45 years of constructive ideas

The Makati Business Club (MBC) celebrated its 45th anniversary last week. It’s an opportune time to reflect on the past and, more importantly, chart a course for the future.

MBC was established in October 1981 by a small group of businessmen to create a voice for the Philippine business community. MBC’s vision was to serve as a “Forum for Constructive Ideas,” speaking out on socioeconomic issues and recommending solutions. Its founders were progressive chief executive officers who had the national interest at heart, and it was built on constructive engagement and collaboration with the government and civil society. It believed that the business sector had a role to play in national development and that business growth contributed to it.

MBC stood for good governance, transparency, democracy, honesty in government, and an open economy. We were formed in and lived through interesting times. In 1981, martial law had just been officially lifted, and the Philippines conducted a presidential “election.” However, large segments of the economy were still controlled by monopolies, the government, or the government’s friends (cronies). These included telecommunications, aviation, power, water, the coconut, sugar, and rice industries, and broadcast and print media, among others. There was also a large government corporate sector. Politically, the communist and secessionist movements were on the rise, and political opposition was tightly controlled. With the assassination of Sen. Benigno ”Ninoy” Aquino on Aug. 21, 1983, social tensions rose and the economy deteriorated quickly. The country was described as a “social volcano,” and the economy contracted by an average of 5 percent a year in 1984 and 1985.

In this milieu, MBC spoke out on economic and social issues. MBC’s main thrust was (and continues to be) for open markets and liberalization. Over the years, it has supported trade and investment liberalization, lower tariffs, the breakup of monopolies, the reduction of the government’s corporate sector, more competition, and an end to “crony capitalism.” Over time, these monopolies were broken up. MBC also supported oil price deregulation, the lifting of foreign exchange controls, the privatization of government assets, and public-private partnerships for infrastructure.

Many of these policy measures required enactment into law. MBC supported key legislation such as the Foreign Investment Act, Foreign Banking Act, Retail Trade Liberalization Act, Department of Energy Act, Central Monetary Authority Act, E-Commerce Act, and the Build-Operate-Transfer Act, among others. These policy and legislative changes led to the opening up of the economy, introduced more competition in the market, and created better public services.

On the social front, MBC pushed for the strengthening of the education, health, and agriculture sectors while expressing concern that the Agrarian Reform Act was targeted toward “land for the landless” rather than “land for farmers” and that it lacked agricultural credit and other supports.

MBC believed that a liberalized economy worked best in the context of a democracy and the rule of law. MBC supported moves toward the return of free, fair, and honest elections, the independence of the judiciary, judicial reforms, and freedom of the press. MBC was an early supporter of Namfrel and the concept of election monitoring and parallel counts.

MBC was deeply engaged in good governance efforts. It managed Project CongressWatch, as well as the Transparent Accountable Governance project and the Coalition Against Corruption, both later succeeded by the Integrity Initiative. We also joined the textbook deliveries project with the Department of Education and the medicine deliveries project with the Department of Health to ensure accountability in public spending.

Many of the conditions of that time persist today. While we have seen many improvements in the economy, we have not been able to sustain consistent performance across the eight administrations that have held office over this period. We lag behind in global competitiveness rankings in the Association of Southeast Asian Nations. Governance remains a challenge, and corruption has arguably worsened.

For these reasons, MBC remains as relevant today as when it was established 45 years ago. Though some conditions have changed, many issues remain the same. New and more complex issues have also appeared. Moving forward, a new form of collaboration between the private sector, civil society, and the government must be created and institutionalized to address the many deep-seated and existential problems we face as a country.