The economic team

“When you think of me, be kind.”

This was Finance Secretary Carlos Dominguez III’s parting shot to me as he prepared to leave the Cignal TV complex last week after we interviewed him on One News’ “The Chiefs.”

He admitted that he borrowed the line from Deborah Kerr, as she bade goodbye to a young man she had fallen for, in the 1956 American movie drama “Tea and Sympathy.”

I’m not familiar with the movie or the actress, and the actual line, I’ve been told, was, “Years from now, when you talk about this – and you will – be kind.” But Sonny Dominguez needs no kindness in the assessment of his performance as the guy in charge of raising the funds for his boyhood classmate Rodrigo Duterte’s projects and programs. The performance of the economic team clearly has been a bright spot in the controversy-laden first half of the Duterte presidency.

Even the Bureau of Customs, with corruption deeply entrenched, has attained its collection goals, Dominguez told us. And after the largest tax evasion case, involving Mighty cigarette corporation, was unearthed and settled in favor of the government, the Department of Finance is ramping up efforts against tax cheats.

The human rights situation in the Philippines has raised concern in the international community and, in some capitals, condemnation. On the other hand, the country has reaped praise from multilateral bodies and foreign analysts for its economic performance and reforms to boost national competitiveness.

Even the discontent generated by last year’s inflation, which started with the imposition of the fuel excise tax and was later compounded by the surge in rice prices, had been overtaken by many other issues by the time the midterm elections rolled around. Duterte’s candidates won, shutting out the opposition in the Senate race.

What derailed this year’s performance targets was the four-month delay in the enactment of the 2019 General Appropriations Act.

Dominguez told us that the reenactment of the budget – the first time it has happened since a decade ago when Gloria Macapagal-Arroyo was president – meant billions not being spent daily on vital projects and programs, including Duterte’s ambitious Build Build Build infrastructure project.

* * * Socioeconomic Planning Secretary Ernesto Pernia told The Chiefs that this time, Duterte isn’t going to allow delays in the budget approval.

This makes it critical for Duterte to have the right person leading the House of Representatives.

Both Dominguez and Pernia denied endorsing Alan Peter Cayetano or any particular person for House speaker. Buhay party-list Rep. Lito Atienza, who identified the Cabinet members supposedly interfering in the contest for speaker, “must be losing it,” Dominguez told us.

He admitted that Duterte asked him if he had anyone in mind for speaker. “I said I will not name anybody,” Dominguez told us. Instead, he said he enumerated the qualities that the economic team wanted from the speaker of the 18th Congress, whether there is term sharing or not: “Everybody has to be on the same page… we have to work on a common goal.”

For this Congress, Pernia said the economic team wants three laws in particular.

One is the Public Service Act, which will exclude telecommunications and several other sectors from what constitutes a public utility, thereby allowing 100 percent foreign ownership.

Second is the Foreign Investments Act, which will ease restrictions on foreign participation in certain sectors as well as reduce the required capitalization for micro, small and medium enterprises.

The third is the Retail Trade Act, which will liberalize the retail industry.

* * * Dominguez wants another law, which he says is critical for attaining Duterte’s goal of curbing corruption: the easing of bank secrecy laws in cases involving tax evasion, drug trafficking and money laundering.

He said the Philippines has the second most stringent bank secrecy laws in the world, after Lebanon. Why should we be like Lebanon rather than the rest of the world? “We just want to be a normal country,” Dominguez said.

Since the proposal will have to be passed by a legislature with a lot of tax evaders and money launderers, however, I wish him luck.

At least the economic team will likely get the funds on time for the unhampered implementation of Build Build Build. Pernia told us that many of the projects and programs that are ongoing or approved for implementation are targeted for completion by 2040 – meaning continuity is needed through three more presidential terms.

Besides Build Build Build, jobs must be created through foreign direct investment. The country is lagging behind neighbors such as Thailand and Vietnam in this area.

Trade and Industry Secretary Ramon Lopez, who also faced The Chiefs yesterday, said those countries launched their own Build Build Build many years ago, providing investors not only with the necessary infrastructure for economic activities but also other forms of support in areas such as manufacturing. They have also done more in terms of ease in doing business.

The Duterte administration has just approved the implementing rules and regulations for the Ease of Doing Business Act, and enacted two laws to promote innovation in business and start-ups.

But the major business groups have expressed concern about the law on contractualization or security of tenure, warning that its enactment could compel many investors to relocate to Vietnam and other countries that are more business-friendly. Or else jobs may be cut and workers replaced by artificial intelligence or AI.

Duterte appears to be considering the concerns, since he has yet to sign the law. Lopez, on the other hand, prefers to look on the bright side, saying AI should open opportunities for boosting national competitiveness.

There are other dark clouds on the economic horizon, among them the adverse impact of climate change that aggravates disaster risks, the US-China trade war, and the continuing volatility of global oil prices. Political skirmishes are expected to intensify as the 2022 presidential race approaches. Rice farmers are groaning from the immediate impact of a flood of imports on their livelihoods. A renewed push for federalism, without consideration of the economic impact, could put a drag on growth.

That’s a lot for the economic team to confront. If they manage to achieve targets by 2022, they will be remembered with more than kindness.