Challenge to Real Change

July 25, 2016

by IBON Foundation

On the day of the State of the Nation Address, IBON explains why the 10-point economic agenda hangs like a dark cloud over pro-people economics prospects and even the chief executive’s recently-affirmed popularity


#SONA2016 #justpeacePH | IBON Features  The unorthodox candidate and eventually President Rodrigo Roa Duterte made a flurry of announcements before and after the 2016 elections. Some of these were unexpected but stil warmly welcomed by a constituency that has for too long been at the losing end of government policies: public funds diverted to private corporate profits, non-distribution of the presidential clan’s Hacienda Luisita epitomizing landgrabbing and landlessness, a raging jobs crisis, worsening poverty, a widening gap between rich and poor, a narrow and selective anti-corruption campaign, deeper subservience to foreign interests, and rampant human rights violations.

Progressive inclination

The new president sides with the poor and marginalized on several issues. He seeks to grant the denied elderly’s pension hike and nurses’ salary hike; end labor contractualization; make education and health accessible to more Filipinos; ensure that mining stops destroying forests, farms and communities; provide free irrigation; release the coco levy funds to the farmers; and stop urban poor demolitions, among others.

The recent signing of the Freedom of Information executive order is a commendable move. Mandating transparency and accountability in government’s executive branch offices is important for the people to be informed of government transactions, which are all of public interest.

Pres. Duterte’s initiative to resume the peace negotiations between the government and the National Democratic Front of the Philippines (NDFP) and the Moro Islamic Liberation Front (MILF) provided a fresh opening for socio-economic concerns such as these and the roots of armed and social conflict to be discussed and begin to be addressed. The unprecedented appointment of Leftists as heads of the agrarian reform and social welfare departments and also in the labor department and anti-poverty commission gives room for more progressive social and economic policy agenda to be pushed.

Pres. Duterte’s unbeholden stance towards the United States is also a potential starting point in asserting a nationalist foreign policy while forging a sovereign economy. He showed his independent thinking even when he was just mayor of Davao City when he refused to let the US military fly drones from Davao or hold military exercises there. As president, he has already strongly criticized the US as an “importer” of terrorism with its aggression in the Middle East. He is also willing to push for bilateral talks and greater diplomacy with China to resolve the disputes in the South China Sea/Western Philippine Sea in contrast to the previous administration’s US-instigated militarist approach.

However, the window for short-term to mid-term reforms, which has been opened substantially by Pres. Duterte’s pro-people inclination threatens to be undermined by the neoliberal, pro-business framework of his economic team’s 10-point agenda.

Neoliberal agenda

The new administration’s 10-point economic agenda presumes that government’s role in ushering development lies in ensuring that businesses, especially big foreign corporations, profit. Whatever economic growth this brings about is expected to trickle down to the rest of the populace.

But neoliberalism, as pursued by the Aquino administration and its predecessors, has failed to develop the economy.  Given the choice, the private sector has primarily sought to extract profit from utilities and services, most of which have been run as business ventures by virtue of privatization. This, instead of having these sectors serve public need and national development objectives.

Neoliberalism has also deliberately neglected agriculture and industry development at the convenience of big local and foreign business, whose main interest is to gain from cheap raw materials and cheap labor. This has resulted in a shrinking production base, a labor force that is accorded slave wages and flexibilities to bring down the production cost, an environment denigrated for business, and agriculture and industry increasingly turned into big or transnational corporate enclaves that have nothing or little to do with local production to provide the needs of the populace and local economic development.

Pro-business at public’s expense?

Advocates of people-centered economic development are concerned that the new administration’s 10-point economic agenda is inconsistent with Pres. Duterte’s pro-poor sentiments.

According prominence to public private partnerships (PPPs) means that public funds will continue subsidizing private profits from lucrative infrastructure projects. This will entail added burden to the public through higher taxes or fees.

The agenda retains the mantra of attracting more foreign investments, but this is tantamount to opening up Filipino natural resources, labor and markets to greater foreign exploitation. The agenda speaks of agribusiness and tourism in rural areas, which can lead to corporate takeover of even agricultural land that should otherwise be the country’s source of food and raw materials for local industries.

The agenda proposes tax reforms that involve adjusting the income tax brackets to take account of inflation. However, raising direct taxes on the rich and big corporations while reducing direct and indirect taxes on the poor is a more imperative measure to lessen inequities than mere inflation indexing.

The agenda retains the currently narrow orientation of education to produce graduates that will serve as the global market’s army of cheap labor. It approves of the practice of subsidizing private school education instead of strengthening the public school system to make education free for all. At the same time it does not offer to reverse the same trend of commodifying health and housing versus fortifying these as social services.

Decades-old neoliberal policies and unequal free trade deals that have kept the Philippine economy backward are sustained. Yet there is no mention of free land distribution, no plan for domestic job creation, nor a clear-cut measure to provide substantial support to farmers in the course of national industrialization.

The agenda echoes past administrations’ thrust of business friendliness and increasing competitiveness, a common clamor of some tens of thousands of business establishments. Yet there is no mention of raising wages or ending contractualization that affects millions of working Filipinos.

The agenda mentions the promotion of science, technology and the creative arts. These are vital elements in pushing national progress. But people-centered development advocates express hopes that this will not be in accordance with the Joint Foreign Chambers’ recommendations to tighten intellectual property guidelines, allow greater foreign participation in Philippine advertising, media and the arts, and expand the practice of foreign professionals here to the point of threatening national culture, identity and self-determination.

Finally, the agenda item on Responsible Parenthood and Reproductive Health Law is welcome for recognizing women’s concerns in family planning as an economic agenda. But women’s groups underscore the greater need to broaden access to free healthcare services for women and children.

Deeper neoliberalism or national industrialization?

The 10-point economic agenda suggests the further deepening of neoliberalism. If unchanged, this continued implementation of neoliberal policies may result in the removal of Constitutional restrictions on foreign capital, new unequal free trade deals, and a tax system that unburdens a rich few while burdening the poor majority, among others. These will undermine the country’s socio-economic conditions and prospects of breaking away from the failed economic policies of the past.

Recent trust ratings of the new Philippine government’s leadership not only show popularity but imply high expectations for change. It is the most opportune time for the country to turn its back on neoliberalism and take on a bold policy shift to one that will stand independent of foreign and business dictates, achieve economic upliftment for Filipino farmers and workers, and push domestic industry development to fuel genuine progress. 

For the new administration to declare national industrialization as economic strategy is a foremost proposal in the People’s Agenda presented by various people’s organizations during the pre-inauguration People’s Summit, along with other social and economic proposals immediate and strategic. With due propagation, this will no doubt earn even wider support from the Filipino people who can then be rallied to various forms of mobilization for long-term nation building.###