The Power of One

Assessing PNoy’s freshman year: the good, the bad and the ugly

In numerology, the number 1 bears singular importance. The first, the start, the origin of anything bears significance and meaning in the sense that it opens up possibilities, it sets the scene, and it leads the way. The level of anticipation and anxiety is always highest at the start.

The mistakes and lessons, the first impressions and achievements all have lingering effects. So it is with the first year of PNoy’s administration: the learning curve, the birthing pains and the wall of public expectation he has had to scale was close to insurmountable.

Comparisons and contrasts

In assessing his first year, the problem of finding an appropriate yardstick has been highlighted before. For those that attempt it by way of contrast, PNoy has done a remarkable job in his first year simply by not being Mrs Arroyo. Some similarities can be drawn with his mother in that she too had to sort out a lot of problems left behind by Mr Marcos and high expectations on the part of the people.

Others like me have drawn some parallels between PNoy and Estrada in the way the president went about managing factions within his cabinet. Some have questioned the president’s work ethic. ‘Do nothing’ was a constant line of attack presented by his detractors.

The question here is, had PNoy not succeeded Mrs Arroyo, how would his first year have been measured? Corollary to this is, had PNoy not been an Aquino, how would we perceive or rate him? The nation treats PNoy almost like an older brother or ‘kuya’. His being the son of ‘Tita’ or Auntie Cory makes an objective assessment difficult because of kindred ties and the ‘halo’ effect.

Factoring out the ‘noise’

Then there is the problem of events outside the evaluatee’s control, or the noise factor. The worsening global economy emanating from the Eurozone, Japan and MENA as well as from the US, have been used to explain the weakening foreign investor confidence in the Philippines.

As Ben Diokno rightly points out, our relative performance to some of our ASEAN neighbors allows us to factor out the ‘noise’ in that our peers in the region all have experienced the same global slowdown, but as the first quarter data shows, they were able to increase their levels of foreign direct investments, while we saw ours shrink.

We need to bear this in mind whenever we hear officials justifying the slowdown in our economy by citing global affairs or cyclical factors like the elections of 2010. We might be maintaining growth in an absolute sense, but in a relative sense, we might fall behind our neighbors in the region. We therefore need to determine whether this poor performance relative to them is due to some of the things the administration is doing or failing to do.

Progress made

Having said that, I would first like to focus on the positive things I believe the administration has done. This would include both its tangible and intangible achievements. I will start with the tangibles.

The introduction of universal kindergarten in public schools which studies show provide long-term learning benefits, the reduction of hunger most recently attributable to the conditional cash transfers program which is really designed to address intergenerational poverty and not fix the unemployment problem in the near term, and the reform of government corporations and debt management which have led to meaningful savings for the government are all worth a positive rating.

With regard to intangibles, the confidence engendered by the government which has led to private domestic firms releasing pent-up demand for capital goods and the greater trust or faith in government leaders are two things that this administration can be congratulated for. If the government can continue to make inroads in these areas it will have done a tremendous service to the Filipino people.

Needs improvement

On the needs improvement column, I would have to cite firstly the government’s handling of its legislative agenda. Both the scope and the pace at which it has been pursuing this have serious flaws. The absence of the FOI and RH bill among its priority measures for instance was a major failing. The fact that it took nine months for it to hammer out its agenda led to meager legislative trophies in the first year.

Secondly, our response to China’s emerging role in the region as a superpower to counterbalance the US our traditional ally has been all over the place. First, we sided with China unnecessarily in not attending the Nobel Prize conferment ceremonies for one of its leading dissidents. Then, in handling the Spratlys issue, we engaged in sabre rattling by sending out a navy vessel into disputed territory, again unnecessarily. A more considered and strategic foreign policy is required.

