Business united for action
Have you ever tried to get a committee to agree on something? Or worse, to agree to many things? Or even worse, many things where strong positions prevail, or something worse than that: two or three committees to come together to agree? If so, then you’ll realize what monumental significance there is in getting 17 business chambers to agree on not just one but eight issues they all think are of the highest importance. The 17 are made up of 10 local business chambers supported by seven foreign ones. It’s an amazing confluence of disparate entities that shouldn’t be ignored.
The foreign and local business groups looked at the whole gamut of issues the government needs to address, and identified just eight. They have asked President Aquino to put these at the top of his list for action. Eight issues that, if resolved and effected in the next three years, will greatly increase investment, business activity—and jobs.
I have written extensively on the need to put JOBS as the only focus. If you do that, all else follows. Only one thing will get the poor out of poverty: Give them a job. These eight issues will greatly help do just that.
So I hope the President agrees, and does so not just with words, not just with promises, but with action and demonstrated results. The one he will find most difficult is the removal of the constraints in the economic sections of the Constitution. He has said he needs to be convinced. Well, here’s not just seven foreign chambers but also the majority of businessmen in 10 local chambers who want it, too. They see foreign involvement not as a threat, but as an opportunity. They want the Philippine economy to catch up to its neighbors. If such a disparate group of businessmen can agree on such a controversial issue, simple logic says it must be of overwhelming importance.
His mother recognized the importance of changing a constitution that was distorted to favor a few, and did it. It was one of the legacies she left that helped transform the society in previously unimaginable ways. I hope her son will see that now is the time, perhaps the only possible time, to bring that constitution into a world that couldn’t be considered in 1986.
One he won’t have any trouble supporting, because he’s only peripherally involved, is the cleanup of the judiciary. The weak, too often corrupt legal system is a major deterrent to business growth. It’s a system that needs to consider what is best for business, for society, in its decisions, and apply them only prospectively. The competence and efficiency of the system needs to be improved, and judges and other employees properly compensated, with decent courts to operate in.
What are the other six? These start with the one that maddens us all: infrastructure and transport efficiency. The public-private partnership program is a great idea, but starting those projects must be accelerated. Cosette Canilao, the head of the PPP Center, is doing an excellent job, but progress is slowed by having to deal with a number of other agencies complicating the process. Here is where the President can step in and simplify the process: Give her greater authority. The Philippines is more than 20 years behind its neighbors; it must catch up. That means setting deadlines, and sticking to them. Three in Manila to start with are an international gateway we can be proud of, declogging the Port of Manila, and connecting NLEx to SLEx. They’ve been discussed and promised for years.
Infrastructure must be built NOW.
Next is enacting an effective antitrust law and competition policy to create a level playing field that will bring more businessmen into the Philippine economy, where more competition is needed in a number of sectors. But once they’re in, there must be an ability to operate without unfair competition. This is particularly important in light of the impending Asean integration in 2015.
This is where the next issue comes in: Stop smuggling. The chambers estimate that over P100 billion is lost annually; that’s 5 percent of the 2013 national budget. You can imagine what good that money could do if the government had it. The Bureau of Customs, as Commissioner Ruffy Biazon has recognized, needs a complete overhaul. I’d close it down and start again.
In some sectors incentives must be given, or the investor goes elsewhere, where the operating environment is better. But at the moment, the incentives offered are all over the place. The various laws providing incentives to investors need to be consolidated into one, well-considered statute. But the priority in developing one must be on what is needed to get business to come here. Direct revenues to the government must be secondary. If business comes, the greater growth of the economy it will create will bring in greater revenues indirectly.
Then we come to the really controversial one: mining. Opposition is strong and the government’s recent actions have stopped mining dead in its tracks. There’s no new mining interest, and there won’t be until fair, sensible policies are implemented. Taxes need to match those imposed elsewhere, and local laws must conform to national ones. Allowing a local law banning open-pit mining to usurp a national law is in contradiction to the Constitution, so no one can understand why it’s being allowed.
Finally, and this you’ll all like: Give us reliable, 24/7 power cheaper. The people of Mindanao can tell you all about this, but we in Luzon will soon, too, if new power plants aren’t built immediately. Yet the only plant proposed has been stopped by NGO opposition. We are heading for inevitable brownouts if new plant construction isn’t started this year.
It’s a concerted appeal to the President for action to make the Philippines a leader in Asia again.