Speech Before the American Chamber of Commerce of the Philippines

Speech Before the American Chamber of Commerce of the Philippines

November 3, 2021 - If you were in a hospital emergency room - lucid enough to choose between a young, smart-looking and articulate surgeon who had graduated a few years ago and just finished internship – and an unassuming, timid and older-looking surgeon who has tucked under his belt numerous successful surgeries – who would you choose?

Let me answer that question towards the end of my speech.

Executive Director Mr. Ebb Hinchliffe, to the officials and members of this esteemed Chamber, to all the guests joining us today, a pleasant afternoon to everyone.

As we speak, our nation is still struggling to defeat the coronavirus pandemic with so much uncertainty. Our economic charts show how this health crisis took an excessive toll on the Philippine economy, as our Gross Domestic Product fell by a record 9.6% in 2020.

While signs of recovery may have been felt this year, 2021, with the availability of the vaccines, we know for a fact that this pandemic will leave deep and long-lasting scars remarkably in a developing economy like ours.

Our obvious failure to insulate our economy from the pandemic-induced recession has turned off our major economic drivers — particularly foreign and local investors. In fact, based on the 2020 World Bank Ease of Doing Business report, we are worse compared to our neighboring economies. We ranked 13th out of 14 Asia-Pacific (APAC) economies in our Foreign Direct Investment attractiveness scorecard. While our economic advisers trumpet positive projections, foreign experts see that the country’s projected gross domestic product (GDP) in 2025 will still be lower than its pre-pandemic forecasts.

Unfortunately for us – the pandemic, worsened by greed and incompetence of some has reversed our significant economic gains in recent years, and magnified the already intrinsic problems that we face as a country: bad economy, corruption of incorrigible proportions, instability of peace and order, joblessness, poverty and hunger, not to mention our ballooning national debt and our maritime disputes in the West Philippine Sea.

Just a couple of days ago, I presented before the Financial Executives Institute of the Philippines, or FINEX and the Federation of Filipino Chinese Chambers of Commerce and Industry Inc. my Economic Roadmap, which carries concrete, realistic, practical, and sensible reforms that will be our key in steering our nation to recovery. It is thus an honor for me to be able to share with you all my proposed strategies which are built on people's trust: trust that we can heal our economic scars; trust that we can shield our people from the existing brunt of the pandemic; trust that our economic policies can win back our hope as a nation and can withstand the test of time.

Healthy people, healthy economy — this is the battlecry of our platform of government in the new normal. Suffice to say that the call of our times has changed our perspective of “progress” from mere economic growth to the barest minimum requirement of recovering from our losses due to the pandemic. I say this with certitude: there is no trade-off between health and economy. These two facets serve as our lifeline as a nation in the years to come.

Hence, I present a “Future-proof Strategy” in the New Normal. Our steps moving forward must be clear, realistic, and adaptable to our state as a nation. It builds on the concepts of responsiveness to where we are most vulnerable, and data-driven knowledge of what lies ahead to ensure that our strategy remains practical and applicable to withstand future threats brought about by the evolving conditions of the ‘new normal’.

In future-proofing our health sector, we must first and foremost depart from our reactive response to the impact of this health crisis which is driven by “pandemic politics” — one that perpetuates unconscionable opportunism at the most damaging time of our lives.

Hence, there must be a proactive and coordinated response—putting to the frontlines our local government units and private enterprises. These sectors are able, and most importantly — willing to take on the herculean task of pulling us out of this crisis. The national government must rally and mobilize vaccination campaigns led by LGUs and the private sector especially in hard-to-reach and high-risk populations. With this partnership, we can guarantee the widest coverage — similar to our present government-funded immunization programs for polio, measles, and extra-pulmonary tuberculosis, among others.

We will make this possible by ensuring that the Universal Healthcare Act will not only look good on paper but one that actually serves its purpose -- healthcare coverage to all Filipinos. Hence, we will fully fund the requirement of the “high-cost” stage of the Universal Healthcare Act to cover all barangays, subsidize Philhealth Premiums for all especially for indirect contributory populations, and ensure optimal benefits for healthcare workers.