Thirdly, in prosecuting cases against Mrs Arroyo and her allies, many will assail the efforts of PNoy as unsatisfactory or timid, as several church and citizen’s groups have done. Personally, I would not consider this too much of a problem, but I know that many have that expectation. So what I cite as a failure by this government is its inability to manage such high expectations. More importantly, I would like to see greater safeguards and economic measures put in place to ensure that the Ombudsman and Solicitor General’s office are well resourced to perform their functions.

Sharper focus required

Finally, I would like to cite areas that deserve sharper focus by this administration. These are things that the administration needs to prioritize if it is to make a lasting impact. The first has to do with its development strategies contained in the Philippine Development Plan 2011-2016. As I have stated in a three part series, entitled the National Development Program, there are serious gaps in the Plan that need to be addressed.

Secondly, in its first year, the government has shown serious shortcomings in its budget plans and execution. Having had a head start by way of Congress’s early approval of their budget, the government should have done better at releasing its funds for infrastructure projects. The practice of forced savings due to off-target collections also has to be addressed. This cannot continue as per the ratings agencies reports if the nation is to keep to its growth trajectory.

Thirdly, in generating much needed employment, this government has to start thinking ‘outside the box’ if it is to keep up with the growing workforce. PPP’s or public-private partnerships are an existing tool already wielded by preceding governments. For it to have a successful employment program, the administration will have to develop a robust industrial policy. To do that it needs to reshape the economic bureaucracy as I have pointed out here.

Looking back, moving forward

A periodic performance appraisal is always necessary for any government to benchmark itself against the undertaking it has given to the people, to celebrate successes and take stock of where it needs to improve or devote more attention to.

The first year of any government is always the hardest. Unexpected roadblocks and landmines often litter its path. The ability of any regime to survive its first year relatively unscathed or even stronger than before usually is a good indicator of the caliber of its leaders.

We will have to say that the government despite all the sound and fury has survived relatively intact. The remaining five years will contain many twists and turns. Hopefully, the correct lessons from its first year will help inform these remaining years. For this reason, it is important for citizens to remain as engaged as they have been during this first year as we here at Propinoy are determined to be.

Doy Santos aka The Cusp

Doy Santos is an international development consultant who shuttles between Australia and the Philippines. He maintains a blog called The Cusp: A discussion of new thinking, new schools of thought and fresh ideas on public policy (www.thecusponline.org) and tweets as @thecusponline. He holds a Master in Development Economics from the University of the Philippines and an MS in Public Policy from Carnegie Mellon University.

  • Thai anton

    Dredging of lagunA de bay project
    RORO project to built ports able to accomodate RORO ships Pnoy claims overpriced by 200 percent
    North rail project extending the rail service Clark in Zamabales claimed to have ballooned to 1.3 billion funded by. China.

    2 European projects and one Chinese funded.

    Just because a project have overshoot it’s projected cost dont it’s corrupt
    there are lot of variables contractors have to deal with like cost of labor,
    Materials,weather,inflation,logistics,equipments, and politics and all of them cost time and money and those will have to added to the cost of the contract because contractor are allowed for justified cost adjustement
    To the projects because the govt also has inspector to oversee the project and it’s cost. it’s what they cost engineering and cost engineering have documented pricing of labor and equipments. Submitted to hover every month for pAyments. They all can be adjusted for price inflation..
    To say that a project is overpriced is a lot of baloney.

  • Thai anton

    I don’t have a problem Pnoy driving a Porsche ,but playing PSP is.
    Tell me why US investors invest in Communist China and Vietnam instead democratic Philipipines ? Because they view us balingbing And therefore
    Unreliable.
    Vietnam will build a high speed train line from Hanoi to Ho chi minh city
    with a projected cost of $33 billion ,with the support of the Japan, Vietnam
    receive $3.5 billion in pledge economic assistance for this year alone.

    • Thai, if we had a very powerful economic bureaucracy like they did which was immune to the changes in government, as I have been proposing here, there wouldn’t be as much uncertainty with regards to such investments.

      • UP nn grad

        You mean…. if Pilipinas honored contracts.

        Which is exactly what Europe had out-and-out complained about with regards Presi-Noynoy trashing two or three big contracts.

