The Philippines: A ‘Number Numbed’ Nation

The latest Social Weather Station (SWS) Survey says that public trust in the President has fallen in the first quarter of 2018. Today it is this and tomorrow its another thing. Survey companies have always had their say, ex cathedra in a manner of speaking over many decades but do their reporting templates still work? Inconsistencies noted lately in SWS’ various sectorial breakdowns which do not add up to the national totals should be explained in order to preserve the integrity of its ‘Acceptance Ratings’.

The lone SALN Article of Impeachment of the Chief Justice took several twists and turns simply to evade getting entangled with the accounting of its contents in the same manner that all previous impeachment cases have been litigated by lawyers without the use of accountants, auditors or financial analysts.

I consulted my friend Bienvenido C. Gonzalez, a SALN expert and retired international financial analyst who had been into business modeling and algorithms since his ADB consultancy days in 1984. He is also into Big Data, Analytics and Forensics. I asked him about the numbers presented to the public. Are they real? Do they have a good scientific basis? 

Gonzalez said, “Number numbed is the phrase which I had coined as a wordsmith to express the sad state of the relationship of the Filipino people with numbers that is definitely contributory to the proliferation of graft and corruption in the entire country. Since 2010 as a SALN advocate fighting corruption, I had been alternately using the words ‘arithmophobia’ (the fear of numbers) and ‘innumeracy’ (the lack of knowledge of the operations of numbers) to describe this sorry situation of the nation”.

In the 80s, a local auditing company, SGV, expanded to at least five Asian countries, while Filipino CEOs and CFOs run Asean head offices of multinational companies, as Filipino financial analysts were staples for World Bank, ADB, and other multilaterals for appraisal missions all over the world. This was still the time when we all had to memorize 6 to 7 digits- telephone numbers and computed short operations in our heads without the use of a calculator. Between then and now, the dumbing and numbing of the nation happened.

Instead of progressing, we regressed and soon enough got beaten by those who once bit our dust. The foundations of the 3Rs came crumbling down as quantity eroded quality in a politicized educational system grappling with balancing the supply and demand for capable instructors. While in general, we know the principle of “garbage in, garbage out”, our present problem is that we cannot even recognize garbage anymore regardless of whether it is coming in or out.

Gonzales further explained this phenomenon using the case of the LTFRB as a concrete example:? “I have been following the GRAB Drivers’ complaints asking LTFRB to reinstate the P2 per minute Travel Time Charge.  They are barking at the wrong tree!  Based on my Grab algorithm, they should lose only around P1,000 daily instead of suffering a decrease of P2,500 per day from their usual range of P4,000 to P5,000.  This clearly tells me that the culprit and what they should question is the current algorithm of GRAB. There is all the more reason now for the LTFRB to get involved with TNV algorithms as this is definite proof that the drivers also need the protection of the law.  Aside from their share of the voided Travel Time Charge of P49 per trip representing their legitimate 80%, another P76 per trip is being gouged from them by Grab’s algorithm without rhyme nor reason, save greed or incompetence.? All hell will break loose if we find out that the TNV algorithms have been all wrong from the initial birth of TNVs in the Philippines.” How will Grab explain that loss of revenue to their drivers and families?

The LTFRB Chair Martin Delgra III said in an interview on DZBB that the two (Uber & Grab) transport network companies (TNCs) use different algorithms in computing their fares and that the board recognizes their proprietary rights over their algorithms. But as far as the fare is concerned, that is the responsibility of the regulatory body. Gonzales believed this contributed to the follow up scandalous news from LTFRB about its discovery that Grab had been overcharging its passengers by as much as P1.8 billion since it started.

I ask Benny if taxi companies can use different algorithms. He said, “In truth, the algorithm is the taxi meter of the TNCs. It would be grossly inappropriate for the LTFRB to completely abandon the supervision of the individualized TNC algorithms because of its mistaken notion that algorithms are proprietary in nature. The LTFRB grants TNCs franchises with approved specific rate provisions on flag down, kilometer, travel time and surge premiums without dictating how each TNC should make use of these factors in their algorithms in order to ensure their respective competitiveness in the market place. This leeway however, must be within the maximum limits prescribed by LTFRB on how much each trip should cost the passenger.”

He continued, “Without an approved LTFRB algorithm version or at the very least supervising the algorithms being used, LTFRB is not and cannot regulate this industry sector in the same way it would not and could not regulate regular taxi meters if each taxi company is allowed to program their own meters any which way they please. The TNC algorithm is simply the formula which will give the algebraic solution equal to or less than what LTFRB deems to be the fairest fare that should be charged to the passenger under the circumstances of the trip to be taken.

Algorithms must be decipherable by the supervising agency or they are not supervising the particular transport sector at all. What should be proprietary to the TNCs are the amounts they use as flag down, kilometer rate, travel time rate and surge premiums for as long as these are within the approved LTFRB rates. If LTFRB understood this and had this checking mechanism in place ab initio, no one would have had the opportunity of overcharging anybody.

Because these different modes of transport have a lot of common variables, their individual algorithms must all be made interrelated such that what affects one, like fuel costs, affects the rest. The resulting macro-algorithm is what will allow the LTFRB to be fair to every segment of the transport sector through an equitable determination of how much fare increase each mode of transport should be given in case of price hikes in the common variables. Additionally, this macro-algorithm which must incorporate the interconnectivity of the entire transport sector it regulates, would have facilitated LTFRB’s denial or approval of the current request for the jeepney fare increase which threatens to disrupt the entire economy.”

It’s about time we get the real experts who specialize in algorithms. Government officials must not just accept numbers the way they are presented. They must understand the science behind all the figures presented to the public. The truth should always prevail. Our people need to be protected from the scoundrels around.

I rest my case.