A new paradigm for the Philippines

Manila, 24 August 2010: As this is being written, the Philippines once again has been thrust into the glare of international media attention and for all the wrong reasons. A former officer of the Philippine National Police, sacked over corruption charges, hijacked a bus full of Hong Kong tourists and held members of the 200-strong rescue team at bay for more than 11 hours on August 23. Eight tourists were killed together with the hostage taker during the bloody shootout as police eventually stormed the bus.

The entire event was played out on national TV and relayed around the world for all to see. Up to the minute reporting took on a whole new meaning as reporters covered live, all police activities allowing the hostage taker to monitor what was happening outside the bus and anticipate police moves.

To make matters worse, a group of college girls visited the scene in their school uniform and treated the entire affair as a party even posting their group photos to their Facebook accounts. Tasteless activity in the extreme – whatever were they thinking?

Former Senior Inspector Rolando Mendoza, who – according to reports – was dismissed in 2008, had seized the bus in an attempt to negotiate reinstatement into the police force. Live coverage of his brother being taken in for questioning by police apparently threw the hostage-taker into a frenzy. According to reports from hostages posted to their Facebook accounts, to that point Mendoza had been civil and considerate towards them. It was seeing the manner in which police manhandled his brother which sent him into a rage and changed the entire mood.

President Aquino declared August 25 as a day of mourning as anger mounts in Hong Kong over the manner in which the incident was handled. Four senior members of the Philippine SWAT team have been relieved of their posts over the botched rescue. Hong Kong authorities have issued a travel advisory warning against travel to the Philippines and China itself is expected to follow suit. Overseas Filipino domestic workers in Hong Kong are being summarily dismissed from their jobs as retaliation according to reports.

In the overall scheme of things, while the deaths of eight people will be quickly forgotten by the world at large it has once again signalled the violent nature of Filipino society. It may be recalled that the last time the Philippines made world news was in November 2009 when more than 50 people were gunned down in Maguindanao during a turf war between rival political clans.

Despite the contraction in global tourism worldwide in the aftermath of the Global Financial Crisis, inbound tourism to the Philippines held up well in 2009, rising by 1.5 percent to 3.14 million. Tourism accounts for 6.2 percent of the country’s GDP and China has been emerging as an important and rapidly growing market with arrivals from China, Hong Kong and Taiwan all posting significant recent growth thanks especially to the introduction of direct charter flights to regional tourism centres in the Philippines. Undoubtedly, as a result of this incident, there may be a dip in numbers from East Asia for some time to come denting prospects of further growth in the months ahead.

In terms of foreign direct investment, immediate fallout within the East Asian region is expected to be minimal. China (including Hong Kong) accounted for a little over five percent of FDI in 2009 – up from 1.9 per cent in 2008. Much of China’s investment is strategic and goes into agriculture and resources and this is expected to continue. Rather, this episode has once again demonstrated the volatility of the local environment for foreign investors generally.
It is the last thing that newly installed President Benigno Aquino II (already dubbed P-Noy – a clever play on the term “Pinoy” which loosely translates as “quintessentially Filipino”) needed. President Aquino has been in the job less than two months but already the mood of the country has shifted, and for the better. While his detractors have been quick to criticise his lack of a roadmap for getting the country out of poverty as he has promised to do, he has been given full marks by most people for changing the paradigm of government. His proclaimed mission statement is to wipe out corruption and to make the government more responsive to the basic problems of the Filipino people – mass poverty, increasing malnutrition, unemployment and underemployment, substandard education and poor social services. And that is just to begin.

Both his inaugural speech delivered on 30 June and his State of the Nation (SONA) address to the Philippine Congress four weeks later, underscored this basic theme. His message was not about programs of governance – that will come later, but rather about quality of leadership. Despite his detractors, his message resonated with the ordinary people; and as one newspaper columnist put it, he is regarded as the most credible and most sincere politician to emerge in a long time. It is leadership by example: a leadership which does not exploit power, a leadership that immediately confronts corruption by refusing pomp and perks and disables a source of abuse and discrimination.

While it may be too much to expect corruption to be wiped out during the term of his presidency, with the right leadership from the top, he stands a very good chance of making a significant dent in the problem and rolling back the tide that engulfed the nation during the Arroyo years.
His task is a formidable one. The Central Bank has pointed out that even if the rate of growth can be accelerated, the Philippines has fallen so far behind its neighbours that it will take decades to catch up. Even if the country could achieve a GDP growth rate of 10 percent over the term of his presidency, by 2015, in per capita GDP terms, the country would only be where Indonesia was in 2009. To get to where Thailand is today would take until 2028 and current Malaysian levels of prosperity would only be achieved by 2038.

The refreshing aspect of this announcement was in its honesty – a far cry from the ludicrous claim of Arroyo and her supporters that the Philippines would achieve developed country status by the end of the current decade.

Change will not come easy and already it is evident that there are many, especially those who prospered during the Arroyo years who want to see business as usual. Ten days into his presidency there were five extrajudicial killings including two teachers, a peasant leader a local official and a journalist. Nobody has yet been brought to account.
While resistance to reform is expected, especially from those in Congress used to presidential largesse, Mr. Aquino has something going for him that former President Arroyo never had – the support of the people. That can be a formidable weapon.