First the good news: In his penultimate State of the Nation Address, President Benigno Aquino 3rd wisely desisted from another lambasting of the Supreme Court’s unanimous and widely applauded decision declaring the Disbursement Acceleration Program unconstitutional for misdeclaring savings, transferring funds between branches of government, and making expenditures not in the national budget.
Besides not challenging the DAP ruling, Aquino did what he should have done instead of his illegal fund-juggling if he wanted to shift resources from appropriated items to unappropriated ones: ask Congress to pass a supplemental budget, something it would have done in past years, especially with billions of pesos earmarked for legislators who impeached and convicted then-Supreme Court Chief Justice Renato Corona.
President Aquino also waxed emotional, his voice sounding tearful when he declared that he would never betray the nation and the good name of his martyr father and democrat mother. That would win him a few rating points, except that the next satisfaction, approval and trust surveys won’t be done till late September.
By then, Monday’s SONA would have faded in the public mind, and Filipinos would instead be buckling down to face some undeniable realities.
Power interruptions will increase, both from typhoon disruptions and the lack of generating capacity. Plainly, Aquino’s instruction for Energy Secretary Jericho Petilla to consult with Congress and the Energy Regulatory Commission means no major capacity will be in place in the next two years.
Rice prices may moderate somewhat with the President’s admission that the Philippines is not self-sufficient in the staple after two years of claiming so. Aquino listed 2.3 million tons of actual or authorized imports: half a million last November, 800,000 in February, 500,000 approved this month, plus another half-million authorized.
That is the same amount as the 2010 importations following the Ondoy and Pepeng devastation, which Aquino repeatedly lambasted as excessive and corrupt. With such a surge in purchases from the Philippines, the world’s largest rice importer, global prices this year will likely escalate. That cannot but put upward pressure on local grain costs.
A further issue affecting food are the disruptions in cargo hauling at Manila ports since the city government’s truck ban in March. No word on this or the Bureau of Customs deadline for importers’ accreditation tomorrow. If that ban is enforced, imports would stop for perhaps half up to two-thirds of the country’s 15,000 businesses still lacking accreditation due to massive red tape. Food and other prices would jump again.
Crime and conflict remain worrisome
Regarding crime, it was of course unrealistic to expect President Aquino to admit that the Philippine National Police had grossly underreported crime in recent years, leading to investigations and suspensions of PNP officials over bogus data.
As noted in this column last Friday (“Aquino’s SONA: Winning back public support”), corrected data showed an 18 percent surge in crime in January-May from the same period last year, with the trend pointing to more than half a million incidents this year — nearly double the 2010 crime level.
So the SONA’s anecdotal claims of policing gains don’t count much. Rather, there is need not only for an upgraded and intensified law enforcement campaign, but also truthful tabulation and reporting of crime incidents. Worryingly, Aquino presented none of that on Monday. Let’s hope Interior and Local Government Secretary Mar Roxas will truly address the grave crime situation.
Conflict may well intensify in Mindanao. Aquino’s plea for more time to craft a Bangsamoro Basic Law measure points to continued disagreement with the Moro Islamic Liberation Front on the BBL. That means the peace accords signed with much fanfare are turning out to be anything but iron-clad agreements.
That can only make the MILF wonder if it can rely on Aquino to deliver on the deals. Add to that the previous objections raised by the Moro National Liberation Front and the Organization of Islamic Cooperation backing it. If hostilities reignite after over a decade of ceasefire, originally forged by then-President Gloria Arroyo, Aquino would face both MILF and MNLF fighters, plus an OIC unhappy with his disregard for past peace pacts.
Former president Fidel Ramos, who concluded the 1996 Final Peace Agreement with the MNLF, believes the BBL would not be enacted before Aquino steps down in mid-2016. If he fails to deliver on legislation that substantially implements the Bangsamoro agreements he so publicly extolled, then the MILF cannot but conclude that he is not a leader whose word they can bank on. The peace process might then have to wait till the next government. That goes for the communist insurgency as well.
Slowing economy, stubborn poverty
Economic growth was already slowing in the first quarter, so it was no surprise that President Aquino did not say much about soaring gross domestic product. The slowdown may continue, especially with interest rates due to rise as the Bangko Sentral tries to curb inflation.
Moreover, the publication of rising self-rated poverty (SRP) on the very day of the SONA may have given him pause, to avoid fueling more criticism about growth doing little for the poor. The late-June Social Weather Stations poll showed that Filipinos who said they were poor rose by two percentage points to 55 percent. Last reached in September, that SRP was the highest under Aquino, and even higher than the levels of 2009, when GDP growth crawled to 0.9 percent. What’s worse, SRP in Visayas and Mindanao of 74 and 71 percent, respectively, are the highest in more than a decade.
Unemployment has stayed between 6.5 and 7.5 percent throughout the Aquino years, partly explaining the minimal reduction in official poverty incidence between 2009 and 2012. The Philippine Statistics Authority contends that poverty has falled three percentage points to 19 percent between early 2012 and early 2013, but inexplicably, Aquino did not trumpet the data in the SONA.
In the first quarter GDP slowdown, four job-generating items saw markedly lower growth: agriculture, probably due to Yolanda’s damage and the coconut infestation, government consumption spending, fixed capital formation, and construction. And as the 2016 elections near, investors may wait and see before committing capital, further slowing growth. And if politics gets more tense, businesses and consumers may hold on to their cash sooner.
In Aquino’s last two years and beyond, better be ready for anything.