Philippine

Journal of Public
Administration,
NEOLIBERAL
GOVERNANCE
IN THE
PHILIPPINESVol. LVI No. 2 (July-December 2012)
151

Neoliberal Governance in
the Philippines: Ideational Policy
Reform in the Ramos Administration,
1992-1998
ROBIN M ICHAEL U. G ARCIA*

Neoliberalism in the Philippines came at a time when the

country was considered the Sick Man of Asia and during the
immediate decade of the post-Cold War. This article provides a
partial explanat ion why more ne oliber al for ms of go ver nance
w er e ado pt ed dur ing t he Ramo s Adminis t ration. Using an
ideational appro ach in the politic al e conomy of public policy
and g ove rnance re fo rms , the art ic le tr ac es ho w ne o libe ral
governance gained acceptance in the Philippines. It argues that
t hr oug h a t hr ee -le ve l r efor m pro c es s, the co nflue nce o f
ex og enous and endo ge no us fac to rs , as w ell as t he epis te mic
privileged status of neoliberalism during that time led to the
demis e of the Ke y ne sian s t at e-le d g over nance mode l and the
e ve nt ual acc e pt anc e of t he mar ke t-led neo liber al go ve r nanc e
mo de l.

Keywords: governance, neoliberalism, ideational framework, Ramos

administration, Keynesian governance, epistemic privilege

Introduction
The years 1978-1980 saw the rise of neoliberal governance thought
and practice in China, the United States and the United Kingdom. This
ushered dramatic changes in the global political economy that enabled a
marked increase in the process and outputs of economic globalization.
Chinas opening-up through Deng Xiao Ping in 1978, the policy against
labor unions of U.K.s Margaret H. Thatcher in 1979 and the United
States policy of fixing inflation rather than full employment by Ronald W.
*Master of Public Administration candidate, major in public policy, at the National
College of Public Administration and Governance, University of the Philippines Diliman.
The author acknowledges Dr. Maria Faina L. Diola for her scholarly support for this
article, which was partially investigated and originally written under her PA 208 class in
2010; Ms. Janina Nadene Vergel de Dios Jalandoni for her editorial assistance; and Mr.
Salvador Santino Regilme for the numerous personal correspondences that have inspired
the author to locate the idea of policy and political reforms not just from the domestic sphere
but also from the global political economy.

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Reagan in 1980 saw ideological renaissance of neoliberalism at the world

stage (Harvey, 2005). Reforms towards neoliberal policy in many
developing countries, are manifested through structural adjustment
programs (SAPs) imposed by the World Bank that precipitated an
economic crisis (Bello, 2009).
This revolt against big government also meant the demise of what
is broadly considered as Keynesian state-led model where the state has a
heavy and substantial role in governance. This revolt culminated a little
later in developing countries. The trammels of great power politics during
the Cold War pushed the United States to support semi-market-led
authoritarian regimes like Marcos martial rule in the Philippines at the
behest of libertarian fundamentalist. Keynesian governance of course was
incredibly attractive because it provided the ever-elusive cushion for the
ups and downs of the business cycle. But the problem that beset
countries was stagflation which Keynesianism could not solve (Mehta,
2011).
In 1991, just a year before General Fidel V. Ramos assumed the
presidency in the Philippines, the world saw another dramatic
development the end of the Cold War. This marked the triumph of
Western capitalist neoliberalism and the demise of centrally-planned
economic socialism of Eastern Europe. Neoliberalism spread like wildfire
yielding a dramatic but varied temporal acceptance all over the world. In a
short time, it became the defining pillar of the late twentieth century
(Simmons, Dobbin & Garrett, 2006).

Figure 1. Worldwide Political and Economic Liberalization since 1980

Source: Simmons, Dobbin and Garett, 2006

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Figure 1 shows the increase in economic as well as political

