Top experts share their insights on how the Philippines and businesses can speed up the country’s economic recovery, grow further, and build a more inclusive and sustainable future for all
Asian Development Bank
The pace of the Philippines’ economic recovery this year shows remarkable resilience, with the country’s growth among the fastest in the Asia-Pacific region. We expect the economy to reach its pre-pandemic level in the third quarter this year, and continue its solid expansionary phase going forward. We project growth for the Philippines of at least 6.5% in 2022, thereby returning to its ideal rate of growth over the medium term. Sustaining economic growth above 6% for the next six years requires maintaining infrastructure investments above 5% of gross domestic product, and continuing improvements in the investment framework to attract quality investments, both domestic and foreign.
New growth opportunities are emerging in information technology, renewable energy, logistics and in agriculture. Further investments in technical and vocational skills and education are critically important for preparing Filipinos to maximize the benefits from these opportunities. Climate change will pose major challenges to the Philippines’ growth trajectory, and therefore green investments in climate mitigation, adaptation and conservation are needed.
The government’s 8-point socioeconomic agenda recognizes these opportunities and the challenges ahead, and well places the Philippines to address them and sustain high and inclusive economic growth for the next six years and beyond.
Philippines Country Director
Asian Development Bank
Bangko Sentral ng Pilipinas
The Bangko Sentral ng Pilipinas (BSP), together with the national government, is committed to bringing the economy back to its pre-pandemic growth level.
On our part, BSP is determined to help sustain economic recovery by creating an appropriate, growth-enabling and growth-enhancing macroeconomic environment through its three pillars of price stability, financial stability, and safe and efficient payments and settlements system. By successfully fulfilling its three core mandates, the BSP can help create the conditions conducive to economic growth. Nurturing the economy, including addressing inequality and resource distribution, is not the direct mandate of the central bank but a by-product of doing its three duties — and doing these well. That said, we will endeavor to do so, mindful of the risks from developments both locally and globally.
As we remain vigilant against risks to the inflation outlook. We will also carefully coordinate with other government agencies in implementing non-monetary interventions, so as to mitigate the impact of persistent supply-side factors on inflation.
We will continue to craft banking policies and regulations that would help ensure that the Philippines’ financial system continues to be sound and stable. We are aware of the key role that MSMEs (micro, small and medium enterprises) play in propelling growth at the grassroots, so we will continue to develop policies that will address their needs, as the country continues to lift itself from the deep impact of the pandemic.
Financial inclusion and the digitalization of financial services are also important to our economy as they enable more Filipinos to reap the benefits of economic growth. As such, we will foster an environment where financial innovation would be safe and responsive to the needs across sectors of the economy.
Against this backdrop of creating a growth-enabling macro environment, the BSP believes the county will achieve a faster, sustainable and inclusive economic recovery as we focus on key areas including:
- Strengthening the health-care system. The government needs to craft long-term plans and strategies for the healthcare system so that it will emerge from the crisis stronger than before. It should foster closer public-private collaboration to bring about innovations in the health sector and further develop the country’s health-care infrastructure. In addition, it should increase investments in human capital, particularly in doctors, nurses, and other health-care professionals. The universal health-care system must be overhauled. The use of digital and IT systems must be promoted to make health services readily available, particularly in remote areas.
- Modernizing and boosting agriculture. Low labor productivity has plagued the agriculture sector due to inefficient production methods and low investments in the sector. Also, government funding to agriculture must be increased but should be well targeted to sub-sectors and goods that have comparative advantage. Modernizing agriculture will require upgrading R&D, investing in new and climate-smart technologies, and providing the right incentives for farmers and agricultural workers to increase productivity.
- Promoting manufacturing through sound industrial policy. Sound industrial policy focuses on innovation and new technologies at the national and regional levels. The government can promote manufacturing by supporting sectors that have strong backward and forward linkages. Manufacturers that have high labor absorption, especially those that can provide opportunities for less educated workers, must also be adequately supported. This industrial policy should also foster closer academe-private sector collaboration to maximize commercial returns to innovations resulting from R&D.
