Our Problems Do Not End With COVID

”May my words be tender and sweet because I may have to eat them “ – Late U.S. Sen. John McCain.

After months of whistling in the dark, NEDA is finally coming clean on the economy. NEDA now projects we could be down by 6% this year. While still on the sunny side – the IMF foresees up to an 8% contraction with one of the slowest prospects of recovery – the new NEDA assessment is closer to what businesses and the people are experiencing, a painful and grinding slow down.

In May 2020 NEDA chief Karl Chua predicted: “COVID is just a temporary setback. However, our situation is better than others and we are more prepared to recover quickly. We have enough funds for social amelioration and COVID”. DBCC chair Wendel Avisado in chorus: “We project 0.8 -1.0% GDP contraction at worst”. So much for economic modeling.

To be fair, our economic team was never in charge of the IATF quarantine prescriptions which were dominated by our “health experts”. Sec. Dominguez was occasionally brought out at the weekly televised briefings but in truth the President was uninterested in the economics of the crisis.

Meantime our neighbors moved on with a measured balance of health protocols and economic stimulus.

Comparative Table (World Bank)


*2019 Numbers

The table shows:

  1. The Philippines spent the least for stimulus in absolute terms, as a percent of GDP and per capita; among our neighbors. We can afford to do more based on our healthy deficit-to-GDP and debt-to-GDP ratios but choose not to. This explains why we are projected to be the slowest to recover together with India, Brazil and Argentina.

2. Vietnam with a 25% smaller economy spent 23% more on stimulus than we did in absolute terms and 38% more per capita.

3.  Thailand and the Philippines have the same credit rating yet the former outspent us by 38%. If we were to match Thailand’s stimulus as a ratio to GDP, we would spend Php 2 trillion more than we did. This figure is 12 times the PHP 165 billion approved under Bayanihan 2.

4. A higher stimulus would not have affected our credit rating thanks to our prudent fiscal management. Understand that credit ratings are a relative guide, not an absolute one. They measure the financial standing of a country compared to others, they are not a stand-alone metric. Our neighbors’ ratings have not been downgraded despite their more aggressive spending. The message is it is fine to borrow as long as the maturities are spaced (10-30 years is not uncommon) and the money is well and honestly spent. Japan’s debt is 2.5x its GDP yet it has a credit rating of A+ largely because its debt is largely financed by local savings. 

After months of silence, our economic team is now pushing back against the IATF health protocols. The military members in the task force led by DND Sec. Lorenzana are finally listening if not Duque & Co. As a result social distancing measures are now being eased for public transportation, tourism and restaurants. Even the President who has been absent on the economy is now appreciating the gravity of the situation and its impact on peace and order which remains his primary concern. We still have a ways to go as other countries experience the second wave of the virus and a safe, affordable, and universal vaccine is delayed, now at least a year away. Two major clinical trials had to be suspended when symptoms emerged but have since restarted. We are not ready for the logistics and sub-zero storage needed for the over 20 million vaccines the President wants . Duterte is still keen on a Russian or Chinese vaccine which if unsafe could kill and maim more Filipinos than COVID.

The combination of a conservative economic stimulus and a failed health program to combat COVID has gotten us to where we are but they are not the only obstacles. There is a bigger problem that starts with a C and it is not COVID. It is called Corruption. 

This Government is not only being stolen from under us. Filipinos are being held hostage by the criminals in authority which is preventing the release of critical funding for health, education, social relief and infrastructure. The Philippine Red Cross stopped testing because it had an unpaid bill of some P1 billion from Philhealth. Next could be private hospitals denying treatment because of massive unsettled Philhealth bills; or Filipinos refusing to pay their Philhealth contributions because of denial of service; or, worse, Filipinos not paying taxes because of other undelivered functions. We are talking fiscal anarchy.

The President has admitted to being overwhelmed by the corruption so it is now open season. The biggest challenge to perpetrators is not incarceration but outlasting the news cycle as the highjacking in Bayanihan 1 was overran by the overpricing in the DOH which morphed into the Philhealth scandal which was replaced by the padding in the DPWH which moved to the “pastillas” scam in Immigration. Next could be the DepEd and other agencies with large pools of cash and few controls. There are reports of massive pork in the hastily passed 2021 Budget disguised as “Flood Control” projects and such. As the President said: “Customs and BIR, wala yan”. In the meantime drug addicts with half an ounce of “shabu” are shot in the back of the head in the dead of night.

