Cory gave the Philippines its backbone

Before Cory Aquino, the Philippines was to the rest of the world a nation of 60 million recreants and one dictator, a spineless and fragmented people incapable of facing up to a despot in Malacanang who led a corrupt government in turning a once-prosperous economy into an impoverished state in the middle of a “booming" Southeast Asia. Foreigners couldn’t understand why it looked amazingly easy for the autocrat to extend his rule of intimidation over the submissive “Flips."

That was why the world gasped in awe and admiration when on live television in February 1986 they witnessed the saga of a fragile-looking Cory lead a bloodless “people power" revolt that drove the strongman out of office and into exile. Emerging from the grief of a housewife widowed by the assassination of her husband who had been a charismatic leader of the political opposition to Marcos, Mrs. Aquino took on the mission that her fallen husband had left unfinished. She bowed to calls for her to challenge the dictator. Cory launched her candidacy for the presidency before a gathering of the country’s major business organizations. In that gathering, she declared she would “undo the evils institutionalized by the Marcos regime" if elected president. This contrasted with Marcos’s campaign line that claimed “we have succeeded in ensuring the economic stability of our republic." As the dust settled from the well-chronicled snap election and the people power uprising that followed the dictatorship’s attempt to steal the vote from Mrs. Aquino, the massiveness of the damage on the economy started to become clear. The treasury was bankrupt, the central bank was without credibility and it carried a huge amount of foreign debt while the state of its own financial health was in distress. The business sector could hardly transact business due to a severe shortage of dollars, investors had simply ignored the Philippines owing to the ousted regime’s favoritism toward business cronies and relatives of the strongman, and foreign banks had withdrawn all credit lines during the dying days of the Marcos regime. Somebody else who possessed none of Cory’s traits – courageous, determined, focused, yet simple and humble in her ways – would have quickly crumbled in the face of the enormous challenge of repairing the ravaged nation. As she set out in restoring democracy and rebuilding its democratic institutions, she simultaneously attacked the huge problems on the economic front. Next: Cory’s bold moves Cory’s bold moves President Aquino’s first official directive was also one of her boldest: she ordered the creation of the Presidential Commission on Good Government that was tasked with tracking and retrieving corporations and various assets acquired under dubious schemes by the Marcos cronies and relatives. To help trim the government’s bloated budget deficit, she ordered the enactment of new revenue-generating measures as well as the sale of government entities that could be run better by private owners and managers. One crucial move she made that had profound impact on wide sections of the population, mainly the rural poor who suffered most under ill-designed policies of the dictatorship, was the dismantling of the monopolies that had controlled the sugar and coconut industries.

The late president Cory Aquino also helped turn the economy around after it posted a 3.4 percent expansion. AP Photo

By letting the market determine prices, instead of the previous setup where favored industry groups set their own unrealistic buying and selling prices that weakened small farmers, producers and related processing industries instantly realized gains. Cory also demonstrated remarkable courage, with the country’s interest in mind, in coming up with a strategy on the foreign debts of $26 billion outstanding when her government assumed power – many of these debts were incurred under perceived onerous terms and did not really benefit the people. Many of her supporters during the campaign against the dictatorship had egged on Cory to make a clear break from Marcos policies and repudiate the country’s foreign debts.

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Creating the Presidential Commission on Good Government -- tasked to run after ill-gotten Marcos wealth -- was her first and one of her boldest moves.

