With two officially announced candidates to run for president in 2016-and a half dozen others who would love to be included-maybe it is time to reflect on the choices.
I am often asked who might be the best choice, and I suddenly become deaf. No matter what answer I might give, it will likely be the wrong one. Philippine politics has completely degenerated into a local form of the Spanish Inquisition as a battle between good and evil. Distinguishing between the two is much easier when one is named Batman and the other is The Joker.
In the next few months, events are going to change the political thinking. I am sure that, after all my endless twaddle about the coming change on the global economic scene, you may conjure that this is simply a case of an old man slipping into his intellectual twilight years.
Perhaps, we need to revisit history.
The 2007 and onward global economic crisis was bad all throughout, but the Philippine economy managed to recover unscathed. Gross domestic product (GDP) growth tracked from 6.6 percent in 2007 to 4.2 percent in 2008, and a low of 1.3 percent in 2009. The 2010 GDP surged to a high 7.6 percent, because it was coming off a very low base-not because of government policy. For a variety of reasons, the Philippines weathered the economic storm well.
However, the 1997 Asian economic crises brought out a different scenario. Between 2007 and 2010, the Philippine peso actually appreciated. But from 1996 to 1998, the peso lost 58 percent of its value against the dollar.
The GDP growth rate in 1996 was 5.8 percent, followed by 5.2 percent in 1997. But 1998 saw the economy shrink by 0.6 percent, and even by 1999, the GDP was only growing at 3.1 percent. By 2003, the GDP was increasing at a 5-percent rate. It was not until 2004-or nearly seven years after the crisis hit- that we were back to a pre-crisis growth rate.
The Asian crisis started in the first week of June 1997. Fidel Ramos was president then. The next election took place in May 1998. Imagine for a moment that, instead of taking place in 1998, the presidential election had been held on May 11, 1997. One month later economic hell would break loose.
The candidates for president were Joseph Estrada, Jose de Venecia Jr., Raul Roco and Emilio Osmena.
Maybe knowing that the financial crisis was just around the corner may not in any way have changed your personal voting decision or the eventual outcome of the election. But it most certainly would have changed the discussion on who might be best qualified to take the nation through the crisis.
Contrary to the way the statistics are presented, the current administration was fortunate to have come to office after the bottom of the 2007 global economic crisis. The Philippine stock market was up 80 percent from the 2009 low at the time of the May 2010 election. The economy had recorded three quarters of increasing growth before the polls. That is not to diminish the administration’s efforts in any way, but it is the reality.
The point is, that which worked in a rising economic trend may not be effective at all if things turn sour, as I believe that they will, and hard questions will require strong answers. So, you want to be the next president?
My first question-and I have more-is, what specifically will you do as president to bring more foreign direct investments (FDI) without changing the constitutional restrictions on foreign ownership?
Here is the answer I expect: As we improve our governance, our competitiveness and reduce corruption, more investments will come in. The problem is that we lag so far behind our competitors for FDI, and it will take years before we can catch up with them. Maybe what we can hope for is that Thailand and Vietnam will suddenly announce, That’s it folks. This is the least corrupt and the most competitive we are ever going to be. It is now your turn, Philippines.
Leaders have to be more than the organization’s pretty face and the manager. They have to have actually ideas for improving the business.
Part of the problem is the Philippines’s lack of a clear objective for its FDI. Here’s my solution: fiscal incentives based on only one factor. How many full-time, regular employees does the company have? We need jobs more than capital or technology. And here is the kicker on capital formation: Philippine companies that set up separate FDI joint ventures will get the same incentives.