Bing Baltazar C.
Brillo[1]
2012 Philippine Quarterly of
Culture and Society, vol. 39, no. 2, pp. 163-183.
Abstract
Policy modification is an area of policy change
least explored, as most of the scholarly outputs have concentrated on policy shift.
As a legislative process, policy modification refers to the re-legislation of a
recently enacted statute in a relatively short period of time to rectify or
adjust it to some domestic or external demand in the political system. This
definition presupposes two dimensions: first, an initial law is passed by the
legislature; and second, after a relatively short span of time, the policy is
amended in response to some post-enactment request, petition, or pressure.
Moreover, the legislative action entails continuity since the aim is merely to
improve or enhance the existing policy due to some post-enactment demand, and
not to reverse or drastically change the overall make-up of the policy. This
study analyzes three cases of statutory re-legislations— the Foreign Investment
Act (R.A. 7042 to R.A. 8179), the Anti-Dumping Act (R.A. 7843 to R.A. 8752),
and the Anti-Money Laundering Act (R.A. 9160 to R.A. 9194)— to empirically verify and substantiate the
assumptions in literature as well as illustrate the intricacies of policy
modifications in the Philippines. The paper contends that the policy
modification of the three cases can be
elucidated through the following: first, the FIA as internally driven via
government learning; second, the ADA by the interplay of domestic strategy and
external dynamics; and lastly, the AMLA as externally driven via coercive
measures.
Introduction
In
the last decade, the bulk of scholarship in Philippine policy making has revolved
around the dynamics of substantive policy formulation and change. For instance:
Antonio Pedro and Eric Batalla assessed the politics of banking and financial
liberalization (Republic Act [R.A.] 7721) in 2002; Lourdes Rebullida discussed the
dynamics between the urban poor and the government in formulation of the
housing policy (R.A. 7279) in 2003; Jorge Tigno examined the legislation
dynamics of the migrant workers and overseas Filipino law (R.A. 8042) in 2004;
Ela Atienza evaluated the effects of the devolution of the health policy (R.A.
7160) in 2004; Amado Mendoza analyzed the politics behind the legislation of
the comprehensive tax reform program (R.A. 8424) in 2005; and Bing Baltazar
Brillo examined the intricacies of the evolution of the retail trade policy (R.A.
8762) in 2010;[2]
and reexamined the quality of pluralism that existed among actors and
stakeholders in the legislation of the foreign bank liberalization law (R.A.
7721) in 2012.[3] Although
the literature has sufficiently explored substantive policy formulation and change;
one form of policy change, specifically policy modification, has largely been ignored
by scholars.[4]
Policy
modification simply refers to the re-legislation of a recently passed statute in
a relatively short span of time in order to rectify or adjust the policy to
some domestic or external demand in the political system.
In other words, policy modification involves the fine-tuning of a recently legislated
policy in order to make it more suitable for the intended purpose or more compliant
to the changing environment. As a legislative process, policy modification has two
dimensions— first, the enactment of the initial law; and second, the eventual revision
of the same law within a short period of time. Policy modification also
presupposes the continuity of the policy. The aim of the legislative action is
simply to improve or enhance the existing statute due to some post-enactment
demand, and not to reverse or drastically change the overall make-up of the
policy.
This study seeks to fill the gap in
literature by elucidating the dynamics of policy modification. In particular,
the paper provides empirical discussions on why and how policy modifications
come about as well as its subtleties in the Philippine setting. In doing so, it
examines three legislative cases of policy modifications: the Foreign
Investment Act (R.A. 7042 to R.A. 8179), the Anti-Dumping Act (R.A. 7843 to
R.A. 8752), and the Anti-Money Laundering Act (R.A. 9160 to R.A. 9194). The cases
were selected since the statutes fit the dimensions of policy modification— that
is after the enactment of the original law, the statutes were re-legislated in
a relatively short period of time with the sole purpose of “adjusting” the said
law. The statutes also share a common denominator since all of them are outcomes
of the post-EDSA governments’ adaptation to the global liberalization trend. Furthermore,
the paper serves as a sequel to the previous research of the author, where the policy
making of the initial laws— specifically, the Foreign Investment Act (FIA), the
Anti-Dumping Act (ADA), and the Anti-Money Laundering Act (AMLA)— has been previously
studied (see Brillo 2010b; Brillo 2011; Brillo 2012b). Thus, this paper intends
to complete the analysis by focusing on the area least explored— the post-enactment
to the amendment phase of the legislative process.
Two Forms of Policy Change:
Policy Shift and Policy Modification
As an analytical concept, policy
change was brought to light only in the late1980s in the realm of policy
studies. In modern political systems, probing on policy change is essential, as
policies are constantly evolving and rarely maintained in exactly the same form
over time (Peters 1986). This reality, hence, makes the politics of changing
policy commonplace among governments. Hogwood and Gunn (1984) cited three
reasons why policy change is frequent in contemporary legislation. First, the
expansion of government activities through the years brings about overlap in
policies which would necessitate reforming existing policies. Second,
legislative oversight, particularly in cases of inadequacies and adverse side
effects, may instigate the changing of the policies. And third, the demands of
sustainable economic growth and the implications of the financial commitment of
a government might require the replacement of old policies. Although prevalent,
policy change is always a difficult legislative undertaking since it is always
easier to continue an existing policy than to replace or reform it (Howlett and
Ramesh 1995).This is expected, as people benefiting from the status quo policy would
naturally oppose any move to change the policy.
