Incremental gains

The problems of this country have festered for decades and it is easy to lose hope we can ever make things better. Bad governance by most of our post WW2 administrations, together with the greed of vested economic interests, combined to bring us down to the bottom of the rankings among the original ASEAN five. Even the sixth ASEAN country, formerly war-torn Vietnam, has overtaken us.

Many Filipino professionals, feeling helpless and worried about their children’s future, have voted with their feet and re-settled in other countries. Many of us who decided to stay made several attempts to use our democratic system to fix our politics and get our country on the road to economic recovery.

But fighting the entrenched political oligarchy who are financially supported by the economic elite is mission impossible. Some in our generation gave up hope on peaceful change and went to the hills, only to face similar frustrations with the typically Pinoy kind of political leaders on top of the world’s longest running communist insurgency and their murderous purges.

Are we hopeless? It seems so. But a small group of professionals still believe it is possible to make things better through incremental change. They are working to change policies, laws, and regulations, waging a white-collar guerilla warfare with the corrupt overlords on top of our government and our economic institutions.

From the outset, this group lowered expectations, thinking that incremental change can bring about enough reforms to make things bearable. Incremental change takes time and patience.

I joined this group, Foundation for Economic Freedom, over a decade ago wondering what these economists, bankers, lawyers, former Cabinet members, engineers, management big shots, and academics are up to. Many of them were educated by the state university at about the time the Diliman Republic battled the Marcos dictatorship. Others are from La Salle and Ateneo, and other universities. Other than the late Gary Olivar, no one looked like the revolutionaries of the early ‘70s I knew.

Many have taken on responsible positions in government, international organizations, and private business. And they all share a frustration about the country’s condition. Of particular concern is how our leaders are clinging to a worn-out policy of Filipino First, which makes us an island to ourselves and divorced from the rest of the world economy.

Nationalist protectionism, in our experience, means elite abuse of privileges. It has been the foundation of economic policy. Even the Constitution written after the EDSA revolution is very restrictive and not hospitable to opening the economy to foreign investments or to foreign competition. Yet, it is clear from the experiences of our neighbors, we are on the wrong path.

We have outdated laws that make the country’s economic development more difficult than it should be. Worse, in a society that lionizes lawyers and lawmakers, we are implementing more and more rules that stifle the functioning of a free economy and stunts our growth.

One of the first issues that the group tackled is the antiquated land ownership system under our land reform program. Our farmers are unable to use land, their only major asset, to borrow from banks so that they can be freed from the control of usurers that kept them poor.

Fixing the problem took years of patient lobbying with Congress and other government officials, but eventually, RA 11573 was passed that removes the application deadline for agricultural free patents. It also streamlined the needed titling procedures and documents, specifically reducing the required periods of occupation and cultivation.

The passage by Congress of the Agricultural Free Patent Reform Act (R.A. 11231) was also made possible by FEF taking on the challenge of doing the hard work of generating the facts, attending congressional hearings, and gathering public support for the measure. The reform streamlined the process of granting free patents for agricultural lands. The law aims to promote land ownership, particularly among small farmers and agricultural landholders, and simplify the acquisition of land titles for agricultural purposes.

Our stringent investment laws created monopolies and discouraged foreign investment and competition in key infrastructures. This, in turn, limited access to essential public services for millions of Filipinos. We were ranked as the world’s third most restrictive country for foreign investment.

For seven years, FEF patiently pushed the amendment of the 86-year-old Public Services Act. Its ownership restriction is a disincentive for foreign investments.  This was controversial because it deviated from the accepted protectionist policies.

What many Filipinos refuse to recognize is that we do not have all the capital resources needed to modernize our vital infrastructures and create the jobs our growing population needs.

Even the highly nationalistic Vietnam partnered with foreign capital to modernize their infrastructures. China, using Deng Xiaoping’s welcome mat for foreign investors, managed to lift 800 million people out of poverty over the last 40 years.

Congressional approval of amendments to the PSA opened up several key industries such as telecommunications, expressways, airports, and shipping up to 100 percent foreign investment. That makes it possible for ordinary Filipinos to enjoy more affordable and reliable access to, among others, wireless broadband internet in remote areas and improved mass transportation options.

In recent years, the passage of the Rice Tariffication Law (RA 8178) or RTL was another hard-fought advocacy of FEF. The law took the government out of the rice importation business, eliminating the expensive subsidy charge of as much as P30 billion a year, which at that time, was as big as or bigger than the budget of other Cabinet departments.

Instead, in the first three years of its implementation, RTL has earned P46.6 billion in rice import duties, directly

benefitting palay (unhusked rice) farmers through a P10-billion annual fund created to finance programs that will sharpen their global competitiveness by way of farm mechanization, high-quality seeds, access to credit, and training.

FEF’s efforts have been internationally recognized when it was twice given the Templeton Freedom Award. The award recognizes outstanding contributions in addressing poverty and social issues through free competition.

FEF has shown the power of working for incremental change… and little by little the old system is changing for the better. Hopefully, we don’t run out of time.

Boo Chanco’s email address is [email protected]. Follow him on X or Twitter @boochanco