? The Philippine immigration authorities have lifted a travel ban on Chip Tsao. My question is: Where are the so-called "heroes" of the Philippine servant who shouted invectives at Chip Tsao? Have you noticed that those who felt insulted by the satire were not the helpers, but those who are actually rich Filipinos (those who have servants at home)? Do you recall that the organized migrant workers attacked those who deny that the Philippines is a nation of servants? There are 130,000 Pinay servants in Hong Kong, how many of them complained and rallied? What are these rich Filipinos, who were insulted by Tsao's satire, doing now? Have they done something to uplift the Pinays? Or, have their so-called "heroic defense" of the maids faded away in just a matter of weeks? Pinoy elite, the hypocrite. Where art thou? And then I'm alone down the lonely road of Hyperwage Theory.

Sunday, April 19, 2009

Legal Strategy for Ted Failon: Sue for millions

Ted Failon is now on the defensive, being hunted down for obstructing justice based on flimsy grounds. What I noticed though is the lack of strategy on the part of the lawyers of Failon and and that of his in-laws, and his helpers. Here's what I would do: I will turn the tables around by filing a case of violation of RA 7438 because the ''invitations'' by the police towards the helpers, in-laws, and Failon itself are illegal because: 1. No warrants of arrest 2. Not Mirandized 3. No counsel present 4. Against their will I will sue for millions. Arbitrary acts by the police should not be covered by immunity from suit. Unless, the hyperdamages are applied in this country, the big businessmen, the big people, and the big authorities will continue to trample our rights. Note that in People vs. Delos Reyes (1999) even an invitation by the barangay chairman is already considered 'custodial investigation' covered by the constitution (a much higher right than obstruction of justice) and RA 7438. ...................................................... REPUBLIC ACT No. 7438 April 27, 1992 REPUBLIC ACT No. 7438 AN ACT DEFINING CERTAIN RIGHTS OF PERSON ARRESTED, DETAINED OR UNDER CUSTODIAL INVESTIGATION AS WELL AS THE DUTIES OF THE ARRESTING, DETAINING AND INVESTIGATING OFFICERS, AND PROVIDING PENALTIES FOR VIOLATIONS THEREOF Section 1. Statement of Policy. - It is the policy of the Senate to value the dignity of every human being and guarantee full respect for human rights. Section 2. Rights of Persons Arrested, Detained or Under Custodial Investigation; Duties of Public Officers. - (a) Any person arrested detained or under custodial investigation shall at all times be assisted by counsel. (b) Any public officer or employee, or anyone acting under his order or his place, who arrests, detains or investigates any person for the commission of an offense shall inform the latter, in a language known to and understood by him, of his rights to remain silent and to have competent and independent counsel, preferably of his own choice, who shall at all times be allowed to confer privately with the person arrested, detained or under custodial investigation. If such person cannot afford the services of his own counsel, he must be provided with a competent and independent counsel by the investigating officer.lawphi1Ÿ (c) The custodial investigation report shall be reduced to writing by the investigating officer, provided that before such report is signed, or thumbmarked if the person arrested or detained does not know how to read and write, it shall be read and adequately explained to him by his counsel or by the assisting counsel provided by the investigating officer in the language or dialect known to such arrested or detained person, otherwise, such investigation report shall be null and void and of no effect whatsoever. (d) Any extrajudicial confession made by a person arrested, detained or under custodial investigation shall be in writing and signed by such person in the presence of his counsel or in the latter's absence, upon a valid waiver, and in the presence of any of the parents, elder brothers and sisters, his spouse, the municipal mayor, the municipal judge, district school supervisor, or priest or minister of the gospel as chosen by him; otherwise, such extrajudicial confession shall be inadmissible as evidence in any proceeding. (e) Any waiver by a person arrested or detained under the provisions of Article 125 of the Revised Penal Code, or under custodial investigation, shall be in writing and signed by such person in the presence of his counsel; otherwise the waiver shall be null and void and of no effect. (f) Any person arrested or detained or under custodial investigation shall be allowed visits by or conferences with any member of his immediate family, or any medical doctor or priest or religious minister chosen by him or by any member of his immediate family or by his counsel, or by any national non-governmental organization duly accredited by the Commission on Human Rights of by any international non-governmental organization duly accredited by the Office of the President. The person's "immediate family" shall include his or her spouse, fianc� or fianc�e, parent or child, brother or sister, grandparent or grandchild, uncle or aunt, nephew or niece, and guardian or ward. As used in this Act, "custodial investigation" shall include the practice of issuing an "invitation" to a person who is investigated in connection with an offense he is suspected to have committed, without prejudice to the liability of the "inviting" officer for any violation of law. Section 3. Assisting Counsel. - Assisting counsel is any lawyer, except those directly affected by the case, those charged with conducting preliminary investigation or those charged with the prosecution of crimes. The assisting counsel other than the government lawyers shall be entitled to the following fees; (a) The amount of One hundred fifty pesos (P150.00) if the suspected person is chargeable with light felonies;lawphi1©alf (b) The amount of Two hundred fifty pesos (P250.00) if the suspected person is chargeable with less grave or grave felonies; (c) The amount of Three hundred fifty pesos (P350.00) if the suspected person is chargeable with a capital offense. The fee for the assisting counsel shall be paid by the city or municipality where the custodial investigation is conducted, provided that if the municipality of city cannot pay such fee, the province comprising such municipality or city shall pay the fee: Provided, That the Municipal or City Treasurer must certify that no funds are available to pay the fees of assisting counsel before the province pays said fees. In the absence of any lawyer, no custodial investigation shall be conducted and the suspected person can only be detained by the investigating officer in accordance with the provisions of Article 125 of the Revised Penal Code. Section 4. Penalty Clause. - (a) Any arresting public officer or employee, or any investigating officer, who fails to inform any person arrested, detained or under custodial investigation of his right to remain silent and to have competent and independent counsel preferably of his own choice, shall suffer a fine of Six thousand pesos (P6,000.00) or a penalty of imprisonment of not less than eight (8) years but not more than ten (10) years, or both. The penalty of perpetual absolute disqualification shall also be imposed upon the investigating officer who has been previously convicted of a similar offense. The same penalties shall be imposed upon a public officer or employee, or anyone acting upon orders of such investigating officer or in his place, who fails to provide a competent and independent counsel to a person arrested, detained or under custodial investigation for the commission of an offense if the latter cannot afford the services of his own counsel. (b) Any person who obstructs, prevents or prohibits any lawyer, any member of the immediate family of a person arrested, detained or under custodial investigation, or any medical doctor or priest or religious minister chosen by him or by any member of his immediate family or by his counsel, from visiting and conferring privately with him, or from examining and treating him, or from ministering to his spiritual needs, at any hour of the day or, in urgent cases, of the night shall suffer the penalty of imprisonment of not less than four (4) years nor more than six (6) years, and a fine of four thousand pesos (P4,000.00).lawphi1© The provisions of the above Section notwithstanding, any security officer with custodial responsibility over any detainee or prisoner may undertake such reasonable measures as may be necessary to secure his safety and prevent his escape. Section 5. Repealing Clause. - Republic Act No. No. 857, as amended, is hereby repealed. Other laws, presidential decrees, executive orders or rules and regulations, or parts thereof inconsistent with the provisions of this Act are repealed or modified accordingly. Section 6. Effectivity. - This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in any daily newspapers of general circulation in the Philippines. Approved: April 27, 1992

