Philippines to be investment grade soon

Many months back, in my column entitled Victory, I somehow said that the Philippines will soon be rerated as investment grade with the continuing surge or inflow of OFW remittances. This has led our Gross International Reserves to hit a record-high $69 billion, which is 10.3 months worth of imports, and surpasses our gross external debt of $61 billion. The new government, under Pres. Aquino, is quite determined to get rid of corruption, with the unraveling of the issues surrounding PCSO and PAGCOR, among others. This seems to be what the public and foreign investors want to hear and see from the government. The budget deficit also appears to be under control with the government really tightening its purse strings.

While this may be fine, the government will eventually have to spend properly for CAPEX to spur more growth. But the financial advisors of Pres. Aquino seem to know what to do. Secretaries Cesar Purisima and Greg Domingo, and former Sen. Mar Roxas are providing the right economic advice. And now, with Amando Tetangco, Jr. reappointed at the Central Bank for six more years, this gives us a much better chance to be rerated to investment grade, just as many countries in Europe are now rated as junk, including Portugal, Greece and Ireland. The latest country that may join this financial contagion in Europe is Italy.

Even the rating of the US has downgraded, and what is worse is that the US Congress has not approved an increase in their fund support. The US might default in its loan obligations to the world which will send us all back to a huge financial crisis. Of course, I believe that the chances of this happening are remote, as the US should know the repercussions of their actions.

But for the past 30 years, many Filipinos did not even think of the possibility of seeing us achieve this in our lifetime. While Asia is now the fast rising star and will be a dominant force in the world, the Philippines is now also a player and not just merely watching from the sidelines.

Over lunch, the other day, with Gawad Kalinga founder Tony Meloto, Boy Montelibano and Pinky Poe of GKnomics, Inc., we discussed the issues about poverty. Tony Meloto has now focused more on developing its Center for Social Innovation. Tony mentioned that Go Negosyo pioneered the negosyo awareness as a solution to poverty. Tony now sees social entrepreneurship as the way forward for many of the GK communities to become more sustainable.

I always believe that negosyo and negosyo education are the ways to solve our problem of poverty. But it’s not negosyo for a few – but negosyo for all. At this point, most big negosyos are controlled by the wealthy or from the AB class. But several of them were also once poor and then rose to become some of the wealthiest, because after the war, many of them worked their way to seek and take advantage of opportunities.

I classify today’s entrepreneurs into two: those who seek opportunities; and those who have no choice but to become entrepreneurs to survive. My grandparents worked hard after the war and saw the opportunity. Their children and our generation, just like other successors of businesses, continue to build on what our grandparents started, which now has become a big business contributing to a large part of the GNP.

But what happens now to the survival entrepreneurs who came from families who do not have the capital or resources to send them to good schools? This is where the “big brother” approach will work. Large companies and organizations like GKnomics, Go Negosyo, DTI, the MSMED Council and many of the other government organizations that are SME enablers must work together in mentoring micro and small entrepreneurs. Social entrepreneurs like Dylan and Anna Meloto-Wilk, Reese Fernandez, Bam Aquino and Mark Ruiz, Cynthia Villar, Pinky Poe, Chit Juan, Illac Diaz, Reuel Virtucio and Ruth Callanta are still quite few in number. We hope to see the number grow.

Last week, as Vice-Chair of the MSMED Council, together with 30 plus organizations, we gave a pledge book to Sec. Greg Domingo and Pres. Aquino to signify our commitment to helping micro and small entrepreneurs. We do not need to help the large entrepreneurs. Many of them are the first movers or leaders in specific industries. They are already established and will continue to be aggressive as they see opportunities. With a better macro environment, they will take the lead in developing and creating infrastructure through the government’s Public-Private Partnership (PPP), which will benefit micro and small entreps. And hopefully, more large entreps will now be aware in helping micro and small entreps, say, through outsourcing certain production stages and services, which present opportunities to SMEs. This is why Go Negosyo has continued to be around for the past six years.

Today, many entreps have volunteered time and resources to inspire, teach, and mentor others. The DTI regional and provincial directors are now also thinking like entrepreneurs. We are still very far from our dream of eradicating poverty, but I can say that we are moving in the right direction, especially with the greater awareness of the need to help small entrepreneurs. –Joey Concepcion (The Philippine Star)