The corruption will get worse as we approach the May 2022 elections. There is an urgency to raise election money. The Bayanihan bills loosened the fiscal accountability of Government officials making it easier to by-pass procurement procedures. Government officials are anxious to enrich themselves before their windows close. In the stock market we see suspicious activity in small cap companies as their prices are reportedly manipulated for money laundering and political funding.

The road to a post-COVID recovery is also hampered by lack of a strategic vision. Vietnam is expected to grow by 3% this year while keeping COVID under control. This is the result of a multi-year strategy of building its exports and filling the supply chain left by China. Vietnamese exports grew by 16% p.a. in the last decade while the Philippines stagnated. In Jan-July 2020, Vietnam’s FDIs increased by $9 billion while ours fell by 33%. Vietnam has spent 8% of GDP on infra versus our 5%. Vietnam has been calibrating its currency to encourage exports and foreign investments such that it has been accused by the U.S. as a “currency manipulator”. That is the ultimate badge of honor. In the meantime our peso has been allowed to strengthen to our detriment. Vietnam has a credit rating of BB or four notches below ours but in a few years could well overtake us in the race for upper middle-income status. And that is with few Vietnamese speaking English. Just wait till that happens.

We are falling behind the rest of the world in innovation, education, manufacturing, agriculture, strategic thinking and governance; and are doing little about it. We can blame COVID but maybe we should start blaming ourselves. The virus was not the beginning of our problems nor will it be the end. It simply exposed the failings that were already there.

Build Back Better

The Q3 numbers should be out soon. I expect them to be better than end Q2 but worse than projected. Our economic managers predicted the economy would end the year down 4-5%. The latest forecasts from analysts now see us contracting by twice that rate. The IMF reports the Philippines together with India, Brazil and Argentina will be the slowest economies to recover. Christmas, I am afraid, will not be merry.

The Government is still struggling to balance COVID lives versus economic livelihoods, health versus jobs. The tragedy is we are behind on both counts. We have the double whammy of losing both lives AND jobs with no clear exit other than a vaccine.

The President has assured us a Russian or Chinese vaccine is on the way and volunteered to be the first to be inoculated. We recall how he also first offered to jet ski to the Spratleys when China invaded our territory. Let us hope, this time, the results are better.

Vaccines take years to be approved. To date there is no vaccine for the 100 year old Spanish flu or 20 year old HIV. Yet, on Aug.11 2020 or less than a year after the outbreak of COVID, Russia approved its Sputnik V vaccine. Like the satellite for which it is named, Russia wanted to be the first in the world to do so. Generally a vaccine undergoes a rigorous three phase trial involving thousands of people. At approval, Sputnik V just tested 76 people according to the NY Times.

Understand that, one, vaccines are not a cure, only a prevention; and, two, vaccines are to be administered to millions of healthy people, not to those already infected. The President has called for 20 million Filipinos to be vaccinated. Assuming one percent develop serious disabilities or death from an unsafe vaccine, we will have 200,000 Filipinos at risk. By comparison, less than 7,000 (or 2% of infections) have succumbed from COVID so the prevention could be 29 times worse than the disease. The Palace has said the vaccine will first be administered  to our soldiers, our front-liners, our elderly and our weak. If the vaccine is flawed, many of our military, doctors, nurses, and vulnerable will be gone; not to mention our very own President.

In a drive against dengue in 2016, hundreds of thousands of healthy Filipino children were vaccinated with Dengvoxia which subsequently was linked to severe disease. The program was halted but by then was too late. In 1976, 40 million people were vaccinated worldwide against swine flu. Many developed Guillain-Barre syndrome which causes temporary paralysis. Pre-mature inoculation of millions may prove a bigger problem than COVID. I just pray it is not compulsory.

Meantime our economy continues to sputter. After an initial surge, as in other countries we can expect to revert to the mean with the prospect of a second wave. Defaults in consumer and SME loans at a major bank are running at thrice the forecasts and climbing.

