The race is on for the 2004 Presidential elections. The only problem is no one is quite sure how many candidates will end up running. Months before the national elections, the country is slowly closing in on who those final presidential candidates will be. It is not as if it’s hard to guess from among the many names that have been floated to the public the whole year.

President Gloria Macapagal Arroyo, who at the end of 2002 declared she wasn’t seeking re-election, changed her mind last October and said she’s seeking re-election. Her former Education Secretary Raul Roco, also a presidential aspirant in the 1998 election, is also in the game. Then there’s Senator and former PNP Chief Panfilo Lacson, who is confident he will get the opposition’s backing to be its standard bearer.

The latest to throw his card into the deck is film actor Fernando Poe, Jr. On 26 November, he ended all speculation about his intention when he finally announced that he is going to run in May 2004. Since then, he has ironically shied away from the spotlight and skipped a number of public speaking engagements.

Party and Politics, Philippine Style

The rules of the game in Philippine politics have evolved very little over time. They remain focused on personalities rather than issues, thus weakening the relevance of political parties. In the Philippines, it is not the party stand that the candidates adhere to but the other way around. Parties don’t pick candidates; candidates pick parties. It’s even been said that parties don’t raise financial support for candidates; candidates bring money to the party.

While there are moves made by political parties today to pretend to go through the process of careful selection of who their standard bearers will be, the qualifications they have in mind still boil down to a very important bottom line – winnability. In the political calculus, popularity outweighs competence. No amount of political experience can match the glaring edge of a prospective candidate whose charisma and appeal can reach out to the masses.

The Issues

Whoever wins this high stakes game will have plenty of real problems to fix. And while the next president, as with all past presidents, understandably won’t be able to turn everything around during his or her term, people should at least be able to distinguish if there is movement in the right direction – that of economic development.

MBC Research identified issues that need to be addressed by the presidentiables if they are to assume the responsibility of leading the country. Hopefully, how the would-be candidates face these problems should be a significant basis for voters in choosing the next President of the Republic.

Population. Currently, the Philippines has a population of 82 million people, with an annual population growth rate of 2.36%, one of the highest in South East Asia. Forty percent of the population is living in extreme poverty. Whether it likes to or not, the government will have to address the population issue and determine how it wants to allocate its scarce resources.

The Philippine government lacks a consensus on how to address the problem on population. A big factor in the creation of an effective population policy is the country’s religious adherence that shuns away artificial birth control methods. The next president should be able to craft a sound population policy that would address the drastic increase in the country’s population as well as take into consideration the clamor of the religious sector of the country.

Trade, Investments and Labor. Over the last two decades, the country has relied on its export sector, which earns the country billions of dollars in revenues. Overall exports of goods and services account for about half of the country’s GNP. If products cannot compete in the international market, it will spell doom for export-dependent sectors, which count among them the largest and most labor-intensive industries like electronics and the garments industries. To add to the challenge, the garments industry will lose its special access to US markets by 2005 and have to compete with the likes of China.

Whether it’s export-led or domestic-led growth, a new president will have to think of how to generate jobs in the economy. A presidentiable should be able to come up with policies to ensure the continued competitiveness of products and services globally, as well as encourage more competitive domestic industries. The labor force – that portion geared toward service exports and offshore opportunities in the Philippines – will play an ever crucial role in the country’s progress.

With respect to imports, a new president will have to deal with tariff programs and bilateral free trade agreements, keeping in mind the need to balance the fulfillment of commitments with international organizations and its obligation to provide local businesses additional headroom to prepare for competition from foreign producers. Smuggling will also need to be stopped or heavily curtailed.

Investments, both domestic and foreign, are crucial to wealth creation in the country, providing jobs and needed infrastructure to move the economy forward. In recent years, the Philippines has lagged behind its Southeast Asian neighbors in attracting foreign direct investments. In the first semester, FDIs to the Philippines were down 52.2% versus the same period last year. FDIs in 2002 were also down to P46 billion from P57 billion the previous year. Investors have repeatedly cited poor infrastructure (transportation, power), high cost of doing business in the country, corruption in government, the slow pace in legislative reform, and perennial problems in law and order and security as major obstacles.

Debt and Deficit. Whoever becomes President in 2004 faces twin financial headaches: a huge public debt and a widening fiscal deficit due to inadequate revenue collections. Last year, the government’s outstanding obligations grew 79.4% to P5.16 trillion versus the P2.95 trillion way back in 1998. The national government’s financing shortfall worsened to P210.74 billion in 2002, or 5.2% GDP, from P49.98 billion or 1.9% of GDP in 1998. At the same time, the tax effort, or ratio of revenues to GDP slid to 12.3% from 15.6%. Fiscal discipline, calls for a policy commitment to raise revenues, balance the budget in the medium-term, and place a cap on borrowing according to the size of the growing economy.

Law and Order. The security situation has deteriorated with various threats from rebels, kidnap for ransom groups, and terrorists. Travel advisories from foreign countries have discouraged nonessential travel to the Philippines.

Security problems are not isolated to the southern part of the country alone. Kidnapping has been rampant in Metro Manila towards the second half of 2003. National Anti-Kidnapping Task Force (NAKTAF) Secretary Angelo Reyes has admitted that the reported cases of kidnapping in the Metro has increased to 82 cases as of October this year from 63 cases during the same period last year. According to the Philippine National Police, the country recorded a total of 41,525 crimes just for the first semester of this year.

The illegal drugs trade also continues to be a multi-billion industry. Despite repeated raids and operations against illegal drugs syndicate, prohibited substances continue to circulate in our country. The 2003 global survey by the United Nations Office on Drugs and Crimes (UNODC) on the use of Ecstasy and Amphetamines in 52 countries showed the Philippines as the third biggest user. The UNODC report stated that at least 1.3 million Filipinos or 2.8% of the population aged 15-64 might be using methamphetamine.

Power Crisis. One of the biggest problems that the country faces and which business is particularly worried about is the onset of another power crisis — the kind which the country endured in the early 90s. Based on DOE’s demand forecasts, some 7,000MW or more of additional capacity is needed by the country in the next ten years. And while the country currently has excess capacity in some areas, other parts of the country have started to feel the crunch. As predicted by concerned groups, including MBC – recurrent power outages have started to hit the Visayas, especially the Negros-Panay-Grid (CNP). Recently, Cebu has started to experience outages.

Agricultural Reforms/Modernization. As Secretary Luis Lorenzo, Jr. puts it, “sustained agricultural growth is no less than the lynchpin to a stable Philippine economy, and the key to unlocking practically all of the solutions to our challenges, from generating jobs, alleviating poverty, and ultimately ending conflict within our shores.” Issues on agriculture encompass that of funding for the continuance of programs for agricultural modernization, the farm sector’s international competitiveness, and safety nets versus foreign competition from both legal imports and smuggled products, and from products coming in through both fair and unfair trade practices. The government will also need to come to grips with the reality that larger landholdings are needed for certain plantation crops – something the current agrarian reform program works against.

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