Manolo Quezon is #TheExplainer Newsletter — Issue #16 (Pacquiao punching lightly)
Today is Electoral Merry-Go-Round Day. There are two analysis you should read, either extensively quoted from or reproduced in full, below. One is political, by Joel Rocamora; the other is economic, by Andrew Marasigan.
Pacquiao punches with kid gloves
Senator Pacquiao’s left for America for his next fight, leaving the President with a parting gift — a series of exposé type questions, but premised, up to now, not on a direct attack on the President, but instead, adopting the public posture of wanting to help the President in his fight against corruption (among the agencies he’s tagged as suffering from anomalies? The Department of Energy, headed by his erstwhile inquisitor in the PDP-Laban, Alfonso Cusi). The parting gift — not a punch, but a tap? — prevents a permanent parting of ways, for now. But it was accompanied by other forms of posturing, too. It was publicized that Pacquiao, before delivering his exposé message, met with senatorial colleagues Vicente Sotto III, and Panfilo Lacson. Sotto is a senior official in the Nationalist People’s Coalition party, which Pacquiao’s good friend and political mentor Chavit Singson recently joined; Lacson has a reputation for being a skilled player of the intel game.
The President for his part upped the ante on his being a putative vice-presidential candidate even as some noticed administration allies such as the Iglesia ni Cristo ramped up their media attacks on Pacquiao; other observers suspect the President is only dangling a candidacy to keep his grip on his coalition.
Wait-and-see is the order of the day, until Pacquiao has his fight and we how it turns out. In the meantime the President will have opportunities to wrap himself with the flag, in the wake of the Philippine Air Force crash.
I did Tweet some days ago, that the President seems to be losing some of the fear factor. It is one of the signs of incipient lame duckhood.
Rocamora says…
Joel Rocamora, scholar, activist, analyst: in pushing for the the Vice-President to seek the presidency, provides an analysis which makes for interesting reading on the current lay of the land. His look-see at Pacquiao looks at how he is both a Mindanawon and a Cebuano-speaker, two crucial political constituencies monopolized up to now, by the President. I am not as convinced by Rocamora’s belief that the President and his daughter are just play-acting; I think the tensions are genuine; but Rocamora makes an interesting point that the President may feel he cannot push his daughter over the top, electorally-speaking.
[OPINION] 2022 is PNoy versus Digong: Decency versus loudmouth braggart JUL 3, 2021 2:00 PM PHT JOEL ROCAMORA — www.rappler.com
Who is ahead?
Many analysts assume that Duterte and his candidate are ahead. Pointing to Duterte’s continuing popularity and to the expected abuse of government resources, they believe that Duterte’s candidate, whoever he/she is, is favored to win the presidency. I disagree. In the coming year, the ability of Duterte to get his anointed elected is going to decline. The opposition candidate is going to steadily get stronger.
Duterte’s popularity is a function of people’s perception of who has power, and who supports him. Of course the President has power. Duterte highlights his power with constant bragging, with ‘panghulga — threats to those who go against him. But he now has only less than a year left in office. This is what being “lame duck” is about, the perception of declining power, decreasing capacity to provide rewards, and punishment.
There are early signs of former supporters abandoning him. Rats only leave when they see the ship is sinking. In 2019, political clans with local vote banks saw three more years of having to hold out their begging bowls for Malacanang largesse. 2022 is different, they will be looking to who has the strongest chance of winning the presidency. If declining power is “push,” electoral ambition is “pull.” The closer the election, the more widespread the pandemic of “illusionitis.” Whoever Duterte’s anointed is, there will be those who think they have more chance of winning the presidency.
The most important challenger is boxer Manny Pacquiao. He is not exactly presidential material (but then neither was Duterte), but he is a threat to Duterte’s anointed for several reasons. It is not just his popularity from a super successful boxing career. He is from Mindanao, and he is a Cebuano speaker. He will take large chunks of Mindanao and Cebuano votes from Duterte’s anointed. Because it looks like he has plans to run for president, Duterte and his people have begun to move against him. Duterte embarrassed Pacquiao by supporting the call for a meeting of the PDP Laban without Pacquiao’s approval as party president. Senator Koko Pimentel is warning against a split in the party.
