New year, more hope?

Increases in toll rates, fares in MRT/LRT and other public transport, prices of food, etc. greet Filipinos in 2011 (Photo from Inquirer.net/Richard Reyes)

As a people, Filipinos are said to be optimistic even amid the direst economic situation. In fact, 93 percent of the population are hopeful of the new year, according to the latest survey of the Social Weather Stations (SWS). The survey results came amid unchanged data on job scarcity and poverty and unabated rise in cost of living.

Malacañang as expected was quick to interpret the survey results as another unmistakable indicator of the people’s trust in the Aquino administration, which a presidential spokesperson called “an engine of hope”. However, it must be pointed out that the first new year of a new administration is usually greeted with high optimism.

For instance, the December 2002 SWS survey showed an all-time high of 95 percent in hopefulness among Filipinos. The ouster of the Estrada administration through People Power 11 months before provided the context of such unprecedented national optimism. It is also noteworthy that Filipino optimism remains high even amid the most uncertain periods. In December 2008, for example, 92 percent of the population were still hopeful amid the massive retrenchment and economic dislocation triggered by the worst global recession since the 1930s.

Thus, when the Arroyo administration, which turned out to be more corrupt, oppressive, and anti-people than the one it replaced was at last over, the people could only have high expectations that things will now start to get better.

Exposing the “reformist” presidency

To be sure, the willingness of President Aquino, unlike his predecessor, to negotiate peace with Asia’s longest-running insurgency is something to look forward to this year. And certainly we have reason to be optimistic that if unrelenting political pressure is applied such as what happened in the case of the Morong 43, the Aquino administration may just address the injustices committed by the past regime.

But Aquino knows that the hopeful perception of Filipinos will quickly dissipate once promises of reforms are not met and the economic situation remains dismal.  This means new economic policies that reverse or correct the failed policies of the past must be put in place very soon. Unfortunately, reforms in this area leave a lot to be desired.

To illustrate, there were three policy issues that stood out in the first six months of the Aquino presidency which exposed the sort of programs and priorities of the new administration and whose impact may before long dampen Filipinos’ high optimism. These were the enactment of the P1.645-trillion 2011 national budget, Malacañang’s promotion of public-private partnership (PPP), and Aquino’s stand on the Hacienda Luisita agrarian dispute.

Debt-funded dole-out

Operating in a tight fiscal space, Aquino chose to fund a P21-billion dole-out program, in lieu of long-term and comprehensive social services, in his first national budget. Called Pantawid Pamilyang Pilipino Program (4Ps), the local version of the conditional cash transfer (CCT) scheme being promoted and bankrolled by World Bank and Asian Development Bank (ADB) loans in many countries (the 4Ps itself is being funded by $870 million worth of debt from the World Bank and the ADB), the program is expected to quickly benefit a portion of the poor and thus bolster grassroots support for the administration.

But at the same time, Aquino has increased payments for public debts by a whopping P81 billion, which easily comprised 78 percent of the total budget increase and 22 percent of his spending program (together with principal amortization, debt payments will eat up 39 percent of what Aquino is ready to spend this year). He also vetoed the proposal of Congress to cap government borrowings at 55 percent of the GDP thus assuring the continued depletion of public resources due to automatic debt servicing while substantially trimming the budget for state colleges and universities as well as public hospitals and specialty hospitals nationwide.

Think tank IBON Foundation has earlier estimated that payments for the CCT loans could reach around $1 billion, an amount which at current exchange rates is more than double of the total CCT funding and could have been used to build more schools and hospitals or hire more teachers and health workers.

PPP – protecting private profits

As his centerpiece economic program, Aquino has aggressively promoted PPPs to supposedly address the national infrastructure needs, spur development, and create jobs without adding pressure to the government’s fiscal woes (the 2010 budget gap is expected to hit P325 billion).

