PGMA's Speech during the Opening of the First Summit of the Philippine Political Parties

Centennal Hall, Manila Hotel, (03 May 2002)
AS we come together today, of course, it is natural to remember that more than a year ago, the nation had to deal with the leadership crisis. Today, in contrast, for the first time in our history, most of the major political parties and the regional parties formally convene to find commonalities on our nation's future, our people's progress and the fate of Philippine democracy.

Because this is a meeting of political leaders, I would like to share with you something that I read about a great political leader in contemporary history - and that is my classmate, Bill Clinton. I was reading David Albersam's new book on the presidency of Clinton. This study of the Clinton presidency brought me some comfort. Because according to this study, in his first year at the White House, Bill Clinton was under attack from all sides. His political enemies made much hay; for instance, from the White Water controversies. And he had to change his stand on many things many times, because the first time he talked was different from what the public wanted. And then when he listened to the public and changed his position, he was attacked for being very weak. He even lost control of both Houses of Congress in the mid-term elections. But a year before he was due for reelection - in fact, his popularity dropped to its lowest point in his career - but he just kept working and moving forward and plodding, focusing like a laser beam on containing the budget deficit, bringing down inflation and the interest rates, even though in the beginning, the people would say that they only read about the inflation rate going down and the interest rate going down in the papers, but they didn't really feel it. And he also put together a crack economic team in his Cabinet. He worked tirelessly to restore fiscal discipline and economic reforms. In fact, once in a phone conversation, with his nemesis, Gingrich, Clinton compared himself to a rubber clown doll that bounced up each time it was hit, bouncing back more quickly the harder it was hit.

And so, in the last year of his first term, his economic policies began to bear fruit. The economy rebounded strongly, a long period of uninterrupted expansion began, and he was reelected to the presidency by a landslide. That is the story of Bill Clinton that inspires me.

But on this platform, I would like to greet other people whose stories have inspired me. We have former President Fidel Ramos whose story inspires me. Because I remember that there were also difficult moments in his presidency, but he kept on with his economic reforms.

I would like to greet the other leaders of the political parties whose parties also gave us very inspiring stories of their leaders' careers. I would like to greet former Vice President Doy Laurel of the Nacionalista Party, as Joe says, a representative of the oldest party in the Philippines. Doy Laurel's father also had his great difficulties during his time. But it was, in fact, my father, Diosdado Macapagal, who told me one thing about the late President Jose Laurel; he never lost his focus on the fundamentals. And that is where my father learned what he called fundamental thinking what we now call strategic thinking.

And, of course, I would lik to greet the leaders of the Liberal Party, Butch Abad and Lito Atienza, who is our host also today as Mayor of Manila. The Liberal Party was, of course, the party that my father started with and ended with. And as President, he also had his difficult moments but I was watching on television a profile of my father. And I'm so happy that after all the difficult moments that he suffered during his presidency, he is remembered with fondness and great respect because he stuck to his principles no matter how difficult the going was.

I would like to greet former Congressman Frisco San Juan, the President of the Nacionalist People's Coalition, and I would like, through him, to thank the NPC because truly during these past several - more than one year of my administration, the NPC has been truly instrumental in helping us pass the most important legislation that have allowed our economy to survive the world crisis that he suffered for last year.

And as we go and remember the history of the different political parties represented here in the platform and represented in the various tables that I see around us today, I go back again to the difficulties of Clinton as recounted with great detail in that book. And one of the themes of that book is that, what- ever issues might have been raised against Clinton's character, no one ever accused him of indolence, of laziness. On the contrary, even his fiercest rivals credited him for persistence. In the last analysis, it was his persistence, it was his plodding that mattered. The record of the Clinton presidency has been inspiring for me. Because like Clinton, the first year of my administration was a period of severe tests. Like Clinton, I inherited a massive budgetary deficit. From day one, I committed myself to taming the fiscal monster. And everybody thought we wouldn't make it. The IMF thought we couldn't make it. Never mind the opposition or the other groups opposing us, keeping down public expenditures is never popular. The political costs are immense in the short term, the positive impact on our people's lives will only be felt farther down the road. Because the natural thing is, oh, the economy is down, spend more. That's the fourth year high school economics, not as simple as that, and that's what Clinton showed. At a time when the economy was threatening to go into recession, … ..spend more instead to tame the deficit. Instead of pump priming was done not by the government but the private sector. Because it responded to the tame budget, it responded to the reduction in the interest rates. And that is what we are seeking to do today.

