National need must dominate
The contretemps that was the truck ban raises a very important question: Who’s in charge? I would have thought the Constitution is clear enough when it says in Article X Section 4 that “The President of the Philippines shall exercise general supervision over local governments.”
Yet here’s a mayor caring solely for his constituents, or should I say voters, with complete disregard for the national welfare. And that’s as it should be: That is his sole responsibility. So let’s accept that he thought it in the local good, to help address the horrific mess that is the City of Manila traffic. And traffic did flow better. But it played havoc on business, and impacted the economy materially—in a measurably negative way.
Yet it took seven months, seven months of daily public complaint before any action was taken. We estimate, very roughly (factoring in a Citibank report that the truck ban could cost the economy around P320 billion per annum), that it knocked around 1.6-2 percent of this year’s GDP. But much worse was the message it sent to the international business/investor community: Don’t assume continuity of policy in the Philippines. The environment within which you will work can change indiscriminately.
The action that finally occurred should have been done in the first weeks, not months later. The only good thing that came out of it was to highlight the lack of attention paid to developing alternative ports. The ports in Subic and Batangas were developed to handle international traffic, but their utilization rates have been appallingly small: only 3 percent for Batangas and 6.4 percent for Subic. Yet 31 percent of Luzon’s volume of exports and imports is centered in Southern Luzon, and the rest in Northern Luzon and Manila. There is enough for ships to come—if the goods are there. I hate clichés, but this is a real chicken-and-egg situation, one that can be solved only through positive government action.
President Aquino has 21.5 months left. I’d like to see him leave a legacy of actions. Here’s an easy first. The government must subsidize the initial shift. Fees have to match the Manila port’s, and there must be government-arranged coordination between the involved groups to get agreement to the shift and the timing of it. Declaring them an extension of the Manila port is a clever start, but it must develop into a more permanent usage of the ports.
We face possible—or should I say probable—brownouts next year because action was not taken when it should have been. Local objection has been allowed to override national need, and proposed power plants have not been built. If the Subic plant (600 megawatts) had been approved, we’d have no problems. Yes, I know, coal is not a desirable fuel, but other alternative fuels must be planned in a wider context. Do we go nuclear, do we put in the complex gas systems, do we harness more geothermal energy, etc.? This has to be done, and should have been done years ago. Now the President feels forced to ask for an even more polluting (diesel) interim solution.
I don’t even have to talk about Tampakan, where $6 billion has been lost because a local directive was allowed to usurp national law, and interest.
On a smaller scale, but with an impact well beyond its localization, is right of way. The Constitution is abundantly clear: The government has the right of eminent domain when national interest trumps local desirability. Major projects of urgent national need are held up for years because someone won’t part with their land. I’ve suggested ages ago, pay one and a half, even double, the market value, not the unacceptably low appraised value. It’s cheap, and the cost to the nation in delay is far, far in excess of the cost of a bit of land.
Another somewhat related area where national government action must occur is what’s (not) happening in the Visayas. “Haiyan” (“Yolanda,” as the Philippines peculiarly renames it) happened 11 months ago. The government promised immediate action to get people back on their feet and into a normal life. Money was no problem; the international community had pledged $1.63 billion (P71 billion), to which the government added P100 billion from the 2014 budget. Despite the urgent need to rehabilitate the affected areas and help the families get back on their feet, a congressional oversight committee found that as of May 2014, only P3.7 billion has been spent out of the P100 billion in the 2014 budget.
According to several reports, only around 300 (as of July 2014) permanent houses have been built for the more than 900,000 families displaced by the typhoon. An additional 2,700 units are currently being constructed out of the needed 220,000. Only around 6,000 of 31,655 bancas have been provided; that leaves around 80 percent of fishermen still without a boat. The Tacloban airport can’t even allow the Pope to land. Relief efforts have been bogged down in the bureaucracy. As I argued some months ago (“Give them power,” 5/15/14), the President should have declared an emergency, with Congress concurring and rehabilitation czar Panfilo Lacson given full discretion and power to fast-track rebuilding.
One donor I talked to just couldn’t understand how so much money could be idle in the face of so much desperation. Neither can I.
These are but a few examples of a question that needs answering: Does national need override local desire?
I believe the answer is very strongly Yes.
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