liberalization or marketization and democratization that started in the
1980s. This ushered policy prescriptions in the dimensions of privatization,
financial openness and democratization. An increase in marketization and
democratization can be observed at the end of the Cold War in the 1990s.
The Philippines was pejoratively tagged as The Sick Man of Asia, a
title ascribed to China in the late 19th to 20th century, sometime within
the decade before Ramos assumed the presidency in 1992. Despite the
crisis that struck the developing world in the 1980s from the structural
adjustment programs imposed by the World Bank, the Philippines saw
neoliberal governance still commanding the policy prescriptions in
Corazon Aquinos administration and culminating during the Ramos
administration (Bello, 2009).
A total of 273 reform measures were passed during the Ramos
administration (Araral, 2006). Despite the long history of economic
liberalism since the Payne-Aldrich Act of 1909, when the obligatory
practice of importing boundless goods from the United States was
institutionalized, neoliberalism was only fully realized during the Ramos
administration through his Philippines 2000 blueprint to give the
Philippines a newly industrialized country (NIC) status by the year 2000.
The fact that the crisis caused by neoclassical economics coincided
with the clamor in the Philippines for liberal politics in the 1980s raises
the question: why did a full-fledged liberal economic and political regime
consolidate in the Philippines?
Yet, while the figure shows an increase in the acceptance of
neoliberal governance, it can be gleaned that not all countries embraced
it. It is a slow and painful process that deserves attention. It can be
observed that even if countries have the same historical, institutional,
cultural and political make-ups that are subjected to the same worldwide
trends and exogenous shocks, they might still not follow the same
governance strategies in the long run. Cox (2001) echoes this conundrum
in his comparative study of Denmark, the Netherlands and Germany that
revealed that the three countries with great similarities did not adopt the
same governance trajectories in the face of the same exogenous shocks
and events in their respective political systems. In the 1990s, Denmark
and Netherlands implemented a wide-range of welfare reforms but
Germany did not. The variation is not limited to the substantive
differences in the acceptance of the same ideology. The temporal or
chronological order of the acceptance should also be considered as can be
gleaned from the order of policy reform acceptance by China, the United
States and the United Kingdom.
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In demonstrating how ideas influence public policy, two variations

the substantive and the temporalin the transnational acceptance of an
ideology point to domestic or endogenous differences and factors, which
should be taken into account alongside external or exogenous factors in
the state.
While it is understood that domestic or endogenous factors matter,
governance reforms do not occur in a vacuum. The 1648 Peace of
Westphalia, which formally gave birth to the central principle of statehood
or the exclusive control of a government over its territory, has been
contested in theory and practice especially in the advent of what we now
refer to as globalization. Public affairs is, more than ever, beset with the
realities of transborder stream of goods, people, and capital on the one
hand, and discourses on ideas, norms and practices about how to manage
their respective affairs on the other (Heywood, 2007).
While there are many factors and variables that can potentially explain
these reforms, it would be a remiss if governance scholarship and policy
discourse are inflicted with methodological nationalism. We have to look
outside to find answers. Independent variables and factors external to the
nation-state system are essential components in studying reforms especially
in public administration (Regilme, personal communication, 2012; 2013
[forthcoming]). This does not mean ignoring domestic variables. Indeed, in
the study of how ideas influence policy, domestic variables are indispensable
as argued earlier.
References to governance in this article use the traditional
theoretical treatment of governance in the Anglo-American tradition. As
Rhodes (1996) points out, the term refers to the institutions and
instrumentalities of the government that in other words may refer to
bureaucracy and the monopoly of coercive uses of power by those
institutions. Thus in this article, governance is more than documenting
the creation of new managerial and administrative technologies or novel
bureaucratic innovations. The uses of governance here reflect the
increasing social scientific interest in the changing arrangements of
managing the state. In this way governance is a change in the meaning of
government, referring to the new process of governing; or a changed
condition of orderly rule; or the new method by which society is
governed (Rhodes, 1996, pp. 652-653).
Moreover, Rhodes (1996) and Stoker (1997) note that governance,
within a review of related literature of the term, has many meanings
used in a variety of ways and that its usage is eclectic and relatively
disjointed (Jessop, 1995). A survey of its theoretical and conceptual roots
would trace to various fields in the social sciences including institutional
economics, international relations, organizational studies, development
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studies, political science, public administration and studies that involved

Foucauldian-inspired theories (Stoker, 1998).
Koiman and Van Vliet (cited in Stoker, 1998) argue that there is a
wide consensus that governance refers broadly to the increasingly
indistinct nature of public and private domains. Thus, as the private sector
or the market is increasingly transnational, the literature of governance
calls for post-sovereign governance (Heywood, 2007) or for post-national
governance (Gilpin, 2001).
The article argues that through a three-step reform process, the
confluence of exogenous and endogenous factors, as well as the epistemic
privileged status of neoliberalism during that time, led to the demise of
the Keynesian state-led governance model and the eventual acceptance of
the market-led neoliberal governance model. The aims of the article are:
(1) to shed light on the governance reform process during the Ramos
administration; (2) to exhibit how international and domestic factors
intertwine in the reform process; (3) to demonstrate how policy reforms
are influenced by ideas and not just interests and institutions; and (4) to
provide a normative organizing framework for discussing governance and
public administration theory in general.

