Things are not going as well for President Macapagal Arroyo as she might have hoped although she deserves full marks for putting a positive spin on the domestic scene. As of mid 2002 three major issues are contributing to the feeling of political instability in the country and while there is no sense of immediate crisis, there is neither any sense that the government is really coming to grips with the problems that have thwarted successive presidencies since the abolition of martial law and the overthrow of Ferdinand Marcos back in the eighties.

Security Concerns

The first such issue is that directly pertaining to security. This is a real hydra for the government in every sense. As soon as one group is lopped, another appears to spring up to take its place. Internationally, attention has been focused on the notorious Abu Sayyaf and the plight of two American missionary hostages (and one Filipino nurse) who had been held for over a year and led directly to the redeployment of American ground troops in the Philippines to train and assist local troops who almost always seemed to be one step behind this elusive group. The final showdown came in June 2002 when, in a firefight in the jungles of Mindanao, two of the three hostages were killed. Gracia Burnham was wounded in the firefight but was rescued. Several days later a second encounter off the coast between Mindanao and the island of Basilan the leader of the rebel group was finally dispatched although his body was washed overboard and not recovered. Have we seen the last of the Abu Sayyaf? Only time will tell. However the root cause of the problem – the endemic poverty of this part of the Philippines has not changed and – as has been shown to be the case in the Middle East – when people feel they have nothing to lose they are prepared to risk everything.

Other groups – including Muslim extremists, communist guerillas, and plain old-fashioned gangsters out for a buck continue to bedevil much of the Philippines. The Muslim problem is confined to Mindanao and we hasten to add is supported by only a small percentage of the Muslim population of the Philippines, but the New Peoples Army seems at times to operate freely in many rural areas. While they may have a point in claiming to be seeking retribution from corrupt officials and companies that (in their view) enrich themselves at the expense of the rural poor, they loose all claim to legitimacy when it is realized that the NPA has driven many poor farmers from their land for failure to pay their “taxes.” Indeed, the NPA is one reason (and not the only one) why much fertile land lies fallow and why the plight of the agricultural population is worsening.

Complicating the problem are the leftist political groups who are helping the opposition party depict a sense of restlessness among the poor. Poverty affects officially about 40 percent of the population, although an even larger segment of society - over 50 percent - regard themselves as poor according to a leading local poll group. These leftist groups have also penetrated the labor unions are blamed for fomenting unrest in several Japanese firms that led to work stoppages last year. The situation may have even turned worse this year, as the Department of Labor has said the number of work-related strikes climbed by 11 percent to 20 cases in the first 135 days of the year from last year’s figure.

Of greater concern to the foreign business community is the extent to which kidnappings and extortion attempts continue to occur in Metro Manila and the seemingly impotence of the government and police officials to do anything about it. Security has been a growth industry for some time and this does not seem set to change any time soon. However it needs also to be said that a number of the reported incidents have been the result of plain foolishness on the part of the victims who appear in some instances to have throw all reasonable caution to the wind and accepted car rides from unknown people met in bars and such places. With sensible precautions, Manila remains a relatively safe place though we stress the need for caution.

Foreigners traveling to the country should check their latest Embassy travel advisory warnings and register their arrival and departure information.

Political Posturing in Full Swing

The second issue of concern relates to the general political environment. While the threat of a presidential coup against the government has receded dramatically in recent months, opposition politicians appear to be using every opportunity in the legislature to take control and impede normal government and legislative functions. The concept of a “loyal opposition” has never taken deep root in this country and with a poorly developed party system and one that operates more on personal allegiances and expediency there is no end in site any time soon. Shortly prior to the end of the last congressional session, opposition senators used the absence of one pro-government senator who was overseas on medical leave to take control of the senate – and more importantly the senate committees that are responsible for oversighting the largesse of government. Read any local newspaper and the whole legislature appears to be walking on quicksand, as there are almost daily reports of changes in the line-up of pro-government and pro-opposition forces. The answer to all of this will have to wait until congress resumes in late July. What is already clear however is that the opposition appears unable to articulate any clear alternative economic strategy beyond its claim that “it is acting for the good of the country.” The fact that there is already talk of another film idol being the opposition’s choice for presidential candidate in 2004 does nothing to inspire the confidence of the business community. He just might win.

President Arroyo is already committed to running in 2004 (was there ever any doubt?) and increasingly her administration appears to be getting into election mode even though the main event is still two years away.

The other name being bandied about by the opposition is that of Senator Panfilo Lacson. Lacson is a former chief of the Philippines National Police and a “hero” or “devil” depending on which side of the political fence to which you are listening. Certainly the government is doing its best at a hatchet job on him and with recent reports of documented but very substantial undisclosed assets – in the United States as well as in the Philippines; he might yet have a case to answer. All of this may go a long way to explain why the opposition is playing hardball – in an effort to strike a deal that would protect its own. In the realm of local politics – who would know for sure?

A Shot or Three in the Foot

If the opposition is causing discomfort for the government then it certainly shows. In some ways the administration is its own worst enemy and has a remarkable penchant for shooting itself in the foot without any help from anybody. This is the third major concern. The charitable view is that this is an administration of technocrats who want to be left alone to manage and reform the economy and who lack skills in - and have little time for - the whirlwind of local politics. Nevertheless caught in a whirlwind they are, and at times it seems they are overwhelmed by the centrifugal forces (they are the ones that fling twirling objects outwards) being generated. By now the lessons should have been learned.

The latest storm in a teacup occurred only this last week in the unceremonious departure of vice president, Teofisto Guingona, from his post as head of the Department of Foreign Affairs. Guingona, a former senator and staunch nationalist was among those who voted for the closure of the U.S. based in the Philippines back in the early nineties and there are some who believe that the U.S. may have had a hand in organizing his departure from MFA this time around. Certainly he and the President appeared to have quite different views on the stationing of American forces in the Philippines. Just who picks up the plum job at the Foreign Ministry (he goes on July 15 and only after his resignation was prematurely announced by Malacañang ahead of any resignation statement from him) will be a good indication of the political winds.

With the recent cabinet reshuffle seemingly about to be completed, the President now believes she has in hand the win or lose team that will carry the day for her in 2004. All eyes will be watching out for whether this latest team can learn from the Brazilians, play together in unison and score some much needed goals for the country.