Aquino’s New Philippine Senate Majority Boosts Political Mandate

Aquino’s New Philippine Senate Majority Boosts Political Mandate

Philippine President Benigno Aquino won control of the 24-member Senate in mid-term elections, giving him a political boost as he starts the process of choosing his successor.

Candidates backed by Aquino, who’s halfway through his single six-year term, won nine of 12 Senate seats contested in the May 13 vote, according to the official results, meaning his allies now hold 13 seats in the upper house. Aquino’s Liberal Party continued to be the single-biggest bloc in the House of Representatives.

Aquino, who has overseen an economic revival during his three years in office, wants a tighter grip on the Senate to push for stronger anti-graft measures, speedier trials and a more efficient procurement system. The 53-year-old leader is now in a better position to anoint a successor who will continue his reforms, Joseph Abaya, who heads the Liberal Party, said in a mobile-phone message.“Aquino’s endorsement power allowed his candidates to win by a wide margin in both national and local posts,” said Ramon Casiple, executive director at the Institute for Political and Electoral Reform. “He needs to continue his anti-poverty and anti-corruption agenda to maintain his popularity, while anointing somebody who also has a good image.”

Senators are elected nationally, while the House, which has more than 280 members, is chosen from candidates representing local districts. Bills must pass both houses.

Fresh Mandate

Even without a Senate majority, Aquino has managed to enact key bills such as raising tobacco and liquor taxes and providing free contraception. He also ousted the country’s top judge, appointed by his predecessor Gloria Arroyo, for illegally concealing his wealth.

“With the fresh, strong mandate, the president is in a better position to implement more reforms to cement his legacy,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. (BDO) in Manila. “He can fix the mining issue, open more sectors to foreign investors and give a clearer signal that the Philippines is open for business.”

The constitution reserves ownership of land and media to Filipinos and restricts foreign stakes in public utilities to 40 percent. In July, Aquino expanded a mining ban and suspended new projects until he has convinced Congress to approve a higher government share in resource deals. Xstrata Plc’s stalled $5.9 billion gold and copper Tampakan project in South Cotabato would be the nation’s biggest foreign investment.

Formidable Opposition

Aquino said in a May 8 interview that he wants to reduce the number of Filipinos who work abroad, and the bureaus of customs, immigration and corrections will be on his radar after the elections. Almost 1.7 million Filipinos working overseas remit about $20 billion a year. There are more than 85,000 in Taiwan, which this month threatened to ban the hiring of Filipinos after one of its fishermen was killed by a Philippine anti-illegal fishing patrol.

The election also showed that Aquino’s political opponents, including Vice President and 2016 presidential hopeful Jejomar Binay, could be a formidable force, said Nicole Curato, a sociology professor at the University of the Philippines. Binay’s daughter Nancy, who has no previous government experience, finished No. 5 in the Senate race.

“His daughter Nancy’s win in the Senate indicates broad public support for the Binay brand,” Curato said.

Joseph Victor “JV” Ejercito, son of ousted president Joseph Estrada, will join half-brother Jinggoy Estrada in the Senate. Estrada, ousted in 2001 for corruption, is now the mayor of Manila City.

Aquino’s “chosen candidate will be the man to beat,” GlobalSource Partners wrote in a May 16 research note. “Within the Liberal Party, Interior Secretary Mar Roxas, who yielded to him as the party’s nominee for the presidency three years ago, is currently the likely anointed one.”

If Roxas drops out, other possible candidates are re-elected Senators Francis Escudero, Alan Peter Cayetano, and political neophyte Grace Poe, GlobalSource said in the note.

Once known as the ‘Sick Man of Asia’ due to its sluggish economic performance, the Philippines expanded at the fastest pace in the region last year after China. It has been rewarded with investment-grade credit ratings from Fitch Ratings Ltd. and Standard & Poor’s this year, helping push the Philippine Stock Exchange (PCOMP) Index to a record high this month. The peso has gained 4.2 percent against the dollar in the past 12 months, Asia’s second-best performer.

The economic growth masks unemployment and poverty levels that have remained almost unchanged since Aquino took office. The jobless rate rose to 7.1 percent in January, according to government data released in March, among the highest in the Asia-Pacific.

“Almost all the reforms Aquino started require time, so these need to be continued by his successor,” said Casiple at the Institute for Political and Electoral Reform. “Otherwise he will be remembered in history as somebody who started something and didn’t finish it.”

To contact the reporter on this story: Norman P. Aquino in Manila at naquino1@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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