Broadly, policy change refers to “the
point at which a policy is evaluated and redesigned so that the entire policy
process begins anew” (Stewart et al. 2008: 11). Policy change takes two forms: first
is policy shift where the make-up of the prevailing policy is substantially
altered or replaced; and second is policy modification where the existing policy
is merely adjusted or reformed (see Anderson 1990; Howlett and Ramesh 1995;
Stewart, Hedge and Lester 2008; Brillo 2010a). Relative to policy modification,
policy shift has been sufficiently studied in both its empirical and
theoretical aspects. For instance, on the empirical side—studies explaining the
pattern of policy shift in American politics. Schlesinger (1986), stated that
policy reforms happen in a regular cyclical alternation between the two
dominant political parties— the Democratic Party and the Republican Party. While
Amenta and Skocpol (1989), argued that policy shifts occur in an erratic
pattern among groups in society since policies of one period which favor one
group, serve as stimulus for a reaction in the next period which would favor
another group.
On the theoretical side— studies explaining
policy shift by means of analytical frameworks. Sabatier (1987 and 1988) and
Jenkins-Smith (1999), via their advocacy
coalition framework, concluded that policy shift occurs mainly through the
competition among advocacy coalitions and through external changes in the
policy subsystem (e.g., shift in socio-economic orientation, public opinion, or
governing coalitions). Here, advocacy
coalition refers to alliances of groups (usually consisting of legislators,
bureaucrats, interest groups, and think tanks) with shared beliefs that
coordinate actions to push for a particular policy (Sabatier and Jenkins-Smith
1999). Another, Baumgartner and Jones (1991 and 1993), through their punctuated equilibrium framework, argued
that policy shift happens when the prevailing policy monopoly in a political
system is “punctuated” (i.e. challenged and successfully replaced) by a new one.
Here, policy monopoly refers to “a set of structural arrangements that keep
policy making in the hands of relatively small group of interested policy
actors” (Smith and Larimer 2009: 84). In a political system, policy monopoly is
usually broken when there is a redefinition of issue (e.g., positive to
negative image) since this leads to the alteration of a policy subsystem. And
Kingdon (1995), utilizing his three
streams framework, contended that, to have a successful policy shift,
certain phases must come together. First, the problem stream where the problem
is highlighted and moved to the government agenda. Second, the policy stream
where alternative policies vis-à-vis the problem is generated. And third, the
political stream where the key actors and stakeholders “bargain” over the
policy. Here, all three streams must converge to open a policy window for policy
shift.
Oddly, policy modification, which is the
more typical form of policy change— as it is easier to make adjustments and
continue a policy than substantially change a policy— has been scantily explored.
Policy modification, as a policy making
process, refers to the re-legislation of a recently enacted statute in a relatively
short period of time to rectify or adjust it to some domestic or external
demand in the political system. The definition presupposes two dimensions
of policy modification. First, an initial law is passed by the legislature
(usually resulting in a policy shift, as this law substantially alters or
replaces the old policy). Second, after a relatively short span of time, the
enacted law is amended in response to some post-enactment request, petition, or
pressure. Here, the initial law is fine-tuned in the re-legislation to improve
or make the policy more suitable or compliant to a national or international
demand. Broadly, the demand to rework the policy can come from a multitude of
factors, such as error in legislation, ineffectiveness of enforcement, revelation
of unintended consequences, changes in the environment, or international
pressure. Furthermore, unlike policy shift which substantially changes the
direction or essence of the statute, policy modification presupposes the
continuity of the existing policy despite the amendment or revision to it.
Among the policy shift’s frameworks, the
closest in explaining policy modification is the advocacy coalition framework
via its concept of policy learning. In general, policy learning refers to a
condition where the policy actors (governmental, stakeholders and coalitions)
continually update their beliefs in response to new information and changes in
the political, socio-economic environment (Heclo 1974, Sabatier 1988, May 1992,
Hall 1993, and Rist 1994). The literature on policy learning provides two
directions that are akin to policy modifications. On one hand, policy learning
is equated to a government’s normal process where decision-makers attempt to improve
the policy or to understand policy failures based on new information and/or
past consequences (Hall 1993). On the other hand, policy learning is deemed as
a governmental activity where decision-makers adjust or revise a policy in
response to an external stimuli or changes in the environment (Heclo 1974). Taken
together, the grounds for the occurrence of policy modification can be inferred
as a function of two sources— internal learning and external changes. In other
words, policy modification, as a legislative process, can originate either from
within (based on internal dynamics among the governmental or societal actors) or
from outside (based on externally driven inducements or pressure from
international actors) of the political system. Taking off from the preceding
discussions, this study analyzes three cases of statutory re-legislations. The
aim is to empirically verify and substantiate the assumptions in literature as
well as illustrate the intricacies of policy modifications in the Philippines.
The Foreign Investment Law (R.A. 7042 to R.A.
