Patriot of the Year

"Here’s a former press secretary on Ramon S. Ang."

Francisco “Kit” Tatad, the legendary former press secretary, former Senate majority floor leader, and today’s one of the country’s best journalists and writers, sent a reaction article to the BizNewsAsia issue which declared Ramon S. Ang, Man of the Year for 2019. Here is the article:

BizNewsAsia, Tony Lopez’s phenomenal business weekly magazine, has named Ramon S. Ang, president and chief operating officer of San Miguel Corp., Man of the Year for 2019.

None of our major newspapers have awarded this title to anybody else, so RSA is the only Man of the Year in the Philippine media for 2019.

This is a very thoughtful distinction, but I would rather describe RSA as “Filipino Patriot of the Year.” Although half-Chinese by heritage, he is more Filipino than anybody else, no full-blooded Filipino can claim to be doing for the country as much as this one.

The honoree is a man of multiple virtues and achievements, none of which is easy to replicate. In less than 15 years, after he joined his friend and mentor SMC Chairman Eduardo “Danding” Cojuangco to run the corporation, he has reengineered and transformed SMC from a food conglomerate into an industry leader in power generation, infrastructure, fuel and oil, premium cars, cement, and others.

It is a stunning feat that has not only contributed to the economy’s long-term growth but also brought so much pride in the entrepreneurial capacity of the Filipino individual. As the country’s largest corporation, SMC posted P1.1 trillion in revenues last year.

The main reason for this is RSA’s P735.6-billion ($14.4 billion) New Manila International Airport project in Bulacan, which will not only put Manila head to head with all the modern tourist destinations in the world, but in Bloomberg’s words, will “remake” the Philippines.

It is a jaw-dropping game-changer. It is the biggest infrastructure project in the country, undertaken as an unsolicited private proposal by a single corporate entity, without any government subsidy or sovereign guaranty.

Among Filipino and Filipino Chinese tycoons, the usual gold standard is the Forbes magazine listing of annual dollar billionaires; this is where you find the names of those whose most important distinction is that they have made and continue to make a lot of money.

RSA invites a higher and far more fundamental measure of the value of his wealth creation: Its actual impact on the long-term economic growth and overall advancement of the nation.

It is a function of patriotism. Bloomberg Business Week, the international business magazine, clearly recognized this when it earlier listed RSA among the 50 most influential people in the world.

Included in this listing are Denmark’s, and the world’s, youngest prime minister Mette Frederiksen, a host of highly celebrated corporate heads from various parts of the world, and the 17-year-old Swedish climate change activist Greta Thunberg, who rebuked world leaders at the UN climate action summit in New York last year for their continued neglect of the environment, and who landed on the cover of TIME magazine in 2019 as its youngest Person of the Year and also the youngest nominee for the Nobel Peace Prize. RSA is the only Filipino on that list.

After years of systematic planning and preparation, RSA signed a 50-year concession agreement with Secretary Arthur Tugade of the Department of Transportation, and received the “notice to proceed” last September.

One Cabinet member had reportedly expressed some skepticism about the viability of the project, so Finance Secretary Carlos “Sonny” Dominguez had to ask the Department of Justice to review all its premises and assumptions.

RSA himself had to assure President Rodrigo Duterte that the big banks are lining up to support the project, and the biggest names in world business from Japan, Malaysia, Hong Kong and the US have expressed serious interest to participate in it, if they are welcome.

On another front, the government statistics agency announced yesterday a 5.9-percent economic growth for the whole of 2019, a drop from the 6.2-percent growth rate of 2018.

In my estimate an annual 6-percent economic growth means one million jobs being created every year. So a decline of .30 percentage point in real economic output easily means 50,000 jobs lost or not created during the year.

Since jobs is about poverty reduction or economic inclusion, 50,000 jobs means 50,000 families not rescued from poverty in the past 12 months. Coincidentally, 50,000 families is 1.3 times the number of families (38,000) displaced by the Jan. 12 eruption of Taal Volcano.

Disturbingly, 2019’s GDP of 5.9 percent is the lowest ever annual rate since Rodrigo Duterte became president. The economy grew by 6.9 percent in 2016, 6.7 percent in 2017, and 6.2 percent in 2018.

Per capita, meaning 5.9 percent GDP minus population growth rate, net economic growth was 4.8 percent, lower than the per capita GDP growth of 4.6 percent in 2018.

The slowdown, to me, was because of the fall in investments—measured as investments in durable equipment (down 5.9 percent in the fourth quarter 2019 alone—the third consecutive quarter of decline). This means we have yet to feel Duterte’s so-called Build, Build, Build program as infra is basically buildup of assets.

Investments are also down in agriculture, in intellectual property (like computer software and databases), telco, and vehicles.

What carried the economy in 2019? Well, spending by consumers, thanks to strong inflows of remittances which boosted banking which in turn boosted the services sector of the economy.

Thus, on the expenditure accounting of the economy, 3.9 percentage points or 66 percent of the GDP growth for the year of 5.9 percent was contributed by household consumption. Government spending contributed another 1.8 percentage points or 30 percent of the 5.9 percent GDP growth and construction, 1.3 percentage points or 22 percent.

In effect, the economy is run by consumers, you and I. We produce P66 for every P100 of economic output; the government P30 of every P100.

What kind of economy is that—one propelled by 96 percent consumption (66 plus 30). No wonder, almost nothing is left to so-called capital goods or durable equipment—assets badly needed for long-term growth. Durable equipment in 2019 was a drag on the economy. Its contribution was negative 0.9 percent.

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