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Southeast Asian Affairs 2014

Renata CRuz De CastRo is a Professor in the International Studies Department at the De La Salle University and the holder of the Charles Lui Keung Professorial Chair in China Studies.

The PhiliPPines in 2013Popular President Confronts Daunting Challenges

Renato Cruz De Castro

In early 2012, President Aquino was dubbed an absentee president by former President Gloria Macapagal Arroyo who denounced his “nobody’s at home” attitude when he convened his cabinet only four times in 2011.1 Later that year, two newspaper columnists characterized the president as a “do-nothing chief executive” who is “not working hard enough to solve the country’s problems”.2 However, the Social Weather Stations (SWS)’ September 2012 survey signified that the majority of Filipinos saw their president in a different light. The SWS’ third quarter survey showed that 77 per cent of Filipinos were satisfied with the performance of Benigno Simeon Aquino III as president of the Philippines.3 The survey noted President Aquino’s record-high net satisfaction rating of 77 per cent which indicated a 25 per cent increase from his rating of 47 per cent in May 2012. Thus far, it is the highest recorded net satisfaction rating obtained by any of the post-1986 Philippine presidents. The following year, the SWS and Pulse Asia surveys showed that President Aquino enjoyed a high performance rating of 72 per cent which showed that, almost three years into his term, public satisfaction for the president remained at unprecedented highs.4

In early 2013, President Aquino’s popularity was at its peak as the Philippine economy expanded and many analysts attributed this to his relentless anti-corruption campaign. The Aquino Administration’s campaign against corruption in government, which led to the impeachment of the chief justice of

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the Philippine Supreme Court, generated political capital for the state and the economy. Thus, the Philippines emerged as a possible tiger economy in Asia as its economy grew by 7.8 per cent in the first quarter of 2013, and was expected to grow by an average of 6 per cent in the same year. However, in the latter part of 2013, the Aquino Administration was jolted by a series of unexpected challenging events.

Early in August, a rescue of a kidnap victim by a law-enforcement agency led to an investigation of several Filipino legislators who were allegedly involved in the US$200 million pork barrel scandal. Consequently, President Aquino was accused of targeting opposition legislators when the government filed plunder cases against them. In September, Muslim insurgents from the Moro National Liberation Front (MNLF) stormed the southern city of Zamboanga. This crisis exposed the government’s weakness in not being able to provide security to its citizens and institute a durable peace in Mindanao. In mid-November, Typhoon Haiyan ravaged the central part of the Philippines and destroyed the provincial capital city of Tacloban. The initial government response was slow but after widespread criticism, President Aquino directed all agencies and departments to develop a mechanism to coordinate the entire country’s disaster relief operations with the international community to speed up relief and rehabilitation efforts for victims of the typhoon. As the year ended, political analysts and observers noted that the pork barrel scam would dominate the political scene till the next presidential election in 2016, and because of the government’s slow response to the effects of the typhoon, this might adversely affect President Aquino’s popularity and ability to push his reform agenda in the last days of his term.

The Anti-Corruption Campaign Opens a Pandora BoxDuring his inauguration in July 2010, President Aquino had censured the past administration for corruption, political impunity and indifference to the plight of ordinary Filipinos. He formed a Truth Commission to investigate ex-President Arroyo for mismanagement and oppressive policies; fired her so-called “midnight appointees”; and replaced her designated officials in the military and in the Office of the Ombudsman. The following year, President Aquino even had his predecessor arrested without bail on charges of electoral fraud.

In 2012, President Aquino pushed his anti-corruption campaign further when he took the unprecedented move of impeaching the chief justice of the Supreme Court of the Philippines. In January 2012, the Philippine Senate tried the chief justice after President Aquino’s Liberal Party and its allies in the

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House of Representatives impeached him in December 2011 for showing partiality in his rulings on cases against the then President Arroyo. After six months of hearing and deliberation, the senator judges determined that the chief justice did not declare his personal savings of US$2.4 million in his Statement of Assets and Liabilities and Net Worth and convicted him on a vote of twenty for guilty and three for acquittal. His conviction, along with the ongoing prosecution of former President Arroyo, boosted the administration’s anti-corruption campaign in the same way that his acquittal would have rendered President Aquino a political lame duck.

In mid-2013, the National Bureau of Investigation (NBI) freed an alleged kidnap victim from his former employer, prominent businesswoman Mrs Janet Lim Napoles. The kidnap victim revealed to the NBI and the Department of Justice (DOJ) that Mrs Napoles had amassed a huge fortune by diverting millions of dollars from several legislators’ pork barrel funds, otherwise called Priority Development Assistance Fund (PDAF), to non-existent Non-Governmental Organizations (NGOs) and fictitious livelihood projects. In principle, the legislators were meant to use the PDAF for infrastructure or livelihood projects that benefit their constituencies. The kidnap victim, however, claimed that Mrs Napoles created fake NGOs to receive funds from the legislators and then diverted much of the money back to the law-makers.

