Aquino's first challenge: Arroyo
By Jennee Grace U Rubrico
MANILA - When Philippine President Gloria Macapagal-Arroyo steps down next month after nine years in office, the scandal-plagued leader will soon find herself on the political and possibly legal defensive. President-elect Benigno "Noynoy" Aquino ran partially on a clean governance vow to prosecute her administration's alleged crimes. Voters who overwhelmingly elected him earlier this month will expect prompt justice.
How he calibrates politicized law suits with forward-looking economic policies will be pivotal to his government's early success. Political analysts note that Arroyo is still a powerful force after winning a congressional seat in her home province and with sway over a large parliamentary voting bloc. She is expected to vie for the powerful house speaker position in the new parliament.
In an April report, GlobalSource Partners Inc, a local research firm, said that because Aquino campaigned on prosecuting Arroyo, "he may find it hard to push through with fiscal and economic reforms".
Aquino will need strong legislative support "to get the government running and put the economy on track" and he will need to use all "the tools at the disposal of the presidency to navigate through transaction-driven Philippine politics to take control and neutralize, co-opt, or cooperate with the forces aligned with the [Arroyo] administration," according to the report.
It added: "Failure to do so skillfully, Aquino and the country may end up in a stalemate, meaning lost years for the economy moving forward as it locks horns with congress."
Although Aquino won the presidency by a large margin over the second running candidate, his Liberal Party will be a minority in both congressional chambers. His party won just 45 seats in the House of Representatives, much less than the 107 controlled by Arroyo's Lakas-KAMPI-CMD coalition. In the senate, Aquino's party only has four representatives in a full complement of 23.
Donald Dee, vice chairman of the Philippine Chamber of Commerce and Industry, the country's largest business organization, is optimistic about Aquino's reform prospects. He believes that the early concession by Senator Manuel Villar, the second running candidate in the presidential race, and his move to publicly congratulate Aquino signaled a willingness to cooperate with the new government. Villar ran independent of Arroyo, but many believed he was her preferred candidate.
"I think that a lot of people who were not really supportive of [Aquino] are willing to give him a chance to prove them wrong," said Dee. "However, the next actions, policy direction-wise, in the next 100 days will be important to see not only if he can get the executive and legislative to work together, but also in convincing people to work together in achieving unity in the country."
Judging by Aquino's modest record in the senate, where critics say he championed few important laws, it's not immediately apparent he has the political skills to build such a consensus.
Aquino will also face "the challenge of changing his 12 years of non-performance in congress", said Clarita Carlos, a political science professor at the University of the Philippines. The academic said Arroyo was "an exceptionally hard worker" but that the various corruption charges "diminished her effectiveness because there was no closure in all of them".
Arroyo's approval rating was at an all-time low of 14% in April, dooming the electoral bid of her party's anointed successor, the Harvard-educated Gilbert Teodoro. While Aquino will aim to differentiate his policies and leadership style, analysts say he would be wise to follow certain of Arroyo's economic leads. Those include fiscal and monetary policies that supported the country's fastest gross domestic product (GDP) growth in over 31 years in 2007, and an average annual economic growth rate of 4.9% during her nine-year term.
Dee identified Arroyo's infrastructure development drive as among her greatest achievements, including the construction of the Subic-Clark-Tarlac Expressway, a highway that linked three central Luzon areas to Manila, and the creation of the so-called Roll On/Roll Off system, a nautical highway that connects the country's three major islands and allows for faster transport of agricultural products.
But widespread corruption allegations took the shine off those accomplishments. Arroyo survived four different impeachment motions and was directly implicated in allegations that her husband, Jose Miguel Arroyo, diverted 300 million pesos (US$613,000) in campaign funds and contributions into a secret bank account. She was also accused of buying votes in the 2004 national elections using a Department of Agriculture fertilizer fund and of rigging the polls in her favor.
Her government also came under fire for accepting bribes in awarding a multi-million dollar broadband Internet project that would have wired the country's creaky and far-flung bureaucracy. Amid uproar, the project was eventually scrapped. While the allegations stirred the media and sustained calls for Arroyo's resignation, none led to evidence-based court convictions. Aquino will be expected to reopen certain of those cases and push to recapture allegedly pilfered state funds.
Federico Macaranas, former executive director of the Asian Institute of Management's Policy Center, said that the steady stream of corruption allegations against Arroyo substantially weakened the Philippine economy. The eVAT policy, the centerpiece of Arroyo's economic reform agenda, "helped attract foreign direct investors ostensibly" but not as much as it could have because of "the perception that graft and corruption is the pervasive factor debilitating the economy."
"The minimization of graft and corruption becomes the major challenge" for Aquino, he said. "He faces the legacy of cleaning up the image that the country is hopelessly ungovernable in terms of clean and honest leadership, showing [a new] way to the masses of people whose lives are made poorer by democratized graft," Macaranas said.
At the same time, Aquino will inherit a spiraling budget deficit that Arroyo failed to rein in despite raising taxes. Like many regional countries, the Philippines resorted to heavy fiscal pump priming to mitigate the negative impact of the US-triggered global economic crisis of 2008 and 2009. Arroyo's government posted a record budget deficit of 298.5 billion pesos last year, representing 3.9% of GDP.
Meanwhile, the revenue shortfall for the first four months of this year amounted to 131.6 billion pesos, or 45% of the full-year forecast. Despite all the state spending, unemployment and underemployment were a stubbornly high 7.5% and 19.1% respectively last year, according to official statistics. The lack of local employment opportunities drove more than one million Filipinos abroad in pursuit of work.
"We turn out college graduates who are hardly absorbed by the local economy and thus leave to form part of the diaspora. The most educated seek greener pastures abroad - indeed a policy of the POEA [Philippine Overseas Employment Agency] now is to send the less vulnerable to earn foreign exchange for the country," said Macaranas.
To address these and other economic challenges, Aquino will need strong parliamentary support for his various proposed reform initiatives. But with Arroyo's still strong pull in parliament, and the legal threats to her and her administration's legacy, she could play the spoiler to Aquino's political and economic success.
Jennee Grace U Rubricohas been a journalist for over 10 years.
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