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The first 100 days of the BBM presidency

CROSSROADS (Toward Philippine Economic and Social Progress) - Gerardo P. Sicat - The Philippine Star

Ferdinand “Bongbong” Marcos received an exceptional electoral mandate from the Filipino people. And so did his vice-presidential teammate, Sara Duterte.

Political support in the legislative branch.  In addition to the presumptive president’s mandate from the people, most of the newly elected members of the two houses of Congress are supportive of the president-elect. The newly elected members of the House of Representatives are allied with the president-elect and are pro-administration. As in the previous Duterte administration, the House can be depended upon for legislative support.

In the Senate, only one winner among 12 senatorial candidates is from the opposition. Three opposition senators who sought re-election suffered a deep electoral wipe-out among the losing candidates. The 12 incumbents in the Senate who will serve for three more years belong to the administration.

Thus, the legislative branch can be relied upon whenever the new president asserts his leadership position for legislative change.

The first 100 days. The first 100 days of this administration are likely to define the new directions that the nation will take in terms of social and economic policies.

There will be many priorities considered to be important by the new administration for this 100 days. I fear that one of the most important concerns could be missed because everyone might presume that it is already in the government’s policy set.

This election did not signal any dramatic social changes that derive from divisive ideological divisions in the nation. The nation’s economic and social foundations are strongly capitalist and private-sector driven.

What the electorate has chosen to express is a preference for stronger executive action in leading the nation. The rise of Duterte, to some extent, has increased the nostalgia for what was perceived as the accomplishments of the Marcos presidency in the early years of that administration. The alliance of the Marcos and the Duterte political forces enhanced the synergistic outcome in the election.

So, the first 100 days can be filled with a short list of issues considered important by the new government. I would like to cite a priority that has to be undertaken if the country is to fully succeed in promoting rapid employment growth, high income growth, and greater productivity of the national economy.

High attention to FDI attraction. In my view, the legislative and political actions in the first 100 days must signal to the world that the Philippines is ready to turn the page toward a broader opening of the economy so that it can attract more foreign capital to help finance this immense future potential growth.

The nation’s economy cannot rely mainly on its own domestic savings and on foreign borrowing to finance domestic growth. As in the case of many successful economies in East Asia and in the world, foreign direct investments have become a big partner in stimulating new and broader employment, and rising industrial productivity to speed up economic growth. In the Philippine case, we can do better.

The country for decades has lived far from attaining its true economic potentials because of its highly protectionist stance based on “nationalistic” economic development mantra. Economies that have embraced more open foreign investment policies have been far more successful in inducing national economic development that benefited their entire populations.

Economic growth has been, in general, very positive and above average among developing countries. But this performance is below what its true potential is capable of delivering, given its human capital and other resource endowments.

The new administration is lucky that it is inheriting major reforms that will shore up the macroeconomic foundations. These reforms will provide strong support to the economic programs in the early years of the Bongbong Marcos presidency. No further additional effort is needed except in seeing to it that the government works to enhance their serious follow-through in implementation.

These economic reforms cover fiscal and tax reforms, including overall fiscal incentives related to investment promotion.

Moreover, the Duterte administration succeeded in further liberalizing the country’s attractiveness to FDIs by passing three major reforms, namely, (1) allowing 100 percent participation in public utilities; (2) relaxation of the Retail Trade Law to allow more FDIs; and (3) further liberalization of the foreign investment law.

They are already strong working tools of policy for the new administration to use. All they need is to provide robust implementation of the policies. They could further be assisted by government actions that remove uncertainties that relate to lingering institutional and constitutional provisions.

Finally, the infrastructure program of Build Build Build has a continuing set of ongoing projects to see through. A major responsibility is to develop a pipeline of new projects.

Given all the above, in my view, actions of the incoming Marcos presidency in terms of supporting faster economic recovery and economic growth should powerfully address the case for FDIs by going the constitutional route. He needs to reiterate the strong need to welcome foreign capital in the domestic economy.

This will be the most important signal to the world that the Philippines is open to foreign capital. The previous Congress almost succeeded in undertaking this amendment last year. The Senate blocked final adoption of the measure, a situation that need no longer be.

It will reiterate in the most direct way that impediments on constitutionality of issues regarding future foreign investments can no longer be advanced insofar as they relate to constitutional restrictions.

One may ask: Why only this and not fuller attention to other constitutional issues as well? If there is any thought along this line at this time, I believe it will become more difficult and could be costly in terms of hard-earned early political capital. The time for that would be later during the presidency when most of the major objectives have been successfully achieved.

 

 

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.ph/gpsicat/

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