POLíTIKA

CRITICAL ISSUES OF PHILIPPINE POLITY 4TH QUARTER

Performance Marawi Case and Legislative Updates:

Ratings: Defense Policy Accomplishments and
The Latest Results Implications: Challenges Priorities in the
of the SWS and to Duterte Administration’s House of Representatives
Pulse Asia Surveys Defense Policy and the Senate
CONTENTS

Performance National Marawi Protecting Legislative

Ratings Updates Case and Maritime Priorities
Defense Commons
Policy
Implications
p.4 p.9 p.11 p.13 p.15

ON THE COVER & CONTENTS

Credits to the following contributors:

Prof. Victor Andres “Dindo” Manhit,
Renato de Castro, Ph.D and Jaime
Jimenez, Ph.D

Picture credits to the following: for the

cover page: conceptnewscentral.com,
content page: gmanetwork.com, page
3: salarium.com and news.abs-cbn.
com, page 24: pexels.com
 POLÍTIKA
OVERVIEW
The last quarter of 2017 has been characterized by a mix of relative successes and uncertainties as the
Duterte administration seeks to consolidate the earlier gains of its overarching thrusts and policy interventions,
particularly on addressing law and order as well as ensuring socio-economic growth and development. Some
of the highlights that defined the course of this quarter include: the decisive victory of the Philippine military
against Islamic State-inspired militants; collapse of the peace process with the Communist rebels; and
suspension and re-inclusion of the Philippine police in the controversial War on Drugs. As the year comes to
a close, the nation looks forward to the Duterte administration delivering more substantial reforms that shall
lead to “Tunay na Pagbabago” or Radical Change and genuine empowerment of the ordinary Juan.

Meanwhile, performance ratings of Duterte rebounded at +71% satisfactory rating with a +58% net satisfactory
rating. The net rating posted a 10 point increase compared to the third quarter. Similarly, the Pulse Asia survey
in the month of December gave an 80% approval and 82% trust ratings for the top official. The approval ratings
did not change while the trust ratings posted an increase of 2 percentage points. This relatively remarkable
rebound coincided with the phenomenon where Filipinos expressed widespread hope for the New Year. The
SWS survey of 8-16 December 2017 registered an all time high record where 96% of Filipinos are “entering 2018
with hope rather than with fear”. This phenomenon is not unrelated to the changing political environment that
the new presidency has brought about.

In terms of internal security, the Marawi case provides insights with respect to the defense policy of the
Duterte administration. At the regional level, protecting the maritime commons has become a pressing concern
that likewise impinges upon the foreign and security policy of the government.

The last quarter of 2017 is also exclaimed by two noteworthy achievements of the administration. First, the
regional and international significance of our country was once again highlighted by the hosting of the 31st
ASEAN Summit and Related Summits. Second, the GAA of 2018 and the TRAIN were signed into law; holding the
promise of better educational, tax and general benefits.

DECEMBER 2017 QUARTERLY 3

POLÍTIKA
Performance Ratings
The satisfaction rating of President Duterte has bounced back from +66% and +67% in the respective last two
quarters. According to the SWS survey on 8-16 December, his satisfaction rating increased at +71% while his
net satisfactory rating registered at +58%, posting a 10-point increase in comparison with the third quarter and
remained “very good” compared to the first quarter of 2017.

Figure 1
Net Satisfaction Ratings of Philippine Presidents
(Satisfied Less Dissatisfied)

Source: SWS (May 1986-December 2017)

The increase in the net satisfactory rating is reflected in the nationwide opinion where his net satisfactory
rating remained excellent in Mindanao at +80%, up by 4 points from September 2017. It was in Metro Manila
and the Visayas where the significant increase was registered: at +55%, up by 11 points and at +53%, up by 10
points, respectively.

Figure 2
Net Satisfaction Ratings of President Rodrigo Duterte: By Area
(Satisfied Less Dissatisfied)

Source: SWS (September 2016-December 2017)

4 QUARTERLY DECEMBER 2017

 Table 2
Awareness and Performance Ratings of Top National Officials
Philippines
(Row Percent)

Source: Pulse Asia (December 10-15, 2017)

According to the Pulse Asia survey on 10-15 & 17 December, the top official garnered an approval rating of
80% and a trust rating of 82%. While the approval rating was constant in comparison with the third quarter,
trust rating increased by 2 percentage points. Specifically, his majority approval rating registered at 78% to 93%
and 77% to 85% across all geographic areas and socio-economic classes. Under the same categories, Duterte
also continued to enjoy a majority trust rating of 74% to 94% and 78% to 85% respectively.

For Vice-President Leni Robredo, her approval ratings increased by 2 percentage points during the last two
quarters, from 57% to 59% respectively. Her trust rating of 58% remained the same in the said quarters. These
ratings cut across almost all geographic areas except the National Capital Region and socio-economic classes
except the ABC class.

With regard to Senate President Aquilino L. Pimentel III, he acquired a majority approval rating of 57% and
majority trust rating of 53%. Specifically, his majority approval ratings of 53% to 61% and 56% to 59% cut across
all geographic and socio-economic classes. Under the same categories, he garnered the trust ratings of 54% to
57% and 53% to 56% respectively. And while House Speaker Pantaleon D. Alvarez failed to acquire the majority
approval and trust ratings, which registered at 42% and 37% respectively, his approval ratings increased by 9
percentage points and his trust ratings by 6 percentage points compared to the third quarter.

