In his second-to-last State of the Nation Address on July 28, an emotional Aquino spoke about his government's achievements in areas such as infrastructure development, military modernization, and reforms to tackle corruption in state agencies. He also vowed not to betray the public's trust amid mounting criticism of a stimulus program that has raised doubts about his anti-corruption drive. About three kilometres away from Congress, police used water cannons on thousands of protesters, some of which burned an effigy of Aquino as he spoke.

The speech comes at a time when the president is facing a spending scandal. Earlier this month, the Supreme Court this month declared partly illegal a 145 billion pesos (3.34 billion USD) economic stimulus fund that the 54-year-old Aquino set up in 2011 from budget savings, sparking a storm of controversy that put into doubt his commitment to fighting corruption.

In a DW interview, Steven Rood, country representative of the Asia Foundation in the Philippines, says that while the president is facing record low opinion ratings, the level is actually quite reasonable by historical standards. However, he adds, the discussion in Philippine media about a "constitutional crisis" has been overblown.

DW: What key issues were addressed in President Aquino's State of the Nation Address?

Steven Rood: In this State of the Nation Address (SONA), President Aquino began to build his case for a positive historical legacy, touting what had been accomplished since he took office. He invoked his family legacy - his father, martyred in 1983; his late mother, who took over as president after the fall of Ferdinand Marcos in 1986 - and enumerated many gains in the last four years. He cited the country's strong overall economic growth as well as policies aimed at reducing poverty such as Conditional Cash Transfers and skills training.

Aquino also enumerated the tragedies since the last SONA a year ago, including an armed incursion into Zamboanga City, an earthquake in the central Philippines, and the strongest typhoon on record - Haiyan, known in the Philippines as Yolanda - and defended his administration from accusations of a slow response to these events.

In the past few weeks there has been overblown discussion in Philippine media about a "constitutional crisis" caused by the Supreme Court decision that ruled the administration's Disbursement Acceleration Program (DAP) as unconstitutional, violating Congress' power to enact the budget. The president disagreed with the Court, and filed a formal motion for reconsideration. In the SONA he pointed out many worthy items that had been funded by the DAP – but then cooled things down by stating he would ask Congress for a supplementary budget to authorize any continued spending in the face of the Court's decision.

Interestingly, he did not address issues of foreign policy, including disputes with China in the West Philippine/South China Sea. His discussion of security included the improved state of the security forces, and the need for Congress to pass a new law to implement the peace agreement with the Moro Islamic Liberation Front (MILF). At the end he began to look into the future, saying that the new leadership to be elected when his term ends in 2016 should be judged on how they continue the process of transformation that he was attempting, and noting reformers from many sectors who would soldier on.

How was the speech perceived by the people?

The speech was long, well organized, and full of emotion. While we don't have scientific survey evidence about how the Filipino citizenry viewed the speech, online polling by major news networks produced favorable results by wide margins. And, using the built-in advantage of the "bully pulpit" of live TV coverage in front of a joint session of the House of Representatives and the Senate, he was able to set the terms of discussion. In that sense the speech was a success, and deemed as such by most independent analysts.

Eight leftist members of Congress walked out of the session as the president was introduced, not even waiting to hear what he said before they expressed their disapproval. Some 7,000 like-minded protesters were turned back by police lines. They are unappeased, and wish to oust the president.

Others were disappointed that certain policy initiatives were not put forward. Many segments of the society, such as the business community, had lists of what they hoped he would endorse. One omission that was immediately noted was the pending Freedom of Information bill, but the president's men explained later that since he had announced the previous week that he would push for Freedom of Information to be passed before the end of his term, he did not need to mention it in the speech.

The speech came amid a dramatic drop in approval ratings for Aquino. What has caused the record low ratings?

It is important to note in this context that the ratings are record lows for President Aquino during his term, but the level is actually quite reasonable by historical standards. A declining rating is normal in a presidential system - it has been characterized as the coming apart of a "coalition of minorities;" as each element is disappointed by something the president does during his term, the rating is bound to drop. Until recently President Aquino seemed immune to this trend, staying at very high levels, but falling out of the stratosphere in June.

