‘Growing too slow’
SKETCHES - Ana Marie Pamintuan (The Philippine Star) - March 13, 2015 - 12:00am

For a nation that’s trying to attract more foreign direct investment, the leader can use a bit more enthusiasm.

Last week, President Aquino didn’t show up at the annual gathering of the Joint Foreign Chambers of the Philippines (JFC) to assess progress on the group’s recommendations for accelerating economic growth under The Arangkada Philippines Project.

JFC members said there was a prepared presidential speech, but for the second year in a row, P-Noy was a no-show. Malacañang offered no explanation for P-Noy’s skipping a chance to address a group whose members are investors from Australia, Canada, the European Union, Japan, New Zealand, South Korea and the United States. Also present were members of the Philippine business community.

The Arangkada report tracks action on its detailed recommendations and releases an annual assessment. Last week’s report was the fourth since Arangkada was launched in 2010.

For 2014, the JFC’s overall assessment is that despite being Asia’s second fastest growing economy after China, the Philippines is still “growing too slow.”

The Arangkada project rated progress on 462 out of 471 recommendations. Its assessment: action on 21 of the recommendations, or 4.55 percent, was “completed” or rated six stars. “Substantial progress” (rated five stars) was noted on 117 or 25.32 percent of the recommendations; 193 or 41.77 percent got “started” (four stars); rated three stars or “not ongoing” are 88 projects (19.05 percent) while there was “regression” (two stars) in 27 or 5.84 percent.

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The three biggest challenges for the economy cited by Arangkada are “to move to a higher level of sustained growth, create more and better jobs, and make growth inclusive.”

We don’t know if P-Noy even bothers to read the annual assessment. He doesn’t seem to relish unsolicited advice, no matter how well meaning, whether from businessmen or political allies. As Arangkada pointed out, he has even ignored Republic Act 7640, the law that provides for the convening of the Legislative-Executive Development Advisory Council at least every quarter. Since taking office, P-Noy has convened the LEDAC only twice, with none in the past two years, Arangkada noted.

A president confident of his authority would consider the regular meetings with members of a co-equal branch of government as a useful consultative tool that helps build consensus on national priorities in legislation and policy-making.

A president with authority issues would see the LEDAC as a useless exercise in which his elders would want to dictate on him.

Convening the LEDAC regularly might have helped P-Noy avoid his current woes in his peace process. When Congress is through eviscerating his draft Bangsamoro Basic Law (BBL), it would be as unrecognizable as the faces of the Special Action Force (SAF) commandos who were butchered by the Moro Islamic Liberation Front in Mamasapano.

The impact of the SAF 44 deaths on the peace process has not been factored into the latest Arangkada assessment. The BBL was initially seen to be good for investments in Mindanao. But with legal experts citing the numerous constitutional infirmities in the draft BBL, its promise is starting to look like a pipe dream.

If P-Noy bothers to read the Arangkada report, he can also get pointers on priorities he can still work on in the 15 months left in his term.

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The JFC lists eight priorities, noting that several recommendations will have to be carried over to next administration. The first is a sustained, major increase in FDI, mostly through economic liberalization policies, lifting of restrictions on foreign investments, and measures to make it easier to do business. Among the roadblocks here are local governments, a number of which function like independent republics and protect local vested political interests through red tape and systems that discourage open and fair competition. Arangkada did cite improvements in certain LGUs.

The second priority is judicial reform – to speed up the process particularly in resolving business disputes, restrict abuse of temporary restraining orders, limit the basis for reconsiderations, and ensure that regional and local courts are independent of LGU influence. We don’t need the Arangkada assessment to tell us the status of recommendations in this area.

Third priority is to sustain and enhance anti-corruption measures. These include approval of the Freedom of Information Act, and speeding up of the trial of public officials and private business individuals charged with corruption. Arangkada also wants all JFC members and all bidders for government contracts to sign an “Integrity Pledge.” This is an idea that has been kicked around for some time so good luck on this.

The fourth priority will elicit a groan from the public: upgrade airports and seaports to boost exports, imports and tourism. This section includes proposals to overhaul Customs and immigration procedures.

Arangkada noted that while some improvements were achieved at the Bureau of Customs, smuggling remained rampant and logistics costs shot up last year because of congestion at the Port of Manila. As immediate measures, Arangkada wants more incentives to use the ports in Batangas and Subic, and wants a ban on traffic bans in Manila.

Power costs remain high – a problem that Arangkada has cited as a major disincentive for manufacturing, with investors preferring neighboring countries. The fifth priority is to augment long-term power and water supply sources. Like his late mother, P-Noy may be remembered for blackouts in his final months starting this summer. The JFC is also proposing programs to recycle wastewater and convert solid waste to energy.

The sixth priority is support for “environmental and socially responsible mining.” Environmentalists believe that’s an oxymoron. The JFC wants small-scale mining regulated and local mining rules to be in sync with national laws and policies.

Increasing job opportunities is the seventh priority. Proposed measures include rationalization of holidays and making wages and labor leaves competitive with those of regional neighbors.

The eighth priority – and again Pinoys will roll up their eyes – is upgrading infrastructure, with emphasis on air, land and sea transport, farm-to-market roads, water projects and power.

As the star-based rating has shown, some progress was achieved in 2014 in the eight areas, but the foreign chambers think more can be done to accelerate growth.

P-Noy will be stepping down with the country still a regional laggard in terms of FDI. The country’s largest grouping of foreign investors has an exhaustive report on what can be done. P-Noy has nothing to lose if he takes a peek at it.

 

 

 

 

ARANGKADA ARANGKADA PHILIPPINES PROJECT AS ARANGKADA BANGSAMORO BASIC LAW BATANGAS AND SUBIC BUREAU OF CUSTOMS EUROPEAN UNION NOY P-NOY
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