DECEMBER 2017 QUARTERLY 5

POLÍTIKA

Table 2
Awareness and Trust Ratings of Top National Officials
Philippines
(Row Percent)

Source: Pulse Asia (December 10-15, 2017)

Figure 3
Net Satisfaction Ratings of President Rodrigo Duterte: By Locale
(Satisfied Less Dissatisfied)

Source: SWS (September 2016-December 2017)

6 QUARTERLY DECEMBER 2017

 Among the classes, the class ABC posted a 9 point increase (at +63%), while in class E, there was a 30 point
increase (at +65%) and in class D, an 8 point increase was posted (at +57%). Between men and women, the
men registered a +61% net satisfactory rating (up by 12 points) while the women registered a +55% rating (up
by 9 points).

Figure 4
Net Satisfaction Ratings of President Rodrigo Duterte: By Class
(Satisfied Less Dissatisfied)

Source: SWS (September 2016-December 2017)

Figure 5
Net Satisfaction Ratings of President Rodrigo Duterte: By Sex
(Satisfied Less Dissatisfied)

Source: SWS (September 2016-December 2017)

Across educational levels, the highest increase was at 22 points with a +63% rating from the non-elementary
graduates, while the elementary graduates gave a +54% rating posting a 16 point increase and the high school
graduates’ rating remained at +56%. Between ages, the adults aged 25-55 and above gave the president a
“very good” net rating while those aged 18-24 gave a “good” rating, nonetheless posting a 6-point increase.

DECEMBER 2017 QUARTERLY 7

POLÍTIKA

Figure 6
Net Satisfaction Ratings of President Rodrigo Duterte: By Educational Level
(Satisfied Less Dissatisfied)

Source: SWS (September 2016-December 2017)

Figure 7
Net Satisfaction Ratings of President Rodrigo Duterte: By Age Group
(Satisfied Less Dissatisfied)

Source: SWS (September 2016-December 2017)

During the Marawi siege of 23 May 2017, the issue of martial law loomed as it was perceived to arrest
the immediate security threat that could spill over to the national level. Thus, Martial Law was imposed
in Mindanao. However, after the Marawi siege was ended, 62% of the Filipinos are in opposition
with the extension of Martial Law in Mindanao. Further, 66% perceive that the Armed Forces of the
Philippines (AFP) can suppress the Maute Group and the Abu Sayyaf even without the Martial Law.

8 QUARTERLY DECEMBER 2017

 Figure 8
Test Statement

Source: SWS (September 2016-December 2017)

Figure 9
Test Statement

Source: SWS (September 2016-December 2017)

II. National Updates

Given the myriad of challenges and opportunities, it is in the interest of the general public for
the Duterte administration to seriously tackle the growing crisis on internal security and public
order brought about by the looming spectre of Islamic State-inspired violent extremism, Communist

DECEMBER 2017 QUARTERLY 9

POLÍTIKA

insurgency, and illegal drug trade, among others. Failure to do so may not only derail the momentum
for economic takeoff but likewise undermine the administration’s achievements altogether.

Volatile Internal Security

The country scored a decisive military victory against violent extremism—albeit a costly one—when
the AFP together with the Philippine National Police (PNP) and Philippine Coast Guard (PCG) thwarted
the ambition of the Maute Group along with the Abu Sayyaf Group (ASG)-Hapilon Faction, the Ansarul
Khilafah Philippines (AKP), and the Bangsamoro Islamic Freedom Fighters (BIFF) to carve a new territory
and establish Marawi City as the capital of the Islamic Caliphate in Southeast Asia. Upon Defense
Secretary Delfin Lorenzana’s announcement on the termination of all combat operations on 24 October
2017, among the casualties were 165 soldiers and policemen killed, 1,700 wounded, 919 terrorists
killed, 47 civilians killed, and 353,921 people displaced.

After the war, the Duterte administration was faced with the Herculean task of rehabilitating the city,
restoring the normalcy of life of internally displaced persons, and preventing further radicalization
of other marginalized sectors of society. While the strategic defeat of Islamic State-inspired militants
remains uncertain, the Philippine government finds itself embroiled in a renewed counterinsurgency
campaign against the members of the Communist Party of the Philippines-New People’s Army-National
Democratic Front (CPP-NPA-NDF) after the collapse of the peace talks on 23 November 2017. The
dynamism of these internal security developments largely hinge on the ensuing efforts by all sides to
forge future negotiations and political settlements.

PNP Back in the War on Drugs

President Duterte’s controversial campaign on the War on Drugs yielded the latest results: from 01
July 2016 to 29 August 2017, Philippine Drug Enforcement Agency (PDEA) in partnership with other law
enforcement agencies was able to confiscate over 2,400 kilos of shabu worth PHP 12.7 billion which were
recovered from more than 7,000 anti-illegal drug operations. However, the anti-illegal drugs campaign
encountered strong public criticism after the untimely death of 17-year old Kian Delos Santos on 18
August 2017. The tragic incident prompted President Duterte to sideline the PNP and assign the PDEA
as the “sole agency” to conduct anti-illegal drug operations on 11 October 2017. Noticing an alleged
resurgence in illegal drugs and crime, President Duterte ordered the PNP and other law enforcement
agencies to return and provide active support to PDEA in the conduct of anti-narcotic operations.