8179)
R.A. 7042 or the Foreign Investment Act
(FIA) was formally signed into law by President Corazon Aquino on the 13 June
1991. The FIA was conceived when the Congressional Executive Investment Policy
Review (CEIPR) set up from November 1989 to February 1990 concluded that most
of the investment laws of the country are outdated and needed immediate
revisions (Brillo 2012b). Specifically, the CEIPR was referring to Executive
Order 226, otherwise known as Book II of the Omnibus Investment Code of 1987,[5]
a law largely taken from R.A. 5186 and R.A. 5455 which were enacted in 1967 and
1968, respectively. The law was considered passé and discordant with the
country’s present economic situation particularly in the contemporary era of
economic globalization. The CEIPR’s assessment reflected the neoliberal
orientation of the Aquino administration. This position was clearly articulated
by the Board of Investments (BOI): those policies to be adopted “should reflect
the desire of this government to open up the economy… that is
outworld-oriented, (with) a broader base of participation, and with minimum
government intervention” (Congress of the Philippines-Senate Committee Hearings
on Foreign Investments of 1991: 3).
The FIA was the foremost of the package
of legislative measures adopted by the Aquino administration to improve the
country’s overall investment climate. The policy was designed to have a
spillover effect since its passage was expected to precipitate the legislation
of other policies that would further liberalize the economy. In particular, the
FIA was intended to address the insufficiency in the capital investment of the
country which should ideally be generated through internal savings. Since the
Philippines has a low domestic savings rate, the government was compelled to
explore external sources such as foreign loans and foreign investments. Foreign
loans, however, was not an appealing alternative as the country at the time was
already burdened by a huge foreign debt amounting to $28 billion. Thus, in
resolving the country’s capital deficiency, the only viable option of the
Aquino administration was attracting foreign investments (Brillo 2012b). Under
this condition, the Aquino administration impelled the Eighth Congress to
immediately enact the foreign investment law.
Four years afterwards, the Ramos
administration called on the Congress to repeal the FIA. The objective of the
amendment was to further liberalize the entry of foreign investment in the
country. Since the implementation of the FIA, the government believed that the
policy was relatively successful in increasing the flow of investments in the
economy. For instance, Senator Ramon Masaysay Jr. cited in his sponsorship
speech that “for the years 1993-94, a 403 percent or more than four times jump
in foreign equity investments of BOI-approved projects was realized when the
actual figures rose from P14.414 billion in 1993 to P97.781 billion in 1994.
The trend continued with the period covering the first semester of 1994 to
1995, which showed a remarkable 53.08% increase in investment over that of the
previous year” (Congress of the Philippines-Senate Session Proceedings on the
Amendments to The Foreign Investment Act of 1991: 9). Despite this, the
consensus among the government agencies, such as the Bangko Sentral ng
Pilipinas (BSP), National Economic Development Authority (NEDA), Securities and
Exchange Commission (SEC), Department of Trade and Industry (DTI), and BOI, was
that there is a necessity to amend the FIA so as to maximize its benefits. As
stated by Congressman Margarito Teves, one of the sponsors of the repealing
bill, “unfortunately, the opportunities offered by the new law was not
competitive enough to attract substantial foreign capital… from 1991 to 1993,
the country attracted only $1.5B or 6% out of some $25.3B foreign direct
investments in Southeast Asia”[6]
(Congress of the Philippines-House of Representatives Session Proceedings on
the Amendments to The Foreign Investment Act of 1991: 135). Here, the success
of neighboring ASEAN countries was attributed largely to their more liberal
investment policies. Thus, the logic formed was that to be at par with them,
there is an urgent need to amend and improve the FIA.
The move to amend the R.A. 7042 revolved
around three substantive provisions. First, the deletion of the three-year
requirement before a domestic enterprise may change its status to an export
enterprise. Second, the reduction of the minimum paid-in capital requirement
from $500,000 to $150,000. And third, the removal/retention of the provisions
relating to the Negative List C[7]
(Congress of the Philippines-Senate and House of Representatives Session
Proceedings on the Amendments to The Foreign Investment Act of 1991). Except
for the last provision, there was concurrence between the two legislative
chambers. The legislation of FIA was facilitated by its initial success. It alleviated
the fear that foreign competition would overwhelm the domestic industries— as
this apprehension did not happen. As a consequence, this psychological fear, which
was a critical factor in the deliberation of the FIA in 1991, was removed from
the equation in the re-legislation. The legislation was further accelerated
since the FIA was included as an integral part of the Ramos administration’s
overall development program of liberalizing the economy. Hence, the government
exerted strong efforts to expedite the legislative proceedings by elevating the
status of the FIA’s amendment over other policy agenda in Congress. Under this
context, the Tenth Congress formally enacted R.A. 8179 which was signed into
law by President Fidel Ramos on 28 March 1996.
The Anti-Dumping Law (R.A.
