Senate Hearing on the Puno Constitution

July 17, 2018

The surveys of both SWS and Pulse Asia, while sometimes contradictory due to differences on polling questions, agree that about 74% of Filipinos admit to knowing nothing or very little about the Constitution. Thus, I ask for your indulgence to allow me a few minutes to say something about it, as well as the context in which charter change is being proposed. As someone said, text without context is pretext.

The inspiration of the 1987 Constitution was EDSA. But EDSA was more than the restoration of democracy through peaceful means. – it was also the promise of a new social order, especially to the poor, with radical changes, but through democratic means.

Before its writing, consultations nationwide were held to listen to the people and they overwhelmingly preferred the stability of familiar structures – a democratic, representative, unitary presidential system, with checks and balances and separation of powers. And, they wanted the power to directly vote for and have access to their president. But from the experience of the Marcos regime, they also wanted safeguards against the return of authoritarianism. It was not only the brutality in the violation of human rights, but the economic disaster of 1983 with total powers, or more accurately because of total powers, from which we did not recover until 2002 to the detriment of the poor. The people also wanted social justice and wanted our national destiny to be firmly and safely placed on Filipinos themselves.

Thus, there are three central themes of our Constitution – first, social justice and human rights with the poor as the center of development, second, never again to authoritarianism in any form and third, never again to any foreign domination of our economy like parity rights and amendments to the 1935 Constitution where we could not even change our exchange rate without the approval of the U.S. President. Which resulted in a foreign exchange crisis in the early fifties.

All these themes were, in many ways, counter-cultural and therefore “radical” because our history is marked by a tendency to give up powers to colonizers and dictators, of deferring to so-called “strong” leaders, of allowing big business to rule our economy and of an over-dependence of the poor on rich landowners for their basic necessities.

The 1987 Constitution can be viewed as affirmative action for our democracy – to correct the shortcomings of previous constitutions, to address the “wrongs” of history and to empower and enable the ordinary Filipino to rise above himself. It provides a system that should correct itself when it theatens to get out of control. And in that process of correction, the role of the people is critical because “sovereignty resides in the people”.

The 1987 Constitution was the first time that we spoke to the world as a truly independent and democratic Filipino nation. It is a document that had not been imposed on us by any colonial power or by a dictatorship.

The 1987 Constitution cut the umbilical cord of the 1935 and 1973 constitutions to the United States Constitution, which gives primacy to civil and political rights because it is a country of immigrants who all started from the same position and only wanted to be free from autocracy.

Our Constitution gives social and economic rights equal primacy with civil and political rights because we are a country of inequalities from the colonial days to the present where the starting positions of the rich and the poor are not equal. Social Justice and human rights are about the adjustment of these starting positions. It is not only a central theme, but the heart, of the Constitution.

This is the Constitution under threat of overhaul because it is blamed as the source of our problems today. I submit that we have largely failed in human development not because of the Constitution but because we have not fully implemented it. No thanks to our legislators who slept on the job for 30 years.. These are the people who want to re-write the Constitution. The question to the Puno constitution and other versions and to the ConAss itself is: are the proposed revisions going to depart from or do away with these three central themes of the 1987 Constitution?

In operational terms and in relation to federalism as a means to the ultimate goals we seek, i.e. address mass poverty, gross inequalities and underdevelopment of outlying areas, I quote/paraphrase from the Philippine Human Development Report 2012-2013:

“….Human development is about the welfare of people, not the development of places. The nature of economic development is uneven. It is not about bringing jobs to people but about closing the distance between the people and the jobs by giving people the capabiity and mobility to choose where to go. But the principle is different when it comes to quality education and quality health care. Breaking the vicious cycle of poverty of the young means bringing these services to wherever they are regardless of the cost. That is what human development is about.,,,,,,”

We might also note that if a federal (or federal-parliamentary) system is critical to our future, why is there no mention of it at all in the Philippine Development Plan 2017-2022 and Ambisyon2040, launched by President Duterte on October 11, 2016, including the means to achieve on a year to year basis its Results Matrices with about 300 targets?

The Philippine Development Plan also addresses the problem of unequal development in our country that the President talks about, with what is called the NSS (National Spatial Strategy) to maximize the benefits of what economists call economic agglomeration.

In other words, the design of government interventions to achieve development outcomes does not require a shift to a federal (or federal-parliamentary) system.

This is not the time to go into details, but my answer to the question with regard to the Puno Commission is a definite yes – that it departs from or does away with the central themes of the 1987 Constitution.

