wallace business forum · 19.11.2012 · during martial law, marcos formed kbl party, members of...
TRANSCRIPT
11/19/2012
1
4th Quarterly Roundtable ProgramNovember 19, 2012 Manila Peninsula
Wallace Business Forum
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 2
Features of the Philippine Electoral System
Elitist
Feudal
Warlordism
Personality‐oriented
Money politics
Fraud‐laden
Narco‐politics
Transactional
Festive mood
Political aggrandizement
Politics of convenience
Political compromise
Political patronage
Propaganda warfare
Partisan
Confrontational
Vindictive
Culture of violence
Unjust
Turncoatism
What’s New?
11/19/2012
2
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 3
Turncoatism in History
Marcos was part of LP; When LP chose Macapagal as standard bearer Marcos joined NP as its contender in ’65, and won, NP gained the strategic support of both HousesDuring martial law, Marcos formed KBL party, members of LP & NP jumped ship and joined.The EDSA uprising led to Marcos and also KBL’s downfall. Cory’s LABAN emerged as the dominant pol party.In the ‘92 election, the strongest pol party (LDP) chose Mitra as its standard bearer over FVR.FVR bolted, formed his own party and established a coalition with other parties (LAKAS‐NUCD‐UMDP).The turncoats joined.Erap’s landslide victory turned the tide in favor of his political party (PMP). But was short‐lived due to his ouster
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 4
…Turncoatism in History
Gloria’s created KAMPI merged with LAKAS to absorb many party defectors.
GMA’s scandal‐laden administration took a heavy toll on LAKAS.
The admin’s candidate in ‘10 polls, Gibo Teodoro had no chance.
Benigno Aquino III cornered 42% of total votes (15.2M); His party, LP, won only 45 seats in the House; now he has the backing of 200+.
Now Binay has formed UNA with Erap for ‘13 polls (and ’16?); Former GMA allies have joined.
The rats are abandoning ship before the inevitable happens.
The same vicious cycle occurs every election season.
Top party will be whatever the President is
11/19/2012
3
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 5
The party list (watch out for the gate crashers)
The party list system was enacted in ‘95.
Its aim was to give marginalised groups representation in Congress & reduce the dominance of political dynasties
What might have seemed a good idea has been bastardized by politicians to further entrench themselves in power; the system has been captured by dynastic legislators
Candidates from political clans manage to secure party list seats despite not being representative of the sector they are elected under
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 6
…The party list
Some party lists are bogus serving only as gov’t, security & religious fronts.
During GMA’s term it also served an alternative parallel route for GMA supporters to assure their continued dominance in Congress to ward off impeachment; and in 2010 to win the speakership (but they failed)
E.G. Mikey Arroyo is the “representative” of security guards & tricycle drivers.
He’d never ridden a tricycle in his life
11/19/2012
4
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 7
COMELEC has started purging the list of party list bets
…The party list
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 8
Mikey’s Ang Galing Pinoy as well as the Pro‐Aquino Black and White movement are outThis shows political will & independence of COMELECThose disqualified do not represent the marginalized sectors “Representatives” are in fact multi‐millionaires supposedly representing the disadvantaged.
Party List Who they represent Who they really areAbot Tanaw OFWs Linked to former PAGCOR chief Efraim
Genuino, currently facing plunder raps Agrarian Development Association (ADA)
Farmers Members of the powerful Singsonpolitical family
Alay Buhay Community Development Foundation, Inc. (ALAY BUHAY)
Small businesses Businessman and member of Valenzuela’s Gatchalian political family
…The party list
11/19/2012
5
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 9
Party List Who they represent Who they really are
Alliance for Reforms Towards Effective Management and Sustainable Development (ARMD)
Not Identified
Linked to a Dinagat Island political clan; and owner of Dinagatmining firm
Ikaw Lagi Ang Wagi ng Bayan, Inc. (ILAW)
Urban poor Misamis Occidental political dynasty scion
Movement of Women for Change and Reform (MELCHORA)
Women Heiress to wealthy Ibuna family, granddaughter of longest‐serving San Juan mayor (12 years), and former partner of late Rep. Iggy Arroyo
Alliance of Organizations, Networks and Associations of The Philippines (ALONA)
Not IdentifiedQuezon Province’s Suarez political dynasty
…The party list
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 10
Dynasty‐building in the Philippines
Plazas of Caraga
Amantes of Caraga
Salcedas of Albay
Imperials of Albay
Abads of Batanes
Jaafars of Tawi‐Tawi
Ermitas of Batangas
Espinas of Biliran
Acostas of Bukidnon
Zubiris of Bukidnon
Emanos of Cagayan De Oro
Asistios of Caloocan
Villafuertes of Camarines Sur
Fuentebellas of Camarines Sur
Alfelors of Camarines Sur
Romualdos of Camiguin
But an enabling law has yet to be passed
“The State shall guarantee equal access to opportunities for public service & prohibit political dynasties as may be defined by law.”
