Endgame

Going by the final Pulse Asia survey, the presidential contest appears basically a done deal.

Rodrigo Duterte leads his nearest rival by about five million votes. That is nearly an insurmountable barrier for his rivals with so few days left to campaign. Duterte’s rivals are not even within striking distance.

Erstwhile frontrunner Grace Poe saw her campaign flag and then fade the past month. Give or take a couple of points, Mar Roxas remains affixed to his 20 percent base vote. Jojo Binay is seeing his base eaten up by the Duterte juggernaut.

True, we could see substantial migration of voters from one candidate to another in the closing days of the campaign. The historical pattern is that they flock to the likely winner and not the inevitable loser. There is no reverse bandwagon on record.

The vice presidential contest remains interesting. The last survey shows a statistical tie between Bongbong Marcos and Leni Robredo.

Robredo is likely to benefit from the consolidation of the Bicol vote, at the expense of Escudero. She has attracted the women’s vote. She is strong in the Visayas, where Marcos is weakest.

However, Marcos enjoys hegemony over the larger Northern Luzon vote and dominates in the populous NCR. He could get more anti-administration votes from the dissipating campaigns of Escudero, Cayetano, Trillanes and Honasan.

Most significant, he is the apparent beneficiary of the endorsement of two large religious groups: the Iglesia ni Cristo and the El Shaddai. That could bring about a million new votes to his column.

The vice presidential contest is clearly where the real last-round fight is happening.

A few days ago, President Aquino broke protocol and usual practice, turning up at the Iglesia ni Cristo headquarters. According to sources, he did not plead for a Mar Roxas endorsement. He asked the sect to support Leni Robredo, who has better chances than her standard-bearer.

The President’s mission was, of course, futile. But it does underscore the ruling faction’s frantic efforts to at least get Leni through.

There were wild rumors the other day that powerbrokers have approached Escudero, pleading with him to withdraw in favor of Robredo. Neither confirmed that effort.

The ruling oligarchy is trying so hard to pull Robredo up and push Marcos down that people who fancy conspiracies are now peddling a “Plan C” scenario.

According to this conspiracy theory, the oligarchs, unable to stop Duterte at the polls, are now planning to depose him soon after taking office. It will help this plan if Robredo, instead of Marcos, wins the vice presidency.

Between the two contenders, Bongbong is more likely to defend a Duterte presidency than Leni.

VAT

Besides capitalizing our agriculture, another issue the presidential candidates avoided through the entire campaign is value-added taxation (VAT).

Like modernizing agriculture, VAT is not sexy. It runs against the populist spin all the candidates prefer.

In the same manner populist groups vilify corporatizing our farm systems and using biotech for better yield, the VAT is demonized as an oppressive imposition. That characterization is most unfair.

It took an act of statesmanship, good macroeconomic grasp and foresight to push for the VAT in 2004. At that time, the country struggled to set its fiscal position aright, with the handover from the debt crisis still lingering. At the end of 2003, the country’s debt stood at P3.36 trillion – or about 78 percent of GDP.

Creditors were willing to finance us except at usurious rates. Investors were hesitant entering our seemingly crisis-prone economy.

Gloria Arroyo’s economic team decided our government should take a dramatic, even if unpopular, step to improve its revenues. Had we not, we would have gone the way of Argentina or Turkey at that time and Greece and Brazil today.

Despite populist protests, the Reformed VAT was passed by Congress during a time when our economy was reeling from a high fuel price regime and a strong El Niño. In the years that followed the passage of RA 9337, the beneficial effects of the measure began to be felt. Government began to cut public debt and reduce the chronic budget deficit. The stage was set for the credit upgrades that would come later.

With VAT providing our fiscal position a reliable ballast, government was able to fund the conditional cash transfer program, expand PhilHealth cover and provide scholarships for the poor. VAT likewise helped fund vital infra projects.

VAT, to be sure, was a bitter pill. But its strategic consequences are now clearly evident. With an improved fiscal position, we were able to bring down interest rates and spur investments.

As President of the Foundation for Economic Freedom at that time, I was on the floor of the House of Representatives when the controversial measure was up for plenary debates. I recall how Ralph Recto took the cudgels for the crucial (even if unpopular) measure was debated. He understood the personal political cost he might incur for standing for what made strategic economic sense.

Indeed, Ralph paid a political price for his intellectual courage. He lost on his first bid for a Senate seat, vilified by the ignorant as the author of VAT.

As the correctness of the revenue measure became evident, VAT became less and less of a political cross on Ralph’s neck. He subsequently won the Senate seat he deserves and proved himself as an economic legislator of the highest caliber.

We now see our government in a much better fiscal position, enjoying credit upgrades and easy access to financing, able to fund the conditional cash transfer, wider PhilHealth coverage and free vocational training.