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First, the Philippine backyard

“To be blunt, I don’t care about what other countries in the ASEAN are doing. What I care about is what we do in our own country.” - Ricky Razon, ASEAN Summit, 2017

Maybe he is just being Ricky Razon, using his battle-scarred business wisdom to say it as it is. Or maybe, amid the feel-good, positive vibe-making, and well-intended initiatives of the country as ASEAN Summit chair, that is exactly what we needed to do to secure the ASEAN win – for us, and for the region.

To be fair, the country is still pretty much in the thick of the fight, with our GDP growth rate at more than six percent year on year during the last decade. We can’t help but be mindful though that while we are making strides, the rest of the economies in the ASEAN are not sitting still. Many of our neighbors have the same advantages that we have: the young workforce or “demographic sweet spot,” the geographical advantage for international trade, and the low cost of business operations.

In fact, two economies are now called Asia’s new tigers, namely Vietnam and Indonesia. This was elicited as well from the PwC CEO Survey report that did not even place the Philippines in the top 10 choices in foreign investment destinations, unlike Vietnam and Indonesia.

Vietnam, very close to the Philippines’ young population at 90 million, have both the domestic market vibrancy and export sector going for them, courtesy of a strong manufacturing sector with strong tech-centric products. Indonesia has a young population as well, and is two and a half times our size with 250 million people. They are coming off the momentums of reforms that involved its rich bringing back to Indonesia their wealth stashed abroad, incentivized by tax amnesty and stern warnings.

Did the country somehow fall out of favor? My job requires me to travel more than occasionally and what I get from colleagues and clients outside is that they heard democracy is not really working nowadays in the Philippines (courtesy of the tragedies from the drug war and how government talks in favor of it or denies it). And, there’s the terrorist attack in Marawi and the Martial Law that helped contain it. People outside simply do not distinguish Marawi or Mindanao from the rest of the country. So it looked like Vietnam and Indonesia appear more politically stable and that helped them.

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I must say these CEO sentiments are not etched in stone. Something can change the momentum and then all the competitiveness rankings (where the country also lags) can be set aside. The question is, can we really get going and sustain that journey towards being one of the world’s top economies in about three decades into the future, when the rest of the countries in the ASEAN are also engaging everyone in this race?

The Build Build Build is kicking off soon with two major life-changing infrastructures, namely the Manila-to-Clark, and the Manila-to-Bicol, railway projects. With an estimated P8 trillion of money for spending required to fulfill the rest of the long-term ambition, the country will not be recognizable from today, if plans are implemented and if that dream comes true.

We still need to get serious about how do we really get the warm bodies to physically work on all these projects. Present-day lodging and living conditions of construction workers in the country cannot be used as the attraction to entice foreign workers to come here. Our citizens must be prepared to pay to uplift the quality of lives of our workers by way of higher toll fees, diligence in paying taxes, and capitalists should shred off fat in favor of its workhorses.

But what of the other important things that can bring the investors in, along with their technology, modern materials, and globally experienced project managers? What happened to lifting foreign equity limitations? The promises on the ease of doing business? The level playing field in government incentive programs? The transparency and keeping commitments in government contracts?

If the answer is we made progress, can we show and advertise the proof? If the answer is still lip service at this stage, shouldn’t we all pick up a broom and tend for real to our own backyard?

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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the Tax Committee of the Management Association of the Philippines (MAP). Email your comments and questions to aseasyasABC@ph.pwc.com. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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