The list of questionable provisions is rather long but we might think about the implications of some examples that depart from those central themes:

(a) the idea of a “surveillance warrant”,

(b) the deletion of the phrase “guarantees full respect for human rights”,

(c) the absence of “distributive programs” in the exclusive powers of the federal government that development experts say should be centralized under any system because of the need to have uniformity of scope and outcomes,

(d) the provisions with “in an emergency” where the Congress OR the President can act with extraordinary powers;

(e) the addition of “lawless violence” to proclaim martial law;

(f) giving the Congress the power to change the foreign ownership requirements on land, natural resources, public utilities which are critical to the lives of the poor.

Since the issue of foreign direct investment (FDI) has been brought up by the ConCom, allow me to comment on it.

The economic argument against limitations on foreign ownership is that it stifles the investment climate and competition resulting in lost employment and growth opportunities,and that such restrictions are, therefore, anti-poor. This noble rhetoric is far from the truth. FDI is closer to what Prof. Emeritus Michael Meyer of Wharton School pointed out in a Business World article (9/24/14)–that the “ethos of capitalism is you operate for your shareholders rather than for the whole people”.

But even with that kind of self-interest, what is the empirical evidence since the enactment of the 1987 Constitution and its limitations on foreign ownership?.

First: From 1960-2009, our average per capita real growth rate was 1.58% a year, the lowest in our part of the world. But from 1988 when the new constitution took effect, we have been growing steadily at a faster trajectory than before. More importantly, from 2010-2017 our GDP grew at an average of 6.4% /yr and per capita real income by 4.5% a year. That is higher than the growth rate of Thailand over the same period.

Second; The Philippines has performed very well compared to its regional neighbors. With a growth rate of 6.7% in 2017, it grew faster than the average of the EMDE in the EAP (6.4%) and faster than its ASEAN-5 neighbors. Only China, Vietnam, and Cambodia grew faster (6.8%).

At that rate, we will be doubling our GDP per capita every 15.6 years. During the Pnoy watch, poverty incidence went down from about 26.5% to about 21.5%.

Third; No wonder then that the UNCTAD World Investment Report 2016 predicted that between 2016 and 2018 the Philippines is among the top 15 preferred investment destinations of Foreign Direct Investments (FDI) — US(2), China(1), India(3), UK(4), Germany(7), Japan(10), Brazil(4), Mexico(8), Indonesia(14), Malaysia(14), Philippines (-), France(10), Australia(10), Myanmar(-), Vietnam(18).(x)=2014 ranking. Philippines and Myanmar did not rank at all in 2014

Two countries were bumped off from that top 15 list – Hongkong and Singapore – to make way for us and Myanmar. And all this took place under the present constitution, and with a unitary form of government.

So what is all the screaming about the need to revise the pro-Filipino constitutional provisions with charter change?

What we should be screaming about is why the benefits of growth and the increases in labor productivity are not distributed equitably with labor, if we really care for the poor.

Real wage has been stagnant in the Philippines despite relatively high economic growth and labor productivity improvements. Real wages need to reflect at least labor productivity, but that has not happened in the Philippines. Between 2001 and 2016, real GDP more than doubled, growing by 5.4 percent per year on average. During this time, labor productivity also increased substantially, 57 percent between 2005 and 2015, with an average growth rate of 3.1 percent per year. However, real wage did not move. Aggregate real wage remained flat between 2001 and 2016 with 7 out of 15 years registering a negative growth rate. This could be part of the reason for the slow progress on poverty reduction and on inequality despite high growth performance in the last decade.

In effect, business has been able to appropriate all the benefits to themselves. Can this be solved by a structural shift to a federal-parliamentary form of government? Or is this simply a problem of public policy and the full implementation of the social justice provisions on labor?

It may well be that our economic growth might have been higher with a higher FDI. But that is different from saying that we need FDI badly and must adjust our standards to their demands.

FDI may have a role to play in our development, but what counts is not the quantity but the quality of the investment. For that, we need to make a full accounting not just of its benefits but also of its costs both internal and eternal to the project, and such long-term considerations as brownfield vs. greenfield investment, its contribution to raising the trajectory of our technological development and downstream plants for our minerals that increase the value added in the country.

According to the World Investment Report and other reports, the factors that affect investment decisions are:​

​​a) adequate infrastructure;
​​b) skill levels (human capital);
​​c) quality of the general regulatory framework;
​​d) clear rules of the game;
​​e) fiscal determination;
​​f) the relative absence of graft and corruption.

