The Philippine Star

Gov­ern­ment on auto pi­lot

- BOO CHANCO Finance · Transportation · Business · Industries · Japan International Cooperation Agency · New York City · Marikina City · Philippines · Davao · Delfin Lorenzana · Congress of the United States · Philippines Department of Public Works and Highways · ASEAN · World Bank Group · World Bank · Asia · China · Bangko Sentral ng Pilipinas · World Economic Forum · Twitter · Capital Index

So, a Cabi­net mem­ber Pres­i­dent Duterte adores be­cause he was his law class vale­dic­to­rian, is in­sist­ing there is no trans­porta­tion cri­sis. Let us not ar­gue with him and just check the facts.

It is dif­fi­cult to ap­pre­ci­ate the JICA es­ti­mate in bil­lions of pe­sos lost while stuck in traf­fic. Let us bring the num­bers closer to per­sonal ex­pe­ri­ence.

A friend crunched the num­bers: 6hrs/day*5 days /wk*52 weeks/yr = 65 days/year wasted on traf­fic. (Data for NYC is 29 days/yr). If you work 40 years in MMA, that equates to seven years spent on traf­fic.

Think about it. Seven years of your life wasted. Yet you have to pay taxes for all of those seven years.

Duterte spokesman Sal Panelo took 3.5 hours one way from Marik­ina to Mala­cañang on pub­lic trans­port. And Marik­ina is a mere 12 kilo­me­ters away. He left his house at 5:15 a.m.

I saw an in­ter­view of Duterte’s vale­dic­to­rian class­mate and he was blam­ing the past ad­min­is­tra­tion of mis­man­ag­ing the main­te­nance and in­ven­tory of spare parts at LRT-2. Surely, the in­ept DOTC of P-Noy is to blame but so is the cur­rent DOTr be­cause they al­ready had three years to make things right and ob­vi­ously didn’t.

This is def­i­nitely not the same man I met with be­fore he took of­fice. He said at that time that af­ter he takes of­fice, the prob­lem is all his. The chal­lenge of the job is too much for him, it seems.

That’s the prob­lem with a Pres­i­dent who is run­ning the coun­try on auto pi­lot. He has said time and again he does not en­joy his job and would rather go back to Davao. So, he gave his Cabi­net mem­bers wide lat­i­tude to run the coun­try.

Un­for­tu­nately, very few Cabi­net mem­bers are wor­thy of the Pres­i­dent’s trust. One is Sonny Dominguez and the oth­ers are Delfin Loren­zana, Ted­dy­boy Loc­sin and Berna Ro­mulo-Puyat. But Sonny is busy try­ing to fix long term struc­tural prob­lems that have hin­dered the coun­try’s eco­nomic growth.

Sonny is fo­cused on fis­cal re­forms which no other fi­nance sec­re­tary be­fore him dared to do. Luck­ily, Duterte doesn’t un­der­stand any of that and just al­lowed Sonny to do what he needs to do.

But Sonny can­not be every­where. He is fight­ing bat­tles he shouldn’t be fight­ing in a Duterte-con­trolled Congress… and things are fall­ing apart else­where.

We be­lieved Sonny’s word that in­creased taxes will help fi­nance Build Build Build that will in turn push eco­nomic growth faster. Most of the money was col­lected but the im­ple­ment­ing agen­cies, DOTr and DPWH were not up to the chal­lenge. Con­gress­men took the money in­stead to fund out­ra­geous pork al­lo­ca­tions and al­lowances.

De­part­ments like health and ed­u­ca­tion, vi­tal in the in­vest­ment we need to make on our peo­ple, have also fallen on the job. A long dead po­lio virus is back… record num­ber of deaths due to dengue… measles and other child­hood dis­eases are also on the surge.

Ed­u­ca­tion? Re­cent sur­veys show the IQ of Filipinos to­day is low­est in ASEAN. How can we be com­pet­i­tive if we don’t have the brain power to com­pete in a chal­leng­ing tech en­vi­ron­ment?

The World Bank said the Philip­pines per­formed be­low the av­er­age for the East Asia and Pa­cific re­gion in the World Bank Hu­man Cap­i­tal In­dex. That means chil­dren born in the Philip­pines will only ful­fill 55 per­cent of their po­ten­tial when they grow up.

We need help from for­eign in­vestors but our busi­ness cli­mate con­tin­ues to be less than hos­pitable so they go else­where in the re­gion. We could have at­tracted busi­nesses mov­ing to ASEAN from China be­cause of the trade war. But no one came.

In­deed, for­eign di­rect in­vest­ments (FDI) in July in­curred a sub­stan­tial 41.4 per­cent drop to $543 mil­lion, lat­est BSP data showed. This is the fifth straight month of FDI de­cline this year.

Year-to-date, FDI reg­is­tered in­flows of $4.1 bil­lion, that’s 39.1 per­cent lower than the $6.8 bil­lion posted dur­ing the same pe­riod in 2018.

FDIs are pre­ferred in­vest­ments com­pared to port­fo­lio in­vest­ments in the stock mar­ket. FDIs cre­ate jobs, bring knowl­edge, skills, and tech­nol­ogy.

No won­der our GDP growth this year is only ex­pected to hit 5.8 per­cent, ac­cord­ing to the World Bank.

GDP for or­di­nary Pi­noys means: if eco­nomic growth mea­sured by GDP slows, so does the rate of poverty re­duc­tion. A fam­ily eat­ing twice a day will only eat once.

And de­spite all the good in­ten­tions ex­pressed in press re­leases about cut­ting red tape and im­prov­ing gov­ern­ment ef­fi­ciency, the Philip­pines slipped eight notches in the 2019 Global Com­pet­i­tive­ness Re­port of the World Eco­nomic Fo­rum (WEF).

We placed 64th out of 141 coun­tries, lower than our 56th spot last year. We have an over­all score of 61.9, lower than the 62.1 points in 2018.

Grief is in the de­tails: In­sti­tu­tions – 87th from 101st; In­fra­struc­ture – 96th from 92nd; Health – 102nd from 101st; La­bor mar­ket – 39th from 36th; In­for­ma­tion com­mu­ni­ca­tions tech­nol­ogy adop­tion - 88th from 67th; Macroe­co­nomic sta­bil­ity – 55th from 43rd; Skills – steady at 67th; Prod­uct mar­ket – 52nd from 60th; Fi­nan­cial sys­tem–- 43rd from 39th; Mar­ket size – 31st from 32nd; Busi­ness dy­namism – 44th from 39th; In­no­va­tion ca­pa­bil­ity – 72nd from 67th;

Our low­est rank­ing is in health, at 102nd over­all. Yet, the Duterte-con­trolled Congress is cut­ting the bud­get of the health depart­ment sig­nif­i­cantly.

The na­tional re­port card shows a coun­try in se­ri­ous cri­sis and not just in trans­porta­tion.

I am afraid that if the ad­min­is­tra­tion con­tin­ues to live in the delu­sion that it is do­ing well be­cause the sur­veys say the peo­ple love Duterte, we will end up worse than when Duterte came into of­fice.

Duterte can­not con­tinue to run this coun­try by auto pi­lot. Or he should get more Sonny Domingueze­s to help him… not just friends who failed to per­form over the last three years. Oth­er­wise, he will leave a neg­a­tive legacy for fu­ture gen­er­a­tions to re­mem­ber him by. Yes, he prob­a­bly couldn’t care less. Boo Chanco’s e-mail ad­dress is bchanco@gmail.com. Fol­low him on Twit­ter @boochanco

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