Moderate Optimism in the Economy

Although a “substantial conclusion” of the Regional Comprehensive Economic Partnership failed to
materialize under the Philippines’ 2017 ASEAN chairmanship, the country had other positive news.
After posting stronger than expected growth of 6.9% in the 3rd quarter, the economy remains on-
track to reach its growth target for the year. The Department of Finance also announced that there
are ongoing discussions for a second batch of projects financed with Chinese loans amounting to USD
3.98 Billion. A loan agreement between the Philippines and Japan is also expected to be signed in
January 2018, where Japan will provide USD 0.92 billion for the first phase of the Metro Manila Subway.
Unfortunately, the government’s flagship infrastructure projects are facing several hiccups along the
way, as the Duterte administration has yet to overcome challenges including implementing agencies’
absorptive capacity and right-of-way issues.

10 QUARTERLY DECEMBER 2017

Successful Hosting of ASEAN Summit
The Philippines was catapulted into the international limelight when it hosted the 31st ASEAN Summit
and Related Summits on 10-14 November 2017 with the theme, “Partnering for Change, Engaging the
World”. Leaders of the ASEAN member-states (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and dialogue partners (Australia, China,
India, Japan, New Zealand, South Korea, Russia, United States, Canada, European Union, and the
United Nations Secretary General) congregated in Manila to present their views on pressing regional
and international issues of common interest, such as terrorism/transnational crime, maritime security,
and Korean peninsula crisis, among others. Towards the end, the world leaders came up with the
Chairman’s Statement and other declarations affirming their unified commitment to implement the
tenets of ASEAN Community Vision 2025 and preserve regional peace, stability and prosperity.

III. The Marawi Case and Defense Policy Implications

Prior to his inauguration on 30 June 2016, President Rodrigo Roa Duterte was expected by defense
analysts and observers to follow former President Gloria Macapagal Arroyo’s national security policy of
gravitating close to China while overlooking territorial defense and focusing on neutralizing domestic
security challenges such terrorism and insurgencies. The implementation of the long-delayed AFP
modernization program had been linked to the agenda of challenging China’s expansive maritime
claim in the South China Sea, which is identified with former President Benigno Aquino III. In contrast,
however, President Duterte’s goal to put into effect a rapprochement with China could mean that public
investments in developing the Philippine military’s territorial defense capabilities would be decreased
if not terminated. From the Aquino administration’s original goal of territorial defense, the Duterte
administration’s thrust was to revert back to the old (defense) posture of internal defense, or more
appropriately, counter-insurgency operations.

Also before his inauguration, President Duterte declared that he wanted a closer relationship with
China and that he would not continue the military modernization program started by his predecessor.
Consequently, his early statements indicated that he would not pursue the modernization of the
AFP with as much vigor as former President Aquino. President Duterte publicly criticized the Aquino
Administration’s decision to procure 12 FA-50 fighter planes from South Korea because he claimed that
the aircraft could not be used for counter-insurgency and were not numerically sufficient to challenge
China’s assertiveness in the South China Sea. He said that the government money spent for the fighter
planes instead should have been used to buy helicopters or boats that would pursue the Abu Sayyaf
(bandits). For him, internal security problems should be solved first so the country can promote
tourism and lure more foreign investments.

President Duterte Changes Tone

However, a few days after his inauguration, his administration slowly changed its tune about the AFP
modernization. Delfin Lorenzana, Secretary of the Department of National Defense (DND), assured the AFP
and the Filipino public that the Duterte Administration would pursue the modernization of the Philippine
military. Secretary Lorenzana also stressed that territorial defense is one of the priorities of the Duterte
administration because “it is very important as we need to protect our territories against encroachment
by other parties.” He then added that the 15-year AFP modernization program will continue as scheduled.
He, however, clarified that there will be some “redirection” as the Duterte administration is determined to
decisively deal with criminality; especially the Abu Sayyaf bandits as it gives the Philippines a bad name
due to a series of kidnappings of Malaysians and Indonesian sailor off the Sulu Sea.

DECEMBER 2017 QUARTERLY 11

POLÍTIKA

In the aftermath of the 12 July Permanent Court of Arbitration’s (PCA) favorable award to the
Philippines in its case against China in the South China Sea dispute, Secretary Lorenza highlighted
that there is an urgent need for the Philippines to upgrade its Coast Guard, Navy, and Air Force to
prevent other countries from encroaching on its territory, especially the maritime ones. In the same
month, President Duterte assured troops of the Sixth Infantry Division that he will continue the Aquino
administration’s efforts to modernize the AFP and to this effect declared that “there will even be
no refocusing of the modernization thrust. We will only adjust our priorities (to internal defense).”
Consequently, despite his earlier statements about his preference for smaller ships and lighter aircraft
for counter-insurgency operations, he eventually gave the go signal for the acquisition of military
material for territorial defense that were put in the pipeline during the Aquino administration.