Immediately, the Philippine media branded the US$220 million corruption scandal the “mother of all scam”.5 Using social media such as Facebook and Twitter to disseminate reports and commentary on the PDAF scam, urban middle-class Filipinos were able to foster long-term discussions of the issue and organize huge public demonstrations that surpassed the subsequent protest actions held by traditional left-wing organizations. Consequently, this revelation outraged several urban middle-class Filipinos as an estimated 80,000 people took to the streets of Metro Manila on 26 August on National Heroes Day to demand the immediate prosecution of legislators who had allegedly diverted PDAF funds to their own pockets. They also called for the abolition of the PDAF. Several other public rallies were held all over the country in solidarity with the 26 August demonstration.

This nation-wide public indignation against the abuse of the PDAF reflected the growing social anger against the perceived impunity of corrupt Filipino legislators and other public officials. This anger was fuelled by the Filipino middle-class’ frustration with corruption. This same sentiment helped Mr Aquino to win the presidency in 2010. However, many Filipinos expected him to make good on his campaign promise to crack down on corruption in high places in government. Observers and analysts noted that the speed with which the

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misuse of the PDAF was disseminated and the way it was taken up and spread on social media sites reflected how the nation’s tolerant attitude to public corruption had been changed by President Aquino’s anti-corruption campaign. However, it also generated a massive public display of anger and outrage that openly questioned the effectiveness of the Aquino Administration’s reform agenda and demanded more drastic measures to punish public officials who abused the system. Some of the protesters also urged the abolition of President Aquino’s discretionary funds and removal of the government’s discretionary funding entirely by subjecting it to a national-level budget scrutiny.6 Fuelled by the pork barrel scandal, this nation-wide display of public indignation was the most serious political challenge that confronted the Aquino Administration since it came to office in mid-2010.

Faced by his most serious political challenge, President Aquino vowed to prosecute legislators and other government officials implicated in the PDAF scam. In late August, President Aquino ordered the Philippine National Police (PNP) to arrest Mrs Napoles, who denied any wrong-doing and went into hiding. Eventually, she personally surrendered to President Aquino and was immediately brought to the headquarters of the PNP. Government prosecutors took control of her office and confiscated all the documents related to Mrs Napoles’ business activities in an effort to uncover the extent of the PDAF scam. President Aquino also formed the Inter-Agency Anti-Graft Coordinating Council to gather evidence and file charges against the alleged culprits. In early September, the DOJ filed complaints against three senators, two former members of the House of Representatives, Mrs Napoles, and 30 other co-accused in the PDAF scam. More significantly, the President also pledged to abolish the pork barrel system.

In November, the Philippine Supreme Court declared the PDAF to be unconstitutional. Prior to the Supreme Court’s decision, legislators were entitled to fixed and equal budgetary allocations for their pet projects under the PDAF. Each law-maker had wide discretion in identifying projects for their supporters, which was done after the national budget was passed. The Supreme Court declared this practice unconstitutional. Now, members of Congress would have to identify and propose their pet projects before and during the actual budgetary process. Thus, they had to convince the executive departments to include their projects in their agencies’ budgets before submitting them for legislation. This, in effect, strengthened President Aquino’s control over the national budget. Members of Congress are now dependent on the chief executive for the inclusion of their public works and livelihood projects in the national budget. These projects are aimed to reward their constituents and supporters, which in turn, will help the legislators in securing their re-election in 2016.

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Critics, however, are skeptical whether President Aquino’s efforts to crack down on government corruption can be sustained. Many observers noted that many of the high-profile legislators charged with plunder are political opponents of the administration. Thus, they challenged the President to file charges against his party mates and allies who were also implicated in the PDAF scam. They also argued that the PDAF’s abolition will not ensure the reduction of corruption in high places since legislators will seek other means to steal public resources to secure their re-elections. Furthermore, they claimed that eliminating corruption requires the creation of a more egalitarian Filipino society that will break the cycle of poverty and clientelism that breeds political patronage and corruption.7

Mother nature Ravages the economyIn 2012, the Aquino Administration embarked on massive public spending to stimulate economic growth and rectify the deplorable state of Philippine infrastructure. This hike in government spending coincided with the steady inflow of remittances from overseas Filipino workers (OFWs) amounting to US$20 billion, and the rapid expansion of Business-Process Outsourcing (BPO) companies in the country. As a result, the Philippine economy registered a 5.9 per cent growth from April to June 2012 reflecting strong domestic demand, robust fiscal spending and continuous remittances from abroad, and record low interest rates.8 These developments led a number of economists and analysts to conclude that the Philippines was no longer the perennial sick man of Asia and would soon be joining the tiger economies of East Asia.

