This and my column on Tuesday serialized the commencement speech delivered by Associate Justice Antonio Carpio to the graduates of the Ateneo School of Government last August 26, 2017. Carpio has served in government for some 20 years, in both the executive and judicial branches, first as Chief Presidential Legal Counsel to President Fidel V. Ramos (FVR) and then as Associate Justice of the Supreme Court where he is now the most senior member. I personally know of Justice Carpio’s work as a colleague in the cabinet of FVR and a legal scholar who has studied his jurisprudence and his work on the South China Sea. Even if I have disagreed with him a few times, I consider Justice Carpio a true patriot, the strongest defender of the Constitution and our national sovereignty at this time, a legal giant, and a senior statesman.
Familiar with both his legal and governance work, I can affirm that Justice Carpio approaches his role in government as a problem solver. It is from this perspective that he shared with our graduates, mostly also public servants, lessons from his journey in government.
The first experience Justice Carpio shared in his speech was how the FVR administration succeeded in breaking the telecommunications monopoly of PLDT. He recalls:
“I remember clearly how it happened. One day the President called me to his office and told me that the PLDT people were bad-mouthing me. Then the President asked me: “Where is that Executive Order on interconnection that you prepared. I will sign it now.” So, I rushed back to my office to send the President the Executive Order for his signature. And that is how we broke the telecom monopoly. Soon, four new telecom players entered the market, and they were promptly interconnected with PLDT. Some of these new telecom players offered fixed landlines within two weeks from application. Others offered on demand mobile handsets for free in exchange for long-term subscriptions. The 15-year waiting time to get a landline was obliterated by the stroke of the President’s pen.”
Justice Carpio emphasized the lesson from that experience. According to him: “There are critical bottlenecks in our economy that severely obstruct development. Many of these bottlenecks can easily be removed by mere executive action if there is political will from the President. Yes, political will is absolutely needed but unfortunately there is often a scarcity of political will. The opening of the telecom industry in 1993 was timely because it prepared the economy for the digital age – for the coming of the internet, the call centers and the BPO industry. The ease of access to land and mobile lines increased the velocity of business transactions and leveled the playing field.”
Another problem confronted by the FVR administration was the state of state of our domestic shipping industry. As Carpio describes it: “The domestic shipping industry was hobbled by the ‘prior operator rule’ which accorded preference to the existing operator to service a route whenever a new entrant came in offering to fill up an underserved demand in the route. The prior operator rule practically gave a monopoly to the existing operator. This prevented competition and resulted in very poor service to the public for several decades.”
Carpio recalls how he explained to the President that the “prior operator rule” was not a law but merely an administrative regulation. The original purpose of this rule was to provide a sustainable traffic to shipping companies that opened new routes. Unfortunately, over time the “prior operator rule” shielded the first operators from competition and became a source of inefficiency with the first operators ending up being complacent. Naturally, services deteriorated while also becoming more expensive. Carpio proposed to the President Ramos an Administrative Order revoking the “prior operator rule” which was approved. According to Carpio” “Suddenly, shipping companies entered old underserved routes with roll-on, roll-off vessels that connected many of our islands. Efficient sea transport between many of our islands took off . . . The revocation of the “prior operator rule” paved the way for a nautical highway that would link the Philippine archipelago from Batanes to Sulo.”
The lesson: “There are incentives designed originally to attract investors to enter pioneering industries but these incentives later on become bottlenecks in the efficient delivery of goods and services to the public at reasonable cost. The incentives become a tool by industries to capture the government agency regulating them. Incentives can be justified if the industry is taking baby steps, but no industry should remain an infant forever. Incentives should always have sunset provisions to allow competition to come in as the natural market force to provide efficient goods and services at reasonable cost.”
Finally, Justice Carpio shared the lessons learned from the FVR administration’s attempt to stop jueteng, the illegal numbers game. After studying the problem and looking at options, including the experience of other countries, Carpio recommended that the Philippine Charity Sweepstakes Office put up a state lottery to compete with and eliminate jueteng. According to Carpio, while the state lottery was successful in eliminating jueteng in Metro Manila, the results were mixed in the provinces. The reason: “In towns where the mayors issued permits to lotto outlets, the lotto gained market share against jueteng which greatly declined. However, many town mayors refused to give permits to lotto outlets in their towns and the people could not buy lotto tickets. In those places, jueteng continued to flourish. What the PCSO did was to directly open PCSO lotto outlets in those towns because the PCSO, being a government agency, need not secure a mayor’s permit to open an office anywhere in the Philippines. But it is always an uphill battle fighting the town mayor.”
The lesson from the attempt to abolish jueteng is sobering. Carpio pointed out how the jueteng operators in the Philippines have become so influential that many mayors are reluctant to against them. The solution for Carpio is massive education: “The schools, public and private, should incorporate in their curriculum materials explaining why jueteng is a rigged game, an elaborate and devious scam, that sucks the last centavo from the poorest of the poor in our society. It is really a pity that jueteng operators continue to prey on the poorest sector of our society. Let the school children echo this to their elders. So, the jury is still out whether the state lottery can finally eliminate jueteng nationwide.”
On Tuesday, I will write about Justice Carpio’s reflections on his experiences reforming administrative law and judicial proceedings in the country. I would also be remiss if I do not write about this statesman and legal giant’s advocacy on the South China sea.
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