THE PEN| It’s the economy, my friend

QUESTIONED by members of the press on how the administration intends to sustain the economic gains the country has achieved so far, President Aquino replied that the solution does not lie in extending his term. The Chief Executive’s answer was quite unexpected considering that the query was not a political but an economic one.

This was perhaps the President’s indirect way of getting the message across to both critics and allies that he was no longer interested in seeking a second term.  This should be music to the ears of those in the administration who are seeking the President’ endorsement come 2016, while on the other hand, douse cold water on those who insist that the P-Noy is bent on extending his term despite the dire consequences this might lead to.

But going back to the question of how to sustain the gains the nation has achieved under the Aquino Government, here are some recommendations which we think can help the administration achieve its vision for the country.

Invest more in infrastructure. Undoubtedly, putting in place much needed infrastructure will be the key in increasing the nation’s global competitiveness. As we know, infrastructure is one of the first things that foreign investors consider when planning to set up operations offshore. This is what American businessman and development planner Peter Wallace, a longtime resident of the Philippines, has been pointing out. With less than two years remaining, the Aquino administration should therefore ramp up infrastructure spending to improve the country’s airports and seaports which are the gateways to international markets. With the looming ASEAN integration in 2015, the country must demonstrate its capability to handle increased trade and commercial inflow. By having highly efficient and well-equipped airports and seaports, the nation will be able to show that it is indeed ready for the big time. Equal attention must also be given by national government in building more and better infrastructure in the countryside such as farm to market roads, bridges and irrigation facilities. Being an agriculture based economy, the country’s farmers need all the help they can get from the government to boost their productivity, and at the same time, gain access to local and international markets. For instance, a well paved road connecting a hinterland vegetable production area to markets in the town center will result to lower transport costs, and consequently, higher incomes.

Engage the private sector. The private sector has long been considered as one of the country’s main engines of growth. Being such, the government must find ways to strengthen its collaboration with this  sector so that they are on the same page, so to speak, and enable the country to move forward and achieve its development objectives. The administration must reach out to members of the private sector – the business community in particular – and solicit their views as to how to create a more vibrant and conducive trade and investment climate. In terms of policy formulation, the private sector must not be left out and should be actively involved in the planning process. Its members clearly understand what needs to be done to improve all aspects of the production value chain. In today’s globalized markets, efficiency is the key and those who are unable to meet stringent international standards will be left biting the dust. The government, through regional development councils, could solicit proposals as to how the private sector can leverage its resources and create more economic opportunities for local residents. Producer associations and business support organizations should likewise be strengthened by providing them greater access to credit to enable them to expand, while offering them other forms of technical assistance to upgrade the capabilities of their membership. As the saying goes “Think global, act local.” By strengthening local economies, pockets of growth are created, which consequently, generates a ripple effect and leads to more sustainable development.

Make the peace process more inclusive. The Aquino administration has taken major strides in pushing forward the peace process in Mindanao. The signing of the Framework agreement on the Bangsamoro (FAB) finally ended decades of armed hostilities between the government and the Moro Islamic Liberation Front (MILF). With the submission of the Bangsamoro Basic Law (BBL) to Congress, there is now a greater sense of hope that genuine peace and long lasting development is within Mindanao’s reach.  However, Mindanao’s quest for peace is still confronting major challenges. The BBL will be put under the microscope by our legislators who will be deliberating on the proposed law’s provisions. As expected, our lawmakers will be training their eyes on the law’s perceived loopholes, particularly those which they feel go against the provisions of the Philippine Constitution. We anticipate some of our congressmen to take this as an opportunity to play to the gallery and push forward their personal political agendas, though this can be minimized, if not avoided, if the House leadership  manages to tow the line and stick to the heart of the discussions. Congress intends to conduct at least 32 public hearings across the country in order to consult the public and obtain their insights on the BBL, which highlights the desire of the government to make the process as transparent and consultative as possible. Though it is doubtful that Congress will be able to complete the scheduled hearings and approve the draft basic law within the year based on its self-imposed deadline, the public consultations will be critical for the Aquino Administration which is seeking to muster all the support it can get in order to pave the way for the formal establishment of a Bangsamoro political entity before the President’s term ends in 2016.

Decisively address the country’s power situation.  Last year, Mindanao suffered one of the worst power shortages in recent history. Though the power crisis lasted for only a few months, the repercussions to the island-region’s economy were enormous: a marked decrease in Mindanao’s production output, significant loses for commercial and manufacturing companies, and a steep rise in power costs, which impact heavily on the Mindanao people’s way of life. This situation worried local and foreign investors who were looking at setting up operations in the region and in a way, reduced the viability of Mindanao as a potential trade and investment location. Though the power situation in Mindanao has since stabilized, there are urgent calls for the government to review its policy agenda for the country’s power sector. Among the major recommendations made by the private sector is for the government to amend the Electric Power Industry Reform Act (EPIRA) of 2001. After 13 years since the implementation of R.A. 9136 under the administration of Gloria Macacapagal-Arroyo, the law has not been able to truly fulfill its goal of providing a more stable power supply, create a more level playing field among industry players, and bring down electricity rates. Experts, however, argue that amending the EPIRA is not the only feasible proposition. Instead, they suggest that the Aquino Administration focus on “doables” which specifically focus on actually improving the delivery of services to the consumer. These proposals include opening the power generation market to honest-to-goodness competition and putting an end to “sweetheart” deals with big-ticket players, wherein the Energy Regulatory Commission (ERC) can issue a resolution requiring competitive bidding for all power supply contracts. The ERC can also establish a more transparent and responsive rate setting mechanism for computing system loses which are ultimately passed on to the consumer. Moreover, the Commission should create the conditions for more competitive bidding in the procurement of assets by distribution utilities in order to discourage overpricing on the rate base. On the part of the Department of Energy (DOE), it can put in place more safeguards that will prevent manipulation in the Wholesale Electricity Spot Market (WESM).

The Aquino Administration can certainly do all of these if it has the political will and the iron-clad resolve to build a brighter future for the nation’s people.

Posted in Opinion