DAVAO CITY—Incoming Finance Secretary Carlos G. Dominguez has challenged the business community to build with Government wide-reaching “coalitions for change” as the linchpin of an out-of-the-box, public-private partnership that would enable the country’s growth streak to continue and finally benefit the Filipino majority, most especially those on society’s fringes.
Addressing over 300 business leaders on Day 1 of the two-day consultation workshop at the SMX Convention Center here, Dominguez said both private and public sectors need to jointly build reform coalitions behind the 10-point socio-economic agenda of incoming President Duterte, in keeping with his electoral mandate for peace and order plus inclusive growth.
Dominguez, who convened this meeting ahead of Mr. Duterte’s formal assumption of the presidency on Thursday (June 30) next week, at the same time called on the business sector to help the next Administration draw up the new and correct metrics or standards to later on measure whether Government has been meeting its socio-economic targets and, more importantly, whether such have been beneficial to poor and low-income families.
“I challenge the business community to build coalitions for change in every sphere of our social life,” Dominguez told delegates to the two-day event dubbed the “Sulong: HakbangTungosaKaunlaran” consultative workshop.
Dominguez, who had served as secretary of Environment and Natural Resources (DENR) and, later, of the Department of Agriculture (DA), called on the business leaders to “build public-private partnerships not just for projects but to transform our national community into a cooperative enterprise that brings out the best in everyone and delivers the best for all.”
“The way our voters chose last May 9 was not just to install a president,” he said. “It is to change the way we do things as a nation. It is a patriotic call to start building a truly 21st century society where citizens trust their institutions and consumers trust producers. It is a society of Shared Value where each one benefits from the excellence of the other.”
“The macroeconomic numbers, however, do not tell the whole story,” Dominguez said. “Our people did not vote for change last May 9 because the macroeconomic numbers are good. They voted for change because the good macroeconomic numbers did not translate into a good life for all.”
Said Dominguez: “We need new metrics to understand how economic expansion could be made more meaningful for the majority of Filipinos. It is not enough to say the economy is growing. We have to develop measures that will show us how that economic growth converts into a more livable life for our people. This is how change should be charted from hereon.”
Hence, he said, “I propose today that we start building coalitions for reform. We need to radically transform the way we do things so that economic growth does not translate into further entrenching the oligarchy; so that when we do things more efficiently, the majority benefits from the values created; so that when government performs better, the consumer benefits in the end.”
For all Filipinos to truly benefit from the country’s nascent economic gains, Dominguez said both the government and the private sector would have to jettison their traditional mindsets and radically change the ways they do business and deal with or serve our people.
CONTINUE BUT OVERHAUL
On the part of Government, Dominguez said the incoming Duterte presidency would continue with the sound macroeconomic policies that have allowed the economy to grow under the current administration, but would overhaul the policies and systems that have barred an overwhelming majority of Filipinos from partaking of such benefits.
This would require sweeping reforms from the incoming government, he said, ranging from much higher public spending on human and physical capital to improve living standards to tougher law enforcement that would make our homes and streets safe anew.
Against this backdrop, he said the incoming government would pursue “an environment that would be good for business” by, among others, leveling the playing field, carrying out investor-friendly initiatives, ridding the bureaucracy of graft and inertia, and freeing government agencies from “regulatory capture.”
For its part, the business community needs to deliver too on this new public-private partnership over the next six years, said Dominguez as he expressed hopes that the business leaders attending the consultation meeting could craft ways on how they could do their part by the end of this two-day workshop.
“We cannot transform government without transforming the community,” Dominguez said. “We cannot evolve a rules-based economy without a rules-based ethos for the whole community. We cannot have good governance in the public sector without good governance in the private sector.”
“Over the next six years, we should transform the national economy in ways that will bring not only social peace but also communities that nurture our people,” he said. “This will require accomplishing the goals outlined in the 10-point program.”
Dominguez said, “The new administration will move away from the chronic under-spending we have seen the past few years. We will invest in building the infrastructure necessary to make us a 21st century economy: from modernizing our ports to improving our logistical spine to ensuring reliable and cheap power for all the islands.”
He expressed the hope that with the two-day dialogue, the public and private sectors could jointly start refining the reforms that would be put in place over the next six years. “From the onset, let me assure you that the new administration will be guided by what is best for the nation,” he said.
