The Mission for Manila

In the last four years, Benigno Aquino III -- generally known by his nickname Noynoy -- has turned the Philippines from one of Asia’s underperformers into one of its economic stars. Aquino is a scion of the Philippines’ most beloved political dynasty; his father, the opposition leader Benigno Aquino, Jr., was assassinated by President Ferdinand Marcos in 1983, and his mother, Corazon Aquino, won the country’s first democratic election after the dictator’s fall. Thanks to an aggressive anticorruption campaign and sound, conservative macroeconomic policies, Aquino has racked up a long list of accomplishments since his 2010 election. In 2012 and 2013, the economy grew by 6.8 percent and 7.2 percent, respectively; inflation dropped; the stock market soared; and for the first time in its history, the country scored an investment-grade rating from the three main credit-rating agencies. This year, however, Aquino started to stumble, with corruption scandals and legal and political battles eroding his once-stratospheric approval rating. In late September, Aquino met with Foreign Affairs managing editor Jonathan Tepperman in New York to discuss the challenges he and his country face.

Over the course of your presidency, the Philippines has become one of the fastest-growing economies in the world. How have you done it?
I’ll borrow a phrase: “Good governance is good economics.” What does that mean? Under my predecessor, all decisions were based on political considerations: Does this keep my powers? Does this strengthen my position? [Former President Gloria Macapagal Arroyo] was my economics professor in college. But had I proposed then some of the things that she did when she was president, she probably would have flunked me. She was doing things that didn’t make sense. When she [took office], she inherited a debt of about 12 billion pesos; by the time she left office, it was 277 billion pesos. And there also must have been moneymaking ventures among certain closely affiliated personnel; we’re still in the process of proving that.

What did we change? Now when you come into the country, the routes are clear. We try to shield you from some regulatory risk. And fiscal responsibility is our mantra. They said at the outset that I was refusing to spend anything. But all that was left to us to run the government for about six months was 100 billion [pesos] out of a 1.5 trillion peso budget -- a very small percentage. The fiscal space we’ve earned now gives us the wherewithal to embark on a lot of social programs, investments in our people. We have tripled the budgets for education, health, and conditional cash transfers. And the people are now empowered.

Your presidential term ends in June 2016. What are your top priorities in the time you have left?
Well, when I am asked, “How do we ensure that [our current success] is not a temporary aberration?” I say, “If our people really feel a difference in their lives, and they are the ones who can give the mandate, then they will insist that we continue all of these things that led to all of these successes.” So the priority has to be, how can we make this [progress] felt by the greatest majority in the time remaining? How do we accelerate what has been happening now, so that people get used to the idea that this is the new normal, this is what we are entitled to, and this is what they should be demanding as a baseline from anybody else.

And how do you do that?
Well, for instance, the conditional cash-transfer program used to only require that you keep your children in school at the elementary level. We expanded it to the secondary level starting this year. And we’ve increased the number of families participating, from 800,000 when we started to 4.1 million today.

But how do you ensure that politics and other variables, which have caused so many problems in the Philippines in the past and doomed every temporary upswing, don’t return again?
Well, part of it is we’re going after people if there is evidence they are engaging in corrupt practices. There has to be punishment if you commit transgressions against the people, and that is how we hope to demonstrate that no one is above the law. We have to abide by all of the rules, the rules that are established for everybody. We impeached the chief justice of the Supreme Court, primarily because he hid 98 percent of his assets. The guy who was supposed to be the primary defender of the constitution was the first one who was not following the rules. He was convicted, and he’s still facing charges on income tax evasion, amongst others, and probably for unexplained wealth.

What has made your anticorruption campaign successful while many other countries still struggle with the problem?
Well, it’s still a struggle for us. People have been doing it for decades upon decades, and they still think they can get away with it. But I’m very persistent. I’ve been called hardheaded, obstinate, unreasonable, etc. But at the end of the day, it’s like cupping water with your hands. You cannot open them and hope that the water will still be there. Eventually, it will all drain out. So as much as possible, you say it’s either right or it’s wrong. It cannot be wrong today and right tomorrow. Hopefully, [each prosecution] will impart the lesson to our people that, again, this is the new norm.

How do you respond to critics who have complained that you’ve used your anti-corruption campaign to target the opposition?
We have not spared anybody. The only question here is, is there evidence or is there not? If the evidence we have on hand is shallow, and we file a case [against someone], then he will get off scot-free. And if we later get better evidence, he cannot be charged again because of double jeopardy. So if we filed charges left and right and couldn’t support them, then next you’d be accusing me of giving them a get-out-of-jail-free card.