Friday, April 17, 2009

Political and Human Rights Violations in the Ted Failon Case

I have long been an advocate for citizens suing for millions in damages against the police or military for violation of constitutional rights. In the recent case of Ted Failon's wife's suicide, the police rounded up the three domestic helpers and the driver of Failon, and including Ted's sister-in-law for a police "invitation" to Camp Karingal. In the height of insensitivity, the police investigators went to the ICU at about 8pm to fetch the sister-in-law of Failon (actually, the sister of Trina, the wife who was in the ICU). A brother of Trina and Pamela, tried to keep Pamela in the hospital ICU but was instead handcuffed for obstructing justice. Notice, that the family of Failon nor that of his wife, did not push for the investigation in that manner. Which is unusual for Philippine police who are known to sit on cases, as a general practice. But what caught my attention was that haphazard way the police "invited" these people. I venture that: 1. the 'invitation' is already a part a custodial investigation therefore, they should be mirandized and counsel must be present. 2. Warrant of arrest should have been issued before rounding them up because this no longer a "hot pursuit." 3. Acdg to RA 7438 and People vs de los Reyes (1999), an 'invitation' is already part of custudial investigation. 4. That being so, the police violated their political and constitutional right, and these servants and driver, and the brother and sister of Trina, should file administrative, civil, and criminal cases against the police with claims amounting to millions of pesos as damages. 5. Without these cases and damages, the police will always trample our rights because they always get away with it. Where is the Commission on Human Rights? Do you need a formal complaint? Don;t you have your own investigative powers, when in plain view, on broadcast TV, the rights of these helpers and relatives of Trina are being violated? Summon that police right now.

