Promises
If there’s one thing that the Aquino administration can be proud of, it’s the remarkable economic growth of 7.2 percent and 6.8 percent in 2012 and 2013, respectively. But if there’s one thing that should keep it from bragging, it’s the fact that this prosperity has yet to be felt by those who need it most.
The inroads in terms of economic development cannot be denied. The Philippines got three investment-grade ratings in 2013 because of the government’s success in keeping its fiscal house in order. Then there was the passage of higher taxes on alcohol and tobacco products, despite stiff lobbying. Another major accomplishment was in improving the ease of doing business in the country by cutting not only red tape but also the time needed for entrepreneurs to set up their businesses. The Philippines was the “most improved” last year in the World Bank’s annual “Ease of Doing Business” report, jumping 30 slots to 103rd place.
Still, much needs to be done. Unemployment remained high at 7.5 percent as of January—just marginally better than the 8 percent at the end of the previous administration. President Aquino’s flagship public-private partnership infrastructure program launched in 2010 is another disappointment. Only one project—a 4-kilometer, P2-billion toll road—has been successfully bid out (aside from the classroom projects that Congress is threatening to investigate). Bigger ones such as the P17.5-billion redevelopment of the Mactan Cebu International Airport and the P60-billion Light Rail Transit line 1 extension are mired in legal and technical issues.
The President’s vaunted influence on Congress did not seem to work as far as key economic measures were concerned. In 2010, he announced in his first State of the Nation Address (Sona) a package of economic reforms, including the rationalization of fiscal incentives, amendments to the Build-Operate-Transfer Law, and passage of legislation on antitrust and national land use. Today, the bills rationalizing fiscal incentives and on land use remain pending in Congress. Proposed amendments to the BOT Law are also pending, and several versions of the antitrust bill, aimed at restraining monopolies, are still languishing.
In his 2011 Sona, the President touched on the energy sector, boasting that the construction of a new power plant for the Luzon grid could lead to lower power rates by 2014. This did not happen. In fact, Manila Electric Co. sought controversial rate hikes for December 2013 and January 2014. The furor generated by this move led to investigations and the eventual recomputation of the rate increases.
In 2012, infrastructure was part of the President’s Sona: new airports in Bohol, Legazpi and Laguindingan—all to be completed by the end of his term. He also promised the repair of structural defects of Naia Terminal 3 by 2013, as well as the completion of the LRT Line 1 Cavite extension project and two new NLEx-SLEx connector roads by 2015. While the upgraded airport in Laguindingan opened in 2013, the completion of new airports in Legazpi and Bohol is not expected until 2017. Naia 3’s original contractor, Japan’s Takenaka, started work to remedy the structural defects in the facility only last year; work on San Miguel’s portion of the connector road began just this year; and Metro Pacific Investments Corp. has yet to start work on its own connector road.
Among industries, it is in the mining sector where government action has been missing. In 2010, the government extracted P145 billion in income from mining but only P13.4 billion (or 9 percent) went to the national treasury. “These natural resources are yours. It shouldn’t happen that all that’s left to you is a tip after they’re extracted,” the President told the Filipino people in his Sona in 2012. But to date, not one lawmaker has filed a bill that will change the tax regime for the local mining industry.
The President just needs to look back at the promises that he made to the nation over the last four years and direct his economic managers and allies in Congress to work more than double-time to translate those promises into action. They should focus on job-generating and poverty-alleviating projects, mostly in infrastructure, agriculture, mining and tourism.
The investment-grade ratings and all the other statistics touted as proof of a resurgent economy mean nothing if a quarter of the population remains mired in poverty and millions are without jobs.
