Political risks to growth

THERE HAS been much talk about the risks to the economy associated with the national elections in May. But except perhaps if there would be massive cheating that would lead to wholesale unrest, the risks arising from the coming polls appear manageable.

Last week, an economist from the Dutch financial giant ING cited escalating jitters over the prospect of a new president with a mere plurality of votes, the perceived risk of reversals in governance reforms, and the presidential candidates’ promises of populist but revenue-eroding measures. Citing the latest survey results, the economist said the Philippines would likely have a new president with only a minority mandate from the electorate. (The results of the December 2015 survey of Pulse Asia showed Vice President Jejomar Binay back in the lead with a 33-percent share, trailed by Davao Mayor Rodrigo Duterte with 23 percent and Sen. Grace Poe with 21 percent.)

It was noted that a minority president would have difficulty getting priority legislation through Congress, and that even before this president assumes office, there would be risks of the results being subjected to protest, leading to a “less stable” political environment. But then, the Philippines is hardly a stranger to electoral protests lodged by losing candidates. And having a minority president is nothing new to this country.

In 2010, Benigno Aquino III was elected president by 42.08 percent of the voters. Other notable candidates in 2010 were Joseph Estrada, who got 26.25 percent; Manuel Villar, 15.42 percent; Gilbert Teodoro, 11.33 percent, and Eddie Villanueva, 3.12 percent. In the hotly contested 2004 election, Gloria Macapagal-Arroyo got 39.99 percent and the actor Fernando Poe Jr. 36.51 percent. The other contenders were Panfilo Lacson, who got 10.88 percent; Raul Roco, 6.45 percent, and Villanueva, 6.16 percent.

In 1998, there were 10 candidates for president. Of the 26.9 million valid votes from 33.9 million registered voters, 39.9 percent voted for Estrada, who was extremely popular at that time. Among those who trailed him were Jose de Venecia with 15.9 percent; Roco, 13.8 percent; Emilio Osmeña, 12.4 percent; and Alfredo Lim, 8.7 percent. The same was true in 1992 when Fidel V. Ramos won the presidential race. Of the 22.6 million valid votes, only 5.3 million or 23.6 percent were for Ramos. The rest were divided among Miriam Santiago, 19.7 percent; Danding Cojuangco, 18.2 percent; Ramon Mitra, 14.6 percent; Imelda Marcos, 11.3 percent; Jovito Salonga, 10.2 percent, and Salvador Laurel, 2.4 percent. Blame this bewildering array of candidates on the multiparty system fostered by the 1987 Constitution.

From our historical experience, minority presidents easily gained control of the legislature, with members of the House of Representatives changing parties as easily as changing clothes, and naturally veering in the direction of the party in power. (Recall the term “balimbing.”) It seems that the executive branch always found a way—or, more to the point, an incentive—to cajole legislators to its fold. It used to be the pork barrel, but since this has been outlawed by the Supreme Court, the next administration will have to find novel means to bring over the majority of legislators.

The ING economist’s anxiety over the propensity of presidential candidates to promise populist reforms seems to be exaggerated as well. Almost all politicians, past and present, promise pie-in-the-sky measures to draw attention—lower taxes for the working class, cheaper prices of basic goods, better public services, etc. But when they are elected… If all those campaign promises were fulfilled, the Philippines would have become a First World country by now, with minimal joblessness and poverty and first-class public service (think transportation and communication).

As it is, whoever succeeds President Aquino can look forward to respectable economic growth for the Philippines despite such global economic risks as the expected uptrend in US interest rates and cheap oil prices. Local and foreign economists agree: Despite the presidential election, economic growth is unlikely to lose momentum this year. The next president will just have to focus on governance and steer clear of business.