Esquire (July) – The State of the Nation
When I was asked to give my thoughts on the state of affairs in the country today, I knew it would be a formidable task. Every new administration is elected by the people in the hope of a better future. We would do well to examine how far we have come to achieving the dreams that we had aspired to four years ago. Some believe we have come far. Others would disagree. What is inevitable though, is that our political cycle will bring a new leadership two years from now.
THE POLITICAL INSTITUTIONS
Any societal system, be it political, financial or otherwise, depends on its institutions in order that it be stable, functional and efficient. These institutions form the bedrock upon which any system functions and therefore they must be robust — and strong in the face of all the challenges they will inevitably face.
The State depends on its political system to provide a framework within which the citizenry can build their lives and within which the task of nation building can prosper. Events in the previous years have affected our political institutions in many profound and important ways.
The impeachment of Chief Justice Corona called into question the independence of the Judiciary. It would seem that the equality between the three branches of Government — the Judiciary, the Legislature and the Executive, upon which all our principles of governance derive, appear to many to no longer apply.
The so-called PDAF scandal, which has turned into a witch-hunt aimed primarily at legislators, has not only severely impaired the work of Congress but also damaged Congress as an institution. Legislators, whether guilty or not, have now all been made suspect in the public’s eye. Members of Congress spend their time defending themselves against the multitude accusations made against them, rather than fulfilling their primary duties of crafting legislation and exercising oversight over government entities.
The legality of the Disbursement Acceleration Program [DAP] has also brought suspicion upon high officials in the President’s official family. This is certainly damaging – especially for an Administration that claims to be following the “Tuwid na Daan” principles of government. Even the Executive’s credibility is steadily being corroded.
It can clearly be seen that all three pillars of our government, the institutions on which we are dependent upon for the orderly and progressive conduct of governance have not only been damaged but, in many ways, have been brought to a standstill.
We cannot move forward until we repair the damage that has been inflicted. We need to rebuild these institutions so that they may once more fulfill their function of being the bedrock upon which we build a vibrant, engaged and unified society.
How do we now build back our government so it is strong and dignified … so that it can once again provide vision and leadership to the country? We must allow those institutions to fulfill their functions and, like Caesar’s wife, be seen to be fulfilling those functions.
In the matter of the PDAF scandals, let us allow the Department of Justice [DOJ] to finalise their investigations and once completed, forward their findings and recommendations to the Courts for them to dispose of. We should give the Courts a chance to weigh the evidence presented and, in the end, punish those who are deemed culpable and clear those who are deemed innocent.
With regard to the legality of the DAP, let us allow the Supreme Court to decide on the matter, without interference or influence from any quarter, thus restoring to some measure its independence and its position as a co-equal branch of government.
The Executive, for its part, must abide by the decisions of an untrammelled High Court and should be rigorous in its efforts to put right any weaknesses and abuses within its own ranks. The President must take the lead in punishing those that have strayed from the “Daang Matuwid” path. The much needed reforms should start from within the Executive so that these nefarious practices are neither tolerated nor possible.
I am firm in my belief that should we do this, then our sacred institutions may be restored as will, in time, the people’s trust in its leaders.
Our economy has shown growth because of the strength of consumer spending brought about by the large remittances from our overseas work force. This has triggered vigorous private construction projects which have, in turn, pulled up the finance and manufacturing sectors.
In the face of this as well as large government expenditures on social programs — particularly the program on conditional cash transfers, [CCT], poverty levels remain high at 19.7% (NSCB). Unemployment per latest NSO data is 7.5% with underemployment at 19.5%. The SWS findings put unemployment at 27.5% — which, sad to say, represents 12 million workers. Clearly, with CCT expenditures at more than Php 60 billion, we have gone past the point of diminishing returns especially with the high level of administrative cost and leakages. Furthermore, since it is a transfer payment, the CCT has ingrained a “dole-out” mentality among our poor. Worse, it is now being used as a political tool.
Our GDP growth of around 7% has not been inclusive. Growth in our agricultural sector has been dismal at around 1%. This accounts for the persistent high poverty rates because 70% of our poor are from the rural and agricultural areas. There is an immediate need to overhaul the Department of Agriculture [DA] in the light of this poor record in agricultural sector growth, the low levels of farmer and fisherfolk incomes, the corruption in the National Food Authority [NFA], the rice smuggling scandals and the DA involvement in the PDAF scandal.
The government must put in place support infrastructure for the agricultural sector by investing in irrigation (irrigation coverage today is less than it was in its peak in 1986), post-harvest facilities, farm to market roads, research and development [R&D] into new farming and fishing techniques and strategies, modern hybrid varieties as well as farm mechanization.
A credit system is needed for the provision of production loans for the inputs needed at the beginning of the season with possibly the provision of payment in produce after harvest.
Mangrove replanting and fish sanctuaries have been documented as tripling a fisherman’s daily catch. Mariculture is also seen by many to be the future for fisherfolk with rapidly diminishing fish stocks due to uncontrolled overfishing in our seas.
Government, in cooperation with international agencies such as the World Bank, ADB and IFC can encourage large Philippine corporations to make their business design more inclusive to make the poor part of their value chain (as suppliers, contractors, hired labor, and as clients and customers). As we have seen in India, Indonesia and Latin America. inclusive business operations have successfully improved the incomes and lowered the cost of living of the poor.
With the fiscal deficit at 1.9% of GDP, there is still fiscal space for more productive government spending, particularly in infrastructure. Our international reserves of about $80 billion (thanks again to OFW remittances and fast growing BPO and call center revenues) to guard against volatilities in imports and debt service, is way above prescribed levels. We must accelerate productive infrastructure spending to bring it to at least 5% of GDP (or about Php 600 billion) or higher.