Thursday, April 16, 2009

Questions for Ted Failon and the Police

Questions for Ted and the Police: (And I hope Ted will be cleared of all these suspicions; answering these guide questions will easily clear the speculations) 1. Was Trinidad (wife) left handed? The bullet entered from left and exited right side. 2. Why four hours before reporting to police? Failon is one of the top 3 recognizable icons in Phil. TV broadcasting, and he wouldnt reach that high without knowing police procedure. He was also a former Congressman. He knows the law. 3. How come the bathroom is squeaky clean even after being washed up? 4. Did the bullet ricochet? How come no traces of the bullet's trajectory? 5. Why clean up the car? 6. Can the gunpowder burns be removed in three hours of washing? 7. Where was Ted for several hours before reporting to police? 8. Is it normal for a husband to leave his wife to the doctors and leave the hospital, giving only a statement like "asawa" ko yan. 9. How come the security guards of Tierra Pura didnt even know about the supposed shooting or suicide until the police came at around 4pm? Ted brought his wife to the hospital in the morning supposedly from the house in Tierra Pura? 10. Is it normal for the house maids and drivers to clean up without instruction from Ted to do so? Or why didnt Failon instruct his 3 maids (hello Chip Tsao, nation of servants) and 1 driver to preserve the scene? Failon is a lawmaker and a famous anchor, he knows the SOP of crime scenes. (He has three servants?) 11. Where did that police statement come from? One policeman told a reporter that Failon had a quarrel with his wife inside their car that led to Failon shooting his wife. 12. Why is the supposed suicide note linked to financial woes? There is no such linkage in the message. It is more of an apology for something done or committed by the wife against Failon, personally, not financially. 13. Why would the wife leave the house the previous night and come back because of financial woes? Isn't financial support given mainly by the husband?

Thursday, April 09, 2009

Of Satires, Hypocrisy, and Caliban

Of Satires, Hypocrisy, and Caliban

A Hong Kong columnist, Chip Tsao, whose column is aptly named Politically Incorrect, writes a satire about the Philippines titled The War at Home, and the Philippine politicians rise up in arms, filing a senate resolution condemning the satire, banning Tsao from entering the Philippines, considering filing a diplomatic protest, and demanding a public apology.

This is not in defense of Tsao. This is in defense of satire and a reminder of Caliban.

Having lived in Hong Kong for more than a decade, I have seen racial discrimination in one form or another, yet despite this discrimination, the Hong Kong government and the general population of Hong Kong treat their Filipina domestic helpers way much better than the Philippine government and the general population do.

Hong Kong people are near in the bottom of my list of nice people but their anti-corruption mentality puts them at the top of my list on a worldwide basis, probably tying with Singapore.

Tsao’s column has a sting to it but then all satires sting. David Letterman, Jay Leno, and many satirists and comedians in the U.S. have made fun and called their Presidents worse names without a whimper from the latter.

Jonathan Swift’s A Modest Proposal is just an example of a brilliant satire. Are the Filipinos supposed to hang him for proposing that the street children in Manila be rounded up, cooked and sold as lechon?

Their own helpers in the Philippines are paid with very low "slavery" wages, and serving an extended family of five to ten people.

The typical Hong Kong family has two children given the small flats they are forced to live in.

And you can bet, that those Filipinos calling for Tsao's head are giving their own helpers in the Philippines slavery wages for their servants.

Doesn't this qualify the Philippines as a nation of servants?

Teachers are exported by the Philippines as servants, not only to Hong Kong but to Saudi Arabia, Dubai, and other Middle Eastern countries, Gaza, Israel, Malaysia, Taiwan, Singapore, UK, Ireland, Italy and other countries who accept servants.

Do they not, on the whole, illustrate the fact that the Philippines is a nation of servants, or more accurately, a nation exporting servants as a government political and economic policy?

And bear in mind, those teachers exported as servants to Israel are also forced to hire their own servants way back in the Philippines.

