MANILA, Philippines — We continue with final Sunday’s “Filipino Vision for Recovery” with endless extracts from a book authored by Dr. Bernardo Malvar Villegas of a University of Asia and a Pacific. Take it or leave it, Dr. Bernie’s observations, recommendations, and conclusions consecrate an lawful mercantile record of where a nation has been in a past 30 years and a vital directions Filipinos contingency now take in sequence to recover, replenish and remodel – and thus, achieve a improved future.
Competitiveness in a 21st Century
Dr. Villegas wrote:
“The Philippines, as a supposed ‘Tiger Cub’ of a mid-1990s, mislaid small of a shine during a Asian banking predicament precipitated by a Thai baht devaluation in July, 1997.
“Thanks to sound mercantile fundamentals, a Philippines in 1997-1998 valid pundits wrong by progressing double-digit expansion rates of exports and investments, while gripping acceleration during 5%-6%.
“The Philippine economy significantly differed from Thailand’s in vital aspects:
“(1) While Thailand grew during a speed of 8%-10% annually over some-more than a decade, causing overheating, a Philippines gifted assuage expansion of 6%-7% in a final dual years.
“(2) Thailand’s ability to boost exports and attract FDI was exceedingly curtailed by shortages of educated/skilled manpower. In a 1990s, believe workers – accountants, engineers, mechanism analysts, English-speaking secretaries, etc. – were few and distant between, causing salaries to skyrocket. In contrast, a Philippines enjoyed a vast pool of believe workers.
“(3) The Thai financial village went on lending sprees to a genuine estate zone which, in turn, heavily invested in thousands of unsellable office/residential condominiums. Philippine banks – carrying advantage of early warning – singular realty loans to reduction than 20% of their portfolios. There was no risk of froth ripping in a genuine estate zone whose industrial parks, mass housing units, tourism estates, and blurb centers were in good demand.
“The biggest captivate of a Philippines is a contentment of rarely prepared and learned manpower – who are culturally variable to operative with tellurian corporations. Other rising markets – China, Vietnam, Thailand, Indonesia, and Malaysia – were pang vicious shortages of proficient manpower, generally in center management.
“Because of a deficiency of short-term mercantile threats to a Philippines, investors, CEOs, and entrepreneurs were means to concentration on formulation for longer periods.
Strategies for small-medium enterprises
“SMEs played a vital purpose in a globalization of Philippine industries. As Harvard highbrow Michael Porter celebrated in his ‘Competitive Advantage of Nations,’ a essential means for competitiveness is a participation of support industries related together in value bondage to assure world-class output. Highly rival industries in Italy, for example, include of SME clusters in leather goods, footwear, ceramics, marble products, and jewelry.
“In this light, we inspire some-more private and supervision efforts to build on existent clusters of industries in valuables (Bulacan), timber products (Laguna), and panoply (Batangas), among others.
“Professional managers who retire early given of downsizing programs should demeanour for entrepreneurial opportunities in former employers’ needs for services and products. In short, new entrepreneurs can lapse to do business with restructured companies as suppliers and subcontractors.
“In 1997, a Philippines had a second top expansion of exports in East Asia, subsequent usually to Vietnam whose low trade bottom generally explains a large 30% boost in trade growth. The Philippines increasing a exports by 15% or some-more yearly given 1993.
“Such a trend indicates a success of FVR’s mercantile reforms that transposed import-substitution policies. The creeping debasement of a peso-dollar rate, and relocation of knowledge-intensive industries to a Philippines can means annual trade expansion during 20% or some-more in entrance years.
“Regarding GDP, a Philippines is approaching to post assuage expansion in 1997, still behind some Southeast Asian neighbors. But, expansion of 6% will give a nation some respirating space to erect much-needed infrastructures – generally water, telecoms, seaports, airports, and roads.
“The Philippines can outperform such ‘tiger economies’ as Hongkong and Taiwan.
Roots of mercantile recovery
“To know how tolerable a ongoing liberation can be in a subsequent 5 years, it is inestimable to inspect a factors behind a success story of FVR’s governance and mercantile turnaround.
“The present means of liberation is, but doubt, a array of market-friendly policies introduced by a Ramos Administration. In a 1980s, a Philippine economy incited sick, essentially given of self-inflicted mistreat from erring mercantile policies: a lethal multiple of ‘mercantilism’ (or supervision control of unfamiliar trade), State interventionism, and protectionism.
“Other factors such as oil shocks, corruption, and healthy disasters were aggravating circumstances. These delegate factors influenced other East Asian countries in identical degrees but stopping their fast mercantile growth.
“The question, however, still remains: how was FVR means to request a antidotes of deregulation, privatization, and liberalization some-more effectively than prior Philippine Presidents?
