As 2012 came to a close, many Filipinos faced the new year with much optimism and high hopes. In a survey conducted by Pulse Asia last December, 92% of respondents expressed hope for 2013 despite present circumstances. Along with that optimism, however, the nation faces many challenges and prospects for the coming year, at least from a political-economic perspective.
Power shifting
The 2013 Philippine Mid-term Elections is only four months away. With a total of 18, 053 elective posts up for grabs, candidates have already begun preparing for the polls in May.
Even prior to the start of the campaign period in February, however, mudslinging has already surfaced from the two largest coalitions in the race: the Administration-backed Liberal Party (LP) coalition and Vice-President Jejomar Binay’s United Nationalist Alliance (UNA).
UNA Secretary General and Navotas Rep. Tobias Tiangco shares that Binay and his party believe that the Administration used its power to gain an unfair advantage in preparation for the upcoming elections. “Vice President Binay believes the 2013 midterm polls are a prelude to 2016 presidential race, and the Cebu standoff is evidence of how President Aquino’s men would play dirty and do shortcuts to continue holding on to power beyond 2016, after President Aquino’s term expires,” explained Tiangco in an article from the Manila Standard Today in reference to the suspension of Cebu Governor and UNA congressional candidate Gwendolyn Garcia by the Administration over alleged malicious appointments in her office.
Consequently, Aquino has taken swipe at the opposing party. “Kung tama kami, puwede bang tama rin ang kontra sa amin? Kung doon sila panig, masasabi po ba nating may maliwanag silang pag-intindi sa tama at mali? [If we are right, can they also possibly be right? If they choose to side with them (the opposing party), can we still stay they have a good understanding of right and wrong?] said the President as reported by Rappler.com.
Aquino also reaffirmed his support for the LP slate, whose senatorial line-up was revealed last October 2012. With only three LP members on the slate, the administration’s coalition is primarily made up of the party’s allies and independent candidates.
On the other hand, UNA is comprised of members of Binay’s PDP-Laban and the Pwersa ng Masang Pilipino (PMP) of former President Joseph Estrada.
Both slates share three common candidates in reelectionists Francis Escudero and Loren Legarda, as well as Movie and Television Review and Certification Board (MTRCB) chair Grace Llamanzares-Poe. However, LP Campaign Manager Sen. Franklin Drilon asserted that the three shared candidates will not be allowed to join campaign sorties of the opposing party.
“We cannot prevent them from adopting some of our candidates. But we certainly find it problematic if these candidates they adopt would suddenly appear in rallies because when they endorse the candidates of the other side, that means they are junking the candidates of the coalition,” said Drilon as reported by Rappler.com.
Surveys conducted in August 2012 by Pulse Asia showed Legarda topping the list of Senatorial candidates, with 67.3% of respondents saying they would vote for her if elections were conducted at that time. Fellow shared candidate Escudero came in at second with 61.2%.
Taming the dragon
The issue over disputed waters in the West Philippine Sea remains an important priority for the Philippines. An indication of this is China’s decision to maintain a firm position on its foreign policy. While delivering a speech during the 8th Lanting Forum of the Ministry of Foreign Affairs in Beijing, Chinese Vice Foreign Minister Zhang emphasized China’s continuity of its policies and its capacity to keeping up with new developments.
In line with this uncompromising stance, China has announced that it will strengthen its presence in the region through infrastructural development and a strengthening of maritime law enforcement. Construction of airports, piers among others in the islands administered by Sansha, which is under the jurisdiction of Hainan Province, is being planned. As a result, the Philippine embassy in Beijing has recently requested clarification of the new maritime rules and infrastructure plans within the disputed region.
Just before 2012 came to a close, China’s deployment of patrol boats in disputed waters prompted a statement from the Department of Foreign Affairs (DFA) calling on China to respect territorial sovereignty and the exclusive economic zone.
The Philippines, along with other claimant countries and certain areas of the South China Sea, are still at odds with an emergent China. In an attempt to level the playing field against a much bigger country in terms of economy and military might, the Philippines has pursued more initiatives to modernize its navy. A recent scuffle over the Scarborough Shoal between the Philippines and China intensified the dispute, before the two countries subsequently decided to settle the altercation peacefully.
For Dr. Renato De Castro, professor of the International Studies Department, such a course of action by the Philippine government is aimed at building up a credible defense capability for the country. In the eyes of observers, this may seem as an arms race; however, he cautions that the country can never really engage China in such a scenario due to the asymmetrical military capabilities of the two countries.
According to him, developing a degree of deterrence will discourage but not entirely prevent an aggressor from challenging a country such as the Philippines.
An essential ally for the Philippines in the ongoing dispute is the United States. “If the US will not do anything, [in any event in which tensions between claimants significantly worsens], how will the other US allies in the region respond?” De Castro points out. Furthermore, he emphasized the significance of smaller countries’ alliance and American strategic interests.
