Manila: President Estrada's
stateof the nation address illustrated how far and fast
suspicion has grown of a resurgence of cronyism, abuse of power and populist
authoritarianism. His problem is his
by Philip Bowring
Manila: Doth he protest too much? In his annual State of the
Nation address to Congress on July 26, President Joseph "Erap"
Estrada vowed to "stake my life" on the defence of the
constitution and upholding "freedom in all its various forms".
That he found it necessary to say this at all was a direct
response to mounting criticism of the style of his year-old
administration. Elsewhere in the region there is debate about
how much has been learned from the Asian crisis. Here, people
are beginning to ask: have we forgotten what was learned from
the Marcos era?
Few imagine that Estrada is planning a return to Marcos-style
martial law administration. The concern is threefold:
* That cronyism in government to business relationships is
* That improper methods are being used to silence critics of
* That Estrada is planning changes in the constitution to
consolidate his own power and perhaps make possible a second
The most immediate issue concerns media freedom and abuse of
government power. Last week the venerable, but often highly
critical, Manila Times newspaper was closed down after it had
been sold to interests believed connected to the palace. The
vendor was the Gokongwei family whose property, food and
banking interests were seen as vulnerable to unfavourable
government decisions and unwarranted attention from the
taxman. Earlier, over the objections of editorial staff the
paper had published an apology to Estrada after he threatened
a libel suit after it called attention to a particular deal.
Another paper to have suffered from Erap's wrath is the top
selling Philippine Daily Inquirer. The movie industry recently
withdrew advertising from it after criticism of Estrada. This
was "the voluntary act of sympathetic people", explained a
spokesman for an Estrada showing growing irritation with media
reports of scandals. The movie industry has recently received
tax breaks. Others to have withdrawn advertising include
government bodies and Philippine Long Distance Telephone
(PLDT), the phone giant where control recently passed to the
First Pacific group, part of the empire of Suharto crony Liem
Despite his State of the Nation remarks, Estrada may well
feel that his own popularity can overwhelm anything the
church, aggrieved businessmen or Manila's chattering classes
have to say about him. His scandal-ridden private life has
long been ignored by the public which still believes that he
represents the poor. Whether or not late-night booze, girls
and gambling sessions are a thing of the past, the masses
still back him, according to all the opinion polls. The
celluloid image of the fighter for the underdog still far
outweighs either his actual elitist background or his
association with businessmen not known for their social
concerns or ethical practices.
His continuing popularity has reduced to silence many of the
normally voluble and critical members of the Senate. For now
it is not good politics to attack Erap, so that job has been
left to the media and the church. Congressmen have mostly
fallen in behind Estrada, as with Ramos, because few can
resist the patronage powers of the presidency.
Estrada also knows that in the short term at least he can rise
an economic recovery wave. The Philippines weathered the Asian
crisis better than most because, through no virtue of its own,
it suffered fewer excesses. Now the economy is growing again -
- it should expand by at least 2.5% this year after only a
small decline in 1998. The recovery is being driven by a
revival in agriculture after a severe drought and this will
lead to a pick up in consumer demand.
Business sentiment, like the stockmarket, is improving as
interest rates and inflation fall, the currency remains stable
and exports increase.The business community at least seems to
have learned from the Asian crisis. Corporations have been
busy reducing debt, closing loss-making factories and agreeing
to mergers or joint ventures with foreigners.
All in all, the president can blame past economic ills on his
predecessor and look forward to the rewards of recovery
underpinning his popular standing.
It is far too early to suggest that the Estrada regime will
evolve into a Philippine version of Peronist populism. There
is a tendency in southeast Asia towards populist
authoritarianism, but here at least this is matched by a
strong commitment to the process of voting and to the forms of
legal and constitutional process. That's why the issue of the
Constitution -- known here by the none too grave acronym of
cha-cha or charter change -- matters.
It is not yet clear what Estrada wants to do with the
constitution. His advisers are evidently planning some changes
and may well be able to push them through while his popularity
is so high and Congress so tame. Certainly there are many
faults with the Constitution which deserve attention. However,
as Ramos found when his supporters tried to change it to allow
him to run again, there is a deep seated antipathy to
amendments. All moves are viewed with suspicion that the
object is not to improve government by rationalising the power
structure but to entrench the interests of existing power
holders, whether by removing term limits or reducing te power
of the judiciary to interpret the legality of executive
decisions.It remains to be seen whether Estrada will face down
a hostile church, press and -- most formidable of all --
Despite the media interventions and push for constitutional
change, many believe that Estrada is too old and lazy to want
to want to exercise autocratic power. Instead, they see that
danger may lie in his tendency to rely on his pals, by they
highschool classmates, carousing buddies, movie world
identities, associates from his days as mayor of San Juan, a
Manila suburb, or fast talking businessmen with plausible
That reliance on pals is not always unfortunate. New central
bank governor Rafael Buenaventura may be a former classmate,
but he is also a highly regarded banker. The same applies to
Foreign Minister Domingo Siazon. Policy-wise there been no
retreat from the liberalising agenda of President Ramos.