7843 to R.A. 8752)
R.A. 7843 or the Anti-Dumping Act
(ADA) was signed into law by President Fidel Ramos on 21 December 1994. The ADA
was enacted by the Ninth Congress principally to preempt the perceived
detrimental effects of the implementation of the General Agreement on Tariffs
and Trade—Uruguay Round (GATT-UR) agreement in which the Philippine Government
was a signatory. As an economic regime, the GATT-UR, which in 1995 became the
World Trade Organization (WTO), promoted the unhampered flow of goods and
impelled the country to open its economy. The opening of the domestic market
and international trade were promoted mainly through the drastic reduction of
tariffs and duties on imported goods. The rationale was that the entry of
foreign producers and imported goods would infuse competition and efficiency in
the economy. This economic arrangement, however, has a downside. It posed a
clear and present danger to the local industries since there was a strong possibility
of dumping in the domestic market (Brillo 2010b). Dumping is considered an
unfair trade practice when foreign producers, in their quest to penetrate and
capture a market share, deliberately flood the domestic market with products
that are priced either lower in their own national markets or below the cost of
production. The intent here is to artificially lower the price to reduce or
eliminate competition. With this looming possibility, GATT-WTO encouraged their
member countries to legislate an anti-dumping law for protection. The law was
designed as a correcting mechanism where the government is given the right to
adopt measures (e.g., imposition of tariffs or duties) to protect the domestic
producers against unfair trade practices from foreign producers. Under this
circumstance, the Ramos administration and the Ninth Congress agreed to repeal
Section 301 of the Tariff and Customs Code of 1957 (R.A. 1937) and legislate an
anti-dumping law.
The circumstance behind the policy
making of the ADA was unusual. Although the legislation was instigated by the
GATT-UR agreement, the ADA was enacted primarily to respond to domestic demand
rather than to diligently comply with the GATT-WTO mandate. The ADA was deliberately
passed before the formal Senate ratification of GATT-UR agreement. This move
was strategic since the objective was to provide adequate protection to
domestic industries before the effectivity of the international trade
agreement. As aptly stated by Senator Gloria Arroyo, a co-sponsor of the
anti-dumping bill, the foremost intent of enacting the law is to set up a
safety net to help local industry and only secondarily to comply with the GATT
mandate (Congress of the Philippines-Senate Committee Hearings on The
Anti-Dumping Act of 1994). The lawmakers’ strategy was twofold: first, to
overlook some requirements of the GATT-UR agreement in legislating ADA so as to
give ample protection to the local businesses; and second, to subsequently
re-legislate the law (after maximizing the “grace period” allowed) to fully
comply with the anti-dumping provisions of the international treaty. As
observed by Brillo (2010b: 22): “The intent of the legislators was to quickly
enact an anti-dumping law tilted toward the domestic industry before the formal
ratification of the GATT-UR Agreement, and to amend the law again after several
years to make it consistent with the commitments to GATT.” Thus, from the very
beginning, ADA was intended to be a “temporary” law to maximize benefits for
domestic industries with the pre-plan of amending it later on.
Four years afterwards, the Estrada
administration and Congress became aware of approaching end of the minimum
five-year time table allowed by GATT-WTO for member countries to strictly
comply with its anti-dumping requirements. As a consequence, the
Legislative-Executive Development Advisory Council (LEDAC) in mid-1998 made the
repeal of ADA a priority measure. In Congress, the principal concern of the
re-legislation was the issue of conformity— that is how to align the domestic
law with the GATT-WTO agreement on Anti-Dumping Practices (Brillo 2010b). As
stated by Senator Juan Ponce Enrile, the principal sponsor of the repealing
bill and the Chair of the Ways and Means Committee, there is a need to recast
R.A. 7843 to make it clearer, simpler to implement and closely adhere to the
mandates of GATT-WTO which the Senate ratified (Congress of the
Philippines-Senate Committee Hearing on the Anti Dumping Act of 1998). The
Tariff Commission (TC), through Commissioner Anthony Abad, identified the
provisions of ADA that were inconsistent with the GATT-WTO requirements:
·
withholding
of the release of questioned importation pending the determination of a prima facie case of dumping;
·
imposition
of a provisional measure immediately upon the finding of a prima facie case, effective up to the final determination of
dumping;
·
inclusion
of substitutes in the definition of like
products;
·
country-specific
application of anti-dumping duty;
·
limiting
the period of submission of replies to a questionnaire to 10 days; and
·
retroactive
application of definitive anti-dumping duty on all importations within 150 days
immediately preceding the filing of the protest (Congress of the Philippines-Senate
and House of Representatives Committee Hearings on the Anti-Dumping Act of
1998).
The
Estrada administration, knowing well the repercussions from the international
community if the government will not honor its commitment, fully supported the
move to repeal the existing anti-dumping law. Under this context, the Eleventh
Congress deliberated and enacted R.A. 8752 which was formally signed into law
by President Joseph Estrada on 12 August 1999.
