Economic outlook for Aquino Year 2: Not good enough

President Benigno Aquino III claimed the “greatest achievement” of his administration upon completing the first year of his presidency on Thursday was the “transformation of people’s attitude from apathy to that of caring and active citizens.”

There was little in his speech at the Philippine Sports Arena in Pasig City, in celebrating the start of the second year of his presidency, to show he was offering this time a roadmap of political reforms and economic projects to compensate for the lack of such a blueprint in his inaugural speech last year, marked by the glib rhetorical theme, “if there’s no corrupt, there is no poor.”

One year into his presidency, Mr. Aquino is again directing the people’s attention to the realm of the abstract after he failed to show appreciable results in his promises in his inaugural to reduce poverty and curb corruption in government.

The shift in rhetorical theme came as the business community started to clamor for action to reinvigorate a faltering economy.

In defining his “greatest achievement,” the President said that “before, there was resignation, dejection and apathy.”

He told reporters: “If you remember at the time, about the people’s apathy and numbness, as if they did not expect anything from their government. They were blasé to scandals that were being unearthed. Now, more people are expectant that their lives are changing for the better.”

More discerning citizens are beginning to ask, “How are we going to quantify these ‘achievements’ or transformation in the public’s perceptions or mood?” Abstractions are hard to quantify. The public needs more proof of results of change that can be seen and felt.

How are we to accept a claim that under this government the people’s lives “are changing for the better” when there’s no proof that this change is taking place?

Opinion poll surveys over the past 12 months unmistakably show that the public satisfaction ratings of the government’s performance have been falling, not because it is becoming corrupt compared with the Arroyo administration, but because during its first year its effort had been focused on uncovering corrupt transactions of the past government.

Mr. Aquino’s administrative competence has been plagued by factional squabbles among members of his Cabinet, torn between two main groups, one made up of cronies surrounding the President and holding key advisory and executive positions (notably Executive Secretary Paquito “Jojo” Ochoa) and the other made up of key Liberal Party leaders, including those with Cabinet positions, like former Sen. Manuel “Mar” Roxas II, now secretary of transportation and communications.

‘Do nothing’

The President spent a huge portion of his report of his first year excoriating the corrupt transactions of the Arroyo administration. He has been criticized for doing little else than bashing the Arroyo administration.

Responding to criticism that his regime was a “do nothing” government, Mr. Aquino claimed that because of reforms in the financial system, the administration was able to save more than the amounts allocated by the General Appropriations Act to implement programs, including providing P12 billion for transport workers affected by high oil prices, housing, rice, security salaries, roads and “other lifeguards for people from poverty.”

He said, “These are changes that we are reaping now.” All these became possible because the administration “went after the crooks in the government, fixed the financial finances and crooked system,” he said.

With all the noise generated by the government in uncovering corruption of the Arroyo administration and its claims of achievements, the business community and the labor sector were withholding judgment on the performance of the administration.

Inherited defects

The Employers Confederation of the Philippines said the administration should be credited for “restoring faith in the government and respect for authority,” pointing out that Mr. Aquino “inherited a structure depreciated by past mistakes in the government.” It said, “We live in a house full of structural defects.”

The Philippine Chamber of Commerce and Industry said the President deserved a “passing grade” for effort. “He’s putting a lot of effort in fighting corruption … We see that he’s focused and unwavering … We definitely give him a passing mark, he needs a lot of support and understanding from the private sector,” the chamber said. “We should give him more time. Let’s give him a chance.”

The Makati Business Club (MBC) said the government’s flagship public-private partnership (PPP) program should start to gain steam in Mr. Aquino’s second year because delays in the auction of these projects were a cause for concern.

“We understand that in the first year, a lot of cleanup, review and foundation work had to be done,” the MBC said.

“But in Year Two, the government should move more aggressively forward, especially in the PPP program, to sustain the high growth rates we achieved in 2010. A year has passed. That’s enough time for review. Come year two, there should be no more excuses.”

The downside of the first-year performance of the administration was highlighted by the slowdown of the economy under the Aquino watch.

Roadmap awaited

A group of private sector economists interviewed by Inquirer reporters pointed out much improvement was needed to support investor confidence, such as speeding up PPP projects and achieve targets.

They said public spending and interventions must support business confidence or it would not translate into economic gains.

According to Cielito Habito, former socioeconomic planning secretary, the economy seemed good enough in the first three months of 2011, using annualized quarter-on-quarter gross domestic product growth.

The GDP rose 1.9 percent in the first three months of the year from 0.5 percent and 0.3 percent in the two preceding quarters. Using a year-on-year comparison, the first-quarter GDP growth slowed to 4.9 percent from 8.4 percent in the first quarter of 2010.

Benjamin E. Diokno of the University of the Philippines’ School of Economics rated the administration’s economic management “NI” (needs improvement).

“After a year in office, the economy is slowing, joblessness remains serious, and poverty continues to deepen,” Diokno said. “Of course, it is unfair to expect him to solve these decadelong problems within a year. But after a year, Mr. Aquino has yet to unveil his vision and concrete roadmap of how he will solve these problems.”

He said he “was not optimistic Mr. Aquino would meet the target of 7 to 8 percent economic growth during his entire term.”

How can the President present a roadmap this time when he has little time to study and think hard to plan—an activity he has no appetite for.

Besides, he already has sore muscles unearthing scams in the past administration—the single issue over which he is obsessed as his mandate from the 2010 election.