Our economic crisis has become a humanitarian crisis.The existential question used to be how do we save jobs? That question now is how do we save lives? What is the peso value of a human life, should fiscal responsibility outweigh feeding people? 

The analogy is of a patient in ICU: Should the priority be to save the patient and then worry about his diet and exercise regime later? Other nations have chosen to do just that, spend what it takes to save the economy, to buy out the COVID problem by strengthening and widening rather than withdrawing the social safety net. Fiscally, this has meant spending up to 50% of GDP in some instances and, monetarily, opening the floodgates of money at the risk of inflation. 

The House finally approved the 2021 Budget. Here are some notables: One, at P4.5 trillion the Budget is acknowledged even by the House economists to be short of what is needed to address our crisis but Congress is bowing to the guidance of our economic managers. The latter has chosen to wait out the crisis and keep its fiscal ammunition dry. The Budget is only some 7% higher in nominal terms and less than that in real terms compared to last year’s. 

Two, the Budget is replete with “flood control projects” apparently the new term for pork even as Speaker Velasco swears no such animal exists. At a time when droughts rather than floods are arguably the bigger concern, we wonder at our priorities.

Three, the Budget has allocated some P1.1 trillion or 24% of the Budget for infrastructure which are long in the making and even longer in the outcome. The Government’s record of executing BBB has been dismal. The DoTr alone reportedly has P 80 billion in unspent funds. Then there is the corruption. The President said the DPWH is ridden with graft. Philhealth officials were elated to hear this.

In contrast only P2.5 billion was budgeted to buy life-saving vaccines (the figure  has since been raised after being flagged by critics) and money for mental illness was halved to P600 million. This speaks to our budgetary process. I guess our Representatives were  too pre-occupied with containing flood waters to notice.

Our foreign exchange reserves are at record high, our peso has been the best performing in the region and foreign direct investments (FDIs) have ticked up; but these are the result of economic weakness not of strength. Our FX reserves are high not because our exports, tourism and remittances are up but because of increased public and private USD borrowings.

 Our peso is strong not because our economy is growing but because it is dying as reflected in low imports of capital goods .

Our FDIs grew not because of increased foreign investor interest but because multinationals have had to bring in dollars in to shore up their local balance sheets. The latter accounted for 61% of FDIs between Jan-July 2020.

Even the World Bank, that most careful of financial institutions, has advocated massive spending to save economies. The WB head Carmen Reinhart: “This is war and in a war governments finance their war expenditures however they can.”

The money is there, our credit lines are there, years of fiscal prudence allowed for this. Yet I can understand why our economic managers are reluctant to spend: There is no clear solution nor timeline to the health crisis, the vaccine is further out than we are led to believe, and social cash transfers end up in the pockets of Government officials. And then there is our credit-rating. It is a hard call to make. I personally would err on the side of the human condition.

There are measures Government can implement while avoiding relief distribution problems and budget deficits. One is the condonation of the CAR’s Agra loans which will positively impact an estimated 3 million destitute farmers. Two, the BSP could be more aggressive in monetary policy. Witness the U.S. Fed which believes price stability and full employment are its two mandates. Our BSP only sees the first, not the second. The PhilGuarantee program is still largely unused because of administrative hang-ups. The P75,000 minimum loan value means the really small businesses are excluded. Three, the BSP could weaken the peso to promote real FDIs, exports and help our OFWs. Four, Government could postpone some infra projects in favor of more immediate life-saving concerns. Five, defer some mandated contributions like Pag-Ibig and SSS and pass these on to workers. Lastly, use technology, private corporations, banks and remittance centers, and NGOs to reduce the leakages in the pay-out system. A recent survey showed only half of Bayanihan recipients received the second installment of cash transfers so even the existing Government pipeline is flawed.

Sadly we see few attempts by Government to actively address our humanitarian crisis even as other countries are going all in. “Build Back Better” is the new mantra of nations, that periods of turmoil are an occasion to be transformational, that there are opportunities in a crisis. We seem content to think small, satisfied with incremental gains when we should be bolder and more innovative. We need to take risks commensurate with the scale of our socio-economic holocaust.

Instead we are waiting for Godot.

