The Philippines in 2005: Old Dynamics, New Conjuncture

Author(s): Eva-Lotta E. Hedman ,

Source: Asian Survey, Vol. 46, No. 1 (January/February 2006), pp. 187-193
Published by: University of California Press
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THE PHILIPPINES IN 2005

Old Dynamics, New Conjuncture

Eva-Lotta E. Hedman

Abstract
The year 2005 witnessed much argument and effortto enact tax reforms,
impeach the president, combat terrorism, amend the Constitution, and end
long-standing armed insurgenciesand little real change. The outcome of
these specific initiatives is likely to remain largely unresolved in 2006, as is the
broader issue of the stability and substance of democracy in the Philippines, a
question that loomed large throughout 2005.

In the Philippines, the year 2005 wavered uneasily between two alternative retrospective categorizations. On the one hand, it was
characterized by many of the same dynamics of other off-season years in the
electoral cycle that has so dominated the countrys politics and society since
independence in 1946: corruption scandals, conicts between the president and
oppositionist elements in Congress, disappointing economic performance, unfullled promises to enact economic and political reforms, minor frictions marring the countrys special relationship with the United States, and something
in between war and peace in those areas of the Philippines touched by
longstanding armed insurgencies. Thus, the past year in many ways resembled
1954 or 1962 or 1993: dj vu all over again, so to speak.
On the other hand, 2005 was also characterized by some of the same dynamics of the peak crisis years of post-independence Philippine history: deadly
bomb blasts in Manila and other cities, impeachment proceedings against the
president, evidence of coup-plotting by dissatised military ofcers, People
Power in the streets of Manila, and plans to amend the Constitution to allow
for a parliamentary form of governmentsuch were the highlights of 2005.
Thus, the past year in some ways also resembled 1949 or 1972 or 1986 or 2000.
Eva-Lotta E. Hedman is Senior Research Fellow, Department of International Development at the University of Oxford, U.K.
Asian Survey, Vol. 46, Issue 1, pp. 187193, ISSN 0004-4687, electronic ISSN 1533-838X.
2006 by The Regents of the University of California. All rights reserved. Please direct all requests
for permission to photocopy or reproduce article content through the University of California
Presss Rights and Permissions website, at http://www.ucpress.edu/journals/rights.htm.

187

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188

ASIAN SURVEY, VOL. XLVI, NO. 1, JANUARY/FEBRUARY 2006

Politics
Public allegations of electoral fraud by President Gloria Macapagal-Arroyo
led to the onset of a national political crisis in May 2005. On June 27, the
president, citing a lapse in judgement, publicly admitted that she had spoken
with a senior ofcial of Comelec (the Commission on Elections) during the
counting of votes in the 2004 national elections, which gave her the presidency. This admission lent strength to charges that Arroyos narrow defeat of
opposition candidate Fernando Poe Jr. was achieved by fraudulent means.
In response, 10 cabinet ofcials resigned on July 8, 2005, and called on
Arroyo to step down; leading members of the administrations coalition in Congress also withdrew support from the president. Former President Corazon C.
Aquino, an erstwhile Arroyo backer, joined in the demands for resignation as
did the inuential Makati Business Club, as well as many non-governmental
organizations (NGOs) and other elements of civil society. Signicantly, the inuential Catholic Bishops Conference of the Philippines (CBCP) refrained
from making such a call in its statement to the nation on July 10, thus discouraging further popular opposition and buying more time for Arroyo and her
supporters.
On September 6, the House of Representatives voted 158 to 51 (with six abstentions) to throw out the impeachment complaint against President Arroyo.
A number of congressmen afliated with opposition parties joined pro-administration legislators to defend the president or conveniently absented themselves, sparking accusations that votes had been bought for money, favors, and
promises. A newly formed anti-Arroyo coalition led a march to the Philippine
legislature, where thousands of demonstrators denounced the outcome of the
failed impeachment process. In the forefront of this march were two of the nations most prominent widows, Aquino and movie actress Susan Roces, whose
late husband, the lm star Ferdinand Poe Jr, had died shortly after his narrow
defeat in the 2004 elections.
However, Arroyo moved swiftly to foreclose the familiar scenario of a People
Power uprising in Manila reminiscent of the episodes leading to the ousters
of Presidents Ferdinand Marcos in 1986 and Joseph Estrada in 2001. Against the
threat of mounting popular mobilization in the streets, the Arroyo government
introduced a so-called calibrated preemptive response policy that prohibited
any protest action without a permit with immediate effect on September 21,
2005, the 33rd anniversary of the declaration of martial law by then-President
Marcos. Against the challenge of growing opposition in the legislature, the
president issued Executive Order 464 on September 28 prohibiting government, military, and police ofcials from testifying before any inquiry in the
Senate or House of Representatives without her permission. The Senate, long
a site of stubborn resistance to presidential authority, had been conducting

