Go for the bold!

For the fourth time in the last five years, I was honored by an invitation from the Joint Foreign Chambers of the Philippines (JFC) to speak at its prestigious Arangkada Philippines Forum. This year’s theme was “A Bolder and More Inclusive Decade.”

I sensed a tinge of exasperation, albeit balanced by a continuing mood of cautious optimism, in the JFC’s choice of its forum theme. This perception was reinforced by the formal letter of invitation that specifically requested my “boldest ideas, solutions and recommendations to achieve higher and more inclusive growth.”

This mirrors a prevalent concern that for the Philippines to seize the opportunity presented by its favorable economic situation, neither continued timidity nor our penchant for moving two steps back after a step forward should be the modus operandi of the next administration.

I thus tried my best to think out of the box and offered a number of suggestions:

1. Decisively ease the entry of foreign direct investments (FDI) by appropriate amendments to our Constitution, or, as Vietnam and Indonesia have done, boldly enact a comprehensive shortening of the list of sectors restricted from FDI. Job creation is the principal means to achieve inclusive growth, and diversification of our economic base beyond the current twin pillars of remittances from overseas Filipino workers and the business process outsourcing industry is a must. FDI can help realize these, but while FDI flows into the Philippines have grown, they are still less than half those of Vietnam.

2. Create sizeable “investment magnets” in Luzon, in the Visayas and in Mindanao starting with the implementation of a Clark-Subic-Metro Manila growth triangle. Clark and Subic are arguably two first-class US “cities” complete with five-star infrastructure turned over to us for free. It would be a euphemism to say that we have not taken sensible advantage of the opportunities they clearly present. This triangle should include the transfer of our international airport to Clark, with the accompanying rapid railway facilities to more efficiently connect Manila and Clark, the fuller use of Subic as an alternative international port and dry-docking facility, and the expeditious construction of MRT 7.

These, together with the existing SCTEx, will provide the basic infrastructure to begin the realization of a vision toward creating a megalopolis that can rival Singapore, seriously provide concrete urban decongestion measures without which Metro Manila will inevitably degenerate into hellish gridlock, create hundreds of thousands of jobs, and broaden the tax base.

3. Jump-start a more dynamic implementation of public-private partnerships (PPP) to help build much-needed infrastructure by a combination of greater political will, less paralysis by analysis, and the revitalization of the PPP Center by perhaps making it a more independent government-owned and -controlled corporation rather than an adjunct of a government department.

4. Merge the Department of Public Works and Highways and the transportation portion of the Department of Transportation and Communications and simultaneously spin off the communications portion of the DOTC to create a Department of Information Technology and Communications. This will not increase the number of departments and Cabinet secretaries but will, I believe, rationalize the structure of government entities involved in the transport sector, as well as give much-needed emphasis to the increasingly strategic IT sector that is presently bedeviled by, among others, our having the slowest broadband speed in the region. IT is decidedly a comparative advantage for us in an increasingly cyberspace global economy and deserves much more than a passing interest in our economic management structure.

5. Evolve our agrarian reform policies toward greater emphasis on productivity instead of obsessive focus on land ownership. We can keep chanting our favorite mantra about the importance of agriculture to our economy, but we will never be able to bring the sector to its rightful place as a major contributor to GDP unless we stop taking steps that tend to perpetuate subsistence farming. Instead, we should take such steps as rational land grouping that result in the economies of scale necessary to promote the rise of agro-industry. We have to shift to lifting our farmers out of poverty rather than formulating ways to make continued poverty more tolerable for them.

6. Stop mulling to oblivion our options about the mining industry. There is no question that environmental protection is an imperative, but neither is it the only thing to consider in the management of scarce natural resources to maximize economic development. It should be equally obvious that the extraction and development of mineral resources have been intrinsic elements in the advance of civilization and the progress of human endeavor since the Stone Age. We must not deprive ourselves of the potential of furthering economic wellbeing presented by this industry. We should be smart enough to strike an appropriate balance, as other nations have done, between preserving our environmental treasures and establishing a firmer foundation for the growth and modernization of our industrial and manufacturing sectors that mining and its related industries can provide.

I presented several more suggestions but space constraints prevent me from listing them, too. Hopefully, the message is sufficiently clear: Timidity is out, boldness is in, and we can, with God’s grace, move forward.

Roberto F. de Ocampo, OBE, is a former finance secretary. He was Finance Minister of the Year in 1995, 1996 and 1997.