politika - second quarter 2016

7/25/2019 Politika - Second Quarter 2016

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C R I T I C A L I S S U E S O F P H I L I P P I N E P O L I T Y

POLTIKAJ U N E 2 0 1 6

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The New President:

Understanding theDuterte Vision for

the Philippines

The Legislative:

The Composition of the17th Congress and

their Legislative Agenda

Foreign Policy:

Duterte Policy onthe South China Sea:

Forecasting 2016


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The Uncertainbut PromisingRoad Ahead

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LegislativeUpdates

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LegislativeAgenda

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ForeignPolicy

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TENTS

ON THE COVER & CONTENTS

Credits to the following Contributors:

Prof. Victor Andres Dindo Manhit, FrancescoPangalangan and Angelica Mangahas

Picture credits to the following: philippine-pjg.blogspot.com, bworldonline.com,news.abs-cbn.com, en.wikipedia.org,channelnewsasia.com

TheNewPresident

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Understanding the Duterte Vision for the Philippines

Rodrigo Dutertes imminent inauguration on June 30 as President of the Philippines has broughta sense of cautious optimism across all sectors of the society, which has clamored for a swift endto endemic corruption, inefficiency in the bureaucracy, income inequality, and the proliferation of armedgroups and other lawless elements. Dutertes rise can be understood as part and parcel of a

broader collapse of barriers-to-power, which is transforming politics both in the Philippines andinternationally. All over the world, micropowers, whether individuals, firms, or states, have foundways to undermine established players that previously served as the gatekeepers of power.

During his campaign, Duterte positioned himself as an alternative to traditional presidential candidates.His unorthodox demeanor appealed to many Filipinos, who saw him as unafraid to speak his mind,even to the extent of testing the limits of so-called civilized behavior. As a result, the millionsof Filipinos that voted for him have high expectations for his presidency.

Given these expectations and the growing curiosity of foreign observers over the man nicknamedThe Punisher it makes sense to expound Dutertes three overarching policy thrusts: reestablishinglaw and order, making Philippine growth inclusive, and restructuring the Philippine system of government.These three thrusts are the means by which the Duterte administration will seek to turn hiscampaign promise of Tunay na Pagbabago or radical change into lived reality.

I. The New President

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Identify specific sectors of competitive advantage to optimizethe value and production of land, resources, and people in asustainable way Remove silos to have an all-of-government approach, withstrategic partnerships with the private sector Develop within specific regional clusters where we havecompetitive advantages to lower logistics and transportation costs,reduce energy cost, and pursue economies of scale

8. Improvement of transport network across the country to improveconnectivity Speedily implement infrastructure projects across the country

Develop a national strategy for utilizing airports outside MetroManila, such as the Clark airport, and utilize Batangas and Subicseaports to decongest Manila ports Develop a regional airports and the Sasa port Specific projectshighlighted are the North-South railway project, C6 projects and theCebu bus rapid project, and Mindanao railway

9. Review Conditional Cash Transfer (CCT) program

Review the CCT program as this promotes dependency ingovernment and must be reviewed to allow long-term interventions Enhance social protection initiatives by including livelihoodprojects and provision of supplemental feeding in schools

10. Addressing bottlenecks in infrastructure and respecting thesanctity contracts

Promote synergy between local and national government andimplementing institutions Address Right-of-way issues such as informal settlers Assure that the existing and future infrastructure contracts willbe honored

Reestablishing Law and Order

The centerpiece of Dutertes campaign platform was suppressing the three so-called evils: crime, illegal drugsand corruption , which he believes are undermining security across all sectors and hampering the growth of thedomestic economy. He pledged to instill discipline with an iron fist and strengthen the countrys justice system

through means that may not be completely legal.

To reestablish law and order, he plans to launcha focused, time-bound campaign against criminals,drug lords and corrupt government officials throughthe joint efforts of the Philippine National Police (PNP)and the Armed Forces of the Philippines (AFP). Thiswill occur in tandem with the elevation of city-levelordinances from Davao, such as curfew on unescortedminors past 10 p.m. and a ban on the sale of liquorand drinking in public spaces after 1:00 am, and soon to the national level.

