Not quite arangkada
January 28, 2012 at 11:41
This is a re-posted opinion piece.
In December 2010, the Joint Foreign Chambers sponsored the publication of Arangkada Philippines, a 470-page document containing 471 recommendations that investors believed could help the economy grow twice as fast.
Arangkada (accelerate) 2010 also cited sectors that offered the best prospects for growth: agribusiness, business process outsourcing, creative industries, infrastructure, logistics, mining, manufacturing, and tourism, medical travel and retirement.
One year later, over 50 experts from the private sector, including senior consultants, former senior public sector officials, senior business executives and academics evaluated progress on the recommendations.
The result is the First Anniversary Assessment, which was unveiled yesterday.
John Forbes, principal author of Arangkada and senior advisor of the American Chamber of Commerce of the Philippines, told me yesterday that implementation of the recommendations “is well underway.”
“We expect to see investment and job creation results start to kick in,” he told me.
Investors appear to be generally bullish for 2012 despite underwhelming progress in several areas last year.
A bleak area was foreign direct investment, where the Philippines continued to lag behind most of its Asian neighbors. The government missed its FDI target in 2011 and is likely to miss it again this year. Foreign investors have greeted the private-public partnership or PPP initiative – once touted as a flagship program of the P-Noy administration – with a giant yawn.
“We decelerated instead of moving twice as fast,” observed Hubert d’Aboville, president of the European Chamber of Commerce of the Philippines, referring to FDI. “Definitely we have to accelerate.”
D’Aboville, a Frenchman who has established roots in the Philippines, said the country should be getting about $7.5 billion in FDI annually. Figures for 2011, however, indicate only $850 million.
One can understand if French investors shy away from the Philippines these days. Two major French contracts have been put on ice by the Aquino administration. To be separately undertaken by two of the largest French conglomerates, the contracts are under review by the Department of Transportation and Communications (DOTC).
One contract was approved not by Gloria Macapagal-Arroyo but by President Aquino’s first DOTC chief, Jose de Jesus. New DOTC Secretary Mar Roxas probably felt every deal in his department could use a review. But if the shelf life of business contracts depends on the stay in office of a Cabinet member, you can’t expect investors to come rushing in. Especially when we have neighbors that can guarantee more stable investment environments and incentives.
Low FDI means fewer job opportunities. We can’t deploy our workers overseas forever, especially with the global economy in a slump.
P-Noy, who has often said one of his long-term goals is to bring back Filipinos working overseas, may want to go over the progress report on Arangkada Philippines. If he read the original report, it should take him only about an hour to go over the assessment.
* * *
Those who evaluated the progress used a six-star rating system. One star means the recommendation is no longer relevant. Two means the recommendation has moved backward or regressed. Three means it’s not ongoing. Four means movement has started. Five means substantial progress while six means it’s completed.
I didn’t notice any six stars. The P-Noy administration got five stars on progress in legislation affecting BPOs, such as bills on cybercrime and the creation of a separate department for information and communication technology. But it got two stars for inaction on bills rationalizing holidays, and for belatedly declaring the Chinese New Year a non-working holiday without first consulting business. Investors have often complained that the declaration of non-working days at the drop of a hat wreaked havoc on their business plans and projections.
The government received several four stars in the fight against corruption – P-Noy’s focus – in terms of prosecution, public sector procurement, and reining in expenditures of government-owned or controlled corporations. But P-Noy still received three stars – or no movement – in cutting red tape, civil service reforms, and smuggling.
No movement was also seen in the JFC’s push for full convergence in telecommunications and in several areas of mining. P-Noy has sent mixed signals about mining, citing the sector as a major economic growth area but unable to reconcile this with his policies on environmental protection.
His government received two stars, or regression, in terms of security for investors, with the New People’s Army’s attack on mining operations in Surigao del Norte last October specifically cited. Investors, according to the assessment report, remained concerned about NPA extortion, terrorism and other security threats.
In other areas, the government received four stars in several aspects of agribusiness, and an average of three-and-a-half stars in various aspects of manufacturing.
Four stars were given for promoting greater utilization of the international ports in Subic and Batangas. Investors have pointed out that the Batangas port is operating at only 1 percent of its capacity and Subic, 5 percent. Last year feeder connections to Batangas were launched from Singapore going out to Hong Kong and Kaoshiung in China.
Progress has been slower in the expansion or construction of other ports and airports nationwide.
Overall the outlook is still positive for 2012, so P-Noy shouldn’t hesitate to go over the assessment report. The star ratings won’t ruin his day entirely, although the underlying message might:
“A lot more hard work remains ahead,” Forbes said.
==============================================================================
By: Ana Marie Pamintuan, Sketches
Source: The Philippine Star, Jan. 27, 2012
To view the original article, click here.