We must not let another budget year pass with insufficient funding for UHC implementation— as in our case in the last three years since the passage of the law.

We are at a point where the vicious “on-off, off-on” lockdowns hurt us more than it helps. The National Economic and Development Authority has estimated the costs of COVID-19 and the quarantines for the present and future generations at 41.4 trillion pesos. We shed 20.5 billion pesos per day when the government placed under ECQ the National Capital Region (NCR) and its neighboring regions.

To prevent another closure of the economy, our containment strategies must be intensified, institutionalized and normalized. Contact tracing, testing, and treatment – at zero cost to the public – should be our anchor to our future-proof economic agenda.

The pandemic-induced recession has magnified the already burdensome day-to-day living of an ordinary Filipino. Full scale job losses, inflation of prices, and spike of poverty incidence have put us into a financial panic.

But we must not fall trap into our economic distress. Economist John Keynes’ discipline taught us that the government must be the spender of last resort. It has to pump money on the economic engine to keep the wheels rolling -- until such time when the people are ready and confident enough to step in the economic wagon.

Spend as the government must - but the key here is judicious spending to benefit those who need it most, not a well-connected few who rake in large profits through overpricing and ghost or under delivery.

As we already know by now, next year, the national debt is projected to reach 13.42 trillion pesos. Credit watchers are already flagging our status due to our soaring debt-to-GDP ratio and widening deficit, thus even exacerbating our slow pace of economic recovery from the pandemic whip.

It thereby goes without saying the need to undertake comprehensive reform programs to prime the fundamental drivers of economic growth.

More than ever, we have to intensify our mutual cooperative efforts with partners and allies in the Asia Pacific Region to maintain the balance of power in the West Philippine Sea -- our strategic maritime pathway to free, open and inclusive commerce. Our Mutual Defense Treaty with the United States of America remains in force, serving as our country’s potent yet untapped weapon in our arsenal. Other foreign military powers have expressed willingness, either openly or during our conversations with their diplomats - to provide and maintain that balance of power.

This also entails laying the groundwork to address business hurdles in our legislation. These efforts will boost our competitiveness to encourage foreign direct investments and leverage its trickle-down effect of more employment opportunities for our people.

Enough with overregulation of businesses and corporations—as this practice, when it goes beyond our competition policy, has no place in modern and civilized society especially now that we need to encourage foreign investments and attract more capital inflow in the Philippines.

My economic agenda hence commits to ensuring that economic reforms will not only pass our legislative mill but actually reboot our economy. Two months ago, the Senate passed on third reading our Foreign Direct Investment Act which puts our country in a more competitive edge for foreign players. Our amendments to the 30-year-old Foreign Investment Act of 1991 so we can leverage our Regional Comprehensive Economic Partnership with other key economies and make us an attractive market for foreign capital.

Our thrust must be on robust economic measures that can substantially impact our global competitiveness.

Of equal weight, we could not turn our heads away from the fate of our micro, small and medium enterprises or MSMEs comprising 99.5% of all enterprises and 63.2% of the labor force, which took the first blow last year because of the implementation of widespread community lockdowns.

To cure this bleeding, we must push for recovery start-ups through comprehensive and targeted fiscal stimulus packages, implement eviction and foreclosure moratoriums and employee-retention tax credits to aid our businesses in reopening and staying afloat.

It is likewise incumbent upon us to resolve poor incentives to local enterprises I could not help but be reminded of the ill fate of a local entrepreneur who invested 200 million pesos to retool his equipment to help produce face masks early last year, only to be shortchanged later by no less than his own government, courtesy of the DBM Procurement Service when it favored expensive face masks through wheeling and dealing and favored Chinese traders. As if adding salt to an already open wound, these traders duped us by evading tax obligations. Displaying their arrogance, they had the gall to purchase pricey luxury cars.

Moving forward, our goal is to unceasingly create jobs so our people can go back to work. One idea is to utilize Cash-for-Work Mechanisms by encouraging public-private partnerships. This we can do by tapping the corporate social responsibility arms of corporations, in pursuing initiatives to provide cash payments under 'decent work' conditions to enable our people to get back on their feet.

