Archive for the ‘Cory Aquino’ Category


NOVO TRENDS PH Survey March 21-16 2015

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President Benigno Aquino III delivering his SONA before the joint session of Congress

President Benigno Aquino III delivering his SONA before the joint session of Congress

 

Yesterday was another State of Nation Address (SONA) day in the Philippines.

The SONA is supposed to be a report of the country’s chief executive on his government’s accomplishments over the past year as well as his plans for the future. In the case of the incumbent, President Benigno S. Aquino III, his plans for the remaining two years of his term.

Sadly, the SONA had been transformed into something less than that.

 

Philippine Congress hears President Aquino's SONA

Philippine Congress hears President Aquino’s SONA

 

For one, the exercise has become a fashion spectacle, an obscene, ostentatious and insensitive display of wealth, pomp, and bad taste in the midst of hunger and poverty.  You have the people’s representatives and servants trying to outdo each other on the red carpet.

Second, it became a game of up-onemanship, a very swell pissing contest. A president will list his accomplishments and declare he did more than his predecessors.  Or all other previous administrations combined, for that matter. What should he do that?  Does he have to do that?  Under the 1987 Constitution, he is limited to a single term.  He is not eligible to run for re-election. Why behave like a candidate on the hustings?  Why can’t he locate himself in a continuing narrative of nation-building even if one president supposedly accomplished more than others?

Why can’t a president talk and report to the nation as the President of all Filipinos and not as leader of his party?

 

After all, the members of the opposition are fellow Filipinos, fellow citizens, and thus also his constituents.

 

Can a reform of our winner-take-all electoral possibly remedy this parochialism and short-sightedness?  How about electing the president and the vice president as a single package, similar to what they do in the United States, to enhance unity at the very top of the country’s political leadership?

In the post-Marcos period, all chief executives have been put on the defensive sometime during their presidency and it has limited their effectivity.  For some reason or the other, they sustain a significant dimunition of their political capital and suffer the consequences.

 

Even the saint-like Tita Cory saw a decrease of her political stock as her administration was unable to solve a power crisis (the same problem confronting his son at the moment).  Only her clear intent not to succeed herself after 1992 prevented a further decrease in her political capital.

 

President Fidel V. Ramos developed a reputation of being a doer fortified by complete staff work (CSW) by his able lieutenants.  He is the only post-Marcos president with a grand plan for the country (Philippines 2000) as well as the first one to plan to succeed himself. Thus the deliberate use of the year 2000 in the fighting slogan “Philippines 2000” even if his presidential term was supposed to end in June 1998.

 

Ramos’ image first took a hit with the execution of Flor Contemplacion, a Filipino domestic, in Singapore on murder charges.  Most Filipinos believed she was innocent of the crime, that she was wrongly accused and put to death, and that the Philippine government acquiesced to the Singapore government’s judgement and did not do much to help her escape death.

 

Ramos’s bid to succeed himself through PIRMA was foiled by the opposition of erstwhile allies led by Jaime Cardinal Sin and Tita Cory.  What finally did him was the Asian financial crisis of 1997-98. 
While President Joseph “Erap” Estrada was elected in 1998 by the single largest number of voters in the country’s political history, his downfall was swift.  As early as 2000, he faced accusations of grand corruption and tried to parry his political opponents by launching a war against the Moro Islamic Liberation Front (MILF) in Mindanao. Eventually, he was impeached and removed by another people power insurrection in January 2001, after only two years and seven months in power.

As vice president, Gloria Macapagal Arroyo (GMA) assumed the office and served the remainder of President Estrada’s term.  The constitutional restrictions of a single term did not apply to her and she successfully stood for election as president in May 2004.  Following the 2005 revelation of her taped conversations with a top Commission on Elections (COMELEC) official suggesting that the count be tampered in her favor, GMA was put on the so-called “survival mode”.  She was hounded by corruption charges during the remainder of her term, largely because of the unsavory reputation of her husband, the First Gentleman Mike Arroyo.

