Binay on economic and inclusive growth

After the recent May elections, one prominent political leader has been singing a different, but not unpleasant, tune.

Other than talking about housing, being the chairman of the Housing Urban Development Coordinating Council (HUDCC), or being the voice of maltreated OFWs as Presidential Adviser for OFW Concerns, Vice President Jejomar Binay has also been campaigning about reforming the country’s economic programs.

Soon to turn 71 in November, Binay is still a political force to reckon with, perhaps as a presidential aspirant in the 2016 polls, but also as a king maker, being the president of the rising United Nationalist Alliance (UNA) and the still powerful Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban).

Whatever his political agenda may be, hearing Binay talk about realigning the country’s economic development agenda with one that supports inclusive growth, or growth that seeps to the grassroots level, makes for a compelling sound bite.

In recent talks before influential business organizations like the Makati Business Club, the Employers Confederation of the Philippines, the Management Association of the Philippines, and the Filipino-Chinese General Chamber of Commerce Inc., Binay has been talking about a strategic shift in the country’s economic development master plan.

Need for change

Indeed, as expressed in previous columns, there is a need to realign our plans for expansion and inclusive growth, taking advantage of the strong economic indicators that have led to the recent upgrades by international credit ratings agencies.

For so long, all we have heard from our concerned government agencies is a nebulous smattering of plans that really don’t define priorities, much less spell out how specifically this country is going to move forward.

Even the Department of Trade and Industry, which now speaks of re-invigorating the manufacturing sector, simply confines its policies to helping “support” private sector initiative in setting up roadmaps, but without really minding impact on employment generation or domestic productivity.

Our DTI executives feel important after having successfully gathered close to a hundred business groups that have indicated their intention to present roadmaps for growth. Let’s hope that the efforts of all these sectors will not end with these well-bound researches and documents tucked away in some bureaucrat’s filing cabinet.

Infrastructure

Binay may not be an economic expert, but when he declares that inclusive growth can only happen if the necessary infrastructures like electricity (and its high cost) are put in place so that the manufacturing sector will be able to rebuild and re-surge, he earns so many pogi points in the heart of businessmen.

These problems have been aired so many times over so many years that it has become embarrassing to keep mentioning them. In fact, these problems are well known to agencies like DTI, and finding solutions to these should have been their major roadmaps.

If the intention of the law to bring down electricity rates in the country is not happening, then our bureaucrats must initiate measures that will make this happen. The Philippines continues to have the highest power rates in the region.

It makes sense for government to focus on infrastructure like air and sea ports, and better and more roads and bridges, which will support trade and industry, including agriculture and tourism, two sectors in the country that need more support.

The country also needs a more efficient transport sector, one that will enable our farmers and fishermen, to move their products to different places within the country without relying on as many as eight layers of middlemen. This will not only bring down prices of goods, but also improve the earnings of our agriculture sector.

If we want to make tourism work for us, we need to solve the problem that our Manila international airport faces – again, something that has lingered for so many, many years already. Government needs to fix things, not just discuss how to fix things.

Improve tax collections

Finally, Binay stresses the need to raise tax collections to support infrastructure investments, one that he says needs to be raised to a decent five percent of GDP from the current two percent. And not by conjuring new tax measures, but by plugging leaks.

If Binay refers to his governance stint as former mayor of Makati City as basis for his above statements, this is because of his impressive track record as a local government executive who was able to bring inclusive growth to the lives of his constituents.

In the same breath, he cites the role that government, both local and national, must play in directing growth. And what business must do. Binay likens the country to a ship, where the government works best as captain and crew, while business works best as navigator.

It is only fitting that we end this column with a quote from Binay himself:

“As I have learned from Makati, expansion must necessarily precede inclusion. As the revenues of Makati City grew, we carefully focused the deployment of these resources in areas that would directly and sustainably benefit the Makati residents that need it most.” –Rey Gamboa (The Philippine Star)