Political Demagoguery

Political and economic reform are badly needed for the country to finally achieve the economic takeoff it has longed for. The prospects are bright now but there is still a lot of work to be done. 

The midterm election is over and the Duterte administration has won what the opposition termed as a referendum on the President's leadership. The win was overwhelming because not one opposition candidate won a Senate seat and they are down to seventeen members in the House. At the local level, you can count with the fingers of one hand how many local government units are still in their hands. 

Last week Finance Secretary Carlos Dominguez implored the incoming 18th Congress to pass vital legislation that is required in order to institutionalize the administration's reform agenda. He used strong words mixing populist, political and demagoguery all in one sentence. It was an indirect jab at the opposition but one which they totally deserved given their held view that TRAIN did more harm than good for the economy. 

Now that the opposition has been put in its place, it's the turn of Congress. The inordinate delay in the passage of the 2019 budget led to a drop in economic growth for the first quarter. The 2019 budget was finally signed third week of April with the President vetoing P95B of insertions from Congressmen. 

A couple of pundits were of the opinion the budget brouhaha was a proxy battle between the President and the Speaker of the House. It was actually a three-way fight because the Senate accused the House of bad faith at the bicameral conference committee where the House and Senate versions of the budget were reconciled. 

A cursory look at the record of post-Marcos administrations reveals that the incessant politicking was the reason why the infrastructure gap widened to the point that it began to directly impact economic growth. The Arroyo administration passed the E-VAT Law but its infrastructure projects never got off the ground because the opposition was always investigating the same for corruption. It didn't help that the NBN-ZTE deal confirmed these allegations. 

The inevitable question is what comes next after the Duterte administration steps down? The economic managers led by the Finance Secretary have definitely done an exemplary job running the economy with the combination of tax reform, national budget allocations and ODA loans as the funding mix for infrastructure projects. The sound fiscal policy in place has resulted in a credit rating upgrade which has allowed the country to tap international capital markets in the form of bond issuances at preferential rates. The Philippines has been able to return to the Eurobond market after a fourteen-year absence. It has already conducted a second round of offerings in the Chinese and Japanese bond markets. 

We wouldn't be having this problem if we had a federal parliamentary government in place because the economic team could go on in government for so long as they have the parliamentary majority. The existing political structure is what creates uncertainty. There is also the added advantage of Cabinet members being members of parliament so they would be part of the legislative process ensuring the legislation passed is what is actually needed to keep the economy on track and comply with fiscal policy. 

It's also time for the opposition to become critical collaborators with the administration instead of being obstructionists and destabilizers. Their resounding defeat at the polls last May is a definitive warning that the public has had it with politicking. Their old playbook won't deliver the outcome they expect based on their experience in 1986 and 2001. 

Political and economic reform are badly needed for the country to finally achieve the economic takeoff it has longed for. The prospects are bright now but there is still a lot of work to be done. Our leaders can't rest on their laurels and claim that their political promises have been fulfilled. Nation-building is a continuing process that never stops. There is always the need to adapt to changes in the environment.

About the Author
RG is a seasoned international trade and sales and marketing professional who also dabbles in writing. He was a contributor to Business World in the mid-90s and is also a tech geek.
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