This time around, President Noynoy Aquino has to deal with a Supreme Court decision that declared his Disbursement Acceleration Program (DAP) (or budget impounding schemes, as other would have it) unconstitutional. His popularity rating plummeted and he faces impechment complaints–an entirely new situation for him.  He chose to go on an offensive short of calling the Supreme Court as the chief obstruction to his progressive reforms. His defense: he did what he did for the good of the people.  He says he will follow processes and file a motion for reconsideration with the Court. Then he commits the gaffe of accusing the Court of committing the same proscribed cross-border transactions when in fact, the Court did not.

In yesterday’s SONA, the President wisely backed away from his tirades against the Supreme Court.  What he did was to ask his allies in the Lower House to act on a proposed P2.3 trillion 2015 budget which will give him the leeway to spend public money as he saw fit. 

 

He spent the initial part of the SONA listing his accomplishments in a rather haphazard manner and lacking a unifying or thematic framework that could have earned him a very low grade if he was making the presentation in my class.  It was too micro and a big picture is barely discernible. 

 

While the accomplishments are praiseworthy, I would have wanted them to be presented in the context of what needs to be done for the remainder of his term.  A generic “good governance” may suffice at the beginning of his term but is inadequate given the context of his remaining years.

 

I think he made a few assertions regarding the swiftness of government’s response to the super-typhoon Haiyan that can be effectively challenged by the victims themselves and fact checkers.

 

The single most important gap is the parochialism of the speech.  President Aquino focused on domestic matters and did not respond to urgent foreign policy concerns.  For instance, there was no mention of (continuing?) preparations for the impending 2015 full integration of the Association of Southeast Asian Nations (ASEAN).
He spends some choice minutes by attacking his critics and so-called “enemies of reform” first before individually naming and praising allies and well-meaning Filipinos who can continue his reform efforts even after he steps down from the Presidency.  He succumbed to the cheap joy of finding comfort among friends instead of embarking on the more difficult path of reaching out and establishing broad unity.

 

While I am pessimistic of the prospects, I do hope he will change his stance and will be the President of all Filipinos.  That is after all what is contained in his oath of office.

 

 


August 21 is a most significant day in Philippine political history.

Exactly forty one years ago, the proclamation rally (otherwise called miting de abanse) of the opposition Liberal Party in Plaza Miranda in the center of Manila was bombed with two grenades.  Fortunately, one of the grenades was a dud and nine people including a girl and Manila Times photographer Ben Roxas died and 95 were injured.  I remember a photo of the dying Roxas published the day after staring right into the camera–dazed but seemingly not in pain.  Almost all the Liberal Party’s candidates for senator and local posts in Manila were severely wounded.

Photo-montage of Plaza Miranda bombing

President Ferdinand Marcos responded to the bombing by suspending the writ of habeas corpus through Proclamation No. 889, later amended by Proclamation No. 889-A  supposedly to align the suspension with the bill of rights provision of the Constitution.  He promptly blamed the communists for the bombing and justified the writ suspension as necessary to restore peace and order.

While Marcos was the usual suspect for the Plaza Miranda bombing, several personalities including former Senator Jovito Salonga (who was seriously injured during the rally) began to believe that the communists were responsible.  Victor Corpus, the army lieutenant who carted arms from the Philippine Military Academy (PMA) and joined the communist-led New People’s Army (NPA) in 1970, wrote in his book Silent War he was present when top communist leaders including Jose Ma. Sison, plotted the bombing.  Sison argued the bombing will be a win-win for the communists: Marcos will be put on the defensive, the ruling class will be split, and the revolutionary cause could thus advance.   Corpus will repeat this same allegation in an interview with veteran Filipino journalist Max Soliven. Sison and his followers have repeatedly denied these allegations.