An October 2012 ADB report, however, underscores that job generation and poverty reduction remain the key challenges for local economic managers.9 The current economic boom is driven by private consumption fuelled by increased government spending, OFW remittances, and BPO operations. To sustain this momentum, the Philippines needs to attract substantial foreign direct investments (FDI). The Economic Intelligence Unit (EIU)’s mid-year country forecast warns that further and sustained growth of the Philippine economy is hampered by structural constraints on the flow of FDI such as the legal limits on foreign ownership of land; constitutional restrictions on foreign investments in certain sectors such as public utilities; the Philippine Supreme Court’s strict observance of these constitutional limitations; foreign investment problems in the mining sector; and the lack of infrastructure that hinders efficient business operations locally.10

Despite this dire forecast for the Philippine economy in 2013, economic growth exceeded the government’s projection of 3.9 per cent as the Gross Domestic

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Product (GDP) expanded by 6.6 per cent in the first quarter of the year and the country became one of the strongest performing economies in 2013. Given its rosy performance in the early part of 2013, the United Nations Economic and Social Survey of Asia projected that the Philippines could outpace the economic growth of Malaysia (expected at 5 per cent), Thailand (expected at 5.4 per cent), and Singapore (projected at 3 per cent).11 This unexpected development was attributed to the government’s expansionary monetary policy which cushioned the economy from a weak external environment; infusion of Php400 (estimated US$9.9 billion) for Public-Private partnerships for building and repairs of roads, ports, bridges, and airports; and growth in the service sector that generated robust domestic consumption.12

The first quarter boom in the economy enabled the Banko Sentral ang Pilipinas (Central Bank of the Philippines or BSP) to sell the first peso- denominated global bonds. This also caused the stock exchange to hit historic heights. Boosted by fresh investors’ confidence, the demand for treasury bills went up and continued to rise as the Aquino Administration was able to pass new revenue-enhancing “sin-tax” law on tobacco and alcohol. The only fly in the ointment was the peso’s appreciation which adversely affected the country’s exports, threatened the country’s booming BPO industry and caused hardships to Filipino families receiving remittances from OFWs. This pushed the BSP to prevent the peso from breaking into the Php40 = US$1 rate as this rate would pose a great threat for exporters, OFW workers and their families, and the BPO industry.13

In the first half of the year, the economy experienced a 7.6 per cent growth driven by election spending, strong investment in construction and the expansion of the service sector which accounted for half of the country’s GDP growth.14 Consequently, after years of economic growth amidst a gloomy global economy, Fitch Service Rating upgraded its outlook on the Philippines from BB+ to BBB. This is the first time that the country attained an investment grade rating. Fitch said that the country’s strong sovereign balance sheet, resilient economy, improved fiscal management and better governance accounted for the upgrade to its investment rating. In May, the country received its second investment ratings boost when Standard and Poor (S&P)’s upgraded the Philippines from BB+ to BBB- for the Aquino Administration’s good governance initiatives. Then, in October, Moody’s Investors Service raised its rating for the Philippines from sovereign debt to investment grade as the country’s economy grew by 7.5 per cent in the third quarter of 2013. This was the same growth rate as China in the same period, and made the Philippines among the fastest

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growing emerging markets. Moody’s raised the Philippines’ rating to Baa3 from Ba1. This, in effect, gave the country investment grade ratings from all three major rating firms.

The following month, however, a category-5 typhoon ravaged the central part of the Philippines with maximum winds of 150 miles per hour. Typhoon Haiyan killed more than 6,000 people and left more than three million Filipinos without homes in five major islands — Leyte, Samar, Panay, Cebu, and Palawan. The typhoon destroyed nearly 550,000 residential houses and devastated several farmlands and fishponds in these islands, which accounts for about 12 per cent of the country’s gross domestic product.15 Consequently, government economic planners observed that the destruction and damages brought by the typhoon to farmlands, residential areas and infrastructures could adversely affect the country’s economic growth.

The aftermath of the typhoon also raised questions regarding the Aquino Administration’s preparedness and capability to deal with major natural calamities. In the most affected islands of Samar and Leyte, the first humanitarian and relief efforts were conducted by international relief agencies and foreign government such as the United States, Australia, Israel, and Japan, and not by the Philippine government.16 The destruction of an entire Philippine city (Tacloban) and the extensive damages brought by this category-5 typhoon to the five major islands in the central Philippines tested the Armed Forces of the Philippines’ (AFP’s) limited capacity for airlift and sea transport in an archipelagic environ-ment. It was reported that a few days after the typhoon hit the country, the AFP in particular and the Philippine government in general lacked resilient all-weather communication facilities such as satellite phones and weather-safe radios. The New York Times reported that the Philippine Air Forces was not able to deploy its aging fleet of C-130s heavy transport planes during the relief operations as the number of cargo planes had dwindled down to three aircraft because of lack of spare parts and technical maintenance. With only three C-130 transports and 44 helicopters (only 28 operational), Typhoon Haiyan exposed the government’s and its military’s limited capacity for Humanitarian and Assistance Relief operations.