― Art. Sec. 26 Philippine Charter
11/19/2012
6
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 11
…Dynasty‐building in the PhilippinesRemullas of Cavite
Revillas of Cavite
Osmeñas of Cebu
Cuencos of Cebu
Gullas of Cebu
Garcias of Cebu
Martinezes of Cebu
Bautistas of Davao Del Sur
Antoninos of General Santos City
Marcoses of Ilocos Norte
Singsons of Ilocos Sur
Defensors of Iloilo
Tupas of Iloilo
Dys of Isabela
Albanos of Isabela
Ortegas of La Union
Dimaporos of Lanao Del Norte
Caris of Leyte
Romuladezes of Leyte
Binays of Makati
The list goes on…
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 12
Why an Anti‐Dynasty bill must be pushed*• Areas represented by members of dynasties tend to have higher
poverty levels and lower per capita income
• Dynastic legislators are richer than their non‐dynastic colleagues.• Dynastic legislators also dominate in political parties• High poverty and inequality increase dynastic prevalence as
the poor vote for dynastic candidates because they dispense favors • Incumbent officials are able to develop and sustain political dynasties
as public office gives them an advantageous position
12
*Sources: PCIJ, Key findings of an AIM Policy Center study
Indicator Dynastic Districts Non‐Dynastic Districts
Ave. Per Capita Income P23,275 P26,872
Poverty Incidence (%) 24% 19%
11/19/2012
7
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 13
Senatorial line‐up for 2013 polls
All 3 UNA leaders have children in Senate slate
5 come from political families
GORDON ZUBIRI MAGSAYSAY COJUANGCO ESCUDERO
3 Same old faces
HONASAN MACEDA LEGARDA
ERAP & JV JPE & JACK JOJO & NANCY
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 14
No “New Politics” for LP as wellPNoy’s cousin Bam
Ed Angara’s son Sonny
Manny Villar’s wife Cynthia
Nene Pimentel’s son Koko
Pia’s brother Alan
…Senatorial line‐up for 2013 polls
AFTER ELECTIONSPNoy will have a certain 9 (10 with Miriam)
A probable 4 more as a min.
11/19/2012
8
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 15
Aspirant Winning Edge Issues & ConcernsLoren LegardaRank: 1
Women’s vote; sympathy for losing last polls; ’98 & ’07 senatorial topnotcher; advocacies: envi, entrep,youth & women’s welfare; voted against Corona; media exposure
Turncoat; mudslinging during ’10 polls; signed Cybercrime Act despite e‐libel provision; broken marriage; early political ads; undecided on RH
Francis EscuderoRank: 2
Youth vote; regional vote (Bicol); media exposure; ranked 2nd in ’07 polls; Author of landmark “Desaparecidos” bill; voted against Corona; backed by Fil‐Chi businessmen; law background
Political family; endorsement of Binay in ‘10 (Noy‐Bi); signed Cybercrime Act; broken marriage; early TV ads; young yet trapo; fence‐sitter on RH
Alan Peter CayetanoRank: 3‐5
Youth vote; law background; Pia & Renato Cayetano factor; voted against Corona; FOI bill filed last Congress reached 3rd rdg approval; staunch critic of GMA
Political Dynasty; signedCybercrime Act; early TV ad (Pilipinas 2020); blocking of Brillantes’ confirmation; no eco/business bill passed; fence‐sitter on RH
SURVEY
FRONTRUNNERS
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 16
Aspirant Winning Edge Issues & Concerns
JV EjercitoEstrada Rank: 3‐5
Erap factor; executive & legislative experience; conversion of San Juan to a highly urbanized city
Political Family; rift w/ Jinggoy; Anti‐RH Bill
Jack EnrileRank: 3‐5
JPE factor; corporate & legislative background; author of Magna Carta of Household Helpers; advocacies: food security & protection of credit card users; provincial vote (Cagayan)
Political family; early TV ads; Anti K+12 & RH; Flip‐flops on mining
Antonio TrillanesIVRank: 6‐10
Voted against Corona; Anti‐Trapo; idealism & conviction that catapulted him to the Senate in ’07; sponsor of Anti‐Epal (credit‐grabber) bill
2nd biggest spender in ‘10; role as back‐channel negotiator for the PH; rift with JPE; against K+12; rebellion charges
Gringo HonasanRank: 6‐10
Ex‐soldier w/ business background; 1stindependent candidate to win a Senate seat; passed bills on envi, agri, nat’lsecurity & educ.; voted against Corona
Undecided on RH; coup attempts against Cory, GMA;his FOI bill still pending on 2nd rdg
SURVEY
FRONTRUNNERS
11/19/2012
9
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 17
Aspirant Winning Edge Issues & Concerns
Koko Pimentel Rank: 6‐10
Sympathy votes (lost more than ½ of his term due to cheating); Nene Pimentel factor; Mindanao vote; law background; voted against Corona
Political family; broken marriage; only 1 bill passed since assuming office; Anti‐RH
Juan Miguel ZubiriRank: 6‐11
Environmentalist; Principal Author of the Biofuels Act; Bukidnon rep. for 3 terms; : “honorable” exit in ‘11
Political Dynasty; 2007 poll cheating allegations; turncoat; early TV ads
Sonny Angara Rank: 6‐11
Ed Angara factor; provincial vote (Aurora); law background; prosecution panel’s spokesperson during Corona impeachment; most prolific Rep. for the 14th Congress
