The premature legacy
THE CORNER ORACLE - Andrew J. Masigan (The Philippine Star) - February 5, 2020 - 12:00am

The Presidential Communications Operations Office (PCOO) recently launched an information campaign to trumpet the achievements of the Duterte administration. Called the “Duterte Legacy,” the campaign spoke of the President’s achievements in the areas of peace and order, infrastructure and poverty alleviation.

Among the achievements highlighted were the creation of 4.2 million jobs, lifting 5.9 million Filipinos out of poverty and having built or expanded 64 airports, 9,845 kilometers of roads and 2,709 bridges.

The achievements are substantive and I give full credit to all those who made it happen. The country is much stronger for it. Without taking away from these notable deeds, however, I reckon that it is too soon to call this body of work a “legacy.” We are not there yet. Here’s why….

To leave a legacy means putting in place the reforms, policies and systems to enable the country to achieve its national vision.

The national vision was established by the National Economic Development Authority (NEDA) under a program called, “AmBisyon Natin 2040.” It is to become a middle class society with zero incidences of poverty by the year 2040. To be a country where all have enough for their daily needs and unexpected expenses. Where everyone has a home and the freedom to go where they desire, protected and enabled by an honest, efficient and fair government.

Based on where we are today, three foundations have yet to be established for us to attain the national vision: 1) Government must set the economy on a course where per capita income is tripled from $3,300 to $11,000. This will necessitate sustaining GDP growth at no less than 6.5 percent annually for the next 15 years. 2) Investments must be made to improve human capital (education and health). 3. Resilience must be built against natural disasters and climate change since they threaten long term prosperity.

Let’s talk about the economy first.

No doubt, the infrastructure projects initiated by this administration will add capacity to the economy. However, there are still a number of structural weaknesses that need to be addressed to sustain high growth.

First among them is the lack of competitive industries. With the IT-BPO and electronics industries decelerating, many worry that government is not doing enough to develop new industries to champion Philippine productivity in the years to come.

Let us not forget that the impressive economic growth we have been experiencing is driven by consumption and government spending, funded by OFW remittances and debts. It is not driven by manufacturing, agricultural output or exports. Making matters worse is that foreign direct investments have dropped significantly last year while manufacturing has been trending downward. No surprise, merchandise exports have been tittering too.

The need to develop industries in which the Philippines is globally competitive cannot be overemphasized. Without it, the economy will have no legs to run on outside tourism.

Second, the downtrend in investments must be reversed. Without investments, there will be no jobs to speak of, neither will there be technology transfer or capital formation. Growth will lose steam.

The impediments to the entry of foreign direct investments must be eliminated. The most compelling of which are the flawed economic laws of the Constitution that limit foreign ownership as well as expensive power cost. We know this already but nothing definitive has been done to solve them yet.

The President has yet to act conclusively to amend the economic laws of the Constitution. This was a campaign promise. He also needs to revisit the EPIRA law.

On agriculture, the policy to focus on rice production, a crop for which the country does not have a competitive advantage, has worked contrary to interest for decades.  The implementation of rice tariffication was a step toward the right direction, but key reforms need to be done to get agriculture growing at a decent pace. Our agricultural programs need to be rebooted.

On human capital, our workforce must be healthy and have the skills, competence and wherewithal to man a complex, industrial economy.

The World Bank’s Human Capital Index (HCI) measures the impact of human capital on future growth. Our latest HCI score was .55 – in other words, due to shortcomings in education, health and nutrition, the future productivity of Filipino children will fall 45 percent below their potential when they join the workforce. This should worry us all.

Not withstanding the K-12 program, the quality of education in the Philippines is the lowest among 79 countries, according to a recent international survey. Standards are so low that Filipinos who attend 12.8 years of school learn as much as a Singaporean would in just 8.4 years.

There are no shortcuts – government must increase its spending per student, improve teacher training, update university curricula and expand classroom infrastructure. I reckon this should be given top priority.

On health, one among three Filipinos below five years old is a victim of stunted development due to malnutrition. Stunted children are of greater risk of performing badly or dropping out of school and less likely to hold jobs as an adult. The issue of malnutrition has not been given the attention it deserves.

While the recent expansion of public insurance has improved healthcare access, challenges remain in improving healthcare quality and making them available in far flung areas.

On disaster readiness, the Philippines is in an unenviable position of being in the typhoon belt and along the ring of fire. The country is at the mercy of nature in as far as earthquakes and volcanic eruptions go. As for typhoons, they will become increasingly violent due to climate change.

As we have seen in the recent eruption of Taal, government’s Risk Resiliency Program is insufficient and underfunded. A full-fledged cabinet-level department is needed to prepare us for future eventualities.

Of course, a legacy will not be complete without the fulfillment of the promise to clamp-down on corruption. It is worsening, not getting better, according to global think-tank, Transparency International. Too, China’s creeping invasion and its effect on Philippine sovereignty must be confronted with unbiased eyes. Make no mistake, China will always work for its own interest – not ours, no matter how much this administration tries to ingratiate itself.

There is still so much to be done to put the country on the right path. Let’s hope the next 2.5 years is spent planting the reforms needed to help us achieve our national vision. Only then can we celebrate the Duterte legacy. In the meantime, we remain grateful for the accomplishments delivered so far.

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