OBG talks to Washington SyCip, Founder, SyCip, Gorres, Velayo & Co.

Interview: Washington SyCip

To what extent has the new administration changed the attitude of business leaders in the Philippines?

WASHINGTON SYCIP: It seems the country now has an honest president, which is long overdue and marks a key difference compared to the past. The Aquino administration has put together a good team, and the focus on transparency and eliminating corruption from the top has proceeded down throughout the administration and into the private sector as well.

This has contributed to a better atmosphere for doing business and should lead to greater interest from international investors. While the government should of course address the issues of the past, it is important that it does not lose its focus, which should be the future of the Philippines. It is important that the leadership of this country now works to close the last chapter of our history and bring about a new age of both economic growth and development.

Which sectors are set to drive economic growth in the country over the next few years?

SYCIP: Infrastructure will be one of the most important areas for development. Many of the government projects moving forward will require private funding, which will likely come through a private-public partnership (PPP) mechanism. However, for this to happen, the government must be much more forthcoming with information about the projects, and it must accurately define which are open to PPPs and what is expected from private partners. While the government has expressed a dedication to additional highways, rail lines, and other transport infrastructure, it has yet to provide adequate information on how private parties can get involved, which has led to delays. One project in particular that holds significant potential for the country is connecting Manila to Clark Airport, which has been a goal of numerous administrations. Linking Makati to Clark would promote economic growth and development, but it has yet to actually happen. While it is not easy to clear up the various issues currently impeding the project, it can and must be done. Another sector that is primed for rapid development is mining, which has until now been hindered by competing national and local interests. At some point the hope is that the government will proclaim that national aspirations trump local concerns. While there is substantial opposition to mining, with some claiming that the industry will undermine the development of ecotourism, players in the country now have proven that they can conduct their operations in an ecologically sound manner.

Finally, business-process outsourcing (BPO) continues to grow, and there is constantly news of new companies entering the country. This BPO-led growth is even expanding beyond Metro Manila to other cities, including Cebu and Davao, as more and more companies realise the potential of these second cities.

What role do you expect education to play in the economic development of the country?

SYCIP: One can really infer where a country will be in 20 to 30 years by examining its education policy and looking at what its leadership is doing to address educational problems. If the Philippines wants to start on the path towards sustained economic growth, it must address the current state of basic education.

It is essential that the country combat illiteracy as well as the high drop-out rates, as this will have a direct positive economic impact on the country. People without basic skills are significantly more likely than not to be poor. Currently, in a few poor provinces, for every 10 children that enter primary school, only three will graduate from grade six. This figure is far too low, and ongoing programmes and initiatives have already shown that the issue can be addressed. It is essential to engage communities and to encourage involvement and inspiration at this local level. Moreover, it is essential that we continue to motivate parents so that they become actively involved in their communities and in the education of their children, and to make education a community aspiration as opposed to a purely individual one.

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The Report: The Philippines 2012

Economy chapter from The Report: The Philippines 2012

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