NIGHT OWL
Anna Mae Lamentillo
Sometimes we plant a seed and nurture it even if we are unsure to harvest the fruit ourselves. It’s already fulfilling to see the plant grow before our eyes, and it even gives us a sense of accomplishment when that tree bears fruit and benefits the people around it. It’s like in public service, you set out a vision and turn it into fruition, hoping that in the long run more people would gain good things from it.
When Former President Gloria Macapagal-Arroyo (PGMA) introduced and eventually enacted Republic Act No. 9337, or the Expanded Value-Added Tax Act of 2005, she became unpopular. Her approval ratings never recovered because Filipinos could not grasp the benefits of the law. Fifteen years after, she had no regrets. If she were to do it all over again — she’d still sign the law.
PGMA told me “A leader must be ready to make unpopular decisions. Any economist knew fiscal reforms were long over due. It had to be done. The country needed it”.
She explains that prior to the fiscal reforms enacted during her stint as President, it was hard to implement infrastructure programs because the budget coming from taxes was only enough for salaries and legal obligatory expenditures. If they wanted to spend on infrastructure, they had to borrow. That meant, if they wanted bigger infrastructure programs, they would need bigger borrowing, which would lead to bigger interest payments.
Former President Diosdado Macapagal had the biggest influence on PGMA's life.
When interest payments are financed through another loan — the risk of bankruptcy and default become more imminent.
To PGMA, it was clear — the cycle needed to be broken. Government should start funding the bulk of physical and even human infrastructure with money coming from taxation.
38 quarters of uninterrupted growth
PGMA’s fiscal reform program proved to be beneficial for the country as it brought down our deficit ratios, earned us multiple ratings upgrades, and funded economic stimulus and social safety nets against the worst of the global recession.“We had 38 quarters of uninterrupted growth, even when the world experienced a great and very deep global recession. At that time two-thirds of the world went into a recession, but not the Philippines,” she shares.
In 2013, three years after her presidency ended, when the Philippines got investment grade rating, Fitch said, “Improvements in fiscal management begun under President Arroyo have made general government debt dynamics more resilient to shocks.”
The economy was the centerpiece of her administration and her presidency came at a time when we needed an economist, to spare us from the impact of the global recession.
Noble dreams for Philippines
PGMA earned her PhD in Economics at the University of the Philippines.
I was curious if she was already interested in entering government as a child. She shares that it was not specific to her yet, but she knew she wanted to do something noble and do something for the people, like her father, former President Diosdado Macapagal. She wanted to be a technocrat.
PGMA studied for two years at Georgetown University in Washington, D.C. where she became classmates and friends with Bill Clinton, who would become the 42nd President of the United States and Alfredo Cristiani, who would become the 37th President of El Salvador. She said they had no inkling then that they would be president of their respective countries.
PGMA with President Rodrigo Duterte
“Bill and I were both honor students. Although, he was also President of our student council,” PGMA narrated.
She earned her Bachelor of Arts degree in economics from Assumption College San Lorenzo, graduating magna cum laude in 1968. She pursued a master’s degree in Economics at the Ateneo de Manila University and a PhD in Economics at the University of the Philippines.
She proceeded to become an economics professor of these three institutions where she obtained her degrees from, before entering government service as Assistant Secretary of the Department of Trade and Industry under President Cory Aquino, who she considers one of her mentors.
‘Being a woman was never a hindrance’
PGMA signed into law Republic Act No. 9337, or the Expanded Value-Added Tax Act of 2005.
PGMA never thought that gender was a hindrance in entering government because the Philippines, compared to other countries, respects the role of women and women’s participation.
During her presidency, the Philippines was among the top countries in the world in terms of gender equity. In fact, PGMA was named by Forbes as the fourth most powerful woman in the world in 2005, when then US State Secretary Condoleezza Rice was number one. In the same year, the Philippines became President of the United Nations Security Council and PGMA presided over the UN Security Council Summit that was attended by her fellow heads of state, such as President George W. Bush of US, President Hu Jintao of China, President Jacques Chirac of France, President Vladimir Putin of Russia, and Prime Minister Tony Blair of the UK, among others.
First world Philippines
At this point in her life, PGMA says her dream is for the Philippines to be back in the ranks of the first world. During the presidency of her father, the country was second to Japan in Asia. She hopes this generation and the next will be able to see a first-world Philippines.