THE Philippines and Thailand have resolved to revive a 23-year-old tourism cooperation agreement during the official visit of President Rodrigo Duterte to Bangkok.

“Philippines’ tourism program may yet gain an added boost with this concrete commitment for tourism cooperation with Thailand as a result of President Duterte’s fruitful official visit in Bangkok this week,” Tourism Secretary Wanda Teo said in a statement.

Thai Prime Minister Prayut Chan-o-Chan and President Duterte stood witnesses as Teo and her counterpart,Thai Ministry of Tourism and Sports chief Kobkarn Wattanavrangkul, signed the Implementing Program of Tourism Cooperation 2017-2022 at the Santi Maitri Building of the Government House of Thailand.

The implementing program is rooted in a memorandum of agreement on tourism cooperation signed in Manila between the Philippines and Thailand on March 24, 1993.

Thailand joins China, Cambodia and Turkey as the Philippines’ partners in tourism cooperation agreements forged within just nine months of the Duterte administration.

The agreement stipulates, among others, that the two countries shall actively encourage their respective local travel agents to develop a joint promotional program that would market both the Philippines and Thailand destinations in one tour package.

“There is so much we can learn from Thailand in terms of tourism development strategies,” Teo said.

Manila-based travel and tour operators who accompanied Teo said the shared tourism program could strengthen the awareness of the international and Thai markets about Philippine destinations.

In 2016, visitor arrivals from Thailand grew by 8.8 percent, reaching 47,913. Thailand accounts for 10 percent of tourist arrivals from Asean.

Under the agreement, officials and staff of both participants will visit each country to build their capacity in the areas of tourism development, administration and finance, human resource, marketing and promotions and standards and regulations.

Teo said this development would also encourage tourism educational institutes in both countries to cooperate on exchanging technical materials, sending experts to give lectures and providing information on the opportunities for tourism-related training.
Published in News
Tuesday, 07 March 2017 10:05

Multiplier effect

DAVAO is “three times bigger than Metro Manila, six times the size of Cebu, one of the largest metropolitan areas not just in Asia but in the world.” Today, it is the unofficial capital of the country. The Davao formula was for the mayor to handle peace and order, use political will to build the city, and the local bureaucracy to attend to the rest. Can this formula be scaled up to the whole of the country?

To a certain degree, yes, in terms of peace and order and infrastructure development. The other side of which is, no, because you have an unwieldy legislature trying to curry favor with PRRD (death penalty for illegal drugs?) or launch diatribes against him (EJK, Matobato, undeclared wealth, Lascañas and every anomalous act is labeled as done by Duterte). The 17th Congress in fact has just enacted two bills into law: the General Appropriations Act, or the national budget, and the postponement of the barangay elections. There are no super majorities because if there were, the legislative agenda of the President would have been on track.

PRRD has convened the Legislative Executive Development Advisory Council (LEDAC) and the chambers have crafted their own agenda. A common legislative agenda is said to be in the final drafting. Though we can do without more laws considering there are laws that have not been implemented fully and there are unfunded mandates, we need more and more for Congress to exercise its oversight function over the Executive and Judicial branches if it is to help PRRD in his effort to pursue reforms.

In a study done by the Congressional Policy and Budget Reform Department of the House of Representatives, there are “62 laws [that]remained partially funded while 75 laws were not funded at all as of 15 October 2015. Unfunded laws grew by 127.3 percent from 33 in 2007 to 75 in 2015, while partially funded laws grew even higher by 376.9 percent from 13 to 62 in the same period.” These laws amounted to “P367.3 billion. Of this amount, only P242.1 billion was allocated, leaving a funding deficiency of P125.2 billion.” Unbelievably, “the House committee on oversight (13th Congress) which made an inventory of unfunded laws even indicated that two laws enacted by the First Philippine Republic—the Friars Lands Act (1904) and Cadastral Survey Act (1913)—were not implemented because they required a huge funding of P1.5 billion.”

So if Congress can’t act as a direct partner to PRRD on infrastructure development and decides to use their pork for the innocuous projects that do not build a nation, then PRRD and his political will should push the envelope daily until such becomes the bureaucratic discipline. Why? Because doing infrastructure development is the way to respond to some promises of the President: inclusive growth, lowering poverty by the end of his term, providing jobs and bringing sunshine (economic activities) to the poorest provinces.

With political will, PRRD can connect the 7,641 islands by a system of airports, ports, bridges and rails. The bridges can be tourist attractions just like the bridges in Porto, Portugal. Porto is the second largest city after Lisbon and it has a mixed transport system of bus, rails, trams and subways. One can do a tour of the Duoro river and see the different designs of the bridges; some are modern while others are historical in make and design. If PRRD can implement Build.Build.Build and other infrastructure plans every year in the three islands of the country then we would have done much, much more than any administration has.