“We seek your counsel as stakeholders in this nation’s progress, as we will the counsel of other stakeholders: those who own nothing in their name but whose capacity for hope rests precariously on the opportunities public policy is able to create,” he told the participants.
According to Dominguez, the tasks of the Department of Finance (DOF) —which he will head — in the incoming Administration rests on the following prepositions:
• Raising the money government requires to operate and invest in social goods such as infrastructure, health facilities and quality educational institutions.
“Raising the means for government to do what it must, however, ought to avoid deepening inequality and denying our citizens their right to make economic decisions for their own benefit.”
• Ensuring the sustainability of the government’s financial affairs.
“While we might seek financing to secure economic opportunities for our people, we must also manage the national debt so that it does not become a drag on our growth.” and
• Playing a key role in making the country’s economic growth more inclusive.
“This can be achieved by: rethinking our investments incentives; reconfiguring our taxation system to build a robust middle class; and, reinventing our trade and tariff policies so that we may take advantage of free trade without sacrificing the development of our industries,” he said.
He recalled that the incoming Duterte administration last month outlined an 8-point program that has now been expanded into a 10-point socio-economic program designed for sustained high—and inclusive—growth.
Dominguez noted that the 10 planks of this socioeconomic agenda were not plucked from thin air, but were actually culled from the advocacies that Mr. Duterte had raised in the course of the three-month presidential campaign season.
“This economic program should reassure the public that the new leadership will basically continue the macro-economic policies that brought our economy to a higher growth plane in the last decade,” he said. “These policies, anchored on fiscal conservatism, worked down the national debt as a percentage of GDP and brought predictability to the markets, produced impressive growth rates.“
However, the comparatively high growth did not sufficiently disperse economic opportunity nor substantially reduce poverty,” he said. “This pattern of high growth fueled by widening income disparity is unsustainable. It has produced great disillusionment among the people. It has made our national economy seem harsh to those who work hard and earn so little.”
To correct this situation, he said the new administration will “push forward the development of rural areas to generate more job opportunities in the countryside. This will involve modernizing our agriculture and encouraging agribusinesses to generate higher value added products. Farming should no longer be the poverty trap it has been for generations.”
He said the new administration will “push forward with the challenging task of bureaucratic reform. With these, we hope to improve on the ease of doing business. More important, we want a bureaucracy that is most responsive to the needs of our citizens.”
“Our economy can move to a higher growth plane,” Dominguez said. “To achieve that, we need a bolder pump-priming plan that will initially involve allowing more headroom for deficit spending. Two decades of fiscal consolidation finds us with a manageable debt service level and investment grade ratings. There is room for more audacious economic policy-making.”
Added Dominguez: “I can assure you the incoming economic management team will neither be timid nor shy. The people expect us to deliver not only peace and order but also an economy that is truly inclusive.”
Following is incoming President Duterte’s 10-point socio-economic agenda for inclusive growth:
1. Continue and maintain current macroeconomic policies, including fiscal, monetary, and trade policies;
2. Institute progressive tax reform and more effective tax collection, indexing taxes to inflation. A tax reform package will be submitted to Congress by September 2016;
3. Increase competitiveness and the ease of doing business. This effort will draw upon successful models used to attract business to local cities (e.g., Davao), and pursue the relaxation of the Constitutional restrictions on foreign ownership, except as regards land ownership, in order to attract foreign direct investment;
4. Accelerate annual infrastructure spending to account for 5% of GDP, with Public-Private Partnerships playing a key role;
5. Promote rural and value chain development toward increasing agricultural and rural enterprise productivity and rural tourism;
6. Ensure security of land tenure to encourage investments, and address bottlenecks in land management and titling agencies;
7. Invest in human capital development, including health and education systems, and match skills and training to meet the demand of businesses and the private sector;
8. Promote science, technology, and the creative arts to enhance innovation and creative capacity towards self-sustaining, inclusive development;
9. Improve social protection programs, including the government’s Conditional Cash Transfer program, to protect the poor against instability and economic shocks; and
10. Strengthen implementation of the Responsible Parenthood and Reproductive Health Law to enable especially poor couples to make informed choices on financial and family planning.
