Midterm crisis

Call it the end-of-term syndrome, which afflicts many elective officials in this country. It seems it can infect even a president with a six-year term as early as the start of his third year in power. People go through a midlife crisis; this one is a midterm crisis.

President Duterte’s annual report today on the state of the nation, in which he is expected to tout his achievements in his first two years, is being overshadowed by the frenzied push by his congressional allies for a people’s initiative to scrap the 2019 midterm elections.

This is ostensibly so the congressmen can work unimpeded on writing a new constitution for the shift to federalism, Duterte’s cure-all for the country’s ills. Apparently as a carrot for reluctant lawmakers, the House leadership has also unabashedly dangled the assurance that “no-el” or no elections in May will mean term extensions for all elective officials.

Election experts say term extensions are unconstitutional. But no-el proponents reportedly believe the case can be settled in their favor by a Supreme Court that is now potty-trained by Malacañang.

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The people’s initiative for no-el has to be settled by the end of September, according to its House proponents. Normally, this could be dismissed as yet another “legally harebrained” idea, to borrow a phrase from one of the country’s best legal minds. But after the chief justice was kicked out by her envious peers faster than you can say “Supreme Court” through a simple quo warranto petition filed by the government’s chief lawyer, anything is now possible.

Among the gains Duterte is expected to tout in his third State of the Nation Address (SONA) are the country’s strong macroeconomic fundamentals.

But now, no-el, indefinite term extension and the uncertainty of a proposed transition period (an idea currently as amorphous as an amoeba) in the shift to federalism are dominating conversations.

No amount of clarification from Malacañang, it seems, can persuade the public that Duterte himself is not interested in staying in power longer through Charter change.

And economists are spooked.

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Finance Secretary Carlos Dominguez, one of the few men whose advice Duterte is known to heed, warned that the shift to federalism “has the potential to become a nightmare.”

The government’s chief economist, Socioeconomic Planning Secretary Ernesto Pernia, told “The Chiefs” on One News that federalism could “disrupt” the momentum of infrastructure improvement in the regions, “wreak havoc” on the country’s fiscal situation and lead to a credit rating downgrade.

Although Pernia was slapped down by Malacañang, a statement over the weekend by Moody’s Investors Service echoed his concerns. Moody’s warned that federalism along with Duterte’s controversial policies on peace and order could negatively affect public finances and the Philippines’ attractiveness to investors, which could pull down the country’s credit rating.

Over the weekend, Dominguez issued a statement pointing out that investor confidence remained strong and foreign direct investments in the past year have seen record highs.

But foreign investment pledges in our country fell by nearly 40 percent in the first quarter of the year compared to the same period in 2017, when total investment pledges also dropped.

The country’s more competitive neighbors, where it’s easier to do business, beckon to investors.

In Southeast Asia, the Philippines is now ranked a dismaying sixth in terms of ease of doing business in the World Bank report, falling from 99th place globally last year to the current 113th. Singapore ranked second overall; Malaysia, 24th, and Thailand an enviable 26th from its previous 46th place. Vietnam also posted a strong improvement, moving up to 68th place from 82nd. Indonesia is also ahead of us, improving to 72nd place from 91st.

I’ve written about some of the good news under Duterte’s watch. I also know a number of businessmen, local and foreign, who don’t give a rat’s bum about his extermination of drug personalities and other crime suspects; I believe they even like what he’s doing. This is a country that appreciates Dirty Harry types when it comes to peace and order. They also wouldn’t mind having economic restrictions lifted in the Constitution.

But this rush to write an entirely new constitution so federalism can be rammed down the nation’s throat rather than just amend certain economic provisions is creating an atmosphere of uncertainty. Moody’s isn’t the only credit rating agency that will sit up and take notice.

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The self-serving bunch now scrambling to have their terms extended through a people’s initiative are the same folks who will be in charge in a federal system. Where’s the real change in that, other than giving them even greater control over public funds and decision making? One of them referred to the House of Representatives as the “HOR” – inevitably inviting nasty comments about how apt the acronym is with its homonym.

This attempt to stampede the country into a people’s initiative for no-el will also distract from efforts to sell the Bangsamoro Organic Law in the proposed new (and expanded) Muslim autonomous region in Mindanao, which Duterte is expected to sign today so he can tout it in his SONA.

The Organic Law is undoubtedly a positive development, and there are other pieces of good news that Duterte can cite in his report to the nation.

But he is delivering his SONA with the peso at its weakest in 12 years and consumer prices soaring, with investors threatening widespread downsizing and even complete shutdowns over new rules on contractualization and wages.

In his push for federalism, Duterte should listen to his economic team rather than his political allies.

The word from administration officials yesterday was that he would highlight his plans rather than achievements in a relatively brief 35-minute prepared speech at his SONA.

Those plans should outline a clear path for the country rather than uncertainty and instability.