15th in a series on GMA's 9th State of the Nation Address

MANILA - As President Arroyo trumpets her economic and social accomplishments in her State of the Nation Address (SONA) on July 27, a look back at the important laws passed during the past 8 years gains mixed reviews.

Crucial fiscal reform taxes were passed, but her allies in the House of Representatives have continued to dangle the controversial Charter change initiative, while human rights bills are gathering dust.

In all her 8 SONAs, President Arroyo asked Congress for 35 legislative measures. Eight of the 14 fiscal and economic reform measures have been passed, including the e-VAT law, amendments to Sin Tax, Personal Equity Retirement Act, Securitization Act, Special Purpose Asset Vehicle, and the creation of the Civil Aviation Authority.

The Arroyo administration’s economic performance deserves a failing grade, according to economist and former Budget Secretary Benjamin Diokno. But he conceded that there were bright spots in her legislative agenda.

Some of these measures were hit for being watered down, but they were acknowledged as important nevertheless. The next president will benefit from these laws, according to economists and businessmen interviewed by abs-cbnNEWS.com/Newsbreak.

Economic reform laws

“There are a lot of good legislation. I will give her that,” said Alberto Lim, executive director of the Makati Business Club (MBC), a group of chief executive officers, chief operating officers, and top business executives of the country’s largest and most profitable corporations. In 2005, some members of the MBC called for President Arroyo’s resignation at the height of the “Hello, Garci” controversy in 2005.

Lim particularly lauded President Arroyo’s political will in passing the Sin Tax law and the expanded value added tax law (e-VAT) in 2004 and 2005, respectively.

“These were very unpopular but necessary laws,” he said. He agreed these laws will continue to benefit the succeeding administration. The e-VAT expanded the limited coverage of 10% to include a wide base of product and services.

“We bit the bullet on e-VAT,” recalled administration ally Quezon City Rep. Matias Defensor. “In 10 years, she will be vindicated. History will judge her differently."

Yet, Diokno noted that the passing of e-VAT became urgent and critical because of President Arroyo’s own doing. “First, she had no choice but to pass the e-VAT in 2005. At that time, the Philippines was at the brink of a fiscal crisis, because of Mrs. Arroyo’s making. She had large deficits in 2001, 2002, 2003, and 2004. Why should she get credit for cleaning up her own fiscal mess?” Diokno explained.

Nonetheless, the e-VAT may as well be the single most important law that was passed under the Arroyo administration, as far as Philippine Chamber of Commerce and Industry President Edgardo Lacson is concerned.

“This very unpopular policy funds most of the social programs of government, labor demand for wage and benefit increase, the exemption of minimum wage owners from income tax, increasing allowable deductions from income tax for middle class, and narrowing of annual budget deficits,” Lacson said.

Economists may not share Lacson’s and Defensor’s assessment, however. It is the constant supply of remittances coming from overseas contract workers—not government policies—that kept the economy afloat.

They also hit other fiscal reforms, especially the reforms to the Sin Tax law. Diokno said this is flawed. “It is not collecting as much as it should collect. Sin taxes should also be revamped. They should be increased and made ad valorem. But this reform requires political will, which the present government does not have because it’s in the pockets of vested interests,” he said.

The Department of Finance has been pushing for Sin Tax law reform, but it’s been falling on deaf ears in Congress.

Nevertheless, there were other critical laws passed during the past 8 years where gains may not be seen under the remaining months of the Arroyo administration. These include the TransCo Franchise Law and the Renewable Energy Law.

The President asked for these laws in her 2002 and 2005 State of the Nation Address (SONA), respectively.

The TransCo Franchise Law was passed only late last year. It paved the way for the commercial operations of the national power grid under a private group as mandated by the Electric Power Industry Reform Act (EPIRA).

“It (TransCo law) is a good law but government credibility is on the line, that’s why it has not really contributed much to the lowering of power costs. From second highest, the Philippines now has the highest power cost in Asia,” he said.

But Diokno is optimistic about the Renewable Energy Law. “Let’s see how it’s going to be implemented. It should have long-run positive effects.”

Most controversial: Cha-cha

But the most controversial legislative action that President Arroyo pushed in the past eight years is, unquestionably, Charter Change.

It was in July 2004, in her first SONA after the 2004 presidential elections, that President Arroyo openly urged Congress to consider Charter change.

“I expect that next year, Congress will start considering the resolutions for charter change,” she said.

It was evident in the following year’s SONA that she would try to galvanize the support for Constituent Assembly as the mode to amend the form of government from presidential to parliamentary.

“The system clearly needs fundamental change, and the sooner the better. It's time to start the great debate on Charter Change,” she said.

“The mode of Charter Change is the exclusive prerogative of Congress. But a Constituent Assembly may well give our people the quickest reforms.

“I recognize that our form of government will be the decision of the body constituted to undertake charter change. But we should consider that legislation could be quickened and laws made more responsive to the people under a parliamentary system, similar to that of our progressive neighbors in the region,” she added.

Between the two SONAs in 2004 and 2005, the “Hello, Garci” scandal broke out alleging that President Arroyo rigged to win the 2004 presidential elections. It worsened President Arroyo’s already negative image.

It didn’t help the administration’s move for Charter change. It was perceived as a move to perpetuate her in power.

Despite immense public disapproval, the administration allies rabidly pushed for it. The year 2006 saw tumultuous times, when the Catholic church, civil society, the business groups, and the academe joined forces in protest. A few months before the 2007 senatorial elections, the administration—particularly her allies in the House of Representatives—gave in to public pressure.

They set the Charter Change aside, but only for a few months. When the 14th Congress resumed, moves for Charter change continued. Learning from its failures in the 13th Congress, the House found a possible way to bypass the Senate. In June, the congressmen passed House Resolution 1109 to declare that joint voting is the proper procedure to convene a Constituent Assembly.

If eventually upheld by the Supreme Court, this will allow the 265-member House of Representatives to complete the necessary 225 votes for charter change without the help of a single senator.

While the congressmen claim President Arroyo has nothing to do with the Charter change moves, critics of the administration are not convinced.

“I have reason to believe that like the failed 'People’s Initiative' in 2006, President Arroyo is the prime mover of this attempt to amend the constitution with the objective of extending her stay in power beyond her constitutional term,” said President Arroyo’s former legal counsel and defense chief Avelino “Nonong” Cruz Jr.

It was precisely because of his opposition to the People’s Initiative move that Cruz resigned from his post in 2006.

Poor record on human rights

House committee on human rights chair Quezon Rep. Lorenzo Tañada III lamented the President’s neglect on pending human rights bills.

In her 2003 and 2007 SONA, President Arroyo asked Congress for the compensation of Martial Law victims and harsher penalties for political killings.

The Senate has passed a measure allowing the use of confiscated ill-gotten wealth to compensate the Martial Law victims. The House committee on human rights and the committee on justice have approved the House version of the bill, but it is yet to be calendared for plenary approval.

“We passed it in the committee in March 2008. It has been pending in the plenary. The rules committee does not want to calendar [it for approval] until they a signal from the administration. I don’t know if she’s backtracking,” Tañada said.

The bills providing harsher penalties for political killings are sitting in the committee, too.

“Honestly, I have not really seen in this 14th Congress the push of the executive branch with regard to the human rights bills. I’m really disappointed,” Tañada said.