The Duterte administration is making sure to meet the AFP’s expectation and continue to finance
its modernization program that was started and prioritized by the Aquino administration from 2011 to
2016. It increased the agency’s 2017 defense budget by 15% from the 2016 level and more significantly,
it also augmented the annual supplemental allotment for the AFP’s acquisition of military equipment
from Php 15 billion (USD 300 million) to Php 25 billion (USD 500 million), reflecting the administration’s
intention of accelerating the Philippine military’s modernization program. It is also introducing new
administrative measures to accelerate the procurement of new military equipment given the significant
delays the defense department and the AFP experienced in the acquisition of big-ticket items such
as the two guided-missile frigates, 12 fighter planes, long-range patrol aircraft and close-air support
aircraft. Indeed, President Duterte was putting his money where his mouth is when he pledged to the
graduating class of the Philippine Military Academy (PMA) that his administration will provide radar,
support, patrol, and assault vehicles as well as new surveillance and fighter aircraft in the next two to
three years to be used to secure the country’s borders.

Under the First Horizon of the AFP modernization program, the Aquino administration spent Php
85 billion (roughly USD 1.7 billion) for the purchase of combat utility and attack helicopters, frigates,
armored vehicles, rifles, and cargo and transport aircraft. Under the Second Horizon, the Duterte
administration declared that it would allocate Php 125 billion (roughly USD 2.25 billion) for the
acquisition of more equipment for territorial defense such as helicopters, fighter aircraft, multi-role
fighters, missiles and radar systems. However, since President Duterte took office in 2016, defense
officials indicated that there would be some changes to the priority list given the new administration’s
new agenda. Along with the planned acquisition of military hardware for territorial defense, the AFP
would also buy more fast attack crafts and drones capable of addressing asymmetric threats such
as terrorism and insurgencies as well as new assault rifles and other force protection equipment for
individual soldiers.

The Battle for Marawi

President Duterte has maintained the past administration’s commitment of modernizing the AFP.
Instead of changing the policy, he simply reoriented the AFP’s key missions by returning the function of
internal security back to the Philippine military while at the same time pursuing its goal of developing
its external defense capabilities. For the Duterte administration, both internal security operations and
territorial defense should go hand-in-hand, since fighting or addressing threats from multiple fronts
is the AFP’s mandated task. This is in contrast with the Aquino administration’s policy wherein the
Philippine military would relinquish its tasks concerning internal security to the PNP and would instead
solely focus on territorial defense. The Duterte administration is not altering the national security
objectives and even the military’s previous efforts to modernize, as it is merely reorienting the key
mission of the defense department and the AFP—prioritize domestic security concerns before focusing
on territorial defense. The administration’s defense policy was tested in mid-2017 when elements of

12 QUARTERLY DECEMBER 2017

the several Islamic militant groups claiming links with the Islamic State of Iraq and Syria (ISIS) took
control of the predominantly Muslim populated city of Marawi.

For the AFP, defeating the ISIS militants in Marawi City as soon as possible became the imperative
because a lengthy siege would attract more militants to Mindanao to reinforce their fellow fighters in
the city or be deployed in other parts of the island. Unfortunately, in the early period of the battle, the
militants found it easier than expected to hold out in the center of the city. The AFP—trained and used
in counter-insurgency operations in the jungle—proved incapable in urban warfare against Islamic
militants determined to die for their cause. Trained for jungle warfare and used in operating in small-
units, government forces have been unable to dislodge the militants despite deploying ground troops,
and armored personnel carriers, and the aerial bombardment of the city. Eventually, the AFP adopted
a strategy of destroying large portions of Marawi City in order to save it. The Philippine Air Force (PAF)
used its helicopters and fixed-wing aircraft to bombard the city. Several units of the Philippine Army
and Marines, supported by artillery and armored personnel carriers, conducted a grueling and bloody
face-to-face urban warfare against determined and well-armed militants. In late October, Marawi City
was liberated by the AFP after the deaths of the insurgents’ three key leaders.

Challenges to Duterte Administration’s Defense Policy

The five-month battle for Marawi City tested the Duterte Administration’s evolving defense policy.
Despite limited improvements in its territorial defense capabilities and being one of the region’s
weakest military organizations, the Philippine military fought a gruelling urban battle against local
militants reinforced by seasoned fighters from the Middle East and Eastern Europe. The battle of Marawi
City revealed three challenges to the Duterte Administration that impinge upon its defense policy.
First, the AFP is plagued by incapacities in terms of intelligence, surveillance, and reconnaissance.
Second, despite the increase in defense budget since 2010, the AFP still lacks basic infantry equipment
for conventional warfare like bullet-proof vests, helmets, night vision goggles, bullets, and tanks since
resources have been diverted for the acquisitions of frigates, lead-in fighters, and other equipment
for the air force and the navy.

Finally, the occupation of Marawi City by ISIS-linked militants showed the complexity of the shift
in the balance between internal and external security calculation that has long been an important
determinant in the AFP modernization program. On the one hand, the Philippine military could not
divert all its attention and resources on territorial defense as domestic insurgents groups have showed
resilience. On the other hand, it could not ignore external security challenges as territorial disputes
have been intensified because of the regional states’ growing wealth and defense acquisitions, and
heightened nationalism. The AFP, in essence, must prepare for both internal security operations and
territorial defense since fighting and neutralizing threats from multiple fronts have become its main
task in the 21st century.

IV. Protecting the Maritime Commons

The year 2017 has been transitional for Asia’s Regional Order. Despite The Hague PCA ruling in
2016 that invalidated China’s nine-dash line claim, China nevertheless continued with its maritime
construction activities in the South China Sea. While states have put less attention in the South China
Sea crisis, either by appeasing China or otherwise, activities therein certainly did not slow down.