Other surveys include low levels of criminality and political instability.

The point is that if we conscientiously attend to these factors, we may have more FDI, but on our terms. In fact, the World Bank does not put lifting restrictions on reserved areas for local control as a priority to attract FDI. They know that it is a fact of public policy in most developing countries, as it was for developed countries when they were themselves developing.

Moreover, our country is already open for the purposes of FDI in long-term land leases, mineral mining (Art. XII, Sec. 2 and the La Bugal case), in power generation and supply with the Electric Power Industry Reform Act of 2001 (EPIRA) which limits foreign ownership only in the natural monopolies of transmission and distribution, as it should be for national security reasons.

Be careful of a sweeping overhaul of our constitutional system.

I would venture to say that we should be very careful about a sweeping overhaul of our constitutional system with a president who has proven to be dangerous with power, especially if the transition also extends the terms of incumbent politicians and an otherwise banned president is allowed to run for re-election under the new Constitution.. And also because the Puno constitution bans any future revision or amendment of it’s “federal setup” which is declared “indissoluble” and “permanent” and at par with the words “democratic” and “representative”. In other words, we will be stuck forever with federalism if we adopt it with all its uncertainties and the risk of unintended consequences.

Allow me to cite two views on the situation in our country today.

Two weeks ago was a Forum of an international NGO about the future of their operations here because of its external environment both international and domestic. Its list of uncertainties in the Philippines were: democratic space, rule of law, political institutions, civil and political space, domestic and foreign policy, the government’s openness to international aid and development assistance, martial law, revolutionary government and excalating conflicts in Mindanao.

Last week, Prof Noel de Dios (UP School of Economics) at a forum cited the threats to the economy under the Duterte Administration described as “insults”, as in medicine, which causes damage to a tissue or an organ:
​
(1) Uncertainty insult​​
– precipitate policy changes (mining, online gaming, Boracay)
– threatened railroading of charter change

(2) Redistribution insult
• 2018 inflation surprise (TRAIN, confused monetary policy, rice fiasco)
• reliance on indirect taxation (TRAIN)
• leaky-bucket entitlements (free college tuition, salary increases to the police and the military, pensioners, free irrigation services)
(3)Selectivity insult
• targeted weaponisation of laws and rules (tax laws, SEC rules, labour laws, franchises, civil service rules, etc.)
• revolving-door of discredited cronies and supporters
• opaque favouring of certain local and foreign business interests
• implicit bias against participation of (some) private sector interests (hence ODA and government procurement in lieu of PPP)
(4) Impunity and threat insult
• “homicide cases under investigation”: 23,518 in the period 1.7.2016-11.6.2018 (Rappler); recent LCE assassinations
• threats and actions against institutions, e.g., the Ombudsman, Chief Justice, the political opposition, media, HR workers, and the Church
(5) War and disorder insult
• Marawi and Mindanao martial law
• Threatened national emergencies
• On-off peace talks with the CPP-NPA-NDF

“Despite the president’s seeming disinterest in economic policy, what throws a shadow over business and the economy is the demonstration of overarching power – power without checks, without accountability, and without regard for custom, values, or history.

“More than the soundness of policy, it is unbridled power and its selective application that is the source of worry for business and the people under the Duterte administration”

We are told that our leaders not only shape our lives but also our values. The Marcos years was not only about human rights and an economic disaster, it was also about a legacy of a culture of corruption that remains to this day. From the experience of the last 2 years it’s clearer now that the Duterte Administration knows how to govern only through the use of fear and force. Thus, if the Marcos legacy is a culture of corruption, then the Duterte legacy may be a culture of violence.

A book entitled “How Democracies Die” published earlier this year, among several books on the same subject, says that:
(1) where authoritarianism during the cold war was imposed through coup d’etats by the military, since then authoritarianism has been assumed by elected leaders through constitutional revisions that would allow them to stay in power indefinitely, i.e. Fujimori of Peru, Chavez of Venezuela, Erdogen of Turkey, even our Marcos and several others.;
(2) any one (or two) of these four signs means that an elected leader wants to become a dictator:
(a) rejects in words or actions the democratic rules of the game, both in written constitutions or unwritten norms of conduct and civility in a functioning democracy;
(b) denies the legitimacy of opponents;
(c) tolerates or encourages violence;
(d) indicates a willngness to curtain the civil liberties of opponents
Are these happening in the Philippines today?

