Philippine Elections: Favorite Son Hits Softball

UNCLAS SECTION 01 OF 03 MANILA 000164 SIPDIS SENSITIVE BUT UNCLASSIFIED E.O. 12958: N/A TAGS: ECON PGOV RP SUBJECT: Philippine Elections: Favorite Son Hits Softball REFS: A) Manila 135 (Ambassador-Aquino Farewell Call),B) Manila 60 (Ambassador-Teodoro Farewell Call),C) 09 Manila 2098 (Price Controls in Typhoon Aftermath) SENSITIVE BUT UNCLASSIFIED ¶1. (SBU) Summary: Philippine presidential candidate Senator Benigno "Noynoy" Aquino's January 21 luncheon speech to an invited audience focused on his economic advocacies and the faults of the current Arroyo Administration. The speech was well-received; no surprise given the anti-Arroyo Administration reputation of the sponsoring Makati Business Club. End summary. ¶2. (SBU) Front-running Philippine Liberal Party presidential candidate Senator Benigno "Noynoy" Aquino's January 21 luncheon speech to a standing-room-only crowd of about 450 Makati Business Club (MBC) members and invited guests marked ONE of his first attempts to sell himself to the powerful business and opinion leaders of the national capital region. In his less than 20-minute speech, Aquino laid out a pro-business, pro-market agenda while criticizing the current Arroyo Administration. The speech was enthusiastically received and interrupted by applause several times. Makati Business Club -------------- ¶3. (U) Established in 1981, the MBC is a prestigious non-profit organization that serves as a forum for ideas on economic, social, and political issues affecting Philippine development. It has about 800 chief executive officers and senior executive members representing 450 of the largest companies in the country. The main thrust of the MBC is to promote the role of the private business sector in national economic development efforts. The MBC has been an outspoken critic of the Arroyo Administration. Man for the Job? -------------- ¶4. (SBU) Perhaps to counter criticisms about his seeming under-performance as a first-term lawmaker, Aquino noted that the Philippines did not suffer from a lack of laws but from the weak and inconsistent implementation of laws. He had therefore focused his efforts as a senator, he explained, on initiating and participating in congressional probes and investigations, including the First Family's alleged involvement in bribery by the Chinese ZTE company for a cyber education project, the fertilizer scams at the Department of Agriculture, anomalous infrastructure projects, and accountability for the government's confidential intelligence funds. ¶5. (U) Aquino said that the country's problems are well-known and the solutions identified. He mentioned the deficits of good governance, accountability, political will, and commitment to national transformation. He lamented the shrinking middle class and the declining education system. Free and Fair Playing Field for Business -------------- ¶6. (U) Senator Aquino noted that the Philippines needed to move away from inward-looking competitiveness based on cronyism and relationships used to obtain favors towards free and fair competition that would spur Philippine economic growth in a globalized environment. He vowed that, if elected, his administration would simplify business processes and procedures to better serve the public and investors; and would not use regulatory systems for harassment and extortion. No New Taxes -------------- ¶7. (U) Despite the growing government budget deficit and his own reference to a looming fiscal crisis, Senator Aquino promised there would be no new taxes if he were elected. Aquino said that good governance and a strong anti-corruption campaign could reduce revenue losses caused by smuggling, tax evasion, and waste in the national budget. He drew strong applause for favoring lower tax rates for all, expanding the tax base, and removing exemptions for a privileged few. Aquino said he believed that markets knew best what opportunities to target and that he would rationalize fiscal incentives if elected. Infrastructure and Agriculture -------------- ¶8. (U) Senator Aquino noted the need to transform infrastructure projects from sources of scandal and waste to models of cooperation and efficiency; from sources of riches for a few to employment generators to boost the economy. He called for local government units to pursue cooperative initiatives with the private sector on MANILA 00000164 002 OF 003 infrastructure projects with benchmarks to evaluate and monitor implementation. ¶9. (U) The Senator vowed to review all programs of the Department of Agriculture to eliminate waste and improve efficient use of resources. He expressed wounded pride that countries such as Thailand and Vietnam previously sent their experts to learn from the Philippines but now led in agricultural productivity. Attacks on the Arroyo Administration -------------- ¶10. (SBU) Senator Aquino's speech was peppered with attacks on the Arroyo Administration, which he described as overshadowed by scandals and driven by self-interest and day-to-day political survival. The Senator criticized government-imposed price ceilings on basic commodities following the typhoons of 2009. He noted that when President Arroyo was his Economics professor at Ateneo University she had espoused minimal government intervention. He characterized the imposition of price controls on basic commodities and petroleum products from late September to mid-November 2009 in some typhoon affected areas as a populist move signifying political desperation. Follow-up Questions -------------- ¶11. (U) During a question and answer session following his speech, Aquino addressed population policy; the deteriorating education system; the Marcos wealth and alleged wrongdoings of President Arroyo and her family; and the role his family would play if he were elected President. -- Population Policy: Aquino responded that he supported further discussion on the reproductive HEALTH bill, including inputs from the Catholic and other churches, but envisioned the role of government as reminding/educating its citizenry on responsible parenthood without dictating method or family size, and respecting individual freedom. -- Education System: The Senator noted the need to address the classroom shortage and expressed support for increasing basic education from 10 years to 12 years. He called for greater cooperation with the private sector in public education and reiterated that increased funding for education would come from improved revenue administration and congressional discretionary funds. -- Accountability: Aquino stressed that laws would be upheld and that his administration would work to recover ill-gotten wealth from prior administrations. He said he would instruct the Department of Justice to investigate allegations of corruption against President Arroyo and her family and file the appropriate criminal charges as one of the priorities of the first six months of his administration. He also noted the need for judicial reform, citing low conviction rates and protracted judicial proceedings; and for using public officials' Statements of Assets and Liabilities as a tool for holding officials accountable for unexplained wealth. -- Family Influence: Aquino joked that his youngest sister Kris Aquino-Yap (a well-known media personality) would remain his fashion adviser and that his other three sisters only wanted to return to a life of anonymity after the elections. He said he sought to benefit from the wisdom of his uncle, prominent businessman Jose "Peping" Cojuangco, and other sources but that, ultimately, his decisions and actions were his own. At Ease Before the MBC Crowd -------------- ¶12. (SBU) Comment: Described by some as lacking charisma and confidence, Aquino seemed comfortable, witty, and able to think on his feet before the supportive MBC crowd. The similarity between Senator Aquino's stated positions and the views of the audience was not surprising given that MBC members reportedly played a significant role in convincing Aquino to enter the presidential race. Aquino won 61% of the votes in a December 2009 survey of MBC members on whom they would elect President. Interestingly, we heard a number of attendees at the MBC speech comment positively on the Administration's standard bearer, former Defense Secretary Gilbert Teodoro (Aquino's second cousin); but they expressed discomfort about Teodoro's close association with President Arroyo. Teodoro, lagging in national surveys, emerged second (14% of votes) in the MBC survey. ¶13. (SBU) Although the Makati Business Club does not reflect the electorate of the Philippines, Aquino's revered parents and hopes that he can provide leadership for a new economic, moral, and political order continue to figure heavily in his commanding lead in national opinion polls. His affiliation with prominent business and opinion leaders, including several cabinet officials of previous MANILA 00000164 003 OF 003 administrations, appears to be trumping uncertainties among the Philippine business elite about his relative inexperience. And while MBC members may command relatively few votes, they will be substantial donors in the campaign, which officially opens February ¶1. End comment. Bassett