A top team
President Duterte is highly controversial; you either love him or hate him. The general public has given him a satisfaction rating of 74 percent in the latest SWS survey, one of the highest among Philippine presidents. This has to tell you something.
Certainly he has offended a lot of people, with his ruthless war on drugs a major issue of complaint. But much of it are words, words he is better off not saying, but he still does anyway. Too many headlines get devoted to them, when Page 4 might be a better place.
But what I want to devote this column to is a very un-Filipino characteristic of him: He eschews hierarchy as the way to rule. Where he’s not knowledgeable, he defers to people who are. This is good news for businessmen, as he’s delegated the government’s role in business to his economic team made up of professionals knowledgeable about their jobs.
This has manifested in tough decisions made that populists hate, with tax reform a big — and unfortunately misunderstood —area. If you bother to study the details of the five packages, you’ll see how well thought out they are in bringing us into the modern world after 21 years of an antiquated tax system that others were too scared to touch. There has been controversy on the details of incentives offered, but this can be resolved, and is a minor point in the overall change envisioned. The impact on inflation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act was exaggerated in the news. Workers are better off and business will be, too, when Congress passes the Tax Reform for Attracting Better and High-Quality Opportunities known as the Trabaho bill. Lawmakers should do this before going on recess.
Then there’s the resolve to get things built after more than 50 years of playing around the edges. Spending on infrastructure has more than doubled, accounting for more than 5 percent of the country’s gross domestic product (GDP) last year from only about 2.5 percent annual average over the past five decades.
Where the government is falling behind is in getting more private sector involvement. Business has money and expertise, and is more than willing to be more involved. There seems to be a growing recognition of this, so there is a softening of opposition against the Duterte administration. Public-private partnership (which is what this is) is an efficient way to get some projects done.
Then there’s the decision, after 23 years, on where to build the second airport: Clark. Now comes the need for a high-speed train (minimum 150 kilometers per hour, 200-plus preferred) from Clark to Makati, a maximum of two stops.
The building of the first ever underground railway is about to start; bridges are being built across the Pasig; SLEx and NLEx are being connected, as well as the extension of the railway from Manila to Cavite. Passenger and cargo rail projects in Northern and Southern Luzon will also be started soon.
A national ID, called PhilSys, is being developed. This will ease dealing with government and reduce identification errors—as long as it will be properly conceived to take into account modern technology.
I’ve dealt with everyone in the Malacañang economic team, and it’s an impressive group, led by Finance Secretary Sonny Dominguez. There’s Socioeconomic Planning Secretary Ernie Pernia, Trade Secretary Mon Lopez, acting Information Secretary Eli Rio, Public Works Secretary Mark Villar, Transportation Secretary Art Tugade, Energy Secretary Al Cusi, Agriculture Secretary Manny Piñol and Budget Secretary Ben Diokno. They’re quietly doing their job, not chattering away about how great they are.
Add to that the stability of the Central Bank led by a professional and independent governor, Nestor Espenilla Jr. (I wish him speedy recovery from his illness.)
The country has seen a 6.3-percent GDP growth over the first three quarters. Foreign direct investments, at $10 billion in 2017, was a record high; it was up by 31 percent in the first eight months of 2018. There has been similar growth elsewhere except agriculture, where it is most needed, and mining, which the government hasn’t fully grasped yet.
The economic team has been with Mr. Duterte since the beginning (no Trumpian turnover here). We in business need them all there until the end, too. Their accomplishments say it all—they’ve done the job but it’s not finished. And they have proven that they are fit to do it.
If Congress gives the team the support it needs, I think we’ll have a good year.
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