Monday, February 7, 2011

2010 SONA: An analysis

The first State of the Nation Address of the 15th Philippine President, Benigno Simeon C. Aquino III, on July 26, 2010 generated mixed reactions from the public as the President, whose primary agenda in his administration is to curb corruption, bared anomalies and excesses of the past administration. He started his speech with a metaphor of the two roads of governance in which he said that the government, for so long, endured a terrible journey of selfishness, grave misconduct, greediness, dishonesty, betrayal on public trust and massive corruption.
It was revealed that the previous year, the government missed P 23.8 billion on the target collection but the expenditure exceeded P45.1 billion, escalating the budget deficit into P196.7 billion. The top contributors to these financial bleeding of the government are GOCCs like NAPOCOR and NFA. When NAPOCOR incurred more than P200 billion debts, the government was forced to absorb these losses. But Aquino accused the past administration of pressing its influence to implement a scheme that would sell cheap electricity, presumably preparing for the 2004 election.
He also criticized the National Food Authority (NFA) for the over-importation of rice resulting to the agency’s debt of more than P1 billion. In 2004, NFA bought 900,000 metric tons of rice when the country only needed 117,000 metric tons; this was repeated in 2007 which overshoot the estimated buying of rice more than three times the needs of the nation. Then there was the government’s wrong move to buy MRT which could not be benefited as the operation is near bankruptcy, which sited as another wasted expenditure.
Among the anomalies he exposed were the excesses of MWSS and its pompous expenditures on bonuses, allowances and salaries of its board of trustees while its retired employees had yet to receive the pension allotted for them and the public endured the scarcity of water. The irregularities of the Department of Public Works and Highway, which has P425 million budget declared, but granted a whopping P480 million but with an accomplishment of less than its listed infrastructure projects. The rehabilitation projects on the affected area devastated by the typhoons, Ondoy and Pepeng, has P3.5 billion budget but almost fall into questionable appropriation, P981 million of these transactions almost approve without undergoing the legal process of public bidding had DPWH Secretary, Rogelio Singson, did not intervene.
The surprising exposé overshadowed the President’s agenda for reforms he wanted to present to the public. But critics easily picked up the message of the purpose of his revelations particularly on NFA which set the tone for the agency’s privatization. As the government incurred huge losses already due to its miscalculations on imported rice acquisitions, Aquino seemed giving hints of a move to privatize NFA, as Aquino mentioned, the debt incurred by NFA already mounted to P171.6 million as of May 2010, on which he rationalized, would have been enough to allocate budget this year for justice department, Conditional Cash Transfers and for Department of Education.
But the contents of his entire speech was not merely confined on his predecessor’s lapses but also highlighted some of his administration’s three-week accomplishments since he assumed office. He also revealed his administration’s plan to expand the services of the government’s run, Philhealth. He expressed his intention to provide the citizens with appropriate health care benefits through the coverage of Philhealth. DSWD will soon implement the National Household Targetting System that will identify families who needed more attention.
Aquino also assured the business sector of the fair trading system to prevent big and influential firms to monopolize the market and encourage a fair and just competition, therefore an Anti-Trust Law is needed to help strengthened the system and further encourage and attract Small and Medium Scale Enterprises to actively participate in reconstructing the national economy, consequently steering economic stability and improvement.
He also revealed his first executive order appointing Truth Commission under former chief justice Hilario Davide Jr. to investigate several allegations of misuse of public funds and corruption of the past administration. He also tackled insurgency problems in Mindanao, and that peace talks among leftists particularly CPP-NPA-NDF and MILF, should be continued.
The President announced his plan to propose a budget that would address the main problem of the society to arrive on the appropriate solutions without bleeding the national economy. Then he mentioned that his administration is very serious in executing its reform agenda in pursuing smugglers and tax evaders through the cooperation of the Department of Finance, Bureau of Internal Revenue and the Department of Justice, this scheme would aim to bring the evaders and smugglers to the court and be prosecuted. He also emphasized that justice will prevail to the victims of media killings as 50% of extralegal killings incidents already moving ahead to the justice department. He also called on the concerned agencies to strengthened The Witness Protection Program to speed up extreme cases of crimes.
Aquino remained optimistic despite the fact that the remaining budget to be freely spent by the government is only 6.5 % of the total P1.54 trillion for 2010 budget. He then presented the highlight of his SONA -- which his administration is bent on implementing to solve the worsening condition of the economy -- the importance of Public-Private Partnerships. He underlined the significance role to play by this partnership, how this will help revitalized the dreary economy, ushering the country into prosperity. It was thought possible that the Chief Executive strongly promoted this partnership because of the impression that investors regained its confidence on Philippine’s potentials and are willing to cooperate with the new administration to any programs that might be beneficial to all.
Through Public-Private Partnerships, Aquino assumed the government may raise funds to cover the country’s most pressing needs in education, health care, infrastructure and the armed forces. The infrastructures needed to flourish tourism will be materialized and in the agriculture sector, the planned grain terminals, refrigeration facilities, road networks and post harvest facilities will be finally realized.
One unnamed investor expressed interest in building an expressway from Manila to South Luzon with no cost on the part of the government and another investor proposed to lease the land occupied by the Philippine Navy along Roxas Boulevard and Fort Bonifacio, the government will also rake a portion of profit from the business which will be built along these lands. This plan, if pushed through, would assumingly cover the government’s spending. Aquino also planned to revitalize the Armed Forces of the Philippines by reconstructing its program, benefits and obsolete equipments. Public-Private Partnerships and privatization, which were among the legacies of his late mother, President Cory Aquino, aim to augment the shortage of funds of the government to implement its social reform and agenda.
However, many analysts frowned Aquino’s backing of Public-Private Partnerships as this would only benefit transnational corporations, foreign firms and the country’s elites. Public-Private Partnerships projects would cover investments on energy, toll roads and other important infrastructures which will be heavily funded by foreign debt, the risk then would be assumed by the government. Public-private Partnerships may give relief to the burgeoning national deficit but it may also pass the burden into the public through high prices on services and products. Hence, many critics branded this plan as anti-people, pro-business.
Some good points of the SONA include Aquino’s dream to create more jobs citing its crucial role in the development process of the national economy to generate more taxes. His intention to hasten the process of the projects under the Build-Operate-Transfer in cooperation with different government agencies and the public, the reduction of the time consumed in processing of transactions and the numerous pages of application form which he wished to be reduced into a single page. The President emphasized that efficiency should be prioritized to speed up productivity. He made it clear that DTI already had some plans especially on the tedious process of company registration. This will give respite to the public who sometimes endured the long hours standing in cue, processing a single transaction which sometimes lasted a day. This method will eventually or hopefully eliminate the “under-the-table” practice by some government agencies which milked businessmen and ordinary people.
But most caused-oriented groups criticized the President for failing to present a concrete agenda and reforms for marginalized sectors. However, Aquino underscores the importance of cooperation and confidence in his administration. He also called for unity and solidarity from public officials and private citizens to help him carry out the difficult task of bringing the country into progress and prosperity. He emphasized the importance of sacrifices to be invested in order to realize everyone’s dream for a corrupt-free Philippines.
But other than promoting Public-Private Partnerships, the President, however, did not clearly underline his concrete social reforms especially on agriculture and mounting unemployment. It is still a tough road ahead if Public-Private Partnerships and privatization schemes could help revitalize the Philippine economy in the long run and could offer concrete solutions to the disillusionment of people about change. The President is still on his first 100 days in office and still scrambling to find surefire solutions to different problems in the country. It might be a difficult mission as Aquino is still pleasing different sectors to embrace his proposal for change.

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