More foreign investments and economic reorganization

Yesterday, an announcement was made that the President has created a new Office of Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) and appointed Frederick D. Go to the position.

The news shakes up the economic decision-making machinery.

During the week (while I was on vacation and secluded from national news), another important economic news came out:  Speaker Martin Romualdez, in a briefing with top House leaders said  that the government plans to lift the restrictive provisions on the economy in the Constitution.  Perhaps the Speaker signals what the President wants to take place because they are close political allies.

Amending the restrictive economic provisions. Let me first take up the reform of the restrictive economic provisions.

I have written in this column and in my other writings about the need to open up the economy by amending the restrictive economic provisions on foreign investments. It will help bring about a faster economic growth of the Philippine economy. It will bring greater technological modernity to the nation.

Contrary to the fears of those who are afraid of foreign economic domination, it will energize the country’s economy and make ours a more progressive country

In fact, I had hoped that the amendment of the restrictive economic provisions would be among the most important priorities of President Marcos when he was elected. But perhaps because of the recent amendments to improve the foreign investment climate undertaken by previous political administration, President Marcos did not initially put this issue among his top priorities.

I was therefore greatly disappointed when he initially did not encourage the early moves in the House during his first year in office to press for the amendments.

Now it seems that he believes that the country needs the amendments to make a big impact on the attraction of foreign investments into the country. This move, if it succeeds to put in the right amendments, will make a big difference in the country’s economic future.

However, to make the move to amend the restrictive economic provisions, the process of doing so should be isolated from other demands to amend the political provisions in the constitution. (If the country wants political structural change through constitutional amendments, that should be undertaken as a separate exercise.)

Special assistant to the President on Investment and Economic Affairs (SAPIEA). The announcement of the appointment of Frederick Go to head the Office of Special Presidential Assistant shakes up the decision structure of the presidential office insofar as major economic matters are concerned. The SAPIEA was created by Executive Order 49 on Dec. 15.

Frederick Go will have the rank of Secretary. In addition, he will chair a cluster of major economic departments and agencies that are critical to the economy to be known as Economic Development Group (EDG). The secretaries of NEDA and of Finance will act as vice-chairs.

The SAPIEA and the EDG will identify the priority programs, activities and projects (PAPs) in the Philippine Development Plan, as well as monitor, review, and evaluate the progress of initiatives and PAPs of the administration.

According to EO 49, as chair of EDG, the SAPIEA is directed to supervise, in behalf of the President, the NEDA, DOF, DBM, DTI and their respective attached agencies, such as the BOI, PEZA, SEC “to ensure effective and efficient implementation of their respective priority initiatives and PAPs.”

Among other things, the SAPIEA will sit as a  member of the NEDA Board and NEDA’s major committees (Investment Coordination Committee, Committee on Infrastructure, Social Development Committee, and Development Budget Coordination Committee.)

Economic reorganization? The creation and appointment of SAPIEA adds only one major officer in the decision-making process, but it shakes the overall process in the Office of the President.

For some time now, there have been rumors of economic reorganization of the Cabinet. Is this a prelude to that reorganization, or is this it?

The economic problems of the nation and the pressures for change are many and sometimes they are conflicting. Also, expectations about outcomes and prospects are never fully predictable. But these all depend on the economic policies in place and on the resources employed to achieve them.

The economic planning, monitoring, and implementation process has been a process in the making in our nation-building. My impression is that there have been improvements over time in this effort.

It does not surprise me if the President appointed a presidential assistant whose duty is to oversee compliance of presidential orders concerning economic programs and policies. This is because the President commands the Cabinet and he is the chair of the NEDA.

Such a hierarchy makes clear that the President makes the economic policy decisions in the nation and that policy decisions are directly made to him by his trusted lieutenants, his Cabinet members.

It does surprise me, however, that he appoints in effect a super-minister in the case of the SAPIEA who is above the members of the economic group of managers and who, in addition, is given a seat of membership in the economic committees where the same officials interact and work.

Perhaps this is only a transition to a reorganization of the Cabinet.

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/