Political family; earlycampaigning (herbal supplement ads; joined PNoy in relief operations); Pro K+12
Cynthia VillarRank: 9‐11
Manny Villar Factor; super‐rich; business background; district rep. from ‘01 to ‘10; advocacies: senior citizens’ and women’s welfare , and entrep
Early TV ads;
SURVEY
FRONTRUNNERS
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 18
Aspirant Winning Edge Issues & Concerns
Nancy BinayRank: 12‐15
Jojo Binay factor Political dynasty; a “mere” staff of VP Binay
Richard GordonRank: 12‐16
Subic legacy; reform‐minded; Red Cross chairman; Legislative & Executive background; media exposure; advocacies: tourism dev’t & automated elections; sympathy for losing in ‘10
Political dynasty;temperamental; no clear stand on RH; filed bills imposing tax on text (sms)
Ramon Magsaysay, Jr. Rank: 12‐16
The “real” Magsaysay; led Senate inquiry into Fertilizer fund scam;business background; illustrious father
Political family; 2nd oldest candidate
Jamby Madrigal Rank: 12‐17
Maverick; criticized Recto’s Sin Tax report; Pro‐RH; advocacies: education, juvenile justice & anti‐human trafficking, environment & good governance
Political family; rift w/ Senators Pia Cayetano & Villar;Anti‐ downstream oil industry deregulation; pro total log ban; against K+12 & Cha‐Cha
SURVEY
FRONTRUNNERS
11/19/2012
10
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 19
Bill House Senate
1. Data Privacy Signed into Law (RA 10173)
2. Anti‐Cybercrime Signed into law (RA 10175) – but bastardized(SC has ordered 120‐day TRO on its implementation)
3. Department of ICT For Bicameral Committee Approval(but PNoy might veto)
4. Sin Tax Amendments Approved on 3rd Reading Pending on 2nd Reading
5. 3rd Amendments to AMLA Approved on 3rd Reading Pending on 2nd Reading
6. Rationalization of Fiscal Incentives
Approved 3rd Reading Committee Level
CONGRESSWATCHBills that Matter to Us
(likely to pass this year)
(likely to pass this year)
(50:50 chance)
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 20
Bill House Senate
7. Fair Competition or Anti‐Trust
Pending 2nd Reading(50:50 chance)
8. Freedom of Info Committee Level Pending on 2nd Reading
9. Reproductive Health Pending on 2nd Reading
(slim chance of passing)
10. Mining Revenue Sharing Bill
Committee Level
11. Amendments to eco provisions of the constitution
Committee Level
12. Anti‐Smuggling Committee Level
13. Anti‐CorruptionAmendments
Committee Level
14. BSP Charter Amendments Committee Level
15. BOT Law Amendments Committee Level
…Bills that Matter to Us
WONT
PASS
(public pressure may work)
11/19/2012
11
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 21
Only 2 out of 14 have been signed into law so far (Anti‐Cybercrime & Data Privacy)
But 1 of 2 has “contentious” provisions (electronic libel)
1 under bicam approval (DICT bill) and could be signed before yearend (if it escapes PNoy’s veto)
Half are stuck at their respective committees
4 are at advanced stage
But House needs Senate concurrence on 3:
Sin Tax Reforms
Fiscal Incentives Rationalization
3rd Amendment to AMLA
All approved by House on 3rd & final reading
…Bills that Matter to Us
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 22
The House, dominated by pro‐Aquino Congressmen, follows Malacañang’s directives
The Senate pushes its own agenda – if it pushes anything
With Drilon taking over Recto’s chairmanship, things might just turn around at the Ways & Means Committee.
It is in charge of all bills relating to revenue generation, esp. Sin Tax Reforms and Fiscal Incentives Rationalization. And, later, mining taxes
It is crucial for the first 2 bills to reach bicam before yearend. They must be signed into law before Feb. 12, the start of the campaign period
…Only 2 signed into law so far
11/19/2012
12
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 23
Both bills would help fund President Aquino’s flagship social protection programs (e.g. Universal Healthcare, CCT)
Sen. Drilon, 1 of PNoy’s most trusted allies in the Senate, now oversees 2 powerful committees:
① Finance – in charge of crafting the national budget
②Way & Means – generates revenues for the national expenditure program
…Only 2 signed into law so far
Prelude to a Senate coup?We hope so
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 24
Sin Tax Reform Act
Drilon’s (Senate)
Net Retail Price
Tax/Pack
2013‐2015
P11.50 P28.50P11.50 P14
Shifts to single tax rate of P32 by 2016
Projected add’l revenues: P26B
Abaya’s (House)
Net Retail Price
Tax/Pack
2013 2014
P11.50 P28.30 P30
P11.50 P12 P22
Then increase by 8% every 2 yrs. From 2015‐2025
11/19/2012
13
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 25
…Sin Tax Reform Act
For Distilled spirits, P30, plus 30% of the net retail price
Projected add’l revenues: P7B
For Beer:Proposed Current
Projected add’l revenues: P12B
Net Retail Price Tax/bottle
P22 P20.57
P14.50‐P22 P15.49
P14.50 P10.42
Net Retail Price Tax/bottle
P22 P25
P22 P20
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 26
Anti‐Laborers!Anti‐Farmers!Anti‐Poor!
