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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 80,574 77,076 71,400 43
         
GNI per capita
 US $ 1,080 1,020 1,050 135
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 046 - (29/10/07)

Just when you thought things could not get any worse, they get worse. By any standard it was a horrible month for the government of President Macapagal-Arroyo and for the Philippines political system.

The nadir came in the form of an explosion that wracked a major shopping complex in the Central Business District of Makati on the afternoon of October 19 leaving 11 dead and more than 100 maimed and injured. It happened around the same time as the bombings in Pakistan that marked the return of Benazir Bhutto and as such, the Manila blast went largely unreported in the international media. Locally, of course, it took all other news off of the front pages of the local press much to the relief of the Arroyo Administration.

Contradictory reports and the inability of police investigators to make a conclusive statement as to what caused the explosion, immediately triggered widespread speculation, ranging from terror attacks by Muslim extremists to diversionary tactics by a government administration which has already been tagged as morally corrupt by the Catholic Church.

Despite finding traces of residue from military-type explosives and a number of other unanswered questions (not the least of which was the apprehension of an army unit at the blast site caught trying to plant evidence) the police claimed subsequently that they could find no evidence that a bomb caused the blast. As a result the Philippine National Police (PNP) dismissed the explosion as an industrial accident caused by a build-up of methane in the basement of the building-a finding disputed immediately by the mall owners and viewed with contempt by a number of technical experts. 

This conclusion was convenient for an administration that is trying to attract investment and foreign tourists to the country, but in doing so, however, they may be scaring people away from shopping malls and other large buildings, which could explode for no apparent reason, according to analysts. Since the blast on October 19th, the Glorietta Mall complex-usually one of the busiest-has been all but deserted.

None of the "usual suspects" has claimed responsibility for the blast, which appears to rule out either the Communist-backed New People's Army as well as Muslim extremist groups. In any event those in the know claim that the blast did not carry the hallmark characteristics of either group. 

The jury is still out. Either it was an accident waiting to happen, in which case the days of the giant shopping malls in the Philippines could well be numbered or it was a bombing perpetrated by some rogue government agency seeking to wreak carnage for its own ends. Either conclusion is pretty frightening and which one is closest to the truth may never be known.

Sadly though, the lives lost have taken a back seat to the politicking around the event. Following the blast, President Arroyo warned publicly of her intention to thwart any further destabilisation attempts against her government. In doing so she appeared to show more concern for her own survivability than she did for the killed and maimed. Opposition politicians of course were only too ready to believe that the government was behind the blast.

Fresh scandals surface ahead of the blast
Ahead of the bombing (if such it was), news from the Philippines had been dominated by one scandal after another and all of them leaving a trail towards Malacañang Palace. 

Fresh scandals to surface over the past month involved the circumstances surrounding an overpriced (overpriced by some US$70 million that is-25 percent of the total) government telecommunications network that curiously appeared to involve the First Gentleman and Election Commissioner (now Former Election Commissioner) Benjamin Abalos in brokering a deal with a state-owned Chinese company to handle all of the Philippines Government communication traffic.

The second involved revelations that at a recent meeting at Malacañang Palace between the President and local government officials, brown paper bags were distributed containing between Php500,000 and Php200,000 (US$11,400 and US$4500; or £5,600 and £2,200). Only 2 governors among more than 190 recipients of this largesse owned up to receiving the cash although it is known that at least 190 were handed out.

These two developments were not unrelated and point to the way the government of President Arroyo transacts business. The communications contract, details of which remained confidential to the end) was signed just weeks ahead of the 2007 election held last May. It is widely believed (but of course this does not appear in the press) that the deal was brokered by the First Gentleman as means of buying off the electoral commissioners on behalf of the President ahead of the election. When the First Gentleman fell sick in April, President Arroyo hurriedly left his bedside to fly to China accompanied by Commissioner Abalos to sign the deal and then straight back to Manila. She was gone only a matter of hours and at the time, many people wondered why. Since then, pieces of the puzzle have fallen into place.

To many people it appears the cost of buying an election in the Philippines is around US$70 million. But Mr. Abalos made a huge mistake. He sought to bribe the Head of the National Economic Development Council, Mr. Romulo Neri with $4 million to have him approve the contract. Mr. Neri reported the bribe attempt to the President who reportedly told him not to accept it but to approve the deal anyway. This much has been publicly revealed thanks to recent Congressional enquiries. What else transpired between Mr. Neri and the President remains confidential although he has since been relieved of his position and now heads up the Commission on Higher Education.

Mr. Abalos has since been relieved of his position and the contentious contract has been cancelled. Who has been paid what and when and how remains a mystery.

This mystery, as well as the mystery of the brown bags each point to the manner in which the government of President Arroyo transacts business. It is determined to stay in power by any means possible and that means a transactional approach to government decision-making. The high moral ground was abdicated a long time ago.

Presidential pardon for Estrada provides a further example of transactional politics
It is in this light that this last week's absolute pardon granted to former President Joseph Estrada needs to be born in mind. Last month we reported the verdict of the Sandiganbayan (the anti-graft court) which had found President Estrada guilty on two counts of plunder-a charge that carries a sentence of reclusion perpetua and indeed President Estrada faced a total of 203 years in gaol and would have been aged 273 by the time due for release.

The case never went to appeal. Despite protesting his innocence even after the verdict was announced, it took the former president, who has been held for the past six years, a little over a month to reach a political accommodation with his former nemesis-but now ally.

The pardon when it came caught many people by surprise. Even for a government not known for its commitment to the rule of law, the quick decision and alacrity with which it made the decision, left many people gasping in disbelief. A number of press commentators believed that the pardon given to former President Estrada could yet be the straw to break the camel's back and could yet bring down the Arroyo Government. But replace it with what?

There is no doubt that the pardon was granted with an unusual degree of alacrity and in indecent haste and as such offended the delicadeza-sense of propriety-that informs traditional Filipino thinking. Not that there has been much evidence of that particular virtue in local politics for some time.
"Malacañang reeks with the stench of Hades" wrote one commentator. The triumph of power and influence over law" cried another. Yes, in a sense it was just that but that is the way things are in this political system.

"A gutsy and decisive move" said another commentator writing in one of the leading Philippine dailies. And he was right that, given the nature of politics in this country, which revolves around personalities and not parties, President Arroyo has once again shown that she is determined to put self-preservation ahead of everything else and particularly with the latest wave of scandals rocking her Administration. 

Any moral ascendancy was lost long ago and Ms. Arroyo and her team will never be popular no matter what she does from this point. In the meantime life goes on regardless. The Philippines will progress in spite of its government.

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