You know it’s a mess when it takes time to figure out if a province voted at all (or for details on how mangled the voting process was). And where the results are so suspicious they’ve been thrown out of the quick count. Although there’s public pressure on Namfrel, too. Read RG Cruz’s report from Lanao on how Namfrel’s been fighting for election returns. Personally, I think Namfrel’s working hard to restore the luster of its reputation.
First, the administration restrains its operators from further fiddling with the May 2007 election returns. Second, the present Comelec commissioners immediately resign their posts, and, in their place, the President appoints individuals of proven integrity and capability. And lastly, Ms Arroyo affirms a previous statement she made years back in a moment of candor-that her presidency has brought so much divisiveness to the nation’s life, and pledges to completely withdraw from public life at the end of her term in 2010, or sooner.
Even Tony Lopez surprisingly (Palace booster that he is), wrote,
It is now abundantly clear the May 14 election was a referendum on the administration of President Arroyo.
This is as far as the senatorial race is concerned where the President has just been dealt a massive defeat. With 10 percent of the votes cast tabulated, there are 10 possible opposition winners (including two independents) against two for her Team Unity (Edgardo Angara and Joker Arroyo, both of whom are not genuinely proadministration).
If you count Angara and Arroyo as opposition people in administration garb, then it’s actually 12-0! No sitting president before her has suffered so sweeping an electoral debacle.
Well, no. One President has: Elpidio Quirino. Lopez also feels a cabinet reshuffle is in order.
But the real news since the weekend’s been on the economic front.
John Prestbo, editor and executive director of Dow Jones Indexes, points to markets doing well globally, following the lead of the US bourse. Records have been set globally (including our own market), but Prestbo, at least, suggests its a kind of mania and global, too:
Two thoughts come to mind. First, this rash of records makes me itchy. I really do believe there is solid economic growth worldwide, but this spring’s record romp seems to me propelled by investors wearing deep-rose glasses. Though the global stock-buying spree is far less irrational than the exuberance of the late 1990s, it’s still worrisome…
Second, geography is a less and less effective way to diversify a stock portfolio. These markets are moving in tandem — up for now, but they could fall together, too. Remember what that sudden sell-off in China triggered in late February?
Meaning, we’re caught up in a global trend. The exuberance of the stock market then, is understandable in terms of this global trend, and in terms of the country reaching the elections, which is like a runner finishing a lap of the race: it sets the stage for the country going on to the next lap, 2010. Read what the traders themselves say, and it has nothing to do with the President:
Astro del Castillo, managing director of First Grade Holdings Inc, said: “The euphoria is there because of the strong overseas markets. This inspired investors to be more aggressive today.”
So before we start attributing a flourishing stock market to the President, let’s take a look at what the rest of the world is doing. Where the President directly affects the economic news, it’s not so rosy.
Last Friday, Standard & Poor’s affirmed the country’s current ratings, with this accompanying statement:
The revenue shortfalls evident so far this year highlight this ongoing weakness, which, in the absence of further revenue generating steps, will put a question mark over the administration’s ability to create the fiscal base necessary for attaining its goals.
Maintaining the S&P rating where it is, was a disappointment that caused Philippine bonds to fall: the day before the announcement still reported that the Palace was chirpy. Today, an article in BusinessWorld, No new taxes: Officials react to Standard & Poor’s call, had officials not being chirpy, and admitting they face a problem:
Socioeconomic Planning Secretary Romulo L. Neri ruled out new tax measures in the quest for an improved credit score, which would lower the country’s borrowing costs, and legislators indicated they would only back efforts to widen the revenue base and promote collection efficiency.
S&P on Friday said…”The outlook could be revised to positive if there are additional revenue measures early on in the life of the new Congress, including possibly the passage of existing fiscal initiatives that are currently on hold in the legislature.”
“Conversely, the outlook on the ratings could again come under pressure, if fiscal correction is endangered by stalling reforms, making the government’s balanced budget goals unattainable or requiring continued expenditure cuts at the expense of future growth prospects.”
Sought for comment, Mr. Neri said “We admit that there is really a problem on tax collection. To address this, what we need to do is collect what we need to collect.”
“New tax measures are impossible because we just raised taxes last year when we expanded the VAT [value-added tax],” he said in a phone interview…
…Mr. Neri’s deputy, National Economic and Development Authority (NEDA) director Dennis M. Arroyo, called for passage of two bills, the rationalization of fiscal incentives and the simplified net income taxation.
“It would take time to pass these bills although having majority of pro-administration [legislators] in the House [of Representatives] would give us a good headway,” Mr. Arroyo said.
University of Asia and the Pacific (UA&P) economist Peter Lee U, in a separate interview, said that while it would be economically better for the government to pass tax measures, these would be politically hard to push through.
“The main concern of S&P is if we can maintain the rate of collection and as S&P sees it, there is a need for new taxes because we’re not yet quite out of [the] fiscal problem. But you need to strike a balance between political and economic aspects,” Mr. U said…
…The Philippines is under pressure to root out endemic tax evasion and corruption after it missed its first-quarter deficit goal by 14%. On Friday, the government said it recorded an April surplus of P12 billion, below last year’s P17.6-billion surfeit, putting the full year goal in doubt.
The government wants to limit its budget deficit this year to P63 billion, or 0.9% of gross domestic product (GDP), versus 1% in 2006 despite higher spending allocation for the country’s decrepit infrastructure.
Analysts want Mrs. Arroyo and Congress to agree new fiscal measures to raise tax collections. Last year, the government introduced a broader and higher national sales tax but there have been no new initiatives since then…
…The government wants to balance the budget by 2008 and has pencilled in surpluses for 2009 and 2010. But Finance Secretary Margarito Teves has said the government could settle for just a balanced budget or small surpluses beyond 2008 because it wants to continue increasing its capital spending.
These plans would require sustained improvements in the revenue base, which at present was still hobbled by lingering uncertainty on collection and tax administration, S&P said.
The Philippines also showed higher vulnerability to economic shocks or negative policy changes than its peers in the BB- rating category because of its huge debt load, S&P said.
A report in The Business Mirror points to the collection problems: Low tax take from 2 areas alarms DOF, specifically,
the government’s fiscal arm has raised the alarm over the “incredibly” high contraction in the tax collections from two sectors: 84 percent off from expectations in insurance and 75 percent off the mark in franchises, or the firms that run tollways, airlines and ships.
So there you have it. If it looks like a duck, and quacks like a duck…
In the blogosphere, Torn & Frayed makes an interesting distinction between Gringo Honasan and Sonny Trillanes:
I would draw a distinction between Trillanes and Honasan. Honasan seems to me the classic loose canon, firing off at will and in all directions. Trillanes, on the hand, is a much more targeted character and, importantly, he hasn’t killed anyone. Whereas over 100 people died in Honasan’s 1987 amd 1989 putsches (oh, sad and pointless deaths), Oakwood was a purely symbolic event. Its main raison d’être, to expose corruption in the military, was proved to be 100% correct shortly afterwards when Major General Carlos Garcia was found to have accumulated a fortune worth over $1 million, despite having a salary of about $600 a month. The fact that Trillanes and his posse were proved to be so spectacularly right is surely an important reason for his support.
I couldn’t agree more.