In mid-December, President Aquino announced that Typhoon Haiyan caused nearly US$13 billion in damages. He also admitted that rehabilitating the typhoon affected area will take up to four years, with the government spending US$4.15 billion in rebuilding residential housing, and another US$640 million in rehabilitating and repairing damaged or destroyed infrastructures such as transmission lines, roads, bridges, and public buildings.17 An important

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challenge to President Aquino’s popularity in the last two-and-a-half years of his six-year term will be how and where typhoon-related reconstruction spending is utilized. The government announced that it has allocated US$3.3 billion for reconstruction of areas badly damaged by the typhoon. How these public funds are used and how long the implementation programme takes will determine if President Aquino can regain some of the political capital he lost because of his administration’s alleged mismanagement of the relief and humanitarian operations in first few days after the storm.18

The Peace Process encounters Road humps In early 2012, government negotiators expressed optimism that a peace agree-ment with the Moro Islamic Liberation Front (MILF) is possible within President Aquino’s term. Speaking in a forum organized by the Japan International Cooperation Agency, Presidential Adviser on the Peace Process, Teresita Quintos-Deles, admitted that despite daunting disagreements during the negotiations, the ceasefire between the MILF and the AFP still held. In April 2012, both sides signed the “GRP (Government of the Republic of the Philippines)-MILF Decision Points on Principles” in Kuala Lumpur that recognizes Bangsamoro as a secular political unit within the Philippines located within its territory and subject to its sovereignty as a state.19 Then, during the 32nd round of the Exploratory Talks on the Peace Process in Kuala Lumpur, in early October 2012, the two parties agreed on the framework agreement for the creation of a Bangsamoro entity to replace the Autonomous Region of Muslim Mindanao composed of five Muslim dominated provinces. The Philippine government and MILF negotiators were one in saying that the peace process is now on “the home stretch and the smell of success is reinforced every day”.20

In 2013, however, the peace process encountered two road humps. On 11 February, 200 Filipino-Muslims insurgents crossed the Sulu Sea and landed on the coast of the Malaysian state of Sabah. Calling themselves the Royal Army of the Sultanate of Sulu, the insurgents occupied sleepy Tanduo Village in the district of Lahad Datu. They then declared that they had come to Sabah to enforce the Sultanate of Jolo’s claim on the Malaysian state. At the onset of the crisis, Malaysian security forces thought that the insurgents were Islamic militants from Mindanao. From Manila, however, Mr Jamalul Kiram declared that he was the legitimate sultan of Jolo, that the insurgents were his soldiers and that they had come to reclaim Sabah for the sultanate. After Mr Kiram’s announcement, the Malaysian army and police began their operation against the armed invaders from

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the Philippines. Malaysian army and police units deployed their forces in and around the village and gave the insurgents an ultimatum to leave the island.

On 1 March, however, armed clashes erupted when two Malaysian police officers were shot dead while Malaysian forces killed seventeen invaders even before the ultimatum expired. This initial skirmish forced the insurgents into the surrounding areas around Tanduo.21 Malaysian security forces then launched a full-scale assault on the village against the insurgents. After a clearing operation that lasted for days, Kuala Lumpur announced that its forces had regained control of the village and surrounding areas, while the surviving insurgents had either escaped back to Mindanao or merged into the various Filipino communities in Sabah.

The incident shocked and embarrassed the Aquino Administration as it promptly denied any involvement in the incursion. Although Manila has never publicly denounced its five-decade long claim to Sabah, the Aquino Administration conveniently allowed the claim to remain dormant in the light of Malaysia’s important role in the peace process between the Philippine government and the MILF. Both Manila and Kuala Lumpur have a common interest in ending the secessionist rebellion in the Southern Philippines. This is because an outbreak of another major conflict in Mindanao will spill over into the neighbouring Malaysian state of Sabah. However, the invasion of Sabah by some followers of Mr Kiram revived in the Philippines the issue of its claim to this resource-rich Malaysian state. The revival of this claim could cause deterioration in Philippine-Malaysian relations at a time when Kuala Lumpur was acting as the main peace-broker between the government of the Philippines and the MILF.22

The Aquino Administration suspected that the incursion into Sabah by the Royal Army of the Sultan was a plot to undermine the peace process between the government and the MILF. This suspicion stems from the fact that many of the insurgents who invaded Sabah are known members and commanders of another Muslim secessionist group, the MNLF. In 1998, the Philippine government and the MNLF signed a peace agreement. However, many MNLF members were never disarmed. An MNLF spokesperson during the Sabah invasion expressed support for the Sultan’s claim while denying that his group had had a hand in the incident. Suspiciously, the MNLF chairman Nur Misuari complained that the peace agreement between the Aquino Administration and the MILF had marginalized his secessionist group.23