Guys, Next Time Take Your Fight Outside

The issue has been resolved but bears recounting because it is yet another instance of the dysfunction in our politics and our institutions. It displayed how power can corrupt, how shameless our leaders have become even while professing to act in the name of the Filipino people. To paraphrase Michelle Obama power does not change who you are, it just reveals who you are.

I refer to the fight for Speakership of the House which has now been settled with one side scurrying away.

The Speaker is an important person. He is the leader of one of the four pillars of our so-called democracy together with the President, the Senate President and the Chief Justice of the Supreme Court. The Speaker is third in line to the Presidency.

The Speaker gets to do many cool things like banging his gavel but he also appoints the chairs of the House Committees where a lot of the back-room deals and pork get done. He decides on the content and timing of the House agenda like getting a Budget enacted. The latter is critical to the economic, health and educational recovery of this country. The 2021 Budget has been hostage pending agreement as who is the next Speaker.

Shortly after the elections of 2016, there was a “gentleman’s agreement” – is that an oxymoron among politicians? – brokered by the President between Alan Cayetano and Rep. Lord Velasco of Marinduque whereby the Speakership would be held by the former for the first 15 months and the latter for the following 21 months until the May 2022 elections. Mr. Cayetano was President Duterte’s failed running mate. Lord Velasco is the son of  Supreme Court Justice Presbiterio Velasco and was supposedly backed by Sara Duterte. The transition was to take place this October.

It appears Mr. Cayetano had a change of mind and declared any discussion take place after the Budget is passed. His opponents claim Cayetano and his allies have a vested interest in the financial goodies embedded in the Budget. Any change in the House leadership would  jeopardize this pork among which, it is claimed, are disproportionate allocations to Cayetano’s Taguig district and his key supporters. In a show of muscle, Cayetano allegedly removed Velasco supporters from critical House Committees.

To prevent any possibility of a “coup” while Congress was in session, Cayetano seemingly fast tracked the Budget process and suspended Congress until mid November. This prompted the Velasco group to “convene” outside of the Batasan where a supposed 186 out of 299 signed a resolution declaring the Speakership position vacant and electing Lord Velasco as the new Speaker. The Cayetano faction claimed the process was unconstitutional and that many of the same Congressmen also signed a manifesto supporting the Speaker. This only proves politicians can not only speak from both sides of their mouths, they can also sign with both their hands.

The President was huffed. This was an affront to the original agreement he mediated. The in-fighting was also holding up the Budget which his economic managers told him was crucial to the economy. Cayetano claimed he honored the agreement by resigning or, more exactly, offering to resign, but the majority of the House would not accept it. What has this world come to when there is no longer honor even among thieves?

The truth is the President could have settled the matter but he chose to let things stir. He may have been respectful of the separation of powers but this has never deterred him. He may have been torn between his loyalty to his former running mate and the demands of Sara, a known supporter of Velasco. Duterte  reportedly called both contenders to Malacanang after which he announced “may the best man win” which simply added to the murk. Alan and Lord continued to dig in their heels.

 Finally, in an unusual display, backed by DND Sec.Lorenzana on his side and members of all the armed branches in full regalia at his back, the President called an unscheduled press conference where he threatened the House to settle matters or he will do it for them. The histrionics was somewhat overdone and, frankly, weird. The President could have simply picked up the phone, told  Cayetano and Velasco to get their act together, but it would not have had the optics.

Anyway all is well that ends well. Yesterday 186 House members – only a majority of 151 were needed – properly elected Velasco as the new Speaker. Cayetano resigned irrevocably while apologizing to the President. He claimed he misunderstood the President’s instructions to pass the Budget before he resigned. So much for the separation of powers. Nice try but nobody was buying.

The Speakership row is interesting at various levels. One, we witnessed the first notable transfer of national leadership to the Generation X who will rule the nation for the next two decades. The Speakership was Alan, 49, vs. Lord, 42, but the attack dogs on either side – LRay Villafuerte, 52, for Alan and Rimpy Bondoc for Lord – were also all young. The question is whether the upcoming leaders will be different from the old, whether they will bring new energy, new ideas and most important a new ethos to a decayed political culture of greed and corruption. I for one am not holding my breath.

