August - September 2008
Till debt do us part?

Romulo L. Neri: Can golf, realpolitik work at SSS?

BACK IN May, speculations were rife that Romulo L. Neri was returning to the National Economic and Development Authority (NEDA) as director general and socioeconomic planning secretary by August. The nasty rumor had so distressed some at NEDA that on a bulletin board next to the ground floor elevator lobby that had been turned into a sort of freedom wall was posted this note from an anonymous commenter:

“I don’t think bringing back Neri to NEDA will be good for the agency. We are now finding out that he maintained a group of advisers/consultants in the likes of Jun Lozada who seemed to act as fixers/moderators of greed. Imagine that! Neri seemed to be running another office corresponding with NEDA staffs whose sole purpose was to take charge of the wheeling and dealing in government. Shall we allow that again?”

It turned out to be a sentiment reflective of what the majority at NEDA actually felt about Neri’s supposed “Third Coming.” An informal survey conducted by the Organization of NEDA Employees (ONE), the officiallly recognized association of the agency’s rank-and-file personnel, would eventually confirm this.

Understandably, the NEDA staff could only breathe a sigh of relief at the recent Malacañang announcement that their former chief is headed to the Social Security System (SSS) as its new administrator — although they remain wary that defeated 2007 administration senatorial bet, former Senator Ralph Recto, would be appointed as the next director general.

Meanwhile, back in the public limelight, Neri has begged his critics to first check the data about his qualifications before assailing his new appointment. His record in government, he said, could speak for itself, pointing naysayers to how he had performed in various capacities in different agencies — as director general of NEDA, as secretary of the Department of Budget and Management (DBM), and more recently as chairman of the Commission on Higher Education (CHED).

ROMULO Neri, the newly appointed SSS administrator, testifying at the Senate on the allegedly anomalous NBN-ZTE deal last year. [photo courtesy of Senate]

“I think I performed satisfactorily,” claimed Neri. Asserting that he is qualified to head the SSS, he then rattled off, in his usual subdued estimation of his self-worth, his track record in investment banking and pension fund management, backed no less by a masteral degree in business administration, major in finance and international management from the prestigious University of California in Los Angeles (UCLA).

Neri will assume the SSS post on August 1, taking over from outgoing president and chief executive officer Corazon de la Paz who had served the state-run pension fund for seven years. The financial institution administers the assets and contributions — currently worth P248 billion — of some 27 million private members.

Though De la Paz cited health reasons for her resignation, her replacement had politics written all over it. De la Paz first intimated how she has not been able to accustom herself to the workings of government, indicating a preference to return to her work in the private sector. But upon further questioning by the media, she eventually relented to a little known fact: she had stood up against the use of SSS members’ funds for the government’s pro-poor agenda, in the process offending the powers that be.

“Using the fund has limits. (It) cannot be used to finance pro-poor projects of the government unless it is defined in the (SSS) Charter,” De la Paz explained, serving up a warning to SSS members and the public of the potential danger of the fund being misused.

With Neri at the helm of the SSS, many have indeed expressed fear that the funds will be used for partisan political interests. Both Malacañang and Neri’s avowal that the funds will not be touched for government’s welfare programs has not helped assuage such concerns for the very reason that the appointment boils down, not so much to the issue of competence, but to Neri’s integrity and credibility — and that of the one who appointed him — as a public official.

Competenece not an issue

By all means, Neri, born February 1, 1950, possesses the sterling academic competence in his field of expertise. He holds a degree in business administration, major in marketing from the University of the Philippines where he graduated magna cum laude and class valedictorian.

Prior to his stint in government, he was associate professor at the Asian Institute of Management and corporate planning and finance officer of companies like the Canlubang Sugar Estate, Canlubang Pulp and Manufacturing Corporation, C-J Yulo and Sons Inc., Philippine National Oil Company, Luzon Stevedoring Corporation, and Mobil Oil Philippines Inc.

His first government job was as director general of the Congressional Planning and Budget Office (CPBO) of the House of Representatives in 1990. As CPBO chief until 2002, he dispensed advice to House leaders on socioeconomic issues, in particular monetary and financial policies, development financing, and the national government budget.

Erstwhile colleagues at the CPBO recall their former director general in high regard. “He was very professional, very broadminded, straightforward,” shares Rodolfo Vicerra, who was at the time the CPBO’s executive director and who later assumed Neri’s post when he left in 2002.