The Aquino Administration’s suspicion regarding the role and motives of the MNLF in the Sabah Crisis was proven right when about 250 MNLF insurgents stormed the City of Zamboanga in mid-September. Prior to the

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incident, MNLF members under the Misuari wing of the movement declared their independence from the Philippines while citing their indignation over their exclusion from the ongoing peace-talk between the government and the MILF. Mr Misuari argued that the peace process between the Aquino Administration and the MILF had superseded the 1998 peace agreement which provided for: (a) cessation of the MNLF’s rebellion against the Philippine government; and (b) creation of the Autonomous Region of Muslim Mindanao, which was made up of the predominantly Muslim provinces of Basilan, Tawi-Tawi, Lanao del Sur, Maguindanao and Sulu.

A dangerous stand-off began as the Aquino Administration deployed 3,000 marines, soldiers, and policemen from the Special Action Force of the PNP in the city. The MNLF responded by taking 140 residents as hostages. The government then cordoned off the entire city, declared a no fly zone and imposed a curfew on the residents. After giving the MNLF an ultimatum, government forces launched a massive and coordinated counter-offensive against the insurgents who occupied portions of the Christian-majority city of Zamboanga. Government forces used artillery, helicopters and attack planes to pound rebel strongholds while ground troops and navy ships cut off land and air routes around the city. This effectively prevented 200 MNLF forces from escaping to the Zamboanga Peninsula and Sulu Archipelago. The fighting lasted for more than two weeks and resulted in the death of more than 200 MNLF insurgents, soldiers, policemen, and civilians; destruction of 1,000 buildings and residential houses; and displacement of nearly 82,000 civilians from their homes. The Aquino Administration was able to prevent the rebellion from spreading to other parts of Mindanao. However, the armed crisis revealed the fragility of the security situation in Mindanao, challenged the government’s capacity to respond to security and humanitarian crises, and exposed the vulnerability of the peace initiative to those who have interest in undermining the process for whatever reasons.24

Balancing an Assertive China At the start of his term, President Aquino publicly admitted his disinterest in foreign affairs and said that urgent domestic problems took precedence over diplomatic functions and foreign trips. However, the tense two-month Scarborough Shoal stand-off between Philippine and Chinese civilian vessels forced President Aquino to pay more attention to defense and foreign policy concerns. The stand-off began in the morning of 10 April when the PN frigate, the BRP Gregoria Del Pilar, confirmed the presence of eight Chinese fishing vessels at the shoal.

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In mid-June 2012, the stand-off in the Scarborough Shoal ended. China and the Philippines withdrew their civilian vessels on the pretext of the onset of the typhoon season.25

After the easing of tension at the Scarborough Shoal, China began consolidating its control over the area. Chinese maritime surveillance vessels constructed a chain barrier across the mouth of the shoal to block Philippine access to it. China also deployed the vessels to protect the fleet of Chinese fishing boats operating deep into the Philippines EEZ or Exclusive Economic Zone. In effect, China’s exercised its de facto occupation of the Scarborough Shoal. The Aquino Administration, however, was not cowed into accepting China’s fait accompli.

In January 2013, the Philippines confronted Chinese coercive diplomacy head on by filing a statement of claim against China in the Arbitral Tribunal of the United Nations Convention on the Law of the Sea. In its Notification and Statement of Claim to the Arbitral Tribunal, the Philippines laid its claims to the Spratly Islands, Scarborough Shoal, Mischief Reef, and other land features within its 200-mile EEZ based on the provisions of the United Nations Convention on the Law of the Sea (UNCLOS) specifically to its rights to a Territorial Sea and Contiguous Zone under Part II, to an EEZ under Part V, and to a Continental Shelf under Part VI.26

In its statement of claim, the Philippines made it clear that it did not seek arbitration over which party had sovereignty over the islands claimed by both the Philippines and China. Rather, it merely requested the Arbitral Tribunal to issue an opinion on the following issues: (a) whether China’s maritime claim in the South China Sea based on its so-called nine-dash line claim is valid or contrary to UNCLOS; and (b) whether Scarborough Shoal, Johnson Reef, Cuarteron Reef, and Fiery Reef which are submerged features below sea level at high tide are islands or rocks under Article 121 (3) of the Convention. It also petitioned the Tribunal to declare that the Philippines is entitled to a 12-mile Territorial Sea, a 200-mile EEZ, and a Continental shelf under Parts II, V, and VI of UNCLOS, and that China has unlawfully prevented the Philippines from exercising its right to exploit resources in its EEZ, and its rights to navigation within and beyond the 200-mile of the Philippines’ archipelagic baselines.27