He also aspires to bring an end to the decades-longCommunist and Moro insurgencies. An early groupof his peace negotiators met with representatives ofthe National Democratic Front from June 13-14, 2016.News reports indicate that a ceasefire agreementcould be put in place even prior to the first State of theNation address on July 25. Duterte offered to elevatemembers of leftist groups to four line departments.At present, however, it is not certain that Duterte fullyappreciates the depth of Communist movement, itsnetwork of political front organizations, and their end

objective.

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The Moro groups have seen similar attention: Duterte had a joint meeting with the leadershipof both the Moro National Liberation Front and the Moro Islamic Liberation Front on June 18. Bothgroups reportedly support the move toward federalism. At present, there is some uncertainty overthe implementation of the Bangsamoro Basic Law as a stand-alone measure or as part of a pushtoward a federal system in the countryanother campaign priority for Duterte. Either case could

be expected to provide a greater share of autonomy to the proposed region.

Making Socio-economic Growth and Development Inclusive

Duterte has expressed his desire to build on the stellar accomplishments of the administrationof outgoing President Benigno Aquino III, particularly the latters good governance initiatives andcritical structural reforms that transformed the Philippines from being the sick man of Asia intoAsias rising tiger. Of his ten-point socioeconomic agenda revealed on Monday, June 20, forexample, his first point was to continue and maintain current macroeconomic policies includingfiscal, monetary, and trade policies.

However, he intends to depart from Aquinos legacy of instituting slow but steady macroeconomicreform by advancing an economic agenda which seeks to upgrade, accelerate, as well as expandaccess to the governments basic services, which shall render the countrys macroeconomicenvironment more conducive for the flourishing of businesses, influx of investments, and conductof seamless trade within the country and the greater ASEAN region. Some megaprojects worthanticipating include: (a) three major railway systems, namely the Mindanao railway, Manila-Bicolrailway, and Manila-Batangas railway; (b) Zamboanga Ecozone, Southern Mindanao Growth Corridor(General Santos growth corridor and Davao Gulf Industrial corridor); and the South Mindanao-NorthSulawesi ro-ro link, among others.

Duterte intends to overcome the alleged structural dissonance between macroeconomic reform

which has been the hallmark of Aquinos Daang Matuwid program and concrete improvementof living conditions and standards of Juan dela Cruz. To do so, he has talked about pursuing thefollowing: generation of domestic jobs; increase of employment; abolition of contractualization;promotion of livelihood; agricultural modernization; and entrepreneurial, technological andindustrial advancement with just taxation and equitable distribution of wealth while caring for theenvironment for sustainable development.15

He also plans to carry out improvement of government provision of social services which includeeducation, health, housing, mass transportation with special attention to the elderly, women,children, youth, indigenous peoples and other marginalized sectors; provision of assistance toOverseas Filipino Workers (OFWs) and their families; and adaptation to climate change throughreducing risk, preparing for natural disasters and adopting 911 nationwide.16

Restructuring the Form of Government

Lastly, Duterte wants to overhaul the unitary-presidential system and shift to a federal-parliamentary System through a Constitutional Convention.17 He desires the holding of a plebisciteand preparing the future federal states to effect power-sharing, resources-sharing, respect-for-alland development-for-all as key to reforming the whole bureaucracy to effect good governance.Reforms under the new system are said to include: increasing the salaries of government workers;fighting graft and corruption; and unleashing the full potentials of all regions and ethnic groups forsocial, economic and cultural growth. Furthermore, constitutional amendment shall lift restrictiveeconomic provisions in the Constitution, grant more foreign ownership of property and certainindustries.



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The Uncertain but Promising Road Ahead

While Dutertes policy thrusts are intended to improve internal security and catalyzeinclusive growth in the country, one cant deny that his vision will, in reality, drawopposition along multiple fronts. He is not only about to wage a bloody war againstthe undesirables such as criminals, drug syndicates and corrupt officials who for

decades have thrived in the dark underbelly of modern Philippine society, he looksset to wage his own revolution against what he sees as a dysfunctional politicaland economic system that has created and perpetuated obstructions that bar thePhilippines path to industrialization.