Though Neri’s training was in finance, he understood the workings of the macroeconomy, says Vicerra. “His long stay in Congress allowed him to read a lot of books, particularly on economics, so much so that he has become a champion of competition and the market that many formally trained economists would care to admit,” he says.

It was at the CPBO where Neri started nurturing the advocacies for which he has come to be known for, like going against anti-competitive, monopolistic and oligarchic structures, regulatory capture, and anything that would limit the efficiency of the economy.

In 2002, Neri earned his first appointment as NEDA director general, a post he would return to on February 5, 2006 after a brief stint as budget secretary in 2005. At the national socioeconomic planning agency, Neri distinguished himself as a NEDA chief with wide academic and policy background, particularly in finance, public policy, and microeconomics.

“He had more of a microeconomic bent in the work of NEDA, particularly in microeconomic analysis at the firm level, which made us work with emphasis on knowing more sector and inter-sector-specific details,” says a senior director who has been with NEDA since 1989 during the last months of Solita Monsod’s term as director general.

Such emphasis, the director adds, required from the NEDA staff to have ready in-depth sectoral knowledge when Neri reviewed and discussed their work with them, in contrast to the normal process of first going back to client agencies to get more information.

Neri’s microinterventions had at times meant going outside the purview of NEDA’s primary work or mandate, which essentially involved preparing and coordinating the country’s socioeconomic and development plans. One staff recalls, for instance, an Asian Development Bank-funded project that Neri pushed to strengthen the provincial planning process, which, to him, was rendered ineffective by the lack of technical know-how and budgeting focus of local government planners.

Known to be impatient with bureaucratic inertia, Neri had also caused the resuscitation of inactive government bodies like the Philippine Export-Import Credit Agency (PhilEXIM) to help finance infrastructure projects. He also maximized the use of the Industrial Guarantee and Loans Fund to address even issues considered marginal to NEDA’s functions, for instance, increasing the productivity of coconut farmers.

“He thinks ‘outside the box,’” another NEDA staff says, an indication of his rather consuming interest in what works while being fully aware of how institutions take a long time to reform.

Only that Neri’s tour of duty at NEDA had more than just this endearing facet of a maverick technocrat to it, and which should be instructive as to how he would conduct himself over at the SSS.

‘Leading than managing’

Top-level officials at NEDA have commended Neri’s preference for a “more horizontal working relationship” with the management and staff, which they say was what made him work “more easily and directly with people than through structures.”

“The time that he was in NEDA,” shares the same senior management official, “he was to me more on ‘leading than managing’ as he left to the career officials in the Secretariat the latter function to exercise more decentrally.”

That, however, did not appeal to many at NEDA who saw how Neri was unlike his predecessors, who were more accessible to the agency’s rank-and-file. Not a few NEDA staff have observed how he was not into employee relations, exerting no effort to connect, dialogue, or reach out to them. They say he also wasn’t as concerned with the internal operations of the office, both in administrative and personnel matters despite his heavy dependence on their technical outputs.

Says Edwin Daiwey, acting assistant director of the Development Information Staff: “He was more technocratic in the sense that his concerns were more on what the staff produced but less on how they could be motivated to work better in terms of improved remuneration, the working environment, and working relationships.”

In contrast to former directors general, Neri also rarely held meetings with senior officials which would have served as venues to discuss or thresh out important issues affecting the agency.

As such, Neri’s term, Daiwey adds, marked the unraveling of the strong teamwork ethic that used to be the hallmark of NEDA. Such a situation had subsequently led to squabbles among his deputies and staffs.

A NEDA ‘outsider’

If the relationship had been somewhat distant and tentative, this was probably because many in NEDA regarded Neri as an “outsider.”

He was, after all, not exactly from academe (read: School of Economics of the University of the Philippines) the way the other previous directors general were. Because he was not an economist, he was also not embedded in the NEDA culture like some of his more recent predecessors (e.g. Felipe Medalla and Dante Canlas) who first worked as deputy directors general before being appointed director general.

Without the benefit of a previous professional working relationship, the NEDA staff were thus wary of their erstwhile boss from the very start. Even then, there was also the added baggage of his long-time association with Jose de Venecia Jr., a Marcos-era consummate traditional politician known for cobbling “rainbow coalitions” in the Lower House during his 12 years as Speaker by offering positions, power and money to win the loyalty and support of congressmen.