Aquino in white being carried by soldiers on the airport tarmac; the other body is that of alleged gunman Rolando Galman (from Times Journal)

Ninoy Aquino in his prime

Exactly twenty nine years ago–Benigno Aquino Jr–the man believed by many to most likely have been the President of the Philippines if Marcos did not declare martial law in September 1972 was assassinated in the Manila International Airport minutes after his plane landed.  The alleged gunman, Rolando Galman, was killed by government troops supposedly after he killed Ninoy Aquino.  Marcos again blamed the communists for Aquino’s murder and alleged that Galman was acting under their orders.

In both occasions, Marcos’ accusations against the communists were not believed.  Most thought that he ordered both the bombing of the Liberal Party proclamation rally and the assassination of Ninoy Aquino.  The logic behind the belief?  The physical elimination of the Liberal Party leadership would redound to his ruling party’s benefit.  The writ’s suspension was seen as a cover-up for the Plaza Miranda bombing.  The death of Ninoy removes the strongest opposition figure that could threaten Marcos’ lifetime rule.

Marcos and Ninoy, fraternity brothers, in happier times (from MLQ3)

The ebullient Ninoy chatting with fellow passengers in that fateful China Airlines flight

Everybody from the US Central Intelligence Agency (CIA) to the communists were being blamed for Ninoy’s death.  His death likewise spawned a fever of jokes.  One of the most popular run like this:

Ninoy: Hindi ka nag-iisa (Ninoy, you’re not alone!)

Marcos: Naka-isa ka! (Marcos, you put one over all of us!)

Galman:  Naisahan ka! (Galman, you’ve been had!)

Still another:  Use Galman briefs! It will bring out the killer in you.

Ninoy’s body loaded into a military van

Ninoy led by soldier out of plane (from Facebook account of Boom Enriquez)

Kidding aside, Ninoy’s assassination was the game-changer in the political struggle against the Marcos dictatorship.  Prior to August 21, 1983, the opposition to the regime was born  by armed rebels–communists and Muslim secessionists.  The legal opposition got scattered when Marcos closed the legislature, arrested and imprisoned many, and sent scores to exile.  Some of them dabbled in violence through the Light-a-Fire and April 6 Liberation movements.

However, Ninoy’s death emboldened hitherto inert social forces such as the middle class, businessmen, professionals, clergy and like  to express their strong opposition to the authoritarian regime.   On a sustained basis.  Until February 1986 when Marcos and his immediate coterie left for Hawaii.

The armed opposition did not figure well in this end game against Marcos.  They lost what business theorists and military strategists call the ‘first mover advantage’.  The Moro National Liberation Front (MNLF) absorbed the brunt of Marcos’ military offensives as it fought conventional warfare in the early going.  In 1977, it signed a peace agreement with Marcos only to be outwitted by the latter in the agreement’s (non)implementation.  The MNLF resumed its military struggle but was soon weakened by a split that produced the Moro Islamic Liberation Front (MILF).  The communists were sidelined when they decided to boycott the ‘snap elections’ that pitted Marcos against Ninoy’s widow, Cory Cojuangco Aquino.  EDSA 1986 was a sea of yellow–the color associated with Cory and the moderate political forces.  A lot of communists and radicals were also there; however, they could not unfurl their red banners.

Of course, the picture was not a black-and-white one.  The radicals joined the newly enervated political forces from the middle class in regular protests against Marcos.  The rallying cry was: Justice for (Ninoy) Aquino, Justice for All!  They parted ways in the 1984 parliamentary elections: Cory and her allies decided to participate and won a significant number of seats while the radicals predictably boycotted.

By 1985, the trajectory was quite clear.  The strength of the moderates had grown so much.  As a result, they spurned a coalition, BAYAN, with the radicals.  They formed their own group, BANDILA.

EDSA 1986 actually started with a failed military coup led by the Reform the Armed Forces Movement (RAM) led by Defense Minister Juan Ponce Enrile and his protege, Colonel Gregorio Honasan.  It soon morphed into a peaceful uprising as Jaime Cardinal Sin called on the faithful to gather en masse to protect the rebel soldiers from the loyalists.  The failure of the military coup contemplated for early 1986 and the communist boycott of the snap elections allowed non-violent forces to claim victory against Marcos in February 1986. The key figure here was the martyred Aquino – likened to the national hero, José Rizal (1861-96), or even to Jesus Christ. Neither the dictatorship nor the insurgents and the military rebels had any equivalent.