The Rise of the Neoliberal Idea

and the Fall of Others in Governance
The rise of neoliberal theory traces its intellectual roots to the Mont
Perlin Society led by Austrian Nobel Prize winning economist Fredrich
Von Hayek. It is a group of historians, philosophers and economists, which
includes some big-names like Ludwig von Mises, Karl Popper, Milton
Friedman, who subscribed to the fundamental liberal idea of freedom in
the original European sense. Named after the Swiss spa where the first
meeting was held in 1947, they sought to revive liberal ideas notably at
the time when Keynesian ideas were popular. They extend the invisible
hand principle of Smith and proclaim that state intervention disrupts
social life ascribed to embedded liberalism during that time (Harvey,
2005). Their founding statement reads:
The c entral value s o f civilizatio n are in dang er . Ov e r larg e
str etche s of the ear ths surfac e the e sse ntial c onditio ns o f
human dignity and freedom have already disappeared. In others
the y ar e under c o nstant me nace fr om the de ve lo pme nt o f
current tendencies of policy. The positions of the individual and
the voluntary group are progressively undermined by extensions
o f ar bitrary po we r. Ev en that most pre cious posse ssion o f
Western Man, freedom of thought and expression, is threatened
by the spread of creeds which, claiming the privilege of tolerance

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when in the po sition of a minor ity , seek only to establish a

position of power in which they can suppress and obliterate all
views but their own. The group holds that these developments
have been fostered by the grow th of a view of history which
denie s all abso lute mo ral standards and by the g r ow th o f
theories which question the desirability of the rule of law. It
holds further that they have been fostered by a decline of belief
in private property and the competitive market; for without the
diused power and initiative associated with these institutions it
is dic ult to imag ine a so ciety in which fr ee do m may be
eectively preserved (Harvey, 2005, p. 20).

Furthermore, Harvey (2005) notes that eventually, the group

garnered financial and political support particularly in the United States
and the United Kingdom. The Heritage Foundation in the United States,
the Institute of Economic Affairs in London, and the Department of
Economics of the University of Chicago became huge supporters of the
group and its ideas. Neoliberal ideas became even more respected when
Hayek and Friedman won the Nobel Prize for Economics in 1974 and 1976
respectively.
Neoliberalism, however, had to be constructed in a way that it would
fit popular culture to democratically enable it to pervade the macropolitical levels and, eventually, the governance structures and policies.
These events were just the prelude. Harvey (2005) demonstrates that the
construction of neoliberal democratic consent included processes that
ascribed evil to any form of government intervention. Indeed, as will be
demonstrated later, this is the case that can be seen in the Philippines.

Disaggregating the Neoliberal Governance Principles

The first order of business is defining neoliberalism. Perhaps the
best definition of neoliberalism is provided by David Harvey. He asserts
that neoliberalism is in the rst instance a theory of political economic
practices that proposes that human well-being can best be advanced by
liberating individual entrepreneurial freedoms and skills within an
institutional framework characterized by strong private property rights,
free markets, and free trade (Harvey, 2005, p. 2). At the risk of
oversimplification, a useful way to understand neoliberalism is through a
demarcation between market-led rather than state-led governance, with
neoliberalism being regarded as the former.
As with classical economics, neoliberalism is a paradigm that adheres
to the belief that development and social well-being can be achieved
through laissez-faire economics or the market mechanism. It has two
mutually reinforcing central pillars: economism and marketism (Scholte,
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2005). George Soros (as cited in Somers & Block, 2005) called this
religious support on the supremacy of Anglo-American capitalism as
market fundamentalism.
Scholte (2005) defines economism as a development narrative which
advances the social construction that development policy should be
informed primarily by economics, while all other social considerations are
subordinate or inferior to economic considerations. Scholte further argues
that the nature of neo-classical economics as a neutral and apolitical
endeavour devoid of any prescriptive and normative dimensions creates a
de-politicization of economic policies. The epistemological implications,
therefore, are to render the study of economics as primus inter pares
among all policy-relevant social scientific fields that may inform public
policy. Thus, the on-going debates between the empirical-positivists and
normative post-positivists account for much of the critique of an emphasis
on markets and particularly economism. The apolitical pursuit towards
economic management is, therefore, a direct implication with the neutral
and apolitical nature of neoliberalism, or so they claim, puts neoliberal
governance at a leverage (Scholte, 2005).
On the other hand, Scholte (2005) notes the pillar of marketism is
more specific because it does not only prescribe the primacy of economics
but also a particular strand of economic thought: neoclassical economics as
opposed to Keynesian, social-democratic, developmen tal, and
redistributive justice strands of economic thought. It should be understood
that it is under the banner of marketism that deregulation, liberalization
and privatization hold water. Government intervention is seen to be
detrimental to the effectiveness of the market in improving the quality of
lives of all. Governance and globalization, which are both neoliberal in
character, have to be primarily understood and propagated in an economic
sense. Political, social, cultural and psychosocial underpinnings are
merely subsumed or not considered at all. Where they represent mostly
subjective and value-laden assumptions, the principal pursuit of social
justice and equity is placed at the altar of efficiency.
While the policy frameworks of privatization, liberalization and
deregulation are premised along the undying faith in the market, their
underpinnings are different in some significant dimensions.
Privatization is essentially the transfer of public or government
assets and property rights to the private sphere. The transfer process can
inc lude auctions, offering s of shares, buyouts of employee and
management or gifts given outrightly. The documentation of the transfer
of public assets to private hands reveals a worldwide yield of $304 billion
from 1988 to 1994. Privatization also included the delegation of policy
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implementation to the private sphere of education, security, development

