The Philippine Senate’s Unwillingness to Address Macapagal-Arroyo’s Charter Change is Blessing in Disguise

When she was President of The Philippines, Gloria Macapagal-Arroyo spoke about her support for making constitutional reforms that would transform the country from a strong presidential to a parliamentary system. Her political and personal opposition at the time brought about a proverbially brutal end to her attempts to change Philippine governance and it would seem that Macapagal-Arroyo is still somewhat shell-shocked from her former experience. Perhaps this is why as the current Speaker of The House of Representatives, Macapagal-Arroyo has presented her legislative colleagues with an incredibly modest and frankly useless bill for charter change that recently passed its second reading.

Macapagal-Arroyo’s proposals correctly call for the federalisation of The Philippines but disappointingly, her proposals for constitutional reform retain a strong presidential system with a largely familiar bicameral American style legislature. Because of this, it is somewhat unexpectedly welcome news that Liberal anti-reform Senator Franklin Drilon called the bill a “waste of time”. Likewise, Senate President Vicente Sotto III has also stated that the current Senate is too busy with other affairs to get to Macapagal-Arroyo’s proposals.

While Drilon and his political ilk do not want any changes to a 1987 Constitution that is effectively a pro-oligarch, anti-free trade, anti-economic growth Yellow document, because Macapagal-Arroyo’s draft legislation is so incomplete and hence would be ineffective if it became law (however well meaning her intent), it would be better to go back to the drawing board after next years midterm elections rather than to try and push through a bill that is largely beyond rehabilitation. Because constitutional change tends to be a once in a generation opportunity in most countries, it would be better to let a bad proposal die and be forgotten so that a more complete proposal has the opportunity to deliver the kinds of reforms that The Philippines so desperately needs. Furthermore, when discussing federalism and a pro-foreign direct investment (FDI) charter change, it also is instructive to remember that President Rodrigo Duterte has previously stated that he also favours a parliamentary system over the current US style presidential system, in addition to supporting federalism and FDI.

Thus, one is witnessing the odd political phenomenon wherein Gloria Macapagal-Arroyo is wrong for the right reasons and Franklin Drilon is right for the wrong reasons. If the ultimate consequence of this dichotomy is that the present bill before the House is allowed to subside prior to 2019’s elections, then it gives a partly new batch of legislators a chance to work on the much needed tripartite reforms to the incredibly flawed 1987 constitution which would assure the creation of a federal-parliamentary system as well as pro-FDI provisions in the constitution to replace the regressive and reactionary restrictions on FDI that are inscribed in the 1987 document.

Below is a piece from Eurasia Future summarising why a federal-parliamentary system is a must if The Philippines is to continue with Rodrigo Duterte’s crucial reforms after 2022: 

A confident nation is able to withstand a great leap into the unknown while a nation aware of its problems but too timid to apply the correct solutions to these problems will see its economic, social and political conditions continue to deteriorate. Philippine President Rodrigo Duterte’s proposed federal reforms and the proposals of his PDP-Laban party for the establishment of a parliamentary system to replace the existing convoluted presidential/congressional system represent a clean break from a past whose success record is appalling by the standards of virtually all of The Philippines’ ASEAN partners.

Since the middle of the 20th century, Singapore, Malaysia, Vietnam, Indonesia, Thailand and even Cambodia have become wealthier nations. In that same period, The Philippines has become poorer with the 1987 Constitution representing a watershed moment in respect of a nation constraining its own potential and thus consigning its people to a worse future than any of its neighbours.

President Duterte has ushered in a new era of confidence among the Filipino nation that is palpable both at a domestic level and in respect of a new non-aligned foreign policy that allows the country to pursue developmental progress across national lines that once represented barricades due to an old Cold War mentality. While Duterte’s foreign policy has turned the barricades of yesterday into today’s doors of opportunity, the domestic political system must equally reshape itself in order to help deliver much needed reforms that the current system is unable to fully implement due to the mechanical and existential limitations of the 1987 Constitution.

