|
By Rene Q. Bas
Conclusion
Going through the Agile work plan for 2001 to
2004, one sees that everything done under the project supports the
policy directions and work schedules stated in the Medium Term
Philippine Development Plan (MTPDP) for 2001-2004 and the
President’s July 2001 State-of-the-Nation Address.
Since her accession to office, through the 2001
and 2002 SONAs, President Arroyo highlighted the key role to be
played by civil society in strengthening the accountability of
officials and the transparency of their transactions. Agile applies
this principle in all areas of its program. It assists civil society
and private sector groups and individuals who are supporting the
government’s efforts for improved governance and growth with
equity.
In the government’s goal of making
institutions, policies and practices transparent and accountable
(therefore less prone to corruption) Agile has assisted the
government in pushing for the strengthening and enforcement of
commercial law.
Thus, Agile experts provided technical
assistance in the development of the country’s capital markets.
The 2001-2004 MTPDP identifies capital market development as
something crucially required for sustained and rapid economic
growth. That is why Agile helped the SEC and the Philippine Stock
Exchange to establish better regulatory regimes (in the case of the
PSE, self-regulation).
Agile also assisted the country’s efforts to
achieve pension reform. The MTPDP had identified legislation to
provide tax incentives for long-term retirement savings
(complementing the SSS and GSIS pension systems). It gave technical
assistance for this effort. The improvements will result in domestic
savings and retirement income (outside the SSS and GSIS context)
boosting the capital market substantially. Still to be attended to
under Agile is the work of strengthening that sector of the
retirement income system represented by voluntary occupational
pension plans, life insurance policies, pre-need plans and the
so-called PERA—Personal Equity Retirement Account.
There is now a pending PERA bill in Congress,
seeking to stimulate larger personal savings by providing for a
tax-deferred personal equity retirement account. An important part
of Agile’s work on the PERA law is to ensure that the incentive
structure will generate new savings rather than simply transferring
existing ones from one instrument—such as life insurance policies.
Another area of concern is to make sure the tax consequences of the
incentive structure in the PERA law does not damage the
government’s revenues.
One of the problems of this country is the low
savings rate. The President mentioned this as one of her basic aims
in the 2001 SONA. There is a National Commission on Savings (NCS),
which was created in 1996. Agile includes technical assistance
support to NCS.
The MTPDP also calls for the expansion of the
domestic investor base. Toward this goal, the MTPDP specifically
aims to see that a Securitization Act, a Revised Investment Company
Act and a Financial Sector Tax Reform Act are passed. Agile supports
the government’s efforts to draft such laws equitably and build up
support for them. It supports SEC and the Capital Markets
Development Council (CMDC), which is made up of the key financial
and securities departments of government and private sector groups,
in promoting investment funds, fixed income securities and new
investment products as alternate/savings investment vehicles.
The project also provides assistance to
government and private sector efforts in what the MTPDP refers to as
policy reforms that will “improve the corporate debt and
resolution framework through passage of a Corporate Recovery Act or
Amendments to the 1909 Insolvency Law.”
These laws and regulations need to be updated
and made legally adequate. Because of these inadequacies, there is
confusion and fragmentation, with protracted court battles, which
create opportunities for corruption and non-transparent conflict
resolution.
Passage of updated laws and crafting of
modernized regulations—encompassing changes in the Civil Code,
presidential issuances, SEC rules and regulations and even Supreme
Court procedures, will bring about improved fairness and speed in
corporate bankruptcy and rehabilitation proceedings, ensure passage
and enforcement of the Corporate Recovery Act (CRA) and build
institutional support for commercial courts.
Agile has also helped in advancing the MTPDP
goal of “improving the administration of justice to reverse the
public perception of a slow and elitist dispensation of justice”
in this country. It may seem that this MTPDP goal involves only the
criminal justice system. The fact is it is also applicable to court
involvement in economic policy implementation.
Judicial intervention in economic policy—and
economic transactions (such as the proliferation of strange TROs
that have hampered Philippine progress)—creates additional
opportunities for corruption and non-transparent decision-making.