The Anti-Money
Laundering Law (R.A. 9160 to R.A. 9194)
R.A. 9160 or the Anti-Money Laundering
Act (AMLA) was enacted on the 29 September 2001, after a record-breaking
deliberation of a little over a month and one day before the deadline set by
the Financial Action Task Force (FATF). The FATF is the principal international
body that promoted the adoption and development of the anti-money laundering
law among countries. The AMLA is a financial regulation policy designed to
specifically combat the global proliferation of illicit money— drug and
terrorist financing— in banks and other financial institutions. The move that
successfully enacted the AMLA began in August 2001 during the Twelfth Congress,
roughly a little over 30 days before the FATF’s imposed deadline. The
accelerated phase of the legislation in Congress was attributed to the
“intervention” of the FATF via the black list or the Non-Cooperative Countries
and Territories (NCCT) initiative (Brillo 2011). In the 2000 and 2001 NCCT Reports,
the Philippines was identified as one of the 23 countries not complying with
the FATF’s financial regulations standard (see FATF 2000 and 2001). As a consequence
of being a blacklisted country, the Philippines was subjected to routine
countermeasures and given until 30 September 2001 to legislate an anti-money
laundering law. FATF also warned that if the Arroyo administration fails to do
so within the deadline the country could face severe sanctions from the
international financial community. Hence, under this condition, the Arroyo
Administration and the Twelfth Congress closely collaborated to pass the
anti-money laundering law within the required deadline.
Not long after the effectivity of AMLA, however,
there were indications that the law did not fully satisfy the global standards.
The FATF pointed out that some stipulations in the law were inconsistent with the
49 + 9 Recommendations which is the international standard for money laundering
laws. As observed in the June 2002 NCCT Report:
1.
Although the Philippines’ authorities
interpret the regulations as requiring the reporting of all suspicious
transactions, this nevertheless conflicts with the AMLA, which only requires
reporting of high threshold suspicious transactions.
2.
The law allows the AMLC to access
account information upon a court order, but a major loophole remains in that
secrecy provisions still protect banking deposits made prior to 17 October
2001. Secrecy provisions also still restrict bank supervisor’s access to
account information (FATF 2002: 14).
Accordingly,
the need to modify the AMLA was confirmed by Vicente Aquino, the Executive
Director of the newly created Anti-Money Laundering Council (AMLC). He revealed
that the FATF’s major concerns are the following: first, the threshold was too
high and should be lowered to the equivalent of US $10,000.00 or roughly P500,000.00
in Philippine currency; second, although incorporated in the implementing rules
and regulations, the suspicious transaction reporting requirement was not
included in the law; third, the AMLC lacked the authority to inquire into or
examine bank accounts or investments without the order of a competent court;
and fourth, bank deposits and transactions prior to the effectivity of the law
may be examined for the purpose of investigation and not for the purpose of
prosecution (Congress of the Philippines-Senate and House of Representatives Committee Hearings on the Amendments to the Anti-Money
Laundering Act 2002).
The inconsistencies in AMLA were brought
about by the insistence of some lawmakers to disregard the FATF guidelines. This
attitude in Congress, in general, was a reflection of either an ultranationalist
sentiment, acts catering to vested interest, or a compromise with opposing
lawmakers for them to agree to pass the bill (Brillo 2011). For instance, the
most blatant deviation in R.A. 9160 was the threshold requirement. Both the
Senators and the Congressmen cited that the FATF’s $10,000.00 (P500,000.00)
threshold for reporting suspicious transactions is unacceptable. Instead, the
Senators (proposing $3 million) and the Congressmen (proposing $5 million)
compromised and agreed to a $4 million threshold, an amount way above the FATF
ceiling. With these inconsistencies, the FATF called upon the Philippine
Government to take the necessary steps to amend the AMLA so as to conform to
the 40 + 9 international standard. The strong determination of the FATF was
manifested when the call was accompanied by an advisory that noncompliance
would result in countermeasures and retention of the blacklisted status of the
country. The FATF insisted, to avoid sanctions and for the country to be
delisted, that the appropriate legislative modifications must be made on or before
15 March 2003 (FATF 2003).
The FATF’s demand was taken seriously by
the Arroyo administration and the leadership in Congress. On the part of the
legislators, it was aptly expressed by Senator Ramon Magsaysay, the Chairman of
the Committee on Banks, Financial Institutions and Currencies: “we remain in
the list of non-cooperative countries and territories, NCCT, for failure of the
Philippines to comply with the recommendations of the FATF, hence, the need to
amend our present law so that countermeasures will not be imposed” (Congress of
the Philippines-Senate Committee
Hearings on the Amendments to the Anti-Money Laundering Act 2002: 8). On
the part of the administration, AMLC Executive Director warned that unless the
current AMLA is modified, drastic countermeasures would be imposed by FATF and
that these sanctions would have severe repercussions considering the Philippine
economy is primarily dependent on foreign exchange remittances of Filipino
migrant workers. Under this context, the move to formally amend the AMLA began
in 2002 in the Twelfth Congress and concluded in 7 March 2003 when the
President signed R.A. 9194 into law.
Analysis and Conclusion
Going back to the concept of policy
learning, policy modification, as a legislative process, was presumed as a
function of internal learning and external changes of the political system. Empirically,
this meant that the repealing legislation can either be instigated or managed domestically
(by actors such as politicians, bureaucrats, or interest groups) or externally
(by actors such as foreign governments, multilateral institutions, or international
treaties/regimes). Taking cue from the preceding inference, the analysis of the
statutory re-legislations of the FIA, the ADA, and the AMLA reveals the
following.
First, the case of the FIA involved policy
modification that can be characterized as internally
driven via government learning. The re-legislation from R.A. 7042 to R.A.
