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Philippine President Benigno Aquino III
November 2011
         

Ready for any challenge

Having weathered the recession better than most, the Philippines has renewed confidence in its economy, its government, and itself
Voters in the birthplace of “People power” united at the ballot boxes in May 2010 to overwhelmingly back a new government for the Philippines. The “No corruption, no poverty” campaign led by Benigno Aquino III clearly struck a chord with the electorate, and the new administration has held firm to its pledge to encourage socio-economic growth through accountability, as the president believes greater transparency goes hand-in-hand with poverty alleviation.
The new administration immediately took steps to demonstrate the courage of its convictions to increase institutional transparency by introducing “zero-waste budgeting”, obliging all government agencies to justify their projected expenses, thereby reducing the potential for overspending or corruption.

New investment laws have been designed to provide better guarantees for investors and President Aquino has highlighted key areas with prime investment potential: logistics, mining, shipbuilding, tourism, agro-industry, business process outsourcing (BPO) and information technology (IT), electronics and semiconductors, and energy and electricity. 

“We have streamlined business registration, improved power supply, instituted reforms and issued policies to fight corruption, and established closer coordination between the national and local governments to improve the investment climate, even in the countryside,” says President Aquino.

With regard to the private sector, many of Aquino’s ministers have orchestrated a more enterprise-friendly and results-based edge to government policy.

“In the private sector, if you do not produce, you do not eat. We are focused on making things happen and letting our actions speak for themselves,” says Secretary of Finance, Mr Cesar V. Purisima. “The work style of President Aquino is designed for action, not for show. He is really focusing on making sure we are able to execute our programs and ensure optimum performance of cabinet members. Those who do not perform are asked to move on.”

 

“We have streamlined business registration, improved power supply, instituted reforms and issued policies to fight corruption, and established closer coordination between the national and local governments”

President Benigno Aquino III

Mr Purisima recently won the 2011 Emerging Markets Finance Minister of the Year Award for Asia in recognition of his “strong policy track record and steadfast commitment to maintaining economic stability over the past 12 months.” Emerging Markets’ editor Taimur Ahmad said: “Secretary Purisima’s decisive action upon taking office to enforce greater fiscal discipline allowed the economy to grow strongly last year and to insulate it from heightened market sensitivity to sovereign indebtedness.”

President Aquino’s plan, which is often referred to as “Aquinomics”, is underpinned by four pillars: fiscal sustainability, infrastructure, investing in people, and improving the way business is done in the Philippines.

“On the fiscal and the macroeconomic side we are doing very well,” says Mr Purisima. “We are a net creditor country; our reserves are greater than our debt. We are a BOP (Balance of Payments) surplus country: we make more dollars than we spend. Our reserves are on a historical high and the increase in reserves, which has proven to be sustainable, is structural rather than hot money inflows driven by the BPO industry and overseas remittances.”

Investing in its people is of paramount importance: better educated individuals  have higher employment rates and earnings, and produce more relative to those with less education. Therefore, governments have to invest substantial portions of their resources in education with the expectation that benefits will accrue over time, and the Philippines’ government is very anxious to pursue this tack – to have a highly educated workforce going forward.

To improve the country’s infrastructure, the government is targeting public-private partnerships (PPPs) in its bid to become a regional logistics hub. An improved transport network and energy provision would also spur growth in the tourism sector, which has ample room for development given the country’s spectacular natural blessings, and the fact that China’s burgeoning tourist market is virtually next door.

“We have an ambitious PPP program,” says the finance secretary, “but we are making sure we are doing it properly. We have launched the first project already –  a toll road called Daang Hari.”

Additionally, the Philippines is geographically located at the heart of what is expected to be one of the fastest growing regions of the next 20 to 30 years. It is on track to be a part of the ASEAN alliance by 2015, an integrated community of more than 600 million people, boasting a GDP in excess of $1.7 trillion. “We will be the northern and Pacific gateway to ASEAN,” adds Mr. Purisima.