- Accelerating information technology and digitization. Faster adoption of technologies should increase productivity in the industrial sectors, including manufacturing, power, mining, oil and gas, and agriculture. These technologies exploit improvements in data collection, computing power, and connectivity. They include internet of things (IoT), advanced analytics, robotics, automation, and advanced engineering techniques like 3-D printing. Various programs can be implemented to help MSMEs benefit from these new technologies faster. One-stop platforms and training programs could also be created to ease the transformation of these businesses in areas like targeted marketing, consumer behavior insights, logistics, and procurement
- Preparing for a blended and hybrid educational system. Covid-19 derailed efforts to improve the quality of education. Significant investments in blended learning must be made such that the most essential learning competencies are highlighted. A curriculum review towards rationalizing and strengthening the K-12 and tertiary programs must also be done. Investment in teachers’ training and professional development must also be increased. Collaboration of community, school, parents, and learners in school improvement plans and governance must be fostered.
Dr. Felipe M. Medalla
Bangko Sentral ng Pilipinas
International Finance Corporation
The Philippines, like most countries in the region, is slowly starting to recover from the impacts of COVID-19. The latest estimates by the World Bank show the economy grew 8.3% in the first quarter. Despite favorable economic conditions ahead, the reality is the needs of the Philippines still greatly exceed the government’s financial capacity. Just as in other countries, billions of dollars in private finance will be needed to bridge the country’s gaps in infrastructure and connectivity and improve its resilience to climate change.
So, to move forward faster towards a better Philippines, the private sector can help create a digital economy far more accessible to people through improved infrastructure and digital platforms. The Philippines is home to over 73 million internet users. The country needs a significant number of new towers and data centers to keep up with rapidly increasing network capacity requirements. Shared infrastructure will be key in addressing this need. It can be done. IFC just partnered with a new tower company, CREI Phils. Inc. to build 600 new towers by next year to be shared on an open-access basis, a first for a telco company in the Philippines.
Let’s also make it easier for small businesses to access digital platforms. The pandemic has shown us digital tools are crucial for micro, small, and medium enterprises (MSMEs) to thrive and survive. Growsari, an IFC client, is part of this digital transformation by providing sari-sari stores with e-services including telco loads, bills pay, e-commerce and wifi, allowing store owners to maximize their capital and easily expand their business. GrowSari’s platform also generates crucial data and insights into the stores’ operations while providing affordable, on-demand inventory and working capital loans.
Clearly, the private sector will also be vital in helping move towards a better country by bringing in the financing needed to meet other challenges, such as with infrastructure and health.
But an overarching need is to work together to meet the financing needs to tackle climate change. It’s not just a job for government. The private sector and financial institutions play a crucial role in aligning and transitioning their business to support the country’s climate goals.
IFC has played a big role in creating a market for sustainable finance in the country, not only through the issuance of the first green bond, but also in helping the Bangko Sentral ng Pilipinas (BSP) become a member of the Sustainable Banking Network, to support the BSP in promoting good governance and effective risk management among Philippine banks. IFC also helped the country’s largest private bank, BDO Unibank, to issue its first blue bond, with proceeds to tackle marine pollution and preserve clean water resources.
For securing the Philippines’ future, there’s clearly a need to keep up the momentum. Ahead of COP27, IFC will stage a climate finance forum in September, bringing together global and industry experts to promote green lending and climate investment opportunities. It’s part of an IFC initiative to encourage banks in the Philippines, Egypt, Mexico, and South Africa to boost climate lending.
There is a lot of ground to cover, with zero time to waste. But we know securing a more inclusive and sustainable future for the Philippines will only be possible by drawing on the innovation and financing of the private sector.
Country Manager for the Philippines
International Finance Corporation
The pandemic has reversed decades of progress made in the fight against poverty. It has also brought in a “new normal” that is detrimental to the poor: more difficult access to healthcare, setbacks in educating our children in a remote set-up, risks to our environment and, the limited access of families to clean water and sanitation. COVID-19 worsened inequalities and exposed the precarity being faced by millions of Filipinos in the fringes of society.
As we pave the way to sustainable recovery, it is vital that we align our collective actions with the Philippine Development Plan and the UN Agenda 2030 to achieve the 17 Sustainable Development Goals (SDGs).
The 17 SDGs are integrated — that is, action in one SDG will affect outcomes in others, and that development must balance social, economic and environmental sustainability. The 2030 Agenda puts forward targets to recreate a world where NO ONE lives in extreme poverty. Where there is no inequality. Where we use our resources wisely and sustainably. Where we do not continue to degrade our environment. Where our governments are accountable to the people and the people are accountable to the planet we live in. The SDGs are far more than inspirations or words of good intent. They provide a guide for action in the key areas where countries, including the Philippines, will have to invest in order to move forward better after years of battling a pandemic.