POSTERS IN MANILA
11/19/2012
14
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 27
…Sin Tax Reform ActPOSTER BY WBF
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 28
…Sin Tax Reform Act
Sin Tax Bill’s approval hangs on 3 things:① Health
• 90,000 Filipinos die annually (or 240 daily)• Lives that must be prioritized over livelihood of a few farmers
(who can shift to other crops and will be given financial support once the bill passes into law anyway)
• High prices will deter the youth from smoking
②Revenues• Additional P40B‐P45B billion into gov’t coffers if the Drilon bill is
passed; P31B to P35B if it’s Abaya’s• 85% of the funds for Universal Healthcare & 15% to support
farmers • More importantly, bill’s passage is crucial in achieving investment
grade, resulting in FDIs = jobs and borrowing cost for PH
11/19/2012
15
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 29
③FairnessExisting law is grossly distorted to favor local manufacturersIf you were in PH in ‘96, you pay lower taxIf you come in later, pay a much higher one
…Sin Tax Reform Act
Brand Tax/Pack Equivalent
Quality
CigarettesMarlboro P12
Lucky Strike P28.30
Basis for taxation? Date at which you entered the market
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 30
Dec. 21 – Congress closes down for the year. That’s the final day Sin Tax bill must be voted uponJan.21 – Congress resumes; politicians will be consumed by thoughts of winning again. Raising taxes is not a way to win votes (Ask Recto)At the latest it must be before Feb. 7; Sessions adjourn Feb. 8; campaign starts Feb. 12
Which version to pass?— It must be Drilon’s or Abaya’s — DOH has expressed support for Drilon’s bill— Expect DOF & BIR to follow suit— Recall Recto went against their (PNoy’s?) wishes and was left
with no choice but to leave his Ways & Means chairmanship
…Sin Tax Reform Act
11/19/2012
16
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 31
Major Business & Eco bills approved by Congress
0 5 10 15 20 25 30
15TH (2010-2013)
14TH (2007-2010)
13TH (2004-2007)
12TH (2001-2004) 14
6
22
3
1. Lifting of nightwork prohibition on women employees (no direct impact on priority industries)
2. Data Privacy Act3. Cybercrime Prevention Act (but w/ contentious provisions; SC
stopped its implementation by issuing a 120‐day TRO)
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 32
Of the bills signed by President Aquino, only 3 will directly impact business
PNoy and Congress need to prioritize eco/business bills
Not those converting municipalities into component cities
This must be done if we’re to send a signal that PH under the current admin is open for business
PNoy’s lack of interest is showing through
…Major Business & Eco bills
11/19/2012
17
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 33
Both Senate & House versions propose the following benefits for househelpers:
— SSS coverage— PhilHealth coverage— Home Dev’t Mutual Fund membership— Employees Compensation Commission coverage
Measures pending with Bicameral Conference Committee since OctoberBut lawmakers’ failure to reach a middle ground on the pay scheme has stalled the measure’s approval Despite it being among Aquino’s priority bills
1 of PNoy’s priorities
Household Help help
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 34
Senate version (SB 78) raises monthly salary
Location Senate’s Proposal Existing Laws
Metro Manila P3,000 P850 to P3,000
1st Class municipalities P2,500 P650 to P2,500
2nd Class municipalities P2,000 P550 to P2,000
But the House (HB 6144) wants regional wage boards to determine the salaries
But whose going to enforce it?
Door‐to‐door “inspectors”?
