Notes from the Field

How Do You Get Reform in a Country Like the Philippines?

April 25, 2012

In previous posts, the nature of politics in the Philippines has been explored from many angles. We’ve examined the history of a weak state, how local politicians have difficulty making a national impact, and trials and techniques of Philippine presidents in the face of this situation. The Philippines does not have political parties that can formulate and enact policy options, and a political system of separation of powers (where Congress, the president, and the Supreme Court all check each other) can be a recipe for paralysis (as the American polity is currently discovering).

All this has been about continuity – the saying that “in the Philippines things are never as good as you hope or as bad as you fear” has been around for decades. But what about change?  Experience over these decades has been that things can and do change. How does a country denigrated by Lee Kuan Yew for having “98 percent of the population waiting for a telephone, and the other 2 percent for a dial tone” become the “texting” capital of the world with the majority of citizens now owning a mobile phone?  How can a country which for decades had a dominant air carrier with inadequate service achieve the greatest global penetration of low-cost carriers?  How did an archipelago of 7,107 islands achieve economies in inter-island transport that lowered the cost of shipping goods and increased possibilities of tourism?  

As a contribution to improving the effectiveness of overseas development assistance, we have analyzed some success stories at length. Here we can focus on the politics of how reforms can happen, with an effort to increase the availability of secure titles to land for urban residents. The process began with a clear idea of what needs to be accomplished – turning the 12 million untitled parcels of land (“dead capital”) into secure property of owners. As a problem in economic development, “dead capital” has been well-discussed, particularly since the publication of Hernando de Soto’s book, The Miracle of Capital. A loose network of individuals interested in reform – ideologues, government officials, academics – began with the aim of unleashing dead capital.

To do this, new administrative procedures would be necessary in order to increase the number of titles being issued (an average of 4,000 per year) – and since the land was public, titles could be issued by the government free of charge if recipients could prove they had paid taxes on it. To lessen political complications, it was decided to limit coverage to urban residential land to avoid continually contentious issues around rural agrarian reform. Urban parcels comprise some 70 percent of those untitled and could comprise valuable sources of security and capital for those residing on them.

The small group of reformers identified potential allies. In the private sector, the team zeroed in on the Rural Bankers Association of the Philippines and the Chamber of Thrift Banks as the private stakeholders who had the most interest in pursuing reform, because the dearth of titled properties constrained collateral-based lending to homeowners and businessmen. In the House of Representatives, Representative Cerilles was the central actor. He used his influence as assistant majority floor leader to get the bill heard in his committee, the Committee on Land Use, instead of the Committee on Natural Resources, where it had been languishing. The Senate took a more deliberative approach, but passed the bill on Oct. 12, 2009, and President Arroyo signed the bill on March 9, 2010.

In 2011, the first full year of implementation, more than 58,000 titles were issued, a 14-fold increase over the previous pace. But in the face of more than 8 million untitled urban parcels, drastic speed-up was needed. The coalition developed a “force multiplier” strategy to harness the 1,600 cities and municipalities who have resources and could draw the interest of local politicians. For elected officials this is practically a “no-brainer” – it was easy to imagine ceremonies where Mayors hand titles over to constituents. The Department of Environment and Natural Resources (DENR) issued an administrative order to provide a legal basis to work with local governments on land administration and titling. Reformers set out to brief local governments on the interests and practicalities of these “Residential Free Patents” and 78 have established “land offices” to drive titling beyond the current capacity of DENR.

So, this case (which is not the only one) is about reformers who search among the various elements of the elite – government bureaucrats, elected officials, private sector, and civil society – to find allies who either agree with their goals or whose interests can be aligned with the reform effort. In this fashion, a technically sound and politically feasible reform can be passed. Cynics may wonder, though, that beyond improving the lives of tens of thousands of families (a worthy goal in itself, of course), has anything fundamentally changed?  But it should be obvious that telecommunications reform not only brought cellphones to the average citizen, but opened up an entire industry of business process outsourcing (where the Philippines is now number two in the world).

What of Residential Free Patent?  In their recent book, Why Nations Fail, Acemoglu and Robinson argue that nations thrive when they develop “inclusive” political and economic institutions, including secure property rights. Urban citizens who own property are more likely to demand efficient city services, courts that can adjudicate property rights, and a better future for their children. They will be less dependent on the whims of powerful people than when they could be evicted as “informal settlers.”  By increasing the autonomy of the average citizen, fundamental change is afoot.

Editor’s note: this version has been edited slightly from the original.

This is the fourteenth posting in the series, “A Representative Professor,” a weekly series during a teaching sabbatical at Johns Hopkins University School of Advanced International Studies.

Jaime Faustino manages The Asia Foundation’s Economic Reform and Development Program in the Philippines and Steven Rood is the Foundation’s country representative in the Philippines. They can be reached at jfaustino@asiafound.org and srood@asiafound.org, respectively. The views and opinions expressed here are those of the individual authors and not those of The Asia Foundation.

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2 comments on this post:

  1. Jaime Faustino:

    Hi Margaret,

    You are absolutely right — Leadership matters.

    This is supported by the book of case studies (see “Built on Dreams, Grounded in Reality” in this website) and the work of Adrian Leftwich and others at the Developmental Leadership Program (see dlprog.org).

    We should also acknowledge that individual citizens and not just the government can provide leadership. In the majority of cases studied, leaders from business associations, think tanks, and civil society emerged and acted as the principal drivers for reform. Focusing our efforts on building local leadership beyond government and instead in all parts of society is likely a good investment for the long-term.

  2. Based on experience in a country like India which failed to take up the second generation reforms since the first reforms on deregulation in the 1990s, the utmost requirement today is good leadership who can form a dedicated competent team …(not appointed or nominated by favoritism and nepotism) to build strong disciplined institutions that carry out reforms and changes in local context and content instead of blind copying of another model.

    A country capable of choosing the ”right persons for the right jobs” are the winners today against increasing odds in environment, immigration, community sustainability, social securities and relations with neighbors.

    The principle of good leadership and choosing the right persons for the right jobs applies for both the developed and developing countries.

    Understanding good leadership is the difficulty; a good person may not necessarily be a good leader, being a female candidate would not automatically qualify good leadership, impressive professional background may not produce good leadership; inadequate knowledge may lead to poor performance.

    It is a dilemma to get the right one to lead, and this poses as the biggest challenge facing citizens today…How do you choose and whom do you choose?

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