‘Big, bold reforms’ pushed

Last Friday, members of the Marcos administration’s economic team led by Finance Secretary Frederick Go stood in front of some 300 representatives from the country’s largest corporations, industry associations as well as the diplomatic sector to present a list of “big, bold reforms” that they are committed to pursue to “strengthen good governance and drive sustainable development.”

During the rare gathering, Cabinet officials and heads of key government agencies provided the movers and shakers of the business community with concrete updates on reform priorities and strategic initiatives that they hoped would inspire the private sector to get off the sidelines and ramp-up investments.

“We convened this briefing to deliver some good news—the big, bold reforms we are pursuing, anchored on our solid long-term economic fundamentals—to inspire optimism, encourage greater investment, and move forward with confidence after the extraordinary year that just passed,” Go said in his keynote speech.

Earning warm applause during the dialog, for instance, were the grant of the 14-day, visa-free entry for Chinese citizens traveling through the Manila and Cebu airports for business or leisure and the restoration of P4.32-billion funding for the Comprehensive Automotive Resurgence Strategy program.

Letters of authority

Also eliciting cheers was the promised overhaul of the tax audit system of the Bureau of Internal Revenue so that the letters of authority to audit individuals, businesses and institutions will be solely used to go after tax cheats and not as weapons of mass extortion.

The audience also eagerly listened to the presentation of the Department of Public Works and Highways that has been at the center of the widening corruption probe that has caused public spending to plunge and economic growth along with it.

Public Works Secretary Vince Dizon committed to jump-start spending with first quarter disbursements for, among others, basic road and bridge maintenance projects and the completion of stalled projects expected to come up to P250 billion.

The heads of the departments of Transportation, Energy, Tourism, Agriculture, and Agrarian Reform, meanwhile, laid out respective infrastructure investment and catch-up plans and reforms in the tourism and agriculture sectors.

The Department of Trade and Industry, Board of Investments, and the Department of Information and Communications Technology likewise shared their ongoing plans to attract high-impact, job-generating investments and accelerate digital transformation to contribute to economic growth.

Significant drop

Then finally the Securities and Exchange Commission, Food and Drug Administration, Philippine Competition Commission, and the Department of Environment and Natural Resources disclosed their respective programs to cut red tape and make it easier for investors to do business in the Philippines, especially in light of competition posed by neighboring countries that also want to attract big-ticket investments.

From all accounts, the private sector leaders appreciated what they heard from the top government officials but even Dizon admitted in a briefing on the sidelines of the high-level dialog that these leaders remained “cautiously optimistic” about the reform agenda, perhaps even outright cynical, dismissing them as nothing new.

Go and the rest of the economic team, however, hope that by presenting a united front and publicly committing to the reform agenda to the private sector, they are getting the message across at the start of a new year to do what it will take to shore up confidence that has been severely battered by the flood control and infrastructure corruption scandal. This after President Marcos divulged questionable flood control projects in July last year.

These concerns have spilled over to the private sector, causing them to hold back on investments and, combined with the significant drop in public spending, pulled down economic growth in the third quarter to a mere 4 percent, its slowest pace in over four years.

Lofty promises

Bangko Sentral ng Pilipinas Gov. Eli M. Remolona Jr., however, said that last year’s crisis “can be the jolt we need to pursue the bold reforms we want.”

Pessimism may be setting in but nevertheless, economists see these “big, bold reforms” as a step in the right direction, and it is now incumbent on the Marcos administration to ensure that these lofty promises will be kept, starting this make-or-break year seen to decide whether the Philippines will regain lost ground or suffer further setbacks.

According to Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., the government’s next move should be simple.

“Treat the private sector as a real partner, cut friction, honor contracts, and make decisions faster. If we create a stable and reliable environment, capital will follow—and that’s how we bring real life back into the economy,” he added.

Otherwise, the landmark gathering will go down as a cordial three-hour exercise with little to show for it.

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