Government plays a critical role to set a clear polies that can create an enabling environment for the Global Goals. They play a major role in shaping where and how resources are used. It is possible to avoid the waste, inefficiency, and corruption that ambiguous and contradictory policies – such as fossil fuel subsidies – encourage today.
The private sector, undoubtedly, also makes a significant contribution towards pandemic recovery and achieving the SDGs. By being “greener,” they can create:
MORE JOBS: Approximately 380 million jobs can be created, 90% of these are in developing countries
MORE OPPORTUNITIES: $12 trillion worth of market opportunities can be opened with sustainable business models
MORE VALUE: 2-3x growth compared to average GDP growth over the next 10-15 years
Mobilizing investment and an action agenda towards delivering the Global Goals requires the alignment of interests, incentives and policies between the public and private sector. To deliver, all parties need to cooperate more than ever before and for that to happen, trust across them is crucial. Portfolios and investment decision-making need to be shifted to make SDGs, green finance, sustainable infrastructure and development become the norm. Businesses must make sure they create well-paid jobs and provide decent working conditions and training.
In order to get there, investors must adapt their strategies to deliver not only financial results, but positive social and environmental outcomes as well. We look forward to seeing more investors and business leaders commit to investing in innovative opportunities that deliver strong financial returns while reducing poverty and inequality, advancing health and education, and protecting the environment.
Dr. Selva Ramachandran
United Nations Development Programme (UNDP) Philippines
Acumen Strategy Consultants
To speed up business recovery and grow faster, there are three major imperatives we are seeing based on all our researches and client engagements:
First, Customer Centricity. Reconnecting with customers to understand the needs and motivations behind their behaviors, decision making and purchasing patterns has never been a more pressing imperative given a lot of market shifts that we saw during the pandemic. This requires a deliberate effort and real discipline, not just lip-service. Identifying a core target segment of customers whose needs can be met by the business’ products and services in a relevant, differentiated, and credible way is the fundamental starting point. The rest of the task is to execute very well across the marketing and sales mix — pricing, distribution, customer service, communications, and logistics.
Second, Strategic Thinking coupled with Agile Execution. Market sizes have contracted, competitive heat is up and resources are limited — financial, time and organizational energy. Business leaders need to invest time in stepping back, assessing the situation as rigorously as possible and making hard, deliberate choices on where to play and how to win. Once there is a plan, be ready to execute but with an agile mindset of constantly learning, re-applying successes, and adjusting for wrong assumptions.
Third, Organizational Transformation. This is the most challenging yet one of the most critical imperative C-leaders have told us in our pandemic research. The organization must be calibrated – its team structure, culture, as well as leadership approach – in order to meet changing customer needs and challenging market dynamics. Old ways of working must be unlearned (especially with digitalization), foundational skills must be re-learned and new skills must be learned and embedded. All these start with deep employee listening and organizational assessment.
Bottomline, businesses will go forward faster if they calibrate their business and organizational engines in response to changing landscapes. To do so, they’d benefit from external expertise to navigate through these steps who can provide objective, unbiased perspectives to enable them in making the tough decisions and adapting to change.
President and CEO
Acumen Strategy Consultants
Bain & Company
We are excited to have established Bain & Company’s physical presence in Manila this year and look forward to helping businesses in the Philippines. With a more challenged and disrupted macro-economic environment (e.g., rising energy prices, supply chain turmoil, looming recession), our local leadership team together with our global experts have continued to help our clients work through their mitigation plans. The good news is that we have seen increased investment activity through COVID, attracted by the pace of consumer change, increased digitalization and a dynamic entrepreneurial environment.
Looking at 2022-2023, GDP (gross domestic product) forecasts have been revised downwards; however, we believe a couple of factors are helping to insulate Southeast Asian economies from broader macro turbulence resulting in a business outlook that is relatively more positive than the rest of world. Actions taken by companies today will be pivotal. Our research has found that companies gains and losses are significantly magnified in periods of economic downturns than during stable times. Businesses in the Philippines can position themselves for growth by carefully tweaking their strategies to adapt for a recession. These include actions such as (i) surgically restructuring costs before the downturn, (ii) diligently managing liquidity and the balance sheet, (iii) obsessively focusing on customers, and (iv) aggressively pursuing M&A opportunities.
