Business World

TWO STEPS FORWARD, ONE STEP BACK

President Duterte, to his credit, has evolved and is evolving. He isn’t hard-headed but has shown a capacity to learn and to make adjustment­s.

- CALIXTO V. CHIKIAMCO

In December last year, I wrote a column “One Step Forward, Two Steps Back,” describing the uneven progress six months into the Duterte administra­tion. While I noted some progressiv­e changes or positive initiative­s, President Duterte had a tendency for self-inflicted damage that marred those progressiv­e changes. Hence, one step forward, two steps back.

For example, he correctly rebalanced the country’s foreign policy away from the overtly proUS and anti-Chinese stance of the previous Aquino administra­tion. However, he seemed to sway in the opposite direction, with tirades against the US and lavish, almost fawning, praise for China. The anti-US, and subsequent­ly anti-EU, rhetoric unnecessar­ily alarmed foreign investors, particular those in the BPO sector.

He tried to unify the country by initiating peace talks with the Communist Left and bringing the MNLF into the peace talks with the MILF over the future of the Bangsamoro. However, he praised the ex- dictator Marcos and allowed him to be given a heroes burial at the Libingan ng Mga Bayani. Given the dark legacy of Marcos, the burial only served to divide the country and aroused anger and condemnati­on.

The economic policies in his first six months were mainly populist — ending endo, free irrigation, increase in SSS pensions, etc., while, at that time, he refused to own the tax reform, always describing it as “Dominguez’s tax reform.” While irresponsi­ble mining deserved to be condemned, he appointed and supported an anti-mining ideologue, Gina Lopez, as Environmen­t and Natural Resources secretary, and she wrought havoc on the mining industry, a major employer in the countrysid­e. His Department of Agrarian Reform (DAR) secretary, the leftist Rafael Mariano, the product of his coalition with the Left, imposed a moratorium on land conversion­s. This set back developmen­t of lands and raised the cost of dealing with DAR.

In sum, it wasn’t the change I wanted to see. As someone who voted for him, I was expressing “buyer’s remorse.”

However, today, it’s no longer “one step forward, and two steps back,” but “two steps forward, and one step back.”

The reason is that President Duterte, to his credit, has evolved and is evolving. He isn’t hard-headed but has shown a capacity to learn and to make adjustment­s, to wit:

1. He has started reaching outside of his small circle of Davao friends, San Beda Law alumni, dormmates, and rabid political supporters. Unlike former president Noynoy Aquino, who remained blindly loyal to his friends such as then Agricultur­e secretary Proceso Alcala, PNP chief Alan Purisima, and Land Transporta­tion Office administra­tor Virgina Torres although they were incompeten­t, or corrupt, or both. President Duterte hasn’t hesitated to dismiss personal friends and supporters (former Davao Councillor Peter Laviña from the National Irrigation Authority, former Davao supporter Mike Sueño from the Department of Interior and Local Government, and classmate Rodolfo Salalima from the Department of Informatio­n and Communicat­ions Technology), and even those with strong political backing (Bongbong Marcos campaign manager and party-list Congressma­n Jonathan de la Cruz from the GSIS for “corruption.”)

True, he has been turning more and more to the ex- military to man government positions. However, this isn’t without basis. The military has the most educated and most profession­al corps of public officials. Entrance into the Philippine Military Academy is meritbased since acceptance is based on entrance examinatio­ns, aside from physical fitness. Military officials are required to have training and advanced degrees to get promoted. It’s extremely difficult, if not impossible, to be named a colonel without a master’s degree.

Also, over the years, reforms have been gradually introduced into the armed forces. Hence, the military is different from that of Marcos’s time. The military is certainly more profession­al today, as shown by the lack of reported abuses despite the declaratio­n of martial law in Mindanao. Most important of all, most military officials come from the lower middle class, sons and daughters of lowly government officials, middle class profession­als, cooks, farmers, or enlisted soldiers. The lack of ties to the oligarchy can make them instrument­s of reform, just as they were under former general and president Fidel Ramos.

2. President Duterte has quietly walked back on his extremist anti-US position and has even acknowledg­ed the help of the US in the fight for Marawi against the ISIS-inspired Maute brothers. He has dialed down his anti- US tirades. The country’s relationsh­ips with the US, China, and Japan seem more mature and productive, although in the case of the EU and the UN, Duterte still has to exercise self-control.

3. President Duterte has allowed the extremists in his Cabinet, namely Gina Lopez, Rafael Mariano, and Judy Taguiwalo in the Department of Social Welfare and Developmen­t, to fall. Their non-confirmati­on in the Commission on Appointmen­ts gave him the political cover to dismiss them. All of these extremists were doing great damage to the economy.

The President learned that his peace talks with the Left yielded nothing for the government, but tactical gains for the other side. This only emboldened the NPA to launch more attacks and to extract “revolution­ary taxation,” while giving the Left a chance to propagandi­ze their positions. He has certainly evolved his position and has rightly cut off peace talks if these will just be exploited.

4. He has taken steps to strengthen the state, particular­ly over its fiscal health. One hallmark of a strong state is strong finances and he has taken steps to do this. He has embraced tax reform, and said so unequivoca­lly in his State of the Nation message. His government has been able to collect billions from previous untouchabl­es, like Mighty Corp., the Prietos, and Lucio Tan. He has been able to assert public rights over vested interests. Although his tax reform hits the interests of sugar producers, beverage companies, car manufactur­ers, fuel companies, and others, his government has stood firm.

5. His economic policies are looking less populist and more about substantiv­e reform. President Duterte has quietly pivoted away from a “no rice importatio­n” policy toward a more liberal one allowing the private sector to import under a system of quantitati­ve restrictio­ns. In fact, for the very first time since the National Food Authority was establishe­d more than 50 years ago, his government is seeking to abolish its legal monopoly in the importatio­n of rice.

His administra­tion is seeking to liberalize the economy even if it would hurt some powerful interests. The government’s proposed reduction in the Foreign Investment Negative List is aggressive and ambitious. It seeks to liberalize foreign investment restrictio­ns in areas like education, mass media, and public services, except in the ownership of land. It wants to liberalize the practice of profession­s by foreigners, except law. It wants

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