cooperation among others (Scholte, 2005).
The diffusion of neoliberal ideas has also per meated public
administrative thought particularly through the New Public Management
(NPM) and governance theories. The NPM is an administrative reform
agenda that seeks to adopt private organizational practices to public
bureaucratic practices and to insert private practice to technocratic
practice and thought. The NPM also emphasizes the role of market in
service delivery (Shields & Evans, 1998).
Liberalization on the other hand is the abolishment of quantitative
and qualitative restrictions on the transnational movement of goods,
money, services, capital and labor. An operationalization of liberalization
is the existence of export processing zones (EPZs) (Scholte, 2005). The
UNDP (1999) documented about 850 EPZs worldwide. Finally, deregulation
emphasizes the removal of rules that disable markets from working.
To accommodate privatization and liberalization, the policy of
deregulation should be in order. Deregulation is not the absence of
regulation. It is rather a regulatory paradigm that posits that governance
should regulate according to market-enabling and market-facilitative lines
rather than a Keynesian conception where there is heavy government
intervention in the market. In this sense it is not deregulation but reregulation. Western capitalist models of growth facilitate legal regimes,
inter alia, in the enforcement of property rights and the provision of
strong judicial institutions for formal commercial redress.

Production and Reproduction of the Neoliberal Idea

Neoliberalism is a not just a policy or a set of policies. The MerriamWebster dictionary offers about four definitions of ideology but the theme
that stands out is that it is systematic and integrated. As such, it has
to subscribe to a certain epistemological fulcrum to allow it to be defended
against all odds. Neoliberalism is properly hinged on positivism or, in an
applied sense, the neoliberal idea has a scientific standing.
The early 20 th century saw the widespread acceptance of logical
positivism or the narrative that paradigms with scientific standing have
replaced other knowledge paradigms that do not have scientific standing
even in the field of governance and development. This has created a
privileging of scientific ideas over non-scientific ideas. That all ideas are
not created equal suggests that only some ideas will have world-changing
effects. This is called by Somers and Block (2005) as epistemic privilege.
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Some ideas win because they have weathered the positivist challenges
over time.
At the onset, it is important to point out that neoliberalism has
politico-epistemological dimensions. Its first political manifestation is in
its pursuit of legitimacy that begins with the knowledge production
process. Its rhetoric is borrowed from the belief that it is primarily a
scientific pursuit of efficiency hinged on value-neutral, positivist and
rational epistemological infrastructures.
As such, neoliberalism appeals to the logic of everyday life and the
social Darwinian beliefs for upward social mobility in most of us.
Neoliberalism appears as common sense, meaning it is cognitively and
behaviorally embedded in political and cultural practices of everyday life,
creating a broad consensus in many places.
On the other hand, the production and reproduction of the rhetoric of
neoliberalism are concomitantly accompanied, on the one hand, by the
construction and reconstruction of pursuits such as social-justice and statist
and developmental arrangements as anti-development, and the continual
political and social construction of market-enabling governance mechanism at
the supranational, national and subnational levels on the other.
Looking back, Darrot and Laval (cited in Wacquant, 2012) remarked
that neoliberalism has not just gained ideological status but also a
generalized normativity, a global rationality that tends to structure
and organize, not only the actions of the governing, but also the conduct of
the governed themselves and even their self-conception according to
principles of competition, efficiency and utility (p. 70). It is imbibed by
individuals so as to reproduce its narratives on other political, social and
cultural units.
Goldstein and Keohane (1993) argued that world views such as
ideologies are large enough to accommodate inconsistencies and make
them look as if there were none. Just as principled beliefs can change,
opposing principled beliefs can still be subsumed under one world view.
Peck and Tickell (2002) echo this position somewhat more specifically.
They remark that neoliberalism is accompanied by an aggressive pursuit
to extend its reach, to manage its internal theoretical and practical
inconsistencies and to protect its hegemonic legitimacy with the use of
positivist classical economic assumptions. In addition, neoliberalism
fosters ahistorical and apolitical treatment of economic policy.
The stature of the idea of neoliberalism empowers the carriers of
neoliberal ideas, in the form of epistemic communities, in the policy
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process. Epistemic communities include an array of professionals with

