By Andrew James Masigan
The year is about to come to an end. As I contemplate the last six months of the Duterte administration, I find myself having mixed sentiments. On one hand, I remain optimistic on the plans and programs of the administration’s economic team. Carried out correctly, it could firmly establish the country as one of the most competitive in the region. On the other hand, the President’s confusing policy declarations, obsessive fixation on the war on drugs and inclination towards partisan politics have become a cause for worry. Let me elaborate further.
On the economic front, the administration’s ten-point economic agenda is the most timely and appropriate we’ve had since President Quirino’s “Drive Towards Industrialization”. It contains the prescriptions needed to eliminate the roadblocks to development and foster rapid growth. Among its important components are: constitutional amendments to relax equity and industry restrictions for foreigners; corporate and personaltax reform; promotion of rural development through agriculture and tourism; investment in human capital through education; promotion of science, technology and the creative arts; and the implementation of the Reproductive Health Law.
More significantly, its intention to spend $160 billion on infrastructure within 5 years should take the economy to a new level, not to mention provide relief to us all. There are nearly 100 projects waiting to be built for which the Department of Transportation (DOTr) and Department of Public Works and Highways are lead agencies. To implement them quickly and without legal impediments, however, the DOTr is requesting emergency powers from the legislature.
All these, along with the continued adherence to fiscal and monetary prudence, should set up the economy nicely for decades to come.
Proposals for tax reform, economic Cha-cha and emergency powers have already been submitted to Congress. Let’s hope it sees light in 2017. The economic team could use the President’s persuasive powers to get it through.
Dampening optimism, however, is the manner in which the war against drugs is being handled. While I recognize that illegal drugs are a problem, I am concerned that the fixation on it takes away precious executive attention on the fight against the real enemy – poverty.
The war on illegal narcotics and its consequential extrajudicial killings are costing us more than we realize. The perception of lawlessness and disregard for basic human rights has already caused the suspension of aid from certain donor countries. Worse, it is the reason for which numerous investors have either put their plans on hold or have cancelled them in favor of Vietnam. Investment commitments to the Philippines have plummeted by 50 percent this year, compared to last year.
Exacerbating matters is the President’s fondness for making grand, sweeping statements relating to foreign policy only to retract or contextualize them the following day. All these compound political risk, not to mention create the impression that the country is a hostile environment for America or EU investors.
Why am I excessively concerned about investments? It’s all about capacity building. Investors, foreign and local, build economic capacities through new factories, acquisition of fixed assets and infusion of technologies. It is our guarantee that growth will continue apace in the years to come. We are losing the battle for foreign investments and our supposed “savior,” China, has not filled the gap in any way.
On the political sphere, a cause for worry is the political appointees chosen not for their academic or experiential credentials but because they are friends or staunch supporters of the President during his campaign. The best and brightest, many are not. Partisan politics has become prevalent again. All these will redound negatively in the manner by which government operates and our how national resources are expended.
As a leader, President Duterte has compelling traits. He is charismatic, popular, armed with the right economic prescriptions, undeterred by religious, social or familial baggage and proven capable of getting things done quickly, no matter the obstacles. In him are the traits needed to foster an economic renaissance like no other. My wish for 2017 is for the President to give the economy the same commitment and attention he has given the war on drugs. What a game changer that will be.
Andrew is an economist, political analyst, and businessman. He is a 20-year veteran in the hospitality and tourism industry. For comments and reactions, e-mail email@example.com. More of his business updates are available via his Facebook page (Andrew J. Masigan). Follow Andrew on Twitter @aj_masigan.