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The nuances of the working visit of President Benigno S. Aquino III to Washington DC showed the intents on both sides more clearly than in the public statements on both sides. Some of them can be gleaned from the statements themselves while others are in the hosting itself.

Both President Aquino and President Obama affirmed the historic ties. President Aquino said that “Ours is a shared history, shared values, and that’s why America is just one of two that we have strategic partnerships with. Today’s meeting has really even deepened and strengthened a very long relationship we have, especially as we face the challenges that are before both our countries in the current situation.” 

President Obama, on his part, remarked that “[H]ow important the U.S.-Philippine relationship was, the historic ties, the 60 years of a mutual defense treaty, the extraordinary links between Filipino-Americans that have brought our two countries so closely together. And we pledged to work on a whole host of issues that would continue to strengthen and deepen the relationship for the 21st century.”

However, President Obama kicked off his remarks with economic issues, citing the Millennium Challenge Grant and the Open Government Partnership as their contributions to developing trade and commerce as well as to the anti-corruption campaign in the Philippines. President Aquino, on the other hand, touched only the strategic and historic ties.

In the official government statement later, Secretary Ramon Carandang would later stressed the “U.S. Government’s strong support for Philippine efforts to build a minimum credible defense posture…” Secretary of State Hillary Clinton only committed that “the United States will support the construction, outfitting, and training of a new National Coast Watch Center in the Philippines.”

Both are more in tune with regards to regional issues. According to Secretary Clinton, “[W]e do … have a clear interest in the maintenance of peace and stability, freedom of navigation, respect for international law, and unimpeded lawful commerce in the South China Sea.”

The visit did not answer the old question of the Mutual Defense Treaty, that is: Will the United States automatically come to our aid if we are attacked by any foreign power? It did not also provide an answer to the newer question, that is: Will the US help us if our vessels and aircraft are attacked in disputed territories of the West Philippine Sea?

The message is clear: The United States will still follow its own national interests in the Southeast Asia region and will only act with or in support of the Philippines if these are consistent with its own interests. Granted, there is a wide latitude of common interests at the moment, particularly in the areas of “the maintenance of peace and stability, freedom of navigation, respect for international law, and unimpeded lawful commerce in the South China Sea.”

A working visit is one rank below a formal state visit. It can be construed as one befitting a strategic ally–for the moment. It is definitely not in the same league as the state visits of real strategic allies such as Britain, Japan, Australia or even Israel. The Philippines still does not qualify.

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The postponement of President Aquino’s trip to China is just one of the signs foretelling trouble in the China-Philippines relations. If not handled well by both sides, these relations may deteriorate and eventually turn sour.

There are several facets of these relations that collectively describe the entire state of China-Philippine relations. One, there is the historically friendly relations on a people-to-people level.  Two, there is generally productive economic relations. Three, except during the Cold war until the Nixon administration’s “ping-pong diplomacy,” there is the generally friendly and respectful political relations between the respective governments. Four, though there are border incidents due to conflicting territorial claims, there is the openness to accommodate each other’s claim.

In the post-Cold War period, these relations not only flourished but generally grow stronger. Through all the administrations, liberal and conservative, these have not been affected by either the politics or policy decisions of these administrations.

Of course, there are historical irritants–ranging from tendencies of Filipino racism and counterpart local Chinese chauvinism, local Philippine “Maoist” communist movement to conflicting claims over the Spratly Islands archipelago and trade issues. However, these are managed issues secondary to the mainly excellent relations up to the present.

In a few short months, the Aquino administration has significantly weakened these relations. There is a discernible shift from the GMA’s “China card” approach to a more US-aligned position. It is also evident that China, for its part, is not contributing much–and is in fact–applying a calibrated response to the Aquino government’s own China-related policies.

Of course, there were immediate causes for this slight shift. We can cite the Chinese (and Hongkong’s) over-response to the Luneta hostage incidence, the perceived unsympathetic Chinese response to appeals at the highest level for the lives of the three Filipino drug couriers, and the provocations in the Spratlys. Even the recent visit of the Chinese defense minister after a few buzzing incidents in the Spratlys sends a subtle threat signal. The Chinese actions can well be interpreted as an ill-disguised and heavy-handed Chinese pressure diplomatic offensives to test the political will of the new Aquino government.

The US government–for its own national interests–saw the opening and took advantage of it. It strengthened the Obama government  relations to the Aquino government with a new US ambassador, provided a certain naval patrol capability to the Philippine navy, and strengthened the Democratic Party’s ties to the ruling Liberal Party. It thus started a new round of political, diplomatic,  and armed power play not only in the Philippines but in the Southeast Asia as well.

