Lessons from EDSA 1

Promise and reality: Lessons from EDSA 1

BENJAMIN DIOKNO

‘Mr. Aquino should be seen as trying to unite, not divide, a people that was once united during those historic days of EDSA 1.’

TWENTY-SIX years ago, Filipinos united by a desire to restore democracy in the Philippines made EDSA 1 happen. What lessons have we learned from EDSA 1? Is the country better off now than 26 years ago economically and politically? Have economic and political institutions become stronger over time?

Corazon Aquino should be credited for restoring democracy in this young republic. During the early period of the Cory presidency, before Congress was restored, there was a great sense of urgency. And except for the rebels and coup plotters, people in government were well behaved and were willing to do whatever was needed to make democracy work.

During the last quarter century, there were successes, but there were failures too. Faced with ballooning budget deficits and rising expectations from a repressed people, President Aquino reformed the tax system within months of her presidency. She replaced the low-yielding, inefficient, inequitable and complicated tax system with a new one. Tax reform without tears, we called it with fondness. The tax reform strengthened the government’s finances. The new tax system, which introduced the VAT system, was doing very well until President Ramos tinkered with it in 1997.

Mrs. Aquino gave local governments new hopes. She pushed the passage of the Local Government Code of 1991 which gave local government units a higher share of the internal revenue allotment (IRA). For the first time in the history of the republic, transfers from the central government l to local governments were not subject to political bargaining; they were made automatically appropriated, predictable and formula-based. Local officials should be forever indebted to Mrs. Aquino for giving them more autonomy and responsibility.

The 1991 Code gave local governments not only a predictable IRA, but also more spending and taxing responsibilities. This allowed local officials -- the likes of Albay governor Salceda, Puerto Princesa Mayor Edward Hagedorn and then Makati city mayor, now Vice President, Jojo Binay – to excel in their own right, deliver public services to their constituents without groveling to Malacañang.

Of course, Mrs. Aquino did not prepare the economy for the power outages that haunted her administration in its final days.

She also did not reform the electoral process, nor did she encourage the development of political parties. Perhaps it was not in her interest. She wanted a friendly successor.

The nearly successful coup in 1989 happened at a time when Japanese investors were looking for investment opportunities in Asia. That did it. Today, the Philippines has yet to shed its image as a politically unstable country.

Political reform was not Mrs. Aquino’s strong legacy. The electionof Fidel V. Ramos, her successor, was under a cloud of suspicion. Under a more open and cleaner elections, the brilliant and multi-awarded Miriam Defensor could have been the first elected president after EDSA 1.

President Ramos was credited for solving the power crisis. But at the same time, he should be held responsible for a number of disadvantageous power deals that gave rise to higher power prices in the Philippines (now the highest in Asia) and for unnecessarily burdening the Filipino people for paying for power they never consumed.

Ramos liberalized the telecommunications industry which, to some extent, gave rise to the BPO industry. He should also be credited for establishing an independent monetary authority.

Ramos’ fiscal performance was overrated. The small surplus that he generated for a couple of years-- an outlier for a country that has consistently been in deficit spending -- is to a large extent due to the sale of the family jewels (PNB, Petron, Bonifacio property, etc.) and window-dressing (he left unpaid contracts already done and delivered).

President Estrada was perhaps the only truly elected President after EDSA 1, that is, before President Aquino III. After EDSA 1, every elections should be seen as a building block for setting a strong foundation for democracy. Yet Estrada was ousted unconstitutionally. The Philippines got off the democratic track -- a move that revealed the shallow commitment of the political and economic elite to strengthening democratic institutions.

Despite Estrada’s truncated term, he was able to restore social spending and to reenergize agricultural production. Per capita spending for education and health was the highest during his term compared to any president after EDSA 1. Coming in at the height of the Asian financial crisis, Estrada was responsible for engineering an economic rebound by investing more in public infrastructure.

Gloria Arroyo’s power grab in 2001 was the start of the decade-long dark period in Philippine history. This was followed by her disputed win the 2004 presidential elections. It was a decade filled with multi-billion scams and anomalies in various government projects. Poverty has deepened, hunger incidence has worsened, and joblessness has risen.

The development of political and economic institutions suffered a major setback. Constitutional bodies were manned with people who were rabidly loyal first and who were not expected to rock the state boat. On the fiscal side, fiscally responsible budget rules and procedures were ignored. Tax effort (tax as percent of GDP) fell, then stagnated at levels only slightly above where it was 26 years ago. And because the government has been spending beyond its means, total public debt, in money terms, has more than doubled in ten years.

In the meantime, local officials were made pawns in the uncertain political drama. Support GMA and local authorities got additional largesse from the Palace; defy and they get harassed. Salient provisions of the Local Government Code of 1991 were ignored. After 26 years, the Benigno Aquino III presidency has come full circle -- from Cory to Pnoy. Fortuitously, Mr. Aquino now has the rare opportunity to correct the mistakes of the past. But he should rise above politics and strengthen the political institutions so that democracy might take firmer root. How can Mr. Aquino reignite the spirit of EDSA 1?

There are ways to keeping the Filipino people’s hopes alive. First, Mr. Aquino should be seen as trying to unite, not divide, a people that was once united during those historic days of EDSA 1. He should be, and perceived to be, a healing, not vindictive, president. Remember: no one can build a strong republic on the foundation of hate and vindictiveness.

Second, he should strengthen the political process and the political and administrative institutions. The electoral process, a core requirement for a well-performing democracy, remains deficient. The Commission of Elections should learn to count votes faster, more accurately, and transparently. The laws on campaign financing should be strictly enforced. Political parties should be encouraged to develop. Mr. Aquino should remember that he is the president of the whole nation, not the Liberal party alone. Sadly, a quarter of a century after EDSA 1, the political system has remained exclusive, not inclusive. Political dynasties reign. Elected posts, and key government posts, continue to be controlled by a few families. Political parties exist in name only; they cannot be held accountable for producing ill-equipped candidates.

The difference between what a candidate has to spend to win and the salary for his post keeps on rising, making one wonders how the huge gap will be recouped. A congressman, running for reelection, has more than P200 million worth of projects under his belt; for a senator, the equivalent amount is around P1.2 billion. Big businesses and corrupt contractors contribute to the campaign in the hope of getting protection or favors from those in power.

Third, Mr. Aquino should work seriously to fix the problems of joblessness, poverty and hunger. That is what the President is supposed to do for his bosses.

Twenty-six years after EDSA 1, the Philippines has lagged behind its Asean-5 countries. Today, our neighbors are richer, their poverty numbers better, and their unemployment rates lower. The Filipino people expect Mr. Aquino to mount and execute a bold, sustainable catch-up plan. That is what the Filipino people expect from him -- no more, no less.

The blame game is over. It’s time for hard, grueling, catch-up work.