The private sector is the ‘driving force’

The continuing health crisis and the stringent community quarantine imposed in most parts of the country, especially in the National Capital Region, have disrupted the economic momentum the Philippines had been experiencing in the past years.

Despite the signs of growth in the third quarter, the World Bank in its September report projected that an additional 1 million Filipinos will be unemployed and another 2 million will fall into poverty due to the COVID-19 pandemic. The report also estimated that “unemployment in the Philippines will rise to 6.2 percent in 2020, up from 5.1 percent in 2019.” This unemployment forecast may even worsen given the devastation brought about by recent typhoons.

Despite the passage of two relief and stimulus package measures, the government has been quite slow in addressing the massive unemployment and unprecedented economic crisis. More than the presence of financial resources and the government’s capacity to stimulate economic activities, the bigger issue now is the Filipinos’ waning trust and confidence in the government’s ability to implement a viable recovery plan.

A recent Social Weather Stations survey showed the primary concerns and apprehensions of Filipinos. It revealed that 46 percent of Filipinos feel that the government’s action is inadequate in assisting jobless workers amid the pandemic. This sentiment could be attributed to the delays in the distribution of COVID-19 cash subsidies to the affected informal and formal sectors at the height of the lockdown.

The sentiment is worse in Metro Manila, where 54 percent of the respondents affirmed the inadequacies in addressing the economic woes of pandemic-hit workers.

In the same survey, an overwhelming majority of Filipinos agreed that investors from the private sector serve as the biggest “driving force” that can create job opportunities and alleviate poverty in a post-pandemic situation. Indeed, amid this downturn, the private sector has proven to be a core component of our nation’s recovery. Despite revenue losses, many of the country’s biggest business groups continued to pay out salaries, contribute to testing efforts, and provide immediate aid where most needed.

Given the current magnitude of the problem, the government cannot afford to sustain more of its “populist” policies. And economic recovery should not be dragged down by political agenda and opportunism.

Private enterprises are perceived to be more productive and efficient in using their resources and manpower to respond to crisis. They are also seen to create better and sustainable jobs. The provision of wider access to loans for micro-, small-, and medium-sized industries is a step in the right direction, but it should be complemented by an easing of tax compliance rules and a competitive regulatory business framework.

In the September Pulse Asia special survey commissioned by Stratbase ADR Institute, majority of Filipinos (85 percent) said it is more practical and reasonable for the government to partner with private enterprises to build and operate key development public utilities, health care facilities, electricity, road, and mass transportation systems.

This sentiment is most prominent in the NCR, where 93 percent of respondents expressed a positive response toward public-private sector partnership projects. By socioeconomic class, 91 percent of Class E respondents shared the same belief.

Filipinos clearly believe that the private sector should actively infuse investments to accelerate infrastructure development and the delivery of public services, which should help alleviate poverty by creating jobs and livelihood opportunities. Simply put, a setup where the government strongly collaborates with the private sector will facilitate economic recovery and reduce poverty.

The government cannot do the work alone. To rebuild and rehabilitate our economy, it needs to engage the whole of society. In times of crisis, there is no room for divisive political rhetoric and empty populist plans. Government leaders and the private sector should turn this crisis into an opportunity to collaborate toward change that is positive, inclusive, and crafted with a sustainable future in mind.

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Dindo Manhit is founder and managing director of Stratbase Group.