The ‘new normal’ has become far more complex, with the now rising cost of capital, ambitious environmental, social, and corporate governance (ESG) commitments and material shortages in the global supply chain. These are critical nuances that will determine whether companies can ride out the recession and emerge from it more successful than when they began.
Patricia Buenaventura Nichol
Partner and Office Head
Bain & Company’s Manila office
Boston Consulting Group
When faced with the extraordinary challenge of a global pandemic in 2020, the business community and public sector came together and collaborated at an unprecedented speed and scale to meet the challenge. In adversity, new ways of collaborating have come to life and ‘symbiotic’ relationships have helped mitigate both health and economic damages. The new Presidency has clearly registered the value of close public-private collaboration with the set up of its Private Sector Advisory Council, as a way to actively address and sustain dialogue between sector groups.
Defining a bold ambition for the country across a set of national priorities (e.g.: healthcare, education, financial inclusion, competitiveness) should help crystalize the national change agenda and provide clarity to all stakeholders. Businesses should act with boldness and confidence to further unlock the Philippines growth potential for the next decade, with a specific focus on addressing the most acute pain points and challenges of more market segments. Accelerating financial inclusion, digital inclusion, and work force inclusion would specifically be among the priorities.
Managing Director & Senior Partner
Boston Consulting Group
We are in a period of continued change. In our recent Ipsos surveys, both local and global, we see signals of moving on from the COVID-19 pandemic (turning endemic) and consumers’ worries shifting towards the rising inflation rates. Are we still in an era of constant disruption? How can we move Forward Faster as businesses and as a nation? If we apply long-term foresight and map out our certainties, we will have better-informed strategies and decisions in the future as it occurs.
While it is too early to tell the full impact of our current realities, we can look at the macro forces shaping our Planet, People, Systems, and Technology. Let’s look at “People” as a macro force, one of Philippines’ strengths is having a young and dynamic population ready to drive growth. When businesses and government initiatives focus on supporting and empowering this segment through education, we can better equip them as the world shifts to a service and knowledge economy. Aside from this, improving connectivity by strengthening communication infrastructure creates an even more literate and globally connected society. Down the line, funneling resources to education allows for better opportunities for employment and livelihood creation.
In the Ipsos 2021 Global Trends Survey, 89% of Filipinos surveyed believe there is a climate emergency. This is evident with our new economy of disrupted [just-in-time] supply chains and growing concern for food and water insecurity due to agricultural issues. Considering these and looking at the macro forces “Planet” & “Technology”, we know that technological solutions can help lead to efficient management of resources to address agricultural issues. Should our Nation’s focus on modernizing the agri-business bear fruit, we can anticipate improvements or even recovery in our economy.
Overall, we know that growth is no longer a long-term given. Aiming to move Forward Faster and prioritize inclusivity and sustainability will be a great challenge. Despite this and knowing how polarizing situations may get, if we learn to transcend our differences and take on our respective roles & functions in society, we will be able to move as one — even as the shifting power dynamics lead to new and emergent ways of being.
Vicky V. Abad
Isla Lipana & Co.
The Philippines is poised to post strong economic growth, post pandemic, given its strong economic fundamentals.
There is a consensus that the country will grow somewhere between 6 and 7% this year despite the expected headwinds brought about by inflation, underpinned by rising domestic consumption and sustained government expenditure on critical infrastructure.
However, despite our expected economic growth, the poverty rate remains to be a problem for the country. Official government data reported that our poverty incidence among Filipinos increased to 23.7% in the first half of 2021, higher than the 21.1% for the same period in 2018. This translates to 26.14 million Filipinos living in poverty or an additional 3.9 million.
