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Monday, June 24, 2024

‘Deal me in!’

"It’s time to up the ante."

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As President Duterte nears his final year in office, it’s heartening to note that the Philippines is finally getting (back) into the game on a growing number of economic and geopolitical fronts. 

People who complain about his seeming timidity against China, his preference to bob and weave instead of charging straight forward, clearly do not appreciate the weakness of the hand he was dealt back in 2016. Such people lead with their mouths and may have checked in their brains at the door.

Our local officials have spent their careers learning how to get by with limited resources and play games with imperial Manila. Duterte is one such official, mayoring from far away in Davao City. He knows the long game and the short, he never mixes them up, and he takes care to accumulate tactical gains before making strategic bets. 

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Let’s take a look first at recent economic news. The current pandemic and lockdown, though painful, have allowed him to push through landmark initiatives. The new CREATE law brings down business tax rates to levels much more competitive with our neighbors. And Congress plans to open our doors a lot wider to foreign investors who’ll be looking around again as the rest of the world recovers ahead of us.

Most recently, Duterte signed a new executive order lifting the ban imposed by the unlamented PNoy nine years ago on new projects from the mining industry. It reminds us that we were blessed with mineral resources—the third most abundant in the world—not so they could be miserly hoarded away, but as part of our competitive advantage.

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As Chinese vaccines continue to enter our country—the first ones to arrive here from anywhere—I was sent an old news photo from 1939 of vaccines made here by the UP Institute of Hygiene that were to be shipped to China. 

That long-ago capability of ours may now be revived under a DOST initiative to set up a vaccine development center as a public-private partnership (PPP). And in fact, a local company called Glovax Biotech plans to break ground this year for a vaccine plant at the Clark ecozone in Pampanga.

CEO Giovanni Alingog says it will be “a complete vaccine plant from the production of antigen to the formulation of the vaccine” as well as “animal testing and research and development laboratories”. Partners will include EuBiologics from South Korea and a “substantial investment” by well-known Capampangan businessman Manny Pangilinan. 

As the Covid-19 virus continues to mutate, while new varieties sprout up in the future, it’ll be important for us to be self-sufficient in vaccines instead of begging from hoarding countries. And there’s no reason why—as in the BPO sector—we can’t give our Indian friends some competition in this area.  

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Less benignly, with China now officially at the very top of the US global hit list, we were recently treated to the spectacle of, not one, but two US carrier strike groups—led by the USS Theodore Roosevelt and the smaller USS Makin Island—steaming into the West Philippine Sea to shoo away the hundreds of Chinese “fishing vessels” loitering in those waters.

If the Chinese reacted by withdrawing from the area, we know very well what made them blink. We may have done our share by sending our Navy’s four most advanced warships to join the fleet. But they would have been about as effective as jet skis without the company of Big Brother.

Over the long-term, this dependence can’t substitute for genuine self-reliance. This is why, while Duterte is obliged to nip and tuck, dance the one-step/two-step, I’m intrigued by former DILG Secretary Raffy Alunan’s proposal in his Manila Times column to go all-out and spend as much as $10 billion on a thorough upgrading of our armed forces.

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Sec Raffy’s shopping list is impressive: two squadrons of refurbished F-5s from Brazil and South Korea, submarines and stealth corvettes from Sweden, interceptors from Japan and Israel, landing docks from Indonesia, US Blackhawk helicopters—it’s a long list. 

And $10 billion is a number that, upon closer inspection, isn’t unreasonable. In 2019 our military spending was under $3.8 billion, or 1 percent of our $377-billion GDP. Indonesia spent a smaller 0.7 percent, but with their much larger GDP, they actually spent some $8.3 billion, more than twice ours in absolute numbers.

The average for ASEAN in 2019 was 1.64 percent. If we just aim to increase from 1 percent to 1.5 percent, this adds another 0.5 percent or $1.9 billion per year. At this rate, we can achieve Raffy’s $10-billion goal over five years of added military spending. 

Will these tabletop numbers be worth it? I would think so—unless we’re happy just to imitate what our inveterate Duterte critics are doing: jump up and down, stick our tongues out and make faces at the enemy. 

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