8179 was prompted principally by the government’s pursuit of its ambitious
economic development program. The Ramos administration, under the banner
Philippines 2000, was determined to accelerate the liberalization of the
economy (De Dios and Hutchcroft 2003; Almonte 2007). As one of the forefront
liberalization policy, the FIA was reevaluated. The Ramos administration’s technocrats
observed that R.A. 7042 since its implementation in 1991 has been showing inroads
in terms of the inflow of foreign investments. The downside, however, was that compared
to the inflow of foreign investments in other ASEAN countries, the country was
still lagging behind and getting a measly share. This fact was the consensus,
as the Ramos administration and Congress conceded that despite the FIA, the
capital flowing in the ASEAN region was still bypassing the Philippines
(Congress of the Philippines-Senate and House of Representatives Session
Proceedings on the Amendments to The Foreign Investment Act of 1991).The
government technocrats, as a remedy, suggested the immediate repeal of the FIA
to enhance the inflow of foreign investment in the country. Their thinking was
that relative to other ASEAN countries, the FIA was still restrictive and hence,
needed to further liberalize to facilitate the entry of foreign capital. Thus, the
legislation experience showed that the government’s evaluation of the existing
policy as well as its assessment of the performance of neighboring countries
served as the main impetus for the amendment of the FIA.
Second, the case of the ADA involved policy
modification characterized by the interplay
of domestic strategy and external
dynamics. The move to amend from R.A. 7843 to R.A. 8752 was prompted by two
attendant circumstances. First was the Ninth Congress’ preplanned action to deliberately
legislate a “temporary” law. And second was the Estrada administration’s
decision to conform to the GATT-WTO terms on anti-dumping practices. During the
Ramos administration, the Ninth Congress hurriedly legislated R.A. 7843 before
the Senate ratification of the GATT-WTO treaty. The intent of the legislature
was strategic— to enact a law that provides an ample safety net to the domestic
industries (even though it does not measure up to the GATT-WTO agreement), and
to revise it later when the need arises (that is once the GATT-WTO demands it).
Here, the action was premeditated to give local businesses some advantages and
protection for a certain period of time. Hence, when the allowable “grace
period” was to lapse, expectedly the Estrada administration and the Eleventh
Congress took up the cudgels in re-legislating the ADA so as to fully comply with
the GATT-WTO mandate. Thus, in this regard, both the lawmakers’ earlier
orchestrated strategic action as well as the government’s later action in
fulfillment of its international commitment defined the amendment of the ADA.
And lastly, the case of the AMLA
involved policy modification that can be characterized as externally driven via coercive measures. The repeal from R.A. 9160
to R.A. 9194 was primarily instigated by a multilateral institution; the FATF
employing direct pressures was able to persuade the government to amend the
AMLA. From the very beginning, there was strong resistance among the lawmakers
in legislating R.A. 9160. As a consequence, compromises were necessary to enact
the law. These concessions resulted in the inclusion of provisions inconsistent
with the 40 + 9 Recommendations which is the global standard for money laundering
laws. From this, the move to repeal the AMLA commenced when the FATF issued a
formal plea to the Arroyo administration. The FATF’s demand, same in its
previous plea (in R.A. 9160), was accompanied by the following: first, a definite
deadline on when to enact the amendment; second, a statement that the country
would continue to be blacklisted unless appropriate action was taken; and third,
a warning that countermeasures would be enforced if the no action was taken by
the government. The FATF’s threat was overwhelming since it was enough to
overcome the intense inertia from some lawmakers in Congress. Consequently, the
leadership of the Twelfth Congress and the Arroyo administration, fearing the
possibility of severe repercussions in the financial sector and the economy, worked
hand in hand to ensure the amendment and conformity of the AMLA within the
prescribed deadline. Thus, the story of the legislation and modification of the
AMLA is all about the FATF’s demand, deadline, and threat of sanctions.
Summing up, these re-legislation cases
illustrate the different dimensions (as well as the subtleties) of policy
modification in the Philippines— the FIA
as internally driven via government learning; the ADA by the interplay of domestic
strategy and external dynamics; and the AMLA as externally driven via coercive
measures.
References
Almonte, Jose. 2007. To Put Our
House in Order: We Must Level the Playing Field. Manila: Foundation for
Economic Freedom, Inc.
Amenta, Edwin and Theda Skocpol. 1989. Taking Exception: Explaining the
Distinctiveness of American Public Policies in the Last Century. In F.G.
Castles (ed.), The Comparative History of
Public Policy. New York: Oxford University Press.
Anderson, James. 1990. Public
Policymaking: An Introduction. Boston: Houghton Mifflin.
Atienza, Ma. Ela. 2004. The Politics of Health Devolution in the
Philippines: Experiences of Municipalities in a Devolved Set-up. Philippine Journal of Political Science,
25(48) 25-54.
Batalla,
Eric. 2002. The Politics of Financial Liberalization. In Eric Batalla (ed.), The Politics of Financial Liberalization:
Foreign Banking in Japan and the Philippines. Manila: Yuchengco
Center/DLSU.
Brillo,
Bing Baltazar. 2010a. The Nationalization and Liberalization of the Retail
Trade Industry in the Philippines.
Danyag: Journal of Humanities and Social Sciences, 15(1) 55-67.
