Reform agenda

When threatening to crush his critics, President Aquino says they were standing in the way of his “reform agenda.”

When touching on the succession to his presidency, he speaks of people who will continue his “reform agenda.”

What exactly is this “reform agenda”?

When Fidel Ramos took the presidency in 1992, he offered the nation a clear agenda of rapid economic growth. He put together policy reforms that will improve our competitiveness and accelerate our economic performance. All the reform measures and policy initiatives cohered with the vision of bringing the Philippines to newly industrialized country status by 2000.

Thus the tag “Philippines 2000” to refer to the comprehensive package of policies pursued by the Ramos administration. This included a tax reform package, privatization, policies that brought forth a truly contested market liberated from the grip of oligarchs, investment incentives, and overall liberalization of the national economy.

The Ramos package of reforms opened with a clear action plan for the first 100 days of the presidency. The key result areas were quantified. Every state of the nation speech delivered was a progress report on the gains achieved by the “Philippines 2000” program.

Unfortunately, the 1997 Asian financial crisis broke the momentum of fiscal consolidation, economic modernization and rapid reduction of poverty rates. The institutionalized reform policies were, however, irreversible. The break-up of the telecoms monopoly enabled millions of Filipinos access to modern communications technology.

When Joseph Estrada took power in 1998, his talented economic team put together a reform program cleverly referred to as “Jeep ni Erap.” It was a policy package intending to bring the fruits of development to the lowest income households.

In pursuit of this administration’s pro-poor economic program, the Estrada administration laid the groundwork for constitutional reform, expanded microfinance programs and prioritized agricultural development.

The Estrada presidency was too short-lived to have any real lasting imprint on our society.

Thrust into power by an uprising, Gloria Macapagal Arroyo had to quickly put together a reform agenda. That agenda highlighted reforms in governance (such as the Procurement Act), rapid modernization of the country’s logistical system (such as the ro-ro and nautical highways program) and further fiscal consolidation to finally pull the country back from the debt crisis (such as the introduction of an expanded VAT).

The Arroyo years, marked by unbroken quarter-to-quarter economic growth finally pulled the country out of the debilitating boom-and-bust cycle. In the second half of her presidency, Arroyo began to strategically alter the country’s planning model. She introduced the concept of “super-regions” and reorganized the bureaucracy according on that format.

The “super-regions” as a planning format highlighted the competitive advantages of all the country’s regions and tailored resource allocation, budget items and bureaucratic units to translate those advantages into functioning economies.

Her mantra was always: “It’s the microeconomy stupid!”

If the regions were able to build on their comparative advantages and if infrastructure support was provided the localities, growth will be broader based. The impact on poverty will be significant.

Towards the end of the Arroyo presidency, the country had worked down the debt overhang inherited from the eighties. The conditions were ripening for a major surge in infrastructure buildup. With less pressure on austerity, a highly liquid financial system and increasingly capable conglomerates, the situation was ripe for a strong private sector-led leap.

Then the global financial meltdown happened. Because of the fiscal consolidation that happened, the Philippines avoided sliding into recession like the rest of the world. More important, we did not slide back into the boom-and-bust cycle that condemned us in the past to short-term investments and a consumption-driven economy.

When Benigno Simeon Aquino took over in 2010, he had slogans but did not draw up a plan.

It was the task of this presidency, after all the reforms done since the nineties, to deal with the hardest nut to crack: bureaucratic reform.

Bureaucratic reform required immense political capital to push through because the chief executive will have to be transforming his own bureaucratic base. Aquino, in 2010, had that political capital — although he did not quite know what to do with it.

Aquino never bothered putting together a comprehensive package of reform policies made coherent by a theme or a far-sighted view of where the country was going. He did not even have a legislative agenda for accomplishment over his tenure in office — at least nothing as coherent as the Comprehensive Tax Reform Package or the blueprint for reorganizing our governance institutions on the “super-regions” format.

The only item of legislation he promised during the 2010 campaign was the Freedom of Information Act. In power, he feared it and the promised law remained in congressional purgatory the last five years.

Instead of offering the nation a vision of what we could become, Aquino instead focused on demonizing his predecessors That inclination blinded him to the policy foundations he must build on.

To this day, when he credit-grabs and speaks of our improved credit ratings as if this decades-in-the-making achievement was something he alone is responsible for, Aquino shows little appreciation for the long accrual of the reform process. The historical dimensions of the process of economic modernization seems to escape him.

In none of his state of the nation addresses did Aquino ever speak of the main task the historical process of reform assigns his presidency: bureaucratic reform. Therefore, the task remained unaddressed.

At the core, bureaucratic modernization aims at transforming the entire state mechanism as a great enabler that empowers our people and enhances wealth creation especially at the bottom income rungs. Modernization of the state is the key factor that will produce real inclusive growth.

Yet this remains undone.