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July 27, 2012
SONA 2012: Reporting housekeeping and half-truths

In closing the 2012 SONA, President Aquino asked rhetorically: “Isn’t the agenda for change moving forward?” Unfortunately after two years, there is clearly no fundamental change and no systematic economic reforms taking place.

By SONNY AFRICA
IBON executive director

MANILA — State of the nation addresses (SONAs) are typically exercises in political advertising rather than government road maps for genuinely addressing the needs of the majority of Filipinos. President Benigno Aquino III’s 2012 SONA on Monday was no exception. The severity of the country’s social and economic problems was not just unmentioned but actually sought to be glossed over with an enumeration of supposed achievements. The SONA, the most important and widely publicized policy speech of the year, would have been memorable had it defined a break from the economic policies that cause severe poverty and inequality in the country.

Housekeeping rather than change

Much was reported in Pres. Aquino’s SONA– around two thirds of the SONA was abundant detail about various government economic and social programs. Yet a large part of every administration’s work is about normal housekeeping tasks. It is in this sense unremarkable to report building roads, airports, trains, terminals and schools, hiring health professionals, paying government salaries and pensions, and others. More so if the quantities involved are not even extraordinarily larger and were just built on the accomplishments of previous administrations.

A candid reporting of the social and economic well-being of Filipinos would have been much more meaningful particularly because admitting the seriousness of the problem is the start of taking real steps to resolve this. On the other hand, painting a picture that all is well on the economic front is at the very least irresponsible and at worst deceitful.

As expected the president cited positive international credit rating actions (eight in two years), record stock exchange index highs (44 times), relatively rapid economic growth (6.4 percent first quarter growth in gross domestic product) and ostensibly becoming a creditor nation as proof of an economic upsurge. The president also mentioned the country’s favorable image internationally.

Even granting the glowing numbers their significance to the daily lives of the people cannot be assumed. The most eloquent refutation would come from tens of millions of Filipinos who know that their lives have not correspondingly improved in the last two years. But another way to put the self-congratulatory account into perspective is to mention some details that the SONA remained silent on.

The 2012 SONA was selective in the data it presented and dealt in half-truths. A few stand out for the misleading picture of the economy that they seek to create.

Half-truths: Social development

When the speech declared “once, we were the debtors; now, we are the creditors” it actually meant something much less impressive. More precisely, all that could be claimed is that the Philippines had technically attained creditor member nation status within the International Monetary Fund (IMF). Even more specifically, the Banko Sentral ng Pilipinas (BSP) lent foreign exchange to the IMF which is very different from saying that the national government (NG) lent the IMF money or that the Philippine economy is so awash with cash that it is now a creditor economy.

The reality is simply that the government and the country remain deeply indebted. The NG had total outstanding debt of P5.1 trillion as of May 2012 which is P564.8 billion more than the P4.6 trillion in June 2010. The country’s total external debt meanwhile stood at US$62.9 billion in March 2012, of which 77 percent is owed by government, which is US$5.6 billion more than the US$57.3 billion in June 2010.

When the speech declared “the three millionth household beneficiary of Pantawid Pamilya had been registered” it sought to give the impression that three million households are being lifted from poverty by conditional cash transfers (CCTs) under the Pantawid Pamilyang Pilipino Program (4Ps). Also reported were 1.7 mothers getting regular check-ups, 1.7 million children vaccinated, and 4.6 million students in school.

More precisely, however, the most that could be said is that some three million households are being given some Php6,000-15,000 in cash transfers annually for a maximum of five years which is very different from saying that they are no longer poor. For instance, when the first two million beneficiary households of the 4Ps ‘graduate’ in 2013 it is unclear how they will be any less poor with no more cash transfers amid an economy that does not generate enough quality jobs and livelihoods for its labor force.

Moreover it is very unlikely that the millions of mothers, children and students only started getting check-ups, vaccinations and going to school upon the CCTs – so reporting these as if they were due to the 4Ps is inaccurate.

When the speech declared that “85 percent of our citizens are members of PhilHealth” it tried to give the impression that all Filipinos are well on the way to getting health care when they need it. More precisely, all that could be said is that PhilHealth liberally estimates that 85 percent of Filipinos are enrolled in their social insurance program. Even assuming that the poorest 5.2 million households will indeed be enrolled and get free treatment, this is very different from saying that Filipinos will get the free and comprehensive health services that is their right and that is the responsibility of the state to provide.

The reality is that the administration is shrinking the public hospital sector and building a domestic hospital sector dominated by private profit-seeking hospitals. The government plans to reduce and eventually outright remove budget support for public hospitals even as more expensive private hospitals already comprise six out of ten hospitals in the country.

The government’s budget for PhilHealth is then, in effect, increasingly a subsidy for private hospitals. And while seemingly large this budget for PhilHealth programmed by government still falls far short of the country’s health needs especially with the limited benefits given. For instance, while 40 percent of Filipinos were supposedly covered by PhilHealth in 2008 it only covered seven percent of total health spending in the country leaving 58 percent still coming out-of-pocket. So even if 85 percent of Filipinos are covered, as reported by the SONA, it is likely that over half of total health spending will still be out of pocket.

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