So the challenge is: How do we accelerate our growth to build a truly inclusive and sustainable economy? Here are some of my dreams for the country:
a) Invest, adopt and support policies to build the resilience of micro, small and medium sized enterprises (MSMEs). They play a vital role in the country’s economy as they generate employment opportunities for the unemployed or underemployed Filipinos. The public and the private sectors need to work together to upskill and upgrade workers’ competencies, provide easier access to capital that they generally lack, and support the sector’s digital transformation. This will enable them to grow, expand and be more resilient. A thriving MSME sector is a big boost to the economy.
b) Increase investments in critical infrastructure across the country, either through government spending or credible/transparent public, private partnerships (PPPs). We need better physical and digital infrastructure across the country that will create and/or accelerate economic activities.
c) Increase productivity in, and make genuine transformation happen, for the agriculture sector. I am from a farming town in northern Luzon. The farming system has not changed since my elementary school days except for the isolated presence of tractors, which make land tilling fast and efficient. Beyond this, nothing has changed. Farmers remain under the control of unscrupulous traders, who charge usurious interest at a minimum of 5% per month. What about the institutionalized countrywide cooperative system and shift to high-value crops? Imagine if we reduce our dependence on imported agricultural products? These will surely enable our poor farmers to achieve economic prosperity.
d) Increase manufacturing output, new manufacturing facilities and investments. How do we achieve this? We need to attract more investments, be it local or foreign investors expanding in the Philippines. But we need to be more competitive and implement genuine reforms to improve the ease of doing business. While we improved our ranking in the World Bank’s 2020 Doing Business Report, we are still lagging behind our major ASEAN neighbors. Thanks to Cambodia, Laos and Myanmar, we are not at the tail end.
e) Accelerate transition to digital economy. E-commerce, no doubt, enables larger market access, drives expansion, hence a real economic multiplier. Based on a think tank study, the digital economy can raise economic output by at least P5 trillion by 2030. However, our workforce of the future must be technologically enabled, too. Real reforms are needed by the country’s education system so that we will not be left behind.
As a Filipino, I continue to dream and believe that one day, we will achieve an inclusive society where there will be no hungry Filipinos, where economic prosperity is felt and shared equitably. God bless our country.
Roderick M. Danao
Chairman and Senior Partner
Isla Lipana & Co.
Kantar Philippines, Inc.
As we try to move on from the COVID crisis, we increasingly realize how crucial it is to adapt to how the pandemic has upended life and livelihood.
Most recent Google Mobility data shows that, despite the return to retail places, groceries, pharmacies, parks, transit stations and workplaces, the frequency of staying home remains higher than before the lockdowns, which indicates that the life-lived-at-home, or better yet, life-lived-close-by, behaviors continue. Sari-sari stores, in general, have recovered quite quickly from the business slump after lockdowns were imposed, and have been the primary source of growth for brought-home fast moving consumer goods purchases as of Q1 2022.1
People have a new set of concerns that have already affected priorities. The pandemic and other threats to public health continue to worry people. In addition to this, social justice and climate change have also become more salient topics of interest.2 Filipinos, especially those exposed to online conversations about the matter, understand that we are in this situation because of people’s own doing, and we are willing to do the right thing to try to remedy the situation. However, Filipinos need a lot of help to take the appropriate actions.3
Another source of worry is about the economy with two fifths of online adult Filipinos concerned about inflation4 even though most do not understand what it is and why it happens. All people know is that their money can buy much less than it could before, which then makes spending a much more difficult decision to make. There is also the global plague that affects mental health5, which, in tandem with the overhauling of priorities, has driven, to a large extent, the Great Resignation, which continues to be a big headache for businesses.
Digital is here to stay after its adoption has been brought to a point of no return through the lockdowns. eCommerce in the Philippines remains small, especially when compared to most other countries, but its continued growth is evident6.
For businesses to move forward faster, empathy will be key. The extent that consumers, customers, shoppers and even employees see and feel genuine empathy in the product and service innovations, and work arrangements that businesses make happen to address new or amplified friction points will determine in a big way how quickly these businesses can stage a rebound or sustain their recovery.
More than ever, businesses need to be where their target markets are and be ubiquitous there whether this means digital, delivery, pop-up stores or using any other relevant media and retail touch point.
People know and want to do what is right to avoid another calamity, but they look to businesses and the government to help them do what they know they must do because sustainable practices, products and services remain expensive and unwieldy.
It is not time for brands and businesses to be quiet because people continue to look for guidance as they navigate the new environment that remains in a flux. The businesses that can translate genuine empathy into products and services that address new or more relevant needs and that can deliver topnotch experience will be secure in the hearts and wallets of the Filipino.