The filing of its Notification and Statement of Claim to the arbitral tribunal of the UNCLOS aims to show that the Philippines’ ownership of its six islands in the Spratlys and other land features within its legitimate maritime jurisdiction is firmly grounded on international law specifically UNCLOS. It is to request the arbitral tribunal as well as to require China to “bring its domestic legislation into conformity with its obligations under the UNCLOS and for it to stop any

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activities that violate the rights of the Philippines in its maritime domain in the ‘West Philippine Sea’ (South China Sea)”.28

As expected, China refused to participate in the international arbitration and openly expressed its opposition to the Philippines’ filing of a case to the arbitrage tribunal. On 20 February 2013, the Chinese ambassador in Manila returned the notice of arbitration to the Department of Foreign Affairs. At the same time, Mr Hong Lei, Chinese foreign ministry spokesperson in Beijing branded the filing as “factually flawed” and accused Manila of violating the non-binding 2001 Declaration of Conduct of the Parties in the South China Sea which provides for ASEAN and China to settle their maritime disputes among themselves.29 The foreign ministry announcement of its refusal to participate in the international arbitration came a week after the Chinese media announced that three Chinese frigates would patrol and conduct drilling operations in the South China Sea after passing through the East China Sea and the Bashi Strait. The two-month standoff at Scarborough Shoal, China’s refusal to participate in the arbitral tribunal, and this live-fire exercise are telling indications of China’s position regarding the dispute — that is, sovereignty over the South China Sea is non-negotiable. This stance is unlikely to change, as to do so would be politically compromising to China’s long-held logic of indivisible territorial sovereignty.30

The tense two-month Scarborough Shoal stand-off and later, China’s occupa-tion of the shoal also generated a sense of urgency on the part of Manila to negotiate with Washington the “Framework Agreement on Enhanced Rotational Presence and Agreement”. The agreement will facilitate the deployment of American troops and equipment on a rotational basis, thus avoiding the controversial issue of re-establishing US bases in the country. Interestingly, the negotiation is being conducted against the backdrop of increased tensions between the Philippines and China because of their territorial dispute in the South China Sea. With its small and obsolete naval force and an almost non-existent air force, the Philippines is relying on the US to help in the modernization of its military and defense capabilities through short-term regular visits by American forces that will conduct joint training, humanitarian and disaster response operations with the AFP. More significantly, the Philippines is also banking on the deterrent effect that can be generated by the temporary deployment of US forces and their equipment in its territory.

On 14 August 2013, Manila announced the start of the negotiation for a framework agreement that will help the AFP develop a credible defense capabili-ties to monitor and defend its maritime territory in the face of the increasing

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territorial dispute with China. Prior to the negotiation, the Pentagon indicated that it plans to strengthen its military presence in Southeast Asia not by establishing giant (permanent) bases reminiscent of the Cold War but by maintaining a light (strategic) footprint in the region.31 This is aimed at reassuring Manila that “Washington has neither desire nor interest in creating US-only bases in Southeast Asia”.32 On its part, Philippine defense and foreign policy officials informed the Philippine Senate that in negotiating this framework agreement, both parties are guided by the following principles:33 (a) The US does not intend to establish a permanent military presence in the Philippines; (b) US access and the use of Philippine military facilities and areas will be at the invitation of the Philippine government; and (c) the agreement should be mutually beneficial in developing both parties’ individual and defense capabilities. The two parties are now focused on the agreement’s technicalities such as the implementing arrangements, prepositioning of American supplies and material, security, ownership of facilities, protection of the environment, utilities and communication, procedures, resolution of disputes and the duration of and termination of the pact.

If the two counties sign the agreement before the end of 2013, it will lead to the temporary deployment of small visiting US forces in Philippine territory. This will send a strong diplomatic signal to Beijing that it will have to take account of American military presence in the Philippines if its uses force against Manila to resolve their intense territorial dispute in the South China Sea. More significantly, temporary US military presence in its territory will strengthen the Philippines’ determination to uphold its territorial claims vis-à-vis China in the South China Sea dispute, and in the future, might also test American resolve and credibility to honour its defense commitment to the Philippines. The current negotiations with the Philippines on rotational US military presence is also sending a message to other claimant states in the South China Sea dispute, such as Vietnam and even Malaysia, about the prospect of bolstering their military relations with the US based on the terms that are acceptable to them.34

Consequently, in negotiating an executive agreement with Washington to facilitate greater US strategic access to the Philippines, the Aquino Administration has shown political resolve, particularly as this was something opposed by nationalist personalities and militant left-wing organizations. The Aquino Administration took into account that it would face widespread public discomfort by relying too much on the Philippines’ only strategic ally.35 Furthermore, closer security ties with the US would also limit the Philippines’ room for diplomatic maneuver in negotiating with China an amicable settlement of the territorial row and, in the long run, would also adversely affect the vibrant Philippine–China trade relations.

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The Aquino Administration, however, showed that it is willing to stake its political capital as it prepares to weather the massive protest and economic fall-out that a ubiquitous US strategic footprint in the Philippines could generate.

