Aquino’s hands-off style suited for growth

THE hands-off leadership style of President Beningo “Noynoy” Aquino 3rd was appropriate for the economic situation today, and his bachelor lifestyle was irrelevant to rapid growth, one of the country’s leading economists said.

Dr. Bernardo Villegas said during a media briefing on Friday that the Philippines was to grow at least 7 percent in 2011 and in the next five to six years, and that one of the contributing factors was the capable economic team of the President. Villegas, a Harvard-educated economist, is a co-founder and trustee of the University of Asia and the Pacific (UA&P).

“I don’t think he’s hands on,” Villegas told journalists, referring to President Aquino. But that seemed to be the leadership style the economic situation warrants, he added.

President Aquino has been criticized for appearing lazy as evidenced by his short working hours and infrequent convening of Cabinet meetings, as well as other official gatherings like the Legislative Executive Development Advisory Council (LEDAC).

“Nothing happens in Cabinet meetings anyway,” Villegas said. In contrast, his predecessor—former President Gloria Arroyo, who held weekly Cabinet meetings—tended to “micro-manage” to a point that it was counterproductive, the economist added.

Mrs. Arroyo, now a congresswoman representing her home province of Pampanga, was criticized for many things, but not for her work ethic. Despite her political setbacks, the economy grew nearly every quarter during Mrs. Arroyo’s nine years in office—even during the worst periods of the global economic crisis.

Competent team
Villegas had all praises for President Aquino’s economic managers, mentioning Sec. Cesar Purisima of the Department of Finance, Sec. Gregory Domingo of the Department of Trade and Industry, Sec. Rogelio Singson of the Department of Public Works and Highways, and Sec. Jose de Jesus of the Department of Transportation and Communications. The economist also praised Armando Tetangco, who was recently reappointed as Bangko Sentral ng Pilipinas governor by the President.

Villegas said that not all the members of the Cabinet were good picks, but he did not mention names.

“In the area of the economics, President Aquino has the right people,” he said. Later he added, “We’re very lucky [that] we have the right team.”

Asked whether the President’s nightlife could dampen his economic forecast, Villegas said that was “irrelevant to 7-percent growth.”

President Aquino’s love life and the bachelor’s apparent passion for luxury cars have been the focus of much media attention.

New competitive advantage
The optimistic economic forecast of Villegas is inconsistent with the prediction of others, including the World Bank and the International Monetary Fund (IMF).
Earlier in January, they reported that the Philippine economy would slow down this year relative to 2010, which benefitted from election-related spending.

But Villegas insisted that the Philippines was poised for an economic takeoff, thanks largely to heavy domestic spending in infrastructure and real estate development.

The government predicts that the economy as measured by the gross domestic product (GDP) would grow between 7 percent and 8 percent this year. GDP, a key economic indicator, is the total cost of all goods and services produced in the country in a year, and that, Villegas said, could reach a high of 9 percent in 2011.

He has been dubbed the “Prophet of Boom” for his rosy economic forecasts in the past. But Villegas insisted that his forecasts were well grounded.

Like the World Bank and IMF, Villegas said that remittances from overseas Filipino workers (OFWs) would continue to fuel the economy. He added that remittances could breach the $20-billion mark this year.

Villegas has another reason to be optimistic about rapid growth—high investor confidence in President Aquino.

“In economic management, the new competitive advantage of the Philippines is good governance,” he said in the prepared statement distributed during the media briefing.

“The upbeat mood of both consumers and investors is clearly due to a perception that the leadership of the country is in the right hands,” Villegas added. “This perception is being backed up by reality as some early economic wins have been registered by the new administration of President Benigno Aquino 3rd in less than six months since it came into power.”

Less optimistic
During the briefing, Villegas said that he was less optimistic about the political situation in the country, and that criminality and bombings, such as the recent attack on a bus in Makati City, could even continue.

Those things, however, would not be enough to keep the Philippine economy from growing rapidly, he said. In an earlier report about the economic briefing for journalists, Villegas explained that the economy will grow because of heavy domestic investments, which should benefit the country for the next two years.

He added that after two years the government needed to find ways to increase foreign direct investments despite restrictions in the 1987 Constitution. Having pointed that out, though, Villegas said that he did not favor Charter Change for now, because it might be distracting, drawing attention away from the economic agenda.

He also said that his rosy predictions for the Philippines were similar to the outlook of foreigners doing business here.

“An investment-led growth is getting support from the foreign investment community,” Villegas said in the prepared statement. “The Joint Foreign Chambers presented to Government last December 31, 2010 a roadmap dubbed ‘Arangkada Philippines,’ which described in great detail how a 7 [percent] to 9 percent universal growth in GDP can be achieved in the next five to six years.”

He told journalists that the Joint Chambers’ report should be “the Bible” for anyone wanting to understand the business climate in the Philippines.

The report, Villegas noted in his statement, identified seven key industries that could double the pace of economic growth—agribusiness, business process outsourcing, creative industries, infrastructure development, manufacturing and logistics, mining, tourism, medical travel and retirement. –Dante “Klink” Ang 2nd, Executive Editor, Manila Times