The nautical highway of then PGMA must be continued and further developed. Just look at the development it brought to Roxas, Oriental Mindoro. Roxas, the smallest municipality of the province, was a sleepy, fourth-class municipality. Today, it is a place of heightened economic activities because of the nautical highway, connecting its port to the famous destination, Boracay. Today, it is a second-class municipality from being a pass-through from Batangas to the Calapan piers and to Caticlan, Aklan.

The underlying reason for pushing for Build.Build.Build is that of the so-called multiplier effect. We can be competitive at the end of PRRD’s term if we are able to launch and implement the infrastructure plan. The multiplier effect is “an increase in income generated by an increase in spending,” which should be part of our national conversation. Such conversation should not settle for mere infra for infra sake but “wise” infra investment. The qualifier “wise” refers to projects that fill a need of the community they serve and which are economically viable. A key lesson is that “projects that have a lot of private capital behind them would have the biggest impact because more often than not they won’t be a road to nowhere.”

Further, it has been a settled model that “an additional 1 percent of GDP invested in transport and communications on a sustained basis increases the GDP per capita growth rate by 0.6 percent. “Productivity growth— and therefore competitiveness—is higher in countries with an adequate supply of infrastructure services.” So, we can even pursue a smart infrastructure development of a mix of hard and soft infra with ICT merged to it to create a resilient Philippines.

Clark should therefore be made as the main gateway, with Subic and Batangas designated as alternative, complementary ports to Manila. Clark and Subic should serve the northern part of Luzon while the south (CALABARZON) can be served by Sangley airport and port system. NAIA can be dedicated to the 12 million residents of Metro Manila. A tri-airport system in Luzon unclogs the bottlenecks of Metro Manila and spurs development from center to the peripheries.

Our unique geography, between East and West, allows us to be a competitive logistics hub. In a Transport Intelligence Report (TIR) in 2015 estimated “Philippine logistics to triple to P326 billion by 2020 from the present P100 billion.” TIR said that by 2020, based on low 11 percent compounded annual growth rate (CAGR) and high of 18 percent CAGR growth scenarios, the logistics market is forecasted to reach P204 billion (low) to P326 billion (high).

The forward linkage index of the Philippine logistics industry as of 2011 was placed at 1.4, the lowest in Southeast Asia, compared to Indonesia, 2.1; Thailand, 2.73; Cambodia, 2.48; Vietnam, 2.64; Thailand, 2.73 and Malaysia, 4.03. Based on the study, logistics’ multiplier effect is such that “every P1 investment has a multiplier of 2.81 investments in other industries such as services.”

There are 109 local and foreign logistics service providers in the country with aggregate revenue of P60 billion. They are very much concerned over the provision of efficient transport infrastructure, conducive policy environment, and regulations that will foster the logistics sectors’ competitiveness in terms of cost, service quality and reliability.

Based on a 2010 traffic study by the Japan International Cooperation Agency in Metro Manila and its environs, truck trips (per day) is expected to increase from 694,271 in 2010 to 872,329 in 2020 and 1 million by 2030. The share of trucks going to and from Manila is 60 percent. That means, we need to increase our road networks.

The Department of Public Works and Highways’ (DPWH) budget has increased dramatically over the last four years. In 2015, almost half (49 percent) of the government’s outlay infrastructure went to DPWH. The big challenge is improving the paved ratio of local roads that comprise 84.5 percent of the country’s total road network. Provincial and municipal roads have a low paved ratio of 35 percent, while city roads have a paved ratio of 62 percent.

Trains and trams are something we need to seriously pursue. Trains can be transshipment mode for raw and finished products, from Mindanao to the Visayas or Mindanao to Luzon. Trams can be an efficient mass transit in urban centers to the peripheries. But Congress will have to contend with the problematic Philippine National Railways (PNR) mandate, which has been pending in Congress despite the extension of its corporate life.

The good news is that under PRRD, the infra spending has been placed at 7 percent, an increase of 2 percent from BSA3’s 5 percent. The other good news is he is hands-on on infra coupled with the political will to push the projects fast. When we see projects launched and a building spree all over, then we test the government’s effort on corruption. If the infra projects are corruption-free, then we see why a Duterte is better than the rest. The surest way to defeat destabilization efforts is to perform well and accomplish more. Unfortunately, the Department of Transportation (DOTr) and the Department of Information and Communication Technology (DICT) are laggards instead of being shining stars. The social welfare clusters are moving. The economic clusters have rolled up their sleeves and the DPWH is getting things done. Agriculture is moving to remove bottlenecks one by one. The uni-dimensional focus must end.