ConclusionWell into the third year of his term as president, Mr Aquino’s popularity among Filipinos was at its peak. The popular president seemingly could not do anything wrong as his good governance agenda had generated unprecedented economic growth and political stability for the Philippines. A number of unexpected shocks in the later part of 2013, however, undermined his popularity among the Filipinos, and probably, even his political legacy to the country. The pork barrel scandal raised concerns regarding his administration’s sincerity and ability to deal with the challenge of systemic corruption in the Philippine government. The scandal also led to an accusation that he is simply focusing on opposition politicians while ignoring party mates and political allies who are implicated in the PDAF scam. Typhoon Haiyan devastated the central Philippines, destroying lives, infrastructures, and agricultural land amounting to about 12 per cent of the country GDP. In the aftermath of the storm, the president was blamed for leaving the government unprepared for this major disaster, and for blaming everyone for the (mis) handling of the relief and humanitarian efforts except himself. Finally, his efforts to challenge China’s expansive claim in the South China Sea by filing a case in the International Arbitrage Tribunal on International Conventional on the Law of the Sea and by strengthening the Philippines–US security relations have severely strained Philippine–China relations.

The pork barrel scandal will probably be the dominant issue in Philippine politics way into 2014, and along with the Aquino Administration’s slow response to the typhoon, may weigh on the president’s ability to push through his legislative agenda into the end of his term in 2016. The armed invasion of Sabah by the followers of Mr Kiram in the Zamboanga crises in February and September exposed the government’s inherent weaknesses in providing security in the Southern Philippines and in instituting a stable peace in Mindanao. Despite these challenges, however, analysts and political observers expect that President Aquino will complete his term and stand down as planned in 2016. This is because the SWS’ mid-December survey shows that President Aquino is still popular among Filipinos as his satisfaction rating has remained at 69 per cent, from 68 per cent in September and after declining from a high 76 per cent in June. What might be at stake now is ensuring for posterity President Aquino’s legacy as the chief

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executive who was able to make the Philippines one of the world fastest growing economies by taking a firm stand against corruption in public office.

notes

1. Michael Lim Ubac, “Philippine President Criticised for Leadership, Economic Policy”, Tribune Business News, 13 January 2012, p. 1, available at <http://search.proquest.com/docview/915648053/13999CFCBOA5B...>.

2. Christine Avendano, “Philippine President’s Working Style is not-do-nothing”, Tribune Business News, 6 May 2012, p. 1, available at <http://search.proquest.con/docview/864984628/139AFoBA01CA2145/45?accountid...>.

3. Social Weather Stations, “PNOY (Short for President Aquino) Satisfaction Rating Hits Record High Net+67”, Third Quarter 2012 Social Weather Survey (Quezon City: Social Weather Station, 24 September 2012), p. 2, available at <http://www.sws.org.ph/index_pr20120910.htm>.

4. Targeted News Service, “Malacanang Says Social Weather Stations and Pulse Asia Surveys Showing President High Satisfaction, Trust, Performance and Approval Ratings Reflect the Filipino People’s Confidence in His Administration”, Targeted News Service, 8 April 2013, p. 1, available at <http://search.proquest.com/docviw/1324591878?accountid=38643>.

5. Richard Heydarian, “Government: People Pressure Piles Up to Cleanse the Philippines”, Global Information Network, 1 October 2013, p. 1, available at <http://search.proquest.com/docview/1439275540?accountid=38643>.

6. James Hookway, “Philippine Economy Withstands Latest Corruption Scandal; President Aquino Renews Battle Against Graft”, Wall Street Journal, 17 September 2013, p. 1, available at <http://search.proquests.com/docview/1428639498?accountid= 38643>.

7. Heydarian, op. cit., p. 2. 8. Xinhua News Agency, “News Analysis: Philippine Economy (one) of the Strongest

in Southeast Asia”, Xinhua News Agency, 20 August 2012, p. 1, available at <http://search.proquest.com/docview/1037764091/139A46FEC895...>.

9. “Philippine Economic Strong but More Jobs Needed — ADB Report”, M2 Press wire, 3 October 2012, p. 1, available at <http://search/proquest.com/docview/1081877719/139A46FEC895...>.

10. Economic Intelligence Unit, Country Forecast: Philippines June 2012 (London, UK: Economic Intelligence Unit, June 2012), pp. 14–17, available at <http://search.proquest.com/docview/1021051489/13999CFCB0A5...>.

11. Asia News Monitor, “Philippines: UNESCAP sees 6.2% for Philippine Economy in 2013”, Asia News Monitor, 19 April 2013, p. 1, available at <http://search.proquest.com/docview/1328386740/accountid=28547>.

