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Sunday, September 25, 2011

The Republic of Philippines: under new management

“We must build islands of excellence to be part of the global supply chain.”


On Thursday, September 22, the Hon. Cesar Purisima – Secretary of Finance for the Philippines – gave a public lecture at the Center for Strategic and International Studies. Entitled “Investing in Alliances: Philippine Reforms Mean Business”, the discussion targeted business, nonprofits and the US government in order to bring more financial investment to the Philippines. It served to showcase the ideals and actions of the latest Aquino administration, which has been in power for about one year. Secretary Purisima discussed four pathways for success in the Philippines: improve structural competitiveness by focusing on economic fundamentals and good governance, seek an environment of fiscal sustainability and macro-economic stability, create a more business-friendly Philippines, and lastly invest in the bedrock of the Philippine economy, its people.

Both Secretary Purisima and President Aquino highlighted the Philippines improved ranking in the September 2011 World Economic Forum Global Competitiveness Report during public lectures in New York and Washington, DC. The Philippines jumped 10 spots – the biggest jump this year – from 85 to 75 out of the 142 countries ranked. The leaders put the success down to reforms made over the last year and held hold high hope for the future reforms.


Much in the same way that the Obama Administration had to restore US diplomatic legitimacy, the Aquino Administration is attempting to restore faith and confidence in the infrastructure and governance of the Philippines by promoting ‘inclusive growth’. Reforms included stamping out corruption, increasing spending on cash transfers and other social programs, and critically evaluating effectiveness of government programs.




Secretary Purisima also discussed the actions taken toward a closer and more structured ASEAN community. A European Union-style framework is not the ultimate goal, and a common currency is not on the table. However, steps are being taken to continue improvements in trade between ASEAN states that have resulted from more dependence between member states and an intertwined global supply chain. The primary method to improve trade within ASEAN, according to Secretary Purisima, is for member states to establish more closely matched customs regulations in order to decrease the transit time and increase access to goods sourced from neighbors.

When I visited the Philippines in 2009 large parts of the capital, Manila, had been developed under the Arroyo Government, but we are yet to see whether this progress in the most affluent parts of the country will improve the lot of the huge number of Filipinos still living below the poverty line. The Aquino Administration’s policies of building and repairing schools, improving infrastructure to advance tourism, providing additional funding for low-income families, and increasing the competiveness of and access to university education are all noble causes in addition to the Administration’s vocal desire and actions to punish corrupt officials. I hope that when President Aquino’s term ends in 2016 he achieves what he sets out to and more, so that as he stated, his successor will “have no choice but to continue with the same reforms”.





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