scientific training who have greater participation in bureaucratic decisionmaking and in the policy process (Haas, 1992). The production and
legitimacy of neoliberalism depen d, in par t, on the policy actors
themselves. As mentioned, the neoliberal project was honed first and
foremost at the Department of Economics of the University of Chicago,
which spread to economics departments of educational institutions in
many parts of the world.
It has to be mentioned that the conception of an objective truth is a
social and mostly political construction that reflects power asymmetries
and deeply serves political ends (Foucault, 1970).

Ideational Explanations of Policy Change and Reforms

Because of the inadequacy of other perspectives in explaining change
or continuity, a number of scholars are now turning into explaining policy
reform using the causal power of ideas or ideations in influencing political
and policy outcomes (Beland & Orenstein, 2010; including but not limited
to: Abdelal, 2007; Barnett & Fennimore, 2004; Berman, 1998; Bleich, 2002;
Campbell, 2004; Campbell & Pedersen, 2001; Chwieroth, 2007; Cox, 2001;
Epstein, 2008; Finnemore, 1993; Genieys & Smyrl, 2008; Goldstein &
Keohane, 1993; Hansen & King, 2001; Jacoby, 2008; Johnson, 2008;
Kelley, 2004; Lieberman, 2002; Mintrom, 1997; Moreno and Palier, 2009;
Parsons, 2002).
Perhaps this rise of the use of the ideational dimension in political
and policy analysis is best argued by Daniel Beland (2010). First, ideas
help construct the issues that would merit a problem and eventually usher
them into the policy agenda. Second, ideas help convince policy actors and
society at large that change is needed. Finally, as ideas have cause-effect
assumptions, they help challenge existing institutions and practices.
It cannot be denied that structural (i.e. Marxist class-based analysis,
systems theory) and interest-based (i.e. group theory, public-choice theory)
theories of public policy and political change are compelling frames to
explain policy change. But regardless if these forms of explanations are
insufficient or not, analytical techniques using ideational reform are
compelling in their own right. So the debate now is not whether ideas
influence policy but, how ideas influence policy (Mehta, 2011).
The policy process is not as straight forward as it is. This complexity
is exhibited by the existence of many different kinds of ideas and how they
relate to the policy change or continuity. Jal Mehta (2011) provides three
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different analytic categories of ideas: ideas as policy solutions, ideas as

problem definitions and ideas as public philosophy or zeitgeist. Public
philosophies encompass all the two categories before it. They serve as
solutions to problems as well as ways to define a problem. As mentioned,
it is not hard to see why neoliberalism can be considered as public
philosophy.
Governance reform ideas or ideas for that matter do not get accepted
in a vacuum. They exist and win only in certain conditions. Why do some
ideas win over other ideas in the process? Why do some ideas get
implemented and why are some ideas abandoned? What kinds of ideas get
accepted?
These questions assume Sheri Bermans (2011) three dimensions that
when present, ideational policy change can transpire. At the onset,
political space has to open up and this occurs when there is a widespread
dissatisfaction over the current ideas. This subsequent opening up of
political space is the phase where a demand for new ideas is created.
Dissatisfaction generally occurs when current policy ideas do not provide
the answer to current problems. In turn, actors supply the ideas to fill in
the political space.
Lastly, the ideas that win or get accepted are the ideas that are
perceived to be the best alternative to an existing problem. This last
dimension obviously depends on a large part on the nature of the ideas
themselves. This dimension owes to the possibility that even when some
ideas are supplied, there is still a question on why they get implemented
at all. The functional perspective asserts that some ideas win because they
fit in a given socio-political configuration. For example certain ideas are
more fit in developed rather than developing countries. Also, certain ideas
win because they make-sense in a given problem or situation (Berman,
2001). In any case, the very nature of the ideas themselves is important.
In the last two crucial
impact on displacing other
Some ideas are generally
arguments, therefore, may
themselves.

