President Benigno Aquino III returned on Friday from a five-day visit to the United States without claiming he had brought home the usual “bacon” consisting of a package of economic assistance and a bunch of contracts on investments from Wall Street.
This is so because after meeting with businessmen and investors in New York, all he got were “pledges” of investments or “commitments” to expand foreign investments in the Philippines.
When hard-boiled businessmen talk about “pledges” or “commitments” to increase investments, they mean some intangible things still floating in the air that cannot be held by grasping human hands.
How ephemeral these commitments are in government and private sector transactions is reflected in the government claim that it has nailed down a “new investment” worth $15 million in the Philippine coconut industry in the next four years, meaning to mature at the end of the President’s term.
This investment is indeed so fluid that it is built on nothing more solid than the nutritionally refreshing “buko” juice still to be extracted from coconuts waiting for the good weather to mature.
We have a huge domestic market for this product in our galloping population growth rate and this raises the logical issue that with this consumer market, it appears there’s no need for the President and his entourage to go on a junket to New York to seek foreign investment.
It is also demonstrable that there seems to be more than enough domestic investors who see in this growth sector of the coconut industry a golden opportunity to tap the domestic market.
At a forum in Phnom Penh, Cambodia, last week, I heard a lecture on emerging Asian economies from ousted Thai Prime Minister Thaksin Shinawatra, who correctly pointed out that economic growth in emerging Southeast Asian economies is now driven by domestic consumption.
That is a departure from the export-led strategies for growth in the l980s, under which exporting countries sell their products to the markets of rich economies.
Mr. Aquino reported upon his return that the Philippines was now “a tale of success” and no longer the subject of “horror stories” about its economic conditions.
“If before only a few listened to our cries, now they sincerely listen to the voice of the Filipino,” he said.
Mr. Aquino made the statement after taking part in the Open Government Partnership (OGP) initiative in New York attended by a group of countries (including Indonesia, Mexico, Norway, South Africa, Britain, the United States and Brazil) which are pushing for open, honest and trustworthy governments.
“We are proud to say that our doors are open and the Philippines will openly take care of (foreign) investments in the Philippines,” Mr. Aquino said. “The truth is, it is more appropriate to say that foreign companies are now lining up to improve the country’s economy.”
He cited two American companies who would like to invest in the coconut industry to produce coco water. Sources in the Aquino entourage reported that the President received praises from the US-Asean Business Council, a group that counts among its members, Coca-Cola, GE, Pfizer and Citigroup.
Mr. Aquino said the Philippines derived “strength” from working together with other members of the OGP initiative. He said the Philippine participation as a member of the steering committee was consistent with his administration’s “commitment to honest and effective governance.”
According to Philippine Ambassador to the United Nations Jose Cuisia, the Philippines was chosen to be among the founders of the initiative because of Mr. Aquino’s “commitment to good governance and his determination to [root out] corruption in order to create more jobs for Filipinos and eventually reduce poverty.” (Government statistics show unsatisfactory job creation results.)
Mr. Aquino told reporters that US President Barack Obama congratulated him for his “achievements in his first year in office.” The reports did not say what the achievements were.
In a speech at Asia Society, the President said the Philippines’ membership in the OGP confirmed that it was “a good place to do business in and a good country to do business with.”
While the Philippines was once again open for business, he admitted that the problem was “most investors want to window-shop,” that is, find out first if the government had established the environment for transparent business before opening their purses.
Mr. Aquino still has to show that there is a nexus between good governance and spurring economic growth to ameliorate poverty.
All these heady praises heaped on the Aquino administration did not wipe out the dismal performance of the economy in the first year of his presidency.
As Mr. Aquino heard intoxicating plaudits in New York, he was confronted by the report that the International Monetary Fund (IMF) had cut its 2011 and 2012 growth forecast for the Philippines—and the rest of the world—as problems of ailing industrialized countries weighed down the recession-threatened global economy.
The IMF now expects the Philippine economy to grow by 4.7 percent this year and 4.9 percent next year, compared to the previous forecast of 5 percent for 2011 and 2012.
Feeling the brunt of the slump, the Makati Business Club did not share the optimistic outlook of the administration.
It reminded the Aquino administration of the bad news—something the government does not want to hear—that it needs to accelerate spending in the coming months and pump-prime the economy. It said the administration wanted to avoid corruption so much that it hardly implemented any projects during its first year.
“Because the government wanted to avoid corruption so much, the pace of government spending became too slow. We can’t (avoid corruption) to the extreme that no projects will be implemented. Infrastructure spending is necessary,” the Makati Business Club said.
“The government needs to accelerate spending even with the risk of having a little corruption seep in.”
The President was offended, making him dig in and insist that he was taught at Ateneo to shun any corruption in an absolute sense—as if the Ateneo is the fount of all moral rectitude and civic virtues in governance.
But this Ateneo disciple also forgot that he was not trained by the good fathers to claim virtue as the magic key to deliver economic performance in secular affairs.
One hopes that the President has not concluded that the Jesuits have trained him to become a saint, or that results flow automatically from constant proclamations that “I’m honest” and that he need not do something more.