The Philippines can't afford to waste any more time on reforms because it risks again being labeled as the sick man of Asia. Vietnam is next in line to become the factory to the world as China becomes more prosperous and wages continue their upward trajectory. It is high time we do away with the practice of being our own worst enemy.
Amidst the noise reverberating in the background and foreground of the political scene in the country, legacy-building has lost its way in the Duterte administration. Four years into his Presidency, Duterte has slowed down his pace compared to his first half in office, when he was highly-visible going in and around the country. The opposition claims he is terminally-ill and while there may be a semblance of truth about this because of his pallor, it doesn't look as if he's going to croak sooner than what his political enemies are constantly hoping for.
The opposition has never stopped taking issue with the President because they have nothing else better to do. Instead of cooperating in the herculean task of nation-building, they constantly politick, which is why we continue to lag behind our more progressive ASEAN neighbors. Allegations of corruption takes the forefront consistently.
Most recently, it has been about House Bill No. 78 which seeks to amend the definition of a public utility. The bill filed by Albay Rep. Joey Salceda seeks to allow foreign ownership of public utilities. This is in response to the obvious need to amend the arcane law passed by the Philippine Assembly in 1906 which limits ownership of public utilities to Filipinos. It is ironic because the country was then a colony of the United States and Americans and their companies controlled the economy. Even after "independence" in 1946, Americans still enjoyed parity rights until 1974 under the Bell Trade Act. The 1935 Constitution was amended to allow this provision. Salceda's bill simply calls for the amendment of the law.
The opposition conveniently claims that the President has again sold out to foreigners, reinforcing their earlier accusation of his pivot to China being detrimental to the national interest. Our ASEAN neighbors have gone past us because they offer more attractive investment incentives. Our level of foreign direct investment has always been one of the lowest in the region. The root of this has never been addressed as we continue to lag behind in infrastructure development and the oligarchs continue with their stranglehold on the economy.
The Duterte administration has addressed the issue of infrastructure development but the pace isn't fast enough to allow us to catch-up with the likes of Malaysia, Thailand and Vietnam. Infrastructure deficiency is our main weakness. Regulatory capture by the oligarchs hasn't been properly addressed. It is again ironic that the opposition has taken the side of the oligarchs, but one must remember that it was then President Manuel Roxas, the founder of the Liberal Party, who gave the Americans parity rights.
The President only has two years left in his term and at the beginning of his campaign for the Presidency he stated the need to amend the Constitution for the Philippines to finally maximize its economic growth potential. The two main points on this agenda were the adoption of a federal parliamentary form of government and lifting foreign ownership restrictions on negative list industries. Duterte has waxed hot and cold on federalism and nothing has been heard from the inter-agency task force he formed shortly before the campaign period for the 2019 polls began.
Congress also hasn't passed packages 2 - 4 of the Comprehensive Tax Reform Program developed by the Department of Finance as a measure to increase foreign direct investment. The lowering of the corporate income tax rate and the rationalization of fiscal incentives for foreign investors are both crucial components for the Philippines to become competitive in the region.
The most essential is still federalism as this presents the opportunity for the government bureaucracy to be streamlined. The structure of the bureaucracy works against economic growth because of the red tape that is still present despite the passage of The Ease of Doing Business Act and the formation of the Anti-Red Tape Authority. We don't have a shortage of good laws but we always fail in the implementation phase.
The Philippines can't afford to waste any more time on reforms because it risks again being labeled as the sick man of Asia. Vietnam is next in line to become the factory to the world as China becomes more prosperous and wages continue their upward trajectory. It is high time we do away with the practice of being our own worst enemy.BLOG COMMENTS POWERED BY DISQUS