“What can be attributed to FVR’s possess personal qualities and what were a formula of auspicious circumstances?
Marcos and Cory
“Despite a reform-oriented technocrats of Marcos (like Cesar Virata), small was achieved in combating mercantilism, protectionism, and State interventionism given Marcos authorised friends/relatives to control pivotal mercantile sectors, and commanded manners bearing associate enterprises.
“As absolved firms started to destroy in a issue of a debt predicament of a mid-80s, Marcos systematic his technocrats to bail out unsettled companies or modify them into State companies by large injections of money/credit, so precipitating hyperinflation and vital devaluation. In short, a common good was sacrificed for a advantage of a few.
“What about a Cory Administration? Why wasn’t she means to use her clever mass support to effectively exercise indispensable mercantile reforms? The doctrine that stands out is that even her best-laid skeleton couldn’t yield tolerable growth in a meridian of domestic instability.
“The unhappy law was that President Cory was too dreaming in combating 9 attempted coups to have been means to concentration on market-oriented reforms. She spent most of her appetite and a resources of supervision in tackling a change of a nonconformist revolutionary and rightist groups, as good as a Mindanao rebels.
“Precisely given of her steady efforts to win behind a masses by reinstituting approved institutions and practices, she was means to palm over a politically-stable multitude to her successor. When FVR took office, he had a singular event of concentrating on mercantile movement programs: elucidate a appetite crisis; deregulating pivotal sectors like unfamiliar exchange, telecoms, banking, transportation, etc.; opening adult to unfamiliar investors; liberalizing imports; and privatizing non-performing supervision holdings.
“The domestic fortitude achieved during a finish of Cory’s tenure was a required condition for a successful implanting of mercantile reforms.
Winning congressional support
“Ramos can be credited with mustering a suitable domestic skills to cobble together understanding Congressional coalitions, notwithstanding carrying been inaugurated with a slight plurality.
“It might be remarkable that FVR had a same frank regard for a common good that Cory had, and a domestic savvy of Marcos. Probably given of his supervision knowledge and bearing to domestic realities, FVR showed larger calm and resilience in traffic with politicians of all colors and beliefs than Cory, who was formidable with normal types.
“Both Cory and FVR were means to gain on a comparatively clever polite multitude that a Philippines had grown from decades of democratization (no matter how imperfect). Such sectors as a giveaway press, proffer organizations, church-related associations, and trade groups played vital roles underneath both Administrations in fostering accord in an atmosphere of honesty on a appropriateness of reforms.
“It is this rarely grown polite society, rather than a domestic complement itself, that was both a means and outcome of stability democratization – starting in 1898 when we became a initial Asian nation to chuck out a colonial master.”
Challenge to incoming presidents
Dr. Villegas concludes:
“The plea to destiny Presidents is to continue building on a foundations of a clever polite multitude as a partner of a comparatively diseased State in a office of tolerable tellurian growth – but succumbing to a enticement of neglecting required reforms.
“FILIPINOS DESERVE A MORE EFFICIENT, EFFECTIVE, AND HONEST GOVERNMENT AS THEY MOVE TO THE NEXT MILLENNIUM.”
PAGKAIN/TRABAHO/KALUSUGAN (OR BREAD-JOBS-HEALTH) ISSUES ARE STILL PARAMOUNT AMONG FILIPINOS. PULSE ASIA PROVIDES PROOF OF OUR PEOPLE’S OPINIONS. IN ITS LATEST SURVEY REPORT (10 JAN), 40% OF RESPONDENTS BELIEVE OUR ECONOMY DETERIORATED LAST YEAR.
WE ARE NOW INTO THE 12TH YEAR OF THE “NEW” MILLENNIUM, WITH STILL 88 YEARS TO GO TO THE NEXT, BUT BARELY 3 YEARS LEFT TO FULFILL THE U.N.’S MILLENNIUM DEVELOPMENT GOALS OF FIGHTING POVERTY, DELIVERING HEALTH, PROVIDING JUSTICE, AND SUSTAINING DEVELOPMENT.
THE ADB IN ITS 2011 STUDY, “ASIA 2050,” PREDICTS THE PHILIPPINES MAY NOT YET EMERGE FROM THE THIRD WORLD BY THAT TIME (2050) — FOR VARIOUS REASONS.
CONCERNED FILIPINOS, HOWEVER, BELIEVE THE PHILIPPINES CAN DO BETTER AND SOONER THAN ADB’S DIRE PREDICTIONS – BECAUSE THE U.N. HAD RANKED OUR NATION HIGHER BEFORE.
TIME NOW FOR INCLUSIVENESS: GREATER UNITY, SOLIDARITY AND TEAMWORK. ASK BERNIE VILLEGAS.
Please send any comments to fvr@rpdev.org. Copies of articles are accessible during www.rpdev.org.
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