Unmadeup Ninoy in his coffin

Ninoy’s bloodied and bruised remains in an open coffin were visited by hundreds of thousands at the Santo Domingo Church.  When he was finally laid to rest in Paranaque City, the funeral march took some 11 hours to reach its final destination.  The historic event was practically ignored by the regime-controlled mass media.  I remember that the Philippine Daily Express (derisively called the Daily Suppress) chose to report the death by lightning of a person who was watching the funeral procession.

Elsewhere in Luzon, the other victim–Rolando Galman–was mourned and buried without much ado by his relatives and friends.

C’est la vie?

C’est la guerre?

Secretary Jesse Robredo

Meanwhile, this morning today, the death of Interior Secretary and Ramon Magsaysay Awardee for Good Governance Jesse Robredo was announced after his body was recovered in the waters off Masbate island.  The reader is enjoined to a say a prayer for this quiet and good man and public servant.

The big question


Twenty six years ago today, a failed military coup that morphed into a popular uprising finally ousted and forced the flight of the dictator Ferdinand Marcos and his close family members and associates to Hawaii after four days.

Ferdinand Marcos

Notwithstanding the presence of armed soldiers on both sides, the uprising was largely non-violent and introduced ‘people power’ into popular and academic discourse.  While it is understandable that some Filipinos claim we invented ‘non-violent revolution,’ perhaps we should be modest enough to acknowledge the pioneering efforts of Mahatma Gandhi and his followers.  The Indians were unable though to expel the British colonists from the sub-continent.  

Gandhi leading the Salt March in defiance of British law

Gandhi leading the Salt March in defiance of British authorities

However, a military-civilian uprising peacefully ousted the 50-year old regime of President Antonio de Oliveira Salazar of Portugal–an event now known in history as the Carnation Revolution–in 1975, some 11 years before EDSA I.

A military rebel during Portugal’s Carnation Revolution

Perhaps, Filipino pride in EDSA People Power is justified because it was the first of its kind in Asia and is said to have inspired the fall of the Soviet Union and its allies through similar peaceful popular uprisings–events which completed the end of the Cold War.

Not a few Filipinos may consider today’s celebrations as ‘just one of those things.’  I suspect that this attitude is true among many of our youth.  An appreciation of EDSA 1986 requires some historical knowledge of martial law and the upsurge of the anti-dictatorship movement after the assassination of former Senator Benigno Aquino, Jr. as well as the four days of EDSA 1986.  History textbooks at the secondary level are relatively blank on these periods.  It is almost as if martial law is still in place.

It is this blind spot that invites historical revisionism.  It is expected that the Marcos family, led by its current spokesperson, Senator Bongbong Marcos, will deny any wrong-doing on the part of the family patriarch during martial law.  In today’s papers, Senator Marcos is reported to have demanded a stop to blaming his father for the country’s problems.

Senator Bongbong Marcos at the firing range

Senator Bongbong Marcos at the firing range

To be fair to Senator Marcos, he has a point.  It is indeed not right to censure his father for all of the nation’s woes.  Post-Marcos presidents share part of the failures.

However, none of the nation’s chief executives, save Ferdinand Marcos, concentrated political power in himself and a narrow coterie of family members and associates.  Such concentration of political power gave rise  to imprisonment of political opponents, human rights violations (including disappearances and torture), and conspicuous consumption.

I recently learned of a story written by Ed Lingao (http://pcij.org/stories/a-different-edsa-story/) at the website of the Philippine Center of Investigative Journalism (PCIJ) that reported a rather intriguing take on EDSA 1986.  It  is about a video-ala-Powerpoint presentation authored by somebody who calls himself Baron Buchocoy.   I actually saw this production before but ignored it until Lingao’s story.  

