Examining the future of the Philippines

FOR a third time, we have the honor of having Steven Rood, The Asia Foundation‘s country representative in the Philippines, as a guest blogger. Here he shares what transpired during a recent conference on the Philippines held in Washington, D.C. where Filipino and American speakers discussed issues about the country’s economy, politics, governance, and reforms in the military. A second part coming out next week will tackle Philippine-U.S. relations and managing the country’s internal conflict.

From Washington: Examining the Future of the Philippines

On April 7 and 8, an important conference on the Philippines was held in Washington, D.C., titled “Can the Philippines Break Out of its Affliction? Prospects for Democratic Governance, Economic Development, and Philippine-U.S. Relations,” organized by Johns Hopkins University School of Advanced International Studies (SAIS) Southeast Asia Studies Program and The Asia Foundation, with generous support from Exxon-Mobil Corporation.

This program was a chance to focus attention in Washington on the Philippines, and it was occasioned by the visiting professorship at SAIS of Noel Morada, immediate past chair of the Political Science Department at the University of the Philippines.

The first panel was “The Philippine Economy: How Can the Philippines Sustain Economic Growth and Development.” Brett Decker, vice president of the Export-Import Bank, acknowledged the recent good macroeconomic figures in the Philippines, but noted that economic success was not diversified enough (being focused on outsourcing, semiconductors, and real estate). A consumer-led economy fueled by remittances does not seem to be having a wider impact, particularly given the fact that poverty seems to have increased from 2003 to 2006 despite growth in GDP.

Felipe Medalla, professor at the School of Economics, University of the Philippines, and former director general of the National Economic Development Authority, asserted that the GDP growth figures (7.3 percent in 2007) were probably overstated by 2 percent. He argued that the National Statistical Coordination Board was under-resourced, so that the national accounts they produce are inconsistent with other data. Medalla, for all his critical stance, advised against any “extra-constitutional” change before the end of President Arroyo’s term in 2010, and advocated a focus on education.

Both speakers stressed the importance of better governance to reassure investors, and to help economic growth reduce poverty. Panel Chair Veronique Salze-Lozac’h, regional economic director for The Asia Foundation raised the possibility that local governments could provide better governance for their local economies, and that small and medium enterprises could be the basic constituency for a better business climate at the local level.

As Chair of Panel II: “Transforming Philippine Politics: How Can the Philippines Get Democratic Good Governance?,” I began by discussing Social Weather Stations statistics about Philippine public opinion. The first chart, on the net satisfaction ratings of Presidents from Corazon Aquino to Gloria Macapagal-Arroyo, which showed that President Arroyo never had the “honeymoon” of high popularity that other presidents had at the beginning of their tenure in office, and that not only was she the first president with negative ratings, she has also been mired at that level since 2004. The second charts expected changes in the quality of life in the next 12 months. While the chart shows that Filipinos are generally optimistic, I said I expected this optimism to fade in the face of the current rice price and supply problems. Paul Hutchcroft, professor of political science at the University of Washington, spoke mostly from his widely circulated “Arroyo Imbroglio.”

His argument is that stronger political parties are crucial to better governance, and that relatively small changes — such as a pre-printed ballot so that voters don’t have to write in dozens of names, or having the President and Vice President run as a bloc instead of individually — would be helpful in starting the long process of reform. Alex Magno, professor of political science at the University of the Philippines, spoke from an unpublished paper, “2010: Controlling the Center of the Board.” His striking prediction was that if there is a consensus among financiers of political candidates, there would be a lopsided win for the consensus candidate, but if not we could have many candidates winning 15 to 20 percent of the vote, with resulting instability. I ended the session by quoting from Magno’s paper, “Gloria Macapagal-Arroyo remains the single most important player defining the 2010 electoral succession,” and pointed out that the entire discussion from both the panel and the audience assumed that President Arroyo would stay in power in 2010 and then step down (an assumption that is often disputed in political discourse in Manila).

The room filled up for lunch, since Ifzal Ali, chief economist of the Asian Development Bank, did a briefing on the recently published Asian Development Outlook 2008. Besides discussing the overall analysis in the Outlook, he pointed out that there had been an unexpectedly rapid rise in inflation throughout Asia, due to such things as food price increases and bottlenecks caused by rapid growth. When asked from the audience about the Philippines particularly, he referred to the ADB’s new publication, Philippines: Critical Development Constraints (December 2007).

In Panel III, “Is Military Reform Possible?,” Colonel Gregorio Catapang, a well-known and sometimes controversial advocate of reforming the Armed Forces of the Philippines (AFP) and currently the Chief of the Program Development and Administrative Staff, Philippine Defense Reform Office of the Department of National Defense, outlined the current Philippine Defense Reform Program. Catapang said military reform would reduce military adventurism, and ended by saying that the institutionalization of reform would require updating the National Defense Act, which dates to 1935.

From the American side, Colonel Desmond Walton began by saying that weak or failed states are a threat to American interests, and when the United States began directly providing tactical types of anti-terrorism assistance (e.g., body armor, helicopter spare parts), it became clear that the problem was more systemic than merely lack of logistics. He ended his presentation by stating that the AFP was willing to admit they needed help, whereas other armed forces in the region might be reluctant to admit their needs. Ed Ross, who now has his own consulting firm after a career in the military and the Department of Defense, likened the Philippine Defense Reform Program to “trying to fix a car going 90 miles an hour while drivers change every 2 hours.”

Audience members repeatedly raised the issue of human rights, which panel chair SAIS Professor William Wise had called part of the “software” of defense reform. Walton said there could be a connection between the large drop in extrajudicial killings between 2006 and 2007 and the training that all squad leaders in the Philippine Army received in 2007 on formal leadership training. Ross said both Defense and State view the issue of human rights abuses as threatening to undermine the U.S’s entire policy in the Philippines, and a constant refrain in interaction with the AFP is to urge them to step away from such practices (and be accountable for past abuses).

(This piece originally appeared on The Asia Foundation website.)