The Duterte administration needs at least P8 trillion to close the infrastructure gap over the next six years. An initial list of 18 big-ticket items worth a total of P427.5 billion has already been approved by the National Economic and Development Authority. Clearly, accelerating infrastructure spending to help pull down the poverty rate to below 15 percent by the time he steps aside in 2022 is vital.

The reality is that the total resources of the Philippine financial system is P16.2 trillion and the Duterte administration would have to invest about Php8 trillion over the next six years on infra to be on a par with Asean. So, the more Congress spends time on this problem area, the better for the whole infra plan to be a reality.

Getting your act together has a multiplier effect, too. It quiets the shrillness in politics. Getting your act together is getting all hands deck, no lone stars. Getting your act together is no public meltdown; the only meltdown should be on tasks not done. From June 2016 to March 2017, or eight months hence, hold the reins tight and get things done. Don’t be derailed by the political noise.

As Socrates said, “the secret of change is to focus all of your energy not on fighting the old, but on building the new.”
Published in Commentaries
Tuesday, 21 February 2017 09:42

Legacy Islands on Water

IN Asia alone, there are 17 reclamation projects of note, such as: the coastlines of Mumbai, India; the coastlines of Mainland China, Hong Kong, North Korea and South Korea; the inland lowlands of the Yangtze Valley, China, including Shanghai and Wuhan; the coastline of Karachi, Pakistan; part of Hamad International Airport; the entire island of The Pearl-Qatar situated in West Bay (Doha) Qatar; Hailou Bay, Hainan Province, China as well as the west side of Haitian Island and Haikou City are all being extended; Cotai Strip in Macau; Nagoya Centrist Airport, Japan; Incheon International Airport, South Korea; Beirut Central District, Lebanon; and Europe, Africa and the Americas have their share of reclamation projects, too.

The Philippines has 7,641 islands and this number could still grow through land reclamation. What reclamation? The so-called enemy of environmentalists, right? But hold it and let’s see what kind of reclamation this is, considering we have lessons learned from the reclamation of Manila Bay in the past.

The Philippine Reclamation Authority (then known as the Philippine Estate Authority per EO 380 as of 2004) is set to build what is known as Legacy Islands on Water. Conscious of the issues attached to reclamation, the PRA has adopted three strategies: 1) purposive reclamation; 2) protective reclamation and 3) capacity development.

Purposive reclamation refers to Legacy Island on Water, or LIoW, that is “liveable, resilient, safe, sustainable, green, generative, pro-people, future-proofed and innovative, and a smart community.” On LIoWs and related developments, “the integration or combination of economic zones, smart community infrastructure, mangroves, flora and fauna eco-systems, renewable energy facilities, coastal protection structures, green landscapes and blue water, socialized housing units, water collection systems, waste management methodologies, public access networks, and mixed-used development are critical.”

Protective reclamation refers to an integrated coastal defense development based on the model funded by the Kingdom of the Netherlands for the “Coastal Protection Strategy for the City of Tacloban and Municipality of Palo, Leyte.” The PRA will seek assistance from donor and multi-lateral agencies, foreign governments and partner organizations to finance and conduct other studies for storm surge and coastal flooding-prone areas identified in the study. Preliminary inspection and assessment of the cities of Butuan, Bislig and Surigao have been conducted.

Organizationally, PRA Learning Ecology has been established. Capacity development programs, at the professional and personal levels, have been identified. If PRA has a green army, reclamation won’t be a zero-sum game.

Imagine a Philippines with additional destinations, self-contained agricultural estates, dairy farms, logistic hubs, tree farm islands; renewal energy model islands that can harness energy for use in the island and as inputs to grid in the main islands, etc. The possibilities are limitless. What if the areas that are part of our territory where there were land bridges before are reclaimed? Think about the possibilities but yes, as in other forms of development, there are issues on reclamation. There are advantages and disadvantages of land reclamation and knowing these is a sure way of avoiding and working around the issues.

Land reclamation means “more land has been made available for development. More buildings and infrastructure can be built, and also for other reasons.” The ability to connect the islands by ports, bridges, rails and airstrips are made easier. It may not be a concrete jungle but eco-tourism zones and industrial estates or model smart cities can be the blueprints. They can be the gems of federalism because the legacy islands will become the magnets of growth.