Among other things, Buchocoy alleges that the only reason why EDSA 1986 was peaceful and non-violent was because Marcos himself ordered his men not to fire upon the rebel  soldiers and assembled crowds of civilians.  Perhaps, he will offer as proof the TV footage of Marcos admonishing a trigger-happy AFP chief of staff Fabian Ver before Malacanang was cut off the air.

Marcos ordering Ver not to fire on EDSA crowds

Let’s examine Buchocoy’s allegations.  If indeed there was no order to attack, why was a column of Philippine Marines tanks and armored personnel carriers (APCs) sent to EDSA?  According to Buchocoy, the Marines were sent to arrest the rebel officers and soldiers holed out in Camp Aguinaldo.  The idea apparently is to convince the rebels not to resist arrest given the overwhelming superiority of the Marines force.

What happens if the military rebels resist arrest?

What if they make a last stand?

These are hanging questions but I guess the Marine commander will have to consult with higher authority.

As  things happened, hundreds of thousands of non-threatening civilians inserted themselves between the Marines and the military rebels.  As a result, the Marines never got near Camp Aguinaldo to accomplish their mission, whatever that was.

Marine with civilian women in front of armored personnel carriers

To accomplish their mission, the Marines will have to plow through the crowd with their armored vehicles. But every time they move, they were stymied by the crowd.  The most effective ‘anti-tank weapons’ were kneeling nuns praying the rosary.

Tank-stopping nuns

In many non-violent people power revolutions, we hear of orders for soldiers to fire upon or bomb the crowds of peaceful protesters.  These revolutions remained non-violent because officers and soldiers refuse to obey such orders.  Those who offered testimony after the fact answered that a key reason for hesitation and defiance is the probability that family members, friends, and neighbors might be in the crowd.

A professional military unit may hesitate, may be puzzled or flummoxed, when confronted by non-aggressive and unarmed civilians that stand in its way to accomplish a mission.

Also, in a situation where the military is divided and the fate of the country’s leader is on the balance, military units may hedge and decide to wait and see or dissemble as if following orders.

In a March 2007 international conference on people power held in Oxford where I presented a paper on EDSA 1986, one of my discussants, former US ambassador to the Philippines (1984-87) Stephen Bosworth revealed that Marcos was warned by his government not to attack the military rebels and unarmed civilians.

US ambassador Stephen Bosworth

Thus, the nonviolent character of EDSA 1986 does not lie on an alleged Marcos decision not to attack.  

What intrigues me to this day is Marcos’ failure to attack when he still had the upper hand.  He got an early warning of the attempted coup the failure of which sent the rebels scurrying to Camp Aguinaldo at the first day of EDSA 1986.   This was when the rebels were most vulnerable.  Their estimated strength was 400-600 and they were yet to be cocooned by a crowd.  

Was Marcos still gathering information?  Was he conducting a loyalty check within the military and consolidating his loyalists first? Or was he caught between a rock and a hard place because of the US pressure?    

Now to my last point.  I mentioned earlier that many Filipinos think February 25 is just one of those commemorations.  While some would invoke a so-called ‘spirit of EDSA’ to carry out deep reforms, others (Senator Bongbong Marcos included) complain that EDSA has not meant a better life for Filipinos.

At the risk of demeaning EDSA 1986, I submit that it is not a revolution in the full sense of the word.  It was participated in by millions of Filipinos who were united on a single issue: Marcos and his cohorts must go so political power can be freely contested.  No unity exists among the many Filipinos massed in EDSA beyond this issue: workers want wage hikes while capitalists would not be in favor of that; some wanted the ouster of the US military bases while others do not. And so on.

The legacy of EDSA 1986 is concretized in the 1987 Constitution.  Through the Constitution, we can carry on and frame our struggles for needed change.  If we deem it necessary, we can amend the charter.  To the extent that we can do all these things, we owe them to EDSA 1986.

