(Part 2)

In my experience in the formulation of the Vision of an enterprise or organization, already found latent in the words of the Vision are some directives for strategy formulation. This is clear in the subsequent elaboration of the AmBisyon Natin 2040 found in the National Economic and Development Authority (NEDA) document. Under the heading of “Realizing the AmBisyon,” it clearly states that all sectors of society, whether public or private, should direct their efforts towards creating opportunities for Filipinos to enjoy a “matatag, maginhawa, at panatag na buhay” (a strongly rooted, comfortable, and secure life).

There is already a clear reference to a strategic move to reach the vision through a specific form of governance, which we can call the social market economy. The Government is given a specific role, which has to do with the use of “fiscal, monetary and regulatory policies” in attaining the AmBisyon. All sectors of society, however, are enjoined to also be actively involved in achieving the goals of development in all its dimensions: economic, human and physical capital, social and cultural. There is no question of proposing a completely free market or untrammeled free enterprise system.

Economic growth itself is not the priority. Economic growth must be relevant, inclusive, and sustainable. This echoes the Mission statement that we recommended above (in Part 1). More specifically, it states that over the next 18 years (until 2040) per capita income must increase by at least three-fold. This can be attained if GDP can increase at an average of 6 to 7% during this period. More than the increase in income, economic growth must progressively improve the quality of life of the majority of Filipinos. In fact, I would even go to the extent of saying that economic growth must improve the quality of life of each and every Filipino citizen. The common good is not the greater good for the greater number. That is an erroneous pragmatic principle of some so-called democratic societies under which an erroneous majority can tyrannize a minority. To avoid this, the common good should be defined as a social or juridical order which enables every single person in a given society to attain her or his fullest integral human development.

There are already clear guidelines on a specific regulatory role the Government should play, starting with implementing a more effective competition policy. It is stated that AmBisyon can be partly achieved by having competitive enterprises that offer quality goods and services at affordable prices. A way of achieving this, for example, is to allow more foreign investments in telecommunications and transport services, especially railways, in which existing monopolies have led to inefficiencies and high prices of service to the consumers. Government must encourage investment in key sectors by improving market linkages (for example, by sustaining the Build, Build, Build program); simplifying government procedures (for example, by digitalizing government services); appropriate human capital development, science, technology and innovation (for example, increasing the public budget for education to 6% of GDP from its present 3%). Except for the increase in the education budget, all the suggested strategic moves above have actually already been adopted by the Duterte Administration. What the next Government has to do is to build on the accomplishments of the previous one and go further down the road. For example, the next Government must make sure that the law opening up telecom and transport infrastructures is not only passed but implemented as aggressively as possible, despite some continuing objections from the so-called “nationalists.”

AmBisyon Natin 2040 identifies the sectors that we can call strategic, those that are most crucial in attaining the Vision articulated by the representatives of the Filipino people. These sectors are as follows:

1.) Housing and urban development, which comprise construction, construction-related manufacturing (such as steel), house development-related manufacturing, and utilities (electricity, gas, water);

2.) Manufacturing (food processing, housing-related (e.g., furniture), construction-related (e.g., cement), transport manufacturing (e.g., motorcycles), and other manufacturing (e.g., semiconductor components);

3.) Connectivity (roads and bridges, ports, airports, vehicles, transport systems, and communication);

4.) Education services (formal, non-formal and informal education);

5.) Tourism and allied services (resort, rest-recreation hotels; accommodation, travel and tour services, cultural shows, heritage and pilgrimage sites, etc.;

6.) Agriculture (farming and fisheries, commercial and industrial crops, biotechnology, etc.);

7.) Health and wellness services (primary, secondary and tertiary care, pharmaceuticals, wellness facilities, sports and fitness facilities, etc.); and,

8.) Financial services (consumer financing, enterprise financing and insurance savings mobilization).

In keeping with the Mission statement that growth must be both sustainable and inclusive, the Vision articulated in AmBisyon Natin 2040 stipulates that economic growth should be broad-based across sectors and regions. The attainment of the highest per capita income possible should be subordinated to a more equitable distribution of income and wealth. We should learn from what is now happening in China. Despite the phenomenal per capita income growth rates (double digit in the 1980s and 1990s), and the significant reduction in poverty incidence (now almost close to zero), there exists a tremendous gap between the rich and the poor which is threatening social stability in China today. The Chinese leaders, led by Xi Jing Ping, are trying their best to narrow the extreme gap between the rich and the poor among the population. Using the technical language of economists, even if the poverty incidence is close to zero (i.e., extreme poverty has been eradicated), the GINI co-efficient (which measures how unequal the distribution of income is at any given time) can still be very high (close to 1.0). A GINI co-efficient closer to zero means a more equitable distribution of income.

The bad news for those who will be at the helm of the Philippine Government starting the second half of 2022 is that the poverty rate rose to 23.7 % in the first half of 2021 from 16.2 % in 2019. I would surmise that after Typhoon Odette destroyed property and lives in the ending weeks of 2021, poverty incidence could have risen even higher by the end of 2021. Obviously, as NEDA Director General Karl Chua observed, as more economic sectors reopen and rebound with less stringent restrictions on movement of people and goods as population immunity to COVID-19 increases, lower poverty rates can be achieved during the last weeks of 2021 and the first quarter of 2022. In addition to allowing market forces to energize the national and regional economies, however, there should be direct strategic interventions of the Government to address poverty, which in the coming months should be focused on rural and agricultural development.

Those who are running for elective positions in May 2022 would do well to read a recent document issued by Dr. Jesus Estanislao, former Secretary of Finance and Founder of the University of Asia and the Pacific. In a paper entitled “A Perspective on Dream PH: Philippines 2040s, Let Us Get There,” Dr. Estanislao reminds all Filipinos that in the decade of the 2040s, we shall be celebrating the centennial of Philippine democracy in 2046. Today would be the proper time to take stock of where we shall be with respect to the Philippines we have been dreaming about since 1946, and even during previous decades before we gained our independence. During the election period leading up to May 2022, we shall have many opportunities to evaluate our past, our current challenges, and the immediate, practical issues we urgently need to address as a result of the crisis in which we find ourselves. As we become more deeply aware of the radical changes (we cannot aspire to just return to what was normal before the pandemic) we need to pursue, we should ask ourselves: how do we get those radical changes undertaken and delivered? The political debates engendered by the election campaigns should help us to do a lot of soul-searching on what type of transformation we need to go through as a people so we can build the Philippines we all want for all Filipinos.

(To be continued.)

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia