To Take A Stand

I’ve noted three positive directions being taken by President Rodrigo Duterte and his administration that points to legacy and a lighter load for the next administration.

First, is the continued improvement of the economy. And there are many signs and milestones to note. The notion that we will fall into a sneaky debt trap allegedly foisted by China is incorrect. Our financial management of the economy has been outstanding so far. It’s unthinkable that we would, at this stage, drop due diligence, fiscal prudence and the national interest for another country’s alleged shady interests. The opposition should perish the thought and shift their sights elsewhere like the real-life day-to-day problems of the poor.

Most of our development money and investments, so far, have been from Japan. Japan has been in the forefront, providing grants and long-term official development assistance at almost negligible interest rates. They’ve targeted Mindanao’s development, the country’s ambitious infrastructure development and law enforcement at sea. The World Bank, Asian Development Bank, the USA and Republic of Korea are the other major providers of development loans and grants. The United Nations system, China and the EU are our other fund providers.

ADB Chief Economist Yasuyuki Sawada said the Philippine economy is standing strong on a low unemployment rate, sustained rise in remittances, and slowing inflation. Increased public investments in social services and infrastructure will also greatly contribute to economic growth. However, I see the Philippines facing several headwinds this year, stemming from natural, political and geopolitical causes: El Niño, the delayed approval of the 2019 budget, the US-China trade war, Brexit, and rising tensions in the Persian Gulf and South China Sea.

OFW remittances in 2018 tallied USD32.21 billion, up 3% from 2017’s USD31.29 billion. BPO revenues are expected to reach USD55-Billion by 2020 surpassing OFW remittances. Average GDP growth covering 2016-2019 (est.) is around 6.5%. GDP per capita and PPP (2019 est) will likely be USD3,730 and USD9,000, respectively. Inflation in April fell below 3%. Foreign reserves are around USD84-Billion. S&P recently raised our long-term sovereign credit rating to “BBB+” while Fitch and Moody’s affirmed their “BBB” and “Baa2” stable outlook ratings.

The government increased its debt to 56.2% of GDP in 1Q2019 from YAGO in anticipation of higher US interest rates. Net debt-GDP ratio (which nets out the NG cash balance from the debt level) dropped from 40.1% to 39.6%.” The “excellent design and timing of borrowings enabled the government to tap cheaper rates and longer maturities with higher volumes and optimize savings for the ‘Build, Build, Build’ program and social expenditures.” It expects net debt-to-GDP ratio to drop to 38.9% by 2022.

Second, is the buildup of our defenses at sea, in the air and on the ground. Our investments in credible deterrence are in consonance with our national security policy and strategy, and independent foreign policy grounded on our national interest. It’s an unforgiving world out there, fraught with risk and threats, natural and man-made. We must work for the best possible outcomes by being friends to all but preparing as well for worst case scenarios. Idealism tempered by realism is the best mix to conduct our international relations.

I’m enthused by the government’s desire to begin acquiring locally-built capital assets. Not only would it develop our technological capacities, it would greatly contribute to economic growth, poverty reduction and national security. For example, the government, in partnership with other governments, could develop industrial parks to produce military and dual-use sea-air-land systems and equipment such as: Special Support Vessels, Offshore Patrol Vessels, Fast Missile Craft, tugboats, Air-Sea-Land transports and cargo delivery systems.

As our economy grows; defense capability improves for homeland security and external defense; political will remains steadfast in redeeming our national dignity; and as our society matures into a united patriotic nation that won’t tolerate being pushed around any longer, the world will take us seriously. We’re gradually gaining recognition, either as a worthy friend or foe, no longer like the doormat we’ve been in the past. Thanks to our independent foreign policy, the international community is now seeing and feeling its effects.

I’m keenly observing the President’s subtle moves that indicate a shift in his tone toward China regarding the West Philippine Sea. There’s a growing dichotomy in his pronouncements where his comments pertaining to its behavior at sea are becoming more critical, while continuing to offer his hand in friendship to cultivate relations in conflict-free arenas — economic, social, cultural. I anticipate the day when the President will invoke the Arbitral ruling if China continues to return his good faith with insincerity.

Third, the President has finally expressed his distrust of Smartmatic and everything it represents with respect to electoral cheating and the trampling of democracy. But I wouldn’t single it out. Anyone who has participated in past electoral exercises knows that systematic cheating is syndicated. It can’t be done without enablers and special operators doing the bidding of a cabal that sustains the status quo. It seems to me that if we want to push the reset button, we’ll have to tackle the whole enchilada, not just a portion.

After having observed and participated in elections for the first time in 1969 all the way until this year, my two cents worth is this. For as long as the cheaters who manipulate the system — any system for that matter, be it manual, electronic or hybrid — are not taken out of the equation, nothing will change. It’s not the system because it’s inert. It’s the people manipulating the system that are the problem, from the deep state to their cohorts to their special operators who provide deniability. Change them first before shifting to a better system.

It really all boils down to corruption, the evil that makes all other evils possible. We need a clear strategy to wrestle it down to manageable levels to keep us moving faster and farther in the right direction.


Rafael M. Alunan III served in the cabinet of President Corazon C. Aquino as Secretary of Tourism, and in the cabinet of President Fidel V. Ramos as Secretary of Interior and Local Government.