He organized a PPP summit last November where he announced that investors participating in his PPP projects will be protected from regulatory risks on top of having easier access to bank loans and speedier processing and the usual benefits such as guaranteed profit rates. Regulatory risk insurance requires government to compensate investors whose profits will be affected by intervention from regulatory bodies, Congress, or the courts. Aside from undermining the mandates of these independent bodies, the regulatory risk insurance will also likely be funded by foreign loans that will further aggravate the already heavy public debt burden.

In addition, the 300-percent increase in toll rates implemented starting this month by the South Luzon Expressway’s (SLEX) Malaysian operator as well as rate hikes in the North Luzon Expressway (NLEX) and the Subic-Clark-Tarlac Expressway (SCTEX), and the impending 100-percent increase in metro rail transit (MRT) fares all show how PPP projects directly burden the ordinary folk. There are demands for Aquino to exercise his executive power to stop these increases but doing so will undermine his PPP program and turn off the investors.

Hacienda Luisita and lack of land reform

But perhaps the biggest challenge to Aquino’s claim as a reformist President is in the area of genuine agrarian reform, specifically the just resolution of the longstanding unrest in his family-controlled Hacienda Luisita. He has refused to implement the 2005 decision of the Presidential Agrarian Reform Council (PARC) rescinding the stock distribution option (SDO) deal between his family and the hacienda farmers and farm workers.

Aquino, who justified the 2004 massacre of seven protesting Hacienda Luisita farm workers when he was still Tarlac congressman, continues to defend the SDO even as peasant groups, civil society organizations, and the Catholic church have all demanded that the control and ownership of Luisita lands be effectively transferred to farmers as a legal and moral imperative. Despite his obvious presidential authority to intervene in favor of the farmers, Aquino opted for a hands-off policy when his relatives again duped the farmers last August through a questionable compromise deal intended to keep the SDO scheme.

Independent estimates say that 75 percent of the Filipino poor live in the countryside while official data show that poverty incidence is highest among farmers (44 percent) and fishers (49 percent). Instead of championing genuine agrarian reform, Aquino has trumpeted the narrow and deceptive line of “Kung walang corrupt, walang mahirap”, concealing the fact that a great majority of Filipinos are poor because of a backward rural economy that is still heavily dominated by landlord families like Aquino’s.

Challenges and hopes

More challenging times await the people in 2011. Aside from the increases in toll rates; MRT/LRT, bus/jeepney/taxi fares; and food prices, oil prices are anticipated to again skyrocket as global prices threaten to breach the $100-mark anew. Officials have warned of possible water shortage and rotating brownouts similar to last year’s amid onerous utility rates even as Aquino vows to privatize more water and energy resources under his PPP initiative.

The fiscal deficit does not show any sign of abating despite the P500-million surplus posted in December and the high-profile campaign of revenue agencies to go after tax evaders and smugglers. This stokes fear that new and higher taxes as long demanded by foreign creditors led by the IMF-World Bank will come sooner than later.

Aquino plans to pursue poverty alleviation not within the framework of long-term development but within the context of a supposedly brand new counterinsurgency campaign called Oplan Bayanihan. The CCT dole-outs and foreign development aid will be used for this purpose. This distorts the concept of development work and the inalienable human right to decent living since addressing the structural roots of poverty, such as the lack of genuine agrarian reform, is sidelined in favor of short-term dole-outs and projects.

The victory of the Morong 43 notwithstanding, the systematic violation of human rights perpetrated by the state’s security forces continue under Aquino. Just last January 2, a local leader of the Kilusang Magbubukid ng Pilipinas (KMP) in Nueva Ecija was gunned down, bringing to 23 the total number of victims of extrajudicial killings under the new administration.

Still there is always a reason to be optimistic. But certainly, the people’s strongest hope lies not in the purportedly reformist disposition of the Aquino administration but in exercising their inherent right to demand that the government adhere to their aspirations of peace with social justice and long-term development anchored on wealth redistribution and the utmost respect for human rights. #

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