        My fearless forecasts — there will be a drop in foreign investment money coming into Pinas in year 5 and year 6 of Presi-Noynoy’s term — Europe having been burned with contracts geting nulled with changes of administration. What Presi-Noynoy had done (undo the contracts signed by the previous president) the expectation is that the next president will do (undo the contracts signed by Presi-Noynoy).

        • Bert

          “My fearless forecasts — there will be a drop in foreign investment money coming into Pinas in year 5 and year 6 of Presi-Noynoy’s term — Europe having been burned with contracts geting nulled with changes of administration.’-up N

          It was the cancellation of the Fraport/Piatco contract that riled the Europeans, can’t you remember, UP n? And it’s not the Noynoy’s admin who cancelled it. Ain’t you barking up the wrong tree?

        • NAIA-3 was the start and the basis for cancelling it, that it was tainted by corruption, was also alleged by this govt in cancelling the more recent contracts.

          The fact is a pattern has been made that our system does not provide certainty. Sovereign risk is becoming a problem.

          • Bert

            Doy, are you sure those recent contracts cancelled already by Noynoy’s admin? Maybe they’re just being on hold for farther review, will you clarify?

          • Yes, Bert. The Belgian firm BDC which was meant to dredge the Laguna Lake has filed for damages before the ICSID worth P6B. This following the government’s non-reply to a letter sent by the Belgian PM seeking a resolution to the matter.

            This case deserves a separate post altogether, but it is illustrative of the problems besetting ODA funded projects.

          • UP nn grad

            The nutball’s thing about that bay-dredging contract…. Presi-Noynoy could not point to any specifics to say “… this one… that one… and this paragraph…. the cost-items are too high and anomalous!!!”.

            His last statement was that dredging-projects like Laguna Bay are usually graft-ridden… ergo….

      • The problem with the cancellation is that it might actually hamper the awarding of PPPs. We’ll have to watch this space. The ADB is reportedly providing assistance to avoid us from entering onerous contracts a la the independent power contracts, but that is but one part of the equation.
        The other side has to do with assessing the need and feasibility. We need to beef up the agencies tasked with reviewing proposals and contracts through higher recruitment and compensation standards.
        We also need to look at how we can fund some of these projects ourselves, given that we are sitting on top of $3 billion additional reserves every year, the average growth in our Gross International Reserves in the last 12 years. That’s more than double our average FDI per year in the same period.

  • Bert

    Amen to that, Doy.

  • UP nn grad

    With Pnoy’s affectation love-hate for GMA, maybe a historical view can be helpful.

    How was GMA’s first-year performance? [I suspect in her first year in office, there were no slime graft-corruption attached to GuLO or her BFF’s in her first year, while PresiNoy has his Torres shooting buddy business invasion to raise eyebrows.]

    • Bert

      Some wines, depending on how they’re made and stored, improved with age.

      GMA, as it turned out, turned to vinegar after one year. And what a vinegar. Worse than datu puti.

      Noynoy? As the present ratings goes he’s no vinegar but we’ll see after his second year, and after the end of his term.

      • UP nn grad

        What abour Ferdinand Marcos? Wasn’t he well-respected even as he stepped into year 3 of his administration(s)? Were there instances when the Pilipinas Supreme Court ruled “unconstitutional” to any of Ferdie’s pronouncements in the first 3 years of his administration? [And when did the Dovie Beams wiretappping happen?]

        and I agree with you about datu puti. Philippine vinegar has fallen behind… it will take had work for Philippine to catch up with the quality of Thailand vinegar, I hope PresiNoynoy selling his vrooOOOOMmmm-Porsche means that Presi-Noynoy will make more time to focus on catching up with Thailand. (Thai economy, not some Thai Airways stewardess)

    • As I recall, there was the scandal involving DOJ Sec Nani Perez over the power contracts even before day one of GMA’s presidency who was forced to resign in order to answer the allegations.