Trapo Alert! Detecting political pandering on the pander-o-meter

Panderometer

Featuring Sonny Angara, Bam Aquino and Alan Peter Cayetano.

The populist is in the details (or lack thereof).

As part of a series covering the senate race of 2013, I am casting a spotlight on the platforms and policy pronouncements of the candidates as the campaign season unfolds.

Previously, I found that only 11 candidates had bothered to present their legislative agenda for the senate. These were Bam Aquino, Chiz Escudero, Risa Hontiveros, Loren Legarda and Koko Pimentel of Team PNoy, JV Ejercito, Gringo Honasan, Ernesto Maceda and Migz Zubiri of UNA, Teddy Casiño of Makabayan, and Greco Belgica of the DPP. This list has recently been updated to include Sonny Angara, Jack Enrile and Peter Cayetano. There are also five more candidates that belong to parties that have released a party-wide platform. This includes the partymates of Greco Belgica in the DPP, namely Bal Falcone and Christrian Seneres, and Kapatiran’s candidates JC delos Reyes, Rizalito David and Marwil Llasos. So in total, there are 19 candidates with platforms.

I will in this series tackle their proposals and evaluate their content in terms of their reformist versus populist credentials. I will offer an overall rating for each candidate based on what I call a Pander-o-meter or Trapo (traditional politician) scale which will indicate the level of pandering that goes on. The various readings of this panderometer are based on the following scale:

Introducing: the ‘Pander-o-meter’ or Trapo Scale

A reading of… …is equivalent to…

1-2

Low levels of pandering detected, generally reformist in nature

3

A mixed bag of proposals aimed at both pandering and reforming

4

Trapo alert! Approaching dangerous levels of pandering

5

Could be likened to a vote buying trapo

Note that for those candidates who do not even present an agenda, their reading automatically goes to 5 by default. I will now proceed with the first three candidates on my list who all belong to Team PNoy: Sonny Angara, Bam Aquino and Peter Cayetano.

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Juan Edgardo “Sonny” Angara (LDP-Team PNoy) looks set to follow in his father’s footsteps in cornering the youth vote by branding himself the ‘education senator’ through proposals specifically targeted to this sector. The following three priority bills are illustrative of the type filed by him in the lower house. Do they reveal a reformist or populist bent? Read on and find out.

  1. National student loan program a.k.a. “study now, pay later”:
    • Description: creation of an education loan fund authority to oversee student loans to tertiary students (both vocational and higher education)
    • Cost: Php5 billion, Php10 million to set-up operations
    • Source of funding: not specified

My critique:

The sufficiency of the fund depends on the take-up rate of students. Currently with Php32.8 billion being spent by government to cover ~90% of the cost of a college place, the remaining ~10% or about Php3 billion in fees have to be shouldered by students. With a 100% take-up rate, the entire fund would be exhausted in less than two years, and that doesn’t take into account students of private colleges and universities availing of the program. Even if we were to assume only a 50% take-up rate, the fund would still be exhausted in three to four years assuming inflation in student fees and administrative cost of the fund. This needs further work to become realistic and self-sustaining. I provide a more comprehensive reform agenda here .

  1. School modernisation and innovation program:
    • Description: upgrade of computer/science labs, libraries and the promotion of distance-learning at public elementary and secondary schools
    • Cost: unspecified
    • Source of funding: earmarked from existing expenditures equivalent to 10 per cent of Department of Education budget

My critique:

DepEd already spends 56% of its budget on maintenance and other operating expenses, with a further 3% on capital outlays, which cover everything mentioned in the proposal including Alternative Learning Systems plus Sports, Health and Nutrition, National Education Test development and others. Without additional funding, this bill would simply bind the department to re-direct existing spending to the areas specified in the bill. This might be counter-productive and lead to unintended consequences due to the inflexibility built-in to budget by such a measure. It also fails to mention anything about promoting web connectivity of classes which would be the most innovative thing we could do. An NBN as proposed by my colleagues in this site should be re-investigated.

  1. Bill of rights for fresh graduates
    • Description: a package of incentives for fresh graduates incorporating: workplace rights (secure tenure, fair treatment, further training), exemption from contribution into workplace entitlement programs (social security, PhilHealth, Pag-ibig) for one year, fee waivers for job search costs (NBI clearance, birth certificate, passport application), access to small business loans of up to Php100,000, additional Php10,000 personal exemption on income tax on top of existing income tax threshold,  discounts to transportation fees for one year.
    • Cost: not specified
    • Source of funding: National Treasury

My critique:

This is potentially a very costly program for government. Last April alone there were just over 9 million Filipinos aged 15-24 who were in the labour force. Assuming that roughly a tenth of them were fresh vocational or university graduates, there would be 900,000 eligible beneficiaries annually. Multiply that by a conservative estimate of Php10,000 worth of benefits per person, that amounts to Php9 billion a year that needs to be funded. Even if we assume half that amount become eligible, you are still talking about serious sums being spent. If the aim of the plan is to encourage college completion, then there might be better, more cost-effective ways of doing that. As it is, this bill is really a stop-gap measure addressing low wages and lack of appropriate job opportunities for graduates in the domestic economy. Creating paid apprenticeships and training subsidies would be a better way to go as I have discussed here.