The situation can easily spiral into an arms race or even confrontation. This will not be in the  best interests of the Philippines, the SEA region, or the great powers themselves. Stability and predictable behavior are the current norms of conduct that must be preserved.

The ball is on the Aquino government’s court on this one. How it handles the pressures arising from great power plays in this part of the world will have a bearing not only on its own political future but on the future of the region as well.

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The aftermath of the Luneta hostage crisis has spawned its own set of crisis, with several dimensions. One dimension is the one within the new Aquino government: the conflicting and unwieldy relations among Malacañang communicators, its command over the PNP, relations with the Manila local government, and its crisis handling capability. Another dimension is the security forces’ hostage-handling protocol, command and leadership skills, and infrastructure/logistics problems. A third and potentially more dangerous dimension is the international one–relations with China/Hongkong, backlash on the overseas Filipinos in Hongkong, and Philippine image impact. Related to this is the impact on the tourism industry, export industry, and other service industries, especially those dealing with Hongkong and Chinese companies. An opportunistic political crisis–spawned by the opposition GMA-identified forces–has also risen and threatens to derail the reform agenda of the Aquino administration by trying to undermine its popularity with the people.

The Aquino government now has its its first multi-front political crisis. In this situation, a crisis center (much as it dislikes the past administration’s style) is called for. One needs a 24-hour monitoring center. Second is the formation of reliable, competent crisis committee(s)–depending on the nature, gravity and requirements of the various crises. Ad hoc arrangements work only when there is already a pre-planned list of these people and committees. At the top of the list are political strategists–those who know the political implications of every decision and can determine the political framework of various solutions.

There are evidently forces riding on the Luneta hostage crisis. One are the various international actors who have their own political agenda, not the least of which is the Hongkong government itself. The GMA opposition is another; it conveniently forgot its own share in the similar incidences in the past and their own irresponsibility in the weak political and police capability today. There are also infighting within the Aquino administration trying to make hay while others are in trouble.

The Aquino administration also has a problem with the erstwhile friendly media. The latter does not have a non-partisan role in its pursuit of the news scope–it is part of the problem in the hostage crisis and media people should accept this failing. The need for strict guidance for media should be recognized by both government and media.

The challenge for the Aquino government is not the hostage crisis and its botched ending. The latter is subject to investigation and responsibilities can be determined. The substantive political crisis is the viability of current administration in terms of popularity and actual political clout. It has to demonstrate that it is on top of things and that no other political force can take advantage of the situation.

There is no political honeymoon for President Noynoy. It’s war from day One. It has to reassess its options and decisively take action. Its worst enemy now is caution and delay. Procrastination in leadership is its own worst enemy.

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Several things happened on the way to the SONA of the president. All of them came from an unexpected source (well, not so unexpected if you’ve been smelling the air for sometime): the US government. The first was the very public speech of ambassador Kristie Kenney where she unequivocally stated the US government’s preference for the holding of a credible 2010 elections. The second was the visit of no less than the head of the US Central Intelligence Agency to talk to President Macapagal-Arroyo. The third was the communication from the US White House that President Obama will meet President Gloria Macapagal-Arroyo on July 30.

The hands-down bet, of course, is that these events are related and manifest a major US decision concerning Philippine politics and the 2010 elections. Considering that the time is fast approaching for final choices for the presidential candidate to support, this is a time for political maneuvers of all political forces to force the situation along their own preferred scenario.

Alas for nationalists, it is the current political reality that the US looms large over any scenario and is in position to encourage or discourage it. Assuming the public position of the US, this will effectively kill the martial rule scenario, the constituent assembly scenario, and the no-election scenario.

However, the intriguing consequence of the US moves is how it will effect any electoral preference it has, if any. Undoubtedly, the US government can deal with any presidentiable who wins. The question, however, is : does it have any favorite? Related to this, why talk to GMA at this particular moment?

Speculations, of course, will revolve around the actual political message from Obama’s US. The SONA represents a good opportunity to read this message.

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The Obama world

Today, Barack Hussein Obama will become the 44th US president. He represents a break with history in many ways. The most obvious, of course, was his being the first colored president, having crossed the monumental divide for the first time. He also represents the post-Cold War generation, the Internet generation, and the vast youthful generation just coming into their own.

A similarly significant Obama characteristic is his unifying theme, yet combined with the determination to redress the wrongs of society that divide and undermine the American vision “that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”

Of course, the rhetorics may not reflect in the reality of an Obama government facing the global recession, two major wars, and a global environmental crisis. At the same time, he has to manage the transition to the brave, new American world–the world where Americans are just equal to everybody else and that America needs the goodwill of the rest of humanity and is a part of it.

However, expectations ran high that his is a government that will think out of the old generation’s box, put intractable problems in new perspectives, and put forward new, workable ideas to solve global problems.

