PCSO shutdown: Just the first shoe to drop?

Credit to Author: The Manila Times| Date: Sat, 27 Jul 2019 16:11:46 +0000

BEN KRITZ

ON Friday, and with no advance warning whatsoever, President Rodrigo Duterte took to the airwaves to announce that he was suspending all gaming operations of the Philippine Charity Sweepstakes Office (PCSO), effective immediately, due to uncontrollable corruption at the state-run lottery operator. The natural question that arises is, “What’s he really up to?”

The PCSO operates a number of lottery games, and primarily uses the revenues from those to fund indigent medical care. The agency has been beset by corruption for years, and has been on the President’s radar for some time.

Just last month, Duterte replaced the general manager of the PCSO after it was found that he had authorized a P6-million office party. Duterte, who on several occasions has publicly expressed his distaste for any kind of gambling, apparently gave the PCSO’s new management a month to straighten things out; that did not happen, so the President pulled the plug on the entire agency.

That is plenty of justification on its own, but the abrupt, oddly timed announce­ment of Duterte’s move raises some suspicions that it is a smokescreen, no matter what value it otherwise has.

Despite the risk of alienating much of his political power base — millions of D- and E-level Filipinos who regard the lottery as a potential salvation, and whose ability to receive basic medical care may now be in jeopardy — Duterte’s suspension of the PCSO was a good move for its own sake. Lotteries are insidious, and to refer to one using the word “charity” is laughable. In effect, a lottery is a form of voluntary tax; yes, the revenues are ostensibly put to good use, but those revenues originate with the people who receive the benefits. The lottery is not charity; it is simply recycling the poor’s own resources.

And, of course, it is no secret that the management of the PCSO has always been suspect; there have been numerous corruption allegations against agency personnel over
the years, and more than a few that have stuck and resulted in someone being legally penalized. Duterte has demonstrated a willingness to take draconian action against an agency when he gets frustrated by a lack of progress in eliminating corruption, and doing so against the PCSO is minimally disruptive to existing processes and policies. As positive attention-grabbing moves go, shutting down the PCSO was a good choice; morally correct and essentially harmless.

However, it is difficult to believe that announcing a seemingly drastic, but realistically safe decision late on a Friday simply cannot have had some ulterior motive. Diverting public attention from a more troublesome issue, wagging the dog, so to speak, has always been a favorite tool in any politician’s toolbox, and it is one that Duterte has demonstrated skill at using.

Until the other shoe actually drops we can only speculate on what it is the president is trying to divert public attention from, but here are some things to think about:

The rice tariffication policy has gone completely sideways. Liberalizing rice imports were supposed to stabilize supply of the country’s staple food and at the same time boost prices of domestically produced rice. That contradiction was never properly clarified or accounted for, and the results have been predictable. Rice supply is now quite stable, but Philippine farmers are getting even lower prices than before.

The administration’s flagship Build, Build, Build infrastructure drive is coming under increased scrutiny for not being anywhere close to its targets at the midpoint of Duterte’s term. Although a great deal of work has actually been accomplished, there have been some obvious failures. A number of big-ticket projects have not gotten off the ground or have become mired in technical and legal difficulties, and the government has been embarrassed by slow progress and inefficiency in a couple of sensitive projects such as the Marawi rehabilitation and the housing program for refugees from Typhoon Yolanda.

Duterte’s veto of the Security of Tenure Act may be more politically damaging than anyone realizes. Although Duterte’s rejection of the bill banning many forms of contract labor was absolutely the right thing to do — it was a poorly conceived and badly written measure that would have created havoc had it become law — it was nevertheless the breaking of a campaign promise on Duterte’s part, and potentially increases the friction between the administration and the heretofore compliant legislature. This could have negative implications for a number of important issues, such as the passage of additional tax reform packages and the National Land Use Act.

These are all complicated subjects that pose more risks than benefits to the public and investors if they do not go Duterte’s way, and it is looking increasingly likely they will not, without some significant compromise on his part. For a leader who has taken the “strong executive” label to heart more zealously than anyone since Marcos, and has for the most part governed effectively with it, losing his veneer has got to be uncomfortable, particularly since the success of his policy objectives is not assured even if he does so. A distraction like the PCSO in that context then becomes very useful.

ben.kritz@manilatimes.net
Twitter: @benkritz

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