Like It Is

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.

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  • ConcernedCitizenPh

    President Aquino will surely realize what the people is telling him. However, when that time comes it will probably be too late for him to do something about the situation. This also happens to us in our everyday life. We just wake up realizing what we should do or realizing there’s no point in deferring a stalled plan of action without anybody telling us. While waiting for Pres Aquino to act on reforms, we should start working on the People’s Initiative as a contingency because whoever will be in power by 2016 will hold back on reforms because of politics and relationships. This is becoming predictable that we should apply literally the thought that change should begin with us.

  • mike8232

    its worthless to try to motivate a president who never really wanted the job

    Someone who just rode on the coattails of his parents

    Someone who is used to pasang awa and mediocrity

    His performance in Congress still reflects this fact till now so why bother?

  • isidro c. valencia

    What Mr. Wallace are saying could be remedied by certain laws but not by Constitutional changes.

    Quantity of several organizations claiming for some changes is not a good basis to effect changes. The question is: what is their business interest. Will it benefit or its effects trickle down to class C D E in the Philippines?

    It is not wise to say that P-Noy mother was in favor of charter change. After Marcos, it is but logical to change the fundamental laws of the land. After Cory, we have already going in good directions, the economic fundamentals are present, but of course there are some defects need to fix but not the Constitution itself.

    In mining, there is an Alternative Mining Laws (to be submitted in the next Congress) which will correct the deficiencies and inefficiencies of 1995 Mining Act and other related laws.

    Mr. Wallace’ reports about P100B lost in smuggling is not correct, it is P500B as reported by ADB. There is a pending law to change the corporate nature of the Bureau of Customs but our legislators are adamant because they have also interest, the same with foreigners. It takes P-Noy political will to do it.

    We need character change, not charter change. The Filipinos are wiser in terms of how to circumvent a law or circumvent IRR . Change its character and I am sure smuggling will be eliminated.

    The energy cost and the price can be solved if we will harness other resources like solar, wind, under current water, storm, biogas or biomass, natural gas, rare earths or rare ores. Let us no be dependent on fossil oil as commercialized by foreigners like Mr. Wallace.

    You don’t need to appeal to the President. The President knows what he is doing for the Filipinos and not for the foreigners. He will not be deceived by good words.

    Sino ba ang magmamahal sa sarling lupa, kundi ang mga Filipinos. Other than that, are all fakes.

    The Philippines is now a leader in Asia. Look its growth rate, its credit ratings converted to investment ratings. Look Ma, foreign investors are doing fun in the Philippines.

    • ConcernedCitizenPh

      Cory was open to changes and she risked by changing the Constitution. The people knew she was a plain housewife when they asked her to run against Pres Marcos and people knew there will be mistakes along the way. Those mistakes are probably not even her mistakes. People around her placed those provisions and explained it to her. Can we really believe that Cory would not want to make any changes to the Constitution? No. She was inexperienced and she had to rely on the people around her. She was inclined though to change whatever she sees was not right. Changing the constitution will be very hard but not impossible to allow us to make changes whenever we find necessary. I hope Pres Aquino realizes this and does not make the wrong assumptions. Even the US Constitution has undergone changes whenever the American people deem necessary (even in just 1 year). They knew that the biggest mistake is not to correct a mistake.

      And why waste the opportunity to make the changes? Can he imagine the impression he will leave if he let’s this opportunity just pass?


    The real problem is not the lack of knowledge of the solutions…it is the lack of the required “feel” of the solutions by the unseasoned, immature and mediocre president…
    Privitization is one of the many solutions but never will it be the solution to pass on to the private sector the provision of the basic services to the Filipinos. The provision of the very basic services to the people must not be subjected to profiteering…

  • Good_Governance

    The Pnoy administration has done a creditable job of macroeconomic management. However, because of limited institutional capacity and poor advice (e.g., on what to do with ownership restrictions in our Constitution), it has not addressed with as much urgency the need for various reforms to increase investment and jobs. The consensus of 17 business chambers summarized in Mr. Wallace’s article above is an excellent list of suggested reform priorities for the remaining three years of Pnoy’s term. These are suggestions of people with actual experience in running companies and meeting payrolls, qualifications that are quite rare among Pnoy’s advisers, many of whom are bureaucrats or ex-politicians.

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