Reforms = jobs
The desire of the Aquino administration to ensure that its actions are corruption-free and can stand up to scrutiny is backfiring. Half of its term is over but there is so much yet to be done to restructure the economy for it to generate the jobs required to reduce poverty. And we’re not even mentioning the stalled projects under the flagship Public-Private Partnership program.
The business community is sounding exasperated. At a forum organized by the foreign chambers of commerce in the Philippines, industry leaders highlighted the need for President Aquino to step up decision-making and the implementation of reforms needed to make economic growth inclusive—by generating more jobs. As former finance secretary and now Philippine Veterans Bank chair Roberto de Ocampo said, “it is imperative to heighten the need for urgency and to make everyone aware of time-based realities starting this year.”
The Joint Foreign Chambers of the Philippines also unveiled last week a report on the progress of its Arangkada initiative, a 10-year roadmap started in 2010 that targets $75 billion in foreign direct investments (FDI), 10 million jobs, and P1 trillion in revenues for the Philippines. Of 462 recommendations put forward by businessmen in the roadmap, 73.26 percent were classified as “active or moving,” and 26.97 percent “dormant.”
The Arangkada roadmap anchored its targets on the so-called seven “big winners”—agribusiness, outsourcing, trade and industries, infrastructure, manufacturing, mining and tourism (medical travel and retirement). Tourism is enjoying some success, according to Julian Payne, head of the Canadian Chamber of Commerce, but “dormant” reforms were noted in agribusiness and mining. Ian Porter, president of the Australia-New Zealand Chamber of Commerce, observed that agribusiness was a crucial area in creating employment as it was also feeding manufacturing. Mining, another crucial sector, has not progressed at all. It has been at a standstill since the issuance of Executive Order No. 79, which banned new mining contracts until the passage of a new revenue-sharing scheme with the government. Porter pointed out that just two mining projects could easily raise the Philippines’ gross domestic product (GDP) growth by 2 percentage points. “The Philippines has great opportunity in mining and should create a responsible, environmentally friendly mining regime that could create thousands of jobs,” he said, noting that most mines were located in remote areas where unemployment was highest. As such, mining has a huge impact in reducing unemployment in these places, he said.
National Competitiveness Council cochair Guillermo Luz also emphasized the need for on-time execution of essential reforms and projects. “It takes too long to get anything done here,” he lamented. “We cannot be sitting back and taking our time making decisions. On-time execution is the key we need and the discipline we should have to be able to move the country forward.” Last year, business groups pressed for the early passage of business and economic reform bills to draw more investments. These included the liberalization of shipping and the negative list for foreign investments, amendments to the economic provisions of the Constitution, mining reforms, as well as the rationalization of and transparency and accountability in fiscal incentives.
Among these, industry leaders are agreed that the government should focus on easing restrictions on FDI. While FDI have increased, their levels pale compared to those received by other Asian countries. This was traced in part to the fact that the 1987 Constitution limits foreign ownership in certain industries, particularly utility companies, to 40 percent. The Constitution was written during the term of President Corazon Aquino, the mother of President Aquino. But while Congress is deliberating on a possible bill that will allow foreign firms to skirt constitutional limits, Mr. Aquino is adamant in his position that there will be no amending the Constitution during his term.
The Arangkada project maintains that in an increasingly interlinked and competitive world, accelerating growth is an imperative, not a choice. The Joint Foreign Chambers of the Philippines estimated that, to achieve results, the country must focus on faster development of the seven “big winners” and move twice as fast. The government should not be a roadblock to this movement.
