Sub-state Muslim Mindanao: An economic “kiss of death”

FULL DISCLOSURE By Fidel O. Abalos (The Freeman) Updated August 29, 2011

 Peace is necessary for any country or region to progress. Therefore, no matter how elusive this maybe, it must be pursued with zest and vigor. Today, conflicts abound in many countries in the world. Rightfully though, most of these conflicts were mainly due to the ruthlessness of some rulers and dictators and the awakening of their hapless citizens brought about by the idea of freedom that have swept across their lands. Thus, the rulers of countries like Tunisia, Egypt, Syria and Libya have to bear the brunt of their citizens’ rant and fury as they fittingly demand for freedom and democratic space.

Though, obviously not similarly situated, we also have our own brothers and sisters who are at it. Not contented of an autonomy, the Moro Islamic Liberation Front (MILF) demanded decades ago of a separate state. Recently, as an off-shoot of PNoy’s discreet meeting with the MILF leadership in Japan, they allegedly abandoned their quest for a separate state and have now settled for a sub-state. Unfortunately, albeit expectedly, before discussions can even start for their fresh proposals and counterproposals, the other side of the negotiating table (the MILF) has already given us an inkling that the usual cycle of negotiating, breaking away and killing will persist.

Decades ago, it can be recalled that we negotiated and agreed with the Moro National Liberation Front (MNLF) on certain autonomy of some parts of Mindanao. We thought peace shall ensue after that historic truce. Years later, however, some of its leaders broke away and formed the MILF. In fact, early this year (February, 2011), we were supposed to deal with them the second time around. Unfortunately (or, for showing their true colors, should we say, fortunately?), the MILF and Umbra Kato showed their true colors as the latter broke away before the negotiators can even warm their seats. Today, as we prepare for another “peace talks”, it is as clear as daylight that even if they can agree on some salient points, dealing with Umbra Kato’s Bangsamoro Islamic Freedom Fighters (now renamed as Bangsamoro Islamic Freedom Movement or BIFF) will still be totally unavoidable. Therefore, the negotiating-breaking away-killing cycle is here to stay.

True, all these years, we’ve been negotiating with our Muslim brothers with the hope that peace shall reign and economic prosperity pervades. However, our ways of achieving this lofty objective remains questionable. Likewise, the sincerity of the MILF is just as objectionable.

To recall, in August of 2008, we had the most disappointing ending of any negotiation we’ve done in decades, the aborted signing of the Memorandum of Agreement (MOA) for an expanded Autonomous Region in Muslim Mindanao (ARMM). While the road that led to its supposed wrapping up in Malaysia was suspiciously smooth, the destination was ostensibly malicious. Every Juan just wondered on the haste and secrecy both parties have maintained throughout the stages of negotiations. Though seemingly choreographed, with foreign dignitaries standing in as supporting casts, it had an awful finale. The finale that was supposed to be a fitting tribute to the protagonists (the government and rebel panels), after a very long and tiring negotiations, turned out to be so disgraceful not just to the so upbeat and primed up foreign dignitaries, who were appropriately dressed for rare photo opportunities, but to the entire nation as well. A nation denied by its leaders the right to know the kind of future they are heading them too.

As viewed globally then, the strongest dissentions had been from the political and business leaders in areas where ARMM through the Moro Islamic Liberation Front (MILF) are trying to encroach or expand. Some civilians have even started arming themselves and are in fighting moods just to protect their interests.

Looking from afar, one may suspect that these political and business leaders were simply exaggerating the situation. That that was just another chapter of the continuing saga of Christians and Muslims biblical animosities and no more than just a consequence of mutual distrust. I have presumed all these years too, just like any doubting Filipino, about this age-old conflict as no more than a legacy that had been passed on to generations.

In the meantime, however, let us set aside all these doubts and apprehensions brought about by the “reality shows” unfolding before us. In evaluating the pros and cons of the expansionist stance the MILF is taking, we must look into the basis by which ARMM was created, and whether or not, it has achieved its preconceived goals and objectives.

