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Makati Business Club at 35

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Business Matters

Makati Business Club at 35

/ 05:10 AM September 09, 2017

The Makati Business Club (MBC) was established in October 1981 by Enrique Zobel and a small group of businessmen with the intention of creating a voice for the Philippine business community. Its vision was to serve as a “forum for constructive ideas,” not only speaking out on the issues of the time but also, and more importantly, recommending solutions for those issues and challenges. It spoke out on economic and social issues. The analysis and policy advocacy behind its views were based on an economic and policy research program, which it set out to do through a professional research staff and secretariat.

MBC was formed during and lived through interesting times in modern-day Philippines. In 1981, martial law was officially lifted and a presidential election was held. But large segments of the economy were controlled by monopolies, the government, and the government’s friends (e.g., cronies). These included telecommunications, aviation, power generation and distribution, water, the coconut, sugar, and rice and grains industries, and media (both the newspaper and television segments), among others. There was also a large government-owned and -controlled corporate sector. Politically, the communist and secessionist movements were on the rise and political opposition was tightly controlled. With the assassination of former senator Ninoy Aquino on Aug. 21, 1983, social tensions rose and the economy deteriorated quickly. The country was likened to a “social volcano.” The economy contracted an average of 5 percent a year in 1984 and 1985 following the loss of confidence in the country.

In this milieu, MBC carried out its mission as a forum for constructive ideas. It spoke out on economic and social issues. Its main thrust was and continues to be for open markets and liberalization. Over the years, it has supported policies on trade liberalization, investment liberalization, lower tariffs and antiprotectionism, the breakup of monopolies, the reduction of the government’s corporate sector, the introduction of more competition, and the elimination of “crony capitalism.”

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It was then MBC vice chair Jaime V. Ongpin (who later became finance secretary) who coined the phrase “crony capitalism” to describe the condition of having so many economic sectors controlled by friends of the government, giving them monopoly powers over large portions of the economy. Over the course of time, these monopolies would be broken up. MBC also supported calls for oil price deregulation, the lifting of foreign exchange controls, and the privatization of government assets.

Many of these policy measures required enactment into law. In this regard, MBC backed key legislation such as the Foreign Investment Act which partially lifted foreign restrictions on investments, the Foreign Banking Act, the Retail Trade Liberalization Act, the Department of Energy Act, the new Central Monetary Authority Act which established the Bangko Sentral, the E-Commerce Act, and the creation of the Department of Information Communications Technology, among others.

MBC also believed that a liberalized economy worked best in a democracy under the rule of law. Thus, it also supported moves toward the return of free elections, the independence of the judiciary, judicial reforms, and freedom of the press, among others. It was an early backer of the National Movement for Free Elections and the concept of election monitoring and parallel counts. It has managed the Transparent Accountable Governance project and the Coalition Against Corruption, both of which have been succeeded by the Integrity Initiative program.

While much has changed and progress has been achieved over these last three and half decades, we still have many challenges ahead of us. Despite economic growth, poverty remains widespread though it has dropped by about five percentage points in recent years. I believe there is a role for the private sector to play in achieving our nation’s aspirations, but this will have to be in a strong partnership with the government, nongovernment, and academic sectors. Experience has taught us that society’s problems are too complex and too large for any single sector to handle. I am confident that a strong partnership will help us meet our challenges.

Guillermo M. Luz (gm.luz@competitive.org.ph) served as MBC executive director in 1987-2006.

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TAGS: Business Matters, Inquirer Opinion, Makati Business Club, MBC
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