Like the US Cavalry coming to the rescue of pioneers being attacked by Indians, Sen. Bam Aquino is coming to the rescue of Filipinos under siege by the lack of jobs.
Senator Aquino’s “Go Negosyo” bill may be passed by the Senate before it adjourns this month, he told the Kapihan sa Manila at the Diamond Hotel last Monday. The measure, if passed into law, will teach Filipinos how to be microentrepreneurs—that is, small businessmen.
Instead of toiling in factories and languishing at desk jobs in companies—the openings for which are sorely lacking, anyway—Filipinos will find lessons in the proposed law that will teach them how to be their own bosses as owners and managers of small businesses.
A reporter asked Aquino: “Sari-sari store owners, sidewalk vendors and market stall owners don’t have to be taught how to be entrepreneurs. They are already doing that. What they need is capital so they don’t become victims of the 5-6 loan sharks. Will the proposed ‘Go Negosyo’ law give them that capital?”
Replied the senator: The capital will be lent, not given. But the government will not do the lending; the private sector will. We have had bad experiences with government loans, like the Masagana 99, to farmers. When it is the government or the Church who provides loans, the debtors don’t pay. The private banks, however, will go after the debtors if they don’t pay.
Question: “Banks don’t give loans without collateral. Where will the sari-sari store owners and sidewalk vendors get the collateral?”
The bank loans will be collateral-free, Aquino said. What’s more, the loans will be interest-free for the first six months. It is only after half a year, when the entrepreneur is expected to have his business running smoothly, that he will start paying interest.
“What if the debtor does not pay?”
We are thinking of government guarantees, the senator said.
He pointed out that a large part of the economy is being sustained by the “underground economy” (the vendors, sari-sari store owners, et al.) and by the remittances of overseas Filipino workers. Of every one million Filipinos who enter the labor market, about 240,000 find jobs here and another 200,000 go abroad to work, he said. The rest go to the underground economy, and they should be taught how to be successful small businessmen.
Said a journalist: “Many of those in the underground economy want to go aboveground and engage in business legally. But they are hampered by the red tape and by the taxes and fees imposed by local governments. They have to go to the provincial, city or municipal governments to get permits. And they are charged fees and taxes. Even the barangays charge fees. The entrepreneur’s capital will be exhausted even before he can get started.”
Not anymore, said Senator Aquino. Under the proposed “Go Negosyo” law, small businesses will be tax-free for the first two years. And the local government units cannot charge taxes anymore. Plus, the red tape will be cut short. There will probably be a one-stop shop in every LGU.
Aquino explained that because of the high electricity rates, the lack of infrastructure, the traffic jams, and the red tape in the Philippines, it is difficult to entice foreign companies to set up their businesses here. It is these foreign companies that are expected to generate jobs for Filipinos. But the high power rates, etc. increase the overhead of these companies. They become uncompetitive in the world market. So they go to other countries that have lower power rates and better business conditions.
Question: Should our Constitution be amended in order to entice foreign companies to set up shop here.
Said Aquino: I do not think so. I know that other legislators think we should amend the Constitution, but I do not agree with that. Improve the way of doing business here and the foreign companies will come here. We have a very good work force here. That is why our workers are in demand abroad. And the fact that we speak and write good English makes us even better.
Remove the red tape, corruption, traffic jams, and very high power rates and foreign companies will relocate here. We don’t have to amend our Constitution.
Besides, a journalist pointed out, we have amended our Constitution in the past to let foreigners come in. Remember the Parity Amendment? The Constitution was amended to allow American companies to come in as if they were Filipino companies. They were expected to generate jobs and improve the business climate here. They achieved no such thing.
Look at our business condition now. It is not any better, maybe even worse, than before the Parity Amendment.
And the constitutional amendments being proposed will allow foreigners to own land in the Philippines, a country with acute land hunger. It’s said that a Filipino will kill and be killed to own land. And yet we will allow foreigners to grab land from Filipinos?
Foreign businessmen can lease land for their use. They don’t have to own it. Leave the ownership to Filipinos.