That he played politics, engaged with politicians, and is himself a politician begun to dawn on some of the NEDA management officials and staff when he surrounded himself with a retinue of “consultants” who were accountable only to him.

Neri also probably felt his detachment that he had to bring along with him to NEDA people whom he could trust. His consultants, many of whom were not known to the NEDA staff, were like a parallel office which acted as his political arm. At first, some at NEDA appreciated the arrangement as it insulated the staff from politics, preferring not to deal with politicians and just continue to do their work professionally. Later, on instructions by Neri himself, NEDA officials had had occasions to interact with his consultants. Even his meetings with them were recorded as part of his official schedule.

‘Realpolitik, not politicking’

The way one director understood it, Neri played politics as a matter of course in public policy. The NEDA Secretariat and other oversight bureaucracies are to exert effort in providing full information to decide policy, he says, and that necessitated engaging with politicians and playing the game of politics.

From his own experience working with him, the CPBO’s Vicerra believes Neri played politics not in the sense of politicking, which he says Neri always tried to avoid. “It’s more of realpolitik,” he explains, “as he always wants to involve himself in policy issues. And he has his advocacies.”

Doing so may have made the NEDA Secretariat more aware of the nature of public policy in their work, but it also made them vulnerable, admits the same director. “It put the organization and employees unprecedently in an unrequitedly bad light,” he says, though maintaining that the Secretariat has remained nonpartisan, its own standard of integrity and professionalism undiminished by this initiation into politics.

But Neri’s pragmatism, the NEDA staff also claim, conflicted with his reformist image. Some would say on hindsight that this probably explains why he is seemingly not appalled by unethical behavior, that is, corruption by way of commissions, extortions, kickbacks and the like, because these make things move or work. Others find it ironic that he wanted reforms yet “still wants to be in the good graces of this government.” Still others comment that since he is a “political animal” himself, it was not surprising that he had been offered bribes as he had admitted.

Of his consultants, estranged friend Rodolfo Noel ‘Jun’ Lozada Jr., who was one of the whistleblowers in the NBN-ZTE scandal, probably best describes Neri’s reform program, which he says is more after adjustments of the system, how to make it work or how to control it to make it work. “He has a very good grasp of the system, both its functional and dysfunctional parts. And from my perspective, he is one of the most knowledgeable persons on how to adjust the system,” Lozada says, adding that Neri is in his elements when he speaks of reforms within the system.

A bevy of consultants

The entire time Neri was with NEDA, his consultants proved to be a thorny issue. A case in point was the more than P20,000-salary he was able to wangle for his driver, which the NEDA staff considered scandalous. The average pay of drivers at NEDA at the time was only pegged at P8,000 to P10,000 a month. But Neri was able to justify the amount, and to which the Civil Service Commission consented, by changing the driver’s terms of reference (TOR) to one of a “consultant on confidential matters.”

While already at CHED, Neri had asked NEDA for the renewal of contracts of technical consultants who were all assigned to him when he was director general. He specifically requested that lawyers Paul P. Lentejas and Heraldo A. Dacayo Jr., Engr. Arsenio D. Mesiona, Tomas B. Eizaguirre, and Antonio S. Manalo be detailed to CHED by extending the memorandum of agreement between the two agencies. Neri claimed the extension was “necessary in order to ensure the continuity of the special assignments, such as, but not limited to the NEDA Productivity Enhancement Projects (PEP)” that he had initiated when he was still with NEDA.

Neri similarly requested for the assignment extension of four NEDA personnel — Lourdes C. Reyes (executive assistant), Felino I. Torsar (administrative aide VI), Antonio F. Enriquez (administrative aide III), and Antonio L. Alvarado (close-in security) — with his CHED office so they could provide him assistance. At the same time, he asked that the NEDA support vehicle, an Isuzu Crosswind, and three cellphone units the four NEDA staff were using be retained.

Out of courtesy to a former director general, NEDA acceded to extending the detail of all except his lawyers until March 30 this year. Neri had wanted another extension in anticipation of his return to NEDA in August but it appears there won’t be any forthcoming as it puts the agency in a very awkward situation as far as the Commission on Audit is concerned. In fact, COA has already issued a notice, starting to question the propriety of the detail arrangement.

Because he tended to overlook employee relations, Neri was said to have left to his consultants the handling of matters, usually administrative or legal in scope, that had to do with staff concerns.