Don’t get too worried
…Household help help
11/19/2012
18
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 35
How does House compare to SenateBusiness bills passed on 3rd Reading
House Senate1. Department of ICT 1. Department of ICT2. Sin Tax Reform3. AMLA Amendments4.Fiscal Incentives Rationalization5. Customs Modernization6. Intellectual Property ActAmendments7. Micro‐Enterprise Dev’t8. Insurance Code Amendments9.Rural Banks Act Amendments10.Rationalization of taxes on Int’l Air Carriers11. Direct Remittance of LGU Share in National Wealth Taxes12. Land Use Policy13. Real Property Valuation Act
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 36
Number of LEDAC Meetings
PNoy and Congress must convene regularly and discuss their legislative agenda
PER ADMIN
PER YEAR
RAMOS (1992‐1998)
81 14
ESTRADA (1998‐2000) 3 1
ARROYO (2001‐2010) 25 2.5
AQUINO (2010‐PRESENT) 2 1
Ramos got things donePNoy hasn’t. Here’s one reason why
LEDAC
Sources: JFC, Congress
11/19/2012
19
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 37
A hardworking Congress (?)In Session Period
Resumption of session Nov. 5 to Dec. 21, 2012
Adjournment of session Dec. 22, 2012 to Jan. 20, 2013
Resumption of session Jan. 21, 2013 to Feb. 8, 2013
Adjournment of session Feb. 9, 2013 to June 2, 2013
Resumption of session June 3, 2013 to June 6, 2013
36 session days left to approve key reform measures (2013 budget yet to be passed)
If bypassed, the bills will have to be turned over to the 16th Congress
It’s back to square one
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 38
Social Weather StationsPresident Aquino’s Net Satisfaction Rating
(% satisfied minus % dissatisfied)
0
20
40
60
80
100
SEP '1
0
NOV '10
MAR '11
JUN '11
SEP '1
1
DEC '11
MAR '12
MAY '12
AUG '12
+60%+64%
+51%+46%
+56% +58%+49%
+67%
+42%
↑ Sa sfac on Rating means ↑ Political Capitalnecessary to make tough, unpopular decisions
― Why doesn’t he?
11/19/2012
20
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 39
It’s time for him to do 2 jobsLeadership is a fulltime job, not a 9‐5 one
He’s the President, not P‐NoyHe needs to copy FVR=CSW
The Philippines needs 7% + P.A. to break the poverty trapThat needs social reform
+Economic/business reform
Remarkable success on the 1st —Anti‐corruption, CCT, K+12 But not the 2nd
The interest is not thereDespite that he’s winning, people want to help him
Jobs – his and theirs
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 40
Manufacturing needs to be revivedServices alone can’t do it –
They need education many don’t havePlus the wealth creation producing products achieves
But real action to achieve it is not happening.The words are there, the action is not
He supports mining, but issues an EO that stops itHe doesn’t mix with business—here, or overseas
Business doesn’t come
Nonetheless there’s a business confidence, optimism that wasn’t there under GMA
11/19/2012
21
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 41
→ However, he is getting somewhere politically. The unusual actions of the President are working.
→ Corruption is actively being attacked. His “NO WANG‐WANGS” has had dramatic reverberations throughout society.
→ Unbelievably, it wasn’t a 7‐day wonder; it’s lasted some 28 months.
→ The arrogance of power has been lessened.
→ The President has been single‐minded on this, and with some success.
The essential social reform could be in place by 2016
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 42
A non‐cooperating ombudsman kicked outAn ex‐president with an ever increasing number of cases against her – under (hospital arrest)A Chief Justice convicted by Senate impeachment court
The successful impeachment strengthens him considerably so these could be the beginning of a true clean up of many other
scandals by many other people
And his no wang‐wangs has brought an important societal change
But he’s taken some bold, and politically risky steps
11/19/2012
22
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 43
NET SATISFACTION RATINGS(PNOY VS PREVIOUS PRESIDENTS)
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 44
The huge gain is attributed to:
CJ Corona’s ouster
Emphasis on his goal to build a culture of accountable & transparent governance – end corruption
Taking the unpopular GMA to task for her alleged transgressions in office (highlighted the “lost decade” under GMA in his last SONA)
Improved weather forecasting & relief & rescue operations during calamities
Personable nature
11/19/2012
23
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 45
…The huge gain is attributed to
Emphasis on: Health (expanded PhilHealth coverage to reach the poor)
Education (K+12, substantial increase in Deped budget, but still unable to close all resource gaps)
Social Protection (Expansion of CCT)
Rice Production ( lower imports, self‐sufficiency by ‘13)
Death of Sec. Jesse Robredo
Sustained high satisfaction & approval ratingsDespite he’s done little, just the occasional action at the right timeSadly he doesn’t need to do a lot to gain high satisfaction ratings
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 46
1. Rise of hunger & poverty incidence2. Failure to address unemployment & underemployment3. Increase of public transport fares4. Failure to convict Arroyo5. Disappointing implementation of flagship PPP6. Defeat of LP candidates in the 2013 Senatorial elections7. Non‐approval of critical & popular bills this 15th Congress8. Failure to conclude peace deal with the MILF9. Failure to address Mindanao power shortage10. Further delay in the resolution of the Maguindanao
Massacre case11. Failure to resolve Scarborough stand‐off
Factors that could affect PNoy’s approval ratings:
11/19/2012
24
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 47
Signing of framework peace deal w/ MILF
What could further raise his approval rating?