1,6: Worldpanel Division, Kantar. Q1 2022
2,4,5: Kantar Global Issues 2022
3: Kantar Sustainability Foundational Study 2022
Gary de Ocampo
Managing Director, Insights Division President
Kantar Philippines, Inc.
P&A Grant Thornton
More than two years after the COVID-19 pandemic hit, experts are seeing an asymmetrical or an uneven post-pandemic economic recovery. Not all countries are moving at the exact same speed toward economic recovery. Concrete government actions, including improvement of existing fiscal or monetary policies and programs to address high inflation, are needed. In the Asia Pacific (APAC) region, increased regional cooperation were cited by experts as one way to prevent a skewed economic recovery across APAC.
But while the government plays a pivotal role in leading the Philippine economy toward recovery and growth, businesses and even professional partnerships play a part in achieving this goal.
Agility and Innovation
The pandemic has tested the business community’s ability to survive; nonetheless, some companies have found a way to not only survive but also thrive amidst the continuing pandemic effects. Some of the ingredients to pivot the company with cautious optimism are:
- Listening to the changes in the needs of the customers
The needs and focus of customer have changed, the channels where customer are also have changed. Companies need to continue to become more relevant in creating value to the customers.
- Being flexible in the needs of the employees
News of the great resignation or the great talent reshuffle is felt by businesses. The expectations of employees i.e. hybrid and work from home arrangements, criteria of focus and sustainability when choosing companies, etc. continue to evolve brought with the shift of working generation and escalated by the pandemic scenario. As an opportunity, companies now can look at expanding talent geographically and taking in better talent. As a focus, strategic human capital and culture has now become a board agenda.
- Reviewing and reinventing the business model
With the pandemic, companies are bound to look at the basics, i.e cash flows, business continuity, reinforcement of the vision, mission, and purpose. At the same time, companies employ their creativity to actualize opportunities out of the situation. This may mean changes in the business models, exploring partnerships, and developing new services, products, or channels.
For example, entering into partnerships, where two companies contribute and raise bigger funds for operating expenses, does not only ensure greater financial strength for business. The economy will also benefit from positive business outcomes as a result of strategic partnerships because successful businesses create jobs and help the government generate more revenue.
In all these, companies need agility and resilience in pushing forward by creating opportunities for themselves.
Digitalization and Technology Advancement
The fourth industrial revolution has been upon us even before the pandemic; nonetheless, the situation has allowed for greater reception and adoption of technology, has pushed for urgency in digital transformation in organizations, and has made itself indispensable in everyday life. The government, businesses, and other organizations have to continue going digital in improving processes, optimizing costs and revenues, and creating value to customers, stakeholders, and society. This is critical if we want the country to move forward and create a brighter future.
Collaboration and support
Different stakeholders have a role to play. The government is critical in developing policies and executing programs that can propel economic growth, encourage key growth sectors, support disadvantaged sectors, and create a stable and reliable economic environment. The business groups and the professional organizations have a role in advancing the needs of the business community and the people they represent and guiding them, as well as finding ways to communicate concerns to and [judiciously] support initiatives of the government. Businesses have a role as corporate citizens in contributing to society and environment. Collaboration and support of different stakeholders are needed to move forward faster and create a prosperous future for the country.
The impact that we hope for — Growth, Sustainability and Inclusivity
Different stakeholders support the country’s growth. Businesses help the Philippine economy recover amid challenging times like this. Improved collaboration with the government and stakeholders, promotion of sustainability and inclusivity – all these are initiatives that can help us go beyond in ensuring continuous economic recovery and an inclusive and sustainable future.
Companies can likewise help accelerate the realization of the UN’s Sustainable Development Goals. An example is using technology and digitalization in reducing their carbon footprint. Through automation and digital processes that speed up work processes and lessen, for example, the number of product shipments which contribute to carbon emission, the carbon footprint of supply chains can be reduced . Remote or hybrid work arrangements, now considered the future of work, also reduce a company’s carbon footprint. These policies, on top of putting a premium on CSR initiatives, can contribute a lot in ensuring a sustainable future while still securing work productivity and business growth.
Grant Thornton’s 2022 Women in Business Report showed that the Philippines ranked third in the list of countries which recorded the highest number of women leaders in mid-size firms. This figure is also in line with the average percentage of women in leadership roles across ASEAN.