Agile has worked closely with the Philippine
Judicial Academy to enhance the impact of judicial decisions on
economic policy and continues to give that assistance. All the
improvements in this area are based on the Supreme Court’s
blueprints for judicial reforms, which the court developed with the
United Nations Development Program, the World Bank and
non-government organizations.
The project has been involved in helping the BIR
achieve more transparency and efficiency.
Agile has helped strengthen the Bureau of
Customs’ role in trade facilitation and the removal of systems
that discourage transparency and encourage discretion leading to
corruption.
To increase public revenues, Agile in general
has assisted in making revenue generation more transparent and
efficient. And in modernizing customs procedures and improving the
ability of customs authorities to facilitate trade and audit and
manage risk.
Agile has also helped local government units
access funds for their development programs.
It helped the Department of Finance and the
Department of Public Works and Highways in developing needed
provisions in the road user charges law that aids in making a more
equitable and efficient Philippine transport taxation system.
The Department of the Interior and Local
Government benefited from Agile’s assistance in streamlining the
procedures for the issuance of municipal bonds.
Agile’s assistance to government in
strengthening the management of expenditures has been in helping
re-engineer the bureaucracy. It helped improve the government’s
ability to manage its contingent liabilities while making investment
incentives more transparent.
It provided the DOF with a framework for
evaluating, monitoring, and budgeting and provisioning for
liabilities.
The Department of Budget Management, received
assistance under Agile to institutionalize tools and systems to
introduce aggregate fiscal discipline, efficiency in public sector
operations, and efficiency in the allocation of government
resources.
It is helping DOF, NEDA and DTI build policy
consensus and coherence in investment incentives. It has helped in
creating and implementing the Omnibus Investment Code amending law
that will make current investments schemes more effective.
Another area of Agile assistance is the design
of a reformed public procurement system that is transparent and
efficient. These efforts resulted in the issuance of Executive Order
262 and the amendments to the implementing rules and regulations of
Presidential Decree 1594. Both of these are expected to reduce
procurement costs and corruption in government.
Related to this, Agile assistance has been given
to a civil society group, Procurement Watch, Inc.
To spur competition in infrastructure and trade,
Agile helps in researching policy and regulatory infrastructure to
promote the knowledge economy and competitive investments in public
utilities and basic industries.
It has been assisting the government to design
appropriate regulatory frameworks for the biotech products industry.
It has helped formulate a more viable food security strategy in
light of the globalization of the rice market. It has set up
internationally approved mechanisms to neutralize the adverse
effects of unfair trade practices and import surges.
Agile assisted in crafting a fair and
Philippine-favorable Electronic Commerce Law. It also helped design
three laws to neutralize the adverse effects of unfair trade
practices: the Countervailing Measures Act, the Anti-Dumping Act and
the Safeguard Measures Act.
In crafting the Retail Trade Liberalization Act,
Agile assisted by giving informational support.
The National Telecommunications Commission (NTC)
turned to Agile in developing its circular mandating the use of the
“uniform system of accounts” to enable fair and reasonable
tariffs and rates in the telecoms industry. It helped draw up rules
and procedures on interconnection among telephone companies.
Agile helped the Intellectual Property Office in
invigorating the enforcement of anti-piracy laws.
The Department of Agriculture benefited from
Agile’s assistance in developing the Plant Variety Protection Act.
It also helped prepare the guidelines for the commercialization of
transgenic plants. The project also helped disseminate information
on biotechnology.
Agile’s help to the Tourism department and the
private sector of the travel and tourist industry, was
controversial. But it is fully in compliance with the government’s
policy of achieving progressive liberalization of the air transport
industry.
The great advance in domestic transport of
goods, through the RO-RO, or roll on-roll off ferry system, that
will radically decrease the cost of goods throughout the country has
been made possible partly as result of Agile assistance.
Lately, the most controversial Agile project
assistance has been in the Bangko Sentral’s—and other financial
institutions’—desire to conform to international best practice
in combating money laundering.
