Business World, 20 November 2012


Family planning makes good business sense, both for employees and employers. The Reproductive Health (RH) bill is pro-poor, pro-women, and pro-growth. If I were to prepare a national budget for 65, instead of 95, million Filipinos, I would have a budget surplus rather than a budget deficit, with a larger share of the budget going to public capital formation, which the economy needs for stronger and sustained growth, rather than public consumption.

If President Aquino were truly for the RH bill, why isn’t he pushing for it hard enough? If he can only show the same passion and doggone determination that he displayed when he had the Chief Justice removed from office, then the RH bill should have been approved by Congress a long time ago.

The RH bill could be a game changer. It has the potential of improving significantly the Philippine economic landscape.

On the other hand, the failure to pass the RH bill is economically and socially costly. It means deepening poverty of many Filipinos. Failure to pass it means more serious unemployment and underemployment. Failure to pass it means more public funds will go to social overhead (education, health care, and cash grants) and less for public capital formation.

Close to two million Filipinos are born every year. That’s horrible, considering that significantly more children are born from poor families than rich ones. This creates a cycle of deepening poverty. Tip-toeing around the high population growth issue, debating about things that don’t matter much in the overall scheme of things, is like rearranging chairs on the deck of the Titanic.

Two million people is more than the population of small countries. Those who refuse to recognize the dark clouds in the horizon, insist that high population is good; for them, higher population means bigger market and higher growth. What they don’t see is the down side — an increasing uneducated, sickly and jobless army which could mean years of personal suffering and social tension.


Who should be responsible for family planning — the national government or local government units (LGUs)?

That’s a no brainer — the national government. Here’s why. For the family planning program to succeed, it has to be sustained. There are 80 provinces, 143 cities, and 1,491 municipalities. A city or province that is successful in its family planning program would attract a lot of people, through the mechanism called “voting-with-the-feet.” But that would put a strain on local finances which would make the program unsustainable. Hence, it is the responsibility of the national government to implement a serious, sustainable, and well-funded family planning program.

For large firms, studies show that the benefits of family planning and maternal and child care programs sponsored by firms make sense. Benefits exceed costs. Labor productivity increases, and the welfare of families and children improve. And since the program is profitable, there is no need for fiscal incentives.

As a nation, the Philippines has been under-investing in public infrastructure. Given past neglect, the state of Philippine infrastructure has always been cited by foreign investors as one of the biggest turn-off. The Ninoy Aquino international airport has been dubbed as the worst airport in the word. The nation’s premier highway EDSA is crumbling.

In order to catch up with its ASEAN-5 neighbors, the Philippines has to allocate — and complete — about 5% of its gross domestic product (GDP) for public infrastructure. That’s much less than what China and its other Asian neighbors spend for public infrastructure.

Yet, public infrastructure spending in recent years had been dismal. It was 1.49% of GDP in 2006, 1.92% in 2007, 1.90% in 2008, 2.24% in 2009, and 1.83% in 2010. In 2011, Mr. Aquino’s first full year in office, it edged down further to a record low of 1.49%.

With spending for public infrastructure so low and falling, I don’t see how the Philippine economy can grow at 7% to 8% on a sustained basis in the next decade.

I know that the government’s failure to invest in “hard infrastructure” projects which would increase the capacity of the economy transcend lack of resources. But precisely, scarce budget resources may be freed up for public infrastructure if only the government has to spend less for education, and health and conditional cash transfers.

I know that in addition to poor budget prioritization, there is a problem with poor “absorptive capacity” (a.k.a. incompetence). I know that public-private partnership (PPP) initiatives have not moved because of deeper and more complicated problems (constitutional provisions which discourages foreign investment, lack of credibility, policy inconsistency, and failure to honor contracts).

The opportunity for catching up is now, while Europe and the US are busy addressing their own internal economic woes and political uncertainty. With the cost of borrowing historically low, financing should not be a problem. The economy is awash with dollars and pesos.

So, why are things moving forward ever so slowly? Sometimes, they’re stagnating (for example, the RH and Freedom of Information bills) or, worse, even backsliding (for example, the expanded Negative List and the “new” mining policy).