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Editorial

Chasing destiny

/ 12:11 AM May 23, 2014

The World Economic Forum on East Asia ends today. The event, hosted by the Philippines for the first time, is in part a timely recognition of the country’s achievements in governance: some of the highest growth rates in Asia in the last few years, historic investment-grade ratings that have lowered the country’s borrowing costs, increasingly robust budgets for social services and infrastructure.

In greater part, however, the forum focused attention on threats and opportunities in the region. A WEF statement noted the consensus in forum discussions, that “the fundamentals for growth in Asean [were] strong. Its young population, natural resources, rising consumption and proximity to China, among other factors, have positioned it to be an engine of growth in the future.” But the discussions also noted key “barriers to unlocking this economic future: disagreements related to the South China Sea, as well as political unrest in Thailand.”

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Indeed, the absence of China from the forum was almost palpable.

If there is a political lesson the Philippines can draw from the WEF, it may be the question of the sustainability of reforms. In the first two-thirds of the Aquino presidency, the 2016 elections acquired an almost totemic status. Despite President Aquino’s own and repeated assertions that it was too early to think of 2016, his own officials as well as other politicians had already seized on the next presidential election as the true test of the permanence of his governance reforms.

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In that view, who becomes the next president will determine whether, say, the new emphasis on fighting corruption or the aggressive initiative to widen the country’s tax base will continue. There is something to be said for this outlook, but the discussions at the World Economic Forum on East Asia tell us we should perhaps be looking at a farther horizon.

As business leader Manuel V. Pangilinan said in one session, the country must grow at the same rate for the next 10 years for economic growth to have a real and lasting impact. “There’s no reason why the Philippines cannot sustain growth levels like the past three to four years. To really drive the economy on a sustained basis, growth must go by a minimum of six percent for about 10 years”—that is, well into the term, not of the next president, but of the president after the next president.

The need, then, is to ensure that the reforms will continue, not merely beyond 2016, but beyond 2022. Phrased this way, we can see that the focus on who the next president will be, or ought to be, can ultimately prove self-defeating. It is very much a short-term view.

“Reforms have the power to alter a country’s economic destiny,” Finance Secretary Cesar Purisima argues in a commentary he prepared for the WEF. “This is why they inspire confidence from markets, businesses and citizens.” If enough of the reforms take root, if the greater majority begin to feel the benefits of economic growth, if the causes of political dysfunction are fixed, if those proven to have plundered the country’s coffers are haled before the courts, then perhaps we would all be in a position to say that the Philippines’ destiny has finally changed. And that progress will no longer be seen to depend on one man, or woman, alone.

As Purisima would be the first to assert, much remains to be done. His WEF-timed commentary provides a sketch of the road ahead. “In the three remaining years of our term, the Aquino administration will intensify efforts at reform by opening up more sectors to foreign investment, rationalizing tax incentives and institutionalizing transparency. Those who doubt our commitment should take note of the enactment of the Responsible Parenthood and Reproductive Health Act and the amendment of the Sin Tax Law.”

But the reformists in the Aquino administration must also learn to be more inclusive. One example, out of many: Part of the reason for the economic takeoff in the last few years lies in the continuous but admittedly erratic growth in the gross domestic product during the 10 years of the Arroyo administration. That’s 10 years of continuous growth, after the trauma of the Estrada years. The Aquino reformists must begin to publicly recognize that some of the necessary foundations were laid down even before they entered office. Destiny is a shared fate.

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TAGS: Asia, business, editorial, opinion, World Economic Forum, World Economic Forum on East Asia
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