DECEMBER 2017 QUARTERLY 13

POLÍTIKA

From a vantage point, the inattentiveness of states or the appeasement policy taken by some states
toward China might have actually encouraged China’s maritime construction of permanent facilities
in the South China Sea. This was made evident by the Brief recently issued by the Asia Maritime
Transparency Initiative of the Center for Strategic and International Studies. A few of the permanent
facilities by which China has completed or started to work in 2017 are found in Fiery Cross Reef;
Subi Reef; Mischief Reef; Tree Island; North Island; Triton Island; and Woody Island. Hence, there
is an urgent need to re-examine and craft a working strategic framework that would facilitate the
attainment of regional security and the preservation of the status quo.

The US used to enjoy a central role in ensuring geopolitical stability throughout the Asian region.
However, with the changing landscape in regional security, a shift had taken place, and China has
risen as an emergent power capable of gradually pushing the US at the side. The waning US influence
is made more evident with the absence of an American definitive foreign policy for Asia except for its
commitment under Japan’s Democratic Security Diamond (DSD).

During the November ASEAN Summit in Manila, the four members of the Democratic Security Diamond
(DSD) or the “Quad,” namely, the US, Japan, Australia and India, met on the sidelines. While there was
no formal agreement or explicit commitment, the meeting insinuated the forging of a commitment
among the four countries to safeguard the maritime commons stretching from the Indian Ocean to
the Western Pacific.

In a special study published by ADR Institute, Dr. Renato De Castro pointed out the importance of a
mechanism like the DSD. “As members of the DSD,” he wrote, “Japan and Australia have emphasized
the relevance of the regional security architecture, using multilateral organizations as a means of
upholding a stable and rules-based order in East Asia.” And since Japan and Australia have assisted
the Philippines in building up its navy, coast guard, and air force, he expressed that the latter can
play an important role in preserving the status quo through maximizing the capacity-building efforts
offered by the two countries.

While there is no question that the DSD is positioned to safeguard the maritime commons, it is
also uncertain whether the strategic partnership among the four countries is meant to engage or
hedge China. In fact, the question whether “to engage or to hedge China” was one of the questions
that were raised in the launching of the study. And whether the DSD is at least indirectly aimed at
engaging China or not, the unity between the four countries suggests the emergence of a rising giant;
or the formation of the quad may not also be in consonance with the national or trade interests of
the concerned countries. In either case, the Philippines stands to benefit well from the promotion of
the DSD. However, it can only do so if the Philippine government identifies maritime security as one
of its key policy priorities.

Amidst various domestic issues that need to be addressed, it is imperative therefore for the
Philippine government not to set aside the importance of maritime security. National security does
not only comprise domestic security but also involves security from external forces or threats. While
it is undeniable that domestic issues have influence, to some degree and thus serve as the basis for
a foreign policy strategy, any domestic issue should be addressed hand in hand with, and not at the
cost of, international relations. As it stands, foreign policy, specifically in maritime security, appears
to have taken a back seat.

14 QUARTERLY DECEMBER 2017

 Hence, the Philippine government should look at the DSD as an opportunity to enhance its relations
with the aforementioned like-minded countries. Our government can likewise utilize and maximize
the capacity-building efforts of Japan and Australia by forging a common visiting forces agreement
with these countries to enhance the training and capacity of our armed forces, among others.

In a nutshell, the Philippine government, in its effort to establish rapprochement with China,
should equally consider the preservation and improvement of bilateral ties with other like-minded
democracies within the DSD, such as Japan, Australia, the US, and even India. This however, does not
preclude the opportunity to engage other states with similar interests in the maritime commons.

V. Legislative Priorities and Accomplishments:

Second Regular Session of the 17th Congress
One of the biggest challenges of the Duterte Administration is its ability to realize its promises
delivered during the campaign and its previous State of the Nation Addresses (SONA). Except for a few
milestones such as the measures extending the validity of passports and driver’s licenses, the bill
establishing free Internet in public places, postponement of barangay elections and the bill providing
free tertiary education, the passage of relevant laws to give flesh to these promises is quite slow.

The presence of the “supermajority” in the House of Representatives is not sufficient to facilitate
even half of these measures which were supposed to institutionalize the reforms. The slow process
of the “legislative mill” and the different priorities of the two chambers are causing some delay in
the much needed legislations. The continuous pre-occupation in fact-finding investigations in aid of
legislations have also preoccupied the lawmakers.

Unlike the administration’s persistence to push the full implementation of the anti-crime and anti-
drug campaign, there were some inconsistencies and weaknesses in pushing for the urgency of the
bills either through the formal channels like the Legislative Executive Development Advisory Council
(LEDAC) or through their political allies in the Senate and House of Representatives.

However, the Executive Branch was able to gain positive support in the passage of its General
Appropriations Act in time for the past two years. In addition, there were major milestone programs
and initiatives which have been funded in the national budget. Significant but in few instances, we
have seen the strength of the “majority group” in the House of Representatives and the Senate. This
was very clear during the extension of the Martial Law and the passage of controversial Tax Reform for
Acceleration and Inclusion (TRAIN) Bill.

