Factors that still afflict us in a growing economy

Last week, my focus was to assert optimism about a rising Philippine economy. In my assessment, the overall management of the country’s macro-fundamentals in the midst of a higher investment effort has enabled the country to sustain a growing economy.

Yet, the country still has many microeconomic and sector issues that need improvement. Indeed, we are faced with many problems that continue to afflict  and negate the economy’s forward motion.

Some negative factors that afflict us. I must now focus on problems that stare the country in the face. Much still needs to be done to reach the frontier of possibilities.

Let me simply cite examples of failures and inadequacies of government implementation to drive home the point.

Some of these are the legacy of failed works of previous administrations. Others are endemic problems of our politics and policy-making processes.

(1) Metro Manila’s water catchment capacity has not increased substantially to provide water supply for the expanding population and economy since the construction of the Angat Dam in the mid-1960s. Why?

(2) The expansion of international airport capacity to help increase tourism in the beautiful and large potentials of the Bicol region, home to the Mayon Volcano, and the coves and islands around the peninsula has been much delayed . Why?

(3) Car registration plates are still not universally used by cars on the road as required by law. Why?

(4) The maintenance of stations, escalators and elevators, and rolling stock of the metropolitan transport system is messy. Why?

The big Manila water crisis a few months ago was an eye-opener to the great deficiency in water resources investment. We are likely to suffer another repeat of the problem next year.

The Bicol Region, with its beautiful attractions of majestic Mayon Volcano and beaches, mountains and island coves has lagged in tourism development due to lack of a suitable air terminal. It has an international airport under construction for more than 10 years, which continues with an unfinished runway and terminal. In part, politics has played a role in this state of affairs. The procurement process was highly politicized. Peace and order disturbance has also entered into the fray.

This problem probably demonstrates the lack of political cohesion to deal with the development of such an important region of the country. The integrated development plan that was prepared for the Bicol Region during the 1970s has not been fully realized for lack of national leadership. The long delay of the Bicol airport project miserably depicts the problem.

Up to this day, the plan has practically just moved in small phases, despite large investments sunk in preliminary work like clearing and getting the cementing of part of the airport.

The car plate scandal in the land transportation bureau is another thing. Until today, we see cars still displaying temporary and “individualized” car plates instead of the official plates.

It has been almost 10 years since this messy problem became known. Those who managed the procurement of the car system failed in their duty to deliver a simple service of vehicle property identification and has inconvenienced millions of vehicle owners and businesses which has shamed the nation.

The maintenance problem of the metro-railroad system is a disgrace. This is partly due, again, to the procurement system coupled by incompetence of those who manage the process. Why the escalators and elevators are not properly maintained is an example of the inefficiency of the public sector, the lack of attention to the upgrade of basic services.

But the procurement issue with rolling stock is governed by political factors and the corruptibility of the system tops it all. Also, it is the result of appointing politically motivated public actors instead of professionals who are supported by high standards of public management.

Historical factors. Perhaps, Jose Rizal might provide a distant perspective to the problems that afflict us even today. The time and circumstances are different, the colonial problems are no longer with us, and we are now masters of our own fate.

Around 120 years ago, Jose Rizal, in “The Indolence of the Filipinos,” gave us this searing, strong passage:

“The great difficulty that every enterprise encountered in dealing with the Administration contributed not a little to kill off all commercial and industrial movement. All the Filipinos and all those in the Philippines who have wished to engage in business know how many documents, how many comings and goings, how many stamped papers, and how much patience are necessary to secure from the government a permit for an enterprise. One must count on the goodwill of this one, on the influence of that one, on a good bribe to another so that he would not pigeon-hole that application, a gift to the one further on so that he may pass it on to his chief. One must pray to God to give him good humor and time to look it over; to give another enough talent to see its expediency; to one further away sufficient stupidity not to scent a revolutionary purpose behind the enterprise …. And above all, much patience, a great knowledge of how to get along, plenty of money, much politics, many bows, complete resignation!

“…The most commercial and most industrious countries have been the freest countries. France, England, and the United States prove this. Hong Kong, which is not worth the most insignificant island of the Philippines, has more commercial activity than all our islands put together because it is free and well-governed.” (Jose Rizal, Politial and Historical Writngs, vol. VII, Centennial Edition, National Historical Commission, 1961, pp. 249-250.)

Though Rizal was clearly referring to a time in history that was long ago, there are big elements of truth in this analysis even for our times. Bad politics, corruption, rent-seeking infects the country’s policy-making process.

Reforms are needed to tame the problems. An economist of today, interpreting these quotes, would add that that proper procurement procedures, well-designed projects, proper vetting of proponents, and the support of national leadership would speed up and solve such glaring problems.

My email is: [email protected]. For archives of previous Crossroads essays, go to: https://www.philstar.com/authors/1336383/gerardo-p-sicat. Visit this site for more information, feedback and commentary: http://econ.upd.edu.p h/gpsicat/