The disadvantages are aplenty as documented from various experiences: “Much greenery has been removed in order for the land needed. Land reclamation can be damaging to corals and marine life. Corals are usually moved to another place when land is to be reclaimed. The corals might not be able to survive in that certain habitat, and thus die out. In some countries, where the project is large-scale, they do not even bother to re-plant the corals elsewhere, instead just reclaim the land on their habitat, causing them to die out immediately. Marine life, such as fishes, might not have enough food after the underwater plantations are destroyed due to reclamation of land. This applies to the food chain. The waters might also be polluted from the soil used to reclaim land, causing the fishes to die and blocking out sunlight, depriving the underwater plants of growth. Marine habitats are also destroyed, as mentioned earlier; therefore, the marine creatures would be forced to move to another new habitat.” Can we mitigate the disadvantages? Manila Bay was reclaimed in the 1970s-1980s. The second phase took place in the 1990s. We learned from such plans and with new technology can do better reclamation today.

As in mining, the rigid environmental impact assessments (EIAs) should be able to assess environmental issues with regard to land reclamation projects. If the project is an environmentally critical project or is in an environmentally critical area, EIA is mandatory. EIAs normally consider issues such as impacts on species and habitats, other human uses (e.g. fisheries, navigation, recreation, cable and pipeline laying), international and national marine protected areas, water quality and coastal processes (sediment transport, erosion, sedimentation, hydrodynamics). The results of an EIA may affect the design/shape of the land reclamation, the public consultations and the permit conditions.

Of essence in planning for LIoW is a citizens’ monitoring feedback mechanism that encourages the participation of citizens in governance. Social acceptability of high impact projects is critical and getting the communities involved in the process will determine success or failure of a project.

Building a nation is not easy. It has never been been easy. But taking the first step and building a common platform to move makes the bottlenecks bearable. It will be hard, but let’s find the common ground.
Published in Commentaries
Monday, 13 February 2017 09:18

Cuisia speaks on Aquino, Duterte

Life should be easier after five years of serving as Philippine Ambassador to the United States and, simultaneously, an active director of several blue-chip Philippine companies.

But when you’re Jose L. Cuisia—who’s been Central Bank Governor, Social Security System Administrator, president and CEO of Philamlife, and Governor to the International Monetary Fund, among others—life is a continuous call to serve.

He’s currently a board member at SM Prime, Manila Water, Century Properties, Phinma, FWD Insurance, The Covenant Car Company (Chevy Philippines), AIG Shared Services, the Asia Breast Center, and the Asian Institute of Management’s Rizalino Navarro Competitiveness Center.

“Even when I was abroad, I would come home to attend annual shareholder meetings in person, and occasionally, some board meetings. Most of the board and committee meetings were held in the morning in Manila, so I could attend them from Washington in the evening via Skype or teleconference,” he says.

Aside from good time management, he relies on a solid foundation in accounting and the ability to sift through a lot of information quickly, which are musts for corporate directors.

How about the musts for good boards?

“First, you must have diversity. In Manila Water, we have two outstanding women directors and we have very enriching discussions because our directors come from different fields of expertise. Furthermore, there is mutual respect for each other’s views,” he shares. “Second, management provides us with a lot of information to help us make decisions. I’ve been privileged to sit on boards which have practiced good corporate governance by making sure that all directors are provided with complete materials. And most importantly, we have independent directors who are not afraid to speak out, even if they have views that are different from those of management. That’s what good governance is all about.”

“We’re making progress [in corporate governance] because of the work done by the Institute of Corporate Directors (ICD), and by the companies themselves; some have been given regional recognition for adopting best practices in corporate governance. There’s a real effort by Philippine corporations to adopt good practices prescribed by the Asean Corporate Governance Scorecard. But we need to develop more qualified directors to ensure that there is an adequate pool of independent directors who can be invited to various boards,” he notes.

“The reason why it’s the same people on the boards is because they’re tested, they have a good reputation … New directors should get more training and exposure—they can start with small companies,” Cuisia advises. “Demonstrate independent thinking, attend more of these professional development seminars and eventually you’ll be noticed.”

Has the quality of boards improved over the years?

“Yes, because the directors, particularly independent directors, have gone through more professional training and development with the help of ICD and other organizations providing governance training,” he notes. “The SEC exhorts independent directors to be better prepared to tackle their jobs. I think directors today are more prepared.”

Philippine-American relationship

Has his stint as Philippine Ambassador to the United States changed his perspectives?

“Of course. Because of my job, I was inevitably exposed to the US-Philippine relationship much, much more. It made me appreciate the kind of military, security, socio-economic and diplomatic relationship that we have developed over the past 70 years. Despite what other people say, it has been very beneficial to the Philippines. And of course to the US too—because they also need us as an ally here in Southeast Asia,” he says.