Billionaire Roberto V. Ongpin, president and CEO of ISM Communications and a former Minister of Trade and Industry, has vowed to attract more foreign investment into the country. “I have brought in so much investment into this country, and I will keep doing it,” said Ongpin, who heads five publicly-listed companies. 

Meanwhile, the Philippines’ long-standing relationship with the United States was strengthened in June this year, when Secretary of Foreign Affairs Albert Ferreros del Rosario met with Secretary of State Hillary Clinton.

Mrs Clinton opened the meeting, affirming: “Whether we are working together to combat extremism, help victims of natural disaster, or stand up for human rights, the people of our countries share a vision of a better world and a mutual desire to take action.”

Leading figures in business and politics in the Philippines

Paquito ‘Jojo’ Ochoa Roberto V. Ongpin Cesar V. Purisima Albert Ferreros del Rosario

The Executive Secretary is the highest-ranking official in the current government. The former city administrator of Quezon City, and Aquino family friend, has served as Noynoy’s legal counsel since 1998.


The President and CEO of ISM Communications is a former Minister of Trade and Industry. Ongpin also partly owns holding company Top Frontier which controls a large stake in the San Miguel Corporation.

The current Philippine Secretary of Finance held the same position under the Macapagal-Arroyo government. He also represents the Philippines as a governor in the Asian Development Bank.

The Foreign Affairs Secretary secured US$1.2 billion in U.S. funding in his former role as ambassador. He also has vast business experience, ranging from insurance and banking to telecoms and pharmaceuticals.

Significant moments in history

1861
Jose Rizal Birthday
1898
Independence Day
1986
People Power Revolution
2010
Benigno Aquino III

A Philippine national hero is born. His literary works denounced the conditions of the local population under Spanish rule, inciting revolt against the authorities.


The independence of the Philippine Islands from rule by Spain is declared by revolutionary forces under General Emilio Aguinaldo from his home in Cavite.

The People Power Revolution led by Ninoy and Corazón Aquino triumphs after three years of demonstrations against the fraudulent practices of the Marcos regime.

Benigno Simeon ‘Noynoy’ Cojuangco Aquino III becomes the 15th and current President of the Philippines, succeeding Gloria Macapagal-Arroyo before him.

Comments
Kris T Domingo
Friday, Dec 2nd 2011
Straight path, straight down

It certainly looks like this country has embarked on the “daang matuwid” that President Noynoy Aquino keeps talking about. Only, he never said that the straight path would be the shortest distance between growth and a virtually flatlined economy.
Of course, these days, you never hear the Aquino administration talk about anything except Gloria Macapagal Arroyo. Perhaps Aquino has decided to keep the masses entertained with his antics to get his predecessor jailed, lest they notice really alarming things like how he’s taking us all to economic hell in a hand basket.

Indeed, drowned in the cacophony of the continuing political melodrama that is the unrelenting government effort to put Arroyo behind bars is the sad news that for the fourth straight quarter since Aquino took over the reins, the growth of the Philippines’ gross domestic product has declined. From a high of 8.9 percent in the second quarter last year, the last period of Arroyo’s term that was tracked, the third quarter GDP growth this year registered a critically laid-back, laggardly and lackadaisical 3.4 percent.

The first quarter under Aquino that was tracked (3Q, 2010), GDP growth fell to 7.3 percent. Since then, the growth of the value of goods produced and services rendered in this country has fallen steadily to 6.1 percent, 4.6 percent and this week’s announcement of 3.4 percent.

By comparison, our neighbors—who have suffered from the same global economic slowdown and weaknesses in the economies of the US and Europe that our fiscal managers are blaming for the slowdown—still fared a lot better than we did. Indonesia had 6.5 percent GDP growth, Singapore and Vietnam had identical 6.1 percent and Malaysia had 5.8 percent for the same period.

Even flood-ravaged Thailand, whose economy practically ground to a standstill during the third quarter, when rains started falling in earnest all over that country, recorded 3.5 percent GDP growth. But the Philippines, which cannot really claim the excuse of extreme weather and whose economy is still shielded by the remittances of Filipinos working abroad, somehow managed to end up at the bottom of the pile, nonetheless.