Economic outlook
The Philippines is now seen as not only one of the fastest growing economies in Asia, but also one of the best-performing stock markets in the world, at least as of last year.
The economy achieved 7.1% growth during the third quarter of last year, from the previous 3.2 % in 2011. According to the National Statistical and Coordination Board (NSCB), the GDP growth for the first nine months of last year was at 6.5% exceeding the 6% target for that year. In addition, per capita GDP grew by 5.3% with estimated population growing by 1.7% to 96 million.
The boost in the economy during the third quarter of last year was driven primarily by the Services sector, along with the vigorous performances from Transport, Communication and Storage, Financial Intervention, Real Estate, Renting, and Business. These services were expected to grow this 2013 because of the sustained industry growth and the Agriculture sector that was resilient in minimizing damage despite disasters.
Department of Energy Sec. Jericho Petilla promises to stabilize the electricity supply, making it affordable to everyone in the long run. He encourages the construction of power plants.
It is also seen that economic growth will continue to rise together with the improvement of power supply and mass transportation because of the Public-Private Partnership (PPP) projects expected to roll out this year. According to the PPP Center, six projects will now begin construction. The different private firms investing on these projects will tend to increase the overall investment in the country. This will also create jobs for people and trigger consumption spending to represent 2/3 of the economy.
Another note for the economy is improved revenue collection in the public sector. One of the good governance platforms of the Aquino administration is in improving the tax collection efficiency and not necessarily implementing new taxes. This is evidently seen in the sin tax law passed during the last quarter of 2012.
According to Rappler.com, it is more important to note that growth will be affected in the 2013 elections, as the May elections will spur consumption from parties and campaigners.
Department of Transportation and Communications Secretary Abaya wants to improve the mass transit system, focusing in Metro Manila’s development. Abaya will address issues regarding the MRT 3, which will now be managed by the government. Construction of extensive roads, airports, and irrigation schemes supported by the financing of private firms will be a strong contributor to growth this year.
The Asian Development Bank has predicted that the Philippines will continuously improve its economic growth; however the current debt crisis and economic downfall in Europe and the fiscal crisis in the US were indeed alarming. In addition, it has been reported that the central bank will continuously decrease its interest rates to maintain high growth rates.
On a different note, foreign direct investment is seen as good contributor of growth yet it remains embarrassingly low compared to that of neighboring Asian countries.
The level of OFW remittances, if continuously high, will definitely contribute and offset any weak flows of capital investments to maintain domestic expansion. The Aquino administration is expecting for GDP growth of 6%-7% this year.
Disaster readiness
All of these considerations take into account the propensity of the country to natural disasters. Similar to the years that preceded it, 2012 was marked by several powerful typhoons that crippled certain parts of the country severely, in terms of damage to producers and infrastructure.
Still fresh on the minds of government disaster agencies is the wrath wrought on by Typhoon Pablo, the super typhoon that struck Mindanao early last December and caught the southern part of the country unawares. According to the international reinsurance intermediary and capital adviser AON Benfield, Typhoon Pablo brought on the most loss of life, with more or less 1,901 dead and 2,666 individuals left missing.
Pablo brought on $802 million worth of damages to infrastructure and private property in Mindanao. The disaster also destroyed 25 percent of the Philippines’ banana crops, necessitating $122 million (approx. Php 4.8 billion) of rehabilitation of banana farms in the region. Total damage to other banana plantations reveal entire damage to cost Php 7.362 billion. 155, 446 metric tons of banana were destroyed.
Coconut, corn, and rice plantations were also severely damaged, badly crippling the productive capacity of the nation’s food basket. The damage to crops dedicated to these amount to a total of Php 2.41 billion. Approximately 96 percent of the plantations ravaged by Pablo can no longer be recovered nor rehabilitated.
Agriculture Secretary Proceso Alcala claims that such damages would not cause a food supply crisis in the nation, assuring the public of the department’s self-sufficiency in the rice staple, and asserts that the losses will be recovered by a targeted increase of farm output from rice, corn, and fisheries by 4 or 5 percent growth.
16 typhoons hit the country in 2012, all of varying intensity. The 16 does not take into account the flooding brought on by a great monsoon from typhoon Hakui, causing billions in damage to Metro Manila.
The national budget, however, may not be able to take into account sufficient budget appropriations for disaster management. As of August last year, the NDRRMC was imposed with a zero-budget policy for failing to spend P391 million of its budget as of the date. The NDRRMC lobbied for an increase in the allocation, in order that the agency might be able to better prepare the populace with disaster training and preparation, and the acquisition of disaster relief equipment.
The approved P2 trillion budget for 2013 spends only an approximate P41 billion for the Department of National Defense, whose allocation for the NDRRMC amounts to less than P500 million. These funds for the NDRRMC are used for damage prevention measures, separate from the actual funds to be used when calamity strikes. The contingency amount in the budget’s unprogrammed funds amount to P7.5 billion, and these funds will be used to answer for damage response for potentially destructive floods in 2013.