While there remains a lot to be done in terms of breaking gender barriers and ensuring workplace parity, progress, no matter how small, is still progress. Businesses must continue to adopt a shift in mindset to make significant strides in addressing gender inequality in the workplace. Also part of bridging the gender gap is building more diverse and inclusive leadership teams.
Maria Victoria C. Españo
Chairperson and Chief Executive Officer
P&A Grant Thornton
The Philippine population is projected to rise to 148.3 million by 2050. According to our studies, we will need 100 new well-designed, properly planned cities by 2050 to bring the Philippines to first world status. Critical social issues for the country include food security, which can be attained with designing an agropolis (city anchored on agriculture) encouraging urban, suburban and rural farming; and healthcare infrastructure in which we need at least 5500 new good quality hospitals in the next years. Right now, in a country of 110M people, around 2000 of our hospitals are substandard.
In 2021, Savills published a report listing the most resilient and future-proof cities in the world which includes New York, Los Angeles, London, Tokyo, San Francisco, Paris, and Seoul. We can study and learn from these cities — how they dealt with their cities’ problems, what worked for them and what didn’t — then we adapt these lessons to benefit the Philippines.
However, while a mission of building well-designed and empathetic built environments lead us to progress, affirmative change will only follow with vision and good leadership.
As evidenced by one of the quickest cities in the world to reach first world status, radical growth is led by visionary leadership, good governance, strong political will, and excellent management along with good appreciation of architecture, urban planning, and good design.
Even a leader with excellent foresight will struggle leading a country to progress if there is no vision and persistent will to do so. On the other hand, definitely, a dishonorable one will only bring us to our descent. Hence, good governance by a good, capable selection of leaders is critical to give the country a head start. We should address corruption, red tape, inequality, and criminality and promote transparency, open data, ease of doing business.
Among these, we must also emphasize on climate change adaptation where we modify our ways – from something as personal as proper trash disposal to wider applications like environmental policies and green building. We should not only “Build, build, build” but should “Build, better, berde”.
Linking the whole Philippines will also aid in spreading development and progress throughout the country which will alleviate poverty and bring about elevated living standards for Filipinos.
Building considering nationwide mobility, connectivity, and accessibility. Basic necessities at the minimum should be accessible to all.
Felino “Jun” Palafox, Jr.
Principal architect and urban planner; founder
Philippine Business for Education
A healthy and educated workforce is the key to shared prosperity. When we talk about economic growth, often we put priority on physical infrastructure, but education is at least equally important. Investing in the learning of our people, upon whom nations are built, is an investment that comes with enduring benefits.
Everybody wins in education. For each individual, it bears promise of better employment, earnings, health, and quality of life. For our country, it is the key to long-term economic growth, poverty reduction, innovation, and social cohesion. Individual prosperity leads to the whole country’s prosperity.
In his first state of the nation address, President Marcos set out a big economic goal of slashing Philippine poverty to a single digit and growing the economy up to 8%. How do we take this giant leap? The challenge is daunting, but we must start by making major strides through proper education reforms. When well-nourished students stay in school to learn, they have an increased likelihood to break the cycle of poverty. Based on a simulation from Stanford economists, if we reform our education system in the next 15 years resulting in learners reaching the basic literacy and numeracy proficiencies based on international standards, our GDP (gross domestic product) is expected to increase on average, 28% per year, immediately after that 15-year period. And this effect is expected to last 80 years.
Right now, what is keeping us from achieving this goal is the longstanding education crisis. We cannot address our learning losses without sufficient resources. Historically, only 3% of our GDP has been allotted for the education sector. While the proposed budget for basic education now is at 4.3%, we still do not meet the global standard of 6%. We should spend as much for education as we do for physical infrastructure.
Just as with public and private partnerships in infrastructure building, the government can also count on private sector support in improving our education system. The convergence of tools, resources, networks, and technical expertise from the education and private sector is needed to address our country’s learning crisis. With Education Commission 2 (EdCom 2) finally becoming a law, we hope the private sector can be given a seat at the table and considered an equal partner as we strive for greater education and industry alignment.
Here are some of the strategies that we at Philippine Business for Education (PBEd) and our other partners in the business community propose in improving our education system:
- Bring all children to quality pre-Kindergarten to Grade 3 education and developmental programs.
- Improve the quality of instruction and teachers with the target that all learners meet basic skills based on international standards.
