June 24, 2019 | 12:20 am
Introspective By Romeo L. Bernardo
I am pleased to share with readers the political section of a primarily macroeconomic and financial quarterly report my colleague, Christine Tang, and I wrote last month for GlobalSource Partners (globalsourcepartners.com). GlobalSource Partners is a New York-based network of international analysts whose client subscribers are mostly international banks and asset managers.
And so the people have spoken — the final electoral tally showed rousing support for candidates allied with President Rodrigo Durterte at both local and national levels.
Hope and fear accompany the results, which many have taken as a referendum on the highly popular President and his policies. Amidst fears that the President’s stronger hold on power would embolden him to ride roughshod over opposition to his policies, there are hopes that the reform window opened up by a more cooperative Senate would strengthen the administration’s resolve not only to speed up implementation of its programs, especially upgrading infrastructure, but also push for longstanding proposals aimed at increasing the economy’s competitiveness and attractiveness to foreign investments. (See table above.)
The fears on the political front are that the President, in line with his rhetoric, would doggedly carry out his extreme measures for achieving law and order to the end, and, true to his campaign promise, revive his proposal to shift to a federal form of government. In the event, the latter endeavor — involving a complex and lengthy process of amending the Constitution — would most certainly dominate the legislative agenda, leaving Congress little time and energy for other priority reforms. In this regard, worriers fret that the incoming Senate has only four members in the minority bloc (one of whom is in jail) and two “independents”; seven votes are needed to block a proposal for charter change.
On the economic front, there are fears of more populist measures slipping through, as well as mid-stream rules changes for long-term infrastructure contracts. An example of the former that has made the news lately is the proposal, nearing approval in Congress, requiring security of tenure for seasonal hires that businesses argue would raise the cost of labor. An example of the latter is the ongoing Department of Justice review of existing PPP (Public-Private Partnership) contracts initiated by the President, starting with the MWSS (Metropolitan Waterworks and Sewerage System) water concession agreements with two of the country’s largest conglomerates.
Countering these fears is the hope that Finance Secretary
Carlos Dominguez, the head of the economic team who appears to have the
President’s complete trust, would prevail upon him to follow
economically sound policies, including abandoning proposals for
federalism which Secretary Dominguez publicly criticized as a fiscal
nightmare. In light of the accolades heaped at the administration’s
economic reforms following S&P’s decision to upgrade the sovereign
credit rating, the more optimistic hope is that the President would
instead use his abundant political capital to forcefully back his
economic team’s reform program, starting with the remaining packages of
the tax reform program. Considering that the reform window is a narrow
one, one to one-and-a-half years, having the President himself champion
the reforms would ensure speedier passage and less opportunity costs for
the economy from the uncertainties associated with rules changes.
Should hope trump fear or the other way around? While it is quite impossible to read this President’s mind, it seems to us that it is not unreasonable to let hope have the edge over fear. After all, politically speaking, whatever the President’s plans are for ensuring effective succession planning in 2022, he would surely have his two decades-long Davao experience in mind and grasp the necessity of having a healthily growing economy to keep strong public support and dissuade challenges. We expect him to spell out his legislative agenda at his State of the Nation Address in late July.
Moreover at this time, political pundits reading the tea leaves from the outcome of the senatorial race have noticed how: 1. Senator Grace Poe, who led the race the first time she ran, has slipped to the second place; 2. the top spot has been taken by Senator Cynthia Villar, the wife of country’s richest man, Manuel Villar, a former House Speaker and Senate President who ran and lost to Benigno Aquino III in the presidential elections of 2010; 3. how unlike her husband, the lady senator does not seem to harbor ambitions for higher office; and, 4. in her speech during the proclamation of winners for the Senate, Senator Villar thanked not only the President but also his strong-willed daughter and mayor of Davao City, Sara Durterte, who was instrumental in forming a coalition of well-funded national and local parties under the banner of her own party, Hugpong ng Pagbabago, which endorsed nine of the 12 winning senatorial candidates, including Senator Villar herself.
Their conclusion? Rather than Senator Villar, the tea leaves seem to point to Mayor Duterte as the lady to watch. And that scenario should not trouble the President.
As a post script, allow me to add two things that happened since we came out with this report last month.
1. A cabinet official confided that he thinks the odds for Federalism taking off are next to nil;
2. It is likely too early to say who will
be the “Presidentiables’ in 2022, much less who will prevail. I am
reminded that “necropolitics” defined presidential election outcomes on
more than one occasion in the past. Another lesson from election
history, unlike elsewhere, here it is not the early bird who catches the
worm. It is the second mouse who gets the cheese.
Finally, as a wise or wisened man said: “The Presidency is a matter of destiny.”Romeo L. Bernardo was finance undersecretary during the Cory Aquino and Fidel Ramos administrations.
romeo.lopez.bernardo@gmail.com