Brillo,
Bing Baltazar. 2010b. The Politics of the Anti-Dumping Law of the Philippines. UPLB Journal, 8(1), 17-29.
Brillo,
Bing Baltazar. 2011. Policy Decisiveness, Public Regardedness, and Unity of
Purpose: The FATF and the Policy Making Process for AMLA. Asia Pacific Social Science Review Journal, 11(1) 79-102.
Brillo,
Bing Baltazar. 2012a. Assessing the Pluralism in Philippine Polity: The Policy
Making of the Foreign Bank Liberalization Act (still unpublished).
Brillo,
Bing Baltazar. 2012b. Bureaucrats and Politicians in Policy Making: The Case of
the Foreign Investment Act of the Philippines (still unpublished).
Baumgartner,
Frank and Bryan Jones. 1991. Agenda Dynamics and Policy Subsystems. Journal of Politics, 53(4) 1044-74.
Baumgartner,
Frank and Bryan Jones. 1993. Agendas and
Instability in American Politics. Chicago: University of Chicago.
Congress
of the Philippines. 1990. Transcript: House
of Representatives Committee Hearings on The Foreign Investment Act of 1991 (Committee
on Trade and Industry, Committee on Economic Affairs and Committee on Labor and
Employment).
Congress
of the Philippines. 1990. Transcript: House
of Representatives Session Proceedings on The Foreign Investment Act of 1991.
Congress
of the Philippines. 1990. Transcript:
Senate Committee Hearings on The Foreign Investment Act of 1991 (Committee
on Economic Affairs).
Congress
of the Philippines. 1990. Transcript:
Senate Session Proceedings The Foreign Investment Act of 1991.
Congress
of the Philippines. 1991. Transcript:
Bicameral Conference Committee on the Disagreeing Provisions of Senate Bill
1678 and House Bill 32496.
Congress
of the Philippines. 1993. Transcript:
Senate Committee Hearings on The Anti-Dumping Act of 1994 (Committee on
Ways and Means).
Congress
of the Philippines. 1994. Transcript:
Bicameral Conference Committee on the Disagreeing Provisions of Senate Bill 357
and House Bill 14177.
Congress
of the Philippines. 1994. Transcript: Senate
Session Proceedings on The Anti-Dumping Act of 1994.
Congress
of the Philippines. 1995. Transcript: House
of Representatives Committee Hearings on the Amendments to The Foreign
Investment Act of 1991 (Committee on Trade and Industry and Committee on
Economic Affairs).
Congress
of the Philippines. 1995. Transcript: House
Session Proceedings on the Amendments to The Foreign Investment Act of 1991.
Congress
of the Philippines. 1996. Transcript:
Bicameral Conference Committee on the Disagreeing Provisions of Senate Bill
1399 and House Bill 5029.
Congress
of the Philippines. 1996. Transcript: Senate
Committee Hearings on the Amendments to The Foreign Investment Act of 1991 (Committee
on Economic Affairs).
Congress
of the Philippines. 1996. Transcript: Senate
Session Proceedings on the Amendments to The Foreign Investment Act of 1991.
Congress
of the Philippines. 1998. Transcript:
Senate Committee Hearings on The Anti-Dumping Act of 1998 (Committee on
Ways and Means).
Congress
of the Philippines. 1998. Transcript:
Senate Session Proceedings on The Anti-Dumping Act of 1998.
Congress
of the Philippines. 1999. Transcript:
Bicameral Conference Committee on the Disagreeing Provisions of Senate Bill 763
and House Bill 7612.
Congress
of the Philippines. 1999. Transcript: House
of Representatives Committee Hearings on The Anti-Dumping Act of 1998 (Committee
on Ways and Means and Committee on Trade and Industry).
Congress
of the Philippines. 1999. Transcript:
Senate Special Session.
Congress
of the Philippines. 2001. Transcript:
Bicameral Conference Committee on Senate Bill 1745 and House Bill 3083.
Congress
of the Philippines. 2001. Transcript:
House of Representatives Committee Hearings on Money Laundering (Committee
on Banks and Financial Intermediaries).
Congress
of the Philippines. 2001. Transcript:
House of Representatives Session Proceedings on Money Laundering.
Congress
of the Philippines. 2001. Transcript:
Senate Committee Hearings on Money Laundering (Committee on Banks and
Financial Institutions and Committee on Justice and Human Rights).
Congress
of the Philippines. 2001. Transcript:
Senate Session Proceedings on Money Laundering.
Congress
of the Philippines. 2002. Transcript:
House of Representatives Committee Hearings on the Amendments to the Anti-Money
Laundering Act (Committee on Banks and Financial Intermediaries, Committee
on Economic Affairs and Committee on Justice).
Congress
of the Philippines. 2002. Transcript:
Senate Committee Hearings on the Amendments to the Anti-Money Laundering Act (Committee
on Banks and Financial Institutions and Committee on Constitutional
Amendments).
Congress
of the Philippines. 2002. Transcript:
Senate Session Proceedings on the Amendments to the Anti-Money Laundering Act.
Congress
of the Philippines. 2003. Transcript:
Bicameral Conference Committee on Senate Bill 2419 and House Bill 5655.