I am confident that in the area of fiscal discipline, we are right on track. Because in the case of Clinton, the positive results, the reduction of interest rates, the stabilization of whatever had to be stabilized among the macro-economic fundamentals only occurred in his third year. In our economy, the results are showing earlier then they did in Clinton's story. You saw the stock market yesterday? You saw our peso? The dollar yesterday was R50.20. Our inflation and our interest rates are at historic lows.

As I said over the last few days, the peso has gained significantly against the dollar despite low interest rates. Usually, when there is an economic problem, you need to raise interest rates to stabilize the currency. Remember what was happening in January of the year 2001, or December of year 2000? They had to raise the interest rates sky high because the dollar was running away, and conversely, if you want to reduce interest rates in difficult times, you would need to let the currency go. Many times as an economist, I've come across a debate among economists. What shall we take care of? Shall we reduce interest rates and let the currency devalue, or shall we strengthen the currency and let the interest rates go up? But today, both the peso and the interest rates are stable, and that means, economic fundamentals are strong.

This is probably one of the reasons why the international credit agencies upgraded our rating from negative to stable. We were working to get this in July this year, but we got this rating one after the other from November to January, November 2001 to January 2002. The last holdout, Standard and Poor, gave us our positive rating this year. And maybe it is not too premature to announce some possible good news about Calpers, the California pension fund of the teachers, who pulled out of the stock market in the Philippines because they felt that we were not fundamentally stable, because they said that we… and lumping us with other Asian countries. But Asian countries don't take care of workers' rights and are politically unstable. Well, after they analyzed and reevaluated the Philippine situation and restudied our labor laws, labor rules and the performance of our stock market and our economic fundamentals, the managing director is prepared to recommend to the Calpers' board that they come back to the Philippine stock market. And they haven't come back yet, but the stock market has begun to show signs of strong recovery adjudged by Bloomberg last January as the best performing market in the world. This is the first time the Philippine stock market ever enjoyed the distinction of being named the best performing stock market in the world.

How do these inflation rates and interest rates translate to the poor? Well, I have been talking to you about the price of rice. When I became president, the price of regular rice was R15.00. Today, it's still R16.00. That means the price of rice has stabilized.

I came from Cagayan Valley where we have a very big source of palay. The deputy head of the National Administration told me that the farmers wanted to give me a message. They are thanking the administration because the selling rice of palay… if going up, the farmers' price is going up. The consumers' price stable. That means we have reduced the cost in-between. So therefore, good macroeconomic policy also translates into direct benefits for the poor farmer and the ordinary consumer. But I want to share these achievements with all the political parties. And I would like to, therefore, especially recognize the leaders of the various political parties from Congress and the Senate. We have here Kiko Pangilinan, our deputy speaker Ningning Espinosa, Raul Gonzales, Gery Salapuddin, and Boyet Gonzales, - because through them and all the members of Congress and the Senate, notwithstanding the pervasiveness of confrontational politics during this last year of our administration - the first year, we managed to pass the Power Sector Reform Act, the Anti-Money Laundering Act on the basis of what President Ramos calls not bipartisan cooperation, but rather multipartisan, or better still non-partisan cooperation. I hope this cooperation up to this summit will spread even to the representatives of the various parties that are outside Congress. That's why I specifically want to also give my greetings to former Senate President Manong Ernie Maceda.

Two days ago, a television station ran a poll on this political summit, and this morning, another television station ran a poll on this political summit. In both polls that I saw on T.V., the overwhelming number of respondents was of the opinion that the exercise will amount to nothing. It won't mean anything for the poor. The opinions of television respondents are understandable, because many of our people, especially among the youth, have become disillusioned with the political class… Oh, I saw Sonny Osmeña.. I'd like to greet him too. But no one can better arrest the disillusionment that those respondents feel than those of us who are here in this poll today. Thus, I Look forward to the final communiqué that will be put out.

