In the Philippines, we are besieged by daily news of violence and serious disturbance of the peace and order as well as graft and corruption, especially in high levels of government. The gravity of the situation is such that most of our people now feel helpless and defenseless and without an expectation of a better future. This gloomy picture even pervades the economic atmosphere as business establishments cannot thrive and grow, but instead falter and close shop.
Yet, this sense of helplessness is not really difficult to overcome if only the country has leaders who could provide the steadfast guidance to bring about the necessary changes that will restore the peace and order, eliminate graft and corruption and ultimately improve the quality of life of our people with the development of the country. Our precarious state of the nation could still be reversed into a really strong republic if only our people and political parties unite to truly serve the country. It could be done if only we put a halt to the pernicious passion of our politicians of attacking each other and dividing our people.
It should be obvious that change must be immediately undertaken in certain areas of our national life that has been locked in heretofore unquestioned traditions. Traditions which our leaders have followed like a religion, without questioning their efficacy and without attempting to change them for fear of adverse reactions from the people themselves. Today, we dare say that change is the order of the day if government should be faithful to its task of serving and protecting its people.
President Franklin Delano Roosevelt in addressing the question "What is the State?" In his message to the New York State Legislature of Aug. 28, 1931 wisely explained: "It is the duly constituted representative of an organized society of human beings, created by them for their mutual protection and well-being. It is but the machinery through which such mutual aid and protection are achieved. Our government is not the master but the creature of the people. The duty of the State toward the citizens is the duty of the servant to its master. The people have created it; the people, by common consent, permit its continued existence."
It bears noting that FDR emphasized that "one of those duties of the State is that of caring for those of its citizens who find themselves the victims of such adverse circumstances as makes them unable to obtain even the necessities for mere existence without the aid of others." "The responsibility is recognized by every civilized Nation," FDR concludes.
Indeed, every man has a right to a life and this means he has also the right to a comfortable living. But how can we assure a humane life to our countrymen when all that our leaders do is to follow the old ways of doing things which time and again has proven to be ineffective and incapable of delivering our people to a better quality of life.
We refer, of course, to the thinking of people of government, mostly those in charge of the fiscal and monetary policies. They are of the cemented thinking that we cannot increase our money supply without causing an inflationary situation.
How then do we get out of this impasse of the rigid resolve of our monetary and fiscal authorities again not to increase the money supply against the actual and felt need for more local money?
For an answer, we go back 71 years ago in 1932 when Franklin Roosevelt in his address to the Democratic Convention emphasized that "We must lay whole of the fact that economic laws are not made by nature".
This should challenge our financial leaders who invariably think that economic laws are sacred, inviolate and unchangeable. Being of this belief, they thus refuse to think outside the box. They refuse to re-think, re-examine and re-evaluate their failed and ineffective policy of preventing our Central Bank from providing long-term, low-interest loans to our government, both national and local, to finance all our requirements for infrastructure and utilities.
For, indeed, how can we build all these requirements of our country and people unless we have our own money with which to finance them? Do our authorities expect houses to be built without money? Classrooms to be provided without cash? Roads, highways, bridges, ports, airports, water, power and communication facilities constructed without tremendous amounts of wherewithal? Do they expect these infrastructure and utilities to be built out of foreign money alone and in the process deepen the country’s quagmire of foreign debt?
If the monetary and fiscal policies that we have stuck to no longer effectively accomplish the ends for which they were aimed to serve, isn’t it high time to change them for more responsive policies? As FDR has reminded us that economic laws are not laws of nature but the creation of men, could we not then change these man-made fiscal and monetary policies that have utterly failed the country and people?
It is high-time then that the man-made section 117 of the Charter of the Central Bank (that bars the Bangko Sentral from buying government-issued securities such as government bonds) be amended to allow the government to borrow long-term, low-interest funds from the Central Bank that is secured against future taxes which will eventually retire the government bonds so issued. These new Central Bank money will be used to buy the government bonds that can then be managed and directed to finance the needed roads, highways, ports, airports, schools, markets and government buildings all over the country. Now what is inflationary about that?
In fact, this has been the tried and tested formula successfully adopted by all the advanced economies of the world from the United States, Japan and Germany, including our prosperous neighbors, to name a few. Why should we not adopt the same man-made formula for our own economic success?
The answer, indeed, is not hard to find nor hard to do. Can we do it? We can, if our monetary and fiscal authorities want to. The Filipino people can, if he wants to.
We, therefore, call on every Filipino, of whatever age, sex, religion or political affiliation to precisely cast aside any and all political partisanship and instead work hand in hand, as one nation, for the deliverance of our people from backwardness and stagnation into growth and prosperity.
You may write your comments/suggestion at 15/F Equitable Bank Tower Paseo de Roxas, Makati City or through e-mail at rgroxas@lawyer.com.
(Editor’s note: Atty. Roxas is writing a limited series of articles dealing with financial matters and other important business topics. He is available for speaking engagements on the subject matters of his articles.)