• Comes 15 years after negotiations were started• Agreement has been generally well‐accepted• A major achievement of PNoy• A welcome dev’t and there does seem to be sincerity and a mutual
trust that give hope it could succeed
But…• Already there’s a splinter group, the BIFM • Nur Misuari has questioned the deal • Infighting w/in the MILF, like its rift w/ with the MNLF, shows
the limitations of a peace agreement in bringing actual peace and development to a conflict zone
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 48
With the signing of the draft framework now is the most opportune time for the Aquino admin to intensify its dev’tefforts:
• Improve the delivery of basic social services
• Enforce the Law
• Improve transparency in governance
If these were in place, insurgencies become irrelevant
But no one’s succeeded at doing so yet
And will be the real test of the success, or otherwise, of the peace agreement
A deal could be reached by 2016―if all goes well
…Signing of framework peace deal w/ MILF
11/19/2012
25
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 49
In a Nutshell
‘10 ‘11 ’12
1. Get infrastructure built ¼ ½
2. Fully spend the money DBM disbursed ½
3. Resolve open‐pit mining ban
4. Upgrade air safety
5. Put 2 big corruptors in jail
6. Swift resolution of the Ampatuan massacre & other EJKs
7. Mandate that all pork barrel funds should go to health & education
8. Increase VAT to 15% & greatly reduce income tax for salaries < 20K
Where PNoy could use his political capital
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 50
…In a Nutshell
‘10 ‘11 ’12
9. Legalize jueteng
10. Revive family planning & sex education in Schools
11. English as primary language for learning
12. Reduce no. of buses on EDSA by half
13. Add carriages to the MRT ?
14. Aggressively push for FOI’s approval
Except for a couple of changes
The political will to get things done is lacking
Not a record to be proud of
Case in point: Implementing Rules & Regulations of EO 79
11/19/2012
26
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 51
EO 79 was issued to clear up the situationInstead, it created a wall of confusion:
• What taxes to pay?
• What term limit will mining firms have?
• What chance of being granted an ECC can companies expect?
• How and when will a firm’s right to open‐pit mining as defined by nat’l law be allowed?
There’ll be no new mining projects for at least 2 years
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 52
The controversy that arose over Section 9 of the IRR forced the gov’t to backtrack:
But the message given cannot be taken back:
This is a government that will change contractual terms if it feels it wants to.
Original Section 9 of IRR Revised Section 9
“Expiring 25‐year mining tenements may be renewed subject to new terms and conditions pursuant to the laws and rules and regulations that are existing at the time of renewal or may be hereafter issued, such as, but not limited to the establishment of the contract area as a mineral reservation.”
“The mining contract/agreement that may be renewed shall be subject to existing laws, rules, and regulations at the time of renewal.”
…Back to EO 79
11/19/2012
27
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 53
New mining investments brought to a standstill• Outflow of P10B since 2011• $4B in add’l investments will not
eventuate in 2013Source: Chamber of Mines
Tampakan ProjectProjected contribution to GDP/year P134 billion or additional 1% to GDP
Gov’t revenues (national & local)through taxes
P307B over 20 years
Employment opportunities ↑10,000 at the peak of construction & 2,000 during operations
Source: Tampakan Project report
…Back to EO 79
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 54
Tampakan’s Contribution to the PH economy in 2010
Employment 1,500 people
Local purchase of goods & services P656M
Power &Fuel Charges P77M
Taxes paid to Nat’l Gov’t P400M
Community sponsorships & donations P135M
Benefits from just a single project Despite these, EO 79 says in clearest terms: The Philippines doesn’t want mining Government can deny, but that’s the perception And perception drives decisions
…EO 79 was issued to clear up the situation
11/19/2012
28
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 55
• NAIA 3» Gloria unilaterally cancelled the contract on the grounds of corruption
(this was during her good days)
» Agreed that as a condition for cancellation just compensation would be immediately paid – but no payment was made
» Had it been settled, the terminal would’ve been in full operation for the past 10 years – imagine the cost of those lost years!
• IPP Contracts» Renegotiated by the Arroyo admin in ‘01
» A populist move to bring power rates down and to reduce state guarantees under IPP contracts
» Gov’t saved $1B; IPPs lost $1B
Contract Sanctity
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 56
• Waste‐to‐energy project w/ Jancom» Arroyo gov’t cancelled the project in ‘02, 5 years after its approval» Despite the SC ruling declaring the contract “valid & perfected”
• DOE‐Mitra Energy oil exploration contract» Nullified in 2006» Contract had not yet been signed, but was about to be» Mitra Energy had expended for it, done everything required
• Thales» Contract to build & install an air navigation system» Existing system is old & failing; several air crashes have already almost
occurred» Contract was put on hold because then DOTC Sec. Roxas wanted to
question its technical suitability & cost
…Contract Sanctity
11/19/2012
29
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 57
• Baggerwerken decloet en zoon» To dredge Laguna de Bay» Cancelled in December ‘10 over allegedly questionable design
specifications» The Belgian firm was not formally informed by the gov’t of the
cancellation, only learned of it through press statements
• Eiffel Matiere» To put up 72 Ro‐Ro ports» The French firm had already delivered 50% of the steel pipes & was
scheduled to deliver the remaining materials, until –» It was deferred due to a change of leadership in DOTC; Sec. Roas
recommended its cancellation» Seemed like a typical GMA project full of questions and should be
cancelled → but only a er due discussion w/ eiffel matiere, & proper recompense
…Contract Sanctity
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 58
Update on Scarborough standoff
PNoy stressed during the Asia‐Europe Meeting (ASEM) that disputes over the West Philippine Sea (WPS) must be resolved following int’l laws
The EU supports a multilateral, ASEAN‐centric approach as instability in the WPS would result in higher insurance premiums for their commercial ships
Australia backs a regional code of conduct & resolution of dispute via UNCLOS
11/19/2012
30
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 59
…Update on Scarborough standoff
Back home, recent events only reinforce China’s argument that PH has been inconsistent in its territorial claims over WPS
DFA Sen. Trillanes
• The Philippines is standing firm on its territorial claims, esp. in Scarborough Shoal and wants a multilateral resolution of the dispute
• Back‐channeling talks seemed to be doing more harm than good.