steps, the nature of the idea itself has a big

reform ideas and on implementing reform.
plausible while some are not. Structural
be dependent upon the nature of the ideas

The Rise of Neoliberalism in the Philippines

The vision is distinctly neoliberal. Ramos set up the three-pronged
neoliber al ec onomic plan. First, an u nwavering commitment to
liberalization was put in place to attract foreign investments and foster
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international competitiveness in the face of w orldw ide economic

liberalism. Second, privatization was accelerated. And th ird, the
deregulation of power, shipping, domestic air transportation, banking, oil
industries and most notably telecommunications through the breaking up
of cartels and monopolies were put in place (Abinales & Amoroso, 2005). It
can be observed that Ramos aligned his development policy objectives with
the on-going neoliberal reconstructions transpiring at the international
political economic sphere.
The liberalization of trade an d industr y under th e Ramos
administration included the significant lowering and/or removal of
protectionist policies including tariffs, quantitative restrictions on import
on about a hundred of goods except rice, capital controls to usher
unprecedented flows of capital, and restrictions on foreign ownership of
many industries (Abinales & Amoroso, 2005)
The Ramos administration started with fresh and complete neoliberal
policy reforms of liberalization through aggressive participation in
regional multilateral neoliberal economic arrangements and groups most
notably the Asia-Pacific Economic Cooperation (APEC), the General
Agreement on Tariffs and Trade (GATT) of the World Trade Organization
(WTO), the Association of Southeast Asian Nations (ASEANs) Free Trade
Agreement (AFTA) (Hutchcroft, 1998, p. 244; Bello, Docena, de Guzman, &
Malig, 2004; Abin ales & Amoroso, 2005). Incumbent with the
multilateralization of Philippine neoliberal economic policies (Bello,
Docena, de Guzman, & Malig, 2004), a series of complementary and
promise-fulfilling neoliberal economic policies were launched: the
liberalization of foreign exchange and foreign investment. Chief of these
barriers are nationality restrictions on foreign investments. The Ramos
Administration prodded the congress to pass yet the most liberal
investment code among its neighbours through the removal of prohibitions
thereby allowing for the 100 percent foreign equity in almost all sectors
and the passage of Republic Act 8179 allowing foreign firms to enter even
in places where there exist adequately served domestic firms (Bello,
Docena, de Guzman, & Malig, 2004).
Another core tenet of the neoliberal policy reform program during
the Ramos administration is the privatization of a host of major firms. The
Ramos administration inherited remnants of almost a thousand publicly
owned enterprises from the Aquino and Marcos administrations combined.
During the Marcos Administration, there were about 300 publicly owned
companies and during the Aquino government, 500 more were public
owned (Abinales & Amoroso, 2005). Among the most notable in these
privatization schemes were the privatization of Petron (an oil-refining
corporation), Philippine Airlines and Metropolitan Water and Sewerage
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System (MWSS) the largest privatization project in the world (Bello,