DECEMBER 2017 QUARTERLY 15

POLÍTIKA

Table 3
LEDAC Legislative Priorities and Status

16 QUARTERLY DECEMBER 2017

DECEMBER 2017 QUARTERLY 17
POLÍTIKA

18 QUARTERLY DECEMBER 2017

SONA Promises 2016 and 2017
In the first SONA of the President, the following legislative measures were included:

Tax Reform
The passage of a Tax Reform measure was both a campaign promise and a SONA priority in 2016 and
2017. Both chambers of Congress ratified the bicameral conference committee report on December 13,
Wednesday. In the Senate, 4 senators voted against the ratification of the bicameral conference report.
These included Senators Panfilo Lacson, Riza Hontiveros, Bam Aquino and Antonio Trillanes III. In the
House of Representatives, it was ratified in just one minute and there were no questions raised in the
floor. On 19 December 2017, President Duterte signed into law both TRAIN bill and the 2018 National
Budget.

After twenty years of waiting, the tax system has been overhauled. In general, the objective is to
make the taxes “simpler, lower and fairer”. The TRAIN Act seeks to exempt 83% of our taxpayers who
are earning Php250,000 and below annually.

The law that increases the take home pay of the majority of Filipinos has been a campaign promise
of the President since 2016. However, this will create losses on part of the government and the
economic managers had to come up with tax reform measures to offset revenue losses. The first
package of the reform measure includes the increasing tax rates on other consumer goods, fuel,
automobile, tobacco and coal products.

The bicameral conference committee report includes the following key points:
• Exempt from tax: individuals with P250,000 annual income and below starting 2018.
• Raise the tax exemption for the 13th month pay and other bonuses to P90,000 from the
current P82, 000.
• Exempt from value-added-tax (Vat): the sale of drugs and medicines prescribed for diabetes,
high cholesterol, and hypertension starting 2019.
• Exempt all milk from tax “given its nutritional value.”
• For fuel petroleum products, new taxes will be imposed on LPG — P1 in 2018, P2 in 2019, and
P3 in 2020. For diesel fuel, a P2.50 tax would be imposed starting 2018, P4.50 in 2019, and P6
in 2020. Meanwhile, the tax on regular and unleaded premium gasoline would be raised to P7
in 2018, P9 in 2019 and P10 in 2020 from the current P4.35.
• Impose a P6 tax per liter for beverages using caloric and non-caloric sweeteners and P12 per
liter for beverages using high fructose corn syrup.
• Raise the excise tax on automobiles. Those valued up to P600,000 and up would be imposed
a 4 percent tax; 10 percent for P600,000 up to P1.1 million; 20 percent on over P1.1 million to
P2.1 million and 50 percent on over P2.1 million.
• Impose a 5 percent tax on cosmetic procedures, surgeries and body enhancements.
• Double the prevailing documentary stamp tax rates fromP1.50 to P3.
• Increase the coal excise tax from P10 to per metric ton to P 50 per metric ton in the first
year of implementation; P100 in the second year, and P150 in the third and succeeding years.
• Double the excise tax rates on all non-metallic minerals and quarry resources, and all
metallic minerals including copper, gold and chromite from the current 2 percent to 4 percent,
and on indigenous petroleum from the current 3 percent to 6 percent.
• Raise the excise tax on tobacco products from the current P30 per pack to P32.50 from
January to June next year, P35 from July 2018 to December 2019, P37.50 from 2020 to 2021, P40
from 2022 to 2023 and a 4 percent annual indexation in 2023 onwards.

DECEMBER 2017 QUARTERLY 19

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Ease of Doing Business

In the 2016 SONA, the President stressed “Reforms to ensure competitiveness and promote ease of
doing business will be mandatory.” He further noted “the restrictions on the economy will be needed
to make more investments to come and to develop labor-intensive industries such as manufacturing,
agriculture, and tourism shall be pursued”

The bill seeks to attract more investments in the country by simplifying permit and licensing systems.
It passed Third Reading in both chambers but is still pending in the Bicameral Conference Committee
as of December 5, 2017. The Congress adjourned its session last December 14 and will resume on
January 15, 2018.

Emergency Powers vs. Traffic

The measure would authorize the President to use alternative methods of procurement under existing
laws to expedite the implementation of key transportation projects to end traffic in the metro. After
almost two years, the bill has not been approved by either the Senate or the House of Representatives.
It is still pending under the Period of Interpellation in the Senate and its Committee Report has not
been filed in the House of Representatives.

Freedom of Information Act

President Duterte has urged both Chambers of Congress to pass the Freedom of Information Law
during its 2016 and 2017 State of the Nation Address. The FOI policy is contained in Executive Order
No. 2 signed by the president on July 23, 2016. The order, which required all offices under the executive
branch to disclose details of their transactions, took effect on Nov. 25, 2016.

Although there are many lawmakers who sponsored the bill in the Senate, the bill has not progressed
for approval. However, it is pending for approval by the Senate on Second Reading since 2016. For its
House counterpart, it is still pending in the Committee. Interestingly, the latest list of 27 legislative
priorities of LEDAC did not include the Freedom of Information Act.

People’s Broadcasting Corporation

In his 1st SONA, President Duterte promised the creation of the PBC to replace state-run PTV4. As of
now, the bill is still pending in the Committee level in both chambers of Congress.

Creation of OFW Department

In his SONA in 2016, the President asked Congress to consider drawing up bills that would consolidate
and merge agencies and offices having to do with the Overseas Filipino and establish a department
that shall focus on and quickly respond to their problems and concerns. The bill is still pending in the
Committee level in both chambers of Congress.

