The longest-serving Philippine president in decades, Gloria Macapagal Arrroyo has seen consistent economic growth during her tenure, and boasts of statistics showing nearly three million jobs created and the country getting 15 percent of the world’s business process outsourcing industry.

Workers protest against Philippine President Gloria-Macapagal Arroyo on Labor Day. Credit: Kara Santos/IPS

But this is far from what has been happening. On the eve of the end of her term in June – soon after the May 10 election that will choose her successor in this country of 92 million people – Filipinos cannot seem to wait until Arroyo leaves the presidential palace. Her nine years in office are the longest since dictator Ferdinand Marcos’ 21 years ended in 1986.

“For a long, long time, (Arroyo) was seen as the worst leader this country has ever had after Marcos, or for some, even before Marcos,” commentator Conrad de Quiros wrote in the English-language daily ‘Philippine Daily Inquirer’.

“Filipinos will see better times only when Arroyo bows out of power,” said Jun Aguilar, who used to be a migrant worker in Saudi Arabia. “She has made many questionable decisions that spurred the flight of millions of Filipinos to seek jobs they can’t find in the Philippines.”

These thoughts are reflected in the surveys by the country’s biggest and most credible polling groups, Social Weather Stations and Pulse Asia, which showed record-low ratings for the President.

Pulse Asia reported that Arroyo’s disapproval rating, polled during Mar. 21- 28, reached a record high of 59 percent or the worst since March 2001, just a few months after she took office.

In the Social Weather Stations survey of Mar. 19-22, the President scored a net satisfaction rating of -53. This was a decline from the -38 she got in a December 2009 survey.

Obviously, there is a disconnect. While the Philippine economy has been growing – even bucking the 2009 global slowdown and posting a cut in the jobless rate at the start of 2010 going by government data – Filipinos have been getting increasingly disenchanted with and distrustful of their leaders. How could Arroyo, thrust into the presidency in place of a disgraced predecessor, have squandered all that enormous political capital at the start of her administration?

The economic trends under this former economics professor and daughter of a former president are of no small import – more so for a country that has long been bruited about as South-east Asia’s most liberal democracy but one unable to deliver the economic goods to make it more like Thailand or Malaysia.

Indeed, the Philippine economy has posted growth for 35 consecutive quarters. GDP growth reached 0.9 percent last year and 3.8 percent is expected this year.

But what many Filipinos recall are the allegations about anomalous deals during her tenure, involving her officials and relatives, including her husband, after she won the presidential elections in 2004.

A year after that, a national scandal erupted over the release of a recording of what was purported to be Arroyo’s voice asking a senior election official to ensure that she kept a one-million vote margin over her closest opponent.

That scandal was followed by others, including the alleged diversion of state funds worth 728 million pesos (16 million U.S. dollars) for fertiliser purchases for farmers to her party’s campaign war chest; bribes allegedly given to legislators ahead of a vote on an impeachment move against Arroyo; and a 329 million-dollar deal for a proposed national broadband network that Arroyo’s spouse was allegedly involved in.

In recent months, Arroyo gained more flak for appointing allies to key positions such as that of Armed Forces chief and for her plan to select, despite a ban on appointments prior to a national election, a new Supreme Court chief justice.

Critics say Arroyo’s appointments could be part of a plan to stay in power beyond the one-term limit set by the Constitution. Her supporters deny this.

The fact that she is now running for a seat in the House of Representatives has done little to ease criticism from those who call her power-hungry.

Analysts say that Arroyo did not have a deep well of public support to start with.

Amado Mendoza Jr, political science professor at the University of the Philippines, says that Arroyo’s satisfaction rating actually “has been low from the very beginning of her presidency in 2001, with her highest mark almost at the same level as the lowest mark scored by Estrada (even with corruption charges against him).”

Pulse Asia’s chief research fellow Ana Maria Tabunda noted that Arroyo got the highest distrust rating of 76 percent among the ‘ABC’ or high-income group, 69 percent among the poorest or ‘E’ group and 66 percent in the lower middle or ‘D’ sector.

To be sure, there are those who say life has improved under Arroyo. Isabelita Mateo of Hagonoy town in Bulacan province got a 50,000 peso- (1,150 dollar-) cheque as a loan to her farm-based business. “This has been substantial capital for our livelihood project in our barangay (village). I hope future administrations will provide the same support that President Arroyo is giving us,” newspapers quoted her as saying.

But in a twist of irony, former president Estrada – who Arroyo had pardoned after his conviction for plunder but who remains popular among the poor – is again running for president in next week’s election.

A former actor who won by the biggest-ever margin in a presidential poll in 1998, Estrada is now in the second place in the latest presidential poll surveys.

