Benigno Aquino faces true test with typhoon

The agenda for the second-half of Benigno Aquino's presidency is devastatingly clear.

In the first three years of his term, the Filipino leader attracted remarkable investment-grade ratings for the onetime Sick Man of Asia. He raised taxes to increase revenues and stabilize the national balance sheet. He won global accolades for jailing his predecessor, Gloria Arroyo, and going after the corruption that has made the Philippines a third-rail country for overseas investors. He even took on the powerful Catholic Church by providing free contraceptives to slow population growth.

Those successes seem like a distant memory today as the Philippines counts its dead. Super Typhoon Haiyan may have killed as many as 10,000 people in the Philippines after floods and winds knocked down buildings and destroyed an airport. The recovery effort will be long, painful and expensive. Haiyan's total economic impact may reach $14 billion, with only about $2 billion of that insured. That's serious money in a $250 billion economy where a quarter of the population lives on less than $1.25 a day.

A botched effort would undermine many of Aquino's accomplishments to date. Hundreds of millions in aid dollars flowing into remote provinces could fuel the corruption he has tried to eradicate. Government infighting and incompetence would destroy the reputation for probity and efficiency that Aquino has fought to establish among investors. The Philippines' new standing is all-too-fragile. If this turns into Haiti, the world might be quick to shrug and say, "Well, what do you expect? It's the Philippines."

This is a test for Aquino — but also an opportunity. If he can oversee a rapid and effective response to Haiyan, he will demonstrate to the world, and his own people, that the Philippines has grown up — that his nation is no longer the kind to sit back and let aid agencies take over when disaster strikes. That should reinforce confidence in his leadership and strengthen his hand against those who would try to roll back the reforms he's implemented thus far.

Most importantly, the crisis gives the president a chance to broaden those reforms to the whole country. For too long Filipino leaders have tended to their fiefdoms and cronies in Manila and left the provinces to fend for themselves. That lack of attentiveness and oversight allowed local politicians to steer funds that should have gone toward better infrastructure into pet projects — or their pockets.

Before the weekend's devastation, Aquino was planning to more than double state spending on public works to 824 billion pesos ($19 billion) or about 5 percent of gross domestic product. That number will no doubt have to be revised dramatically upward. Storm-struck areas need to be rebuilt from the ground up. Roads and bridges and buildings elsewhere need to be strengthened to withstand the next killer typhoon or earthquake.

That money gives Aquino leverage to improve local governance in ways that Manila has never attempted before. Aquino could release national funds on a quid-pro-quo basis, demanding certain sets of metrics be met to ensure that the next disbursement is made. Local governments could be subjected to surprise audits and lifestyle checks of public officials and their staffs to make sure funds are being properly managed.

Aquino also could demand that more information be released on the Internet, including bidding processes, to improve transparency. Such efforts could spread Aquino's good-governance push to thousands of far-off islands and towns, raising the nation's still-woeful score on Transparency International's corruption index.

Aquino rarely misses an opportunity so say that the Philippines is back in business. This is his chance to prove it.

William Pesek is a columnist for Bloomberg View.