Recent polls have shown that perceptions of corruption in the business sector are going back up again. Last year, 45 percent of executives surveyed said it was widespread; this year, it was 56 percent. You personally have faced criticism for the misappropriation of hundreds of millions of dollars by an enormous number of former and current legislators. Is corruption making a comeback? And how will you ensure that it doesn’t?
I am not privy to this particular survey that you are citing, but it might be possible that now that we are actually enumerating and uncovering all of these nefarious deeds, many people think that there’s more corruption.

The [other charges you mention] have to deal with the period from 2007 to 2009, when I was not president; I was a member of the opposition. As a member of the opposition, we were not given some of the Priority Development Assistance funds [that were the source of the scandal]. Used correctly, you know, [such funds] can produce many positive changes. Unfortunately, some quarters have abused them, diverting funds to fake nongovernmental organizations producing spurious results. That has to be corrected.

What are you doing to ensure that those abuses don’t continue?
Number one, we charge those that abuse [the system]. Number two, the funding system has been changed by a recent ruling of the Supreme Court. I’ll start complying with the Supreme Court’s instructions.

You criticized the Supreme Court after it ruled that your use of another fund, the Disbursement Acceleration Program, was unconstitutional because you did not consult with Congress first. After that ruling, you said that you thought the court had too much power. What do you see as the court’s proper role, and what do you plan to do about it?
One retired Supreme Court justice recently said, “Our expertise is in the law. What expertise can we claim as far as politics or economics are concerned? But we are being tasked to rule just on one aspect and not consider the net results.”

Would you like to change your country’s institutional structure so that the Supreme Court can’t intervene in areas where it has no expertise?
It’s not a question of not intervening, but rather exercising power with restraint, as opposed to exercising it at every given opportunity.

Would you like to see a constitutional amendment limiting the court’s powers?
We are asking our legal luminaries to come up with a common position that we will consider.

The current constitution also limits the president to a single term, but you’ve suggested that you’d like to amend that portion of it to allow you to run again. Many Filipinos worry that might lead to the re-creation of the imperial presidency that caused so many abuses in the past. Why is it so important that you get a second term?
I never said I wanted a second term. But for instance, our partners in the peace process with the Bangsamoro say, “Sir, so long as you’re there, we’re confident this thing will happen. If you’re no longer there, we will worry about the new people that we’ll have to talk to.” I’ve been asked by so many quarters, “How do we continue the transformation that’s happening now [under a different president]?” A lot of people say, “We don’t like this candidate; we don’t like that candidate. Why don’t you continue? We’re confident in you.”
Now, that has to be balanced with a fundamental precept my parents taught me, which is that a measure of success is your ability to train your successor. There has to be that infusion of new blood.

Does that mean you haven’t decided whether or not you want to run again?
I’m just listening to everybody’s opinion. At the end of the day, I think what is expected of me is to generate a consensus about how we can continue the transformation that is happening. Personally, I’d like to be on the sidelines. But I have to be able to generate a consensus that propels the person most likely to continue what we’re doing into office.

But if you do decide to run again, there has to be a constitutional change, which presumably would need to start soon. Do you plan to start pushing for that?
I am hoping to finish all the dialogue soon. After that, I will call every aspect of the broad coalition that brought me into office into a meeting and say, “This is the route we’re going to take.” But I have to listen to all of them.

The reason the constitution limits presidents to one term is to prevent the abuses of the Marcos era from ever happening again. Your mother was the president who oversaw the creation of this post-Marcos constitution in the first place. How do you think she would feel about an attempt to change it? I think there’s a marked difference between that period and now. Having said that, I believe a lot of benefits can accrue from a one-term limit. I am not concerned about getting reelected. I can make the unpopular but necessary decision. Your focus from day one is on your legacy rather than political considerations.

And what is the legacy? I want to be able to step down from office and say, “Every promise I made, we accomplished.” But I am not the type of guy who says, “I am the only one who has all the answers.” That would be totally wrong.

Back in February, you compared China’s territorial claims in the South China Sea to Hitler’s seizure of the Sudetenland and called on the world to say, “Enough is enough.”
There might be more tensions now. But let me pull in the context [of my original remark]. During a lunch at an ASEAN [Association of Southeast Asian Nations] summit, the leader of another ASEAN country was sitting next to me, and he said, “They’re a big country, and we’re small. This is the reality of the world. They can be very generous.” The idea was to give in to what they wanted. My response was, “Isn’t that the same as what [people said about] Hitler? He said, ‘We need “living space.” I want a third of Czechoslovakia.’ And the Czechs were not even consulted.”

In this situation, obviously I cannot say, “Please take a portion of the Philippines.” And nobody will stand up for our rights unless we stand up for our rights. This is not a problem just for us. You know, the tensions are spreading. It used to be China, Vietnam, and the Philippines. Now we have reports that even nonclaimant countries to the features in the South China Sea are getting embroiled. So we’re asking, can we not have an ASEAN code of conduct that would manage the disputes among all of the parties claiming features in the South China Sea? It’s not just for our benefit. I think it benefits everybody to have airtight obligations, so we don’t have all of the competing theories [over how to establish ownership].