(Footnote on Buchocoy: He sees EDSA 1986 in a negative way that one cannot be faulted from thinking that he would have wanted Marcos to issue orders to fire upon the military rebels and civilian crowds to prevent his ouster and the ascent to power of Cory Aquino.)


Yesterday at the UP College of Law, former Supreme Court Chief Justice and now member of the UP Board of Regents Reynato Puno opined that now is the best time to amend the country’s constitution.

Former SCCJ Reynato Puno

Puno made the declaration after President Noynoy Aquino announced that Charter change (Cha-Cha) was not among his administration’s top priorities.  In a straightforward manner, he said that the current charter had spawned a frail state–crippled  by a weak electoral system, social inequalities, and most importantly, by a politically vulnerable judiciary.

I agree with the former chief justice that changes to the basic law of the land must be done now.  I will also add that it should be initiated by President Noynoy and he must nurture the process to a satisfactory conclusion.

The time is now when the political capital of Noynoy is at its peak.   Especially after he declared that he will not seek any other post after his term ends in 2016–unlike some people we know.

Puno in fact remarked that now is the time to talk about Cha-cha when the President has “pristine intentions.”

In my opinion, the exact nature of Noynoy’s intentions may not be that important since we do not have any way of ascertaining what they are.  However, what is crucial is the perception of such intentions and to the extent that he currently enjoys high trust ratings, one can conclude that he is widely perceived to be indeed pristine.

President Noynoy with Tita Cory's portrait behind him

Previous attempts to amend the charter have been rebuffed since the chief executive proposing it was perceived to be doing so for self-serving purposes.  Now is the only time since 1987 that the President is seen to have different intentions.  For this reason, if Noynoy pushes for charter change, then it could get greater traction this time around.

My unsolicited opinion: President Noynoy should not think that championing charter change will be a betrayal of his mother’s legacy.  I forward the opinion that Tita Cory opposed Cha-cha in the past because she knew–in fact, felt it instinctively in her guts–that the previous proponents were motivated by less-than-noble intentions.

Tita Cory, I believe, will not opposed a Cha-cha pushed by President Noynoy.

I ask President Noynoy to open the process for charter change.

Why? That will be the subject of my next blog entries.




Noynoy and Kris

Here’s the easiest no-brainer-question (NBQ) I have composed so far.

Would his candidacy for the presidential post have been a viable one if Noynoy was not the son of his famous parents?

Would he be topping the surveys since September last year?

If his mother did not die in a very timely and opportune fashion in August last year?

If he was not the brother of Kris Aquino? Of Ballsy? Of Viel? Of Pinky?

If Mar Roxas did not make way for him?

If his girlfriend was not a run-a-way looker and a formidable politician in her own right?

But apparently to many voters, these are reasons enough for them to support Noynoy.

I just hope they have made the right choice.



In this blog entry, we continue sharing parts of the draft book on political institutions and policy making in the country.  To sharpen the discussion, we focus our attention on tax policy-making with emphasis on tax measures adopted during the presidency of Fidel Ramos.

I believe this discussion is timely given recent warnings that the incoming president will be saddled with fiscal deficits and need to raise revenues by way of raising value-added-tax (VAT) rates and rationalization of current fiscal incentives.

The examination of tax policies is a good way of seeing the policy making process of a country in action.  Taxation touches almost every aspect of the economy and society and taxation is the area of public policy where the most interests are at stake.  For one, a number of public policy decisions (such as public spending and borrowing) and private economic behavior (such as spending and investments) are related to taxation.

Raising adequate tax revenues to finance government programs and support public policy thrusts is one of the key failures of the Philippine state since the colonial period.  During the American colonial period, the efforts of the American-dominated Philippine Commission (which operated as a quasi-executive branch) to raise greater revenues were consistently opposed by the legislative assembly (composed largely of a Filipino elite that acquired land via Spanish land grants and the sale of church lands during the American occupation) (Golay 1984).