The irony of it all. Servants hiring servants. What does this tell you about the Philippines and its policies? A nation of masters?

How many American homes have servants? How many Canadian homes have servants?

There are servants in almost every home in the Philippines, doesn't this qualify the country as a nation of servants?

And they are paid only P2,000 per month on the average. That's only US$42 per month for a 20-hour day, 7 days a week slavery work. (Some helpers have no days off).

Is this a nation of servants or a nation of slaves?

There is no minimum wage law in Hong Kong, subject to the exception mentioned below. A company may choose to give only a P1,000 (US$20) per month to its sales clerk. Or it may give only P5,000 (US$103) to their supervisors. Or it may give only P1,000 (US$20) per month to their domestic helpers, who is usually a Filipina.

Being non-citizens of Hong Kong, why should the Hong Kong government protect and worry about the Filipina domestic helpers? After all, the Philippine government does not even protect Filipina helpers working in the Philippines, not even a protection in the form of a decent wage. And the government does not even include them under the minimum wage law. (Strictly speaking, Hong Kong citizens are citizens of China, but the distinction is too complicated, so we stick to citizens of Hong Kong, for convenience.)

If the Hong Kong government decides that Filipinas be paid only P5,000 (US$103) per month, given the fact that there is no minimum wage law in Hong Kong, they would still be treating Filipinas better than our government does.

And the irony is that even with P5,000 (US$103) per month, still more than a million Filipinas would be willing to go to Hong Kong as maids. It would be like going on a paid tour of Hong Kong. Nobody in the Philippines will give them P5,000 (US$103) per month as wages as domestic helpers, subject to the proverbial exception.

And these helpers are working in aircon flats, with elevators, microwave ovens, gas range, electric floor polishers, and washing machines. All the conveniences of modern life.

Thus, even a helper in Hong Kong getting P5,000 (US$103) per month will have a quality of life better than a helper in the Philippines getting the same wages.

In the Philippines, the helpers have no contracts and are not protected by a minimum wage law.

There is no minimum wage law in Hong Kong, but there is just one exception. The government imposes that a contract for domestic helpers must state a salary of HK$3,580 = PhP22,346 (US$462) to protect our Filipina teachers who are working in Hong Kong as toilet cleaners which is one of the duties of a domestic helper.

The Hong Kong government says to the Hong Kong employers, "Give the Filipina P23,000 (US$462) per month plus international airline tickets, plus days off, plus free medical care, plus extra pay for washing your car. Take it or leave it. If you cannot afford it, then do not hire helpers. The US, Canada, German, Japan and Switzerland homes do not have helpers anyway. Why should you?"

This is a quirk in Hong Kong's labor law: The Hong Kong companies cannot be prosecuted for giving Hong Kong citizens only P1,000 (US$20) per month as salaries for working as sales clerks, but the Hong Kong families will be prosecuted and jailed for not giving a minimum of P23,000 (US$462) per month to a foreigner, a non-citizen, the Filipina domestic helper.

The Hong Kong government does not offer a minimum wage protection to its own citizens but offers a wage protection to servant foreigners. And yes, the laborers of Hong Kong has been clamoring for a minimum wage for decades but the Hong Kong government, the most laissez-faire territory in the world, refuses enact a minimum wage ordinance.

Think about that.

And remember, almost all of the helpers are non-citizens (foreigners) of Hong Kong. The Hong Kong government treats Filipinas better than the Philippine government does.

It is a common joke in Hong Kong that they would not be surprised that their Filipina helpers have PhDs in Physics. After all, teachers in the Philippines get less than half the wages of the servants in Hong Kong.

The column of Chip Tsao was obviously a satire. And it is so amusing the satire is lost on the Philippine politicians including one who won via a statistical impossibility and one who was caught on tape demanding for the a million more votes.

The column should be read as it was designed to be - a satire - and recognize the essence of the essay.

1. The Russians sank a Hong Kong Freighter and the Japanese planted a flag on Diaoyu Island and the Filipinos claimed the Spratly Islands. These are facts but the author satirically put this in a perspective that could be called literary brilliance.

Yes, indeed, Lenin and Stalin are ideological mentors, and yes, it is a fact that the Hong Kong people are suckers for Japanese telenovelas and fashion. And yes, the Philippines exports servants to Hong Kong. This is segment is a satire against the Chinese who have and still continue to venerate communist Russians. This is also a satire against the Hong Kong people who, for unknown reasons, idolize the Japanese TV and movie artists, forgetting the Japanese soldiers brutally killed many Hong Kong and British soldiers. The Filipinos are not singled out in this segment.