However, a strong populist leadership can sometimes fall victim to parochialthinking. Having been used to running a secondary city without serious opposition,there is some fear that Duterte could travel down the path of arrogance towardabuse of power at the national scale. As elected legislators have begun to fall inline, the creation of a super majority in Philippine Congress could transform itinto a rubber-stamping body. It is imperative for the Filipino citizenry to maintaina collective critical mindset and attitude on what his mantra truly means and howit is carried out. While we should support security and development policies andstrategies that will help build strong institutions and genuinely democratize politicalpower. we ought to remain vigilant against any tendencies to build a new religionaround his quasi-messianic, strongman persona.

Nevertheless, used wisely, his strong mandate can help to institutionalize needed

government reforms, clear up regulatory gridlock and, at least for the next sixyears, stabilize the policy environment. At the very least, increasing investment andpromoting growth have been identified as policy priorities for the next six years. It isin everybodys interest to see the phenomenal rise of Duterte in the annals of historyas the moment we as the Filipino nation freely chose a humble Visayan probinsyano

from the distant island of Mindanao to instill upon us a renewed sense of nationalpride and lead us to reclaim, redefine and deepen democracy, on our own terms.

16th Congress Adjourns Sine Die

On June 6, 2016, the Senate and House of Representatives (HOR) adjourned Sine Die

for the last time in the 16th Congress. Over the last three year, Congress passed atotal of 238 new laws. Among those passed were several landmark economic reformlaws, such as the Philippine Competition Act (Republic Act 10667), the amendmentsto the Cabotage Law (RA 10668), the amendments to the Philippine Deposit InsuranceCorp. (RA 10846), the Right of Way Act (RA 10752) and the Tax Incentives Transparencyand Management Act (RA 10708).

Congress also passed law to make improvements in education and public healthwith the passage of the Iskolar ng Bayan Act (RA 10648) and the United FinancialAssistance System for Tertiary Education Act (RA 10687) as well as the Graphic HealthWarning Act (RA 10643), Mandatory PhilHealth Coverage for All Senior Citizens (RA10645) and the Magna Carta for Persons with Disability (RA 10754). Furthermore, also

passed into law were long awaited measures such as the Department of Informationand Communications Technology Act (RA 10844) and the Customs Modernization andTariff Act (RA 10863).

II. Legislative update

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Many of the measures that were passed were part of the Senate,House and Presidential Legislative Liaison Offices (PLLO) legislativepriorities that were identified early in the 16th Congress. Over thelast three years, the leadership of both Houses of Congress metseveral times to coordinate the measures each would take up inthe hopes of streamlining the process and improve the chances of

passing common priorities. The Aquino-friendly 16th Congress wouldalso take into consideration the Presidents legislative wish list whichwas coordinated through the PLLO, or through the seldom-convenedThe Legislative-Executive Development Advisory Council (LEDAC).

Several of the bills on the list were also on the business communityslist of priorities. Arangkada Philippines, a major advocacy of the JointForeign Chambers (JFC), came-up with a list of bills that it consideredimportant and of interest to the business community. The PhilippineCompetition Act, amendments to the Cabotage law, Right-of-WayAct, and Customs Modernization and Tariffs Act (CMTA), were ontheir list and were all approved in the 16th Congress. However, a

majority of the business communitys priorities did not make thecut, even though several were on the Senate, HOR or PLLOs lists.These were bills such as the Amendments to the Economic Provisionsof the Constitution, the Bangko Sentral ng Pilipinas (BSP) CharterAmendments, Freedom of Information (FOI), the Public-PrivatePartnership (PPP) bill, Bangsamoro Basic Law, Fiscal Incentives, andwhistleblowers protection act.

Undoubtedly, the business sector will continue to push for thesebills when the 17th Congress begins in July. Furthermore, if returningas members of the 17th Congress, the proponents of the above

mentioned bills could choose to refile these unpassed bills and arguefor prioritization, especially for those bills that reached advancedstages of legislation in the previous Congress. Ultimately, however,the legislative agenda of the 17th Congress will be determined by itsincoming leadership and committee chairpersons.

