AS EASY AS ABC - Alex B. Cabrera (The Philippine Star) - March 5, 2016 - 9:00am

If it is mind-boggling that the Philippines will be the 16th largest economy in the world come 2050, it is indeed even more mind-blowing that it will be the biggest economy in Southeast Asia, come 2050 – not the first time we’ve heard this account, based on an HSBC study. Hearing it again from the venue of the Philippine investment forum in New York the other day refreshes a great prospect which, if it does happen, could be one of the greatest comeback stories of any country. Some of us may even witness it happen and live to tell about it, just about 35 years from now.

But 35 years is a lot of time. Recalling that 20 years is what it took to take the Philippines from the frontrunner position in Asia in the late 1960s to the bottom of the pit past mid-‘80s makes one appreciate that 2050 is not a date with destiny. It is a journey – an arduous and deliberate one that requires us not to look back, except to remember where we once were, and where we don’t want to find ourselves again in.

When the Philippine government and private sector representatives were in New York this week to pitch the country to foreign investors, some things stuck out like several sore thumbs. So far, the Philippines has remained as one of the recipients of the lowest foreign investments in Asia; it has not attracted as much tourists as its neighbors; has an underdeveloped agricultural sector, still a country that has some restrictive investment laws; and of course, as one survey says, it’s not one of the countries easiest to do business in.

Despite all that, the Philippines has achieved an average of six to seven percent in GDP growth rate in the last five years and this nourished it back to health – healthy enough to be called Asia’s next tiger. The HSBC report says that the ticket to Philippine supremacy come about 2050 is to achieve seven percent growth, year on year. Because the rest of the world does not stand still, and the potential of our neighbors in Asia cannot be underestimated, the tide of funds could go any which way the momentum is. Surely, growth in the region is beneficial to the common ASEAN market, but we, as a country, still need all the help we can get.

Among the solutions the country needs to fix to attract more foreign investments, one is not necessarily low-hanging because it requires a constitutional amendment: the lifting of foreign investment limitations that exist due to nationalistic fervor, such as those prevailing for instance in ownership of land and public utilities. In this regard, the obvious must be stated. We can be worried about prices of real estate being driven up beyond affordability of the common Filipino if foreign ownership is liberalized for land. But certainly, such is welcome in places outside Metro Manila where development, as well as improvement of lives, is much wanting. In fact, allowing foreign ownership of land outside Metro Manila could just be the lubrication needed to decentralize urbanization and let other places in the country catch up. As for ownership of public utilities, if these can also be directed geographically, the public and the quality of their lives can only be impacted one way – positively.

One helpful emphasis in the forum in New York is that foreign investment in the agricultural sector need not be spent on land. It needs to spend on people, on the farmers. This happens when the multinational purchaser plays the role of an enabler, be it in tobacco, coconut oil, or abaca, for instance. An enabler offers the farmers favorable contractual terms, gives them financing (for equipment and farm needs) and mentoring for the quality of the produce. Success therefore is not in the supply contract, but in the partnership between farmers and multinationals (and of course, local business).

Tourism numbers, while still low, is on an upswing. It took the forum for me to realize that the country has five international gateways (Manila, Laoag, Subic, Cebu and Davao) compared to our neighbors that would have about two international gateways per country at most. Indeed our slogan of “Fun” is second to none, but unless we get the investments going (in hotels, restaurants, convention centers, theme parks, and infrastructure), especially in our secondary, but no less beautiful tourist destinations, our tourism numbers will remain second-rate.

The sector represented in the forum that offered much emotional content, and is a gem of its own, is the manufacturing sector. Filipino CEOs and expats alike share a common observation about the Filipino worker’s reliability, loyalty, and “malasakit”. It was shared by one Filipino multinational CEO that in China, their turnover rate is 30 percent (workers do not return after taking a vacation during Chinese New Year). And in the US, per anecdote, workers may not show up when there is snow. Not so in the Philippines, where typhoons do not stop production and shipment of goods because Filipino workers, unless there is no way to overcome floods, will show up. They have “malasakit” and are “driven”, even in bad weather – the same traits carried anywhere in the world by our OFWs.

I am running out of space, but I need to comment on everybody’s question about the next government. I believe that it is quite critical for our next government to be a guitar - with strings in tune. I mean, it cannot do roadshows, invite investors, and when they come in, other government agencies give them a tough time here or worse, give them unfair treatment by changing the rules. It cannot preach good governance at the top while what is practiced elsewhere is unmoderated greed. It cannot claim to be a government for the people if it preaches nationalism but turns a blind eye to opportunities that can deliver an uplifted standard of living that every Filipino deserves. The next government and the next ones must have their eye on the aspirational Philippines 2050. It should not be about delivering the Filipino’s next meal, but about delivering the country’s bright future.

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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the Educated Marginalized Entrepreneurs Resource Generation (EMERGE) program of the Management Association of the Philippines (MAP). Email your comments and questions to 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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