Relates Daiwey: “He let these consultants handle employee-related matters like the COLA (cost of living allowance) backpay, employee complaints (one such case involved a regional director accused of sexual harrassment), and other matters that had nothing to do with socioeconomic staff work.”

The NEDA staff would hear other names of consultants such as Rody Cruz, said to be a nephew of construction magnate Felipe F. Cruz, who is a close friend of Neri. The younger Cruz is alleged to be another of Neri’s operators who is involved more in the execution phase of NEDA-approved contracts. Francis Chua, the former president of the influential Federation of Filipino-Chinese Chamber of Commerce and Industry, and his son Brian were also reportedly close to him.

Golfing buddies

A peek into who Neri plays golf with at the exclusive Wack Wack Golf and Country Club in Mandaluyong could also give clues as to who the fomer NEDA chief prefers to mingle with. Between December 10, 2006 and January 5 this year, Neri played golf 21 times usually during Saturday and Sunday. His regular playing partners were some of his consultants like Lozada, the Cruzes (Felipe and Rody), Army colonel Maximo Caro, Cesar Lacuna and a Col. Philip Cruz.

During that same period, Neri also played rounds of golf twice with businessman Donald Dee, and once with former Supreme Court Justice Jose Melo, Rufino Javier (no confirmation if he was the former elections commissioner), Art Tuason, Joel Muyco, an E. Choa, a Dr. Lim, and a certain Estrella.

At past eight in the morning of December 29, 2006, he played golf with Executive Secretary Eduardo Ermita as guests of Francisco Ortigas. On January 5 this year, shortly before noon, he played with broadcaster Rey Langit and Cerge Remonde, chief of the Presidential Management Staff.

Having consultants is not an issue, explains a senior director, pointing out that the NEDA Secretariat has had consultants all the time in different capacities and at different levels, especially when projects called for it.

But what is clear is that the practice had no precedent from the time of Monsod up to Canlas. Of NEDA’s directors general, it was only Neri who hired consultants specifically for his office.

Monsod, who in her time saw no need for consultants as she relied solely on the expertise of the staff, does agree that as an agency, NEDA can hire consultants. But that privilege, she says, does not extend to the director general.

Cielito Habito, the socioeconomic planning secretary during the administration of Fidel Ramos, says he didn’t even realize that the director general could hire that many consultants, much more hire consultants at all.

WHAT’S IN A LETTER? Compare this letter (click here for a larger view) of Neri to Chinese ambassador Li Jinjun with his other official NEDA correspondences to Transportation Secretary Leandro Mendoza (here and here) and Jose ‘Joey’ de Venecia III), and spot the differences.

Compromised communications

By relying on consultants like Lozada, the NEDA staff also point out that Neri did not maximize, and at times even bypassed, the NEDA Technical Secretariat which serves as the research and technical support of the NEDA Board.

During his NEDA watch, Neri allowed an unwieldy interplay of the official and unofficial actors and processes of policy, politics and patronage.

In the Senate hearings on the NBN-ZTE deal, Lozada, who was almost like Neri’s alter ego, admitted that his job as consultant involved looking at the deal structure of proposed projects, or in Neri’s own words, “moderating the greed” of project proponents both from the government and private sector.

This set-up, mid-level division heads argue, had a negative effect on the usual flow of information and decision-making critical to the institutional stability of NEDA. “It’s hard for the NEDA Secretariat to own, defend decisions, positions or communications that did not pass through it,” they say.

There are indications that some “official” communications in connection with the NBN-ZTE deal and the cyber education project could be the handiwork of Neri’s consultants and not of the NEDA staff. One such document is the letter of Neri to Chinese ambassador Li Jinjun bearing the supposed “FG” marginal note that Senator Jamby Madrigal mistook as the initials for “First Gentleman,” Arroyo’s husband, as proof of his alleged involvement in the deal. (NEDA corrected the senator as her copy did not have the letter “I” after “FG” to signify the original endorsement for “FGI/PIS” referring to Florante G. Igtiben, chief of the Asia Pacific Division of the Public Investment Staff (PIS) that handles projects funded by China.)

Had the senator been more discerning, she could have examined the said letter and noted what were apparent discrepancies. For one, NEDA staff say, the letter was not written in the style of NEDA. The salutation part did not specifically address the ambassador using his title and surname. The use of the phrase “your undying support” at the end of the body of the letter was rather unusual. NEDA as spelled out lacked the word “and.” Even the leading, the space between lines of text, was not in accordance with NEDA official communications. Besides, it appeared to have been printed without using the official NEDA letterhead.

