This year’s election comes at a most challenging time.
The new coronavirus disease2019 (COVID-19) pandemic and the Ukraine-Russia war hounding the economy add to the jitters of investors faced with the anxiety associated with the change in administration.
Months before the handover to a new leadership, three major economic were passed into law and should buoy investor confidence moving forward. But the fruits of these reforms have to wait until a new administration is installed.
“Hopefully the next administration would benefit from all these major economic reforms that we have prepared for them. We planted the seeds of reforms. Hopefully we see the fruits in the next administration. We want them to perform better than this administration,” said Trade Secretary Ramon Lopez in a television interview last week.
Lopez dubbed the Retail Trade Liberalization Act, Foreign Service Act and Public Service Act as game-changing economic reforms that will encourage more investors, introduce more competition in the local industry and provide better quality of services and lower prices for the consumers.
Biggest challenge
Finance Secretary Carlos Dominguez said the economy has to grow faster than 6 percent every year over the next five to six years for the country to “grow out of the debt,” incurred for pandemic response: a staggering P12.68 trillion to be inherited by the next administration.
At the recent celebration of the DOF’s 125th anniversary, Dominguez said there is still much to be done in the remaining two months of the Duterte presidency: finalizing a comprehensive fiscal consolidation and resource mobilization plan for the next administration to ease the transition and keep the momentum of the economic recovery from the pandemic.
For Lopez, the Department of Trade and Industry expects the next administration to continue to build on the successes that will lead to the steady recovery: 5.7 percent GDP in 2021; annual average of $9.1 billion in foreign direct investments the last five years, the reopening up of all sectors due to lower alert levels in most areas.
For trade and industry, Lopez said he hopes the next administration would continue to pursue the modernization of production system that will support local producers in agriculture, industry and services; development of new sectors like creatives and electric vehicles; and provision of skills training for big and small companies.
“We just have to continue all these policies and programs that will upgrade industry and agriculture,” he added.
Continuity
The business community will support whoever wins in the national elections but wants to see continuity and stability of policies.
To this, Lopez said, ease of doing business should be pursued vigorously by streamlining and automating government processes.
“These should be the priority for the next administration and more importantly, they should not reverse the economic reforms that we have established and tested,” Lopez said.
Joey Concepcion, presidential adviser for entrepreneurship, said the next president “must resist the temptation to reinvent the wheel and risk reversing our gains in our fight against COVID-19.” “This is true both on the national and the local level… What the country needs most at this point is continuity and a steady hand at the wheel. Our duty as citizens is to respect the process. We cannot continue to be divided at this point. When we go in different directions, nobody wins,” Concepcion said in a statement.
George Barcelon, president of the Philippine Chamber of Commerce and Industry, said the group has come up with “REACH OUT, ” an acronym on its wish list for the new administration which, among other things, calls for the new leaders to put in place business-oriented key officials in government, particularly for the economic team — Department of Finance, Department of Trade and Industry, National Economic and Development Authority, and Department of Labor and Employment.
“We need a good economic team,” Barcelon said, noting the new administration will face many problems including a high inflation and uncertainties caused by the Russia – Ukraine war.
Betting on PH
For Astro del Castillo, First Grade Finance Inc. managing director, coupled with the ongoing pandemic which restricts capital flow, encouraging investors to bet in the growth story of the Philippines will be one major hurdles of the next president.
But Del Castillo said the next government can take advantage of the major reforms which “have opened the floodgates” of investor interest for the Philippines.
“(But) We’re still weak in manufacturing, exports remain weak, and even food production is still low – (These things) are a stumbling block to growth,” said del Castillo.
Castillo said the next administration also needs to address is how to prop up government revenue to finance the country’s mounting debt, which limits the government’s space for more borrowings. – Irma Isip, Angela Celis and Ruelle Castro
