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Two steps forward, one step back

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Calixto V. Chikiamco-125

Introspective

Two steps forward, one step back

In December last year, I wrote a column “One Step Forward, Two Steps Back,” describing the uneven progress six months into the Duterte administration. While I noted some progressive changes or positive initiatives, President Duterte had a tendency for self-inflicted damage that marred those progressive changes. Hence, one step forward, two steps back.

For example, he correctly rebalanced the country’s foreign policy away from the overtly pro-US and anti-Chinese stance of the previous Aquino administration. However, he seemed to sway in the opposite direction, with tirades against the US and lavish, almost fawning, praise for China. The anti-US, and subsequently anti-EU, rhetoric unnecessarily alarmed foreign investors, particular those in the BPO sector.

He tried to unify the country by initiating peace talks with the Communist Left and bringing the MNLF into the peace talks with the MILF over the future of the Bangsamoro. However, he praised the ex-dictator Marcos and allowed him to be given a heroes burial at the Libingan ng Mga Bayani. Given the dark legacy of Marcos, the burial only served to divide the country and aroused anger and condemnation.

The economic policies in his first six months were mainly populist — ending endo, free irrigation, increase in SSS pensions, etc., while, at that time, he refused to own the tax reform, always describing it as “Dominguez’s tax reform.” While irresponsible mining deserved to be condemned, he appointed and supported an anti-mining ideologue, Gina Lopez, as Environment and Natural Resources secretary, and she wrought havoc on the mining industry, a major employer in the countryside. His Department of Agrarian Reform (DAR) secretary, the leftist Rafael Mariano, the product of his coalition with the Left, imposed a moratorium on land conversions. This set back development of lands and raised the cost of dealing with DAR.

In sum, it wasn’t the change I wanted to see. As someone who voted for him, I was expressing “buyer’s remorse.”

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However, today, it’s no longer “one step forward, and two steps back,” but “two steps forward, and one step back.”

The reason is that President Duterte, to his credit, has evolved and is evolving. He isn’t hard-headed but has shown a capacity to learn and to make adjustments, to wit:

1. He has started reaching outside of his small circle of Davao friends, San Beda Law alumni, dormmates, and rabid political supporters. Unlike former president Noynoy Aquino, who remained blindly loyal to his friends such as then Agriculture secretary Proceso Alcala, PNP chief Alan Purisima, and Land Transportation Office administrator Virgina Torres although they were incompetent, or corrupt, or both. President Duterte hasn’t hesitated to dismiss personal friends and supporters (former Davao Councillor Peter Laviña from the National Irrigation Authority, former Davao supporter Mike Sueño from the Department of Interior and Local Government, and classmate Rodolfo Salalima from the Department of Information and Communications Technology), and even those with strong political backing (Bongbong Marcos campaign manager and party-list Congressman Jonathan de la Cruz from the GSIS for “corruption.”)

True, he has been turning more and more to the ex-military to man government positions. However, this isn’t without basis. The military has the most educated and most professional corps of public officials. Entrance into the Philippine Military Academy is merit-based since acceptance is based on entrance examinations, aside from physical fitness. Military officials are required to have training and advanced degrees to get promoted. It’s extremely difficult, if not impossible, to be named a colonel without a master’s degree.

Also, over the years, reforms have been gradually introduced into the armed forces. Hence, the military is different from that of Marcos’s time. The military is certainly more professional today, as shown by the lack of reported abuses despite the declaration of martial law in Mindanao. Most important of all, most military officials come from the lower middle class, sons and daughters of lowly government officials, middle class professionals, cooks, farmers, or enlisted soldiers. The lack of ties to the oligarchy can make them instruments of reform, just as they were under former general and president Fidel Ramos.

2. President Duterte has quietly walked back on his extremist anti-US position and has even acknowledged the help of the US in the fight for Marawi against the ISIS-inspired Maute brothers. He has dialed down his anti-US tirades. The country’s relationships with the US, China, and Japan seem more mature and productive, although in the case of the EU and the UN, Duterte still has to exercise self-control.

3. President Duterte has allowed the extremists in his Cabinet, namely Gina Lopez, Rafael Mariano, and Judy Taguiwalo in the Department of Social Welfare and Development, to fall. Their non-confirmation in the Commission on Appointments gave him the political cover to dismiss them. All of these extremists were doing great damage to the economy.

Two steps forward, one step backThe President learned that his peace talks with the Left yielded nothing for the government, but tactical gains for the other side. This only emboldened the NPA to launch more attacks and to extract “revolutionary taxation,” while giving the Left a chance to propagandize their positions. He has certainly evolved his position and has rightly cut off peace talks if these will just be exploited.

