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Business Matters

Moving forward

/ 06:26 AM December 15, 2012

The third-quarter 7.1-percent growth in our GDP, which brought the year-to-date growth to 6.5 percent, coupled with the Philippine Stock Exchange index breaching the 5,800 level, augurs well for the country. Foreign direct investments in the first three quarters of the year are also up at $1.1 billion, registering a 40-percent increase. Our international reserves are also at its highest at $84 billion. We are now among the world’s fastest-growing economies for 2012 and, save for the temporary setback and devastation caused by “Pablo” in eastern Mindanao, the Philippines is now definitely set for takeoff.

The P-Noy administration and his economic team deserve the credit for what the country has achieved thus far. With the sin tax bill about to be signed into law, and the reproductive health bill and the freedom of information bill finally moving forward, the foundations of economic growth and the government’s anticorruption policies will get further boosts. But there are still certain issues that the government can fine-tune to further cement these economic gains.

The first is traffic congestion in Metro Manila. Every December, as we approach Christmas, the traffic situation peaks at its worst levels. The decision of the Metro Manila Development Authority to ban trucks from Edsa 24/7 and extend the truck ban by one hour more in the morning and another in the evening will help. These are, however, temporary solutions; permanent ones are needed.


The proposed elevated roads to link SLEx with NLEx deserve to be speeded up. The number of cars in MM continues to increase and the number of roads needs to keep pace lest we choke. The government should also fast-track the LRT and MRT extensions as well as improvements focused on moving people rather than cars. These projects deserve a sense of urgency and can serve as the legacy infrastructure projects of the P-Noy administration. While these will promote easing the movement of people around MM, the government also needs to address the movement of goods that the populace consumes.

In this regard, the government should seriously look at building safe gas and fuel pipelines that will connect the depots in Batangas port to central depots in MM. This will significantly cut the number of trucks that traverse SLEx and the congested metro streets, as well as reduce the risk of accidents. Most modern cities transport gas and fuel through pipelines, and we can learn from their experience in laying down safe and more economic pipelines that the private sector, through the public-private partnership, can take on. The use of gas as fuel is increasing globally, and Canada and the United States have vast reserves that rival the oil reserves in the world. It is not unlikely that over time, natural gas may displace oil as the primary source of fuel to generate electricity and power vehicles. The pipelines will thus not only help alleviate the traffic situation in MM but also make available clean and safe fuel to the city.

Another solution to the slow movement of goods is the use of the railways to move container vans to and from the south, including the port of Batangas. The railroads can be better utilized to move both people and goods, substantially reducing the number of container vans traversing SLEx. Use of the railroads will be fairly easier and relatively cheaper to implement. Strategically locating central container van depots in MM beside railroad tracks will reduce the travel that the container vans will have to make for deliveries, thus easing the traffic in MM.

The second issue is improving competitiveness.

The Philippines continues to fare poorly in the International Finance Corporation’s survey (June 2011-June 2012) comparing the business regulations for domestic firms in 185 economies. It ranked 138th compared to 136th in the prior period in terms of ease of doing business, with starting a business (161), paying taxes (143), and resolving insolvency (165) dragging its overall rating down.

Anyone who has started a business that involves securing a construction permit, a permit from the Bureau of Fire Protection and an occupancy permit will agree with the country’s poor rating. The tedious process involved in securing licenses and permits nurtures opportunities for corruption and needs to be addressed immediately. Studies made by some multilaterals have paved the way for software and templates that streamline these processes. The technology is now available and has been pilot-tested successfully in a number of cities and municipalities. Unfortunately, most of the local government units have not used these tools for various unexplained reasons. The national government has to step in and compel these LGUs to adapt and use these procedures, using perhaps the release of their internal revenue allotments as a carrot.

Perhaps the Local Autonomy Code should be revisited and amended to transfer to the national government the authority to introduce processes and procedures that will make LGU operations uniform and less prone to corruption. But these amendments should be acceptable and not in any way impinge upon the autonomy of the LGUs to govern effectively. These should in fact give them more time to address the needs of their constituents given the more efficient processing of day-to-day activities that will no longer eat up much of their time.

David L. Balangue is a former chair and managing partner of SyCip Gorres Velayo & Co. and founder of the Tita Cory Movement. He chairs the Coalition Against Corruption. Comments may be sent to


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