Wanted for 2022: A reformist

Last week, I wrote about the massive contraction of the economy and the bleak prospects for recovery given the pittance of stimulus funds appropriated by government.

Following that article, I received an avalanche of emails from concerned citizens, the majority of whom expressed their frustrations about how the economy is seemingly mismanaged and how we are being left behind in the region’s development race. One veteran diplomat recalled how the ADB purposely chose the Philippines for its headquarters in 1966 as the country was well on its way to become the economic hub of Southeast Asia. No more, he declared. A prominent businessman told me flat-out to forget about keeping up with our neighbors since government can’t even deliver basic services, let alone compete internationally. Numerous organizations invited me to talk to their groups about what needs to be done and how they can help. The frustration among our people was palpable.

Is the country’s perennial underachievement a result of the Filipino’s lack of capability? Are the best days of the Philippines behind it?  These questions played in my mind all week. After much reflection, I realized that we were never in short supply of talent, resources or the opportunity to succeed. What we have been bereft of is a leader with a clear vision, an unbendable will and morality strong enough to resist corruption in its many forms. In short, a reformist. While this may be a truism, it does not make it less true. Make no mistake, fates of nations come down to the quality of its leaders.

Although our successful neighbors never had leaders as “perfect” as the one I just described, at some point in their history, they had a leader that came close to it. Singapore had Lee Kwan Yew, South Korea had Park Chung-hee and Taiwan has Chiang Ching-kuo. What these leaders have in common is that they all adopted the same three-point formula for economic & social development and effective governance. This formula consists of: 1. Declaring rapid industrialization a national priority; 2. Adoption of reforms to make local conditions conducive for business and manufacturing and 3. Strengthening public institutions for effective governance.

The Duterte administration is nearing its end and until the pandemic struck, it has managed to eke out respectable growth (albeit declining) and decrease incidents of poverty. Its significant legacies include having fast-tracked infrastructure development, digitization of government institutions and the establishment of the Anti-Red Tape Authority (ARTA).

While the Duterte reforms helped, it is far from sufficient to make the country economically competitive and politically competent. The problems of the Philippines are fundamental – they stem from our laws itself. Our laws encourage political dynasties, perpetuate corruption and patronage politics. They serve the interest of the narrow elite while providing the bare minimum to the majority. They make it difficult for manufacturing industries to thrive, attract capital and build local industries.

If we are to truly change the trajectory of the country, we must change our laws. For lack of space, let me site the most urgent reforms needed.

On political reforms, first, the Anti-Dynasty Bill must be passed. This is vital to democratize leadership. This edict will eliminate patronage politics and the protection of political turf at the expense of public interest. Second, the Anti-Political Turncoatism Bill should be made into law. This will put an end to the practice of switching sides for political expediency. It will compel lawmakers to stick to one party on the basis of philosophy and political platform, not by personality. Third, Campaign Finance Reforms must be enacted. Doing so will even the playing field as far as campaign funding is concerned. It will promote accountability and transparency whilst deterring powerful corporations from “owning” politicians and trading on political debt.

To address corruption, the definition of “plunder” must be expanded in the context of RA 7080 or the Anti-Plunder Law. From an act of misuse or pilferage of public funds amounting to P75 million or more, acts of plunder should be lowered to a minimum of P1,000,000. This will make most acts of corruption ineligible for bail and must be accompanied by reforms in the justice system.

On foreign policy, we must adopt a multi-dimensional approach (eg. legal, diplomatic, economic and cultural) to assert our victory at the Permanent Court of Arbitration at UNCLOS, relating to China’s illegal territorial claim of the West Philippine Sea. In parallel, we must invest in programs to increase Philippine soft power as doing so will have a tremendous impact our diplomatic agenda and trade.

On social reform. We must ramp up annual spending on primary and secondary education from $455 per student, to at least $600, with special emphasis on math, science and a third foreign language. For tertiary education and vocational skills, emphasis must be placed on our curriculums in engineering, the sciences and ICT. We must build more links between the academe and the private sector to deepen research and development across industries, especially in technology-assisted agriculture. Spending on R&D should not be less than one percent of GDP. Healthcare spending must also rise from the present 4.45 percent of GDP to 6 percent, with emphasis on early childhood nutrition. Reproductive health and population control measures must be intensified.

On economic reform, industries in which foreigners are precluded from participation must be drastically reduced. Foreign investors must be allowed to own equity up to 100 percent in unrestricted industries. Income tax and tax holidays, especially in PEZA zones, must be made regionally competitive, no higher than 17 percent. Allow and incentivize the establishment of an international shipping line under the Philippine flag and relax the Cabotage Law. Amend and update the EPIRA Law to decrease average power rates from P7.28 per kwh to P3.84 per kwh (ASEAN’s average). Accelerate infrastructure spending to 8 percent of GDP by aggressively promoting PPP. Enact the Economic Sabotage Law to deter LGUs from harassing businesses. Engage in as many free trade area agreements as is viable.

There is so much more to fix, but the above reforms are a good start. We can quickly become regionally competitive if we do it right.

To sum it up, we will never live up to our full potential unless we reform our laws. Are my proposed reforms realistic? No, if we elect a traditional politician in 2022. That is why our next leader must be a reformist.

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Email: [email protected]. Follow him on Twitter @aj_masigan