His June rating is higher than his mother's approval rating at a similar point in her term - and very much above the levels to which both his predecessors - Joseph Estrada and Gloria Arroyo - fell.

When asked why their satisfaction was dropping, perhaps the most corrosive issue cited by voters is lack of progress in "fighting corruption." President Aquino campaigned, and has governed, on a platform: "If there is no corruption, there will be no poverty." A steady drumbeat of the complex scandal surrounding misuse of Congressional Pork Barrel funds (that has three sitting Senators arrested), and the conflation in the public mind of this scandal with the DAP budgetary initiatives, led to a drop in citizen rating of the administration's anti-corruption performance. It remains to be seen whether the administration's vigorous public defense of the last few weeks will lead to a rebound in citizen satisfaction in the future - as seems likely.

The address also came amid three impeachment complaints against the president. What is at the core of these complaints?

All three impeachment complaints were filed by the leftist Makabayan bloc of members of the House of Representatives. They are unlikely to have much impact, for procedural reasons - the proponents lack votes - and substantive reasons.
The first two complaints have to do with the DAP, struck down by the Supreme Court as unconstitutional. They are clearly premature since the Court has not ruled with finality, and fly in the face of the presumption of "good faith," that is, the administration thought that what it was doing was legal under the Administrative Code of the Philippines.

The third complaint is about the Enhanced Defense Cooperation Agreement (EDCA) the administration signed with the United States earlier this year, in which US troops will increase their tempo of six-month rotations through the Philippines and the US will provide facilities and equipment for Philippine bases. Though popular with the general citizenry, a large proportion of the Philippine policy elite is suspicious of the motives and actions of the former colonial power. Still, the Supreme Court has ruled on several previous occasions that these sorts of agreements are constitutional, so there seems to be little ground for impeachment here.

What is driving the high inflation and unemployment rate in the Philippines and what is the government doing about it?

The Philippines' high recent growth rate has only marginally improved the poverty situation, and unemployment is stubbornly high. Economic growth tends to be consumption driven - buoyed by increasing remittances from the millions of Filipinos working overseas - with insufficient investment. The administration has tried to reverse this, but any cures are long-term. Doubling infrastructure investment in the past few years will raise competitiveness of the economy; increasing spending for health and education will improve the earning power of average citizens.

Inflation is caused, among other things, by the high price of rice, which forms a large percentage of Filipinos' market basket. In his speech the president promised to have the National Food Authority (NFA) import more inexpensive rice to drive down the price, but for more than 15 years economists have been advocating the abolition of the NFA's monopoly on imports so as to reduce the cost of the country's staple. However, in the name of food security this has not happened, and seems unlikely to happen.

What are the main challenges for Aquino's presidency before stepping down in 2016?

Several challenges were mentioned in the SONA. One is the establishment of the Bangsamoro, a special region in the southern Philippines, as agreed with the Moro Islamic Liberation Front. This requires that Congress promulgate a law, which has to be ratified in a plebiscite by the affected populace, a MILF-led interim administration to be established, and regular elections for the regional government along with all other national and local elections in May 2016. Time is obviously short.

Another SONA challenge that could derail the good economic news is the energy situation - high prices, occasional shortages, and a looming El Nino event that would hamper hydroelectric generation. Given how long it takes to commission baseload powerplants, the Philippines could be in for energy problems.

One topic that was not mentioned in the SONA was the confrontation with China in the West Philippine/South China Sea. The Philippines must balance assertion of claimed rights in the area, with the economic importance of China to the Philippines. How much should the Philippines rely on EDCA and the US "rebalance" to Asia, and how much on ASEAN solidarity with respect to a "Code of Conduct" for the area? While naturally a Philippine President's main focus is domestic affairs, international events cannot be ignored.

Finally, of course, from the president's point of view, a main challenge is supporting a successor who will continue his programs. After all, two years from now, the Philippines will be under a new leadership.

Steven Rood is country representative of the Asia Foundation in the Philippines and Pacific Island Nations. You can follow him on Twitter @StevenRoodPH.