LEAVING aside the effect of Philippine politics on the economic development of the nation, it is worth noting that often there is a disconnect between the aspired level of technological development and reality. In other words, there is an apparent eagerness on the part of the bureaucrats to adopt the “latest” international standards and update preexisting rules and regulations in order to reflect advances in ways of doing things, or in the application of new technology. Two examples come to mind connected with water; firstly, the specifications for waste water discharge to the sea, and secondly, the requirement for an environmental sustainability study and the need to satisfy certain criteria in order to gain rights to use river water. Both of these sets of requirements are adopted from standards in the USA.
The question is, are they appropriate to the Philippines at its current status of economic development, or are they just there in order to show that the Philippines is at the “leading edge” ? Another example is the Wholesale Electricity Spot Market, a complex sort of thing which is eminently suitable for “gaming”—it may be the sort of thing that would be used in the advanced economies if they, like the Philippines, had a fully privatized electricity generation sector [but most of them don’t]. A step too far in sophistication, perhaps, like EPIRA [Electric Power Industry Reform Act] itself.
Two issues arise from this, neither of which are conducive to speeding up economic progress. When a bright idea strikes, something which is new and advanced, any poor soul who has been pursuing whatever studies were required according to the rules when they started, has to go back and start again, a bit like snakes and ladders.
“Grandfathering,” by which approvals can be gained under a set of rules current at the time of commencement of the application process, even though the rules have subsequently been changed, is not a recognized concept in the Philippines. Given the time it takes to actually secure approvals in a conformist way, it is easy to find, partway through one of these tedious processes, that the rules have changed. In Palawan, there is a rule that gives a validity of only six months for a local endorsement.
A factor which makes things even more difficult is that in the less developed democratic economies of the world generally, significantly lower proportions of the working population are employed in government service—the public sector, than is the case in the advanced economies. In the UK and Canada, nearly 20 percent of the labour force is employed in the public sector, in Norway it’s over 30 percent, in the USA about 15 percent, and in Switzerland 18 percent. The Philippines has about 1.5 to 2 million public sector employees out of a working population of about 40 million [excluding 3 million working children in the age range of 5-17!]or 3-5 percent. It looks as if this is not a high enough proportion; there are simply not enough people employed in the Philippine public sector to handle the enormous number of rules and regulations and their continual modification. To get a government department to undertake the necessary validation for a permit issuance invariably means that the applicant has to book the validation exercise a long way ahead, and then also pay the costs of the validators. The more the rules change, the more validations are needed, the longer it takes to have government do the work and the more it costs the developer.
Government cannot or should not be endlessly making rules and then modifying them if they do not have the resources to implement them. At one time in China, 100 percent of the working population was employed by government and even now in Cuba, over 80 percent are employed by government, but these numbers reflect state-controlled economies.
In the UK and USA, both heavily privatized, the government bureaucracy employs way more people to implement rules and regulations which are more stable than those in the Philippines. Privatisation, as in the case of the Philippine power sector, does not mean that government doesn’t have to do anything—it has to do more, not less, in order to ensure that the rules which it has established are followed in a responsible way.
To employ the needed number of people in the Philippine public sector would also have the benefit of helping the employment statistics, but more important than that is the need to strike a proper balance between the number of regulations and their volatility and the people employed to implement them! To plan and budget accordingly would surely help the real Philippines economy to advance at a faster pace.
Mike can be contacted at email@example.com