Realities and challenges of 2014
“A danger foreseen is half avoided.” — Thomas Fuller
With typhoon Yolanda behind us, massive public works projects are underway, and with generous foreign aid pouring in for reconstruction and rehabilitation of Central Visayas as well as existing programmed outlays for Luzon and Mindanao, the immediate outlook for 2014 should look bright and rosy, which optimism is shared by investment bankers and multilateral financial agencies.
In fact, foreign analysts, credit rating survey organizations, the Asian Development Bank (ADB), the World Bank, and foreign governments are all praises for the Philippines for its prudent fiscal management, sound monetary policies, mild inflation, and the reformist policies of the Aquino administration.
Not surprisingly, the Philippines now finds itself as one of a half dozen rapidly emerging global market economies that are well poised to attract direct private foreign investments and propel the economy to the next higher level pari-passu, with countries, such as, Indonesia, Malaysia, South Korea, Mexico, Poland and a few others.
Moreover, the Philippines today is the number two country in the world, after India, in Business Process Outsourcing (BPO) that is giving employment and income to thousands of Filipino youths. This country is also the world’s fourth largest source of forex remittances from the nearly 10 million Filipino labor force residing and working in every corner of the globe.
Additionally, the Philippines does not only have a huge, young, literate and skilled population eager to work overseas but is also one of the world’s most mineral rich nation.
On the other hand, the Philippines also faces many challengers, hang-ups, and realties which must be addressed.
First, the Supreme Court TRO freezing the proposed rates hike in electricity is an exercise in futility, and will merely postpone what is inevitable.
The reality is that the world, especially impoverished oil importing countries, is condemned to, and must accept wild oil price swings and fluctuations as a way of life.
Not only are oil supply conditions unpredictable and erratic, particularly since Saudi Arabia and OPEC (Organization of Petroleum Exporting Countries) member countries are facing diminishing spare capacity but the increasing political instability that results also tends to spill over and trigger the same destabilization in oil -dependent nations.
The Philippines, which does not have oil or coal deposits, or nuclear power, is particularly vulnerable to the vagaries of oil price and supply volatilities that places the Philippines at the mercy of the oil cartels.
Second, for those who are critical of, or unhappy with the Aquino administration, the reality is that President Benigno “Noynoy” Aquino is not likely to change his attitude or character at his age.
He will remain vindictive, stubborn, and insensitive. Can a zebra change its stripes?
On the other hand, owing to the contribution to the economy coming from the OFWs and BPOs, and higher GDP growth, the Aquino Administration has been adjudged as an economic success, and the Philippines as an emerging tiger economy.
For these reasons, the policy philosophy and attitude of President Noynoy Aquino towards politics and the economy can be reduced to “if it ain’t broke, why fix it” which he applies to his policy decisions and aversion to Cabinet revamp and the deadweights in his administration. The apple does not fall far from the tree.
The third reality, and more urgently, is the glaring and sorry lack of infrastructure investments in the country.
To overcome this handicap, modernize and entice investments, Constitutional amendments on land ownership and utilities will be necessary, and serious attention ought to be given to reducing power costs and upgrading ageing power plants.
When all is said and done, these realities and corollary issues need to be addressed before the Philippines can attract quality foreign direct investments, and worthy to be called the “emerging tiger market economy” of Asia.
You be the judge.