According to top economist Benjamin Diokno, the Philippines “is now looking at a full-year GDP growth of 3.8 percent, much lower than the revised official forecast [4.5 percent] and certainly much lower than the aspirational GDP growth rate of between 7 and 8 percent.” The “sick man of Asia” is still the sickest around—even if you never hear the Aquino administration mention this sad, sad fact.

For the economy to hit the downwardly revised 4.5-percent GDP growth target for 2011, the Philippines must grow 6.9 percent growth in the fourth quarter—a number that not even the most optimistic of Aquino’s economic planners will suggest can be reached. And the 7.1-percent GDP growth in the fourth quarter of 2010, the second that Aquino presided over, seems to have happened so long ago, probably in another country.

Yes, the economy is still performing worse than the government projected even after it was forced to scale down its growth targets. On the bright side—if you can really call it that—Arroyo has been arrested and charged.

You can almost hear Aquino and his palace propagandists call to ratchet up the anti-Arroyo noise, to shout down the bad news that the national economy is the stalling and inexorably failing. Who cares if the economy is going down the toilet, after all, as long as something called the “rule of justice” is served?

* * *

As sure as the national economy is bottoming out – taking the stock market and jobs with it and causing upward spirals in the unemployment picture and the prices of goods—you can count on Aquino’s economic managers to pin the blame on stuff they can’t control for the malaise. This time around, according to Economic Planning Secretary Cayetano Paderanga, these are “[t]he typhoons that caused losses and damage in the agriculture sector, the global economic slowdown amid uncertainties in Europe and weakness of the US economy, and contraction in the construction sector, amid stricter project reviews for public construction projects.”

Also, you can bet that Paderanga and his colleagues will predict that a turnaround will take place in the fourth quarter—despite the presence of no evidence to make such a prediction and their reluctance to even put a number where their mouths are. The economy will rebound, Paderanga said, because of “anticipated higher demand on account of the Yuletide and harvest seasons; a more stable macroeconomy; a broadly steady consumer sentiment; the continued inflows of remittances from Filipinos overseas; the reported higher level of business confidence relative to the previous quarter; and the full implementation of the P72-billion disbursement acceleration program of the government.”

At least Paderanga is still talking about his belief, no matter how shaky, that the economy will actually do a turnaround—perhaps because he has no choice since that is his job. His boss and all other officials of this government have apparently decided to pretend that the latest GDP figures don’t mean anything and that Job Number One is still getting Arroyo in jail.

There is certainly something to be said about doing only the things you have a good chance of actually achieving instead of focusing on problems that you can’t really solve. But that should never apply to the government, even to one that apparently truly believes that poverty will be eliminated (and economic growth will probably be achieved, as if by magic, as well) if it succeeds in jailing a corrupt ex-president.

Right now, all everyone who has not been totally enthralled by the get-Arroyo circus sees is a government that will do anything to achieve one man’s political goals—while forgetting to do everything else it was elected to do, like make national economic growth targets. And no matter how few people there are left who actually believe that government has a responsibility to improve the lives of all Filipinos instead of just exacting political revenge from the sworn enemies of the current rulers, that won’t ever mean that the minority is in the wrong.

But maybe the Filipinos who think that Aquino is expending to much time, money and effort in punishing Arroyo and way too little doing all the other things he was voted into office for aren’t really in the minority. Maybe they’re just too busy trying to make ends meet to enjoy the show that the government is putting on for their benefit, so they don’t see what really should be done but which has been grossly neglected.

So punish Arroyo already. Lock her up in jail and throw away the key.

And then what?

Well, maybe Aquino will find that there’s a lot more to do than what he set out to get done. Only, by then, it will probably be too late to do anything anymore.

http://www.manilastandardtoday.com/insideOpinion.htm?f=2011/november/30/jojorobles.isx&d=2011/november/30
 
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