Other prominent politicians who used to be in the Duterte camp now beginning to distance themselves include Duterte’s vice presidential running mate in 2016, Alan Peter Cayetano; Senate President Tito Sotto; Manila Mayor Isko Moreno. These are prominent politicians with 2022 ambitions who will take votes away from Duterte’s anointed. These people do not necessarily aspire to the presidency, but getting exposure as “presidentiable” is useful for vice presidential or senatorial ambitions.
It appears that Duterte is slowly losing his capacity to control decisions by the judiciary and the legislature. The Supreme Court, sitting as the Presidential Electoral Tribunal, has confirmed VP Leni’s victory over Bongbong Marcos with finality. Solicitor General Calida’s push to impeach Supreme Court Associate Justice Leonen did not get a single vote in the House of Representatives. The validity of former Senator Sonny Trillanes’ amnesty was affirmed by the Court of Appeals (CA). The CA also ordered the government to remove Leyte Representative Vicente Veloso from its list of local officials involved in drugs. Two San Beda fraternity brods of Duterte were convicted of bribery.
There is a concerted effort to push Davao City Mayor and Duterte daughter Sara to run. Duterte says he does not want her to run. Spokesperson Roque turns around and says he actually wants her to run. This is standard Duterte zarzuela. It does not matter if he and his spokesperson say opposite things, it keeps her in the news. If she does run, she will be weighed down by a large albatross, her father. She has no choice but to build on being Duterte’s anointed while avoiding Duterte’s many negatives.
Sara has to shape her own political persona. Being Duterte’s daughter can cut both ways. What little the public knows of her makes her out to be a female version of her father. But can a female be macho? Boxing the sheriff at an urban poor demolition is one thing. But there’s also insisting that being honest is not required in politics; there’s saying she has been raped, but does not mind her father’s rape jokes. Her move to unseat Pantaleon Alvarez as House speaker made her out to be a power broker on the national stage. But Alvarez got back at her by defeating her candidates in Davao Occidental, Sara’s political backyard.
Duterte is showing doubts about his ability to secure the victory of Sara. The Duterte as vice president floater is an attempt to maximize his endorsement. Duterte has tried this formula in Davao City where in one election he ran as vice mayor. Many have denounced the move as unconstitutional. A Duterte-Duterte ticket would be perfect — for the opposition. Duterte’s recent call for arming untrained civilians is revealing. He wants a private army like he had in Davao City, another instrument for winning the coming election. But it has been denounced by everyone including his secretaries of justice and the DILG.
It can’t be the economy, stupid
Much as I believe most of the real news is actually in the business section, the problem is the public doesn’t see it that way. Take this bit of news:
I think elsewhere it would have grabbed the headlines, and become a real, red hot political issue; after all, the President vetoed wage subsidies! But the public didn’t notice and neither did the politicians. But the economic situation is rather dire, and bears a closer look:
Our broken economy and what caused it | Philstar.com — www.philstar.com
THE CORNER ORACLE — Andrew J. Masigan
I spent the better part of last week conferring with fellow economists from the University of the Philippines and De La Salle University. We discussed the state of the economy and the decisions that led to four quarters of economic contractions. We agreed that: 1. Our situation today is just as serious as the economic crisis of 1984 and 1985 in that many industries are now permanently broken or severely damaged. 2. But unlike 1985, we are not facing a currency crisis or a debt crunch. This is our silver lining. 3. We recognize that the economic consequences of the pandemic could have been minimized if it were better managed.
We already know that the economy contracted by 9.6 percent in 2020 and 4.2 percent in the first quarter of 2021. Ours was the worst economic reversal in the region. What are the implications of this?
Our people are poorer — personal incomes of our countrymen have contracted by an average of P23,000 per year. Industrial output plunged by 13.1 percent and services by 9.1 percent last year. This is why private businesses have had to lay-off some 743,000 employees just to stay afloat. As of last April, 3.44 million of our countrymen were without jobs and this does not count the unemployed in the underground economy. Household consumption, which accounts for 70 percent of the economy, contracted by 5.7 percent (or roughly P2.8 billion a day). This explains why restaurants, retailers and service providers continue to experience depressed sales and mounting losses. 72 percent of all MSMEs have either closed permanently or significantly downsized. Around 250,000 MSMEs have succumbed to bankruptcy.