Docena, de Guzman, & Malig, 2004)
To complete the reform package, the deregulation of monopolistic
and cartel infested major industries including shipping, airlines and most
prominently the telephone industry, which was virtually only the
Philippine Long Distance Telephone (PLDT), was carried out.
The resulting gains according to neoliberal economic yardstick are
the following: annual GNP grew from 5.1 percent in 1994 to about seven
percent in 1996 (Hutchcroft, 1998); flow of foreign credit grew from 27
percent in 1992 to 70 percent in 1997; foreign private investments jumped
from $1.6 billion during the time of Marcos, $4.8 billion during Aquinos to
$14.5 billion during Ramos time (Araral, 2006); inflation declined from 8.9
percent as he assumed office to just around five percent a year before he
stepped down (Araral, 2006); unemployment decreased from 10.5 percent
to 7.5 percent in 1992 to 1996 respectively particularly because of the
investments in special economic zones; and, lastly, poverty incidence
decreased from 40 percent in 1991 to 31 percent in 1997 (Araral, 2006.).
Privatization, which accelerated mostly under Ramos watch, yielded the
Philippines Php300 billion or $12 billion from 1987 to 1998. Liberalization
ushered improvements in infrastructure particularly in electricity
(Abinales & Amoroso, 2005).
Neoliberalism was also institutionalized into state structures. The
multilateralization of Philippine neoliberalism was pronounced especially
in Ramos reform agenda. Ramos endorsed APECs Bogor Declaration of
1994 which involved the commitment of members to full set neoliberal
reforms (Bello, Docena, de Guzman, & Malig, 2004).
Recognizing that East Asia can attribute its economic success to the
developmental state, Ramos National Security Adviser Jose Almonte
(cited in Araral, 2006) remarked in 1996 that the Philippine development
shall have to rely much more than the East Asian tigers did on the
play of market forces, with stronger emphasis on [market] incentives
rather than command (p.271).
If the success of East Asias economic development had to rely on
some heavy state intervention, why did the Philippines have a neoliberal
turn in governance?
At that time, neoliberalism had started to rise as a solution for the
economic woes of individual countries. As mentioned, this was the
dominant reform banner in China, the United Kingdom and the United
States in the late 1970s to early 1980s. The demographic mood of the
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need for reforms in fact contributed to the end of the Cold War, which
was dramatically demonstrated in the Fall of the Berlin Wall in which the
former communist-leaning Eastern Germany was forced to liberalize. This
culminated in the rise of this ideology in the world stage as reforms were
ushered in post-communist states immediately after the Cold War.
The following domestic-international mood for reforms provided the
strong currents that created the political space for the entry of new ideas
in the Philippine context. Even in this case, the stature of the idea of
neoliberalism had to do with opening up the political space. But how did
neoliberal governance reforms latch on to the political space?
Why did fixing economies have to entail the adoption of neoliberal
ideas? The consensus among those in the government and in civil society
proved to be instrumental in the espousal of neoliberal ideational policy
reforms as they latched on and influenced the policy outcomes at that
time.
Policy reforms during the Ramos administration were premised on a
strong state that in fact would lead some analysts to argue that during
Ramos time as president, the Philippines was a developmental state
(Araral, 2006). The breaking up of cartels previously existing under the
ambit of regulatory capture exemplifies this point. Further, reforms
tow ards neoliberalism are technocratic in natu re. D ereg ulation,
privatization and liberalization are policies that ascribe to specialist
knowledge rather than street-level policymaking (Hall, 1989). Both these
conditions would point to a high level of control by the state in the pursuit
of reform.
Social forces were in confluence towards the neoliberal restructuring.
If there were any opposition exerting its influence in the policy process,
they were minimal (Bello, Docena, de Guzman, & Malig, 2004).

Analysing Ramos Neoliberal Ideational Policy Reform

As mentioned, ideas enable policy reforms through three phases: the
demise of a prevailing idea and therefore a demand for idea, then the
supply of these ideas from policy actors and lastly its acceptance which
owes to the quality and substance of the ideas themselves.

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Figure 2. Ideational Change in Governance Paradigms

Three-Level Ideational Reform
1

Political Change

Demand
Fall of State-Led Keynesian Governance

Supply
The Rise of Market-Led Neoliberal Governance

Acceptance

Demand-Side Analysis
In the Philippines the demise of the Keynesian state is not because
of its inability to solve stagflation. The politically illiberal Marcos regime,
known for its crony capitalism in which most of the economic gains were
given as rents to perpetuate the regime, provided the impetus in
reconsidering the role of the state in economics. The prevailing national
mood towards and discourse on the ineffectual state began domestically
during the first Aquino administration as a response to the post-Marcos
public experience. Despite the clear sentiment of many scholars and
observers from the political left that the economic crisis that struck the
region was the fault of liberal economic policies imposed by the World
Bank, the outpouring of dissent that followed the assassination of
opposition leader Benigno Aquino paved way to the legitimization of the
adoption of liberal ideas on all fronts (Bello, 2009).
The collapse of the state-planned economy of the Soviet Union
provided even more impetus at the international level for the decline of
state-led development. This event gave rise to the widespread public
perception that liberal economics is the best way to go and the observers
who blamed the crisis on it were wrong. On the other hand, the seeming
success of the market-prescribing governance prior to the end of the Cold
War, which pitted the record of the United States and the United Kingdom
as the two leading powers, made a good case for policy borrowing.
Endogenous or domestic factors are complemented by the exogenous
or external factors in discrediting the idea of Keynesian governance, which
in turn provided the opening of the political space of ideas.