In fact, the political dominance of landowners in the legislature helps explain why the real property tax system was not even codified until 1973 (Montes 1991).  In addition, legislators had continually sought tax concessions for constituents and supporters.  Golay (1961) concluded that reliance on tax incentives was the reason why tax revenues did not increase (as a percentage share of the GDP) between 1950 and 1959 despite increasing rates of import duties on American goods.  In his study of the pre-martial law legislature, Stauffer (1970) noted that Congress consistently held back efforts to tax the export industries.  While the martial law government of Ferdinand Marcos adopted tax reforms that increased the tax burden of the wealthier classes, it also granted vast tax exemption privileges to cronies and front-men (Eaton 2002).

Notwithstanding the chronic fiscal crises and crushing debt burden inherited from the Marcos period, legislators were still reluctant to enact tax reform measures after the return to democracy in 1986. However, they were  yet were not immune to tax particularism.  In fact, the most common type of tax bills passed between 1987 and 1994 was designed to grant tax exemptions (Eaton 2002).  President Corazon Aquino (1986-1992) was thus forced to respond to the fiscal bind by relying on domestic borrowing, which allowed her to avoid the politically difficult decisions involved in either repudiating the Marcosian foreign debt or in pursuing tax reform.

Prior to the re-establishment of Congress in 1987, she enacted a limited tax measure which imposed a 10% value-added tax (VAT) on manufactured goods but excluded a wide range of services, including those provided by professionals and financial institutions.

The Ramos presidency (1992-1998) faced a harsher fiscal situation compared to the preceding Aquino government.  On top of the foreign debt service burden, Ramos had to contend with the loss of millions of dollars in official aid from the United States following the abrogation of the Military Bases Agreement and the subsequent withdrawal of American military forces from the country in 1991.  With the passage of the Local Government Code in 1991, his government also had to deal with the increased and automatic claim of local government units (LGUs) on national revenues.  He also had to honor international treaty commitments to lower tariffs.

The need to raise revenues is also demanded by his “Philippines 2000” program, a plan to transform the sick Philippine economy into the latest Asian newly industrializing economy by his term’s end.  It was regarded by many observers as the first strategic top-down project for social and economic restructuring since the Marcosian “New Society” program associated with martial law.

On his election to the presidency in May 1992 on a narrow mandate, Ramos faced an economic crisis characterized by nearly zero economic growth, falling average incomes, and daily power outages of up to 8 hours (De Dios 1993).  At 15% of gross national product (GNP), tax revenues in the Philippines were the lowest in Southeast Asia.  In contrast, In­donesia, Thailand and Malaysia had better tax efforts at 19.8%, 19% and 17.5% of GNP, respectively.  Similarly, the level of tax evasion (more than 50% of potential tax revenues are uncollected) in the country clearly reflected the weakness of Philippine tax administration (Manasan 1994).

As a first step, Ramos proposed the broadening of the narrow VAT base and asked Congress to include telecommunications, cargo transport, hotels and restaurants, books, newspapers, broadcasting, and the lease/sale of real estate.  By buying off congressional opposition to the measure through accelerated releases of pork barrel allocations, an expanded VAT law (Republic Act 7716) was enacted in 1994.  However, the new law’s implementation in July 1994 was suspended when the Supreme Court ruled it violated the Constitution.

After the 1995 mid-term elections, legislators from the House of Representatives resumed their offensive against expanded VAT coverage.  The outcome of this new tax policy process was the improved VAT or IVAT law (Republic Act 8241), which took effect on 1 January 1997.  The new law was a setback for Ramos as legislators reneged on an executive-legislative deal to limit exemptions.

Instead of expanding VAT coverage, RA 8241 expanded the list of industries and economic activities exempted from VAT, leading to foregone revenues estimated at US$20 million (Eaton 2002).  In effect, Ramos used up government funds and substantial political capital to end up with a tax law not entirely up to his liking in terms of revenue productivity, economic neutrality, and equity.