For some time now, I have not had the feeling that the industrial development of this country has not been well managed and that no one is really in charge of that aspect of Philippine economic development. The last time I had that feeling was during the incumbency of the person who from 1970 to 1979 headed the Board of Investments, the implementor of the investments-granting measures approved by Congress.
That person passed away two weeks ago at age 88. He was Vicente Tirona Paterno.
People remember him mainly for his leadership of the BoI, forgetting that prior to joining the government, Ting Paterno was an extremely competent chief operating officer and general manager of this country’s largest electric power company, Manila Electric Co. Fresh with a Master in Business Administration degree from Harvard University, Ting Paterno was invited by the family of Eugenio Lopez, which had just bought control of Meralco from its American owners. Those who can remember those days will probably agree that the utility’s consumers equated Meralco with Eugenio Lopez and Ting Paterno and that they were confident about the stability of Meralco operations because Paterno was in charge.
But it was at the BoI that he really made his mark. Taking over from Cesar Virata as BoI chairman after Virata’s appointment in 1970 as Secretary of Finance, Ting Paterno quickly discerned the potential presented by two newly approved pieces of industrial incentives legislation—the Investment Incentives Act and the Export Incentives Act—for revving up Philippine industry and in the process transforming the Philippine economy, which until then had been based upon agriculture and services.
The new chairman quickly saw that the key to the economic transformation process was doing a good job in the preparation of the Investment Priorities Plan and the Export Priorities Plan that the industrial incentives laws required the BoI to prepare and publicize annually. The laws’ underlying philosophy was made up of two parts, viz. the setting of measured capacities for the production of identified industrial and agro-industrial products and the granting of a slew of incentives—mainly fiscal—to enterprises that were the first to register with the BoI as producers of the capacity-measured products. Clearly, obtaining fiscal and other incentives gave registered enterprises a large advantage over the competition.
Enterprises not registered under the IPPs and the EPPs were not prohibited from continuing to operate outside the Plans, but that obviously meant operating under a competitive disadvantage.
During the decade that he was its chairman, the BoI was virtually unanimous with Ting Paterno. It was Meralco all over again.
During the seventies, the BoI was a highly respected government agency. The preparation of the IPPs and EPPs was done in a transparent, purposeful and competent manner. Extensive studies were undertaken by the BoI technical departments and broad consultations were held with the business organizations, academe and other interested sectors. To be sure, there were complaints about the choice of certain industries and about measured capacities, but rarely were there complaints about transparency and incompetence. And there was virtually no talk about corruption.
Ting Paterno and his BoI colleagues appreciated that certain industries were strategic and catalytic in character and therefore deserved special attention. Thus, were born the various progressive manufacturing programs. Three were established for the motor vehicle industry (Progressive Car Manufacturing Program, Progressive Truck Manufacturing Program and Progressive Motorcycle Manufacturing Program) and one was established for the petrochemicals industry, which economic planners recognize as one of the building blocks of a country’s industrial development.
The Plans and the progressive manufacturing programs thrived while Ting Paterno was BoI’s head. But that situation was not to last. In a move that many people, including myself, could not comprehend, President Marcos appointed Paterno as Minister for Public Works and Highways.
With Ting Paterno’s departure, BoI’s halcyon days were at an end. The impression of virtuous competence and the aura of professional purposefulness were over.
Ting Paterno’s memoirs about experience at the BoI, added to those about his experiences as Minister of Public Works and Highways and Meralco COO, would, had they been written, have made an excellent guidebook for planners of a country’s industrial development. Unfortunately, they were not written.
Rest well, Mr. Industrial Development Administrator.
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