A peaceful, blessed and bountiful 2013 to all of us! As always, we start the new year full of hope for an even better year ahead. On the domestic economic front, there is good basis for such optimism even as major economies of the world continue to struggle with threats and uncertainties. In particular, the United States and key European economies are saddled with problems on government finances that threaten their overall economic outlooks. In contrast, the outlook here at home is generally upbeat.
There are at least three reasons for this. First, it is an election year, which always boosts overall spending—by government and by candidates—which from past experience significantly ramps up economic growth from its usual pace. Second, government finances are improving, especially with the passage of an enhanced sin tax law that takes effect today. Third, an investment-grade credit rating now widely expected to be forthcoming from the major rating agencies will boost investment flows into the Philippines, of both the financial (“hot money”) and real kind (those that bring more jobs). While the former is not necessarily desirable, the latter most certainly is. In any case, further economic growth would ensue.
Still, we all know that sustaining or speeding up the past year’s brisk economic growth rate of 6-7 percent into 2013 is not all there is to improving the Philippine economy. Growth in production has not been accompanied by commensurate growth in jobs and wages. Hence, too many Filipinos have yet to feel the benefit of the economy’s recent growth surge. Certain fundamental changes still need to happen if economic growth is to be more broad-based and inclusive. And this season for drawing up New Year’s resolutions provides good opportunity to define changes required of all of us, whatever particular roles we play in society. Here are some that I would personally like to see:
For our national and local leaders: Articulate a clear and unified vision that we can all rally behind. I hear it said too often that we lack a concrete vision for our country, say in 25 years and beyond. To be sure, asserting the “matuwid na daan” has been a clear boon to the economy. But where that straight path is intended to lead us to seems to remain unclear to many, which in turn hampers our ability to work in unison toward defined common goals. We need to look and plan well beyond the span of a presidential term or that of local officials. And once we clarify this vision, we could all define how each of us can help lead our nation toward it.
For our economic managers: Work to regain peak tax and revenue performance we already attained in the 1990s. Even with recent substantial improvements in revenue performance, government revenue collection continues to fall short of targets, and tax effort (ratio of tax revenues to gross domestic product) has improved little (just above 13 percent as of the third quarter). Pushing tax effort back up to 17 percent of GDP—something we achieved in 1996-1997 when we last had a woman leading the Bureau of Internal Revenue—would wipe out our current government deficits and permit the long-needed boost in public spending on education, health and economic infrastructure.
For members of Congress: Focus on crucial lawmaking. A number of key legislative measures that would strengthen the economy, unleash much more economic activities and create many more jobs remain pending. Bills to promote transparency in governance, provide a level economic playing field via a firm competition policy, rationalize fiscal incentives and others are among a number of pending bills that would address current and persistent weaknesses of the Philippine economy. I’d like to see our senators and representatives work to pass these critical measures before they adjourn for the elections, so that their positive impacts may indeed translate to a better economy in 2013 and beyond.
For the business sector: Practice true corporate social responsibility (CSR). Too many business people still equate corporate social responsibility with channeling a portion of earnings to charitable projects through a philanthropic entity. But CSR in its fullest sense means running one’s business responsibly, that is, in a way that does not unduly exploit its workers and consumers but treats them with respect and makes them cobeneficiaries of positive business performance. It means producing one’s product or service without damaging one’s surroundings or depleting natural resources to the detriment of future generations. And it means paying the proper amount of taxes to the government, without concealing or misrepresenting one’s true income. Promoting inclusive growth is, after all, not a job for government alone.
And for the rest of us, as we face another election year: Let us choose our leaders responsibly and protect our sacred right to do so. We must take the effort to know our candidates and make an informed comparison of the choices before us. We must guard our votes once we have cast them, by taking part in citizens’ actions to ensure that votes are properly and accurately accounted for. And most importantly, we must vote for candidates according to their potential for responsible leadership, and not for any other reason. If we fail in these most basic of our democratic responsibilities, then we cannot complain about the people who rule over us, for we always get the leaders we deserve.
A happy and better New Year to all of us—and may 2013 bring forth the election of new enlightened leaders who will make it so!
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