Congress
of the Philippines. 2003. Transcript:
House of Representatives Session Proceedings on the Amendments to the
Anti-Money Laundering Act.
De
Dios, Emmanuel and Paul Hutchcroft. 2003. Political Economy. In Balisacan, A.
and Hill, H. (eds.), The Philippine
Economy: Development, Policies, and Challenges. Quezon City: Ateneo de
Manila University Press.
FATF-GAFI.
2000. Review to Identify Non-Cooperative
Countries and Territories: Increasing the Worldwide Effectiveness of the
Anti-Money Laundering Measures. Paris: FATF/OECD.
FATF-GAFI.
2001. Review to Identify Non-Cooperative
Countries and Territories: Increasing the Worldwide Effectiveness of the Anti-Money
Laundering Measures. Paris: FATF/OECD.
FATF-GAFI.
2002. Review to Identify Non-Cooperative
Countries and Territories: Increasing the Worldwide Effectiveness of the
Anti-Money Laundering Measures. Paris: FATF/OECD.
FATF-GAFI. 2003. FATF
Withdraws Countermeasures with Respect to Ukraine and Decides on Date for
Countermeasures to the Philippines. Paris: FATF/OECD.
Hall,
Peter. 1993. Policy Paradigms, Social Learnings and the State: The Case of
Economic Policy-making in Britain. Comparative
Politics, 25(3) 275-296.
Heclo,
Hugh. 1974. Modern Social Politics in
Britain and Sweden: From Relief to Income Maintenance. New Haven: Yale
University Press.
Hogwood,
Brian and Lewis Gunn. 1984. Policy
Analysis for the Real World. Oxford: Oxford University Press.
Howlett,
Michael and M Ramesh. 1995. Studying
Public Policy: Policy Cycles and Policy Subsystems. New York: Oxford
University Press.
Kingdon,
John. 1995. Agendas, Alternatives, and
Public Policies. Boston: Little Brown.
May,
Peter. 1992. Policy Learning and Failure. Journal
of Public Policy 12(4) 331-354.
Mendoza
Jr., Amado. 2005. Politics of Tax Policy
Making in the Philippines: The Comprehensive Tax Reform Program (CTRP) of
President Ramos. Ph.D. Dissertation, University of the Philippines Diliman.
Pedro,
Antonio. 2002. Legislating Banking Liberalization in the Philippines:
Business-Government Relations in Policy Reform. In Eric Batalla (ed.), The Politics of Financial Liberalization:
Foreign Banking in Japan and the Philippines. Manila: Yuchengco Center/DLSU.
Peters,
B. Guy. 1986. American Public Policy:
Promise and Performance. Chatham, NJ: Chatham House Publishers, Inc.
Rebullida,
Ma. Lourdes. 2003. The Politics of Urban Poor Housing: State and Civil Society
Dynamics. Philippine Political Science Journal,
24(47) 37-68.
Rist, Ray. 1994. The Preconditions for Learning:
Lessons from the Public Sector. In F.L. Leeuw, R.C. Rist and R.C. Sonnischen
(eds.), Can Governments Learn:
Comparative Perspectives on Evaluation and Organizational Learning. New Jersey:
Transaction Publishers.
Tigno, Jorge. 2004. Governance and Public Policy in
the Philippines: RA 8042 and the Deregulation of the Overseas Employment Sector. Philippine Political Science Journal,
25(48) 1-24.
Sabatier,
Paul. 1987. Knowledge, Policy-Oriented Learning, and Policy Change: An Advocacy
Coalition Framework. Knowledge: Creation,
Diffusion, Utilization, 3(June) 649-692.
Sabatier,
Paul. 1988. An Advocacy Coalition Framework of Policy Change and the Role of
Policy-Oriented Learning Therein. Policy
Sciences, 21(3-4) 129-168.
Sabatier,
Paul and Hank Jenkins-Smith 1999. The Advocacy Coalition Framework: An
Assessment. In Paul Sabatier (ed.), Theories
of the Policy Process. Boulder, CO: Westview Press.
Schlesinger
Jr., Arthur. 1986. The Cycle of American
History. Boston: Houghton Mifflen.
Smith,
Kevin and Christopher Larimer. 2009. The
Public Policy Theory Primer. Boulder, CO: Westview Press.
Stewart,
Joseph, David Hedge and James Lester. 2008. Public
Policy: An Evolutionary Approach. Boston: Thomson Wadsworth.
[1]
The author is Assistant Professor at the Department of Social Sciences,
University of the Philippines Los Baños and is pursuing the PhD in Development
Studies (by Research) at De La Salle University.
[2]
Refers to Brillo 2010a
[3]
Refers to Brillo 2012a
[4] The paucity of scholarly works on policy modification
is largely a consequence of being subsumed to the broader literature of policy
change, where policy shift (substantive alteration or replacement of the
prevailing policy) is given preference over policy modification (rectification
or adjustment of the existing policy).
[5]
Entitled “Foreign Investments Without Incentives,” specifically Article 44 to
56.
[6]
Malaysia captured $12.8billion or 50.5%; Thailand received $5.7billion or 22.6%;
and Indonesia got $5.2billion or 20.7%.
[7]
The Senate version is for the retention while the House version is for the
removal.
