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Friday, March 1, 2024

Listen to and engage the private sector

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"Innovativeness and nimbleness are natural traits of the business sector in contrast to the regulatory and bureaucratic government culture."

The Philippine Statistics Authority recorded five consecutive quarters of negative growth shrinking at a rate of -4.2% last March. Unemployment is evidently high, and prices of food and goods keep rising. Unlike the government, which is primarily funded by our taxes, the private sector has to do the heavy lifting on the ground to survive and to remain viable. A developmental mindset is key.

In the second virtual Business Roundtable Discussion of the Stratbase Albert del Rosario Institute (ADRi) held recently, top business groups exchanged insights and strategic recommendations targeting the most urgent governance and policy issues.

In his keynote address, Former Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo warned of the fragile situation and the long-term structural impact of the prolonged recession on the domestic economy. He underlined the need for new approaches and a “well-coordinated mix of policy responses” to rebuild the damaged economy. He sees the private sector leading in the digital economy, agility and flexibility, and says a green and inclusive recovery will solve the complex issues of this crisis.

Employers Confederation of the Philippines Chairman Edgardo Lacson bemoaned how “critical and basic industries are near the edge of the economic black hole” because of “the trial and error of delayed responses and unduly prolonged quarantine protocols.” Aside from the urgency of vaccine roll-out as a prerequisite to opening the economy, he pushed to temper punitive and restrictions on labor laws for three years. He echoed the need for foreign direct investments and to further rationalize incentives and shorten the list of prohibited industries from foreign investment. He also espoused adherence to the principles of Environment, Social, and Good Governance to ensure business continuity and sustainability.

Management Association of the Philippines (MAP) Committee on National Issues Chairperson Rizalina Mantaring maintains that “moving forward, it’s really all about living with the virus” and cited how Singapore is developing strategies where COVID-19 will be treated like the flu with the necessary vaccines, treatment, tracing, and no more lockdowns. A level that can only be achieved with a vaccinated population and developed healthcare system. She points out that crisis leadership must have clear and trustworthy communication.

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Mantaring said: “Leadership should provide direction in a decisive, clear, and consistent manner and this goes for both public and private leadership. If the direction keeps changing, how can people believe that you actually know what you’re doing?”

Foundation for Economic Freedom president, Calixto Chikiamco pointed out several policy reforms in ownership restriction to promote positive competition and the problem of land fragmentation in agriculture caused by the Comprehensive Agrarian Reform Program which he says has made farmers poorer because the five hectare limit is too small and impossible to apply scale machinery. He recommends labor intensive industries and proposed special employment zones where labor and capital will be free to negotiate wages as a strategy to generate jobs and be competitive in the region.

On education, Coordinating Council of Private Educational Associations (COCOPEA) Managing Director, Atty. Joseph Noel Estrada, highlighted the sector’s strategic role in training the country’s human capital and as a public and private education ecosystem that deserves state support especially now that education is in crisis mode. Latest DepED data reported 900 schools closed and 900 million students failed to enroll, worsened by the controversial BIR revenue regulation which effectively increases income tax of private schools by 150 percent! The esteemed panelists of the forum supported COCOPEA’s position to immediately reverse this, what I believe, an insensitively onerous provision that ignores the damaging consequences to our already ailing educational sector.

International Container Terminal Services, Inc. Executive Vice President, Christian Gonzalez highlighted the need for consistent policies in relation to education and transportation to ensure continuity of schools and workplaces. He called on the government to listen to and engage the private sector as a frontline provider which he claims, and I totally agree, will get us to herd immunity in half the time. Quite interesting is his view on achieving regional herd immunity focusing on the most productive areas such as the greater Manila area and surrounding regions.

Stratbase ADRi president Prof. Manhit thanked the private sector for helping bring more confidence to the economy and increasing the vaccine stocks to accelerate the rate of inoculation. He maintains that shaping a responsive roadmap to recovery must integrate the benefits of stakeholder communities with economic continuity propelled by public-private partnership.

Innovativeness and nimbleness are natural traits of the business sector in contrast to the regulatory and bureaucratic government culture. The government must empower the private sector to do its thing which is to invest, create jobs, boost the economy, and spread prosperity. Learning from the lessons of the pandemic, we have an opportunity to build a much better world.

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