Considering the better access of government to cheaper financing, we should fast track spending on potential PPP projects by undertaking the financing and construction of the project at the early stages and present the project for public bidding as the project is completed or at a more advanced stage where risks to the bidder will be seen to be more manageable.
We also need to generate more employment by encouraging greater investments in the country. We have one of the lowest levels of Foreign Direct Investments [FDI] in ASEAN. This indicates our low desirability as a direct investment destination.
The problems facing prospective investors are our high cost and unreliability of power supplies, poor infrastructure, inflexible labour policies and instability in our financial institutions, to name a few. Again, government must refocus its public investment plan to improve the situation in our basic infrastructure (especially transport and communication) as well as build up traditional power production capacity together with identifying new power sources from geothermal, hydro, solar including other so-called alternative sources. Reforms in our financial institutions are called for and a stable and long-term policy toward financial activities in the country must be adopted.
There is a need to train our local government units [LGUs] to support national efforts through the training of farmers and non-farm workers. They must also be more open to legitimate business investors who have identified good projects in their areas. By way of example, we should learn from the proposed Hanjin shipyard in Cagayan de Oro as well as the XStrata Mine (US$ 6 billion investment) in South Cotabato, both of which would have hired at least 5,000 workers. Unfortunately, these prospective investors pulled out because of prohibitive bureaucratic requirements and political interference.
DISASTER RESILIENCE AND PREPAREDNESS
Government must undertake a widespread program to address the increasing threat of natural calamities as was seen by the overwhelming destruction wrought by typhoon Yolanda. We must simplify, waive or otherwise reconfigure government procurement procedures that induce bureaucratic paralysis, for emergency cases such as disaster recovery.
Our country is composed of many fragile eco-systems. Recognizing this, we must undertake massive reforestation of our mountains and construct water catchments to mitigate the onset of flooding. We must replant our mangroves and restore the coral reefs and designate fish sanctuaries in cooperation with local communities to preserve our islands’ farm and marine productivity.
Massive urban re-planning has become an imperative in the light of recurring floods and other natural disasters, especially because 65% of the Philippine population now live in urbanized areas. Green building practices must be instituted to reduce levels of pollution and the effects of urban centers on the environment. We should further expand and improve our urban transport systems to lessen our dependence on private and public vehicles, with their damaging internal combustion engines spewing carbon dioxide and other greenhouse gases into our atmosphere.
In the last few years, our foreign policy has been dominated by our worsening relations with China and the increasingly belligerent rhetoric from both sides of the West Philippine Sea. These last years, the Philippines has made a staunch and clear declaration of our position concerning the disputing claims of the two countries. The policy of conflict and isolation has served its purpose.
With our national position well known to all, it is now time to find a way forward to resolve these issues and move from further posturing and confrontation to one of engagement, eventual resolution and hopefully even cooperation. We must engage China in substantive discussions on the problem (especially since they have declared their intention not to participate in or recognize any international arbitration).
Being in the middle of and a somewhat unwilling participant in the redrawing of the global power structure, I believe that the key concept for the Philippines should be one of balance.
Because of the emergence of China as a global economic (and to a lesser extent, military) power and because of the continuing desire of the United States to maintain a strong presence in Asia, it is not surprising that both countries have very active agendas in the Asia-Pacific region.
For smaller nations such as the Philippines to align itself with one side or the other does not bring any advantage to our position as a sovereign nation in the international community. Therefore, since the Cold War is over, such a simplistic approach is no longer relevant considering the much more complicated forces that all nations are subject to in the modern world. The key guide in understanding such a situation is a clear understanding of our national interest.
It cannot possibly be in our national interest for us to have such poor relations with a large and powerful neighbor so close to our shores. We must, of course, defend our national sovereignty by any means against any threat. We must defend with force, if need be. However, to actively seek such a conflict is misguided and not the right path forward.
We must exhaust all possible diplomatic means before considering any other options. We should explore each and every line of communication and seek to resolve the points of disagreement. Since the disagreement is between China and the Philippines, then it is only between our two countries that an agreement can ever be reached. This can only happen as a result of bilateral talks between China and the Philippines. Only when China and the Philippines are signatories to such an agreement will a true and lasting solution be found.
It is clearly time for us to seriously re-examine the part played in our political life of partisan politics. We must always separate partisan political interest from the national interest. They are almost never compatible.
In my view, it must be clear to all in government and to the people that the promotion of the national interest is the primary concern of all of us in public service.
Our nation cannot prosper if we are factionalized; if we are fractured. It must be the aim of all in the political leadership to unite the nation behind a vision for our country, fueled by an abiding nationalism and love of country.
I see no lack of that nationalism and love of country in average Filipinos. I fear that it is in the ranks of our elected officials and of others in high office that there has been a weakening in resolve and commitment to that principle.
The exercise of leadership must be one that seeks to galvanise the entire country behind a common goal, a common vision, a shared ideal for the Philippines. Only then will we be able to muster the strengths, talents and industry that can be richly found in our countrymen and apply it to the service of nation building.
Partisan politics has its place in our system of government. In my view, it is there to allow the expression of different ideas and advocacies to be expressed in public debate. Then, as the political cycle comes around, the voters can decide which of the different ideas and principles that have been espoused they favour, vote to support them, and thus create a consensus as expressed by the majority.
Once the electoral process is over, the elected political leadership must rally a unified citizenry in order to work to achieve the goals of the manifested consensus.
We cannot allow the interests of partisan politics to divide and fragment the country into political factions defined by political colour that continue to act solely for partisan interests. We have headed down that road before and this is why our progress is stalled.
Political forces are working at cross-purposes rather than in service of a shared vision. It is a mindset that must change.
Only when we have begun to do the things that directly address the structural deficiencies in our economy and the gridlock of political life can we say that the country is strong and that the state of the nation is sound.