Aquino may follow Obama path, warns think-tank

President Benigno Aquino III’s promise of change is likely to follow the same path as that of US President Barack Obama, according to a US-led multinational risk consultancy firm doing intelligence work for the world’s top corporations and embassies in Manila.

MANILA, Philippines—President Benigno Aquino III’s promise of change is likely to follow the same path as that of US President Barack Obama, according to a US-led multinational risk consultancy firm doing intelligence work for the world’s top corporations and embassies in Manila.

In a paper titled “Chasing a Legacy: Assessing Aquino’s Ability to Impact Change,” Pacific Strategies and Assessments (PSA) warned that like that of his US counterpart, Mr. Aquino’s change agenda appeared likely to fail to institute reforms for the great majority.

“Approximately 100 days into office, it appears that the bubble of expectations around Noynoy (Mr. Aquino’s nickname) is beginning to burst,” PSA said in the October 2010 paper that it had prepared for its clients, one of which furnished the Philippine Daily Inquirer a copy.

“The dynamics are not too dissimilar to the shared doubt being cast on US President Barack Obama because he simply has not lived up to the hype and soaring-oratory expectations of those who voted for him,” PSA said in reference to the losses suffered by the US President’s Democratic party in the midterm elections.

“Mr. Obama’s grace period has expired and eventually so will Noynoy’s,” it said, adding that while Mr. Aquino had “done a fair job acknowledging and framing the country’s major issues,” he had “not articulated any semblance of a strategy to address them.”
Obstacles too huge

PSA director Pete Troilo, who was involved in the preparation of the paper, said that while it was too early to pass judgment on the Aquino administration, the latter was faced by obstacles too huge to overcome.

“The odds are really stacked against him,” Troilo said when asked by phone to elaborate on the paper.

According to PSA, an early sign of trouble for Mr. Aquino’s reform agenda was the mishandling of the Aug. 23 hostage crisis in Manila that ended in the killing of eight Hong Kong tourists.

The bungling of the crisis “only halted any early political momentum and provoked suspicion over the President’s already uncertain leadership abilities,” PSA said.

It also said the cloud of doubt hanging over Mr. Aquino’s ability to bring about genuine change was made larger by the continued hold on power by a few powerful families and traditional politicians, or “trapos.”

“The reality remains that Philippine democracy is actually the institutionalization of powerful families who have long controlled the nation’s incestuous political economy,” PSA said.

It said that while few doubted Mr. Aquino’s intentions and the reason people pinned their hopes on him, “the reality is that trapos are still dominating Philippine politics at both the national and local levels.”

“Changing the playing field will require a steel will and stomach for horse trading that Noynoy has simply not yet demonstrated,” it said.

Can’t control 2 factions

PSA said a basic requirement for meaningful change in the Philippines was the end of the domination of traditional politics—a development that, it observed, was unlikely to happen under the new administration.

“This is best evidenced by Noynoy’s inability to control the two competing factions that have already caused problems within his administration,” PSA said.

It said the “Balay” and “Samar” factions had become examples of how powerful interests were clashing for dominance: “The trapos have continued their reign … and Noynoy can do little about it.”

While Mr. Aquino came to power as an antithesis of the scandal-wracked Arroyo administration “the rest of the Philippine political system did not change,” PSA noted.

It said that Mr. Aquino, a scion of an elite family and brought up in the ways of traditional politics, was not likely to turn against the very system that put him in power.

“Regrettably,” it said, “there is nothing more critical for the country’s future than changes to the political system.”

Temper hopes

Troilo said that while PSA was not saying it was now useless to hope for real change, this view mirrored the thinking of foreign businessmen who expressed their opinions on governance under Mr. Aquino in the course of the paper’s preparation.

“What we really wanted to say was people should temper their expectations,” Troilo said. “These [expectations] should really be matched with Noynoy’s ability to impact change.”