Parliament 

A parliamentary system in The Philippines would help to end the inbuilt political deadlock which is one of the most irksome features of the 1987 Constitution. Under the present system it is possible for a President, Congress, Senate and Vice President to all be at odds over the correct political course that the country should take. Such a system represents the opposite of democracy. It represents a reality where competing branches of government can conspire against a clear mandate of the people in order to prioritise petty personal power struggles and party political gamesmanship over a clear cut majoritarian system where by those in charge of policy drafting and implantation have secured their position in a way that directly reflects the will of the people.

In a unicameral parliamentary system, the number of seats in a parliamentary chamber are allocated based on the number of popular votes received by each party. A natural check and balance against abuse of power is reflected in the fact that if a party which receives the most number of votes falls sort of an overall majority, this party will be forced to enter a coalition with another party (or parties) in order to form a government – thus reflecting the nation that has not felt a singular confidence in any one party. At the same time, rather than having separate opposition chambers or opposition offices of state, the opposition in a parliamentary system operates within the same unicameral chamber and is able to challenge the government on every issue they raise in the format of a real time spontaneous debate.

A further check and balance on potential abuses of power exists in a parliamentary system in so far as an unpopular, corrupt or incompetent government can be removed from power at any time that it loses confidence in a majority of parliamentary members who themselves are responsible to their local constituents. This is a far more effective and efficient way of holding government to account than in a current system that sets elections based on arbitrary dates rather than based on the real time ability of a government to command a majority in parliament.

Taken in totality, a parliamentary system is not only more efficient than the current convoluted system but it has many more checks and balances on power, thus making government more responsive to a robust opposition and making the entire political process more contingent on the people’s vote than on arbitrary deadlines and permanent deadlock between competing branches of government whose real job is to uniformly serve the people rather than fight among themselves.

Only a country that fears real political reform and transparency would hesitate before embracing such a system.

Federalism 

The best of all of the flawed and illogical arguments against federalism in The Philippines is the mentality that covertly states “the regions of the country are incapable of responsible government”. This idea that “imperial Manila knows best” is an insult to regional political leaders and moreover to voters from outside of Metro Manila and Luzon as a whole as it implies that the further south one travels in the country, the less intelligent leadership one sees. This unspoken bigoted attitude denies Filipinos agency over their own political destiny but it also denies the reality that in a large nation whose regions each have highly distinct characteristics, a reasonable level of self-government for such regions would be self-evident.  This the case in other large and regionally diverse countries ranging from Germany to Australia, Pakistan and India, Russia, Canada and the United States.

Why is it that the aforementioned nations are worthy and capable of federalism but The Philippines is not? The answer points to a combination of a lack of confidence among Filipinos from all parts of the country combined with an arrogant attitude of the Imperial Manila elite who think that the rest of the country simply isn’t capable of self-government within the context of federalism. This arrogance has not achieved anything meaningful for the wider nation and yet this attitude continues to persist in many quarters. This in and of itself is a strong argument for federalism as it implies that the old guard will not even attempt to support President Duterte when during his recent State of The Nation Address he waned against continuing the process where the labour of the poorest parts of the countries continues to feed the top echelons of power.

FDI 

President Duterte has laid the stage for The Philippines to continue to bolster its sources of attraction to foreign investment. However, there remains one stumbling bloc to realising the full potential of Duterte’s drive for infrastructural modernisation. The constitutional restriction on foreign direct investment (FDI) in The Philippines is holding back potential future investors from making the most of a modernising Philippine nation. Currently, the so called 60/40 rule as inscribed in the 1987 Constitution prohibits a foreign investor from controlling more than 40% of his or her Philippine based business or construction project.

To understand how the growth rates of a country can skyrocket in the aftermath of inviting copious amounts of FDI and embracing free trade, one needs to examine the statistics of the early years of Lee Kuan Yew’s independent Singapore. Between Singapore’s (forced) independence in 1965 and the world’s first modern energy crisis in 1973, Singapore’s growth rate averaged 12.7%. Even when the 1973 oil crisis put pressures on both developed and developing economies, Singapore still managed to maintain an illustrious 8.7% growth rate in the mid 1970s.

In Malaysia under Mahathir, an opening up to FDI saw an average growth rate of 8% between 1986 and 1996. Focusing on the early 1990s, specifically the period between 1991 and and 1995, China’s economic growth rate was 11.8% while Singapore held steady at an average of 8.6% while Malaysia was just .1 percentage point behind its island neighbour. And yet during this period when Cory Aquino was “supposed to” modernise the economy of The Philippines, economic growth was a mere 2.4%, just .4 percentage points higher than the 1st world American economy that itself was going through a recession for much of the early 1990s.

