Ask business, PNoy is fine

In spite of a not-too-mild drop in popularity rating as seen by Social Weather Station in its latest survey, President Aquino is doing just fine, according to the perception of businessmen who were asked by the Makati Business Club about their outlook for 41 government agencies in the two years that the Chief Executive has been in office.

Satisfaction over the performance of the Office of the President improved from 16 in July 2011 to 14 in June this year with net satisfaction soaring more than 170 per cent from 18.9 to 49.1.

The survey results point out “how businessmen rated the performance of government offices, agencies, and services over the previous 12 months (July 2011 to June 2012 in % of respondents.)

Staying at the top is the Bangko Sentral, followed by the Department of Finance (story below).

The executive outlook of business in relation to the performance of the Office of the President soared presumably because of positive developments in the economy, largely brought about by the BSP but attributed to the President as the country’s leader.

The economy has been under a low interest rate regime for some years. Under the watch of President Aquino, the inflation rate hovered between three and four per cent.

The continuing increase in remittances of overseas workers increased the gross international reserves higher than total foreign debt, which has longer maturities.

This is first the time in recent history that this happened. Consequently, the foreign exchange rate between the peso and the dollar and other freely convertible currencies has stayed within a narrow and tolerable band.

The sharp shift of the economy to the service sector, particularly the flourishing business process outsourcing, tourism and call centers, has created jobs but the unemployment rate is still less than desirable, not only because of slower foreign direct investments that in turn slows down the growth of the manufacturing and export sectors, but more so because of the unchecked population explosion.

The economy has not been affected by the crisis that hit the United States and lately the European Union.

On the contrary, it might have been these crises that fueled faster growth of the service sector.

The developed economies in the financially hit areas started looking for emerging markets that include the Philippines although it is not the first priority among ASEAN countries.

Learning the lessons from the crisis, the investors and the banks sobered up remarkably. The “flight to safety” resulted in preference for sovereign liabilities. The government is awash with cash and practically dictates the rates of its borrowings.

For the first time, the banking system started considering the needs of the small man such that the fight among banks to lend to small and medium-scale industries is getting intense almost by the day although “kinks” brought about by the fact that banking is a highly regulated business has not sharply reduced interest rates.

Still, the rates are far lower than the numbers charged by usurers and the lending investor companies which collect as much as three per cent a month. Borrowers queue up for money because institutions of this type have fewer requirements.

For the first time in banking history, a micro bank was set up by the Ayala companies including the Bank of the Philippines Islands. The micro bank and Planters Bank, the biggest and most successful private development bank, have tapped outlets including pawnshops and money changers.

The micro bank has included Mercury Drug chain as one of a growing number of outlets.

Also for the first time, micro finance institutions accept initial deposits of as low as P50 from the small money.

The hope of micro lenders is to encourage savings by accepting small deposits and lend them the money with their counterpart as loan. Over the longer term, businessmen hope to see a nation of small shopkeepers who create their own jobs.

President Aquino gets the credit for all these although he did not do much to bring them about. That, according to businessmen, is his biggest contribution to economic growth. The President knows that the best government for business is less government. –AMADO P. MACASAET, http://www.malaya.com.ph/index.php/business/business-news/10620-ask-business-pnoy-is-fine