The Composition of the 17th

Congress and their Legislative Agenda

While incumbent Senate President Frank Drilon and House SpeakerFeliciano Belmonte of the Liberal Party will still be members of the17th Congress, it is unlikely that they will retain their positionsin the congressional leadership. At this point, it is all but certainthat President-elect Rodrigo Dutertes party President, Sen. AquilinoPimentel III, will have more than enough votes to be elected SenatePresident, with Sen. Franklin Drilon expected to become SenatePresident Pro-tempore, Sen. Vicente Sotto majority floor leader andSen. Francis Escudero or Sen. Antonio Trillanes as the leader of theminority.

Over at the House of Representatives, Davao RepresentativePantaleon Alvarez will be Speaker of the House with the support

of a growing pro-Duterte super majority currently estimated tocomprise 249 members of PDP-Laban, Nacionalista Party (NP), NationalUnion Party (NUP), National Peoples Coalition (NPC) LAKAS, Laban ng



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Demokratikong Pilipino (LDP) and various party-lists. This will leave adwindling Liberal Party (LP) and United Nationalist Alliance (UNA) in theminority.

With his brand of tough governance and his growing number of allies

in both Houses of Congress, President-elect Duterte is in a unique

position to push his priorities through the legislature. According toRep. Alvarez, the pro-Duterte Congress first set of priorities will bethe switch to a federal government, restoration of the death penaltyand lowering the age of criminal liability. These three bills are in linewith the Duterte administrations strong anti-crime stance which alsoincluded a promise to end criminality in three to six months.

The shift to a federal form of government would require the conveningof either a Constitutional Convention or a Constitutional Assembly todecide on the proposed amendments to the 1987 constitution.

For this, Congress may choose to go the route proposed by formerSenate President and federalism advocate Aquilino Pimentel Jr., whoalso happens to be the father of incoming Senate President, AquilinoPimentel III. The proposal seeks the creation of 11 federal states thatwould be created out of the existing administrative regions, so thatthe identities of the proposed states would already be known by thepeople. Furthermore, each of the 11 federal states would be representedby 6 senators, with 6 more coming from Metro Manila and 9 overseassenators, for a total of 81 senators.

The death penalty, on the other hand, was abolished decades ago, butcould be reinstated for heinous crimes with the approval of Congress.

Lowering the age of criminal responsibility would require amendmentsto the Juvenile Justice and Welfare Act of 2006.

According to incoming House Speaker Alvarez, other legislativepriorities would be the Freedom of Information bill, a proposed increasein value-added tax and an increase for Social Security System pensioners.Sen. Pimentel, on the other hand, said that Congress will ensure theGeneral Appropriations Act reflects Dutertes all-out war against crime,drugs and corruption, and, at the same time, work to make food moreaffordable and overhaul the income tax brackets.

In the 16th Congress, there were several bills in the Senate andHouse that sought to lower income tax rates across the board, reducethe highest tax rate from 32 to 25 percent, and to compress the taxbrackets from seven to five. The next Congress may decide to revivethese bills in the next few months as it is in line with the incomingadministrations 10-point economic agenda.

Aside from these early pronouncements, the legislative agenda will

slowly be shaped not only by inputs from the Executive branch, butby other factors such as the yet to defined Committee priorities, theadvocacies of individual legislators, current events and inputs from

other interest groups. We can expect Congress legislative agenda tobecome clearer when the 17th Congress commences on July 27, 2016and Committee chairmanships are distributed and party alliancesfinalized.

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Duterte Policy on the South China Sea: Forecasting 2016

A favorable outcome in the forthcoming decision from the Permanent Court of Arbitration in The Haguehas never been expected to be a silver bullet to the disputes in the South China Sea. The court, notauthorized to determine the sovereignty of the disputed features, will rule primarily on the maritimeentitlements accorded to the disputed features. As such, the courts primary value will be to help clearup one angle to the disputes (the maritime rights) and ideally rule as unlawful certain bases for claims

to sovereignty (such as Chinas controversial nine-dashed line). In the weeks that follow the decisionsrelease, the multi-state disputes themselves will not be resolved.

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Nevertheless, clarity from the decision will be an important step in defining the bounds for futurenegotiated agreementsfor example, if struck down, China will not be able to use the nine-dashed lineas the basis for its claims. Even in the short term, clarity can help delimit the acceptable behaviors of

states around the territories they occupy. For example, determining whether a feature is an island or notwill impact whether or not a country can enforce a 200 nautical-mile Exclusive Economic Zone around it.Thus, the lack of an immediate resolution to questions of sovereignty does not render the case pointless.

