GMA address to signal gov’t back in business

BY JUDY T. GULANE, BusinessWorld Reporter Monday’s State of the Nation Address (SONA) is expected to showcase a President Gloria Macapagal-Arroyo different from last year. Whereas last year’s address was made by a leader under intense political pressure, Mrs. Arroyo now wants to show she has survived the worst political crisis in her incumbency. Mrs. Arroyo is expected to unveil her "mega-regions" plan, or the grouping of the Philippines into four "mega-regions" for development planning purposes. Monday’s SONA is seen as her administration’s signal that the worst has been overcome and it is time to go back to work. Political analysts polled by BusinessWorld, however, pointed out the President is still not out of the woods and might never be. The damage wrought by tapes alleging she cheated in the 2004 election will always put her administration under a cloud of doubt. The filing of impeachment charges against her will be an annual pain, and her actual impeachment could be assured if the opposition gains more seats in next year’s elections. Monday’s SONA -- and the reconvening of Congress -- does not just mean the setting of a new direction but a signal of the start of another political season that will culminate in the 2007 election, and from there, the future of the Arroyo administration, the analysts said. "I don’t think the worst is over [for Mrs. Arroyo], there still are many threats. But if she can hurdle the 2007 election, then she will last until 2010. The 2007 election is certainly crucial," said Antonio Gatmaitan, president of the Political Economy Applied Research Foundation. The opposition has started another impeachment round against Mrs. Arroyo this year, but given her supporters at the House of Representatives, "she is going to breeze through it," Mr. Gatmaitan said. "There will always be threats until questions about her legitimacy are settled," opined Ramon Casiple, executive director of the Institute for Political and Electoral Reform. "The 2007 election will be a referendum on her administration. If she makes it to 2008, she will make it to 2010." But it will not be easy sailing from 2008 to 2010, Mr. Casiple added. Mrs. Arroyo will need to continue campaigning to ensure her candidate wins the 2010 presidential contest. "She would not want to join Erap (former President Joseph E. Estrada) in Tanay when she steps down from office." Mr. Estrada, ousted through a "people power" uprising in 2001, is presently under house arrest in Tanay, Rizal while undergoing trial for plunder. For Benito Lim, a political science professor at the Ateneo de Manila University, Mrs. Arroyo needs to ensure her candidates win in next year’s election, and as such, sees a political cast to the unveiling of the "mega-regions" plan at this particular time. "By engaging the mayors and governors -- who are also running for reelection -- in this plan, Mrs. Arroyo is creating or developing an enthusiastic campaign for her congressmen," he said. Mrs. Arroyo has pledged P25 billion a year from 2007 to 2009 to each of the four mega-regions: North Luzon (Ilocos and Cagayan Valley), Metro Luzon (Central Luzon except Aurora and Nueva Ecija, Region 4-A and Metro Manila), Central Philippines (Region 4-B, Bicol, Western, Central and Eastern Visayas), and Mindanao (Zamboanga, Northern Mindanao, Davao, Socsksargen, Caraga and the Autonomous Region in Muslim Mindanao). North Luzon and Mindanao, she said, will be developed as the country’s agribusiness centers while Central Philippines will showcase the country’s prime tourist spots. Metro Luzon, which extends from Subic to Batangas, will be developed into the country’s logistics and manufacturing hub. Two rounds of consultations were made with the regional development councils of the four mega-regions beginning in June, in order to update the Medium-Term Philippine Investment Plan (MTPIP). The councils’ inputs, Mrs. Arroyo also announced, will be incorporated in her SONA Monday. The MTPIP, consisting of priority infrastructure projects, is to be financed mainly by the national government through the annual budget and through government firms and financial institutions. The budget is approved by Congress. If the President does not have enough supporters in either chamber, then she will have a hard time getting it approved, as is the case with the 2006 budget. Local government executives have taken enthusiastically to the "mega-regions" approach because it is participatory and responsive to the strengths and weaknesses of their localities. Mr. Lim said a vigorous campaign needs to be waged at the local level because this is where the opposition intends to bring Mrs. Arroyo to trial. "The opposition is going to use the impeachment charges as campaign issues against the President," he said. He said the opposition does not even have to craft a campaign platform, which should have been ideal in any election, but merely take advantage of Mrs. Arroyo’s unpopularity among the people. Mr. Casiple also said he sees a calculated political move with the "mega-regions" plan, but reserved more comment. "It’s not in the (Medium-Term Philippine Development Plan)," he noted. "This could be a political move to consolidate