Recommended growth prescription

The Philippines is slowly inching its way up the global stage judging from the latest World Economic Forum Global Competitive Report 2014-2015 showing the country climbing seven steps higher to 52nd out of 140 countries. The momentum should not be wasted, which is why government should heed the call from industry leaders, economic thinkers and civil society groups to push for critical reforms that would lessen the burdens faced by ordinary Filipinos.

In a recent roundtable discussion convened by former La Salle Political Science department chair Professor Dindo Manhit, government was urged to address the looming power crisis by encouraging investments that would build more power plants and lower prices by creating a more competitive market. The group, known as CitizensWatch and composed of professionals from various sectors, also called for a review of numerous taxes on fuel and electricity that they described as “oppressive and a major block to the country’s economic development and competitiveness.”

According to Foundation for Economic Freedom president Calixto Chikiamko, one of the biggest challenges facing the country is to convert the current consumption-driven growth into an investment-driven growth. The growth has to be inclusive in order for the people to feel the benefits, he noted, lamenting the high unemployment rate in the country.

Indeed, the jobless rate – with the latest surveys indicating it at over 25 percent in the second quarter – continues to be a problem, with concerns that it could be exacerbated due to the repatriation of overseas Filipino workers from Libya, Syria and West Africa either because of conflict or health threats like the Ebola virus.

The group also hit anti-development policies such as restrictions on foreign ownership that hinder competition, particularly in strategic industries. Not surprisingly, red tape and taxes also figured in the discussion, with free trade advocate Nonoy Oplas arguing that bureaucratic red tape and taxes must be reduced to make the Philippines truly competitive.

Philippine Exporters Confederation president Sergio Ortiz-Luis also pointed out that one of the areas where the country is lagging has to do with financing for micro, small and medium enterprises or MSMEs which comprise some 99 percent of enterprises in the Philippines. “One of the disadvantages that local industries face is financing. While we are still talking about it, our neighbors have long resolved this issue,” he said.

This sentiment was echoed by PCCI’s Fred Yao. The former Zest Air chairman pointed out that power and transport infrastructure problems, high logistical costs as well as red tape have to be addressed to attract more foreign investments in light of the ASEAN integration in 2015. “Conflicting laws and regulations, issues related to taxation, business permits and licensing and access of SMEs to financing and technology were the most common concerns raised that could affect the private sector’s readiness for, and competitiveness under the ASEAN economic integration. There is a need for the government and the private sector to heed the adoption of an industrial roadmap for Philippine industries to be able to compete with the forthcoming ASEAN integration,” he reiterated.

The poor implementation of so many laws and rules, not to mention the conflict between national and local laws where industry finds itself caught in the middle and eventually bearing the costs of such conflicts, is an unnecessary burden that drives away investors, noted Chamber of Mines executive vice president Nelia Halcon.

“The frustrating part is that we in the private sector would really like to be able to do our jobs,” George Chua, president of the Federation for Philippine Industries, complained, adding that bureaucracy has become too burdensome to the point that many businesses, both local and foreign, have not been very enthusiastic about the Philippines as an investment destination. “We hope government will understand what is needed to nurture investments and nurture people to go into development,” he appealed.

“We challenge the government in the remaining two years of this administration. We deserve better governance and policy stability. There is a growing impulse for change coming from all directions,” Manhit concluded.

ISIS: World’s newest terrorist threat

An intel officer who did not want his identity disclosed for obvious reasons predicted that the crisis involving terror group ISIS or simply the Islamic State, that has declared itself a caliphate ruling over Iraq, Syria and territories in the Levant region that include Jordan, Israel, Palestine, Lebanon and Cyprus, could escalate even more.

It’s obvious that the terror group is challenging America’s resolve, making good on its threat to behead a second journalist two weeks after the beheading of James Foley. A video titled “A second message to America” that showed the beheading of American journalist Steven Sotloff circulated yesterday, with the gruesome video ending with a threat from the black-clad, masked ISIS fighter promising to execute British captive David Caines, a former soldier who works for aid organizations.

ISIS, described as an evil worse than al-Qaeda, says the rise of the terrorist group is a consequence of the removal of strongmen rulers in Iraq, Afghanistan and Libya, declaring that the imposition of a democratic system simply cannot work in Muslim countries with multi-sectoral tribes or groups.

Certainly, reports that ISIS has become very attractive to Muslims (especially the younger ones) across the Asia-Pacific region such as Indonesia and Malaysia and even Australia are cause for concern. The Philippines is also vulnerable considering our close relationship with the US, not to mention the problems in Mindanao – which is why local authorities have to be more watchful. Even that foiled bombing in NAIA – with perennial nuisance candidate “Spike Ely” Pamatong being implicated – should be investigated thoroughly because it might just be a ploy to distract authorities, our inside sources tell us.

*  *  *

Email: [email protected].