Legislation to open retail trade to foreigners, to increase
competition in banking, to privatise the power industry is in
process. Despite recession there has been no major backsliding
from tariff reform. Senior ministers such as Finance Secretary
Edgardo Espiritu, Trade and Industry Secretary Jose Pardo and
Economic Planning Secretary Felipe Medalla all appear on top
of their jobs and espouse coherent policies.
But critics there is a growing gap between coherent policies
and implementation on an ad hoc basis through the
intermediation of Erap's court of buddies and business
associates. That matters in the Philippines, a nation where
government institutions are weak and where politicians are
easily influenced by the patronage that the executive can
bestow. The president seldom holds cabinet meetings and the
regular meetings between the president and congressional
leaders to speed important bills through the legislature have
come to a halt. Though Estrada supporters currently dominate
both houses of Congress, legislation has been making snails'
Decisions on purely business issues are being made in
Malacanang (the presidential palace) not the marketplace.
Deal-makers close to the palace have been key figures in big
deals including acquisition of control of Philippine Long
Distance Telephone Co. (PLDT) and the takeover of PCI Bank.
The intermediary in these cases, Mark Jimenez, is subject to
extradition proceedings by the US on a variety of criminal
charges. After much pressure, Jimenez has resigned as an official
adviser but may yet have Erap's ear.
Government and private sector social insurance funds
controlled by palace-friendly executives have been used to
promote particular deals and shares, including the above two.
Thus far, playing in the marketplace has been profitable. But
those with memories of the Marcos era recollect how social
security savings were abused in the past.
There has been a huge increase in legalised gambling, some of
it connected with businessmen of mixed reputations. The
gambling surge is supposed to be a way of raising money from
the rich to help the poor but critics say that the poor are
also the gamblers and the main winners are middle men.
Erap's ballyhooed anti-poverty program so far featured
telegenic parades of movie stars -- reminiscent of past
ventures by Imelda Marcos -- rather than efforts to collect
taxes and invest in irrigation, roads and schools. Priority
for agriculture is so far just rhetoric, though the poor are
mainly rural and the weakness of the agricultural sector has
been a root cause of the Philippines' abysmal economic
performance over the past two decades.
Several names closely linked to the Estrada administration are
new and not yet well known. But others include such prominent
Marcos business associates as Eduardo "Danding" Cojuangco and
tobacco magnate Lucio Tan. Both had made partial comebacks
during the Ramos era, but are now enjoying the benefits of
having been strong backers of the Estrada campaign. Tax cases
against Tan have been dropped or shelved and Danding seems
poised to keep many of the proceeds from a Marcos-era coconut
levy which critics say was the biggest of all frauds on the
poor conducted by Marcos.
It has always been difficult to keep business (with its
oligarchical tendencies) and politics (with its quasi-feudal
basis) separate in the Philippines. Cultural habits of
rewarding friends are also strong. But Ramos made a conscious
effort to reduce the government's role, to undermine oligarchy
by increasing competition, cutting tariffs and liberalising
foreign investment. His tough but thoughtful National Security
adviser Jose Almonte ran a long campaign against big business
tax evasion. Success was mixed but the trend was encouraging.
The extent of payola now cannot be measured. But anecdotal
evidence indicates an increase. The latest World
Competitiveness Report, ranks the Philippines close to Russia
and Indonesia for tax evasion, irregular payments and
favouritism towards well connected companies.
Estrada's administration is not without its successes -- for
example a reduction in kidnappings. But its association with
people on the fringes of the business world is causing concern
in many quarters, not just among censorious Catholic bishops.
Estrada may yet galvanize himself into action. He may listen
more to ministers and less to friends. He may use his
popularity to take on the church over family planning. He may
collect taxes and promote job-creating investment over crony
capitalism. He may remain popular regardless of his
performance in office.
But there is a long way to go before the celluloid champion of
the poor becomes their real champion, and before smart
Filipinos stop looking abroad to exercise their talents rather
than struggle against sleaze and feudalism at home.
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