Bangsamoro Basic Law

President Rodrigo Duterte expressed his intention to call for a special session of Congress for the
proposed Bangsamoro Basic Law (BBL), which is meant to create a Bangsamoro political entity with
enhanced autonomy. The Palace further reiterates that the measure is one of the top priorities of the
administration.

The BBL is the enabling measure of the peace compact signed by the Philippine government and the
Moro Islamic Liberation Front (MILF) in 2014. It was crafted by the Bangsamoro Transition Commission
which formally turned over the draft measure to Malacañang last July 17. In effect, the executive
branch has already transmitted a copy of the BBL to Congress.

20 QUARTERLY DECEMBER 2017

National Land Use Act
The President appealed to all our legislators to immediately pass the National Land Use Act or NLUA “to
ensure the rational and sustainable use of our land and our physical resources, given the competing
needs of food security, housing, businesses and environmental conservation.” The bill is pending in
the Senate Committee on Environment and Natural Resources while it has been approved on Third
Reading in the House of Representatives as early as May 2, 2017.

Creation of the Disaster Response and Management Department

The President wanted Congress to craft a law establishing a new authority or department that is
“responsive to the prevailing 21st century conditions and empowered to best deliver an enhanced
disaster resiliency and quick disaster response.” The bill is still pending in the Committee levels in
both Houses of Congress.

Rightsizing of Government
The bill seeks to eliminate redundancies and overlapping functions in departments, bureaus, offices,
councils, and government-owned and -controlled corporations in the Executive Branch that have led
to inefficient processes and added cost to government. Through the bill, government will embark on
a Rightsizing Program to simplify systems and processes, take out redundant agencies or offices, and
eliminate unnecessary regulatory requirements.

The bill was approved on Third Reading in the House of Representatives and still in the Period of
Interpellation in the Senate.

Review of Procurement Law

The President urged Congress to “thoroughly review the existing procurement laws and come up with
legislation that will ensure prompt delivery of goods and services to the people – especially medicines
and hospital equipment”. The bill has not passed the committee level in the Senate and House of
Representatives.

House of Representatives
At the House of Representatives, seven of the nine priority bills have already been approved on third
and final reading since the start of the second regular session of the 17th Congress. These were the:
Occupational Safety and Health Standards Compliance Act (HB 64); Tax Reform for Acceleration and
Inclusion (HB 5636); Strengthening the Balik-Scientist Program (HB 5792); Enhanced Universal Health
Care Act (HB 5784); and Amendments to the Public Service Act (HB 5828); United National Identification
System Act (HB 6221); and Utilization of the Coconut Levy Fund (HB 7545).

Other bills approved on third and final reading are: Amendments to the Urban Development and
Housing Act of 1992 (HB 159); Exempting the system loss charge component in the sale of electricity
by distribution companies and electric cooperatives from the coverage of the value added tax (HB
1616); Comprehensive Mental Health Act of 2017 (HB 6452); Magna Carta of Daycare Workers (HB
6550); Amendments to Public Telecommunications Policy Act of the Philippines (HB 6558); An Act
Prohibiting Leaving Children Below Eight Years Old Unattended In Motor Vehicles (HB 6570); Medical
Scholarship and Return Service Program Act (HB 6571); Philippine Quality Framework (PQF) Act (HB
6572); Retirement Law of the Office of Ombudsman (HB 6578); Amendments to The Fair Election Act
(HB 6604); and the Philippine HIV and AIDS Policy Act (HB 6617).

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Table 4
House Bills Approved on Third and Final Reading

Both Houses of Congress have also identified the six bills as their Common Legislative Priorities
which they would try to approve by end of the year: Free School Feeding Act; Expanded Local Absentee
Voting Act; Estate Tax Reform Act; One Town, One Doctor Act; Amendments to Anti-Hazing Law; and
Department of Disaster Response Act. Of the six bills, the Lower House already approved three bills on
third and final reading: Free School Feeding Act (HB 5269, approved on May 2, 2017); Expanded Local
Absentee Voting Act (HB 5661, approved on May 29, 2017); and Estate Tax Reform Act (HBs 4815 and
4814 approved on May 29, 2017).

Moreover, the Lower House has also approved on third and final reading House Joint Resolution 18
that will modify the existing base pay of around 381,381 military and uniformed personnel nationwide.

22 QUARTERLY DECEMBER 2017

 Table 5
Senate Bills Approved on Third and Final Reading

Senate of the Philippines

At the Philippine Senate, the shift to federalism remains to be a legislative priority in addition to at
least 20 bills including People’s Freedom of Information Act of 2016 (SB 1208), Expanded Anti-Wire
Tapping Act of 2016 (SB 1210), amendments to the Anti-Money Laundering Act (SB 1468), Traffic and
Congestion Crisis Act (SB 1284), Corporation Code of the Philippines (SB 1280), Expanded Anti-Red Tape
Act of 2017 (SB 1311), Teaching Supplies Allowance Act of 2016 (SB 812), Coconut Farmers and Industry
Development Act (SB 1233), Pagkaing Pinoy Para sa Batang Pinoy Act (SB 1279), and Anti-Hospital
Deposit Law(SB1353).

