Philippines PM Aquino’s reformism hits a dead end

Unlike his scandal-plagued predecessor Gloria Macapagal-Arroyo — who left office as the most unpopular post-Marcos president — it has long seemed that Benigno S. ‘Noynoy’ Aquino III, could do no wrong. Aquino promised to take the ‘straight path’ (matuwid na daan) to clean up corruption. This, he said, would also eradicate poverty.

Aquino’s reforms were, at first, very successful. Economic growth accelerated to the highest among ASEAN nations. Corrupt politicians were held accountable — Arroyo was charged with plunder while Aquino’s congressional allies removed Supreme Court Chief Justice Renato Corona, a ‘midnight’ Arroyo appointee accused of obstructing Aquino’s anti-corruption drive. More people paid their taxes after a Bureau of Internal Revenue crackdown. And pro-administration candidates dominated mid-term congressional elections in 2013.

Credit rating agencies such as Fitch gave Aquino’s administration a vote of confidence as well, upping the country to investment grade. The Philippines steadily improved its ranking in Transparency International’s Corruption Perception Index, moving from 129th of 177 countries in 2011 to 105th in 2012 and to 94th last year. Aquino seemed to be moving fast along a ‘straight path’.

But over the past 12 months Aquino’s reform drive has run into a dead end.

In 2013, there were revelations that corrupt legislators employed fake non-governmental organisations (NGOs) set up by businesswoman Janet Lim-Napoles and others to divert pork barrel funds into their own pockets. After initial hesitation, Aquino — seeking to limit the outcry from his middle class base — agreed to abolish the Priority Development Assistance Fund (PDAF) that had been used to pay the fake NGOs.

Aquino was not initially blamed for this pork barrel scam — the president-appointed ombudsman indicted three opposition senators. But Aquino was accused of shielding his allies in Congress by limiting the Commission on Audit investigations of the scandal to before he took office in 2010. Aquino’s opponents also claimed that money had flowed to legislators to vote for Corona’s impeachment, trial and conviction.

In the absence of a strong party system, patronage has long been the only way for a president to ‘get things done’ in the Philippines. Fidel V. Ramos, generally considered the most successful reformist president before Aquino, was particularly adept at pork barrel spending to push through reforms.

Aquino’s artful concealment of the necessity for presidential pork was ‘outed’ when the Supreme Court ruled unanimously on 1 July this year that major components of the Disbursement Acceleration Program (DAP) — which Aquino defended as a necessary instrument to quickly disperse unspent funds from other programs to higher priority projects — were unconstitutional.

Aquino lashed out at the Supreme Court in his penultimate State of the Union address, leading to fears that he would try to impeach its members (including his newly appointed chief justice) or slash its budget. Aquino also hinted that he might push for constitutional change to allow him to run for a second term, raising old fears of Marcos-style continuismo (continuing indefinitely in office).

But his congressional allies abandoned him both on his challenge to the Supreme Court and his call for constitutional change. His poll ratings have dipped sharply and Aquino — accustomed to high levels of popularity — now faces political isolation as a lame duck president.

Philippine politics appears to have gone through yet another case of a popular leader brought low by cascading scandals and failed promises. Aquino himself admitted his pledge to clean up the Bureau of Customs had failed miserably and recently appointed a new Custom’s chief to try again.

But in Aquino’s case, the fall from grace is particularly striking given his narrative of ‘good governance’. Graft remains, and Aquino’s family continues to resist the court-ordered land redistribution of his family’s huge plantation Hacienda Luisita.

Growth in the Philippines remains profoundly unequal.

Under Aquino, the Philippines has experienced impressive macro-economic growth, fuelled by remittances from the 10 per cent of the country’s population working abroad — often in menial jobs — and business process-outsourcing, primarily call centres that are largely foreign owned and can easily be moved to another country. While the service sector has boomed, agriculture — the economy’s biggest sector — has performed dismally.

Last year, economist Cielito Habito calculated that the growth in the aggregate wealth of the country’s 40 richest families in 2011 was equivalent to over three quarters of the increase in the country’s GDP that year . Unemployment, already the highest in ASEAN, has risen during much of Aquino’s presidency, while poverty has hardly dipped. Self-reported poverty has actually risen. Aquino has poured money into a Brazilian-style conditional cash transfer scheme that has met with some success but critics say he should concentrate instead on universal social services and creating jobs. The administration’s list of major completed infrastructural projects is also lean.

Vice President Jejomar Binay (who defeated Aquino’s vice presidential bet in 2010; presidential and vice-presidential candidates are elected separately in the Philippines) is widely seen as a leading contender in the 2016 presidential election — although his bid has been tarnished by a plunder case (for a supposedly overpriced parking garage said to involve payoffs) recently filed against him, which his supporters claim was instigated by Aquino allies.

Binay became a national political figure through his promotion of social welfare when mayor of Makati, Metro Manila’s business district. This suggests that Aquino’s inability to stick to the ‘straight path’ may have shifted the focus of the next campaign to the plight of the country’s poor who lack access to decent jobs, adequate education, health care and other social services.

Mark R Thompson is Director at the Southeast Asia Research Centre (SEARC) and Professor of Politics at the Department of Asian and International Studies, City University of Hong Kong.