This is a snipe at the Chinese people and government who sheepishly borrowed their mental prowess from not-so-benevolent dictators and mass murderers from Russia.

This is a snipe at the Hong Kong people, who despite their so-called independence from their conquerors, both politically and financially, they are still slaves to the fashion and art of modern Japan.

Can't you see the satire? This is not a satire against the Philippine government but also against the Chinese, and Hong Kong people.

2. And the truth is our military force is weak against China, and satirically, this is illustrated in the column about a nation of servants flexing its muscle.

3. Yes, we are a nation who exports servants, and writing it as a ‘nation of servants’ is a satirical illustration of the truth. Is the Philippine government going to deny this exportation of servants? And is the government ready to change this export policy or will it continue to expand this policy?

4. The phrase ‘you don’t flex your muscles at your master, from whom you earn most of your bread and butter,’ is a satirical illustration that the exporter of servants is economically dependent on Hong Kong for the 130,000 Filipinas and their respective five dependents being fed and sent to college using Hong Kong wealth.

The percentage of remittance money coming from Hong Kong is not relevant. This is a satire. And Hong Kong isn't the only country who have Filipinas as servants.

You have to combine all those countries, and the truth will dawn upon you that the Philippines is the world's greatest exporter of servants. Doesn't that qualify the country as a nation of servants?

5. The ‘cheap labor’ of HK$3,580= PhP22,346 (US$462) is numerically correct. Being the lowest paid labor in Hong Kong, the P22,346 (US$462) monthly salary is actually cheap labor in Hong Kong, and yet, the Philippine government allows the maltreatment of domestic helpers in the Philippines with wages of only P2,000 (US$41).

Who is protecting the Filipina better? Recall that there is no minimum wage law in Hong Kong but despite this, the Hong Kong government imposes a protection wage in favor of the Filipina.

Don't you wish the Philippine government does even half of what the Hong Kong government does? The Hong Kong government is actually forcing and imposing its own Hong Kong homes and master against the latter's will. Pay the Filipinas a good pay or else...

6. "I summoned Louisa, my domestic assistant who holds a degree in international politics from the University of Manila, hung a map on the wall, and gave her a harsh lecture."

This is obviously a satire and it is laughable our consulate in Hong Kong and politicians are taking this seriously. The author does not even know if there is a University of Manila; he was just satirically shooting in the dark that a there would be a university named after the capital city. Hong Kong executives are familiar with European, American and Canadian universities not Philippine universities. I tell you, they don’t even know our expensive schools like the Asian Institute of Management.

This is actually a snipe at the Hong Kong masters - that they are less educated than their servants. This is a praise for the servant, not the masters.

Hello, are you there? Can't you see the satire?

7. It is also unthinkable that our politicians believe that it is true that Louisa has a degree in International Politics. Come on, guys, it’s a satire. It’s probably embarrassing for you not to recognize the satire.

This is a satire against the lack of education of the Hong Kong masters and the overeducated Filipina. Do you accept that drivel from the Philippine government saying that education is our way out of poverty? Rubbish.

The Philippines has one of the most educated workforces in the world, and yet, they are still poor. How can a college graduate get out of poverty if it is paid at wages that hardly enough for food and travel daily? In the Philippines, janitors are second-year college, and the baggers in the grocery stores are college graduates, and the bank tellers are CPA's. Don't forget the security guards who are also college graduates.

8. It is also unthinkable that our politicians believe that the author really had a heart to heart talk with Louisa. Satire, my friend, satire.

(And later, after I wrote this article, this was confirmed by Luisa to ABS-CBN News; Luisa is not an employee of Tsao and doesn't work in Tsao's home. Tsao has Indonesian helpers. She didn't even know what was written in Tsao's column, and she has served her master - Tsao's father, who lives separately - for over 14 years. It would be illegal for Luisa to work in both Tsao and his father's homes; one contract, one home. She wouldn't have stayed that long if she was not treated well; each contract is good only for 24 months. She has no plans of leaving her employer, and as expected she doesn't have a degree in International Politics, and did not graduate from the University of Manila. And Luisa is not the only one exported as a servant by the Philippines, and Hong Kong is not the only country to where the Filipinos and Filipinas are exported as servants, and the Philippine government is very much active in expanding this exportation, even considering war- torn Iraq. Isn't it embarrassing that the Philippine government officials and many Filipinos who over reacted to Tsao's column, really believed Luisa has a degree in International Politics? Hypocrisy.)