“I see the value of a strong economic relationship. Which is why I’m concerned when they say we’ve got to move away from Washington. It is fine to develop other relationships with China, Russia, and many other countries—but not at the expense of the US,” he insists. “Why? Because we have a very healthy, very friendly relationship that has been mutually beneficial. We have over 600 American companies operating here, roughly 350,000 Americans living here. On the other hand, we have 3.4 million Filipinos and Filipino-Americans living in the US. So why should we move away from the US? Are we going to cut off relationships with the US just because we want to please China? It doesn’t make sense,” he adds.

“There is a greater bond between American companies and Philippine companies. Mainly because of our long history of shared values and friendship, the many Filipinos who live, work or study in the US and the lack of a language barrier— which allows Filipino nurses, who are so much in demand in the US, to get good jobs,” he muses. “Because of this, there is a greater affinity between Filipinos and Americans.”

“In traveling around the US, what surprised me is that outside of the major cities, many Americans don’t know much about the Philippines,” Cuisia says. “We did a business presentation in Miami and we were asked, ‘Where is the Philippines? How come we don’t hear the good news regarding your rapidly growing economy? How come we don’t hear about it?’ When Americans talk about Asia, they think of China, Japan, South Korea. They don’t know much about Southeast Asia or the Philippines. There’s not much exposure to our country, but we’re trying to change that. That’s why we had a lot of these trade and investment fora around the US.”Economic policy of Aquino and Duterte

The Philippines is in the news much more often now, because of the President’s rhetoric. How does this affect business?

“First, let me say that the administration’s 10-point economic agenda is very good. They’re building on the gains of the Aquino administration, they’re not throwing those away. If the Duterte administration implements that 10-point program, we will continue to see sustained economic growth,” he promises.

His reasons?

“Infrastructure spending’s going to be increased—that’s very important. Five percent of GDP was the highest target under the Aquino administration—I know we hit 4 percent of GDP at the end of 2015. But remember, when Aquino took over, it was 1 percent of GDP. The Duterte administration intends to bring up infrastructure spending to 7 percent of GDP.

“Second, they’re putting more emphasis on agriculture, which I would say was one of the weaknesses of the Aquino administration. In the third quarter, we had 7 percent growth because agriculture was growing by 2.5 percent, the best in the past few years despite bad weather. Government should pay more attention to building irrigation systems, farm to market roads, and providing greater support and assistance to farmers which could definitely contribute to increased economic development.

“Third is the commitment to education sector and health —that’s very critical. While President Aquino and his education secretary should be credited for having implemented the K-12 program, much more attention has to be given to the education sector to provide the youth with more job opportunities. In the health sector, President Aquino and his health secretary ensured better healthcare for the population particularly the lower income groups. Much more needs to be done by government to provide adequate infrastructure for social services.

“Fourth is tourism. We’ve seen our tourist arrivals move up from 5.5 million in 2016; we should be able to hit the 10 million target by the end of Duterte administration. But even if we hit that, that’s still very low compared to Thailand’s 27 million. The tourism sector can provide a lot of job opportunities because our people have the facility of the English language.

“There are tax reforms being pushed—a more progressive system—but they need to plug the loopholes. They’re still many people who evade taxes. You have to widen the tax base —that’s going to be one of the challenges.”

Cuisia adds: “One of our biggest challenges is developing the skills of our work force to meet the higher level of skills required in the future. As you know, we have millions of Filipino workers all over the world. Our Filipino workers are very adaptable, very trainable, and this is why they’re very much in demand. But if we are able to provide jobs here, and bring back these people who were exposed to technology in developed countries, they can contribute a lot more to our economy.”

Cuisia is keen to see more capital injected into the economy.

“Foreign direct investment will increase if you have less taxes, less bureaucracy, less regulation: Just opening a business takes so long because of so many requirements and too much red tape! You’ve got to have policies that encourage companies—both foreign and local—to bring in more modern technology when they invest in the country. But they’ll only do that if they see a more conducive business environment which provides incentive to the private sector to create more jobs,” Cuisia says.
Published in News
Friday, 03 February 2017 10:28

Brighter futures Mindanao

KNOWN as the “Land of Promise,” Mindanao is characterized by long coastlines and mountains that are filled with unique flora and fauna. A third of its land is devoted to agriculture and supplies 40 percent of food to the entire Philippines. Its land area is three times the size of Taiwan, 88 times bigger than Hong Kong, and 136 times larger than Singapore.

For a long time, it seemed that Mindanao was perceived as the backdoor to the Philippines. A closer look at the world map would show that Mindanao has a great opportunity to be the country’s frontdoor to Brunei Darussalam, Indonesia, Malaysia, and even Australia and New Zealand.