Speaker Velasco, a neophyte, will have to lord it – pun intended – over a traditionally unruly Congressional bunch. He has many debts to pay and the chips will be called in. Foremost is Sara and her brother Paolo who has just been given a plum position as chair of the Panel on Accounts which oversees the financials of the House and the expenditures of Congressmen. GMA’s Lakas party with Mikey Arroyo, 51, threw in their support for Velasco at an important juncture of the vote.

The ascension of Lord is possibly the prelude to a Sara Presidency. Here is something for you: If Sara, 42, was to run and win; Sen. Bong, 46, was to seek the Senate Presidency and win; and Paolo Duterte, 45, was to go for the Speakership in 2022 and win; we would have only the Supreme Court with a leader over the age of 48. More important, the top three institutional leaders of this country would be a Duterte or a quasi-Duterte. The Philippines could then be truly called a family enterprise with the old man as Chairman Emeritus. One marvels at the possibilities.

In fact the President could move on this scenario now but it would be brazen and pre-mature. The kids have still to grow into their positions but in two years they would be ready. The big unknown is the President’s health in the next 18 months. God forbid but anything untoward would throw a spanner in the works at which point everything is up for grabs. Without his presence the Duterte magic would be gone although, depending on the timing, there could still be a residual halo effect on Sara.

What happens to Cayetano? Alan had a Pulse Asia approval rating of 70% before the Speakership mess, below the President’s 91% and Senate President Sotto’s 84% but above Leni’s 57% (There is a message somewhere here.) Alan is, temporarily, pretty much done as a national figure. He is seen to have violated his “palabra de honor” which means something to an electorate with still noble ideas about keeping one’s word. But Alan is clever, young, and if he can find somebody to shake his hand, he will survive.

What were the other take-aways from the Speakership fight? Well, we were told it was always about what was best for the Filipino people. Rule of thumb: Do not vote for anybody who uses “for the Filipino people” more than twice in a sentence. That our representatives take our name in vain is an insult to our intelligence and our being. Guys, next time take your fight outside and leave the Filipino people out of this.

Why People Like Me Were Wrong

 Pulse Asia reports 91% of Filipinos approve of and trust the President. This is higher than his pre-COVID number of 87%. Presidential Spokesperson Harry Roque was quick to point out the Vice-President’s equivalent was 50% and 57% on approval and trust; even if nobody was asking. The poll was taken between Set. 11 – 20.

The President’s extreme popularity surprised most analysts amidst a pandemic that continues to kill Filipinos, the longest and most severe lockdown in the world, an economy that is on its knees and probably slowest to recover among its neighbors, 7 million families in dire straits, 27 million workers displaced, over 300,000 returning OFWs, a multi-billion Philhealth scandal, 3 million kids unable to school and over 20 million unable to learn, and thousands of businesses shuttered. The President’s numbers are an amazing social and political phenomenon.

Some pundits attribute the President’s popularity to the Bayanihan cash program of Government but that falls short. The P 5,000-8,000 per month for two months was not received by many and even then was modest especially compared to the same programs of our neighbors. Again Bayanihan 1 ended some 4 months before the poll was taken while Bayanihan 2 was signed into law only on Sept. 11. No, the money is not the reason for the President’s popularity. If anything the meagerness of Government’s aid would have detracted from rather than added to Duterte’s poll numbers.

The simple truth is the President is very popular. Period. The only question is why?

Voters judge their leaders on the basis of security, empathy, trust and competence, arguably in this order of importance. The President checks out most of these boxes.

Filipinos feel protected with the President. However controversial, his war on drugs made streets safer. He has put some 29 ex-military in key positions in Government which projects an image of stability, law and order. 

China’s invasion of Spratleys is a challenge to our national security but not one that unduly bothers the ordinary Filipino. All he knows is that China is a bully who took something from us and there is nothing we can do about it. Filipinos accept Duterte’s admission as such.

 COVID is crushing our health and our economy but is an exogenous factor, a black swan that caught us and the rest of the world unprepared. Filipinos do not blame the President for the crisis. To his credit Duterte acted decisively in locking down the country. The IATF’s subsequent botched job is a failure of his health secretary, not his, but more on this later. The nation has taken the President to his word we simply have to wait for a vaccine that is on its way whatever medical experts have to say about it. 

