Applying modified 4-way test on current issues

I recently gave a talk before the Rotary Club of Manila, which employs a four-way test to guide members in their decision-making. Rotarians’ Four-Way Test asks:

Is it the TRUTH?

Is it FAIR to all concerned?

Will it build GOODWILL and BETTER FRIENDSHIPS?

Will it be BENEFICIAL to all concerned?

We believe it could also be useful to policymakers, advocates, and citizens in encouraging critical thinking on the government’s proposed policies and programs.

Our modified four-way test asks:

Is it legally feasible? We need to determine whether a proposed policy is within legal boundaries and ensure it does not conflict with the letter and spirit of existing laws.

Is it economically desirable? We should establish the economic viability of a certain proposal by asking: Are there enough funds available? Will this lead to increasing the fiscal deficit and external debt of the Philippines? Is it a good time to pursue the proposal given the increasingly challenging fiscal position of the government?

Is it socially desirable? Even if the project is financially attractive, will it generate a lot of employment opportunities? This is particularly important for developing countries like the Philippines where the rate of underemployment is relatively high at 14.1 percent of the total labor force in January 2023.

Will it be accepted in Plaza Miranda or the court of public opinion? Plaza Miranda was the symbol of public opinion in the 1960s and 1970s. These days, public opinion is manifested through surveys conducted by Social Weather Stations (SWS) and Pulse Asia.

To apply the four-way test in a more practical setting, let us try to use our version in two ongoing issues: the proposed Maharlika Investment Fund (MIF) and convening a constitutional convention (con-con) for Charter change.Example 1: MIF Legally feasible? Section 56 of the latest Senate version (SB No. 2020) of the proposed MIF states that all relevant laws inconsistent with any of its provisions shall be repealed or modified accordingly.

Particularly, the Pagcor Charter and Section 2 of the BSP Charter shall be amended once the MIF is passed into law to facilitate its implementation. It would be more prudent if these charters are amended first before passing the MIF bill into law, as such could subject the capitalization of the MIF to legal challenges.Economically viable? Economic managers have estimated that the MIF will have an average return on investment ranging from 6 to 11 percent in 10 years. This estimate is still uncertain since it was based only on average rates of return on different investment options and not on proposed specific investments.

It would be helpful for proponents to highlight how the MIF could improve the economic well-being of Filipinos, especially concerning their most important and urgent concern: inflation.

Socially desirable? While the MIF’s prospective investors include foreign entities, private investors, and multilateral institutions, no specific projects have been proposed yet, making it unclear to what extent the MIF will be able to help create job opportunities for Filipino workers.However, MIF could have a positive social impact since the Senate version’s objectives include socioeconomic initiatives i.e. addressing environmental and social issues. This may also attract the attention of multilateral institutions that are looking to fund such endeavors.

Will it be accepted in Plaza Miranda? Several civil society organizations have released their statements expressing their concerns about using the Bangko Sentral ng Pilipinas, Land Bank of the Philippines, and Development Bank of the Philippines as initial fund sources for the MIF.

Example 2: Constitutional amendments via con-conLegally feasible? Yes. The 1987 Constitution allows for the calling of a con-con.

Economically viable? Amending the 1987 Constitution via con-con, instead of a constituent assembly (con-ass), is going to be more costly to the government and the public. Initial estimates of the National Economic and Development Authority suggest that the cost of electing con-con delegates plus funding the operational requirements (e.g. per diems and travel allowances of delegates, salaries of staff, rental of the venue, and cost of ratifying the amendments, etc.) if the latter does not coincide with the barangay or local elections, will be in the P20-P30 billion range.

In contrast, amending the Constitution via con-ass will be much cheaper. By just focusing on removing the restrictive economic provisions, there is a good chance that the work of the con-ass can be done in a few months and the ratification of the amendments by the people can coincide with the barangay elections in October 2023.

Socially desirable? Yes, if only the restrictive economic provisions are removed. We believe this can bring in more investments and in turn, create more jobs and higher pay.

Will it be accepted in Plaza Miranda? Historically, the public has had issues with trust and confidence pertaining to Charter change as many are wary that the con-con might discuss other issues that go beyond economic provisions, like extending term limits of elected officials.

In line with the results of the SWS and Pulse Asia surveys, Charter change should focus on Filipinos’ top concerns (jobs and inflation)—which could be achieved by limiting amendments to the economic provisions.

Conclusion. The Rotary Club’s Four-Way Test and our modified version have a convergence in that it follows the principles of the common good associated with the idea of general welfare or what is beneficial to most, if not all, members of society.

Similarly, these principles of the common good should guide decision-making, policy formulation, and advocacy, and could be used as a framework to aid citizens in performing critical thinking and providing suggestions on the government’s plans and programs.

Gary B. Teves served as finance secretary under the Arroyo administration.