her allies and bolster her political defense, or this could be her answer to those advocating a shift to federalism." "I have yet to see if this has an economic impact I am reserving judgment for now. If the mega-grouping is in terms of infrastructure projects, it is understandable. But if it’s economic integration, it is hard to see the logic of lumping the Bicol region with the Visayas, for example," he added. While Mrs. Arroyo’s hold on the presidency will continue to be tenuous and she will need to fight for 2007, she will be helped by the resources of her office and the opposition’s lack of imagination. "There are threats, yes, but she is in a position to counter them. The institutional strength of the presidency will carry her through," Mr. Gatmaitan said. She just needs to be careful in who she steps on, he warned, because some of them are "friends" who might turn totally against her. "These include the church, the businessmen. Any misstep on her part would spell deep trouble for her. For if she considers them her opponents, who are left who are really for her?" Mr. Casiple branded her a "survivor" and will remain in power because no alternative is being presented by the opposition. "The opposition has not learned the lessons of 2004. If they are split, then they cannot win," Mr. Lim added. He also said he is "disappointed" with the opposition. "If you listen carefully, the President’s economic program is anchored on foreign direct investments...I wish the opposition would say that is not the only solution." Whatever Mrs. Arroyo will say in her SONA Monday, that will not take away the fact that the campaign for the 2007 election has unofficially begun. The economy, meanwhile, will continue to "muddle along," Mr. Gatmaitan said. "The economy might have grown 5-5.5%, but this is nothing to crow about, this will not cut ice with the ordinary people. There is nothing much Mrs. Arroyo can do in a difficult situation...she can’t point to her accomplishments because the people will just shrug them away," he said. SONA details awaited A more definite blueprint from the President regarding her proposed "mega-regions" plan is what businessmen await from Monday’s State of the Nation Address (SONA). As this is expected to require pump-priming spending, they would also want her to announce a revised fiscal management plan considering above-target collections and a lower spending authority due to a reenacted budget. Sergio Ortiz Luis Jr., president of the Philippine Exporters Confederation, said businessmen want President Gloria Macapagal-Arroyo to outline her development plan, and the corresponding infrastructure and financial programs. Infrastructure spending, said Philippine Chamber of Commerce and Industry President Donald Dee, should be focused on the agriculture sector. Businessman Peter Wallace of the Wallace Business Forum said explaining the mega-regions plan a little more in the SONA is a good idea, but a more complete and comprehensive plan should be released after Monday’s speech. The international finance community, he added, should understand and accept a balanced budget by 2010, two years later than the original 2008 target, in order to allow more spending for infrastructure projects. But Raul Concepcion, chairman of the Makati Business Club, said the President should first and foremost address the issue of charter change in Monday’s SONA. "If this was addressed, then that cloud of uncertainty, which business is so concerned about, that unpredictability would be addressed. You can’t have growth unless the issue is addressed," he said. He also said the SONA should focus on the need to reform the elections system, adding he expects the President to push for the immediate enactment of amendments to the poll automation law in light of the upcoming 2007 polls. Senators, meanwhile, said they expect the President to outline a clearer path for economic growth during her SONA. "We expect to see a listing or an outlining of the strategic directions the government will be undertaking," Senator Manuel A. Roxas II said. He said the President should avoid selling charter change again as a solution to the country’s woes, as she did in last year’s SONA. Senator Ralph G. Recto, meanwhile, also expects a more definite discussion of the megaregions plan and charter change. Senate Minority Leader Aquilino Q. Pimentel, Jr. was pessimistic, saying Monday’s SONA will just be about the same old promises which have not been fulfilled. He said Mrs. Arroyo failed to address a number of concerns in her more than five years of office, including economic growth and well-being of citizens, corruption, and a deteriorating human rights record. At the House of Representatives, Minority Leader Rep. Francis G. Escudero said he will "not prejudge but instead await" for what Mrs. Arroyo will say. Mr. Escudero said he hopes the SONA would "squarely address" proposed economic reforms, as well as deal with issues of corruption in her administration and the upcoming 2007 elections. House Majority Leader Rep. Prospero C. Nograles, on the other hand, stressed that Mrs. Arroyo’s message would focus "strictly on business". -- Francis Y. Capistrano with a report from Michelle Syonne M. Reyes/BusinessWorld