Overall comments:

The three proposals are specifically targeted to a large chunk of voters sensitive to education issues: the youth and parents of school and college students. The problem with the measures is that they are all potentially expensive and unfunded. They pander to the electorate by promising a whole slue of benefits, but without proper costing and funding, they may simply become ‘paper entitlements’.

Pander-o-meter: 3 out of 5

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Benigno “Bam” Aquino (LP-Team PNoy) has a three-point agenda which are aimed at the youth, job hunters, and micro-to-medium sized business owners.

  1. GoTrabaho Act
    • Description: Addressing education-employment mismatch through a national internship program supported by a database with incentives for business and educational institutions to properly match training with demand
    • Cost: not specified
    • Source of funding: not specified

My critique:

Although the funding issue is not tackled, this is a much more practical and manageable response to the problem of youth unemployment and skills mismatch than what Sonny Angara proposes above. I have previously tried to cost this program based on the level of demand from employers as per government released statistics. The cost of Php1.5 billion is not prohibitive and really well-targeted and cost-effective, as I discuss here. This makes this proposal realistic and actionable.

  1. GoNegosyo Act
    • Description: Supporting the creation of sustainable micro, small, and medium enterprises (MSMEs) through regulatory red-tape reduction, microfinance, market mapping, training and cluster road map development, as well as incentives to social enterprises
    • Cost: not specified
    • Source of funding: not specified

My critique:

This proposal need not necessarily require additional funding. The package of reforms brings together several programs already operating, including the National Competitiveness Council’s efforts to address the cost of doing business, the DTI’s and BMBE program that provides credit to MSME’s and TESDA’s and DepEd’s entrepreneurial programs. What is new is the boost to social enterprise signalled by the policy statement and the creation of a cluster within government to develop a roadmap for MSMEs.

It is important to include MSMEs, research councils and scientists and civic society in cluster development and to have multiple industry clusters to develop roadmaps so that government can get behind these naturally forming clusters and help them expand and agglomerate. At some future stage, when priorities are identified, there may be a need to fund industry- or cluster- specific infrastructure, but only after stakeholder consultation and engagement has indicated that there is a need for it.

  1. PPP4E
    • Description: supporting public-private partnerships for education
    • Cost: not specified
    • Source of funding: not specified

My critique:

PPP’s to close the classroom deficit have already been scheduled according to the responsible agency, DepEd. This proposal seeks “to arrive at the best form of partnership/s that will be beneficial and fair to all parties, while leapfrogging government’s resource constraints.” Perhaps what the proposal should do is seek to close other gaps such as those involving equipment and science labs. Connecting schools, colleges and universities with high speed broadband needs to be addressed either through PPPs or through a sovereign wealth fund model as per my suggestion here.

Overall comments:

Bam Aquino has not yet learned the bad habits of veteran legislators to enact broad sweeping entitlements with no costings or sources of funding. His more modest, measured proposals would require minimal or no cost as they involve better coordination and improvements to existing programs and policies. One cannot discount the impact that these will have on the broader economy, if done correctly.

Pander-o-meter: 1.5 out of 5

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Alan Peter Cayetano (NP-Team PNoy) has recently launched his PiTiK program (P-presyo, T-trabaho, K-kita) an acronym he has obviously borrowed from former socio-economic planning secretary Cielito Habito, but failed to acknowledge (could this be a case of plagiarism?). The following is a list of proposals the senator seeking re-election has made in conjunction with this framework. These he claims were the product of his listening tour of the country.

  1. Reconsidering VAT on gas
    • Description: reconsidering the application of VAT on petroleum products.
    • Cost: not specified
    • Source of funding: not specified

My critique:

The senator needs to propose revenue neutral ways for the government to recover the revenues lost from lowering or eliminating VAT on petroleum products. As it stands, this proposal could impact the gains which the government has already made in raising its revenues to close the budget gap. A more realistic proposal was offered by former budget secretary Ben Diokno wherein the VAT rate automatically adjusts to oil prices (the VAT rate goes down when prices are up, conversely the tax rate goes up when prices are down, although there is a ceiling which would limit the rate rise to the current 12%).

That proposal is meant to be revenue neutral, but what Cayetano does here is a classic case of pandering to the masses, because they would avoid the VAT but have to pay in the future through higher inflation if the government has to borrow more because it is unable to maintain its revenue base. Interestingly enough, Diokno’s recent pronouncements that VAT needs to be raised to 15% to deal with the infrastructure gap and chronic budget deficits might become necessary if Cayetano’s proposal is enacted into law.