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258 Renato Cruz De Castro

12. M2 Pressire, “Philippine Economy Surging But Job Creation Lags; ADB Sharply Upgraded Its 2013 GDP Growth Forecast for the Philippines, but Warns that Growth has Yet to Generate New Jobs”, M2 Presswire, 4 October 2014, p. 1, available at <http://search.proquest.com/docview/1439205704?accountid=28547>.

13. Mayvelin Caraballo, “Philippine Economy to Grow at Faster Rate”, McClatchy- Tribune Business News, 20 February 2013, p. 1, available at <http://search.proquest.com/docview/1289047937?accountid=28547>.

14. M2 Press Wire, “Philippine Economy Surging But Job Creation Lags: ADB Upgraded Its 2013 GDP Growth Forecast for the Philippines, but Warns that Growth has yet to Generate New Jobs”, M2 Press Wire, 4 October 2013, p. 1, available at <http://search.proquest.com/docview/1439205704?accountid=28547>.

15. Josephine Cuneta, “Typhoon Left Nearly $13 Billion in Damage: Government Report Details Losses Along with a Rebuilding Plan”, Wall Street Journal, 18 December 2013, p. 1, available at <http://search.proquest.com/docview/148886459?accountid= 38643>.

16. David Piling, “Philippines Typhoon Knocks Benigno Aquino’s Reputation”, Financial Times, 14 November 2013, p. 1, available at <http://search.proquest.com/docview/1468025495?accountid=38643>.

17. Cunetra, op. cit., p. 1.18. Economist Intelligence Unit, “Philippine Politics: Political Prospects for 2014”, EIU

Views Wire, 9 January 2014, p. 2, available at <http://search.proquest.com/docview/1476210274?accountid=38643>.

19. Xinhua News Agency, “News Analysis: Philippine Gov’t, MILF Agree to Create New Political Entity in Mindanao”, Xinhua News Agency, 25 April 2012, p. 1, available at <http://search.proquest.com/docview/1009679863/139A87060651EFB99B3/24?accountid=...>.

20. Asia News Monitor, “Philippines: GRP, MILF Express Optimism in Reaching a Peaceful Settlement to Mindanao Conflict”, Asia News Monitor, 5 October 2012, p. 1, available at <http://search.proquest.com/docview/1082304042/139A87060651EFB99B3/59?accountid=...>.

21. John Gee, “Clash in Sabah Testifies to Colonialism’s Lingering Legacy”, The Washington Report on Middle East Affairs, September 2013, p. 1, available at <http://search.proquest.com/docview/1434715284?accountid=28547>.

22. Rhea Sandique-Carlos and James Hookway, “Aquino Urges End to Standoff”, The Wall Street Journal Asia, 27 February 2013, p. 1, available at <http://search.com./docview/1312537144?accountid=38643>.

23. “The Sultan’s Sabah Swing; Malaysia Invaded”, The Economist 406, 8824 (23 February 2013), p. 39.

24. Richard Heydarian, “Conflict: Philippines Struggles with Muslim Rebels”, Global Information Network, 23 September 2013, p. 1, available at <http://search.proquest.com/docview/1434879400?accountid=38643>.

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25. Jane Perlez, “Stand-off Over South China Sea Shoal Eases: Beijing and Manila Pull their ships from Area, but the Dispute is not settled”, International Herald Tribune, 19 June 2012, p. 4, available at <http://search.proquest.com/docview/1020884288/1386FC0C1134...>.

26. Department of Foreign Affairs, “Notification and Statement of Claim to the United Nations Convention of Law of the Sea (UNCLOS) Arbitral Tribunal”, Manila, 22 January 2013, pp. 12–14.

27. Ibid., pp. 18–19.28. Bernice Camille V. Bauzon, “PH Sues China”, Tribune Business News, 23 January

2013, p. 1, available at <http://search.proquest.com/docview/1271937475?accountid= 28547>.

29. Simone Orendain, “Philippines to Forge Ahead with Sea Dispute Arbitration”, Voice of America/FIND, 21 February 2013, p. 1, available at <http://search.proquest.com/docview/1291089711?accountid=28547>.

30. Kailash K. Prasad, “An Assessment of the Goals, Drivers, and Capabilities of China’s Modernizing Navy”, Korean Journal of Defense Analysis, vol. 24, no. 1 (March 2012): 56.

31. Craig Whitlock, “U.S. Seeks to Expand Presence in the Philippines”, Washington Post, 26 January 2012, p. A-1, available at <http://search.proquest.com/docview/917826110? accountid=28547>.

32. Ibid., p. 1.33. Defense Undersecretary Pio Lorenzo F. Betino’s Letter to Senator Franklin Drillon,

(Camp Aguinaldo, Department of National Defense, 29 August 2013), p. 1.34. Whitlock, op. cit., p. 1.35. International Crisis Group, “Stirring Up the South China Sea II: Regional Responses”,

Asia Report (24 July 2012), p. 24.

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