This longing of Filipinos for security and readiness to sacrifice their freedoms in exchange for an emotional safe haven; is a product of our economic desperation and the culture of feudalism and patronage, the deference to a lord and master, we inherited from generations past. It is, arguably, also the result of our Catholicism with its faith and dependence on a Father Almighty.

The President conveys a strong sense of empathy. Filipinos believe he is authentic and truly cares for them. They are comforted by the President’s weekly assurance that he understands their plight and that a solution is soon to come. People will support a leader who can inhabit their meager existence. The lack of empathy is, incidentally, possibly the reason the Liberals lost the last election. They were not able to shed their image of elitism and false compassion. This is a message for Leni who has inherited the baggage.

Filipinos trust the President. Trust rating is more about character and integrity than it is about human rights or democratic values. In periods of hardship, injustice and inequality such as we have in this country, people will gravitate towards strongmen who espouse discipline and order and the take down of established institutions, vested interests and business oligarchies. Historically we see this whether it was the rise of Hitler when Germany was humiliated following WWI, Stalin post the Russian revolution, or Mao in China. Filipinos believe Duterte  is willing to challenge the status quo. That the masses continue to support the President is their figurative finger at the elite, the revenge of the people against the privileged who have ruled the nation with disdain.

The President is arguably less founded on the issue of competence but competence is to us an over-rated political value anyway, witness how we elect inexperienced show biz personalities to the highest offices of the land. Sadly, Filipinos have a very low set of expectations. We have been so beaten down with false promises and corruption, we readily accept that things do not have to work and that politicians can steal us blind. We do not realize that other nations have done better with less, that it is possible and even necessary that we demand more. I am reminded of stories of OFWs who are surprised that meals in airline economy class are free. The Philippines need not be a discount airline where essentials are extra.

We see this acceptance of, for want of a better word, mediocrity even in the President. There have been clamors from all sectors for the President to dismiss his secretary of health for incompetence, lack of leadership and possibly corruption. The President says there is no probable cause to do so. As a former prosecutor, Duterte sees everything from the narrow prism of the law. What I heard was if one is honest one can be given a really, really important job even if inept. The President is correct, integrity is the foremost value but it need not be to the exclusion of merit and results. These should also be measures of governance.

The message for aspiring political leaders is empathy and a sense of security are what voters most look for in their representatives. Over-educated analysts and limousine liberals like myself have been wrong and surprised by the continuing popularity of the President because we see him from standards like human rights and competence; not realizing it is the soft values of care, sincerity, inclusiveness, a sense of belonging and faith in a leader that drive voter sentiment. I understand why desperate masses would prefer authoritarianism because they do not know there are alternatives, that we need not settle for under achievement as a trade-off for integrity, that these qualities are not mutually exclusive, that it is possible to be honest and still be good at what one does.

Sadly we do not appreciate that as a nation we can be better than we are, much better. We should demand that competent and honest governance be a right not a privilege, like airline meals, fully paid for.

Running On Empty

“ The beatings will continue until the morale improves.”

This somewhat sums up the IATF approach to COVID. They will keep us in lockdown until we all behave, wash our hands, don a shield on top of a mask, stay home, social distance by six feet. Never mind if one lives in a 8×8 feet shanty, has to rummage for food, walks to work or searches for non-existing jobs. Having tasted the power of fiat, regulators are reluctant to shed rules however ineffectual they have become.

The result is a lock down that is the longest and most severe in the world. This goes right up there with our other world records like the lowest scores in reading, math and comprehension; the lowest prospect of economic recovery among our neighbors; one of the least friendly places to do business; and Manila consistently voted the most congested and oppressive city in the world.

Why are we so unique in all the ways we don’t want to be? We are a great nation. We are not, by and large, incompetent, we are reasonably intelligent, we practice good hygiene, we have a failing but arguably still working democracy, we used to be educated, we are prepared to work and sacrifice, we can be brave and we generally care for each other. 

Our healthcare workers are among the best in the world, avidly sought after by other countries.

Our professional managers are actively recruited by multinational enterprises for their competence, integrity, marketing, financial and business skills.

Our call center agents are renowned for their service, care and communication abilities.

Our OFWs are hailed worldwide for their dedication, empathy and hard work.

We are blessed with a beautiful country. I love this place, I love the people.