His is a basically non-ideological approach, encompassing the wisdom of all sides. However, his is expected to be a simple and straightline addressing of problems. Ideologues, Right and Left, will have problems with an Obama, yet his popular support and the openness of the American people and most of the other peoples might force them to open to him.

Obama has a historical opportunity to do the right thing not only for America and the world. The world lies at his feet. Whatever he does in his presidency, none can diminish what he has already accomplished today by becoming a president of his nation.

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Bush’ $700B gamble

Bush and his finance managers seemingly leapt out of the box early this week when they announced an immediate $700 billion plan to buy out dead assets and underwrite the liabilities of the finance and investment sector. In effect, the US government will not anymore be a regulator of the private economic players; it decided to be the commanding player, dwarfing everybody else.

That it put forward such an unprecedented proposal to a Democratic Congress in the year of the presidential elections showed the desperate straits of the US financial (and eventually the economic) system as well as the Republicans’ presidential campaign. Democratic presidential candidate Barack Obama immediately surged in rating, topping 52 percent in some surveys to Republican presidential bet John McCain’s 44 percent. The Palin “good conservative feel” evaporated under the scorching issue of a threatening economic meltdown. Going into the first presidential debate, the Democrats had a legitimate, close-to-American hearts issue that spans across the political divide–the US recession.

The foundations of this recession were laid during the first Bush term with its laid-back, hands-off regulation of the financial system, started to make itself felt in his second term, and is now going into its full-blown phase as the man leaves the office. There is nothing Republicans can do to offset the blame going their way; there’s nothing that Sen. McCain can do to divert the eyes of American voters from the riveting scene of the inexorable destruction, one after the other, of American giant financial institutions.

The Bush $700 billion gamble is solely targeted to prevent this collapse and salvage a developing Republican rout in the coming elections. At most, it will only delay the inevitable as injection of liquidity is only good as the level of fear and loss of confidence among depositors, investors, and among banks themselves. The Democrats–who controls Congress–suspected this and renegotiated the Bush package to include protection of the small people (read: voters), and restrictions on the managements of banks and other financial institutions.

The Bush bluff had been called and he will have no choice but to give in to the Democrats’ position–he has no room to maneuver with the stock markets slide nipping at his heels. At this point, the Obama campaign calls the shot, as shown by McCain’s sudden reversal of a decision not to go on with the presidential debate.

Unfortunately for McCain and the Republicans, the economic crisis is THE ISSUE. And it’s not theirs but the Democrats’ and Obama’s.

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The riveting drama gripping Filipino urban-based businessmen and yuppies now is not the forthcoming Ateneo-La Salle legendary basketball championship games. It is the game of markets, specifically the US stock market and companies who got burned (and are still burning) in the US subprime bond market.

Bear Stearns, Freddie Mac and Fannie Mae, Lehman Brothers, Merrill Lynch, AIG–a who’s who of giants in the bond market (and also in the stock market) toppled or are toppling like dominoes. Others are teetering on the edge. Some may be bailed out by huge Federal funds, some may merge into the banks, but some will fold up.

Hard times are ahead for the Americans and their economy. The US economy is almost sure now to go into recession. Some analysts are even saying a depression is already a possibility, in the horror tradition of the 1929 Great Depression. The world stock market has taken note, and global stock markets started their sympathy dives.

How fare the Philippine economy and businesses? The US remains the country’s biggest trading partner, largest source of overseas Filipino remittance, and largest concentration of overseas Filipinos. Most of our foreign currency is in US dollars. Though Philippine economic relations have diversified in a globalized economy, the biggest share is still with the US economy. When the latter sneezes, we will still get the colds. Due to globalization, other economies (or Philippine trading partners or job markets) will feel the US recession. We will doubly feel their pain and still get the colds.

Assurances from the President, the Central Bank, the banks, and the affected businesses here are not much different from Bunraku, the ancient Japanese shadow theater–the puppeteer is in full view of the public but the puppets are what the audience see, thanks to the skills of the former.

Credibility however is paramount. GMA’s assurances are worrying because the more she insists on the economy’s strength or capability to withstand the US recessionary pressures, the more people will believe the opposite. More often than not, the people are correct.

The only prudent thing for our people to do is to hope for the best but prepare, prepare, and prepare for the worst. Prepare to deal with local stock market losses, bank fold-ups, disappearing insurance plans, dissipating foreign and local investments, company bankruptcies, job insecurity, decreased remittances, decreased jobs, and labor repatriation. Prepare to deal with poverty on top of poverty.

The nearest thing to recall is the 1997 Asian crisis. That was a hiccup. The situation now is threatening to be a flu, even possibly a pneumonia.

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