Said PSA: “The crux of the issue is that trapos refuse to undermine the very network that facilitated their rise to power even though that is perhaps the sole prerequisite for sustainable reform.

“The result is policy that benefits the privileged and powerful few and neglects the national or public good.”

In Malaca?, Mr. Aquino’s spokesperson Edwin Lacierda declined to comment on whether he thought Mr. Aquino’s popularity would, like Obama’s, be eroded in the next three years.

“At this point, it would be too speculative to comment,” Lacierda said in Wednesday’s news briefing.

But he said the Aquino administration could work with the US government even with the expected changes in its legislature.

“The midterm elections are a lively demonstration of American democracy. We will work with whatever configuration that the US government presents to us,” Lacierda said.

Lesson for P-Noy

Philippine business leaders said the Republican party’s victory in the US House of Representatives should serve as a lesson to Mr. Aquino.

Ramon del Rosario, chair of the Philippines-US Business Council, said Mr. Aquino should strive to preserve and improve ties with Congress if he wanted his reform agenda to stay on track.

“I believe his efforts to work harmoniously with Congress should be pursued, as much of the reform agenda requires legislative cooperation,” Del Rosario said.

This view was echoed by economist and University of the Philippines professor Benjamin Diokno, who called on Malaca? to take advantage of the President’s high approval ratings to push unpopular reforms.

“The lesson for Aquino is that he should front-load his most important reforms while public support is still high,” Diokno said.

It is now unlikely that Obama would be able to push new initiatives, Diokno said, adding: “To his credit, he was able to put in place some long-lasting reforms such as the financial reform and health care reform.”

RP to benefit

But Del Rosario, a former finance secretary and the current chair of the Makati Business Club, said the Philippines stood to benefit regardless of which political party dominated the US government.

“The main lesson that I hope will be learned is that the two parties should work together and forge a common program to get the US economy back on its feet,” he said. “That is the first order of business. Nothing will benefit the Philippines more than a US that is economically strong.”

The local impact of the power shift in the US legislature was also downplayed by Oscar Sa? the president of the Business Process Association of the Philippines, despite the fact that most Republican candidates opposed the outsourcing of US jobs to countries like the Philippines.

“Republicans have historically been supportive of liberal world trade. This thinking certainly extends to the global services trade,” Sa?said.

ING Bank investment manager Paul Joseph Garcia said the Republicans’ gain would be a “generally market-friendly” development for financial markets.

Little effect on US policy

Local analysts said the Republican victory would have little effect on US policy toward the Philippines.

“Of the two [US chambers], the one that calls the shots on foreign policy is the Senate, which is still controlled by the Democrats,” Mon Casiple pointed out by phone.

If anything, Casiple said, Obama would be “more cautious” in making any unilateral change of policy toward Southeast Asia and the Philippines, and would consult the House more.

Speaker Feliciano Belmonte Jr. also weighed in on the issue, saying: “[The Americans will] continue to have vital interests here and in Asia. The domestic economy is their issue.”

But former Sen. Aquilino Pimentel Jr. predicted “drastic changes” in US military and economic policies in Southeast Asia under a Republican-dominated House.

“There might be a conscious need for supremacy as the world’s No. 1 policeman that might complicate things since we are living in the shadow of an emerging challenger: China,” Pimentel said by phone.

He said the US government would now be expected to be “a little strict” on foreign economic aid, especially concerning population control.

Conservatism trend

Former National Treasurer Leonor Briones, the Oxfam ambassador to the G8 Group of Countries, warned of “a global trend toward conservatism” that could lead to a reexamination of aid policies.

As a consequence, Briones said in a phone interview, there could be a shift in aid priorities from social development, education and health, to infrastructure.

“This is one of the characteristics of the trend toward conservatism. There’s less sympathy for social issues… Contractors will come in, and trade will become a bargaining chip for assistance,” she said. With reports from Daxim L. Lucas, TJ Burgonio and Norman Bordadora –Tony Bergonia Philippine Daily Inquirer