And yet we have failed in our promise as a nation. We failed in protecting our democratic legacy and ideals. We blew our advantages in education. We  systematically destroyed our natural resources be it in logging, mining and beaches. We widened the economic gap between the rich and the poor. We grew at a clip faster than our neighbors only to make the narrow minority of rich richer and the wide majority of poor poorer.

We made martial law possible.

We accept continuing restraints on our freedom of speech and of action.

We are unmindful of the degradation in our cities.

We vote into office leaders who do us harm.

We have surrendered to the corruption in Government.

The seeds of our dysfunction did not start 4 1/2 years ago. The genesis of who we are started way before this Administration although COVID has unveiled us for who we have become, a community with dishonest governance, misguided priorities and abuse by a Business/Political dynamic. 

The root causes of our illness are many. One is poverty.  Just as our economy cannot recover without first taming COVID, we cannot achieve true democracy without first addressing income inequality.

Two is a neo-liberal economic doctrine that allows unfettered exploitation of the larger collective for individual greed. Our policies are fashioned on a classical theory that favors fiscal responsibility over humanitarian needs and a strong peso over a stronger economy.

Businesses are permitted, even encouraged, by the mantra of economic growth to pick at the low lying fruit of urban spoils like real estate; while protected by tariffs that discourage innovation and efficiencies especially in manufacturing. We have ignored the more arduous and strategic sectors of agriculture, public health and education. The latter two do not show up in the GDP numbers so dear to our economic planners.

The result has been a mass migration to the cities from the countryside with effects on congestion, urban poverty, income inequity, an over concentration of economic risk in a limited geography, an under investment in the rural sector which supports the greatest population, subsistence farming; and now, we are discovering, a health hazard in our over populated cities.

On the political front the disproportionate wealth in the capital region aggravated what was already a skewed distribution of power, budgets and electoral dynamics in Imperial Manila. This  resulted in further under development of the countryside and over development of the dangerous liaison between Big Business and Big Politics.

Pres. Duterte is the first truly provincial figure to make it to Malacanang which has been both positive and negative.

On the positive side, he has diminished the forces of Imperial Manila and the so called oligarchies. Businessmen are now emerging from the provinces to challenge the Makati corporates who have dominated business for years. A vision of Balik Probinsya would not have been possible in prior times.

On the negative side, we have a Government born and bred in the province with its emphasis on peace and order to the detriment of other imperatives like the economy and jobs. This has created a vacuum of economic leadership at a time when it is most needed. There is also a small-mindedness and micro-management of issues and ideas which may explain our failure to address a massive crisis like COVID. We have applied a checkpoint philosophy that may be appropriate to security concerns in war-torn Mindanao but not to the delicate balance between health and economics. The narrow filter which this Administration applies to our problems means we are unlikely to surface as quickly as we require. 

The scale of our national crisis is visibly overwhelming this Administration. The President has publicly acknowledged he can no longer control corruption so deeply is it embedded. Corruption is so bad he will accept incompetence for honesty. You know we are in trouble when the President has to settle for this trade-off.

 The President admitted we are not winning the war on drugs. Corruption and drugs are the two pillars on which he ran for office – he vowed to end them in six months – so for him to surrender to them four years later bodes ill for his other promises like a better life for the Filipino. With COVID we are now batting 0 for 3.

The Q3 economic numbers should be out in a few weeks. These should be better than end Q2 but worse than projected as our recovery stalls. Businesses are going through a second wave of layoffs, many now permanent as we fail to contain the virus.

This Government is running out of gas. You sense it in the weekly IATF presidential conferences. You see it in the drain in our national coffers. We are now studying the sale of our fiscal crown jewels, PAGCOR and PCSO, which sustain most of  Government’s social programs. You witness it in the frustration as the quarantines fail to take hold. We are paralyzed, transfixed at the headlights of our health and economic crisis as the rest of the world moves on. Instead of a much needed 2021 Budget, however modest, we are offered the sorry spectacle of a fight for the House Speakership and the attendant economic spoils. You recognize it in the straws that we are grasping, the elusive vaccine that was supposed to arrive in September, then Christmas, now late 2021. You see it in the exhaustion of the President.

This country is running out of battery. Sadly, I am afraid, those in charge do not seem to know it.