Preparing for the future

Yokohama, Japan – Among the many highlights of the Asian Development Bank’s 50th annual meeting included lessons from the 1997 Asian Financial Crisis and how flexible policies and other mechanisms made East Asian economies become more financially stable. These in effect prevented a repeat of the crisis and enabled the ASEAN+3 (Association of Southeast Asian Nations plus China, Japan and Korea) to weather the 2008 global crisis that brought down many nations across the globe.

Financial ministers, bankers and business leaders tackled various issues that could still hamper countries from achieving full economic growth such as income inequality and poverty which, as noted by former ADB president and now Bank of Japan governor Haruhiko Kuroda, continues to be “a considerable burden in Asia.”

As the next host of the ADB Annual Meeting, the Philippines will be sharing prospects about the economy in the session dubbed as “Manila 2018: ADB’s Next Annual Meeting Host” which will be held before ADB president Takehiko Nakao’s closing press conference later this afternoon.

Our friend Tessie Sy-Coson, vice chairman of SM Investments Corporation, is also here in Yokohama – supportive of President Rodrigo Duterte’s efforts to improve the economy even before his assumption of office. In her speech during the Nomura Investment Forum early in June last year, Mrs. Coson noted the growing discontent among the population due to everyday traffic because of the lack of infrastructure, with projects often postponed due to legal or technical delays. Her testimonial about their experience in Davao City during the time of then-Mayor Rody Duterte – where the business climate and the GDP vastly improved as the crime rate went down and business processes were shortened – should make a compelling example that “political will” can spur economic prosperity all over the country.

The ADB is actually the perfect opportunity for Finance Secretary Sonny Dominguez to give leaders and foreign businessmen a glimpse of the Philippines’ mammoth infrastructure program – anchored on President Duterte’s 10-point socioeconomic agenda – and how it is envisioned to transform the Philippine economy into one that is “inclusive and pro-poor.” The ADB forecasts strong economic growth to continue for the Philippines at 6.4 percent this year.

Certainly, the approval of the first package in the DOF’s proposed tax reform program by Congress is a positive development as this could guarantee a “robust revenue stream” for the administration’s infrastructure agenda, with P39.6 billion in additional revenues expected to be generated. Many employees definitely welcome the plan to cut down on personal income taxes, while businessmen are looking forward to other key measures such as the lowering of corporate taxes as part of the second package.

By the way, we asked Secretary Dominguez about the close to P10-billion tax evasion case against Mighty Corporation and what’s happening to that case – and he told me this is already with the Department of Justice.  This would really be a big windfall for the government if the BIR could collect on the almost P10 billion in taxes that Mighty has allegedly failed to pay the government. But from what we are hearing, it seems that certain people at the DOJ have been dragging their feet regarding this case.

Department of OFW

The proposal of Senator Alan Peter Cayetano to create a Department of Foreign Employment that would solely cater to issues pertaining to overseas Filipino workers has met with resounding approval from many Filipinos including members of the clergy.

I guess this is a really important proposal considering that the OFW sector has been largely credited for keeping our economy afloat due to the billions of dollars that they remit to the country every year. In 2016, OFW remittances hit $26.8 billion – a five percent increase from the $25.6 billion in 2015 – and that amount only comes from the so-called formal remittance channels. 

There are many issues faced by OFWs, among them illegal recruiters, abusive employers, insufficient benefits, harsh work conditions, not to mention the lack of funds and representation when they face legal issues in host countries. Despite the presence of agencies such as the Overseas Workers Welfare Administration and the Philippine Overseas Employment Administration, many of these “modern-day heroes” still find themselves in distress for one reason or another.

The creation of an OFW department is something that Senator Cayetano has been proposing as early as 2013, and was also one of the campaign promises of President Duterte – who gave his assurance that an OFW department will soon be created during his recent visit to the Middle East.

For sure, the creation of a new department will require Congressional action but if this happens, removing this concern from the Department of Foreign Affairs will give our overseas Pinoy workers the kind of full attention they need – and deserve. Besides, it’s high time our ambassadors concentrated on bilateral relationships with host countries instead of solely attending to our OFWs’ problems which often hamper them from performing their diplomatic duties fully and effectively.

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It was a good move on the part of US president Donald Trump to request President Duterte to call Chinese president Xi Jinping – giving Duterte recognition that he could actually become a major player in helping maintain peace in the region. That was a smart move considering Duterte’s growing “closeness” to China.

The government’s recent hosting of the ASEAN is also a good indicator of the important role that the Philippines could play in maintaining regional peace and stability – and of course, much of the credit for the successful ASEAN Summit should go to the hardworking staff at the DFA and DTI, which turned out very well and good for the country.

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