BW FILE PHOTOBy Charmaine A. TadalanReporter
DOMINATION of the Senate race by bets endorsed by or associated with President Rodrigo R. Duterte promises to revive the impetus for reforms in his last three years in office, analysts agreed on Tuesday, and Malacañang lost no time in listing prompt approval of the P4.1-trillion 2020 national budget and a shift to a federal form of government among its priorities for the 18th Congress that opens its first regular session on July 22.
“We will leave it to the winning senatorial candidates,” Mr. Panelo said in a briefing in Malacañan Palace on Tuesday when asked for the Executive’s legislative list, even as he added: “‘yung federalism is one of them.”
He added that “siguro, hopefully, wala nang stalemate sa budget,” referring to a spat between the House of Representatives (HoR) with the Executive first on a shift to a stricter budget framework in a bid to ensure state offices spend funds they get, and then with the Senate over realignments that resulted in a four-month delay in enactment of the 2019 national appropriations, which were slashed by P95.3 billion to P3.662 trillion.
A May 14 Nomura Global Markets Research note, authored by senior economist for Southeast Asia Euben Paracuelles, said the “unsurprising” results of the Senate race — marked by “dominant performance” of administration bets — are “likely supportive of political stability and the government’s reform agenda.”
“Fiscal reform, which has been delayed and has lost some visibility, is likely back on the radar screen as a result of Duterte’s stronger support base in Congress after the mid-terms,” the note read.
“Specifically, we believe the next package on fiscal incentive rationalization combined with corporate income tax cuts may now have a more realistic chance of enactment than not within this year.”
Asked on remaining tax reforms, starting with the plan to slash corporate income tax rates and remove redundant fiscal incentives, Mr. Panelo was less definite, saying: “If the senatorial candidates who will be proclaimed believe that it’s for the benefit of the people, then they should.”
For Mr. Paracuelles, however, the emerging mix in the 24-man Senate “now shows that Duterte may have about 17-19 seats, by our estimate, that will likely be supportive of fiscal reforms, based on how the existing 12 senators voted for Package 1 [which slashed personal income tax rates and raised or added taxes on several goods and services]…”
“We think passing fiscal reforms remains crucial, as these are designed to help fund an ambitious infrastructure program while at the same time maintaining fiscal sustainability.”
Unofficial, partial Senate election results as of 4:50 p.m., covering 97.4% of clustered precincts, sowed nine of the 12 seats up for grabs going to Mr. Duterte’s allies. The top 12 were led by reelectionists Cynthia A. Villar (24,497,560) and Grace Poe-Llamanzares (21,415,299), who were followed by former special assistant to the President Christopher “Bong” T. Go (19,864,849), Taguig City 2nd District Rep. Pilar Julianna “Pia” S. Cayetano (19,147,818), former Philippine National Police and Corrections chief Ronald “Bato” M. Dela Rosa (18,255,363), reelectionist Juan Edgardo “Sonny” M. Angara (17,612,084), former senator and actor Manuel “Lito” M. Lapid (16,468,345), former Ilocos Norte Gov. Maria Imelda Josefa “Imee” R. Marcos (15,370,053), former Metropolitan Manila Development Authority chairman Francis N. Tolentino (14,951,045), former senator Ramon “Bong” Revilla, Jr. (14,161,021), reelectionists Aquilino Martin “Koko” D. Pimentel III (14,149,497) and Maria Lourdes “Nancy” S. Binay (14,123,874).
Jostling in 13th-15th spots were reelectionists Joseph Victor “JV” G. Ejercito (13,876,548), Paolo Benigno “Bam” A. Aquino IV (13,764,593) and former senator Jinggoy E. Estrada (11,026,189).
The Foundation for Economic Freedom (FEF) said the emerging lineup should make it “easier” to push Mr. Duterte’s legislative agenda, although support is not completely guaranteed.
“Well, I think, on the whole, it would mean it will be much easier for him to have his legislative agenda passed; on the other hand, senators — they say they’re an independent republic — so although it augurs well for the agenda of the President, doesn’t mean to say he will get what he wants,” FEF President Calixto V. Chikiamco said in a telephone interview on Tuesday.
Asked on remaining tax reforms, considering the first package and an amnesty that was enacted in February were watered down, Mr. Chikiamco replied: “Yes I think it will pass but, of course, it will be a result of compromise and I don’t think the version passed by the Department of Finance will pass as is.”
“There will certainly be compromises. In fact they have to start from scratch because we have a new Congress and they have to refile it in the lower house and then it goes to the senate. So I think they will probably pass that, but there will have to be changes or compromises along the way.”
Security Bank chief economist Robert Dan J. Roces, in an e-mail to reporters, said “with a Senate likely to be composed of admin bets, future budget proposals may most likely be passed within the time frame and the tax reform program will likely be revived.”
“On the other hand, the Senate is just one-half of a co-equal Congress, and it will be interesting to see the leanings of the incoming House of Representatives as well.”
For University of Santo Tomas Political Science Department chairperson Dennis C. Coronacion, it is still unlikely the chamber will be a “rubber stamp.”
“I doubt if our senators, including the President’s allies, would give the same full support for the less popular measures such as the restoration capital punishment. We shouldn’t be quick in concluding that a Senate dominated by the President’s allies would become a rubber stamp,” Mr. Coronacion said in a mobile phone message, Tuesday.
“These senators, when they decide whether to support the President’s proposed measures, always take into consideration and prioritize their political ambitions and individual interests. If these factors come into play, we’re going to see more complex dynamics between the executive and the legislative branches.”
Ateneo Policy Center senior research fellow Michael Henry Ll. Yusingco, meanwhile, said the complexity of remaining tax reforms and of the shift to a federal government form will force 18th Congress lawmakers to choose between the two.
“If President Duterte decides to push charter change, that will put Congress in a quandary. The leaders of each chamber will have to decide whether to continue the comprehensive fiscal reforms that they have already begun during the first half of the President’s term or to pursue charter change as directed by the President. Because the reality is our lawmakers cannot be relied upon to do both,” Mr. Yusingco said via e-mail.
“For now I would not bet on the success of these fiscal reform initiatives until I hear the President clearly and strongly express his directive to Congress to continue with his fiscal and economic reform agenda. Without an unequivocal mandate from the President, the HOR (House of Representatives) and the Senate may instead focus on other urgent matters such as the water crisis and the reform of the agriculture sector.”
Choosing to focus on the shift to a federal form of government, however, could introduce political uncertainty, Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis Jr., warned via text, adding that“the uncertainty will take a toll on FDIs (foreign direct investments) and expansion programs.”
For Integrated Development Studies Institute Director George Siy, the emerging election results show stronger support for Mr. Duterte, which was otherwise expected to weaken in the second half of a president’s term. “I think this puts some level of continuity and confidence. Normally the second half of the presidential [term sees] power… weakening, so this is an indication that reforms,… major projects, have a good chance of being continued,” he said by phone. — with Vann Marlo M. Villegas, Arjay L. Balinbin and Janina C. Lim
BW FILE PHOTOBy Charmaine A. TadalanReporter