4. He has taken steps to strengthen the state, particularly over its fiscal health. One hallmark of a strong state is strong finances and he has taken steps to do this. He has embraced tax reform, and said so unequivocally in his State of the Nation message. His government has been able to collect billions from previous untouchables, like Mighty Corp., the Prietos, and Lucio Tan. He has been able to assert public rights over vested interests. Although his tax reform hits the interests of sugar producers, beverage companies, car manufacturers, fuel companies, and others, his government has stood firm.

5. His economic policies are looking less populist and more about substantive reform. President Duterte has quietly pivoted away from a “no rice importation” policy toward a more liberal one allowing the private sector to import under a system of quantitative restrictions. In fact, for the very first time since the National Food Authority was established more than 50 years ago, his government is seeking to abolish its legal monopoly in the importation of rice.

His administration is seeking to liberalize the economy even if it would hurt some powerful interests. The government’s proposed reduction in the Foreign Investment Negative List is aggressive and ambitious. It seeks to liberalize foreign investment restrictions in areas like education, mass media, and public services, except in the ownership of land. It wants to liberalize the practice of professions by foreigners, except law. It wants to reduce the capital requirements for foreigners in retail enterprises to $200,000 from $2.5 million. These liberalization measures are bold steps in the right direction to improve competitiveness, facilitate technology transfer, and make the Philippines more attractive to foreign investments.

However, where is the one step backward?

President Duterte exaggerates the political threats against him and resorts to scorched earth tactics that can only backfire. I believe that there’s no destabilization plot against him and if there is, it won’t succeed.

The reason is that he hasn’t practiced crony capitalism so far and hasn’t directly stepped on the core interests of the oligarchy. This situation is unlike that under former presidents Joseph Estrada and Gloria Macapagal-Arroyo who were perceived to be interfering in the financial markets or in government projects for their own benefit. The affected oligarchs financed destabilization efforts and, in fact, succeeded in the case of Mr. Estrada.

One reason why there was a lack of coup threats during the administration of President Aquino was that he wasn’t perceived to be practicing crony capitalism or being corrupt, although he didn’t apply Daang Matuwid toward his friends and partymates. Oligarchs don’t care a whit if the president makes money from jueteng or drugs for as long as he doesn’t rig the economic rules in his personal favor. In fact, the oligarchs, most of whose wealth come from real estate, love President Duterte for reversing his stance on online gambling — again a sign of his capacity to evolve. What’s not popularly known is that the administration’s legalization of online gambling has resulted in a large uptake of office space, leading to high occupancy rates and higher real estate prices. It’s sustaining the real estate boom.

Therefore, President Duterte is over-reacting to the so-called threats against him by attacking the institutions of the Ombudsman and the Supreme Court, which he considers controlled by the “Yellows.” However, I think the president’s attempts to have Chief Justice Sereno and Ombudsman Conchita Carpio-Morales impeached and removed from office will fail. The accusations of Lorenzo Gadon are baseless and without merit. The public will see that clearly, if and when the impeachment proceedings are televised. And even in the unlikely event that the impeachment will succeed, it will come at a great political cost to President Duterte. Most probably, the president will have to bargain away some reforms in exchange for securing the pro-impeachment votes of the Senate majority.

This is not to mention that his legislative agenda will be derailed if the Senate convenes into an impeachment court. Furthermore, purging these institutions of any opposition will only increase the temptation of his administration to engage in crony capitalism, and thereby increase the chances of real destabilization.

Therefore, he should leave these institutions alone. Let him focus his fire and fury at Senator Antonio Trillanes — but overreacting, rather than ignoring, Trillanes just bolsters the latter’s case.

Moreover, President Duterte’s continuing reliance on a corrupt and inefficient bureaucracy to deliver on infrastructure and public services is also a step backward. The lack of palpable movement in improvements in traffic and public transportation, and the sorry state of internet speed in the country probably account for President Duterte’s cut in popularity ratings.

Blaming the “Yellows” for everything — from the drug problem to plots against him — can only go so far politically. The job at hand for him is to focus on the economy, particularly to get Congress to pass critical economic reform bills in order to generate jobs, raise government revenue, improve transportation and telecommunication services, and increase food production. If he does so, it will be more like three steps forward, rather than two steps forward and one step back.

 

Calixto V. Chikiamco is a board director of the Institute for Development and Econometric Analysis.

idea.introspective@gmail.com

www.idea.org.ph

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