• Filipinos are not interested in Scarborough and the dispute should be settled bilaterally
• DFA Sec. Del Rosario strained PH‐China ties by taking a hard‐line stance
Sen. Trillanes’ statements reflect the exact position of Beijing and the exact opposite of expressed PH foreign policy
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 60
…Update on Scarborough standoff
Sen. Trillanes has no foreign affairs experience but was entrusted by PNoy to handle such a delicate task
Handling of territorial disputes is one area where mature circumspection is vital
Also, his tirades vs Enrile have bordered on juvenile
Whatever gains Trillanes gained in easing tension bet. the PH & China were negated by the political ruckus that followed
What transpired was a foreign affairs debacle and was reflective of the ul mate authority in cra ing PH foreign policy ― Pres. Aquino himself
11/19/2012
31
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 61
Recent Appointments & Reshuffles①Mar Roxas (DILG)
Has the integrity to continue the reforms initiated by Sec. Robredo. He has no record of corruption, but is not action oriented
Served as PNoy’s trouble shooter – a sign of Pres. Aquino’s confidence in him
Can use his political astuteness as Malacañang’s bridge to LGU’s
Has experience: District rep. for 3 terms; Authored laws that give priority to LGUs
It’s a political move for ‘13 elections; strengthens LP with LGU’s
As LP President and now DILG Sec. strengthens his position should he decide to run for the presidency in 2016
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 62
② Jun Abaya (DOTC)Comes to task relatively unknown, but w/ a good reputationOne of PNoy’s most trusted allies in the House
Manager of the prosecution team in the impeachment trial of Corona
As LP sec‐gen, he was the architect of LP‐Akbayan‐NPC‐NP‐LDP‐NUP coalition for ‘13 Senatorial polls
Head of the Appropriations Committee that reviews & ensures timely enactment of the nat’l budget
Principal author of Palace‐backed Sin Tax Reform
In line w/ the mandate of the DOTC: co‐authored bills that seek to upgrade and improve various domestic airports
Has legislative, military, law & engineering background – so gets things done (progress in infra dev’t has been slow in the past year or so)
…Recent Appointments & Reshuffles
11/19/2012
32
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 63
…Recent Appointments & Reshuffles
Set to face huge challenges as DOTC Sec.:1. Resolution of the NAIA 3 case2. Implementation of PPP projects3. Improvement of the PH aviation status to Category 14. Rehabilitation of NAIA Terminal 15. Dilapidated air navigation system of NAIA
He’s an engineer!
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 64
③ Jericho(Icot) Petilla (DOE) Executive experience as governor of Leyte for 3 terms & CEO ofIT‐BPO companiesNo significant exposure to the power sector (limited to dealing w/ electric cooperatives & power plant operators in Leyte)Biggest concerns are:1. Upgrading of power distribution & generation systems2. Mindanao power crisis3. “Thin” power reserves in Luzon & Visayas4. Getting investors who would be willing to construct more power plants esp. in
Mindanao5. Sustainability of electric cooperatives6. Shift to renewable energy – solar & wind are costly
His eloquence & experience as LGU official could help in dealing with local politicians who have influence over power cooperativesDaunting tasks ahead and with limited relevant experience, the objectives seem difficult to achieve
…Recent Appointments & Reshuffles
11/19/2012
33
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 65
④ Rene Almendras (Secretary of the Cabinet)
Vast managerial expertise (29 years w/ top private firms)
Could serve as Malacañang’s link to the private sector
Criticized during the Mindanao power crisis; but he merely inherited the non‐action when he joined the PNoy cabinet
» Tried to get awareness of the problem – but was ignored until it occurred
» Encouraged distributors to contract barge power but they refused
New post shows PNoy’s trust & confidence in him―he’s among PNoy’s closest friends
…Recent Appointments & Reshuffles
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 66
Extensive powers and functions:
• Identify priority areas under the Phil. Dev’t Plan 2011‐2016
• Monitor the status & impact of admin’s key projects
• Represent the President in meetings
• Run the Presidential Management Staff (PMS)
• Sit as member of the NEDA Executive Committee
Appointment has sparked speculations of wrangling between the 2 factions w/in the official family (Almendras w/ Balay; ES Ochoa w/ Samar)
…Recent Appointments & Reshuffles
11/19/2012
34
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 67
⑤Ma. Lourdes Sereno (Chief Justice)At 52, she has 18 years to undo the damage to the institution that was caused by the scandal involving her predecessorHas shown independence in controversial decisions where she did not go along with the majority who seemed to favor GMAWhat needs to be done:
Hasten resolution of casesPut litigation w/in the reach of many people, even w/ free legal assistanceHire more judges & court personnel & increase their payInvite experts or “friends of court” when deciding on business‐related cases
…Recent Appointments & Reshuffles
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 68
Prelude to a Senate coup?Malacañang officials & Senators deny it but SP Enrile’s stand on Sin Tax & RH (PNoy’s priority bills) could cost him his seat
If the Malacañang‐backed Sin Tax, RH, etc. aren’t passed this 15th Congress, there could be a new Senate President on July 22, 2013, when the 16th Congress opens
Fellow senators can easily invoke “loss of confidence”
If UNA gets at least 8 seats Enrile could stay – Can UNA?
