Goodbye to 2017

The top phrases for the Philippines in 2017 would be the extra-judicial killings or EJK, martial law in Mindanao and the Marawi siege, and the Tax Reform for Acceleration and Inclusion Act (TRAIN).

More than a year after President Duterte launched his war on drugs, the killings have continued, mostly of drug users and pushers, eliciting added pressure from human rights advocates for proper processes and accountability for the mounting number of drug-related deaths.

Despite the negative backlash that the EJKs have contributed to bringing down the President’s approval rating, the administration continues to enjoy popular support from Filipinos, and surprisingly, even from the bereaved families of those executed for drug use.

The drug war seems to have lost some of its original intensity, but given the President’s personal dislike for drugs, you’ll never know when his not-so-secret army of executioners will be regrouped in force again.

Let’s hope that the exercise – that had extended beyond the promised 100-days period – will indeed have contributed positively for the nation.

Peace and order

The siege of Marawi against armed Muslim extremists of the Maute Group based in Marawi City in Lanao del Sur triggered a call for martial law in the whole of Mindanao, with eventual threats of extending this to Visayas and Luzon should the “state of rebellion” escalate.

With broad support from Congress, the President was able to proclaim a state of martial law in Mindanao, starting on May 23 effective for 60 days, then extended until the end of 2017, and currently in effect until the end of 2018 despite declarations that the crisis is over.

While the five-month long battle to wrest back control of Marawi City ended with the deaths of militant leaders Omar Maute and Isnilon Hapilon, the latter considered as one of the most deadliest terrorists by the US State Department with up to $5 million for his capture, the extended period of martial law raises new questions.

Hapilon, who headed the Islamic State-funded Abu Sayyaf group known to be operating in many parts of the country, including the Visayas and Luzon, had grown the formerly ragtag team of Muslim kidnappers into an ideologue-led armed movement.

One of the more significant findings from the Marawi siege was the existence of whole cities of armed men, especially in the predominantly Muslim areas of Mindanao, with enough firepower to maintain a five-month-long battle against the supposedly more superior capability of the Philippine government’s armed forces.

Indeed, as peace and order is one of the requisites of sustained economic growth, the extent of militarization by private armies – or worse, but ideology-led extremists – raises questions on the future growth of resource-rich Mindanao.

The war on drugs, thus, pales in comparison. In contrast, the war against extremist groups may need perhaps more than 1,000 days, and definitely the might of an entire army, not just a team of executioners.

First salvo

The Comprehensive Tax Reform Program (CTRP) by the Department of Finance was bared early this year, and followed a few months later with the supporting legislative action for TRAIN. As a priority measure, the Duterte government made sure to have this signed and up for implementation before 2017 ended.

TRAIN is the first salvo of supposedly six tax reform packages under CTRP, and one that is intended to bring in the bulk of funds to cover for the lost revenues from the simplification of personal income taxes as well as the reduction of estate taxes.

Taking into account the additional and new tax collections from consumption of petroleum products, automobiles, and sugar-sweetened beverages, plus from the simplified VAT system, the government stands to raise P90 billion net to finance its ambitious Build Build Build infrastructure and other socio-development programs.

More than the promise of lower income taxes, most Filipinos focused on the possible increase in automotive taxes, and therefore, the price of their dream car or van next year. True enough, people supposedly benefiting from reduced personal income taxes did not appreciate the “Christmas gift” from our government.

Filipinos are known to be patient and enduring, and so, amid all the new consumption taxes coming in 2018, including on their favorite 3-in-1 breakfast coffee sachets, they simply went back to their calculators to revise their savings plans for that new vehicle.

As to Build Build Build, the year was basically devoted to putting together the ingredients, including TRAIN, to make this happen in the grand manner that it has been promised.

Sustaining growth

Other noteworthy events that transpired in 2017 include the successful hosting of the ASEAN Summit and the continuing exemplary growth of the Philippine economy in Asia from a strong export performance and improved public spending which, in turn, boosted the manufacturing subsector and services sector.

Agriculture continued to sustain positive growth, although lower than in previous years. The country continues to be challenged by typhoons and other natural disasters, and this year has seen a few that affected local agriculture output.

Despite Trump’s protectionist stance, our business process outsourcing services continued to grow. The mining industry maintained its cautious stance in response to continued statements by the President of his displeasure over the negative environmental and social impact of mineral extraction.

The yearend brought better tidings, with Fitch Ratings raising the country’s credit rating from “BBB-” to “BBB,” which would come in handy for the expected infrastructure building boom and the need for more loans to finance these projects.

All told, it’s been a relatively good 2017.

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