Inclusive Growth or Equality in Poverty?

By Romeo L. Bernardo

Posted on April 17, 2017

There goes the neighborhood, literally.

This was my half joking Facebook post reacting to the news item “Kadamay to call for nationwide distribution of idle housing units.”

Reactions from Foundation for Economic Freedom friends include: “What happened next was so predictable” to “occupy Forbes Park!” and many echoing the warnings from Senators Gordon and Trillanes of mob rule that may be unleashed. When the state is perceived to be powerless, it courts contempt, incentivizes extortion, and puts us on the road to deepening disregard for the rule of law, eventually, anarchy.

We have seen this story of populism leading to “equality in poverty” play out in Maoist China, until Deng Xiao Peng introduced market based reform and opened up China (see column of Professor Raul Fabella, “Which way will Duterte turn, BusinessWorld, April 3, 2017). Also, more recently, Chavez’s impoverishment of Venezuela.

Instead, we should be striving for inclusive growth, as envisioned in Ambisyon 2040 -- a long-term plan (work in progress) initiated by former NEDA secretaries and UP Economics Professors Arsenio Balisacan and Emmanuel Esguerra. This is being given life in this administration by its core economic team. Indeed even before they assumed office, President Duterte’s 10-point economic agenda went in this direction of aiming to eradicate poverty in one generation. Rule of law, including respect for property rights, underpins most of its elements. “Item zero,” the President’s self-authored insertion is “Peace and order, including the fight against criminality (per Secretary Ernesto Pernia ).”

Within the term of this administration, poverty is targeted to be reduced from 21.6% now to 14% by 2022. Some six million Filipinos uplifted from poverty. The essential first step towards this is a highly progressive tax reform program being championed by Secretary Dominguez. The program reshapes the tax system, making it fairer, simpler and less prone to evasion and corruption while at the same time raising the additional revenues to fund the “golden age for infrastructure” and direct social spending for health, education, and social services.

It’s about time that our Congress leadership display for this administration’s key legislation, the same kind of energy and urgency which amazed all with the House of Representative’s passage in record time of the flawed and suspicious two-tiered tobacco excise tax bill.

Reverting to the subject of the Kadamay occupation of public housing, the NHA is among the agencies under Sec. Evasco that is tasked with social spending. Under his leadership, we look forward to more strategic interventions in addressing the mass housing problem.

We await similar well-thought through policies there as in his reorienting NFA away from corruption-prone rice monopoly. As well-documented in researches by the Philippine Institute for Development Studies, the World Bank, and others, this has only led to huge waste in public resources and high cost of rice, contributing to poverty, malnutrition, and wage uncompetitiveness.

(Please see just released statement by the Foundation for Economic Freedom by visiting this link http://bit.ly/FEFonFB.)

Tribute to honorable Victor C. Macalincag, Public Servant, Patriot, Mentor
Ninong Vic was an outstanding public servant -- competent, dedicated, hard-working, bright, and scrupulously honest.

He is best remembered for his service to the Department of Finance. When Prime Minister Virata’s biography by Dr. Gerry Sicat was launched, Vic said of PM: “Reading his biography, one is tempted to conclude that in a different setting and stable political environment, and despite restrictive provisions in our laws, his economic management and policy prescriptions and strategies could have placed the Philippines not far behind South Korea, Singapore, Taiwan, and Hong Kong.”

The Prime Minister, on the other hand, upon receiving the Japanese Emperor’s award of the Order of the Rising Sun, credited his colleagues at the DoF. Ninong Vic was the steady and reliable hand for PM, managing and nurturing the DoF Planning Service into a center of excellence supporting the tremendous demands on PM Virata, particularly when he was National Treasurer during the very trying debt crisis years that hit the Philippines in the early ’80s.

He was the youngest undersecretary appointed during his time (and certainly the best looking according to one First Lady), one of a handful in government who was asked to continue as Usec even after the tumultuous change in administration with the EDSA revolution.

I was privileged to have started my professional career under his mentorship. My then girlfriend Amina (who was a Researcher in the Planning Service), realizing that I was better suited for the DoF, arranged for an interview. Vic and I hit it off and I have not regretted a single minute of my career with the DoF. Vic nurtured and mentored us, his staff: current Usecs National Treasurer Lea de Leon, former NEDA Sec. Manny Esguerra, former Philguarantee COO Jane Tambanillo, Banking Executive Cynthia Paras-Santos, my better half Amina, and many many others.

Together with former Rey Palmiery (later GSIS COO) and Nitz Amatong (later DoF Sec and member of the Monetary Board), Vic ran a Planning Service which was the envy of many of the Prime Minister’s colleagues.

As proof, successive Finance secretaries have accepted the DoF technical staff, grateful for their committed service. I remember the late Jimmy Ongpin remarking to me that he never realized how good government people were until he became Finance secretary and got to know his technical team. Vic, and later Finance Secretary Ernest Leung, were his trusted undersecretaries.

His influence extended to our counterparts in BSP, NEDA, DBM, line agencies. Many of them, young technicians at that time, have risen to Cabinet and sub cabinet levels (Gov. Say Tetangco, Sec. Emy Boncodin, to name just two.)

Vic invested in us. He made sure that we got scholarships abroad to hone our skills. He also invested in us emotionally, such that several of us asked him and Remy to be our ninong and ninang when we got married. Our ties did not end when we left the service. Ninong Vic would invite us for get-togethers regularly.

I’ve come to appreciate the enormous influence he’s had on my own career. His standards were high. Ninong Vic set a high bar in dedication, integrity, simplicity, and modesty in public service, a standard he shares with Prime Minister Virata and Ninang Remy. Values he brought with him in retirement. Thus, after he retired from government, he was much sought after as a director of major corporations.

I had the privilege of working with him on a couple of projects recently. I was not surprised that none of his sharpness, putting 100% on any task, enthusiasm, and yes, sense of humor, had been diluted with the passage of years.

He has taken to hosting us every Christmas, all of his young boys and girls, now senior citizens ourselves. This Christmas will be a most sad one.

Romeo L. Bernardo is a board director of the Institute for Development and Econometric Analysis. He was undersecretary of Finance during Corazon Aquino and Fidel Ramos administrations.