Of the current frontrunners, only 6 are strongly pro‐UNA
11/19/2012
35
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 69
Rank Aspirant PRO‐LP PRO‐UNA
1 Legarda
2 Escudero
3‐5 Cayetano
3‐5 Ejercito **
3‐5 Enrile **
6‐10 Trillanes
6‐10 Honasan **
6‐10 Pimentel
6‐11 Zubiri **
6‐11 Angara
9‐11 Villar
12‐15 Binay **
12‐16 Gordon **
12‐16 Magsaysay Jr.
12‐17 Madrigal
How the current frontrunners are aligned
‐ strongly pro‐LP ‐ strongly pro‐UNA 9 6
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 70
Who Has Who
Senator PRO‐LP PRO‐UNA
Estrada **
Enrile (excluded)
Sotto **
Drilon
Recto
Guingona
Osmeña
Cayetano, Pia
Marcos *
Revilla *
Lapid
Miriam *
6(+1) 4(+1)
You need 13 to win, or 12 if Miram goes
How the Non‐Reelectionists are Affiliated
11/19/2012
36
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 71
Senate Presidency (A competitive advantage)3rd Highest post in the Land
3rd in the line of constitutional succession
Presiding Officer & CEO of the Senate
Even more powerful than the VP in the past,
3 Senate Presidents became Presidents – Quezon, Roxas, Marcos
Also,
A STRATEGIC POSITION TO CHALLENGE THE PRESIDENT ON
KEY ISSUES
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 72
What to expect
in 2013
11/19/2012
37
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 73
…What to expect in 2013Mid‐term elec ons―li le surprise. It will be the same old faces.
Enrile will go; Belmonte will stay
The House will continue to follow the President; Senate will push its own agenda—unless PNoy “LEDAC’s”
More funding for CCT, K+12, and Universal Healthcare as the gov’t scrambles to achieve its MDG targets
President Aquino’s satisfaction ratings will remain high
But down a little – if he implements some needed tough reforms, as he may
Initial stages of the framework agreement w/ MILF likely to be settledInvestment pledges in ARMM; but won’t eventuate till after ratification of the Bangsamoro Basic Law
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 74
…What to expect in 2013
Upgrade to investment level
Continued implementation of zero‐based budgeting scheme, approval & implementation of budget on time
Competitive bidding of government projects will continue
Infra construction finally starting
Lackluster inflow of FDIs despite PNoy’s popularity & extensive campaign vs corruption
Power shortage in Mindanao to worsen
Rice self‐sufficiency goal in ’13, maybe a little later.
Open‐pit mining ban to continue till after elections after w/c PNoymust act. But uncertain if he will
The bureaucracy won’t improve much
11/19/2012
38
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 75
…What to expect in 2013
Eco/business bills before end of 15th Congress:
① Sin Tax Reform Act②AMLA amendments (3rd phase)③Department of ICT④ Intellectual Property Act amendments⑤Fiscal Incentives Rationalization‐but 50:50 chance⑥ RH—If PNoy pushes it hard (he’s not yet)
Other key reform bills (FOI, Mining Revenue Sharing, Anti‐Smuggling) will be revived in the 16th CongressReview of the Constitution now unlikely to occur
WWW.WALLACEBUSINESSFORUM.COM
NOV 18, 2012 QRT POL CHART-LONG 76
…What to expect in 2013
The PH’s anti‐corruption and competitiveness rankings will improve
Gov’t to pursue fertilizer fund scam, other scandals vs GMA; tax evasion raps vs Corona
Strengthened campaign vs. top‐level corruption; but corruption among LGUs must also be a acked aggressively―unlikely to be
More tax evasion cases will be filed before the DOJ; but legal processes will defeat the success
NO DRAMATIC CHANGES
– BUT BRIGHTER PROSPECTS