AT the beginning of the week, a consultative conference of business groups met in Davao to present a list of economic policy recommendations to President-elect Rodrigo Duterte.
At the end of the meeting, a list of 10 recommendations, reportedly whittled down from several hundred that were suggested by the attendees, were presented to the incoming administration, and subsequently widely reported as likely to form the basis of the next government’s economic policy.
To be accurate, Duterte himself indicated no such thing, promising only that the recommendations would be “studied and reviewed.” But he followed that up with an ironically encouraging comment: “I am a lawyer and I never pretended to be an economist.
So do not expect me to just discuss with you these economic programs, especially taxation.” That seemed to suggest that Duterte will be inclined to follow the advice of his economic team, which in turn means that most if not all of the list of recommendations will eventually become policy, provided the advocates of the particular initiatives can convince people like Carlos Dominguez, Ernesto Pernia and Ben Diokno of their value.
That the conference took place at all was already a significant improvement on the last six years of frustration under a stubborn, self-centered, and largely ignorant President who actually seemed to take a sort of perverse pride in his distaste for consultation of any sort.
For instance, BS Aquino 3rd only convened the Legislative-Executive Development Advisory Council (LEDAC) twice during his term—which technically makes him liable for up to 22 violations of RA 7640, the law that created the consultative body, and stipulated that it hold quarterly meetings.
Given that Duterte has shown a willingness to at least hear the views of most of his vast new constituency, those who find they have his ear should make the most of it. While nothing on the list of 10 key recommendations from the business community is a bad idea, it is in some ways disappointing; there is a sense that a chance to make a significant impact on the future direction of this country has been missed.
The 10 recommendations that were presented, quickly summarized, were comprehensive tax reform; implementation of a national ID system; improvement of ‘ease of doing business’ factors; improvement of internet and telecom services; provision of more support services for farmers; encouraging value-added, responsible mining; development of regional industries; improvement of the transportation infrastructure; review of the Conditional Cash Transfer (CCT) program; and reduction of barriers and bottlenecks in public-private partnership investment, including guaranteeing respect for contracts.
Again, none of those are bad ideas, although a couple of them—in particular the call for a national ID (The country has had one for decades. It’s called a passport.) and the call for a review of the CCT dole-out program (which should be scrapped entirely)—may not be significant enough to elevate to the level of broad economic policy. The list, however, should have been extended, because there are a number of glaring omissions, such as:
• A review and overhaul of the Electric Power Industry Reform Act (Epira), which should be done in line with the development of a robust, long-term energy policy: as the vast majority of the business community represented at the Davao get-together are not in the electricity business, it is rather incredible that this issue was entirely overlooked, as the cost and unreliability of the nation’s power supply is nothing if not an unreasonable hindrance to investment and a drag on the entire economy.
• A call for clarification and more efficient management of land reform policy, including a comprehensive and practical land-use policy: Concerns are growing about the potential Zibabwization of the Philippines given the signals made by Duterte so far in appointing the hysterically anti-everything Gina Lopez to the DENR, and his intention to surrender the land reform job to a designee of the Maoist rebellion.
• Streamlining government: The conference attendees at least got partway there with the recommendation comprising suggestions to improve ‘ease of doing business,’ but these do not go far enough. The Philippine government is a bloated mess riddled with redundancy; eliminating the many agencies with overlapping or contradictory functions—the country does not need, for example, both a National Competitiveness Council and a Philippine Competition Commission—would go a long way toward the easing of costs and procedures associated with doing business here.
• Overhauling the judicial system: Apart from the cavalier attitude Filipinos seem to have toward rules, the biggest problem with the country’s court system is that it continues to be inadequate, poorly-managed, and easily compromised. Contract enforcement is impossible without a court system that works, and as it stands now, not only do companies wait for years for individual issues to be resolved, virtually every policy matter is challenged and held in limbo for an extended period of time; the Mining Act of 1995, for instance, was held up by court challenges for 10 years before it could come into effect.
Without addressing these important but seemingly overlooked issues, all of the other matters on the business community’s ‘wish list’ are going to be more difficult to accomplish successfully, if at all, and it is disappointing that no one thought to include them—or, as the case may be, that the business community bowed to pressure to leave them out. Hopefully, more opportunities for consultation with the new administration will arise; if and when they do, the country’s business leaders should take better care not to waste them.