Mindanao is part of the East ASEAN Growth Area, a sub-regional cooperation initiative bringing together the neighboring areas of the ASEAN countries of Brunei Darussalam, Indonesia, Malaysia, and the Philippines in the BIMP-EAGA, which was formally launched in 1994 in Davao City. The sub-regional cooperation initiative aims to utilize the strategic proximity of the cities and enhance key target areas such as agro-industries, trade and tourism. Aside from the benefits to be from cooperation, cities like Cagayan de Oro, General Santos, and Davao are experiencing significant economic growth, and are visibly becoming a destination of business investment and local tourism because of their emergence as the commercial and business centers of the south.

The Muslim provinces of Basilan, Lanao del Sur, Maguindanao, Sulu and Tawi-tawi also have great potential being in the center of trade for East Asia. But they would need more infrastructure development, especially in education, health and road infrastructure. Improvement in societal stability should also be addressed to attract more investors.

Prioritizing development projects in Mindanao

Under the Duterte administration, the allocated budget for both the Autonomous Region in Muslim Mindanao (ARMM) and the Mindanao Development Authority increased significantly. Infrastructure projects are also already in the pipeline like the Mindanao Railway System that will total 2,000 kilometers in length. The proposed railway system will interconnect Butuan, Cagayan de Oro, Davao, General Santos, Surigao and Iligan. Other infrastructure projects in Mindanao will include upgrading and modernization of airports and seaports, as well as road networks that will improve access to tourism destinations and farm-to-market.

Last January 13, Japan’s Prime Minister Shinzo Abe visited President Rodrigo Duterte in Davao and pledged a trillion yen for infrastructure projects. The visit is seen to usher in more foreign investments, especially in Mindanao.

Zamboanga City

Just recently, Palafox Associates and Palafox Architecture had the opportunity to help Zamboanga City in the preparation of its Comprehensive Land Use Plan and Zoning Ordinance.It consists of plans for transportation, tourism, disaster preparedness, and security by design, among others. The plan also advocates an “agropolitan” development for the City of Zamboanga, integrating agriculture and aquaculture production with the necessary urban amenities that will spur growth for the city.

In addition, the Philippines, through the City of Zamboanga can play a crucial role in strengthening trade links with BIMP-EAGA, the Muslim countries in Asia and the Middle East. Along with the cities of General Santos, Cotabato and Davao, Zamboanga is identified to be among the selected urban centers in Mindanao for the BIMP-EAGA region. The Zamboanga Peninsula plays a critical role in realizing the medium and long-term goals of Mindanao and BIMP-EAGA which is to become a major location in ASEAN for high value-added agro-industry, natural resource-based manufacturing and high-end tourism that will eventually shift towards ensuring socio-economic, physical development, and a southern gateway to and from the Philippines.

Learning from Metro Manila

Indeed, Mindanao has a great opportunity for development, given the support from the Duterte administration. It would be important to prepare the island for the influx of investments through proper planning and development guidelines, so as not to repeat the mistakes of Metro Manila. At present, Davao City is already experiencing traffic congestion and is feeling the pressure to make necessary improvements to its mobility and transportation given the attention it is gaining from investors.

Comprehensive and collaborative planning is urgently needed as it is estimated that with the rapidly growing population and urbanization, there will be 35 million more Filipinos by 2050. Seventy to eighty percent of them will migrate to the cities. I estimate that with 150 million total population by 2050, the Philippines will need 100 more new cities. Moving forward, planning should not only be short-term and opportunistic, but also long-term and visionary.

I believe that the next six years give our country an opportunity for genuine reform and change. Mindanao is taking a major step in the right direction by prioritizing projects that will improve connectivity, convergence, context, corridors, and networks. Instead of putting up walls, the Philippines is building more bridges. Improving peace and order as well as promoting unity in diversity would also be crucial for growth to be inclusive. With this, bringing the Philippines well into the 21st century – a globally competitive country – will soon be in the horizon.
Published in Commentaries
Tuesday, 24 January 2017 09:56

Can Duterte keep both US and China?

WILL President Rodrigo Duterte still be all praise for newly inaugurated US President Donald Trump when/if the latter makes good his threat to go after China as a cheating trader and a regional bully?

Sooner or later, especially if State Secretary nominee Rex Tillerson joins the Trump team, Duterte may have to choose between continuing to cozy up to the next-door Mandarin suitor or swing back to good old Uncle Sam.

Or, summoning his skills in handling such triangular love affairs, Duterte may just succeed – to everyone’s relief – in positioning himself as a moderating influence in the seething regional rivalry between China and the US.