Short-term Instability

China has declared that it will not abide by the decision of the court, which is in line with its decisionnot to formally participate in arbitration. Beyond this declaration, however, it is likely that China willdecide to tangibly demonstrate its unwillingness to comply. Experts have begun to discuss the variousforms of retaliation that China may resort to: raising an Air Defense Identification Zone in the South

China Sea, thereby requiring pilots flying through the disputed areas to seek the countrys approvalbefore flying over the sea; beginning to build an artificial island in Scarborough Shoal, well within thePhilippines Exclusive Economic Zone; or blockading Second Thomas Shoal, where the BRP Sierra Madrehas been grounded, have been raised as some possibilities.

Although the Philippines has not signaled its own response to such measures thus far, other countrieslike the United States have begun activities to deter Chinese retaliation. These include this weeks moveby the United States to sail two so-called super carriers through the disputed areas as a warning toChina. While the Philippines is expected to be the primary target of such retaliation for having been thecountry to lodge the case, other claimant countries, such as Vietnam, Malaysia, and Brunei, could alsoreact to defend the islands that they occupy through shows of military force or even by following in the

Philippines footsteps and lodge cases of their own.

As a result, the weeks that follow the release of the decision are likely to have the greatest tension, asall interested states will want to signify their support or disregard for the ruling. These weeks will alsopose the greatest risk for unexpected escalations, as countries may miscalculate their own capabilitiesand, in testing each other, miscalculate the response of an opposing side. While the Philippines shouldtake extra care during this period, neither should it abandon the advantage that it has, by virtue ofhaving lodged the case in question, of being the lead country in what could be a regional effort to enforcethe decision.

For Southeast Asia, one excellent venue to discuss the case would be the upcoming Association of

Southeast Asian Nations (ASEAN) Foreign Ministers meeting, which will be held at the end of July andseparate meetings with the participation of ASEAN dialogue partners like China, Japan, and the UnitedStates. Southeast Asians would ideally reiterate their strong consensus over the need to freeze alldestabilizing activities in the South Sea and request all countries to abide by the decision of the court.Just as impactful, and perhaps even more so, would be for all the claimant countries to release a jointstatement indicating their decision over the best course to take for the resolution of the disputes in themiddle-to-long term.

Medium-term Progress

Depending on states behaviors in the short-term, medium-term prospects for resolution could look verydifferent. If a peaceful new normal is quickly established in the disputed areas, the stage will be setfor the Philippines to consider or even lay out the conditions under which it will enter negotiations with


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the disputing parties. These options include bilateral negotiations with China or multilateral negotiationswith different make-ups, either with all countries sitting together jointly or by dividing the large areas ofdispute into discrete areas where only the claimants with overlapping claims need negotiate.

With different options on the table, we can again expect varying levels of cooperation for each optionfrom the states in the dispute. Unlike in arbitration, China must agree to participate for meaningfulnegotiations to take place. This will be an important time not only for the Philippines to assert its rights,but for it and other Southeast Asian countries to reassure China that negotiations under any set-up willoccur in good faith and without collusion from the other claimants. In the past, experts have posited thatChina is unwilling to enter negotiations where it feels as though it will be ganged-up on by other states.In the near-term, the Philippines will also need to consider a means of reassuring China that does notsimultaneously put it in a disadvantageous negotiating position.

Understanding the Philippines Next Steps

Despite the various possibilities ahead for the Philippines, there has been little open discussion frompolicymakers over the next steps for the country. This can be explained in part by the political transitionthat is occurring in Manila from one administration to another. Thus, part of the considerations for thePhilippines options are not only what the Philippines could do, but also what the incoming Duterteadministration considers a viable and wise option.

Uncertainty born out of political transition is not unique to the Philippines but a common experience tocountries as a whole. Nevertheless, the timing of the transition complicates both short- and medium-termoptions for the country because it introduces new uncertainties at period where increased diplomatic

and military activity is to be expected in the short term. Put another way, other countries may be moreliable to miscalculate the Philippine response because of poor predictions over the future of Philippineforeign policy.