Moreover, the barcode at the bottom of the page indicated that the letter was received by the PIS, instead of having originated from it under normal circumstances. The letter was considered “official” only in the sense that it bore Neri’s signature.

‘Beholden to the President’

“He appeared to be a very straight guy at first, until the NEDA staff started hearing about corruption allegations in the media,” says another employee, particularly referring to the controversy over the allegedly anomalous NBN project awarded to the Chinese firm ZTE Corporation, that first broke out in April 2007.

NERI told the Senate that then elections chair Benjamin Abalos Sr. offered him a P200-million bribe to faciliate the approval of the NBN-ZTE project, but invoked executive privilege when asked to elaborate on Arroyo’s involvement in the controversial deal. [photo courtesy of Senate]

Neri was the NEDA chief when the $329-million NBN-ZTE deal was approved. In one of the hearings conducted by the Senate on the scrapped project, Neri testified that then Commission on Elections chair Benjamin Abalos Sr. tried to offer him a P200-million bribe to facilitate the project’s approval.

But when pressed by senators if he was ordered by Gloria Macapagal Arroyo to prioritize ZTE and to approve the project despite his report to her of the alleged bribery by Abalos, Neri refused to answer and instead invoked executive privilege. Many believed Neri’s conversations with Arroyo could have implicated her in the alleged bribery and overpricing that attended the NBN-ZTE deal, as Senate witnesses had testified.

“Neri gave us the impression that he is beholden to the President and whatever she says he will abide (by),” laments a NEDA employee. Many still recall with a sense of pride how former directors general had strong convictions who cannot be dictated or coerced upon even by the President.

Even Monsod, whose term was credited for turning around the agency’s image of a Marcos rubber stamp, could not hide her disgust at how NEDA had sunk to its “lowest point” under Neri.

At a U.P. forum in October last year, the feisty economist, along with past NEDA directors general Gerardo Sicat, Cayetano Paderanga, Medalla, Habito and Canlas, disagreed with Neri’s portrayal of a “weak NEDA” in his first and only Senate testimony on the NBN-ZTE deal.

Neri said NEDA’s role only entailed approving projects based on their viability and consistency with the country’s long-term development goals and not in determining how it would be funded in the best possible way. Project approval, he added, was a collegial function of the NEDA-Investment Coordination Committee (ICC), of which he was just one member.

By saying such things, Neri, said Monsod, indicated that the independence and integrity of the country’s premier social and economic development planning and policy coordinating body had been compromised.

For this reason, many have viewed with alarm Neri’s recent appointment by Arroyo to head the SSS, with groups like the Makati Business Club questioning his “intestinal fortitude to be able to withstand the pressures from the powers that be and protect the interest of SSS members.”

But what is even curious about the appointment is Arroyo’s July 8 issuance of Administrative Order No. 232 clustering the existing social welfare programs of the SSS, Department of Social Welfare and Development (DWSD), Department of Health (DOH), Government Service Insurance System (GSIS), and other agencies under a National Social Welfare Program to be overseen by the SSS Administrator, who is bestowed with Cabinet rank.

Ermita was candid enough to disclose the reason. As a member of Arroyo’s Cabinet, Neri, he cheerfully said, remains covered by executive privilege.

Still, some at NEDA would like to give their former boss the benefit of the doubt. “I believe he has a basic decency, although I am not sure about his consultants,” one director says. “He may have wanted to please several masters, maybe he was trying to differentiate the technical staff from his other dealings,” others say. Or that he was mediating probably in the NBN-ZTE deal without knowing that he heads the agency that evaluated it.

Not privy to all the events surrounding the NBN-ZTE scandal, Vicerra says he is not one to judge Neri. But he is certain that he had his reasons for doing what he did. “As far as I’m concerned, he is one person who thinks well in advance. Every major decision or action he does is well thought out.” Neri’s thinking process, he adds, is not only that of an MBA holder but of someone who consults the I Ching (also called the “Book of Changes,” one of the oldest Chinese classic texts) to guide him on how to think and act.

Yet for an I Ching practitioner, it is quite a conundrum that Neri seems not ready to accept the inevitability of change for the government he serves.