Can We Expect Action? (First of 2 parts) by Peter Wallace

Peter Wallace BW

Peter Perfecto of Makati Business Club (MBC) summarized the business community’s recommendations to President Aquino in his column in the Inquirer on June 6. But let me take it further and go back a little to when we started – in 2013.

In 2013, 17 business groups, 10 local and 7 foreign, got together and for the first time ever came to agreement on the stand to take on a number of issues. Getting 17 different groups, each with its own agenda, to agree on anything is an almost impossible task; to get them to agree to eight issues is a monumental achievement, and shows how important they considered those issues were.

They submitted those eight issues to President Aquino prior to his SONA in the hope and expectation he’d be grateful for business’s inputs, and take them into account as he planned for the coming year. Unfortunately, that didn’t happen; of the eight only one saw any action at all. This was the passage of the Anti-trust and Fair Competition bill in Congress which is now awaiting President Aquino’s signature.

Of the others here’s where we are two years later –

  • Infrastructure projects must be accelerated. Instead government spending on infrastructure has been dismal. Public construction in the first quarter of 2015 was down -24.6 percent compared to first quarter 2014. In 2014 only 76 percent of the budget for infrastructure was spent. In the four years of the Aquino administration only an average of 2.2 percent of GDP has gone to infrastructure, or P237 billion annually, well below the P 300 billion per year supposed to have been spent under plan. An estimated P 520 to P540 billion should have been spent annually if the necessary minimum of 5 percent of GDP (the ASEAN average) had been met. The flagship PPP program is finally moving with 10 projects awarded, but only 4 in actual construction. To do any better regulatory bottlenecks must be cleared and the government needs to change its bidding policies and remove the constitutional restrictions to attract more foreign investors into the program. None of this has been done.
  • An overhaul of the Bureau of Customs and creation of an oversight committee. The latter has yet to be created. Under Commissioner Sevilla the bureau implemented several reforms but the necessary major overhaul at the bureau has yet to take place. With Bert Lina there’s a chance it might.
  • Retain the existing mining act with a competitive tax regime. This was repeated in 2014, but the business community gave up this year, realizing the President was not going to act. The local mining sector is now at a standstill from the President’s non-acceptance of the importance of this sector to the economy and to the Filipino people.
  • Additional power plants and implementation of a favorable investment climate for energy investors is essential. Construction of the 600 MW Subic plant will finally commence. However, not enough new power plants are being built as fast as the increase in the demand for power, and projected reserves are not enough for what the entire country needs.
  • Enact the Fiscal Incentives Rationalization bill. The government needs to harmonize and rationalize laws providing fiscal and non‐ fiscal incentives to investors so as to make the Philippines competitive with its neighbors and thereby attract foreign investments. The DTI and DOF have yet to reach a final agreement on the terms to be offered so it won’t happen.
  • Amendments to the economic provisions in the constitution. Repeated every year as the business community realizes how essential it is. The Philippines’ “more open” neighbors are attracting 5 to 10 times the country’s FDI level but for reasons no one knows the President still does not support it. The Speaker couldn’t get enough support without the President’s backing so it didn’t get approved before the second regular session of the 16th Congress adjourned. Sad.
  • Reforms to improve competence and efficiency in the justice system. The Judiciary is an independent body, so it is more addressed to that body. The Chief Justice is initiating reforms, but there is a very long way to go.

Let’s leave the Judiciary out. Then of the six only two have seen any progress, and that limited. One power  plant approved and a PPP program that is now moving, but there’s very minimal counterpart spending from the government. The others have not been accomplished.

Not prepared to give up, the 17 met again in 2014 and sent the President another letter, this time with 9 suggestions.

Six of which were a repeat of 2013, three were new. This time president Aquino mentioned three in his SONA – infrastructure, power, and reforms at the Bureau of Customs. But there was little further action on any of the three after that.

This year 15 very specific recommendations have been made that were designed to be actions that can be done in the remaining 12 months. Next week I will discuss them individually.

***

What team of idiots (a carefully chosen word) decided the ingress and egress to the skyway at Alabang should only be one lane. They MUST be found and fired from government service. Already the expressway operators have to make the out lane into an in lane during peak morning. A vehicle breakdown will bring traffic to a halt. It can’t cope with the present, it will be a disaster into the future. And the toll gates can’t cope either. It took me 25 minutes the other night to get through the E-pass lane – a 30 second procedure in any other country.

It’s essential that new lanes and more tolls be added. There’s no choice on this, the extra cost will just have to be borne. And the people responsible fired from their job.

 

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