9. The satire about sending Louisa home because the author may be charged with treason is a classic.

And yes, paying helpers ‘to wash toilets and clean windows 16 hours a day’ is a satirical illustration of what the Philippine government has done – export our teachers to work as servants abroad.

By the way, as a protection against helpers, their contracts contain the maximum work hours per day. I think it is lesser than 16 hours. Also, ‘car washing’ is not considered part of the helper’s work, and is usually paid additionally.

10. ‘With that money, she would pay taxes to her government, and they would fund a navy to invade our motherland and deeply hurt my feelings.’

This is a satirical illustration that the Hong Kong government, or any other foreign country, pays our exported servants a huge amount of money that helps the Philippines economically. The actual amount does not matter. But you must combine all the incomes from all countries where Filipinas are accepted as servants, and total will tell you whether it is true that the Philippines is a nation of servant, or an exporter of servants.

11. ‘We have a hostage in each of our homes in the Mid-Levels or higher’ is another classic. We don’t fully realize it but we have a Filipina in almost all of their homes especially those in the rich areas like the Mid-Levels district.

12. ‘Their maids have been made to shout “China, Madam/Sir” loudly whenever they hear the word “Spratly.”’ This obviously is not happening and it would be embarrassing for Philippine politicians not to recognize this satire.

But the following are not satires:

1. A voice that sounds very much like a national leader is caught on tape discussing vote padding and election fraud.

2. The World Bank has implicated the First Gentleman, a Senator and Cabinet members in corrupt practices in World Bank projects.

3. A middle bureaucrat and his unnamed political patrons being investigated regarding the fertilizer scam. Did a billion pesos go out of the Department of Budget at the behest of a mere undersecretary without the blessing of Malacanang?

4. The former Speaker of Congress’s son implicates the First Gentleman and Chairman of the Comelec in the ZTE broadband corruption investigation and the Speaker himself said he was kicked out because of this issue.

5. Supranational organizations names the Philippines as one of the most corrupt in the world.

6. Former President Estrada was convicted of a crime related to corruption and pardoned without serving a single day in jail and without issuing even a mere apology for what he has done.

7. A Department of Justice prosecutor deposits to his personal account more than a million pesos on the day he signed a resolution preventing the filing of a drug case with the courts.

8. Hundreds of Filipinas are abused and raped working in foreign countries.

9. And ten of thousands of cases filed before the Ombudsman against government officials buying the most overpriced firetrucks, the most overpriced computers, the most overpriced highways, the most overpriced pencils etc.

So given the satires and the non-satires, what are the respective actions of the politicians and the enforcers of the law? Did the government officials, and even the so-called patriotic Filipinos now meaning to lynch Tsao, do something to enforce justice against the corrupt perpertrators mentioned above? Or are they just grandstanding suddenly concerned about the country?

The statement that the Philippines is “a nation of servants” was a satire but its political leaders chose to take offense. How about a “nation exporting servants”? Would they take offense?

And given the fact that more than 70% of our workers are receiving less than the wages of a domestic helper in Hong Kong which is P23,000 (US$462) per month, would they take offense if the country is called “a nation of people receiving less than a servant’s wages”?

According to the latest data from the National Statistics Office, 90% of the families (not individuals) in the Philippines earn less than P24,000 (US$495) per month. What an irony. The Hong Kong government is protecting non-citizens of Hong Kong by ensuring these servant foreigners earn individual salaries higher than the family incomes of 90% of the Filipinos. And Filipinos take offense at an obviously satirical column?

How about “a nation of corrupt public officials?”

And lately, a book named the Philippines as "A Country of Cannibals." Why isn't anybody angry at this racial slur? Is it because the author is a Filipino? Double standard? Such hypocrisy.

Which one is acceptable to the Filipinos and the Philippine government?

A nation of servants?

A nation keeping servants in their own homes?

A nation keeping servants at slavery wages?

A nation of slaves but using the euphemism "servants?"

A nation of servants hiring servants?

A nation exporting servants to every country who accepts servants?

A nation being the world's biggest exporter of servants?

A nation of professionals earning less than a servant's wages?

