Problems create opportunity that create jobs

Last Monday afternoon, I had the privilege to listen to SMC president Ramon Ang share his views, as well as plans for the next five years. It was not an exclusive interview but everyone in the room listened intently to RSA talk about a wide choice of topics. I sat back, listened and watched for cues or hints. What did he talk of in detail? What topics revealed emotion, changed his tone of voice? What did he keep going back to and what was the recurring theme or spirit in the things he shared? In the end, I could sum up his 4-hour talk as: Problems create Opportunities that create Jobs.

While RSA avoids publicity, he, like many visionaries, must share their thoughts for feedback, confirmation and to draw inputs and insights, even criticism. I am thankful for such opportunities with our country’s business leaders because it elevates what has otherwise been an environment of “low esteem,” defeatist attitudes and small mindedness as well as habitual critic’s response. As expected, RSA covered the San Miguel Corporation Bulacan Airport project or the future NMIA, what to do with the current NAIA, the cost of electricity and fuel, problems in the agriculture sector and of course several projects coming into play for SMC.

Ramon Ang reiterated his suggestion from the beginning of the Duterte administration to sell off the NAIA, which was vehemently rejected by economic managers and the DOF but who are now pushing the idea. RSA believes that the sale should be done in small blocks of about 50 hectares as soon as possible, as is, and priced to sell. The strategy is not to gain a windfall for government but to use the sale as an instrument of pump priming the economy, property development and job creation. From the development phase, the private sector can then create mixed-use areas or new residential communities that lead to construction and job creation.

Asked what can be done about the high cost of electricity, RSA explained that electricity is expensive during the peak consumption hours when the demand is equal to supply or greater. The government and the industry should adapt battery storage technology that will charge up during off peak, store electricity and load the stored capacities on to the grid when needed. This will meet the demand and can easily create a small surplus to drive prices down.

As for the prices of fuel, Ramon Ang suggested: Suspend the 5 percent biofuel requirement in gasoline and diesel because ethanol alcohol are all imported from Brazil, Indonesia, etc. The requirement helps foreign farmers but not the Philippines. We don’t produce the required ethanol and it is an unnecessary expense. Another cause for higher fuel cost is the result of fuel marking on the top three brands that increased the excise tax but did not stop fuel smuggling in plain sight in Subic and Sariaya, Quezon. RSA said that all the government has to do is to ask independent players how they can sell at P10 to P15 cheaper, or inspect bus companies, trucking companies, boat operators for receipts of fuel purchase.

When asked about the state of agriculture, RSA suggested: “Before we talk about agriculture, make a list of the problems of the department before we talk about solutions.” RSA simplified the process and requirements: use of low yield varieties, poor irrigation, inefficient farming and that many “rice lands” are not ideally located, thereby requiring more inputs. Rice farming should be encouraged or developed directly by government in flood plains, beside rivers and freshwater lakes and not just traditional areas. RSA believes the Rice Tarrification Fund is sufficient to subsidize the small population of rice farmers on the condition that they efficiently produce X tons of palay per X hectares using modern machinery and process. As for the rest, RSA expressed that the government should lead a “Plant Plant Plant” program to establish new coconut plantations, palm oil plantation, regional vegetable farms, fruit orchards, etc. If Israel can do it in the desert, why not in the Philippines?

For their part, SMC is going all out in developing their processed food business, especially for export. They will build ten poultry raising facilities all over the Philippines and each facility is designed to produce 80 million birds per year to be used for processed food, local sales and export. Again, RSA pointed out that these facilities will create jobs and economies in different regions because of the input requirements for feeds, ingredients and operations. SMC’s sales are back to pre-pandemic levels and 85 percent of their inputs are sourced locally. SMC is now less dependent on imported corn by providing assistance to big farmers, co-ops and LGUs to plant corn, etc. RSA also pointed out that Pagcor should increase taxes on gambling from 5 percent and make it equal to the 40 to 42 percent sin tax of cigarettes and alcohol.

The big-ticket item is still the SMC Bulacan Airport designed to have four runways with an initial goal of 100 take-offs a day to bring in 30 million tourists beginning in 2025. Aside from more runways, the departure platform will feature covered weather-proof “parked” unloading slots equivalent to estimated passenger loads. From the unloading slot, passengers walk over to a 15-meter deep outdoor passenger security screening area. Once cleared, they enter the main departure featuring ceilings several stories high, dedicated lounges per locator airline, multiple more gates and aerobridges than the NAIA. RSA emphasized that the ultimate “product” will all be based on the needs of experienced travelers. He also pointed out that the SMC-NMIA will cater primarily to domestic travelers and the doubled capacity for take-offs and landings will increase the volume of air travel resulting in a reduction of travel costs. There’s more to come in a couple of months, but that’s all for now.

*      *      *

Last Monday, I absent-mindedly wrote Mikey Romero instead of Mikey Arroyo as chairman of the committee on energy. My apologies to my friend Cong. Romero.