As the new foreign and defense secretaries are still in the process of being brought up to speed, theforthcoming weeks (as in previous weeks) will not only be spent discussing policy options but alsotransferring information and explaining existing policy. Yet, while these discussions occur, clues aboutthe future of Philippine foreign policy continue to emerge from off-the-cuff statements from the incomingpresident, Rodrigo Duterte.

On various occasions, Duterte has indicated that he is willing to warm up relations with China once

more. As examples, he has indicated that some of his cabinet will travel to China to discuss tradematters; that the South China Sea disputes are mere irritants in the Philippines-China relationship;that he is open to bilateral negotiations (although he later said that the multilateral option was on thetable); and that China is willing to help the Philippines develop railways either from Manila to Subic orthroughout Mindanao. However, the extent to which these points of view will affect Dutertes handling ofthe disputes is still up for interpretation.

In contrast to his predecessor, Duterte has demonstrated less trust in the United States. On more thanone occasion, he has questioned the United States resolve over the South China Sea disputes, askingwhether the United States would be willing to help the Philippines militarily despite previous assurancesfrom President Obama that the US commitment to the Philippines is ironclad. These shifts makePhilippine behavior more unpredictable, and therefore more dangerous, in both the short-term andmedium-term.



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Conclusion

There are many moving parts in the foreign policy landscape for the Philippines. It ishard to say what other short-term moves from the incoming Duterte administration couldhave as long-term an effect as its decisions in the weeks that follow the release of adecision from the Permanent Court of Arbitration. On other issues, Duterte has spoken ofthe importance of considering current political realities in his decision-making.

When it comes to the South China Sea, the current political reality is that the Philippinesis an underpowered state, sandwiched between China and the United States, that mustalso contend with the politics of other Southeast Asian nations. Under these conditions, itwould be tempting to walk away quietly with a few concessions. However, the incomingpresident must also weigh the extent to which the country should permit short-termpower imbalances to carve away at the countrys maritime rights and natural heritage. ThePhilippines hands are not as tied as he may believe.

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ENDNOTES:

1 Ina Andolong, How Duterte-Cayetano will suppress crime in 3-6 months, CNN Philippines,18 April 2016, accessed 17 May 2016, http://cnnphilippines.com/news/2016/04/15/Duterte-Cayetano-plan-crime-corruption-drugs.html.

2 Duterte may impose curfew on minors, ban loud karaoke, ABS-CBN News, 11 May 2016, ac-cessed 17 May 2016, http://news.abs-cbn.com/nation/05/10/16/duterte-may-impose-curfew-on-minors-ban-loud-karaoke.

3 Carmencita A. Carillo, Communist party offered posts as Duterte Cabinet takes shape, Busi-ness World, 16 May 2016, accessed 17 May 2016, http://www.bworldonline.com/content.php?section=TopStory&title=communist-party-offered-postsbr-as-duterte-cabinet-takes-shape&id=127583.4 http://cnnphilippines.com/news/2016/06/15/Duterte-team-peace-talks-with-NDF-Oslo-Nor-way.html

5 Edith Regalado and Aurea Calica, Philippines is Asias rising tiger, Philstar Global, 06 Feb-ruary 2013, accessed 05 May 2016, http://www.philstar.com/headlines/2013/02/06/905371/philippines-asias-rising-tiger-world-bank.6 LIST: Dutertes 8-point economic agenda, CNN Philippines, 13 May 2016, accessed 17 May2016, http://cnnphilippines.com/news/2016/05/12/rodrigo-duterte-eight-point-economic-agenda.html.7 Pia Ranada, Dutertes dream legacy: 3 major train lines across Philippines, Rappler, 09 April2016, accessed 17 May 2016, http://www.rappler.com/nation/politics/elections/2016/128807-duterte-rail-way-systems-china-legacy.8 Mike Frialde, Duterte to amend Constitution for foreign ownership expansion, PhilippineStar, 04 February 2016, accessed 17 May 2016,http://www.philstar.com/headlines/2016/02/04/1549659/duterte-amend-constitution-foreign-ownership-expansion



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CRITICAL ISSUES OF PHILIPPINE POLITY

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