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THE PHILIPPINES IN 2005

189

hearings with two military ofcers about the so-called Arroyo tapes of wiretapped telephone conversations between Arroyo and a senior election ofcial
during the 2004 national elections.
Against the backdrop of these persistent threats to her presidential authority,
over the course of 2005 Arroyo and her supporters sought to draw attention
away from presidential misdeeds and toward the broader, long-standing issue
of reforming Philippine political institutions and processes. Having stated publicly that our political system has degenerated to such an extent that it is very
difcult to move within the system with hands totally untainted, Arroyo emerged
over the course of the year as a vocal supporter of a shift away from the current presidential system with its bicameral legislature toward a federal republic with a unicameral parliamentary government. Such a proposed shift would
require amendment of the 1987 Constitution, and to that end a 55-member
Consultative Commission (Con-Com) was appointed by Arroyo in September
2005 to formulate proposals for congressional consideration.
By late December, the commission had issued its recommendations to
amend the Constitution in order to pave the way for a new system of government. In particular, commissioners recommended that the upcoming 2007 local
and congressional elections be suspended and that members of both houses of
Congress be allowed to serve in an interim Parliament until the national elections scheduled for 2010, at the end of Arroyos six-year term. By offering parliamentary seats until then for incumbent legislators in both houses; continued
tenure for serving city, municipal, and provincial ofcials for the same period;
and the new post of prime minister (under presidential supervision until 2010),
the commissions formula for a shift to parliamentary rule was designed to
maximize its appeal within the political class. Yet, a dissenting vote by at least
20 commission members against the no elections recommendation suggested
that the Arroyo administrations efforts to stage-manage a shift to a parliamentary system could run aground in the months to come. Indeed, December 2005
also saw renewed signs of opposition-led activity against the president in Congress, and a public opinion survey the same month reported that Arroyo enjoyed the lowest ratings of any president since the transition from authoritarian
rule in 1986.
Renewed Insurgency by Communist Guerrillas
Beyond Manila, the year 2005 also witnessed a similar pattern of uncertainty
and instability in those areas of the Philippine archipelago where longstanding
armed insurgencies remained active. After a brief interlude of formal peace
talks between the government and the National Democratic Front (NDF) in
2004, hostilities resumed and persisted throughout 2005. Talks brokered by
Norway had been suspended by the NDF in August 2004 after the United States

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ASIAN SURVEY, VOL. XLVI, NO. 1, JANUARY/FEBRUARY 2006

decided against removing the Communist Party of the Philippines (CPP) and
its New Peoples Army (NPA) from a list of foreign terrorist organizations, a
key demand of the NDF in its negotiations with the government. Despite initial hopes that Manila would persuade the U.S. and European governments to
remove the CPP and NPA from their terrorist blacklists, the Arroyo administration instead issued a public statement in late October that year warning of
increasing linkages between the CPP-NPA and international terrorist organizations and calling for far-reaching changes in government counter-insurgency
strategy.
In this context, and against the backdrop of continuing challenges to the
Arroyo government in Manila, in 2005 the NPA asserted its strength in its remaining pockets of inuence around the country. With the House vote against
impeachment in September, the NPA intensied its anti-government campaign,
reportedly killing some 50 government soldiers in more than 100 attacks since
that month.1 According to a CPP spokesman, late in the year the NPA counted
some 13,500 regular ghters and maintained an active presence in 69 out of 79
provinces. While other sources put the total number of regular ghters closer
to 8,000, the government proclaimed the NPA the biggest threat to national
security.
The Arroyo administration achieved some minor successes against the insurgent threat by exploiting factional divisions within the remnants of the armed
revolutionary movement. In October, the government signed a ceasere accord
with the Revolutionary Workers Party of Mindanao (Rebolusyonaryong Partido
ng Manggagawa ng Mindanao, RPMM), a breakaway faction of the CPP-NPA
claiming some 500 members and 3,000 supporters in several provinces on
Mindanao.2 In early December, there were also reports of an agreement between the government and the Revolutionary Proletarian Army-Alex Boncayao
Brigade (RPA-ABB), another small breakaway faction of the NPA. But 2005
ended amid continuing NPA attacks on government troops and installations3
that killed more than 400 soldiers over the course of the year.
The Peace Process with Muslim Secessionists
While peace talks with Communist rebels remained scuppered by the continued blacklisting of the CPP-NPA by the U.S. and the European Union, the
global War on Terror campaign appeared to encourage moves toward a peace
1. Manny Magato, Philippine Communist Rebels Kill 3 Soldiers, Reuters, December 16,
2005.
2. Joel Francis Guinto, Breakaway Reds Ink Ceasefire Accord with Government, INQ7.net,
November 9, 2005.
3. Ben Serrano, NPA Rebels Attack Caraga; One Killed, Reuters, December 18, 2005.