Think about Sen. Leila de Lima and of former SC CJ Sereno or about the House and its deference to the Quo Warranto proceeding. Or of the SC with it total deference to the President on the proclamation and extension of martial law. Such that now, the President is empowered to declare martial law anywhere anytime in the Philippines. Or the attempt at a zero budget for the Commission on Human Rights and the attacks on the Ombudsman who is retiring this month and will likely be replaced by a loyal follower.

With the weakening of the constitutional “checking powers” of the Congress, of the Supreme Court, the Office of the Ombudsman and of the media (i.e. Rappler and the PDI, among others), the President has almost total powers even without charter change. However, there remained the potential checking power of the church to deal with. There are only 3 institutions with a nationwide reach in our country – the LGUs, the police/military establishment and the Church. That may account for the latest attempt to smear the “source” of its power – God.

All this may constitute, wittingly or unwittingly, a step towards what mental health experts refer to as “malignant normality” which can take different forms but, in the case of democratic countries, would consider aberrant behavior or language as part of the democratic process. Thus, a dangerous leader becomes normalized, and malignant normality would dominate the governing dynamic. Clearly, this situation endangers our democracy and should not be allowed to continue.

In fact, I believe that we are already on the slippery slope to authoritanism and a new constitution that allows it or provides for it would be the ultimate betrayal of the Filipino people who brought us out from the darkness of a dictatorship,

In reading the Puno constitution, I had the impression that its proposals of a sweeping overhaul of the Constitution is more an act of faith than a product of reasoned thinking because it forgets or ignores the situation in our country today and the context of charter change.

During its 5.month tenure, the ConCom failed to provide the road map for the transition to a federal system.

That is made the task of a Transitory Commission headed by the President whether in his present capacity (or as a transitional one), who also appoints the 10 other members from a list provided by a 5-person search committee headed by the Chair of the Civil Service Commission, with the four members also appointed by, you guessed it, the President.

It has dictatorial powers – legislative powers by decree-making to formulate the transition plans of the federal government, every federated region,and the branches of government; executive powers to act and implement the transition plans; and judicial powers to settle disputes arising from the plans.

It can hire and fire any government official or employee of the government.

It has the power to organize, re-organize and establish all the branches and agencies of government, on fiscal management and administration plans, on the appropriation, allocation and expenditures of the moneys of government and to exercise all the powers necessary and proper to ensure the smooth, speedy and successful transition.

Putting the constitution to a vote before the transition plans are formulated means that the people, especially in the outlying areas, who are supposed to primarily benefit from the shift, are asked to approve a constitutional shift to a federal system without knowing how and when they will become federated regions with the powers and the money promised to them. They will only know that after the Transitory Commission has formulated the transition plan for their region, which could take years.

With these dictatorial powers for at least three years, who do you think will win the first elections under the new constitution?

What are the imponderables in all this?

(a) There is the imponderable of what the President really wants. Hence the need for real independent thinkers involved in the process and not people who are quick to carry out the wishes of the president, i.e a transitional president
(b) The issue of a joint or separate vote, and what the senate does if the vote is separate;
(c) The final ConAss version, given that it will surely reflect the power plays of the political dynasties and the compromises of politicians in their self-interest;
(d) Can free and fair elections be conducted under martial law?
(e) And finally the judgment of the people in the plebiscite.

In closing, may I say that:

1. I believe that there is a statesman in every politician and it is up to us to find it in whatever way we can. As long as there is a window of rationality, however small the opening, it is worth the effort to try;
2. Democracy is about dialogue and compromise. There is very little space in the room for purists.. But we all have a right to be heard;
3. ​We are willing to work together on the goal of a new social order using the lens of social justice and peace-making without resorting to a revolutionary government or a major overhaul of the Constitution. However, I believe that there are provisions proposed by the ConCom that are good ideas that should be considered for legislation.
4. ​Bringing the President down with people power is not a good idea. He is a duly-elected President and is still a beacon of hope to many of the poor;
5. ​If he does not want to talk or insists on taking the charter change and federalism route, we may have a fight in our hands for our rights and our freedoms. We have fought five of the last 6 presidents on issues of principle and won all of them.
6. I believe that federalism is not the answer to addressing mass poverty and gross inequalities and the underdevelopment of the outlying areas. And I believe that our people will know if a charter change is really for their benefit and will act accordingly.

As a Pulitzer awardee reminds:“the most common way that people lose their power is when they think that they don’t have any.”