Of the aforementioned bills, two have been signed into law by President Rodrigo Duterte—the Anti-
Money Laundering Act or Republic Act 10927 and the Anti-Hospital Deposit Law—while the Expanded
Anti-Red Tape Act of 2017 and Teaching Supplies Allowance Act of 2016 have been approved on third
and final reading by the body. Other bills approved by the Upper House are the the proposed Tax
Reform for Acceleration and Inclusion (TRAIN) bill, the Mental Health Act of 2017, the Energy Virtual One
Stop Shop (EVOSS) Act, the Balik Scientist Bill, the Philippine Quality Framework (PQF) Act of 2017, and
the Service Charges in Hotels and Establishments Distribution Act.

Both houses of Congress ratified on December 12, the proposed P3.7-trillion national budget for 2018.
The 2018 General Appropriations Act (GAA) was signed into law by the President on 19 December 2017.

The approved 2018 budget is higher by 12% from the current outlay. The education sector received
the bulk of the budget. This includes the provision of an additional P1,000 cash allowance for public-
school teachers from the current Php 2,500 to Php 3,500 (budget allocation: Php 770 million) and the
increase of at least Php 10 million each for all state universities and colleges (SUCs) across the board
for capital outlays to be used in the repair, rehabilitation, construction of academic buildings and the
purchase of equipment, among others (Php 3.7 billion).

The combined budget of the education sector accounts for Php 672.4 Billion. It includes Department of
Education (DepEd) (Php 553.3 Billion), State Universities and Colleges (Php 62.1 Billion), Commission on
Higher Education (CHED) (Php 49.4 Billion) and Techinical Education and Skills Development Authority
(TESDA) (Php 7.6 Billion).

Also, for the education sector, the rollout of the free college education program under Republic Act
10931 or the Universal Access to Quality Tertiary Education Act was provided Php 40 Billion to cover the
free tuition and miscellaneous fees for college students in all SUCs nationwide. The 2018 budget will
also ensure the implementation of free Wi-Fi for all SUCs amounting to Php 327 million.

DECEMBER 2017 QUARTERLY 23

POLÍTIKA

24 QUARTERLY DECEMBER 2017

 An additional Php 64 billion was set aside for the increase of military and uniformed personnel’s
base pay beginning January 1, 2018. House Joint Resolution 18, which bears this effect, was approved
on third and final reading on December 11.

Also funded under the 2018 budget is the purchase of body cameras for PNP members amounting
to Php 334 million (up from the initial allocation of P100 million); acquisition of two single-engine
helicopters with a funding of Php 451 million; housing for PNP, AFP members worth Php 952 million (up
from the realigned P900-million Oplan Double Barrel fund); and the increase of police stations’ funds
by adding Php 850 million to their Maintenance and Other Operating Expenses.

Included in the budget is the Php 3.5-billion subsidy for the Philippine Health Insurance Corporation
budget for the cost of healthcare benefits of government employees in the Executive branch.

The 2018 budget also includes a Php 10-billion allocation for the Marawi Rehabilitation and Recovery
Program lodged in the National Disaster Risk Reduction Management Fund (NDRRMF). The amount
will fund the infrastructure, housing, healthcare, education and livelihood needs of the communities
affected by the war.

The Department of Public Works and Highways (DPWH) is provided with Php 637.9 Billion with a 40.3%
increase from its 2017 budget. On the other hand, the Department of Transportation (DOTr) gets Php
66.3 Billion for a 24.4% increase.

The other agencies with highest appropriations include Department of Interior and Local Government
(DILG) (Php 170.8 billion), Department of National Defense (DND) (Php 149.7 billion). Department of
Health (DOH), inclusive of the allocation for the Philippine Health Insurance Corporation (PHIC) (Php
167.9 Billion).

Extension of Martial Law in Mindanao

The Philippine Congress for the second time this year approved the extension of Martial Law in
Mindanao and the suspension of the privilege of writ of habeas corpus. In July, Congress extended it
for five (5) months upon the request of the President. Last December 13, it was extended for additional
one year from January 1 to December 31, 2018.

Under the Constitution, the Congress, voting jointly, has the sole power to extend martial law. A
majority vote of the two chambers — or at least 158 members — was necessary to pass the Resolution.
As a whole, there were 240 members of Congress who approved the motion to extend Martial Law and
27 who voted against the extension.

The overwhelming approval in the House of Representatives, where 226 voted yes while 23 voted no,
simply demonstrates the strength of the “supermajority” in the Lower House. In the Senate, a total of
14 senators voted in favor of the motion and 4 were against it.

Before the end of 2017, some members of the opposition filed a petition in the Supreme Court to
issue a temporary restraining order (TRO) on the extension of martial law and the suspension of writ of
habeas corpus. They argued that the latest request of the President for Martial Law extension has no
basis as the siege of Marawi City by Islamic State-linked fighters is already over. Albay Representative
Edcel Lagman said that “imminent danger of rebellion or invasion is no longer a ground for the
declaration or extension of martial law.”

The President in his letter to Congress stressed that Mindanao continues to be a “hotbed of rebellion”
noting the presence of DAESH-Inspired Da’awatul islamiyah Waliyatui Masriq (DIWM), other like-minded
Local/Foreign Terrorist Groups (L/FTGs) and Armed Lawless Groups (ALGs), and the communist terrorists
(CTs) and their coddlers, supporters, and financiers.

DECEMBER 2017 QUARTERLY 25

POLíTIKA
CRITICAL ISSUES OF PHILIPPINE POLITY

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