Likewise, while China is the world’s top industrial producer, the country is also the global leader when it comes to receiving FDI. This reality helps to crush the myth that industrial development and the receiving of FDI are somehow contradictory. The opposite is in fact true.

Although Duterte has achieved sustained economic growth that alluded many of his predecessors, it is important to remember that not long ago The Philippines impeached pro-FDI president Joseph Estrada while former President Gloria Macapagal-Arroyo’s economic openness drive was ultimately crushed under the weight of an entangled political system. As The Philippines was besot with the political stagnation of the 1990s and early 2000s, Malaysia, Singapore, China, Thailand, Indonesia and Vietnam continued to forge ahead both prior to and in the gradual aftermath of the 1997 Asian economic crisis.

The reasons for this are clear enough. While Singapore and later China, Malaysia and Vietnam opened up to ever more FDI, in 1987 The Philippines adopted a new constitution which specifically restricted foreign direct investors from having control over more than 40% of their investment (the so called 60/40 rule). By restricting foreign investors to minority ownership, The Philippines became automatically less attractive than its faster growing neighbours.

Making matters worse, when two post-Marcos Presidents did try and open up the economy along the lines of The Philippines’ closest ASEAN neighbours, a convoluted presidential/congressional political system conspired to stop such proposed reforms dead in their tracks. By contrast, the parliamentary democracies in Singapore and Malaysia allowed Lee Kuan Yew and Mahathir to respectively pass reforms for economic openness through a simple series of majority votes in a traditional parliamentary system that is directly related to the majority democratic consensus of the voting public.

While to Duterte’s great credit, he has managed to manoeuvre through the convoluted political system established by the 1987 constitution more ably than any of his more reform minded predecessors, this simply is not good enough. A country like The Philippines today should not be measured against Singapore and Malaysia’s growth rates decades after initial reforms were made but should instead be in a position to aspire to the kinds of mega-growth numbers of Singapore in the late 1960s and early 1970s as well as those of Malaysia in the first fifteen years of Mahathir’s time as Prime Minister.

The reason for this is that while growth tends to stabilise in economies that have matured into their new reformist realities, The Philippines has yet to make such reforms. In this sense, from a point of view of economic policy, The Philippines today is 53 years behind Malaysia, 40 years behind China and 37 years behind Malaysia.

Because of this, if a Philippine government managed by Duterte or someone sharing his policies and goals were to preside over a constitution with few restrictions on FDI and likewise if Duterte was leading his government from a unicameral parliament rather than a presidential administration at odds with two bodies of a legislature, the numbers that The Philippines could see today might well be closer to the double digits of growth that Singapore had after its reforms while it would almost certainly break the all important 8% threshold as Malaysia repeatedly did during the reformist drive of Mahathir.

This is why while it is impressive that The Philippines is even breaking the 6% threshold under an outdated and reactionary constitution – this is simply not good enough. President Duterte is doing all he can within the constraints of the 1987 constitution. If these shackles were lifted, there is no doubt that The Philippines would go from a country trying to catch up with itself to one that could replicate the economic miracles of Singapore and Malaysia within the framework of Filipino aspirations and cultural characteristics.

Conclusion

The Philippines deserves a system where change is the rule and stagnation is the exception. The country further deserves a forward looking, outward looking and modern political class that can be more easily attained when locals are in control of their localities and a directly elected national parliament reflects the mood of the nation as a whole.

There is nothing that makes a Singaporean or a Malaysian more capable of government than a Filipino, not least because each of these nations are themselves multicultural. It is therefore the political system and 1987 Constitution that has led The Philippines to fall behind its ASEAN partners for no reason other than a lack of confidence in replacing the old and failed with that which can offer the utmost potential for an economically growing nation that is being held back but old rules and those who cling to them more out of personal fear than national optimism. It is time for the new found confidence of the Duterte era to help foster a spirit of optimism in profound and lasting change that can not only undo the damage of the last 30 years but help to create a better nation for Filipinos in the 21st century.

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