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Can we expect action?

(First of two parts)

Peter Perfecto of Makati Business Club summarized the business community’s recommendations to President Aquino in his June 6 Inquirer commentary. But let me take you further back to when we started submitting recommendations to the President.

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In 2013, 17 business groups, 10 local and seven foreign, got together and for the first time ever agreed to make a collective stand on a number of issues and concerns.

Getting 17 different groups, each with its own agenda, to agree on something was an almost impossible task; to get them to agree on eight issues was a monumental achievement—it showed how important they considered those issues were.

The groups submitted their recommendation to President Aquino before his State of the Nation Address. They expected that he would be grateful for the inputs and take them into account in his plans for the following year. Unfortunately, that didn’t happen. Of the eight issues only one was acted on: the Anti-trust and Fair Competition bill now past Congress but still awaiting the President’s signature.

As to the other seven, here’s where they are two years later:

Infrastructure projects must be accelerated. Government spending on infrastructure has been dismal. Public construction in the first quarter of 2015 was down -24.6 percent compared to first quarter 2014. In 2014 only 76 percent of the budget for infrastructure was spent. In the four years of the Aquino administration only an average of 2.2 percent of the gross domestic product has gone to infrastructure—that’s P237 billion annually, well below the P300 billion per year that was supposed to have been spent according to plan. If the necessary minimum of 5 percent of GDP (the Asean average) had been met, an estimated P520 billion to P540 billion should have been spent annually. The flagship public-private partnership program is finally moving after the awarding of 10 projects, but only four are under actual construction. To do better, regulatory bottlenecks must be cleared and the government needs to change its bidding policies and remove the constitutional restrictions in order to attract more foreign investors into the program. Not one of these has been done.

Overhaul the Bureau of Customs and create an oversight committee. The oversight committee has yet to be created. Under Commissioner John Phillip Sevilla, the bureau implemented several reforms, but the needed major overhaul has yet to take place. With Bert Lina there’s a chance for the overhaul to push through.

An existing mining act with a competitive tax regime. This recommendation was iterated in 2014. This year, the business community gave up on this issue, realizing the President is not going to act on this issue. The local mining sector is now at a standstill because the President’s doesn’t recognize the importance of this sector to the economy and to the Filipino people.

Build more power plants and create a favorable investment climate for energy investors. Construction work on the 600-MW Subic plant will finally start. But not enough new power plants are being built to cope with the increase in the demand for power; projected reserves are not enough to cover the entire country’s need.

Enact the Fiscal Incentives Rationalization bill. The government needs to harmonize and rationalize laws that offer fiscal and nonfiscal incentives to investors in order to make the Philippines competitive with its neighbors, and thereby attract foreign investments. But the Department of Trade and Industry and the Deparment of Foreign Affairs have yet to reach a final agreement on the terms to offer, so this won’t happen yet.

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Amend the Constitution’s economic provisions. Realizing how important this move is, the business community has repeatedly made the recommendation every year. The Philippines’ “more open” neighbors are attracting foreign direct investments 5-10 times more than this country does, but for reasons no one knows President Aquino does not support this suggestion. The Speaker couldn’t get enough support without the President’s backing. So the proposal didn’t get approved before the second regular session of the 16th Congress adjourned.

Introduce reforms to improve competence and efficiency in the justice system. The judiciary is an independent body, so this issue is better addressed to the judiciary itself. The Chief Justice is introducing reforms, but that’s has a very long way to go. Let’s leave the judiciary out.

Of the remaining issues, only two have seen progress, albeit limited: one power plant has been approved and a PPP project is now moving, but with very minimal counterpart spending from the government.

Refusing to give up, the 17 business groups met again in 2014 and sent the President another letter, this time with nine suggestions. Six were on the 2013 list. This time he mentioned three in his Sona—infrastructure, power, and reforms at the BoC. But there was little further action on any of the three after that.

This year 15 very specific recommendations have been made. They are designed is such a way that they can be done in the remaining months of the Aquino administration. I will discuss each of them in my next column.

* * *

Whoever decided that the Skyway ingress and egress at Alabang should only be one lane should be fired from government service. As it is, the expressway operators have to make the exit lane into an entry lane during peak morning hours. A vehicle breakdown would bring traffic to a halt. Right now, the setup, including the toll gates, can’t cope with the present load; this will be a disaster in the future. It took me 25 minutes the other night to get through the E-pass lane—a 30-second procedure in any other country.

It’s essential that new lanes and more toll gates be added. There’s no other choice; the extra cost will just have to be borne. And the people responsible for the mayhem fired from their job.

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TAGS: Bureau of Customs, Makati Business Club, news, State of the Nation Address
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