A nation of corrupt politicians and government officials?

A nation of cannibals?

The hypocrisy of them all. A satire is a satire.

Politically, it is an expression of freedom of speech.

Literarily, it one of the summits of man’s intellectual achievements.

Socially, it is one of the best forms of entertainment.

In reality, it is like Caliban seeing its own face in the mirror.

In the Preface of Oscar Wilde's The Picture of Dorian Gray:

"The nineteenth century dislike of Realism is the rage of Caliban seeing his own face in a glass.

The nineteenth century dislike of Romanticism is the rage of Caliban not seeing his own face in a glass."

And don't forget that the reason there are no Filipina domestic servants in the US, Canada, Germany, Japan, Switzerland and similar First World countries, is not because the Philippines does not want to export its servants there but because they do not accept Filipinas as servants.

If these countries were to allow servants, the Philippine government would immediately send 50 politicians and bureaucrats, including the President, to beg these countries to give hiring preference to Filipinas.

After all, the Philippines is a nation keeping servants in their homes, and a nation exporting servants to almost all countries in the world who accept servants.

The world's greatest exporter of servants.

Chip Tsao is a mirror. Maybe a distorted mirror, but a mirror nonetheless. Don't destroy the mirror. Reform the face of Caliban. Reform the face of Philippine society. Reform the face of the Filipino.

Begin with the government imposing a decent wage - and giving purchasing power - to the lowliest worker in the Philippines - the lowly servant.

Finally, I am a Filipino, I love satire, and I hate hypocrisy.


originally written April 1, 2009

I have received many requests for:

1. Why Filipinos Are Not Rich

2. Hyperwage Theory .

Hence this notice. Get the PDF files for free. Email me at


I know you are now a new "patriot", and before you react to this essay:

1. Now, you find it fashionable to defend the Filipina servant. This is the flavor of the month. Before you were so fired up in your "patriotic" defense of the Filipina servants in Hong Kong upon reading Tsao's satire, what have you done to improve the lot of these servants abroad?

Assuming you find it hard to "do" something concrete, what have you written or advocated in the last five years in their support, even in your own blogs or emails?

2. In your own home in the Philippines, how many servants do you have? And what is the salary you are giving them?

3. Before Tsao's satire, did you ever think or do something about the plight of your own servants at home?

4. How long have you had these servants?

And for that period of time, have you done something or even written something to help them rise about their station in life?

Or have they remained servants over the years since you were a small child?

5. Have you rewarded their loyalty to you as servants with another five years of perpetuating their servanthood in your home?

6. Have you done something to bring these servants out of their servanthood, or have you perpetuated their servanthood with your so-called benevolence?

7. Have you actively blogged, emailed, and insulted the authorities to fight for the plight of your own servants at home?

Or did you even think about your own servant's plight at all?

8. Did Tsao's satire make you a better master of your own servant at home that you and your family are now going to rally in the streets of Manila to force the government to improve the well-being and the wealth of your own servant at home?

9. Going forward, with your new sense of patriotism, are you going to rally under the heat of the sun to specifically petition the government to give P20,000 (US$413) minimum wage to your domestic servant at home? If not P20,000 (US$413) how much do you think they deserve?

Or did you even think in the last five years that you are going to fight for your own servant's wage increase?

10. Before you felt "patriotic" because of Tsao's satire, did you ever support, fight, shout invectives against other Filipinos and the government itself, argue in the streets to adopt Hyperwage Theory in the Philippines?

11. Or suddenly, you are just being patriotic because of a satire, but has never really thought about the plight of your own domestic helpers in the Philippines?

Do you need Tsao to write another satire about your own servant at home before you are going to fight for their rights inside your own home?

12. Isn't this hypocrisy?

13. Did you spend 10 years conducting research and studying the history of economic thought specifically on how to rationalize, justify, and weave a theory that will support the raising of the wages of our own domestic helpers in the Philippines to a higher amount, say, P20,000 (US$413) per month?

14. Did you spend months writing down these ideas when nobody else was supporting the servants with a theory that calls for their P20,000-a-month purchasing power (US$413) ?

15. Did you expose yourself to intellectual ridicule for coming out with such a perspective of thought as Hyperwage Theory?

16. Did you take every available opportunity to direct everybody's attention to a theory that is focusing on the improvement of the wages of the servants in your own homes?