Hailed then as the panacea for peace and progress, today, ARMM symbolizes nothing but wanton catastrophe. Heightened conflicts are reaching unparalleled peaks and mutual distrusts are piercing through every ARMM citizen’s bone.   Warlords have continued amassing wealth while their poor followers had become unwilling paupers. Straightforwardly, the entire ARMM has no factories, just warlords’ and politicians’ mansions. Consequently, they’ve continued to languish by their own doings.

Amazingly, despite this undesirable track record, they’ve pleaded not just for expanded territory but more autonomy in all fronts as well. They demanded to take control of their political and economic direction (including control of the banking system) within the expanded region. By their own gestures, this is as if the real panacea for the political and economic ills they are in right now. Whether it is an appropriate solution, only the future can tell. However, before agreeing or conceding to the demands of our brother Muslims for self-governance, both politically and economically, it is imperative that we must evaluate some facts about what they have done so far in this regard.

In regard to good governance, history and current events showed otherwise. The truth is, in terms of good governance, ARMM has been a total failure. The Commission on Audit (COA) in their examinations of the accounts and records of ARMM reported that among other very serious infractions, the correctness of their bank accounts cannot be ascertained as bank reconciliations are not prepared. Moreover, huge cash advances have remained unliquidated. Worst, their (COA) reports have oft-repeatedly emphasized that they extremely doubt the physical existence of property, plant and equipment due to the continuous failure of the agency to conduct physical inventory. Likewise, the Province of Maguindanao (one of the provinces of ARMM were the Ampatuans rule) is in total financial disarray. For instance, COA’s audit revealed that the validity, existence and correctness of the its cash in bank amounting to P107,268,451.94 cannot be ascertained due to the inability of the office of the provincial accountant to prepare monthly bank reconciliation statements for the entire year. Moreover, fixed assets valued at P345,227,725.51 cannot be ascertained due to the absence of unit value, physical count and subsidiary records. Worst, even the withheld amounts from employees for their contributions to the Bureau of Internal Revenue (BIR), Government Service Insurance System (GSIS), PAGIBIG and PHILHEALTH totaling P7,088,625.70 are still unremitted. Ironically, the Province of Maguindanao solely exists on annual internal revenue allotments of over PhP500 million. Incredibly, despite all the mansions and businesses of the Ampatuans, Maguindanao earned a measly PhP204,294.62 in local taxes for the whole year of 2008.

On the other hand, as a sub-state, they would likely emphasize that they would like to take care of their own banking system too. Whatever their basis are, the fact remains that they are even a failure in just running a bank, the Al-Amanah Bank, which was established supposedly for their own banking needs. While the Al-Amanah Bank is fully taken over by the Development Bank of the Philippines (DBP) on November 14, 2007, the fact remains that during their reign the bank was a total wreck. The fact is, since its inception, the bank has been saddled with huge operating losses and sizeable non-productive assets.   In 2006, the bank just earned P9,513,859. Its total expenses was way above at P62,681,813 thus, leaving a net loss of P53,167,954. As this scenario has been going on for years, the accumulated losses has ballooned to P562,869,351. With a paid up capital of only P50,238,260, the bank is capital deficient (2006) by P510,137,715. Said capital deficiency simply means that the bank’s liability is P510,137,715 more than its assets.   Though today, through DBP, operations have improved, it can’t be denied that then, the bank’s financial condition has raised doubts as to its ability to continue as a going concern.

As shown above, their track record of just running a bank was a mess. If it was a mess, then running the entire banking system in the region should be no less than a self-inflicted calamity.   Therefore, with this impending tragedy, the rest of the country should be ready to bear the brunt of subsidizing the cost of the MILF and the would-be sub-state leaders’ whims and caprices. Passively, let us be living witnesses of an economic disaster that is about to unfold.

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