As the year creeps slowly towards its end, it is an excellent time to look back and take stock of the challenges we have faced and the lessons we can take away from them. This year, many of the biggest challenges faced by Filipinos were brought by the COVID-19 pandemic. Not only a health crisis, but COVID-19 had political, social and economic impacts as well. So, it comes as no surprise that these challenges played a central role in the discussions in this year’s Pilipinas Conference.
Every year, the Stratbase ADR Institute organizes the Pilipinas Conference to bring together thought leaders from the national and local government, business sector, academe and civil society to discuss pressing economic, social, political and strategic issues that influence the Philippines and the region. This year, the conference was held from November 23 to 27, with sessions on business, governance, security, and climate resilience.
The conference opened with a discussion on the country’s economic outlook in a session entitled “Rebooting the Economy Post-Pandemic: Cushioning the Long Emergency.” The session saw a panel of economic and political experts weigh in on rising economic pessimism and contraction and the need for reform to attract sustainable investments that build jobs, increase social protection and provide stable incomes towards growth.
Former Bangko Sentral ng Pilipinas Deputy Gov. Diwa Gunigundo, for instance, said that “while we are doing both pandemic mitigation and restarting the economy, we must not let up on the pursuit of policy and structural reforms. This commitment to market-based reforms will contribute a great deal to helping heal economic scars and restore confidence in our economy.”
This call for policy reform was also echoed by Prof. Dindo Manhit, president of Stratbase ADR Institute, who said, “for now, the Philippines cannot return to its pre-pandemic normal.” Hence, there is a need to craft policies and frameworks that can attract the right foreign investors to the Philippines. Through these investments, inclusive growth can be attained, thereby creating jobs and providing stable incomes to the people as the Philippines heads towards a “new normal.”
Another common theme that emerged from the discussion was the critical role of multi-sectoral collaboration in the country’s economic recovery.
Ambassador Albert del Rosario alluded to this during his keynote speech. He talked about the Filipino tradition of community and cooperation, saying the “Bayanihan spirit has been the secret of our durability as a people during times of immense difficulties. Because of this, we survived and recovered before, and so we will survive and recover again.”
Former National Economic and Development Authority Secretary Ernesto Pernia, citing Filipino’s Bayanihan Spirit, related it to public-private partnerships or the need for government and the private sector to work together to provide services and complete projects. Pernia added, “there must be mutual trust and empathy within the public and the private sector… The government should take on a friendly and collegial (not adversarial) stance vis-a-vis the private sector for a unified effort toward the country’s development goal.”
The critical role of public-private partnership was reiterated by Prof. Raul Fabella, who noted that “many of the good news in the Philippine economy in the last three decades has been associated with public-private partnerships. There are many instances where government pushing activities where it doesn’t have comparative competence in the private sector.”
During the pandemic’s early days, the private sector demonstrated how it could work with national and local governments towards the country’s recovery. Business groups mobilized resources, logistic networks, and workforce to support health workers and daily wage earners cut off from their income due to the lockdown. The country’s conglomerates are also behind many of the mega quarantine facilities, the country’s increased testing capacity, and many have already committed to help the government bring a vaccine into the country.
In addition to combatting the pandemic’s immediate health-related aspects, however, the private sector plays an even more critical role in rebooting the country’s economy. However, to attract investment and create jobs, a policy environment conducive for business to thrive must be in place. The Corporate Recovery and Tax Incentives for Enterprises Act bill, for instance, will reform corporate income taxes and incentives and is seen to help businesses badly hit by the pandemic. In addition to fiscal incentives, the government must also give investors the confidence to invest through transparent governance and adherence to the rule-of-law.
In turn, the private sector should continue to embrace the concept of “stakeholder capitalism,” wherein businesses consider not only the bottom-line but also stakeholders in their long-term vision and plans.
Indeed, 2020 has been a challenging year. Nonetheless, one of the critical lessons that can be taken from it is that whether you call it multi-sectoral collaboration, Bayanihan Spirit, or public-private partnership, the country’s economic recovery hinges on it.