The BSP consulted experts provided by Agile in
reforms such as the General Banking Act, which paves the way for
ensuring better capitalization and stronger supervision of the
banking industry. And Agile helped the BSP develop measures that
were enacted in the Anti-Money Laundering Act of 2001. It continues
to help the BSP in meeting international requirements of the
Paris-based Financial Action Task Force.
In the formal document of its implementation,
JPIL No. 55, it was made clear that Agile was going to be “a new
step in the evolution of USAID/Philippines assistance for economic
growth.”
Agile has “two critical economic objectives”
to address: “Expanding and sustaining liberalization, and
increasing the degree of competition in the economy.” “Agile
retains liberalization but will place greater emphasis on
competition, which has positive implications for increased
participation in economic growth.”
This stress on competition could be the
ideological foundation, if there is any at all, of the current
feeding frenzy against Agile.
The project also differs—“in its design and
operational aspect”—from previous approaches of USAID/Philippine
government project-planning to achieve the strategic objective of
improving “national systems for trade and investment.”
In this, I learned from DAI and USAID
executives, that the Agile design and operational mode is a model
for American aid program implementation in other countries. And, in
fact, a similar design and approach is at work in Mindanao—not
under the project name Agile—but under the name GEM—Growth and
Equity in Mindanao. This USAID project is called GEM 2 because it is
only a continuation of the original GEM program that operated from
1996 to 2002.
GEM, with method inputs now similar to Agile,
got under way in late 2002. It will most likely continue until 2007.
GEM is something that Mindanao politicians and businessmen as well
as rural and urban working folk—treasure.
Says JPIL No. 55, the document that created it:
“Agile will consolidate within one core management unit, the
policy reform activities under SO2 now [in 1997] being implemented
by several separate activities and management units. AGILE will
become the main policy design and implementation vehicle for policy
reform work under SO2. The initial Agile policy areas will be
competition structure and trade and investment. As other individual
contracts and grants under SO2 come to an end, Agile may be tapped
to cover the activities requiring continued financial and technical
support. In addition, Agile will coordinate with other USAID SOs
[strategic objectives] on economic policy issues that have national
level implications.”
This clearly shows that the project has a vast
mandate. But who gave it that mandate? Not only the US government,
through USAID. But also Agile’s co-creators, which are this
country’s two most important economic “ministries”—the
Finance department and National Economic and Development Authority.
In fact, if the Philippine government had not requested Washington
to provide assistance, there would be no USAID involvement, no
Agile.
Its American and Filipino creators designed
Agile to provide “three categories of services” to the
Philippines. “(1) Policy analysis, formulation of advocacy and
technical assistance in support of increased liberalization and
competition; (2) Administration of the Agile Special Activities Fund
(SAF); and (3) SO2 monitoring, assessment and reporting.”
The project’s policy areas cover competition
and competitive structure; agricultural tariff and non-tariff
barriers; WTO issues; financial markets, including securities
markets’ inter-island and overland transportation; industrial
relations; intellectual property rights; fiscal policy;
telecommunications; development planning and economic statistics;
privatization of public infrastructure; and, further in the future
[this, remember is from a 1997 document] tax administration and
microfinance policies.
Agile therefore veritably covers the entire
gamut of Philippine economic life. Its mission is to liberate
present systems from the control of monopolies and rentiers and—as
in the examples of strengthening the Anti-Money Laundering Law and
reforming the government’s procurement methods—to combat
corruption in government and in the banks.
The project’s enemies are powerful. They are
the forces—and people—who control the feudalistic, undemocratic,
rentier ruled economy. And, of course, the Left, which does not want
democratic capitalism to thrive in this country.
The reforms Agile was designed to help the
Philippines achieve threaten these aged and long-established powers.
These forces’ grip on the economic life of this nation will be
disrupted—maybe even ended—if the project succeeds.
That is why, in the past two weeks, Agile has
raised a storm of enmity.
Part
1 | Part 2
|
