A new year is always cause for celebration. It makes us look forward to many things, but it also reminds us to make good use of the lessons we learned in the past.
The year 2022 saw the reopening of our economy after the pandemic-induced lockdowns, which were harrowing for our people on many levels. But in the year just past, for the first time in nearly three years, we were able to live with a semblance of normalcy — even holding official events, holiday gatherings, and family reunions face-to-face again. To be sure, COVID-19 is still very much around and remains a risk to our people and economy. Still, owing to a good percentage of vaccination among our people, the cases have been milder, and we realize the virus is something we all must live with.
We remember it was the private sector that played a pivotal role in bringing vaccines to the people, especially in the beginning. This is just an example of the sector’s capacity — and willingness — to help in the things that matter to our people. And to think that these business enterprises did more than their share despite being unfairly demonized by the then-administration instead of focusing on the dynamics of problems, harnessing expert guidance, and pursuing strategic solutions and reforms.
Under the new administration of President Ferdinand Marcos, Jr., however, there appears to be a renewed and sustained interest by the government in partnering with the private sector. This is crucial since while we are seeing the first few signs of recovery from the ravages of the pandemic, the situation remains volatile. Business sentiment slipped to 23.9% in October 2022 from 26.1% the previous quarter, according to the Bangko Sentral ng Pilipinas. Consumer confidence also took a hit, sliding even further to -14.6% from -12.9% the previous quarter.
Filipinos are acutely aware of the crucial role of the private sector in accelerating growth. In a September 2022 survey by Pulse Asia, 86% of respondents agreed that the private sector does have this crucial role. Likewise, 89% of respondents nationwide agree that the government and the private sector should engage in partnerships to sustain economic recovery.
The same survey revealed that Filipinos have a good idea of the areas private investors can address to boost the economy. In a question where respondents could pick up to three answers, 69% cited creating jobs, 65% said helping uplift the lives of Filipinos out of poverty, and 49% pointed to expanding livelihood opportunities.
Meanwhile, a survey undertaken by PwC and the Management Association of the Philippines in September sought to find out what CEOs believe to be factors that would delay the Philippine economy. The top answer of 67% of the chief executives surveyed was corruption.
These surveys, both among ordinary Filipinos across the country and among CEOs of top business organizations, all point to the need for a robust and proactive policy to attract capital not only from foreigners but also from domestic investors. The pandemic revealed our economy’s vulnerable areas, and continuing issues such as Russia’s invasion of Ukraine and high prices of agricultural produce tell us in no uncertain terms that more needs to be done to make the Philippine economy resilient to whatever blows and external disruptions that may occur.
Good governance is always key to fostering an investment friendly environment. Aside from this, we at Stratbase have been advocating the reinvigoration of our manufacturing sector that specifically caters to the domestic market. This would be good for the economy on several levels. Foremost, it will significantly narrow our trade deficit, because we would lessen the need to import goods for consumption here in the country. Second, it would create jobs and other opportunities for the population, providing them income security, alleviating poverty, and revitalizing consumer spending.
For this to materialize, there need to be serious policy and governance reforms. The government needs to provide greater support to domestic investors via incentives, and to address issues such as the unstable supply and high cost of electricity, and ease of doing business. The latter continues to be difficult and uneven as bureaucratic and regulatory concerns at both the local and national levels could often seem like roadblocks.
Other areas for reform include providing local businesses access to raw materials such as wheat, sugar, salt, corn, and coffee. The Agriculture and Trade and Industry departments remain focused on safeguards based on outdated data instead of current supply and demand information and trends. Trade facilitation at the level of the Bureau of Customs and the Philippine Ports Authority must also be addressed.
Micro, small, and medium enterprises should be given greater access to capital so that they could fill the gap in producing raw materials and other components in certain sectors. Finally, the government must also help develop and upgrade the skills of workers.
We believe that what the NEDA (National Economic and Development Authority) outlined as the six cross-cutting strategies of digitalization, connectivity, leveraging the role of the private sector, “servicification,” technology, innovation, and the inclusion of local governments as an equal in the country’s development agenda would do much to advance the entire economy.
It was only year 2022 that ended — not our problems and challenges. We look to our government leaders to set the tone and pace for engaging different stakeholders so that we can effectively address the lingering issues brought about not only by the pandemic but by a myriad of threats from all around us.
We will be closely watching the big and small decisions that our leaders make — these would indicate their seriousness and sincerity in making the lives of our people better. At the same time, we will always be ready to do our part wherever we can be most helpful, just like the private sector has always done.
We look forward to the rest of this new year, driven by hope and guided by the hard lessons of multiple crises of these times.
Happy New Year to everybody.
Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.