I call on everyone, above else, to reaffirm our common commitment to constitutional democracy, while democratic practice connotes constant debate on all issues affecting the public interest, this must be differentiated from constant combat that first puts the life of the constitutional order on the line at every turn.

In a living democracy, no group has the right to hold policy making hostage by threatening to overthrow the executive on every issue of policy disagreement. It is time to enrich our democratic culture by engaging in political debate driven by good faith and guided by the best intentions for our nation.

Instead of perceiving electoral competition as an act of war, let us agree to treat such competition as a cooperative process to win the future. Lately, a number of political parties have resumed advocacy of charter change. They are well within their rights to do so. Let me take this opportunity to emphasize now what I believe are prerequisites to constitutional change. Because if we do not recognize these prerequisites, as the discussion on charter change moves forward, there might be a tendency to look at alternatives removed from the realities on the ground.

For instance, the proposed move towards federalism, this should take careful account of economic viability. Federalism is not merely a political form. It will have substantive implications on the political economy of the nation. Thus, before we can go to federalism, we must address the issue of economic viability and the preparedness of component states. Otherwise, federalism could lead to the further underdevelopment of the less developed regions of the country, therefore, if federalism is to be the path, then there should be transitionsto be evaluated at every milestone.

First, from this present situation where we are, the next transition should be towards economic zones, then towards autonomy and only then to statehood. And there must be success of the economic zones, success of the economy before we can be confident that statehood will be successful.

As for the other proposed shift in the form of government, before that can happen viably, there must be meaningful political reforms, such as a law on political parties. The rehabilitation of our societal organizations and mass movements and the cleaning up of our electoral processes.

These political reforms were what I was referring to when I said at EDSA on the day I became president last year that - and let me repeat what I said - we must change the character of our politics in order to create a fertile ground for true reforms. Our politics of personality and patronage must give way to a new politics of party programs and process of dialogue with the people.

Political parties exist to catalyze opinion and influence the decisions of government. This is a challenge facing our electoral parties which must evolve mechanisms of transparency and accountability to the public. The political parties have that responsibility of keeping their constituencies properly informed of the issues, where our parties have the responsibility of raising the quality of public debate so that our people may make the best choices. It might help to study further existing proposals to subsidize the political parties. I believe that many of the mature democracies, some of which have their members of the diplomatic corps represented here today - and I greet them too, - that is the system that might help diminish reliance on dirty money and on power brokers. It will help reduce the corruption that infects our electoral process. It will assist the parties as they help to clarify public opinion of the issues and offer reasonable options for our nation's future.

As agents of the democratic order, the political parties should find cause, common cause on the need to enhance the credibility of our electoral process. After each election, losing candidates routinely claim failure of the electoral system. Instead of doing this, let us join hands to ensure the integrity of our elections by modernizing the process. It might seem odd at first glance that the political parties should take the lead in advancing change especially charter change. The process should be as non partisan as possible, effort must be invested in involving a larger universe of people's organizations, professional organizations and other civic groups. Blossoming democratic institutions are gaining in legitimacy and effectiveness. Over the decades, the democratic system has been fortified as political dynasties have steadily diminished, as the media has become more militant and socially oriented, and as the globalized realm has enlarged the political and economic options of society. It is in this milieu that I wish for the full success of the endeavors in this political summit.

Once more, I salute all of those who have joined this gathering. This summit of political parties offers a unique opportunity for us to reinvent the conduct of democratic politics so that it is guided, first and foremost, by the national interest. And so, let us, together, end the episode of turbulence and threats. Let us, together, demonstrate our common commitment to good governance and reasoned public debate. Let us provide our skeptical constituents the best from this conference so that we may shore up once again optimism in the possibility of a productive future for our people. And once again, I thank Joe for conceptualizing this summit. And I thank the various leaders or the various political parties who, whether or not they like Joe as a person, have come to join us because they believe in the idea, because after all, in the new politics, it is not the singer; it is the song that matters. Thank you and good luck to all of you.

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