In Philippine politics, it's often the relatives who stand out in a crisis. In the 1980s Imelda Marcos's penchant for designer shoes defined the excesses of her husband Ferdinand's dictatorship. His ouster capped a "people power" revolution orchestrated by the widow of a powerful Marcos opponent assassinated two years earlier. Today the relative in the klieg lights is Jose (Mike) Miguel, President Gloria Macapagal Arroyo's businessman husband, who allegedly took payoffs from illegal gambling syndicates and conspired with his wife to fix the last presidential election. He denies the charges, yet last week Arroyo announced that the First Gentleman had "volunteered to go abroad" in an effort "to remove himself from any situation which will cast doubt on my presidency."
The decision betrayed a tinge of desperation. Congressman Joey Salceda, one of Arroyo's closest allies, told NEWSWEEK the presidential palace was in "affirmative mode" after the administration's toughest week in office. But he added somewhat ominously: "To save the queen, we should sacrifice the king, the bishop and the rook."
Will Queen Gloria survive? That question hangs in the air across the Philippines (and, indeed, among international investors) as the president struggles to weather an all-too-familiar string of scandals. Among them: allegations that warlords running underground jueteng lotteries had Arroyos on their payroll; that Mike pocketed $5 million in surplus campaign funds after his wife's May 2004 election victory, and that the couple conspired to rig that contest. The final charge gained credibility a month ago, when wiretaps surfaced supposedly capturing the president, during the vote count, fixing the outcome by telephone with an election commissioner. After a three-week silence, Arroyo nervously acknowledged the conversation on national television, but called it a "lapse in judgment" and not a crime.
That's a legal question, of course. But if recent history is any indication, the odds are good that it will be settled on Manila's streets. Most of Arroyo's opponents are aligned with former president Joseph Estrada, an actor turned politician who was ousted during 2001 protests dubbed "People Power II." They now view turnabout as fair play. They're organizing mass protests to drive her out of power to vindicate the late Fernando Poe, who they believe was cheated out of an election victory in the 2004 presidential race. Their symbolic leader is Poe's widow, Susan Roces, who last week accused Arroyo of "stealing the presidency, not once but twice."
The backdrop to this sordid political soap opera is a country that's become truly bleak. Once at the vanguard of the political change that swept the globe in the 1980s, the Philippines has turned out to be the clown in a class of new democracies. Its economy is growing but hamstrung by a serious debt problem, 25 percent of the population lives in abject poverty and corruption is arguably as bad as during the Marcos era. Perhaps the saddest measure of all is the daily exodus. Last year the Philippines "exported" more than a million people to work fishing boats in the Pacific, build skyscrapers in Dubai or change nappies in places like Hong Kong and Singapore.
Ironically, even the chief architect of democratization now perceives "a fatal flaw" in the system. In an essay published last April, former president Corazon Aquino argued that entrenched institutions, including the police, the courts and most ministries, remained arrayed against change in the Philippines. "Even the best and the brightest... could not wrestle governance out of the grips of corruption, patronage, and inefficiency," she wrote. According to polls by Pulse Asia, the public's trust in government has eroded dangerously because successive administrations have failed to deliver what average people want most--a better standard of living. Between 1990 and 2002, the average annual growth of per capita income was 1.1 percent.
The country's fiscal condition is indeed dire. Today a third of government spending goes to servicing foreign and domestic debt totaling $55 billion. The country's narrow tax base compounds the problem: of the 31 million workers who are supposed to pay taxes, fewer than a third actually do--and most of them are middle class.
Arroyo's reform agenda, which has included higher prices for electricity and public transport, remains incomplete. At her urging, the legislature just boosted the nation's value-added tax, which will increase state revenues. (Last week the country's high court suspended the tax pending a review.) The president endorsed a bill hiking the "sin tax" on tobacco and liquor, but analysts say she didn't push the legislation and the bill was diluted in Congress. Those same analysts note that one of her major campaign donors, tycoon Lucio Tan, is the main domestic player in those industries.
Corruption remains a cancer. Estrada, the former president, is on trial for accepting bribes from gambling syndicates. He denies the charges. In another case, former military general Carlos Garcia is under investigation for plundering at least $5.6 million from his budget and using it to buy real estate and cars, while padding secret bank accounts overseas. He, too, has denied doing anything wrong. Arroyo's son and brother-in-law, both elected lawmakers, are under investigation for influence peddling--a situation that has understandably bred cynicism regarding the government's claim to be mounting a decisive campaign against corruption. Little wonder Transparency International ranked the Philippines as one of Asia's most corrupt countries in 2004.
The country's total population, forecast to top 85 million this year, is growing so rapidly that it eats up much of the annual economic gains. Even with GDP expanding at a respectable 4.6 percent clip in the first quarter of 2005, most of the country's growth is driven by energy exports that do little to boost employment or shrink the ranks of the poor. Unemployment now stands at 8.9 percent. Perhaps most disturbing: the country's middle class has atrophied as entrepreneurs and professionals emigrate in droves to find work overseas.
With its weak institutions, rogue military (there have been eight coup attempts since 1986) and near-continuous political turmoil, it's fair to ask if the Philippines is a failed democracy. "We continue to be a democracy in progress," says Mario Taguiwalo, head of the National Institute for Policy Studies, a progressive think tank. "We are in a vicious cycle of bad government which diminishes our capacities, leading again to continued bad government. There is no substitute for leadership in the reform of our institutions."
Many look back to the presidency of Fidel Ramos (1992-1998) for solace. The former police general grew the economy, broke down monopolies and deregulated key industries like airlines and telecoms while maintaining political stability before his time in office expired (the Constitution mandates a single-term presidency). His successor, Joseph Estrada, was an actor with a reputation for living fast. Arroyo, then the vice president, led mass rallies that ousted him from office after impeachment efforts stalled in the Senate.
Arroyo's strategy for avoiding the same fate is to ask the people for "a six-month probation period," says Salceda. During that time, he explains, the president will push hard to root out corruption in government, broaden the country's tax base and deregulate the economy through bold executive action. On the political front, she will champion a plan to abandon the country's American-style presidency for parliamentary democracy; she has even proposed a constitutional convention to be followed by elections in 2007--a timetable that would cut short her tenure by three years, providing her an early but graceful exit from politics.
Foreign investors, international aid organizations and even the ratings agencies hope Arroyo can weather the storm. They applaud her efforts to fix the fiscal crisis, knowing that a populist successor could easily ratchet up spending again. She has begun to go after tax cheats; Agriculture Secretary Arthur Yap resigned last week to contest tax-evasion charges filed against him. Pressed to comment on the turmoil, the World Bank issued a statement declaring itself "very encouraged by recent progress on fiscal reforms"--the bank's equivalent of a five-star movie review. Still, nobody expects the president's enemies to stand idly by. "The opposition will continue with its campaign for her to step down, whatever she does," says Environment Secretary Michael Defensor. "So we should make it difficult for them to gain public support by [implementing] effective programs, showing good governance."
Were Arroyo to resign, Vice President Noli de Castro would take the helm. The former television news anchor was the top vote getter nationally in his 2001 senatorial race, but he's perceived as a lightweight who would struggle to solve the many problems facing the Philippines. But, then, so has just about everybody else.
