What aren’t up next for the Philippines?

Michael Alan Hamlin

Posted on June 18, 2010

Last week was punctuated by the proclamation of a new president who wasn’t considered presidential material a year ago. President-elect Benigo S. Aquino III followed in the footsteps of his mother, who established a precedent for unintended but successful presidential candidates. The president-elect is replacing a president who wasn’t in the view of many, since she assumed the presidency following the extra-constitutional overthrow of her predecessor.

That view was strengthened when out-going president Gloria Macapagal-Arroyo allegedly cheated to win a subsequent election in which she had vowed not to run. Whether these events are viewed as predictable or unpredictable in the Philippine context, they demonstrate an amazing propensity for situations that “aren’t” anticipated to rapidly evolve into situations that “are” reality. Since the Philippines will inaugurate Mr. Aquino in two weeks, this is a good time to ask, “What aren’t supposed to happen with this administration, and what are likely to occur.

Some historical perspective is useful in answering that question. Mr. Aquino’s mother, former president Corazon C. Aquino, inherited a bankrupt treasury from her disgraced authoritarian predecessor, the infamous former president Ferdinand E. Marcos. She also inherited a coterie of relatives and cronies whose actions so incensed certain young, supposedly idealistic individuals in the Armed Forces that they mounted seven attempted coups against her. Despite enormous global goodwill for Ms. Aquino and the Philippines, investors deserted the country.

Ms. Aquino had other issues to deal with that were just as damaging to the economy and its ability to create jobs. Under the guise of “The Filipino Can,” industrialists allied with the administration convinced Ms. Aquino to grant them protection from outside competitors. A protectionist constitution was ratified that hampers economic development to this day. The false sense of nationalism it invoked perpetuated low productivity, low quality, and high prices, demonstrating that the Filipino can screw the Filipino with not immodest impunity.

Infrastructure development-other than the curious frenzy of overpass building that marked her administration’s last days-was largely ignored. Hobbled by a hugely dysfunctional electronic grid, the administration was paralyzed into inaction and failed to address energy concerns. The result was no power for much of the day, further undermining the administration’s feeble attempts to create jobs and accelerating immigration and the export of Filipino labor.

Ultimately, the first Aquino administration was the breath of fresh economic and democratic air that wasn’t, and Ms. Aquino’s legacy is the restoration of democracy, not the return of free enterprise and a vibrant economy. Her anointed successor-former president Fidel V. Ramos -did a much better job jolting the country to its feet. Instead of coddling industrialists, he removed their monopolies. And he brought back power, albeit at a steep yet necessary cost.

Liberalization of the telecom sector deserves particular singling out, since it is the most profoundly impactful economic reform ever undertaken in the Philippines. It was meant to provide new investors opportunity in the sector with the result that competition would improve the quality of service and responsiveness of telecom monopoly PLDT. That was the consequence that wasn’t, however.

Instead, the nascent mobile sector exploded as two little-known Filipino entrepreneurs showed definitively that “the Filipino can” when given a real opportunity. “Doy” Vea and the late Dave Fernando not only transformed the Philippine telecom industry, they rewrote the rules of competition in the industry globally, transforming the nation into the text capital of the world. The other unintended consequence of liberalization under Mr. Ramos was putting in place conditions to support VoIP, a technology that made it possible to create half a million outsourcing jobs in less than a decade, something no one imagined would happen.

Mr. Ramos’ ill-stared successor, former president Joseph “Erap” Estrada, continued Mr. Ramos’ efforts to liberalize the Philippine economy. Unfortunately for Mr. Estrada-and perhaps the Philippines as well-his crassness made him susceptible to middle-class cringing. Influential industrialists leveraged that ire to pressure the Armed Forces to withdraw support for Mr. Estrada, and the Supreme Court subsequently declared the presidency vacant, a status found undefined in the constitution. Mr. Estrada’s term wasn’t completed despite broad popular support that if not for Ms. Aquino’s passing last August, would probably have resulted in his re-election last May.

What won’t happen under Mr. Aquino’s administration? One thing seems certain, and that is that his mother’s cronies and allies will seek to reassert their protectionist, self-serving influence, and new groups like the Hyatt 10 will seek to impose their brand of good governance. Hopefully that vision of governance places the Philippine’s broad interests ahead of personal interest.

However things turn out, if history is an indicator-and it probably is-the new Aquino administration will be formed and characterized by issues we aren’t thinking about, and can’t possibly imagine.

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand . Write him at mahamlin@teamasia.com and follow him on Twitter, Facebook and LinkedIn.). Copyright © 2010 Michael Alan Hamlin. All Rights Reserved.)

1 Comment

  1. paul concepcion says:

    hi.. my name is paul and i just wnted to inform you that i borrowed some info from your blog for my report.. thanks…

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