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 Different folks, different views: Businessmen are happy with the Aquino administration's economic performance in its early days, but some pro-poor groups and ordinary people think it's just repeating mistakes of the past. JES AZNAR Opinion is divided on the performance of the Aquino administration –with the business community and analysts giving it positive ratings while some social affairs think tanks and voters are concerned that campaign and other promises have yet to make any difference to the lives of the poor.
People are also divided over the government’s plans to pursue public-private partnerships (PPPs) as a key part of its economic planning.
April Nuyda is an 18-year old student in a public school in San Juan, Metro Manila who dreams of being a teacher. For now though she has to set aside her plans to instead help her father, a tricycle driver and her mother, a domestic helper, to support their family of seven.
“I can’t go to college anymore. I will have to work after high school,” she told the Philippine Public Transparency Reporting Project (PPTRP).
“I don’t see any improvement with President Aquino because prices continue to go up,” says April. Rising oil prices she says has affected his father’s income.
“Everything else is going up too,” she said.
IBON Foundation, a progressive research think tank based in Quezon City maintains there has been “a disappointing lack of progress,” so far in moving away from the alleged excesses of the past.
“Overall, outside of certainly titillating exposés of corruption one doesn’t get a sense of resolve even on this supposedly banner Aquino administration issue,” IBON Research Head Sonny Africa told PPTRP.
Africa argues that the Aquino administration is continuing the failed policies of the previous government.
“Its declarations and actions are more consistent with continuity of failed policies, merely superficial or cosmetic changes and empty slogans rather than the bold reforms the country needs,” Africa says. He raises concerns too about government plans to develop PPPs.
Under the program, the government intends to partner with business in building crucial infrastructure projects such as roads and bridges. As a sweetener, the government aims to provide guarantees to industry against certain regulatory risks.
“The public-private partnerships absurdly mean to expand or deepen privatization into health, education and housing. The promise of guarantees against ‘regulatory risk’ for foreign investors is a slavish deference to big corporate profits and will drastically limit the policy space of government vis-à-vis vital public infrastructure, economic services and social services in the future,” Africa says.
For its part, the government says all terms offered to businesses which win contracts through “open competition and through fair and transparent terms” will be done “without compromising the public interest.”
But Africa says that the Aquino administration has had six months to show where it is headed.
“Six months is long enough to get a sense of the government's priorities and directions. In particular, it can be asked: what kind of political change has there been if the economic thrusts remain the same?” he notes and maintains the administration has failed to maximize its political capital.
“Even more alarming, the rhetoric of good governance, democracy and poverty alleviation -- which resonate with so many Filipinos who have long-suffered bad governance, marginalization and deep poverty -- is being used to maintain policies and programs that have failed to benefit the majority of Filipinos,” Africa says.
Africa urged the new administration to make the most of 2011, as it would be a defining year for the new government. Some sample economic reforms he would like to see include a nationwide across-the-board wage hike for private sector employees and a salary hike for government workers, a substantial reduction in the value-added tax (VAT) rate and a correspondingly substantial increase in taxes on corporations and high-income individuals.
He also hopes that the new administration will in the future increase the budgets for hospitals, indigent patients, schools, colleges, and universities and impose cuts in pork barrels of the president, Senate and Congress.
The Freedom from Debt Coalition (FDC) also has concerns and believes the Aquino administration is merely “rehashing the failed economic strategy of past administrations.”
FDC president Ricardo Reyes maintains that the economy is becoming more and more a service economy and that the industry and agriculture sectors are on the decline. The group also criticized the government’s export labor policy and the pervasive low wage, low income and high unemployment and underemployment regime in many areas of the economy.
Fixing the holes
Finance Secretary Cesar Purisima counters such complaints and concerns and says the new government is wasting no time in fulfilling its promises to people. Purisima told PPTRP that to have more funds for the poor and address the plight of people like frustrated teacher April Nuyda, the government is fixing the revenue leakages.
“It’s like a pail of water with a lot of holes. We’re trying to fix the holes. The opportunity to do this is there. Let’s fix the administrative problems first. I believe we can continue to increase revenues so long as we improve collection,” Purisima says.
Businessmen interviewed by PPTRP appear upbeat about the government’s current record and future prospects. Former Philippine Prime Minister Cesar Virata, who is now Chief Executive Officer of Rizal Commercial Banking Corporation believes things are going well so far.
“Right now, the business side is still very optimistic. They have good feelings towards the administration and they would like to see it continuing,” Virata said, noting that the government has been hitting its targets on the fiscal side of things.
According to the latest data from the Department of Finance, the government managed to post a budget surplus of PhP 482 million (USD 11 million) in November.
That brought the January to November fiscal position to a deficit of PhP 269.8 billion (USD 6.13 billion) – down from the PhP 272.5 billion (USD 6.19 billion) recorded in the same period in 2009.
For 2011, the government hopes to contain the budget gap at PhP 290 billion (USD 6.6 billion) or 3.3 percent of gross domestic product (GDP). This is narrower than the projected ceiling for last year of PhP 325 billion (USD 7.4 billion) or 3.9 percent of GDP.
Former Bangko Sentral ng Pilipinas (BSP) Governor Gabriel Singson turned consultant for the Gokongwei group shares the same view.
“The fiscal situation is improving. It’s not as bad as before,” Singson told PPTRP. “That said, I hope they will have a more definitive program for the economy.”
Another senior businessman, Aurelio Montinola III, Chief Executive Officer of Ayala-led Bank of the Philippine Islands (BPI) says that one area in which the government is doing especially well is in the Bureau of Customs and the Bureau of Internal Revenue where top key reformers are now in place.
And unlike IBON’s Africa, Montinola believes the PPP program is a step in the right direction. “It’s a good initiative and after all, the government doesn’t have unlimited money.”
He further believes the fiscal target of keeping the deficit at PhP 290 billion this year or 3.3 percent of GDP is a significant improvement from previous administrations. “As long as it’s within 3.3 percent of GDP, it’s okay.”
The global credit rating agency Moody’s Investors Service however, said in a January 6, 2011 report that the Philippines needs to continue working on improving its fiscal position. It also focused on the issue of the PPP.
“Another area we will evaluate is whether the government can successfully begin implementation of its public-private partnership program for infrastructure development. As this program forms a key pillar of the Aquino administration's economic agenda, successful execution of associated projects would provide a bellwether for an improved business climate and growth prospects in general,” Moody’s said. Philippine Public Transparency Reporting Project /i>
(The author covers public finance and the macro economy for the Philippine Star. She is also a blogger on development and human interest issues. She won last year in the Think3 global blogging competition organized by the European Journalism Center. Some of her winning entries may be read in her blog site.)
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What's wrong with these photos (apart from the blocked out bits)? 
