Uproar over ISM sale

Another case of killing the goose that lays the golden egg.

If the auction of the International School Manila (ISM) property in Fort Bonifacio pushes through, then ISM is for all intents and purposes dead.

The public sale, courtesy of the Department of Labor and Employment (DOLE), is ostensibly meant to cover some $7.1 million, or P397 million, in back pay differentials being demanded by the school’s locally hired teachers.

It will be recalled that ISM management implemented a salary scheme some time in 2000 which placed the pay of locally hired mentors at par with those hired from other countries. The move to grant the locals world-class pay followed a Supreme Court directive which the school immediately obeyed. This is why locally hired teachers at ISM now reportedly receive an average of $4,000 to $4,500 per month.

The windfall transformed ISM’s faculty into the country’s "richest" teachers, receiving salaries reportedly 700 percent more than what a full-fledged professor of the University of the Philippines would be paid.

The problem is the teachers want the bonanza to be made retroactive to 1995. ISM management, however, says the Supreme Court order does not mandate such retroactive effect. The Court of Appeals, in an earlier resolution, supported the ISM management position. But the DOLE has backed the teachers’ demand for which reason the ISM property is now being advertised as the subject of a forthcoming auction.

The DOLE’s move to auction off the ISM property would not have been such a big issue were it not for the fact that the impending sale has caused an uproar in the expatriate community. It so happened that ISM is school to some 1,500 students, mostly children of executives working in the Philippine headquarters of multinational business concerns.

ISM also happens to be the oldest and the largest among the international schools in the country. It is also the biggest employer of Filipino faculty members among the educational institutions catering to the expatriate community.

This is perhaps the main reason why the Foreign Chambers of the Philippines (FCP) is now in an uproar over the impending auction.

In a recent statement, the FCP said the DOLE move "has resulted in deep consternation among the students, their parents and the international business and diplomatic communities".

The FCP counts among its members the American Chamber of Commerce of the Philippines (AmCham), the European Chamber of Commerce of the Philippines, the Australian-New Zealand Chamber of Commerce, and the Chambers of Commerce in the Philippines of Canada, Japan and Korea.

The FCP, with over 2,000 firms in its member list, also includes the Philippine Association of Multinational Companies Regional Headquarters, Inc.

We hope the government would not take the FCP outrage over the impending ISM auction for granted. The FCP is an influential group. It will be recalled that several months ago, the FCP threw its support behind the state-of-the-art Alien Certificate of Registration Identification Card project of the Bureau of Immigration.

The ID project was, for a time, under attack by influential lobby groups including those suspected of coddling illegal aliens. Some immigration officials were then reportedly adamant to implement the ID project until the FCP came out in support of it. With FCP backing, the ID project is now smoothly being implemented.

We understand the outrage of the expatriate community. The DOLE’s auction scenario is a deathblow to the 80-year old ISM. There is going to be immediate displacement for the 1,500 students. It will not be easy for their parents to transfer them to other schools that would at least approximate ISM academic standards. It is not also clear whether or not the other international schools have the capacity and capability to absorb ISM students.

The displacement appears inevitable. We do not foresee the prospective buyers continuing the operation of the school. The possible take-over by the ISM Union could also mean outright closure since the students would probably not continue their studies under a hostile environment.

We aired such a warning last week. We said if the expatriate community withdraws its patronage of a school "owned" by the Union, where would the "new" ISM derive its business? There are doubts there would be enough locally-based Filipino families who can afford $10,000 a year for the high school studies of just one kid. Thus, an auctioned off-ISM may have no business prospects at all – at least not in the field of education, we said.

This week, the FCP confirmed our warning. It added that the school’s possible closure "could result in headquarters of our member-firms reassessing their business plans for the Philippines". We cannot fault the FCP. It is already difficult to entice foreign executives to take a Philippine posting given the many scare factors in the country. Take away the incentive of an excellent school for their kids, what else would there be to offer?

Some quarters have opined that the ISM auction is just a "DOLE scare tactic" to force the school management to pay the $7.1 million demand of the teachers. We hope so. But other quarters have also warned that the DOLE is capable of carrying out its threat. It did so with the Divine Word University of Tacloban City. DOLE auctioned off the school following the demand of the teachers for back pay differentials. The school closed down thereafter.

We hope the FCP outrage would be heard by the pertinent officials of the government. The FCP is hoping that the labor dispute could be resolved without having the sell or close down the school. The horrifying scenarios would definitely have a bearing on the country as a whole.

There is, of course, the Court of Appeals which could actually save the day. There is a pending motion before the court filed by the ISM management. Let’s hope that the motion could be resolved by the Court of Appeals before that fateful day of the public auction which, as the DOLE advertisements say, is on Sept. 5.

Locally Produced Ethanol

If oil companies can lower the price of gasoline by as much as 65 to 71 centavos per liter by blending gasoline with 10 percent imported ethanol, imagine the cost savings if the ethanol were to be produced locally.

Energy Secretary Popo Lotilla estimates that the country could save as much as P12 billion a year if all 3.4 million gasoline-fed vehicles in the country would use ethanol blended fuel. Again, the savings would be humongous if the oil companies were to source their fuel ethanol from within the country.

It has therefore become a matter of national interest that Congress immediately pass a propose legislation that will mandate an initial five percent ethanol blend, increasing to 10 percent in a few years. The mere proposal has already generated huge interest in the business community to put up ethanol production facilities. Secretary Lotilla’s estimates could easily double, if not triple, if we include the additional employment that will be generated, increased farm incomes if we were to use local feedstock (sourced from sugarcane, corn, cassava, etc.) to produce ethanol. This does not include the environmental benefits by burning less fossil fuel which of course cannot be quantified in pesos.

The Philippine Fuel Ethanol Alliance, an industry coalition engaged in the promotion of bioethanol in the Philippines, has pointed out that the business interest for bioethanol of the member oil companies of the Independent Philippine Petroleum Companies Association only shows that bioethanol‚s time has indeed come. To borrow a quote from a recent Newsweek issue, "after years of hype, biofuels are starting to fill the world’s gas tanks."

The Alliance however has stressed the need for a comprehensive information and education campaign especially by the Department of Energy that will highlight the benefits of bioethanol and E-10, and explaining their compatibility with existing cars. After all, bioethanol and E-10 largely remains unfamiliar to the general public despite its widespread use in other countries. Our transport sector has been used to conventional fuels such as gasoline and diesel. E-10 is a totally new product that may be viewed with anticipation and interest on the one hand, but skepticism and caution on the other hand.

I also fully agree with the Ethanol Alliance in its view that the use of bioethanol will become more feasible in the long term if local production is established. There is a need to enact a law for investors to have confidence to venture into establishing bioethanol production facilities all over the country. The policy support for these investors must be underpinned by legislation so as not to subject them to changes in government policies. It is only in making bioethanol a homegrown, truly indigenous fuel that the three-pronged developmental objective of energy security, environmental quality, and employment generation will be achieved.

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