By Jose Galang
MANILA, Dec 14 2009 (IPS)

As if the pressures of living in an ever more competitive world were not enough, the challenges of coping with inadequate income support are bearing down on Asia’s growing army of retirees, whose long years of hard work helped the region’s economies grow.

With traditional informal family-based support mechanisms cracking, Asia’s seniors are left to depend on pensions that are increasingly unable to meet their needs.

Particularly in rural areas, older people are considered especially susceptible to poverty. That is why increasing numbers of individuals of retirement age continue to seek employment, and most are eventually absorbed by the informal economy. This hardly makes them less vulnerable.

More worrisome, the number of elderly people is increasing so fast that the demographic profiles of societies across Asia are changing. United Nations estimates point to a tripling of the number of seniors aged 60 years and over between 2007 and 2050 in eight Asian countries -China, Indonesia, Thailand, Malaysia, South Korea, Singapore, the Philippines, and Vietnam -even as their total population is forecast to increase by only 13 percent during that period.

For Asian Development Bank (ADB) senior economist Donghyun Park, the ballooning ratio of retirees to workers requires a change in priorities for Asia’s pension systems. Park concludes in study, “Ageing Asia’s Looming Pension Crisis”, that Asia’s pension systems are “ill-prepared to provide economic security for the large number of retirees who loom on the horizon”.

A pension is an annuity or lump sum of cash that individuals receive upon their retirement, usually when they reach 65 years old or, in some countries, as young as 55. In most countries in Asia, the government mandates national defined-benefit (DB) pension plans that pool funds set aside by all individual members. There are also defined contribution (DC) pension plans where the individual employee is held responsible for his own investment. In Australia and Hong Kong, not included in the ADB study, the pension systems were up by the government but are managed by the private sector.

Park’s study, released by ADB recently, covers pension systems in the eight countries listed above, where the demographic transition toward older populations is much more advanced.

Park notes that while the family network used to be Asia’s pension system, with children taking care of the material needs of their elders, far reaching changes accompanying the region’s economic progress have given rise to smaller nuclear families that are less conducive to intra-family support. Such changes, he says, include rapid urbanization and the declining relative importance of agriculture in the economy.

“Urbanization, industrialization, and socio-cultural changes are creating a vacuum in Asia’s old age support, a vacuum that must be filled by formal pension systems,” Park says.

The Australian government recently announced increases in pension rates under its 2009-2010 budget. Australia’s pension system offers two sources of retirement income: 1) superannuation, which is paid for through employment-related contributions, and 2) age pension, which is funded by taxpayers and paid through the government.

Total pension assets as of 2006 ranged from less than USD 1 billion in Indonesia to more than USD 180 billion in Korea, with the ratio of pension assets to gross domestic product highest in Singapore, Malaysia, and Korea.

More recently, the international consulting firm Watson Wyatt Worldwide published estimates that Asia’s pension savings bucked the downtrend in 2008 and actually grew while total funds under management by Asia-Pacific pension funds surpassed Europe’s for the first time. The growth in Asia was attributed to the fact that many funds in the region were new, with contributions from working members outweighing pensions paid to retirees.

Watson Wyatt listed Japan’s Government Pension Investment Fund as the world’s biggest retirement fund with assets worth USD 1.28 trillion as of last year. Singapore’s Central Provident Fund and Malaysia’s Employees Provident Fund also recorded healthy growth rates in 2008, according to the Watson Wyatt tally.

But overall, Asia’s pension funds continue to face challenges and, according to Park’s findings, there is significant scope for reducing administrative and transaction costs, which could otherwise go to the pensioners as benefits.

Hamstrung by these weaknesses, pension systems in Asia are able to cover only a small portion of the total population. The share of the labour force covered by pension systems ranges from 13.2 percent (Vietnam) to 58 percent (Singapore), according to the ADB study. On the other hand, the coverage rate for the working-age population (15 to 64) ranges from just 10.8 percent to 40 percent. In developed countries, pension systems typically cover around 90 percent of the labour force and 60-75 percent of the working-age population.

Moreover, coverage of Asia’s pension systems has been skewed towards workers in urban areas and the formal sector and towards government employees as opposed to private sector workers. The replacement rate -the ratio of retirement to pre-retirement income- has been largely inadequate, with only the Philippines reaching the recommended level, with a 79 percent rate. However, such a high level is often difficult to sustain and could result in other challenges down the road.

Park’s study lists four major areas for reform: 1) strengthening the institutional and administrative capacity of the pension systems; 2) improvement in their governance and regulation; 3) expanding coverage, and 4) enhancing financial sustainability.

The case for urgent pension reform is as much economic as social. Policy-makers around the region would do well to heed his warning that, if left unreformed, Asia’s pension systems will be unable to honour their future pension promises. (END/COPYRIGHT IPS)

(*) Jose Galang is a journalist specialized in business and economics reporting.

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