- Use the lens of lifelong learning in workforce development.
- Fully leverage private education to better complement delivery of services.
- Strengthen autonomy, coupled with accountability, of school leaders and local governments.
Shared prosperity in the Philippines can be achieved, within our lifetime, through education reforms. To move forward faster, this time let us try prioritizing investment in education.
By Ramon R. del Rosario, Jr.
Chairman, Philippine Business for Education (PBEd)
Philippine Disaster Resilience Foundation, QBO Innovation Hub, and IdeaSpace Foundation
Poverty is the country’s greatest ill. So we need to create jobs to give people an income and lift them up. We can start by focusing on MSMEs (micro, small and medium enterprises) since they make up over 90% of the Philippine economy. Government institutions and private banks can loan money to small businessmen to help them restart their livelihoods, many of which were affected by the COVID-19 pandemic and lockdown. Several startups, the telcos and others are pushing for the digitalization of MSMEs which would open them up to the growing world of online ordering and distribution.
We should encourage this trend and train our small business owners so they have the technological skills to avail of new resources. We need to incentivize the private sector including foreign companies to invest in the country by giving them tax breaks, easing restrictions on the flow of capital, and removing unnecessary regulation. Let’s make it easier for foreigners to put their money to work here and that includes lifting limitations on the ownership of land and various industries. Their investments will generate jobs and improve the infrastructure while increasing competitiveness in the local economy and freeing it from self-defeating protectionism.
Disasters knock Filipinos back into poverty. Therefore, we should develop tax-free PEZA (Philippine Economic Zone Authority) zones in disaster-stricken areas to enable them to rebound faster by encouraging investment and the creation of businesses and jobs. The government will earn more from the added revenues and higher property taxes than it ever would in a normal tax environment. We should upgrade our health care system so that all of our people are healthy and ready to work. In addition, we need to build more resilient communities so that we are better prepared for the more than 20 typhoons that hit the Philippines every year plus the earthquakes and volcanic eruptions that come from living in the Pacific Rim of Fire. People are ready when they have business continuity plans in place, emergency supplies, sturdier houses and can move their boats away from danger areas.
We should also advocate for population control to relieve the pressure of having to produce more and more jobs for over 110 million people. Any increase in our growth rate is reduced by increases in population size. We need to improve the educational system to restore our lost advantage of speaking English, as the President has mentioned, to allow Filipinos to compete globally for employment and locally for jobs in the BPO (business process outsourcing) industry. Good governance and a fair and impartial legal system will give our countrymen the best opportunity to rebound from the pandemic and rebuild their lives in safety and prosperity. It is said that fortune favors the bold and if we act boldly, we can finally achieve our dream of making the Philippines a First World country.
Rene “Butch” S. Meily
SGV & Co.
These are challenging times that call for greater collaboration between the government and the private sector in areas such as education, health, food security, energy sufficiency, employment, investments in infrastructure and technology, and climate change. We see businesses striving to regain their footing as the economy reopens after more than two years of crippling lockdowns. The pandemic has forced them to be agile and transform their business in order to make it through this global health crisis. But beyond surviving, they will have to shift gears and begin to focus on thriving.
The government can prop up businesses with the enabling infrastructure and environment. Time and again the Filipino’s entrepreneurial spirit has proven to be indomitable, but this is a special time for the government to lend a hand and nurture entrepreneurship as small businesses nurse their way back to healthier bottom lines. At no time has business and industry ever stopped emphasizing their preference for clear and consistent government rules and policies, but in this difficult time, policy stability should be a key ingredient in our business and economic recovery goals.
In all this, we believe that the quality of leadership in business becomes all the more significant, as leaders face changes in the way talents and even consumers interact with organizations and brands. For professional services firms like us, we see these challenging times as an opportunity to be of service by staying true to our Purpose as an organization – to nurture leaders and enable businesses for a better Philippines.
The crisis has called upon business leaders to lead with empathy, to protect the health and wellbeing of people, and to contribute to economic recovery. These are responsibilities that we will continue to cultivate in our conversations and interactions with business leaders. Our experience with the pandemic over the past two years has strengthened our resolve at SGV to continue to build trust in the capital markets and in business transactions, and to remain a strong catalyst for socio-economic development as we have always done so for more than 76 years now.
Wilson P. Tan
Chairman and Managing Partner
SGV & Co.