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THE PHILIPPINES IN 2005

191

agreement with Muslim secessionists of the Moro Islamic Liberation Front

(MILF) late in the year. Already identied as a refuge for the shadowy Indonesiabased Jemaah Islamiyah (JI) in 2002, the southern Philippines gained increasing signicance in subsequent years as an area of Islamic terrorist sanctuary
and training, even as kidnappings attributed to the Abu Sayyaf Group in the Sulu
Archipelago enhanced the notoriety of the region. In this context, the MILF,
with its bases of popular support and armed strength in Muslim provinces
of Mindanao, emerged as the key to counterterrorism efforts in Mindanao for
Philippine and U.S. government ofcials alike.
Continuing Manilas efforts to persuade the U.S. to drop the group from the
list of foreign terrorist organizations, these talks and draft proposals expanded
upon a deepening pattern of cooperation between the Armed Forces of the
Philippines (AFP) and the MILF in the War on Terror. After early moves in
this direction in 200304, a major shift came in the wake of a series of bombings in February 2005 attributed to hard-line Islamic extremists in the Philippines. These bombings, which claimed several lives in Manila, Davao, and
General Santos City on February 14, provided the impetus for an aggressive
U.S.-backed AFP campaign, including air strikes, on alleged Islamic terrorist
bases in Mindanao in subsequent months. During the campaign, the MILF
leadership reportedly shared information with the AFP about hard-line elements in its ranks, suspended local commanders suspected of association with
the Abu Sayyaf Group, and removed MILF troops from areas under government assault.4 This level of cooperation provided the basis for a ceasere between the MILF and the AFP through much of the year and progress toward a
formal peace accord based on new provisions for autonomy for Muslim areas
of the southern Philippines.5
Yet, as 2005 drew to a close, the prospects for a lasting settlement remained
far from certain, given both domestic and foreign constraints. Indeed, in the
nal months of the year commentators were already predicting that the new
plans for autonomy in the Muslim South would be held hostage to partisan
politics in Manila and to the Arroyo administrations push toward a parliamentary system. Some active and retired AFP ofcers voiced strong opposition to
Arroyos pact with the MILF, even as the United States government offered
only very limited public support for the deal. Thus, 2005 witnessed inconclusive movement from war to peace in the southern Philippines, with the more
familiar mixed pattern of informal accommodation and sporadic aggression
prevailing as in previous years.
4. Philippines Terrorism: The Role of Militant Islamic Converts (Brussels/Jakarta: International
Crisis Group, December 2005).
5. Marites Danguilan Vitug, Isolating the Terrorists, Newsbreak, December 18, 2005.

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ASIAN SURVEY, VOL. XLVI, NO. 1, JANUARY/FEBRUARY 2006

Economy
The year saw a similarly mixed pattern on the economic front, with much talk
of reform but little real progress in the face of the countrys entrenched problems of poverty, social inequality, and indebtedness. Budget decits continued
to deepen the nations debt, which almost tripled to 3.94 trillion pesos ($74.9
billion) since 1997, when the government last posted a budget surplus. Although economic growth slowed to a record two-year low in the third quarter,
the pesos 5.4% appreciation against the dollar in 2005 helped reduce import
prices and dampen inationary pressures, thus allowing the Central Bank to
keep interest rates unchanged.
Some progress on establishing a stronger scal basis for future years was
arguably achieved over the course of the year. The Arroyo administration introduced legislation imposing new taxes on cigarettes and beer that was passed
by the House of Representatives in May. Ofcials in November imposed a
10% value-added tax on oil, power, and other previously exempt products and
services, with plans for a further increase to 12% in February 2006.6 Forecasting some 80 billion pesos ($1.52 billion) in extra revenue from this tax in the
next scal year, the government predicted a narrowing of the budget decit to
125 billion pesos ($2.38 billion) in 2006, which, if achieved, would mean a
41% decrease from the record 211 billion pesos ($4.01 billion) in 2002. Such
measures, the government claimed, should allow for a balanced budget by 2008,
two years ahead of the announced schedule.7
Meanwhile in 2005 remittances from the estimated 7.4 million Philippine
nationals working abroad helped boost the Central Banks foreign exchange
reserves, as well as consumer spending and the local economy. According to
the Asian Development Bank, the Philippines ranked third, after Mexico and
India, in the amount of money sent home by workers abroad; the Central Bank
in Manila reported a total of $8.8 billion in remittances during the rst 10
months of the year, a 27% increase compared to the previous year. Meanwhile, the 10.3% jobless rate reported by the National Statistics Ofce in December remained one of the highest in Asia, only surpassed by comparable
gures available for Indonesia and Pakistan. As noted above, economic growth
slowed down after the rst quarter, with predictions of annual growth ranging
from 4.7% to 5.3%, far more conservative estimates than the 2004 gure of
6.1%, a 15-year high for the Philippines.
6. In July, Moodys Investors Service, Standard & Poors, and Fitch Ratings all reduced the
nations debt rating outlook to negative after the Supreme Court stopped Arroyo from imposing
the expansion of the value-added-tax.
7. Bloomberg Update, Philippine Central Bank Cant Rule out 2006 Rate Rise, New York,
December 15, 2005.

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THE PHILIPPINES IN 2005

193

Conclusions
Overall, the year 2005 witnessed considerable drama and yet little in the way
of denitive outcomes in the Philippines. The year saw much argument and
effortto enact tax reforms, impeach the president, combat terrorism, amend
the Constitution, and end long-standing armed insurgenciesand little real
change. Questions as to the outcome of these specic initiatives are likely
to remain largely unresolved in 2006, as is the broader issue of the stability
and substance of democracy in the Philippines, a question that loomed large
throughout 2005.

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