Pacific Strategies and Assessments, a major risk-consultancy with offices in Manila, Beijing and other Asian cities, released this advisory to its clients last April.

MANILA — Shortly after winning a second term as president, Gloria Macapagal Arroyo announced an optimistic 10-point plan created to solve the nations problems and prepare it for takeoff, words that soon became her catchphrase. Nearly two years on, there is progress on only a few of the 10 points.

The objectives Arroyo lined up were unrealistic, but the vigorous political infighting of the past two years has eroded much of the progress the government might have made toward these goals.

1) Creating six million jobs in six years. Arroyos economists have been crowing about 750,000 new jobs last year, but the government needs 1.5 million new jobs per year until the end of Arroyos term to cut unemployment a whopping 29.4% if you include the mysterious government category underemployment to manageable levels. Many of the new jobs created under Arroyo involve sweeping streets and trimming grass.

2) Constructing new school buildings and classrooms, as well as providing desks, chairs, and books for students. Providing scholarships to poor families. Little progress on this front. 50-60 students per class in public schools remains the norm, in part fueled by rapid population growth, and in rural areas classes may be held under trees. Teachers are poorly paid, joining the professional exodus abroad, and those that remain have declining skills. A recent report said that todays average sixth grade Filipino student has the skills of a third grade student in a global setting.

3) Balancing the budget. The administration said it would improve collection and began imposing higher taxes on goods and services. Still, tax collections missed their target by 34% for the first two months of 2006, mostly a result of corruption and evasion. This year, experts say the government deficit will reach roughly US$2.5 billion. While Arroyo has pledged to solve the deficit problem at the end of her term, most knowledgeable observers believe a balanced budget is highly unlikely given pervasive corruption and the governments need for endless borrowing to service its gargntuan foreign debt.

4) Decentralizing economic progress through better transport and digital infrastructure. Arroyos much-vaunted strong nautical highway of roll-on-roll-off vessels designed to connect various island groups is now heavily depreciated. One month ago, a government assessment team gave the project a very low mark.

5) Providing electricity and water supply to communities nationwide. Capacity and distribution problems remain. The country is on the brink of a national power crisis that is expected to hit within a couple of years.

6) Decongesting Metro Manila by forming new cores of government and housing centers in Luzon, the Visayas, and Mindanao. Manila remains heavily congested because of continued inward migration for work. Traffic jams and squatter communities are still prevalent.

7) Developing Clark and Subic as Asias best international service and logistic centers. Officials have done promising work by building interconnecting highways and upgrading the Clark airport. However, the Supreme Court nullified the tax benefits that the Government used to attract companies to locate at Clark. Congress, which is expected to fix the problem, is too busy with political bickering to pay attention to other matters. Logistics firm Fedex transferred its operations from Subic to China, saying that the Chinese economic zones have better facilities. Competitor UPS is planning to relocate its regional hub from Clark to Shanghai in two years.The decision of these companies to pull out sends the signal that infrastructure in the Philippines doesnt measure up.

8) Automating elections. The most recent attempt was a disaster; officials who headed the procurement of election machines are now being investigated for corruption. Election officials have a poor reputation after allegations surfaced last year that one of its top officials helped Arroyo cheat in the 2004 elections.

9) A just end to the Muslim and leftist insurgencies. The government says a final peace deal with the Moro Islamic Liberation Front (MILF) is on the horizon, but the government has not addressed basic issues like poverty and land rights issues. Unless it does, new more radical separatist groups will merely emerge. Peace talks with the New Peoples Army have been suspended indefinitely, and fighting continues. Recent news had it that the rebels were in touch with rightist groups for a junta that would attempt to topple the government.

10) A fair closure to the divisiveness created during the Edsa 1, 2, and 3 uprisings. Following allegations that she cheated in the 2004 election, Arroyo protected herself with executive orders that countered opposition moves against her. She attacked the media and has cracked down hard on those alleged to be plotting coups against her. Rather than being united, the players of Filipino politics are now drawn against each other in opposite camps, waiting for an opportune time to strike.

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