In April, your government signed an agreement to boost the U.S. military presence in the Philippines. Do you feel that Washington is doing enough to help you in your dispute with China?
We’re very comfortable with the position that says [the United States] is not going to take positions on individual claims. And we appreciate [Washington’s] comments that the resolution [of claims] has to be peaceful, with no threats or intimidation or use of force.

Would you like to see a larger U.S. military presence in the region? Would that help convince China to play by the rules?
I have to leave that up to people who are more competent in military matters than I am.

Are you worried that the renewed U.S. focus on the Middle East will distract the United States from engaging more in Asia?
I think President Obama, like myself, is a multitasker. Without getting cross-eyed, you have to focus on everything at the same time. And [the United States has] enough built-in structures, institutions, and mechanisms that [ensure] appropriate focus will be maintained.

When Japanese Prime Minister Shinzo Abe took moves recently to amend the Japanese constitution to allow his country to do more for its own defense, you were one of the few Asian leaders not to criticize him, and even to suggest that such moves were legitimate, despite Japan’s troubled history in the region. Does that mean you’re interested in building stronger relations with other countries in your neighborhood to deal with the China threat?
Not specifically to deal with the China threat, but to deal with all of the issues that the world is facing right now. Let’s start with the Middle East. Japan was part of the peacekeeping force, I understand, in the Golan Heights. Their constitution is so restrictive, they tell us, that they had to be protected by another country when they were attacked. In a convoy of allied ships, if other ships in the convoy are attacked, they cannot interfere; only when they are themselves attacked can they respond. So what’s the value of having them in a coalition when you cannot count on them? They are now trying to correct that situation. They are a large economy; they are a strong voice on so many things. They should also have the wherewithal to be able to contribute completely and in concert with the rest of the world.

But why, given how nervous the South Koreans, for example, get when the Japanese talk about enhancing their defense capabilities, are you more comfortable with the idea?
I guess because of the behavior the Japanese exhibited in the Philippines after World War II. The same thing goes for America, for that matter. We have a saying in our country: “You cannot get to where you want to go without looking at where you came from.” We have two strategic partners who have demonstrated real friendship to us over quite a number of decades, especially after the war, and that’s the United States and Japan.

You’re close to setting up a new autonomous Muslim region in the south, made possible by a peace agreement you negotiated with one of the largest rebel groups there in 2012. How were you able to make this happen, and what are the lessons for other countries struggling with similar issues?
It was a very big challenge, because you had belligerents sitting across from each other at the negotiating table. And there was a great absence of trust because of atrocities that each had committed against the other. So we were at loggerheads until I asked if they would be willing to meet with me [personally]. And that’s what happened. And I really tried to put myself in their shoes, and I think they put themselves in my shoes also. I said, “Ask of me that which I can provide, and it’s done. Ask of me that which is impossible, and there is no way I can give it to you.” And we proceeded from there. Step by step, we moved on to the details of the various agreements, and we finally got a sense of what is attainable. And we both agreed that the endpoint was desirable from all perspectives.

So I met with honorable, trustworthy individuals who wanted to put an end to the violence, and we were also prompted by our respective constituencies to really strive for this. At the end, they stated, “Sir, so as long as you’re here, since we trust you, we’re open.”

So personal contact and trust, those were the secrets?
Yes. And I guess they’ve seen the track record of my own family, and how we shared the same struggles, perhaps differing only in details.

What is your message to outside investors who are nervous about the recent slowdown in the overall economy and some of the recent snags in the anticorruption drive? What do you think is the most important thing foreigners still don’t understand about the Philippines?
Regarding the economy, we’ve gone from 5.7 [percent GDP growth] to 6.4 in the last two quarters, so we’re on an upward trajectory. It’s down from 7.2 [in 2013], but if investors are looking at the figures only on a quarter-by-quarter basis, they might be too timid. I wonder what business can be [run] quarter to quarter.

As for snags on corruption, we’re a democracy. There’s protection for the rights of everyone, which means a very lengthy [judicial] process, which we’re trying to correct. Speedy trials are what is wanted. What’s the phrase? “Justice delayed is justice denied.” We want to eliminate that as a condition in the country.

The main message is that the Philippines is strategically located and blessed with the greatest resource: its people, who are hard-working, very loyal, and very adaptive. We are now in a period where the potential which the Philippines has always had has been unlocked. We have had 6.3 percent growth over the past four years. So you can join us now -- or a few years from now say, “I missed the opportunity that was presented.”

Note: This interview has been edited and condensed.