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Although a seemingly easy move to take, repudiating the obligations could also effectively turn the country into an economic pariah, making it struggle hard to establish new ties with the banks again when normalcy returns to the economy. In trying to arrive at a policy on the foreign debts, President Aquino said a more viable option would be to “seek relief from the debt burden not by fiery rhetoric about unilateral interest cuts – although the injustice of the debt legacy should entitle us to indulge in it – not by moving away from the responsibilities of a sovereign government whose animating spirit is honor." Mrs. Aquino chose to honor all foreign debts – but that did not come easy at all for the creditor banks. President Aquino also wangled easier terms for these loans that would allow room for the economy to again grow and enable local industries to operate again and create jobs. Under these new terms, the Philippines was granted longer periods to repay the debts and at concessionary interest rates. The creditors also granted the Aquino government new loans and trade facilities. The country’s biggest sources of multilateral financing, the World Bank and International Monetary Fund, followed not long after with new credit facilities. From 1983, the year former senator Benigno Aquino was assassinated, to 1985, the year before the Cory Aquino-led people power revolt, the Philippine economy shrank by over 11 percent, making more of the population vulnerable to poverty. During that same period, inflation soared to a debilitating 63 percent at one point and unemployment increased to 2.6 million. The first year of Mrs. Aquino’s presidency reversed the economic decline with an overall growth of 3.4 percent. Subsequent positive signals from investors – a few even volunteered to advance payment of income taxes on their businesses – helped double that economic growth rate in the following year. However, the coup attempts against the Aquino government somehow weakened this momentum, and exacerbated by the impact of major natural disasters (a major earthquake in 1990 and the Mount Pinatubo eruption in 1991) on scarce resources. When Cory relinquished her post, the economy was getting substantial boost from the industry and services sectors, along with revenues from exports of a diversified range of products. The Aquino administration laid the foundations for lasting economic reforms that were anchored on the principle of greater market-orientation. These reforms, later entrenched in the 1987 Constitution, included reduced government intervention in the economy, re-establishment of functioning competitive markets, renewed emphasis on rural development, and social equity and enhanced external competitiveness through trade liberalism and flexible exchange rate policies. Next: Unfinished task Unfinished task

Cory Aquino attends mass in this 2007 file photo. Among her legacies include a project that provides microfinancing for the poor. AP Photo

By the end of her term, it was not the slower rate of progress caused by the coup attempts and the natural calamities that Cory Aquino considered as a major challenge. Rather, it was the apparent miscalculation that the “people power" phenomenon would readily spill over its beneficial effects on the economy. Mrs. Aquino had actively pursued community-level initiatives for people’s living standards with non-government organizations and people’s organizations in the lead. “Somehow," Mrs. Aquino noted in an August 2008 speech before a gathering of Ramon Magsaysay Awards laureates, “the efforts along these lines did not gather the momentum we had hoped for." For that matter, poverty incidence continues to be a major challenge to economic managers, in part due to misguided programs that Cory’s successors pursued. An advocacy ardently pursued by Cory was in the field of microfinance, providing financial assistance to small enterprises in communities with the objective of supporting livelihood projects that could help the poor rise from poverty.

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With the aid of banks and corporations, Mrs. Aquino was able to establish the Pinoy Micro-enterprise movement whose goal is to help 5 million poor families.

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“Millions of our countrymen who have been trapped in wretched living conditions for generations have simply been deprived of dignity and hope. The first step in a ‘people-powered’ anti-poverty strategy, therefore is to unlock the potential of this great mass of Filipinos who have been cut off from mainstream socio-economic life." One of Mrs. Aquino’s recent initiatives has been aimed at harnessing people power against poverty through a micro-enterprise strategy through microfinance institutions. She was able to summon a social consortium of corporations, banks, foundations, non-government institutions, academics, and microfinance institutions that led to the creation in 2007 of the “PinoyME" movement, whose goal has been to reach 5 million poor families, raise 5 billion pesos in funding within 5 years. “PinoyME literally stands for Filipino micro-enterprise, the development of which lies at the heart of our ‘people-powered’ anti-poverty strategy," Cory explained. “PinoyME harnesses ‘people power’ by bringing various stakeholders together to eventually enable our marginalized countrymen to rise out of poverty through their own efforts." “Ultimately, we hope to see a critical mass of these micro-entrepreneurs graduate into more stable businesses that would create jobs in their communities. This is the next step in our roadmap toward realizing the vision of PinoyME: to create a broad middle class, composed of Filipinos who can make mature and intelligent choices – economically, socially, and politically. From there will spring the foundation for a strong and sustainable democracy." The PinoyME program is now being implemented by a group which in its core management some respected leaders in business, social entrepreneurship, and the academe. There is a good chance that it will be able to make a dent on poverty in the next year or two, the global economic slowdown notwithstanding. Cory Aquino gave the Filipino nation a backbone on which it now can lean during times of doubt and weakness, a source of courage and strength and determination during times of adversity. Now it is time for the Filipino people – Cory’s children – to build on this legacy and move forward. - GMANews.TV (The author, a veteran business and economics journalist, was working for the Far Eastern Economic Review in Hong Kong when Senator Benigno Aquino Jr. was assassinated in 1983. He was assigned to the Manila bureau after a few months. He got to chronicle not only the fall of the Marcos regime, but also the rise of Cory Aquino, who helped restore democracy in the Philippines.)