In his Davao home base over the weekend, Duterte was gushing over the inauguration of the 45th US President: “It was a very superb ritual and Trump was at his best.” He talked of looking forward to repairing bilateral ties that took a beating during the Obama administration.

Appreciating that the New York tycoon-turned-politico “talked from the heart,” Duterte said he liked Trump’s “Make America great again” slogan reminiscent of the martial law Marcosian “Make this nation great again” mantra.

But after the excitement of the inaugural wears off and everybody settles down to realpolitik, Duterte may have to spend time guessing how Trump would translate into policy and action his thoughts about the Asian dragon:

• China must be laughing at how easy it has been to take advantage of the US. Better to slap all its exports to the US a 25-percent tax to make American products competitive and balance out the trade deficit.

• The US must rethink the opening of its market to countries like China that “steal (e.g. intellectual property) from us” or oppress and violate the human rights of their people.

• China’s currency manipulation should stop. Although American products are better, Chinese goods are given a competitive edge by the currency manipulation.

• Pressure or motivate US firms to close their factories in China and relocate home to provide more jobs to Americans.

The US-China rivalry will loom bigger if Tillerson, an outspoken former Exxon Mobil Corp. chairman and chief executive, is confirmed as State Secretary and given a chance to influence and enforce foreign policy.

• Tillerson favors confronting China

TESTIFYING days ago before the Senate foreign relations committee, Tillerson batted for stopping China’s building of artificial islands in areas within the territorial seas of its neighbors – and the building of military installations on them.

He said the US must reaffirm its security ties with its regional friends. He did not mention the Philippines, a treaty ally, but cited Taiwan (which China regards as a renegade province) with which he said the US must renew its commitments. This departs from the standing One-China US policy.

Beijing bristled at the declarations of a figure who stands to become the key enforcer of a more aggressive US foreign policy that could put the US on collision course with China.

As the two superpowers gird for a showdown in the South China Sea, where will Duterte position the Philippines, a military pygmy and a medium-scale economic player in the region?

Assuming Trump attempts to catch up, will Duterte put on hold the multimillion-dollar development projects and aid that Beijing has started to position in the pipeline? Or will he just open the country indiscriminately to both Chinese and American assistance?

As reported by Reuters, Tillerson appearing for confirmation in the Senate described China’s building and militarizing of artificial islands as “akin to Russia’s taking Crimea” from Ukraine – a move that triggered a US-NATO military response.

Asked whether he supported a more aggressive stance toward China, he said: “We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed.” He did not elaborate.

Using a unilaterally drawn “nine-dash line” boundary, China claims most of the energy-rich waters through which about $5 trillion in ship-borne trade passes every year. The Philippines, Brunei, Malaysia, Taiwan and Vietnam have competing territorial claims.

China’s foreign ministry spokesman Lu Kang said he could not guess what Tillerson was referring to when asked about the nominee’s suggesting blocking access to the islands.

• Pope warns against ‘populist saviors’

A NEW CROP of leaders of varying shades and styles of “populism” has sprouted in several countries, eliciting cautionary counsel from Pope Francis that “populism” in some cases could lead to the election of Hitler-like “saviors.”

In an interview with Spanish newspaper El Pais conducted as Trump was being sworn in as President, the Pontiff also condemned the idea of using walls and barbed wire to keep out foreigners.

“Build bridges, not walls,” the Holy Father once quipped after a visit to Mexico. Trump, then a candidate, had announced he would build a wall on the US border with Mexico to stop illegal migration and the smuggling of narcotics.

In his El Pais interview, the Pope said, “Of course crises provoke fears and worries,” but that for him “the example of populism in the European sense of the word is Germany in 1933… Germany was looking for a leader, someone who would give her back her identity and there was a little man named Adolf Hitler who said ‘I can do it!’”“Hitler did not steal power,” the Pope said. “He was elected by his people and then he destroyed his people.”

The Germans at that time also wanted to protect themselves with “walls and barbed wire so that others cannot take away their identity.” He added: “The case of Germany is classic… Hitler gave them a deformed identity and we know what it produced.”

As for the new US President, the Pope said it was too early to pass judgment on Trump: “Let’s see what he does and then we will evaluate.”
Published in Commentaries
Tuesday, 24 January 2017 09:40

PH, China firm up 30 projects worth $3.7B

China and the Philippines have agreed to cooperate on 30 projects worth $3.7 billion focusing on poverty reduction, the two countries announced after a meeting in Beijing on Monday.

Chinese Commerce Minister Gao Hucheng announced the agreement without giving details, saying it involved an “initial batch” of projects that still needed to be finalized and paperwork still needed to be processed by the banks involved.