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Supply-Side Analysis
The sponsors of these ideas are a domestic epistemic community of
notable economics- and business-trained scholars and experts who were
schooled in the United States at the time when liberal economics was
gaining ground. Many of them were housed at the University of the
Philippines and in economic management departments of the Ramos
administration.
Thu s, th e neoliberal-leaning domestic epistemic commun ity
permeated in many of the important executive positions in key economic
agencies. These include among many others, Harvard-trained advisers like
Cielito Habito as the secretary of the governments socio-economic
planning agency, the National Economic and Development Authority
(NEDA) (Bello, Docena, de Guzman, & Malig, 2004). Others but not limited
to, include Rizalino Navarro as the secretary of the Department of Trade
and Industry who was replaced by his classmate at Harvard, Ramon Del
Rosario, and former World Bank (WB) staff Roberto de Ocampo was
appointed as the Secretary of Finance.
Likewise, a confluence of neoliberal supporters and lobbyists
permeated civil society and the legislative branches. The academethe
University of the Philippines School of Economics and the University of
Asia and the Pacific (formerly Center for Research and Communication)
housed these thought leaders. The likes of Dr. Bernardo Villegas, inter
alia, earning both masters and doctoral degrees in economics at Harvard
after finishing at De La Salle proved instrumental. Then Philippine
Senator Gloria Macapagal Arroyo was herself a prominent neoliberal.
Additionally, the University of the Philippines School of Economics
released a prominent anti-Marcos white paper that was warmly received
by many (Bello, 2009). While this is the case, Bello (2009) notes that the
left-wing players who advocated a state-led governance were out of the
picture. The Left was preoccupied with their regrouping, an outcome of
their failure to participate in the last leg of the ousting of the Marcos
dictatorship. Because of this, they were unable to match the positional
power of right-wing scholars and economic managers.
Certainly, those who supported the neoliberalism had two options: to
bask in the glory of winning the Cold War and let res ipsa loquitur or let
the thing speak for itself; or to use this as an opportunity for policy
borrowing and policy learning as a case for neoliberalism.

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Policy Acceptance
The neoliberal idea is not just the ability to co-opt anti-statist
sentiments, but since neoliberalism is ahistorical and apolitical, they can
either deny that the structural adjustment programs were the cause of the
crisis or opine that policy should not be based on historical learning. Both
are based on the positivistic orientation of neoliberalism. As mentioned,
this gives neoliberalism its epistemic privilege.
Figure 3 summarizes the analytical position this article postulates.

Figure 3. Schematic Representation of Ideational Reform

in the Ramos Administration
Thre e-Level
Ideational Reform

D e mand

Supply

Political Change

Independent Variables of Policy Change

Endo g e no us
Exo ge nous

Fall of Keynesian
State-Led
G o v e rnanc e

Anti-State PostMarcos National

Mo od

Collapse of the Soviet

Union and the end of
the Cold War

The Rise of
Neoliberal MarketLed Governance

Power of Rightwing "Scholar

Activists" and
failure of left-wing
sc holars

Policy Borrowing and

Learning: Market-led
reforms in the U.S.
and the U.K.

Ac ceptance
Epistemic Privilege of Neoliberalism

Conclusions
The article argued that the neoliberal turn in governance during the
Ramos administration was influenced by both domestic and international
ideation al factor s thr ough a th ree-step refor m process. At the
international level, the collapse of the Soviet Unions planned economy
and the end of the Cold War gave rise to the demand of new ideas and
legitimacy to those who proposed neoliberalism as the governance model
that states should adopt. This coincided with the general post-Marcos antistate sentiments that engendered the Philippines at the time of Ramos as
well as the inability of those who are against neoliberalism to consolidate
their power and influence policy. These two dimensions are supplemented
by the fact that neoliberalism in itself garnered an epistemic privileged
status both internationally and domestically.

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Governance theory, in general and in many writings in the field of

public administration including the New Public Management and
governance theories, was influenced by neoliberalism as an ideology. In
this sense, neoliberalism is an organizing framework that informs theories
of public administration and governance. Furthermore, the reform process
using ideas may be a guiding analytic device for thinking about public
policy theory, as many have argued before.
The ideational framework of analysis can help map continuity and
change in public administrative and programmatic thought as well and not
just in policy and political analysis. The continuum of administrative
thought and practice from traditional public administrative on one hand to
governance on the other can undoubtedly be illuminated with ideational
analysis. In terms of policy analysis, the dominance of the use of
economistic rather than a Rawlsian analy tic meth od can also be
investigated. Furthermore, highlighted in this article are an interesting
mix of international and domestic analyses a mix that should not be
ignored. Too many times, the international dimension is ignored and if
mentioned, not properly theorized. This article provided some examples
for future research using ideas as an analytic tool.
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