17. Have felt the insult from the doctors of economics, the ridicule of the intelligentsia, the mockery of the Filipinos themselves upon proposing that increasing the purchasing power of the servants at home is the single greatest key to bringing the Philippines out of this Third World quagmire?

18. And now you call me names for accepting the satire as a satire, as a mirror of our condition as the world's greatest exporter of servants, a situation I have been wanting to rectify for over 10 years now by proposing Hyperwage Theory?

19. If you haven't really done anything to rectify your own servants at home, not even actively and vitriolically advocating for their own wealth improvement, what gives you the right to disparage those who read satires as satires?

20. I did and am still doing my share. I was interested in the plight of the domestic helper's economic situation ten years before it was fashionable to do so. (I've been researching on Hyperwage Theory for more than 10 years). Do something. Don't just ride on the latest flavor of the month of "patriotism." Don't shoot the messenger. And don't waste your time attacking those who see Caliban's face in the mirror.

I have received many requests for:

1. Why Filipinos Are Not Rich

2. Hyperwage Theory .

Hence this notice. Get the PDF files for free. Email me at


From ABS-CBN News:

“No knowledge of column”
According to Labor Attaché Romulo Carlos Salud, Tsao has two Indonesians domestic workers. Salud explained that the Luisa referred to by Tsao is actually employed by the Hong Kong writer’s father.

“Si Luisi is the helper ng father ni Chip Tsao,” said Salud.

The Consulate found out that Luisa has been under the employ of Tsao’s father for 14 years now.

Luisa allegedly has no plans of leaving her employer and neither has any knowledge about the column which appeared online in the HK Magazine.

“She doesn’t know anything. She doesn’t know why her name was mentioned. She doesn’t want to be interviewed,” Salud said.

Despite this, Salud said the consulate is determined to meet with Luisa and have her read the article.

Meanwhile, Tsao is set to be placed under the Consulate’s "watch list" and will be strictly monitored in case he decides to hire a Filipino maid because of his abusive tendencies.


----------- Here is Chip Tsao’s column --------------

The War At Home

March 27th, 2009 The Russians sank a Hong Kong freighter last month, killing the seven Chinese seamen on board. We can live with that—Lenin and Stalin were once the ideological mentors of all Chinese people. The Japanese planted a flag on Diàoyú Island. That’s no big problem—we Hong Kong Chinese love Japanese cartoons, Hello Kitty, and shopping in Shinjuku, let alone our round-the-clock obsession with karaoke.

But hold on—even the Filipinos? Manila has just claimed sovereignty over the scattered rocks in the South China Sea called the SpratlyIslands, complete with a blatant threat from its congress to send gunboats to the South China Sea to defend the islands from China if necessary. This is beyond reproach. The reason: there are more than 130,000 Filipina maids working as $3,580-a-month cheap labor in Hong Kong. As a nation of servants, you don’t flex your muscles at your master, from whom you earn most of your bread and butter.

As a patriotic Chinese man, the news has made my blood boil. I summoned Louisa, my domestic assistant who holds a degree in international politics from the University of Manila, hung a map on the wall, and gave her a harsh lecture. I sternly warned her that if she wants her wages increased next year, she had better tell every one of her compatriots in Statue Square on Sunday that the entirety of the Spratly Islands belongs to China.

Grimly, I told her that if war breaks out between the PhilippinesChina, I would have to end her employment and send her straight home, because I would not risk the crime of treason for sponsoring an enemy of the state by paying her to wash my toilet and clean my windows 16 hours a day. With that money, she would pay taxes to her government, and they would fund a navy to invade our motherland and deeply hurt my feelings. and

Oh yes. The government of the Philippines would certainly be wrong if they think we Chinese are prepared to swallow their insult and sit back and lose a Falkland Islands War in the Far East. They may have Barack Obama and the hawkish American military behind them, but we have a hostage in each of our homes in the Mid-Levels or higher. Some of my friends told me they have already declared a state of emergency at home. Their maids have been made to shout “China, Madam/Sir” loudly whenever they hear the word “Spratly.” They say the indoctrination is working as wonderfully as when we used to shout, “Long live Chairman Mao!” at the sight of a portrait of our Great Leader during the Cultural Revolution. I’m not sure if that’s going a bit too far, at least for the time being.

Chip Tsao is a best-selling author and columnist. A former reporter for the BBC, his columns have also appeared in Apple Daily, Next Magazine and CUP Magazine, among others.