Global think tanks validate the Philippine economic wreckage. Swiss-based Institute for Management Development (IMD) reported that the Philippines dropped by a massive seven notches in economic competitiveness, from 45th to 52nd place, out of 64 countries. Among the Asian economies rated, the Philippines was only ahead of Mongolia.
The International Monetary Fund announced that it had downgraded the country’s growth prospect for 2021 to just 5.4 percent. With this, the Philippines will only attain 2019 levels of GDP by the second semester of 2022, at best. In contrast, Vietnam’s growth was uninterrupted while Singapore, Malaysia, Indonesia and Thailand are all due to recover fully this year.
All these mean that the Philippines will lag further behind in the region’s development race. We have been overtaken by Vietnam in per capita income, while Cambodia is fast catching up.
Where did it all go wrong?
It all went wrong when Malacañang failed to consider the economic ramifications of its long protracted militaristic lockdown last year. Palace insiders bear out that during the early days of the pandemic, the voice of the economic team was not heard in the IATF meetings. Thus, the IATF prescription, which was to subject the country to the world’s longest and strictest lockdown, failed to balance economic interest with contagion containment. This resulted in a lockdown so severe that it crippled supply chains across industries and stifled consumption.
The Asian Development Bank published a study that quantified the level of lockdown stringencies among countries. Within ASEAN, the stringency quotient of the Philippines was the highest at 83.33 points. Malaysia was a far second at 59.93, Thailand was at 59.26, Indonesia was at 54.17, Singapore was at 53.7 and Vietnam was at 51.85. Malacañang was overkill, but was only marginally effective due to the lack of a science-based testing and tracing backbone.
Which industries were the hardest hit? As of last September, NEDA statistics show that air transport was the most affected with revenues plummeting by a 93.8 percent. This was followed by water transport at 72.8 percent; hotels and accommodation services at 73.4 percent; land transport at 65.6 percent; restaurants and food service at 64.9 percent; sports, entertainment and recreation at 63.2 percent; construction at 33.5 percent and real estate at 20.1 percent.
Governments around the world swiftly arranged stimulus packages to ease the plight of their citizens, cushion their industries from wreckage and foster a quicker recovery. The Philippines, despite being the most economically affected, appropriated the region’s smallest package. By way of Bayanihan 1 and 2, our stimulus war chest amounted to only 5.88 percent of GDP. In comparison, Singapore’s stimulus package was 26 percent of GDP. It was 22 percent for Malaysia, 18 percent for Indonesia, 16 percent for Thailand and 10 percent for Vietnam.
Government attributes its paltry stimulus package to fiscal prudence. Prudence dictates not jeopardizing the country’s investment-grade status by bloating debt levels, they said.
We think this reason holds water in normal circumstances — but not at a time when our countrymen are suffering and the economy is on its knees. Now is the time to exhaust all means to get out of this crisis as soon as possible. We were fortunate to have entered the crisis with manageable debt levels (39 percent debt-to-GDP ratio in 2019, ballooned to 58.7 percent today) — we should use this to mend the economy. Being overly concerned about debt ratings reek of political considerations and/or vanity. Besides, debt rating agencies have allowed higher tolerances for increased debt levels in consideration of the extraordinary circumstances.
Bayanihan 3 was proposed but NEDA’s Karl Chua gave it a thumbs down. According to Chua, Bayanihan 2 has not even been fully disbursed. This only confirms that government efficiency in cascading Bayanihan aid is painfully inefficient.
Making matters worse is that the lion’s share of Bayanihan 1 and 2 was appropriated to the supply side of the economy (eg. beefing up health care capacity, etc.), not on the demand side. While we concede that the supply side needs funding, what was not considered is that two-thirds of the economy is consumer driven. The bulk of funds should have been channeled to financial aid so that people can consume goods and services again. This would have had a greater impact in reviving our consumer-lead economy.
Government borrowed some $14.77 billion over the last 14 months. Yet, financial lifelines towards MSMEs were a mere token while financial aid to the indigent was insufficient. Neither did the state extend aid to economically strategic companies like Philippine Airlines. The Senate is right to demand an accounting of pandemic-related debt proceeds. So should we.
Our once thriving economy is now the sick man of Asia all over again. The tragedy of it all is that it could have been avoided.
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