My proposal is to also capitalize on our able and talented youth sector who have the potential to drive our economy. I am pushing for a paid internship program where poor and deserving college undergraduates, even junior and senior high school students can undergo paid internships in government offices, as well as in private corporations and businesses, in order to maximize their skills development and productivity. This can improve the country’s very low 31% growth mindset among the 15-18 year-old segments of our young population.

Along with this, we will provide a social safety net especially for those who are pushed to the brink. In large part, we must reinvent our Conditional Cash Transfer also known as the 4Ps with the overarching principle that every Filipino should bridge the poverty line with a sustainable livelihood or employment opportunities, instead of permanently relying on dole-outs.

My economic agenda also puts forward a bold vision of improving our country’s tax administration to pump up our revenue collection. I have long been proposing the cross-referencing of data between and among our major revenue collecting agencies and the other relevant government agencies like the Land Transportation Office, Land Registration Authority, Securities and Exchange Commission and the Department of Trade and Industry to plug our tax collection leakages.

In my long years as a public servant, I have always looked up to captains of business and industry, like most of you, in driving the economic stability and growth of our country. We could really take off from what we have learned from successful business corporations in terms of efficient and strategic management to shepherd our way to recovery.

You and I would agree that our economic ills are largely hinged on the tradition of political corruption. What we endure is the bankruptcy of our bureaucracy, where government spending is wasteful and unnecessary and departs from our priorities, resists change, and sticks to its old ways.

More than ever, we must reinvent our government. We should depart from the “more of the same” mentality. It is time to discipline the bureaucracy and fix government to treat the business sector as partners in economic growth and development, instead of competitors.

Even before this health crisis, I have been vocal in my advocacy to boost the digitalization of Government Processes, as automation and interoperability in government agencies will be key in improving the efficiency of our business transactions, raising our revenue collections, and ultimately minimizing, if not totally eradicating corruption in all levels of our bureaucracy. To this end, I will guarantee a historic increase of budget infusion for our research and development efforts which now stands at a ridiculously pitiful share of 0.4% of the national budget.

As I have consistently stood for in all the years that I have been diligently scrutinizing the expenditure program of the national government, I saw the need to re-allocate the national budget to provide adequate resources commensurate with the mandated functions of our LGUs. A meaningful devolution not only on paper, but the actual downloading of functions and fair share of budgetary resources to the Local Government Units, including capacity building interventions to make them competitive, especially those municipalities in the 5th and 6th class categories. This is the essence of my advocacy program called the Budget Reform Advocacy for Village Empowerment (BRAVE).

Moreover, it is time to shift from the age-old practice of imposing a budget ceiling for the national agencies to work on - to a zero-based budget planning as a takeoff from the best practices of big private corporations in implementing a bottom-up approach in budgeting to address the actual needs and priorities of our local government units. This is our budget reform to improve the delivery of basic services, creating employment opportunities, and improving the lives of our people, especially in the disadvantaged, far-flung communities. A bonus outcome of this approach is decongestion of a few highly urbanized metropolitan areas best exemplified by Metro Manila and Metro Cebu. If only the government commits to providing greater equity in resource allocation, trusting the LGUs as the National Government’s partners for development but with greater accountability in fiscal management, in due time, the culture of mendicancy and patronage politics will be a thing of the past.

As we are about to traverse the crossroads of these trying times, we are in dire need of leadership by example – one that breaks away from the politics of double standards, double-speak, and lip service and stands for the rule of law, inclusiveness, transparency, and accountability – the very tenets of good governance.

In all my 50 years in public service, I have consistently adhered to a personal credo: what is right must be kept right, and what is wrong must be set right.

Now, going back to my opening question, let me answer it this way: Between Senate President Sotto, my vice-presidential candidate and me are 83 years of government service experience, including 42 years of legislative work as senators of the Republic. Ladies and gentlemen, the country is in a state of emergency. We are capable enough and ready to perform the surgery.

Again, I thank you all for this opportunity. Mabuhay tayong lahat!

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