Duterte visit

In a statement from Beijing, Philippine Finance Secretary Carlos Dominguez mentioned irrigation systems, hydroelectric power plants and railways, details of which, he said, would be fleshed out with Chinese officials during two days of meetings that end on Tuesday.

The deal is the first announcement from a two-day visit of a Philippine Cabinet delegation to China that comes three months after President Duterte visited Beijing to clear the way for new commercial alliances.

China has welcomed Mr. Duterte’s foreign policy shift away from the United States and toward doing more regional deals for loans and business under his “pro-Filipino” policy.

Relations between the Philippines and China “fully recovered” after Mr. Duterte’s visit, and “China supports President Duterte to lead the Philippines people in developing their economy,” Chinese foreign ministry spokesperson Hua Chunying told a regular news briefing on Monday.

Hua was referring to Mr. Duterte’s fence-mending after relations between China and the Philippines were frayed by a territorial dispute in the South China Sea that Beijing lost to Manila in the UN-backed Permanent Court of Arbitration in The Hague last year.

After taking office in June last year, Mr. Duterte deferred assertion of the court’s ruling to ease tensions between the two countries and improve relations.

Chinese officials pledged $15 billion of investment to Manila during Mr. Duterte’s visit to Beijing in October last year, according to the Department of Finance (DOF).

Asked by reporters in Beijing whether US President Donald Trump’s economic policies would affect commercial ties between China and the Philippines, Dominguez said: “It’s better to be with good friends.”

“I’m not sure at this moment exactly what the new US policies [are], but I believe that the reorientation of our President to our neighbors really was very smart,” he said.

The Philippine delegation was scheduled to meet Vice Premier Wang Yang at Zhongnanhai, the Beijing complex that houses China’s central government, later on Monday.

In his statement released by the DOF, Dominguez said he had a “very productive” meeting with Gao and that they had discussed large projects in rural areas, as well as some smaller projects.

“This will be our second discussion [with Chinese officials about the projects] since November last year. We hope that [during] our visit here, we [will] be able to proceed with the projects that are ready to be implemented,” Dominguez said.

Matching priorities

“We submitted last November a list of projects to the Chinese government through the Chinese Embassy in Manila for their review. The Philippine team would like to get their reactions and determine what their priorities are and see whether this also match our priorities,” he said.

Dominguez said “the generous assistance offered by China to the Philippines is among the concrete results of the President’s foreign policy rebalancing toward accelerated integration with [the Association of Southeast Asian Nations] and its major Asian trading partners China, Japan and South Korea.”

“The President has recognized the importance of China in the region and he has redirected our economy more toward China and the Asean than to the West,” he said.

“I believe that China will continue to lead the world and continue to lead the Asean in becoming the engine of global growth,” he added.

Philippine delegation

The Philippine delegation includes Budget Secretary Benjamin Diokno, Socioeconomic Planning Secretary Ernesto Pernia, Transportation Secretary Arthur Tugade and Public Works Secretary Mark Villar.

Besides meetings with Gao and Wang, the Philippine delegation will also meet Vice Chair Wang Xiaotao of the National Development and Reform Commission, China’s chief planning and strategy agency.

The Filipino officials also plan to meet top executives of China Investment Corp., a sovereign wealth fund.

“The meetings will cover discussions on the government-to-government projects signed between the Philippines and China, the proposed projects for financing and feasibility studies, the chairmanship of the Philippines this year of the Asean, and matters concerning the Asian Infrastructure Investment Bank and the Philippines’ flagship infrastructure projects,” the DOF said in a statement.
Published in News
Friday, 06 January 2017 11:05

Economy seen growing over 7% this year


MANILA, Philippines – First Metro Investment Corp., the investment banking arm of the Metrobank Group, expects the Philippine economy to remain strong in 2017.

The country’s gross domestic product (GDP) is expected to grow by 7 to 7.5 percent, driven by higher capital investments as the Duterte administration continues to ramp up infrastructure spending coupled with sound foreign direct investments, strong consumer expenditure, stable OFW remittances and sturdy BPO sector.
Published in News
Saturday, 28 May 2016 16:30

The Philippines’ New Strongman

Rodrigo Duterte’s authoritarian neoliberalism isn’t the answer to poverty and political abuse in the Philippines.

Rodrigo Duterte’s election as president of the Philippines made global news. It’s not hard to see why. Described as an “outsider” and a “maverick,” Duterte is a charismatic enigma.
Published in Commentaries
THE PHILIPPINES moved up to third place on a list of countries where so-called “crony sectors” accounted for a big chunk of the gross domestic product (GDP), even as the share of rent-seeking tycoons’ wealth slightly slid amid a growing economy.
Published in News
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