  1. College scholarships to the top 10% of every graduating class from public schools
    • Description: exempting this cohort from student fees at state universities and colleges
    • Cost: not specified
    • Source of funding: not specified

My critique:

The proposal is representative of a number of pending bills in the senate. I have canvassed them here. Mandating SUCs to provide tuition free places to a cohort of students is in my view a band aid measure. One of the unintended consequences of this is that SUCs will have to fund these scholarships by raising the fees charged to the rest of their students. They either do that or lower the amount they spend upgrading their facilities and lecturers. At the rate at which legislators call for the creation of newer SUCs, government simply cannot keep up with the funding costs as there is much duplication of programs and administrative departments. It is in fact necessary to encourage SUCs to merge rather than to multiply to gain economies of scale.

Addressing the issues of equity, efficiency, appropriateness and effectiveness of higher education is the more important reform agenda that needs to be tackled.

One important question to consider in all this is: Why should Juan dela Cruz, the grade school drop out who works in the informal sector, for instance be paying with his taxes the studies of Isko the scholar who will become a skilled professional after graduation and earn a high salary? The returns to training of both private individuals and society at large must be studied and assistance offered to scholars to deal with the incidence of costs to training on that basis. Rather than create a universal right to free higher education, government should help private individuals by shifting the timing not the value of the costs associated with their studies. I have offered a comprehensive program on how to do that here.

  1. Providing cheaper loans through cooperatives
    • Description: building more and expanding existing cooperatives that can lend to their members using cheap interest rates.
    • Cost: not specified
    • Source of funding: not specified

 My critique:

The proposal is half-baked. What is the role of government in building and expanding voluntary organisations such as cooperatives? That is not defined. Studies have shown that it is the unavailability of credit rather than the cost of it that is the biggest roadblock the poor face in undertaking entrepreneurial endeavours. This proposal was framed in the context of public transport operators making less money as a result of high input costs but regulated prices in their industry. So if that is the case, offering them credit will not necessarily help them address that fundamental issue.

Overall comments:

The senator has used his so-called listening tour to launch his PiTiK campaign, which is really more of a loose organising principle for his policy pronouncements than a robust policy framework. As a result, his proposals seem to be shot from the hip and not well-thought out. The senator (currently sitting at no. 3 in the SWS and Pulse Asia polls) seems to be more focused on grabbing the headline than on governing responsibly. His proposals are laden with costly unintended consequences from a fiscal, economic and social standpoint and don’t really address the fundamental problems. They in fact misconstrue the very nature of these problems and as a result lead to false solutions. For violating the rule in public policy, which is “to do no harm,” Peter’s proposals are even worse than if he had done nothing.

Pander-o-meter: 6 out of 5 (off the scale!)

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The next batch will include Chiz Escudero, Risa Hontiveros and Loren Legarda.

 

 

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.

  • GabbyBD

    Regarding educ loans…

    the 2 problems with loans is repayment and job market success.

    if schools/vocational schools link with industry/employers, then this can solve both problems at the same time, with results that are cheaper than an apprenticeship/internship program beyond tertiary education.

    • On educational loans, of course there will be bad debts. That has to be budgeted for. The Philippines is the only non-ASEAN-5 country that did not participate in the recently concluded conference on “income contingent loans, education and labour markets” held in Bangkok and featured talks by Joe Stiglitz and Bruce Chapman, the architect of the HECS system in Australia. So it seems we are again behind the learning curve and will have to play “policy catch-up” again.

      Apprenticeship and traineeships tend to be offered to school leavers after Year 10, not after tertiary education, GabbyD. Subsidies are needed since employers will not hire unskilled workers or invest in their training given the competitive pressures they face. These unskilled workers on the other hand will not be willing to invest in highly specific skills especially firm-specific technologies given the non-transportability of these skills elsewhere. But training these workers would be more optimal for both the firm and the prospective employee and society as a whole. That is the rationale for the state providing subsidies for OJT.

  • What a wonderful commentary. I would offer specific observations, but the Department of Immigration has determined that such might undermine the sovereignty of the Philippines, or blow Filipino minds, I’m not sure which is their bigger concern.

  • Carolingling

    Peter Cayetano,, wag mong lokohin ang taong bayan,,plastik kang hay*p ka!

    • GeorginaBilson

      tsk tsk, i wont vote for Peter cayetano!

  • BonnieBailey9

    Wow bakit hindi nakalagay ang pagnanakaw ni Peter Cayetano sa project sa C5?? isa ka sa mga pinaka-corrupt sa senado! unggoy!

    • Erarara

      magnanakaw ang hayup na si cayetano! wag iboto ang hayup na yan!

    • Floridahhh

      gigil na gigil ako sa mga ganitong klaseng kandidato, epokrito ! numero uno namang magnanakaw si Peter Cayetano!