Interview: Ramon del Rosario Jr
How has the business community reacted to the reforms enacted by the Aquino administration?
RAMON DEL ROSARIO: The mood of the private sector has been very positive over the past 18 months, and that has everything to do with the tone set by the new administration. The private sector in the Philippines, and hopefully increasingly across the rest of the world, has responded positively to the president’s determination to minimise corruption in the country. Graft and corruption have been major obstacles to the development of the Philippines. It seems that the government is responding to the nation’s desire for change. Unfortunately, it is easier to declare intentions than to produce results, and while the government is proceeding with a number of high-profile corruption cases, it will take the conviction of a major figure to truly make an impact.
The economic programmes the government has thus far pursued have generally been quite good, and the economy has continued performing moderately well. In the first three quarters of 2011, government spending was seriously lacking, and the business community and the public were impatient to see concrete progress. Understandably, the government wanted to ensure that the major infrastructure projects and public-private partnership (PPP) initiatives are high quality and relatively graft-free. However, the business community was looking for more aggressive implementation of these projects to show that, beyond good intentions, the current administration is one that has the capacity to implement projects and to get things done. We are pleased to note that government spending accelerated significantly in November and December 2011, and continued at a strong pace into the first quarter of 2012. The optimistic view is that, with government spending picking up significantly, economic growth will be sustained into the coming years.
Not only should this bring us in line with the traditionally faster economic growth rates of our neighbours in the ASEAN region, but it should also set the stage for an increase in foreign direct investment inflows to the country. Large-scale PPP projects are the type that will attract international capital, and if these projects are handled in an appropriate and effective way, they will lay the foundation for continued investment in the country.
How can the regulatory framework be changed to facilitate increased investment?
DEL ROSARIO: I think it would be a very good move for the economic provisions in the constitution to be completely removed and they should instead become part of the normal legislative process. This would allow the country and its leadership to react to economic developments more readily without having to undertake the daunting task of changing the constitution. A better system would allow the congress to determine what is appropriate for the country at any given time, with these provisions as part of the active legislative process rather than the rules that govern the process.
There is support within the business community for this to be accomplished, and we hope that it will be completed under the current president’s leadership.
What role do you see for small and medium-sized enterprises (SMEs) in the country, and how can their growth be supported?
DEL ROSARIO: There is a strong movement for micro-finance and other microenterprise support to become more readily available. It is important to examine the system and then look how we can aid SME growth. For example, the country should explore what can be done to help increase the capacity of existing SMEs to be more effective and efficient in their activities, such as small-scale computerisation projects ensuring that SMEs have access to markets where their products can be sold and incorporating SMEs into value chains of larger corporations. The microfinance movement in this country had made major strides over the past two decades, but there is still more that can be done.
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