Beyond the surveys: The real state of the nation

By Ricardo Saludo

“Are things getting better in our country?” That rhetorical question from an elderly friend this week identified him among the one-fifth of Filipinos who do not have trust, approval or satisfaction toward President Benigno Aquino 3rd. The rest of the nation, going by Pulse Asia and Social Weather Stations extrapolation, believe and cheer PNoy.

The state of the nation, however, goes well beyond the ups and downs of public opinion. Today’s column reviews recent news to assess where the Philippines is and where it may be headed over the coming year.

Most crucial to progress is the economy. Recent headlines make much of the Philippines bucking the global downturn. But in fact, gross domestic product is merely bouncing back from last year’s slowdown, induced by state underspending in pursuit of credit rating upgrades.

Indeed, sustaining growth demands fundamental initiatives to boost investment over the long term. This area remains disappointing. While the World Economic Forum’s latest competitiveness survey, done by the pro-administration Makati Business Club, lifted the country’s rank by double digits since last year, two other major reports disappointed.

In the 2012 World Competitiveness Report by Switzerland’s IMD business school, with the Asian Institute of Management as local partner, the Philippines dropped two places to No. 43. And the UN Conference on Trade and Development World Investment Report 2012 continued to show low attractiveness for foreign direct investment and below-potential FDI contribution.

It doesn’t help that only one public-private partnership project has been awarded, and new mining policies as well as China tensions are giving investors pause. Still, with election spending and a bigger national budget in 2013, the economy looks set to turn in about 5 percent growth this year and next. Not great, but decent. Of greater worry is hunger’s August increase after the usual summer decline amid the seasonal rise in construction, tourism and retailing jobs.

On the political and governance front, continued high approval ratings for top officials continue to sustain public and business confidence. President Benigno Aquino 3rd’s grades rebounded strongly in August, as usual in surveys after the State of the Nation Address. Also lifting national sentiments and international perceptions is the preliminary agreement between the government and the Moro Islamic Liberation Front.

Key to the President’s popularity is the widespread belief that he is honest and sincere, leading most Filipinos not to give much weight to criticism over Aquino’s special treatment of associates and allies; the surge in crime, smuggling and jueteng; his support of the cybercrime and reproductive health bills; and his open meddling in the courts with public statements on pending cases. Nor has PNoy’s treatment of ailing former president Gloria Arroyo stirred much adverse public reaction.

The coming election campaign will likely intensify anti-administration rhetoric, although little of it will likely target Aquino himself, since Vice-President Jejomar Binay and other leaders of the main opposition coalition, United Nationalist Alliance, remain pro-PNoy. The expected rise in violence during the poll campaign will disturb communities, but most blame will fall on Interior and Local Government Secretary Mar Roxas.

What could negatively impact the Chief Executive is the failure to conclude a final peace agreement with the MILF. But as long as the Arroyo-era ceasefire is preserved, even a delayed accord would not hurt Aquino much. A bigger threat to his clout would be major UNA gains in the polls. A larger opposition bloc in Congress could fiscalize more loudly, resist Palace pressure on bills and impeachment, and reassert the House’s power of the purse. Maybe.

On the top administration priority of good governance, there have been two big steps forward. One is the mid-year implementation of the Results-Based Performance Monitoring System (RBPMS) and the end-year payment of performance-based bonuses (PBBs). If done properly, RBPMS and PBBs should improve public service.

Another positive is this year’s Social Weather Stations survey on corruption, which continued the improvements shown in the 2009 poll. After dropping by nine percentage points to 60 percent, from 71 percent in 2008, the ratio of companies asked for bribes fell another 12 points over the past two years to 48 percent this year.

What about China? The Aquino administration’s policy to allow increasing USD military deployment continues, with retired general Edilberto Adan, who oversees the Visiting Forces Agreement, recently confirming further increases in American troop presence.

This will only exacerbate tensions with Beijing, which has not only announced plans to build a garrison in the Spratlys, but also moved a ballistic-missile brigade within striking distance of the entire Philippines. Expect the country to then join the US anti-missile defense system and host one of its three X-Band radar stations in East Asia.

While the increased US alliance has now made the Philippines a strategic threat and target for China, it only boosts President Aquino’s standing in defending the country’s territory and security. Even the loss of Chinese investment and aid has not diminished support for the policy about-face from maintaining strong ties with all major powers to siding with America.

So in coming months, expect moderate economic growth, rising election-related violence and anti-government criticism, and further frictions with China (but not enough to drive Asean into Uncle Sam’s embrace. Plus more of Aquino’s high ratings and assertive style. At least until next May.

Ricardo Saludo serves Bahay ng Diyos Foundation for church repair. He heads the Center for Strategy, Enterprise & Intelligence, publisher of The CenSEI Report on national and global issues ( report@censeisolutions.com).