Business World, 27 October 2015


I predict that after the dust has settled, four serious presidential contenders would emerge, namely: Vice-President Jejomar C. Binay, Senator Miriam Defensor-Santiago, former Interior and Local Government Secretary Manuel “Mar” A. Roxas II, and Senator Grace Poe.

Assuming that the presidential candidate is running for the right reasons, the next President who will assume office on July 1, 2016 should turnover to his successor on June 30, 2022 a better, stronger, and more beautiful Philippines, a people more united and guided by a sense of nationhood, and a country with stronger and more established political institutions.

Do these candidates understand the formidable challenges faced by the country today and in the years ahead? Realistically, there is no perfect candidate.

But who among the Magnificent Four has the highest likelihood of preparing a reform agenda and assembling a good, competent, and experienced team that would meet today’s challenges?

Below, I think, are the most formidable challenges for the next President.

The first challenge is how to unify a divided people, how to heal the wounds of the past, and how to rally them behind his leadership. He should be perceived to be the president of all the people and not only of his party mates.

That is why the next presidential elections should be fair and less contentious. They should be about real problems of the day and how the contenders propose to solve these problems. Prolonged post-election allegations of fraud and massive vote-buying will only further divide the Filipino people, and deepen the wounds that afflict society.

The new President should rise above politics and work for the common good. He should seek the cooperation of all parties concerned and the leaders of both houses of Congress. He should convene Legislative Executive Development Advisory Council frequently, as congressional leaders should be seen as partners in national agenda setting. In addition, the President should maintain good relations with the Supreme Court at all times.

The next President should think less of who will takeover after his watch and more of what he should do during his six-year term. The Filipino people, his principal, will hold him accountable for what he did and failed to do during his watch — no more, no less.

The second challenge is extreme poverty.

One in four Filipinos suffer extreme poverty, surviving of less that $1.25 every day. Easily, half of the 100 million Filipinos perceive that they are poor.

The third challenge is high unemployment rate.

The Philippines has the highest unemployment rate among Association of Southeast Asian Nations (ASEAN)-6 economies (Indonesia, Malaysia, Philippines, Thailand, Singapore and Vietnam). A recent improvement in unemployment statistics is largely because more Filipinos simply stopped looking for a job. The labor force participation rate sunk.

The Philippines also has the highest incidence of overseas workers among our ASEAN-6 neighbors. The joblessness picture would be higher if a huge chunk the 10 million or so overseas Filipinos were to return to the country voluntarily or involuntarily.

The fourth challenge is the poor state of public infrastructure.

The Philippines lagged behind its ASEAN-6 neighbors in terms of road infrastructure, ports infrastructure, air transport infrastructure, railroads, and electricity supply.

Yet, poor infrastructure is a major constraint to growth. Traffic congestion imposes huge external costs to people and firms. The high and unreliable power costs puts Philippine manufacturing at a disadvantage, especially some capital-intensive firms like glass and cement manufacturing.

The fifth challenge is the dysfunctional bureaucracy.

The next President should take the lead in restoring meritocracy in government. It should start at the top. There should be “deep selection” in choosing the President’s Cabinet with the goal of recruiting the best, the brightest, and most knowledgeable men and women in their respective fields.

The new President should limit political appointees in government. He should appoint only one political undersecretary in each department, and thereafter respect the career civil service. The appointment of political operatives in key career positions, even in an acting capacity, should be resisted.

The sixth challenge is the weak preparation and implementation of the budget. The national budget is the lifeblood of any government. But because it involves taxpayers’ money, its preparation, authorization and implementation has to be done carefully, openly, and prudently. The whole budget process has to done in accordance with the Constitution, existing laws and strict budget rules.

The national budget has to be crafted with extreme care. Only programs and projects that can be accomplished within the fiscal year should be included in the annual budget. Congress should exercise its power of the purse diligently.

The seventh challenge is the anachronistic, unfair, and complicated tax system.

The next President should be ready with his tax reform package within 100 days of his presidency. The 19-year-old income-tax systems are out of sync with the ASEAN-6 tax systems. Keeping the present income tax system unchanged is unfair since it has bumped all income taxpayers into higher income tax brackets through inflation.

Keeping the present corporate income tax system unchanged put the Philippines uncompetitive with its ASEAN-6 peers. This disadvantage is on top of other handicaps such as poor infrastructure, higher cost of doing business, and policy inconsistency.

As ASEAN integration approaches, competition among countries will become keener. While it might not happen overnight, the Philippines has a lot of catching up to do to keep abreast with its ASEAN-6 neighbors.

Indeed, one of the tasks of the next President to prepare the country in this more competitive world. At the risk of the country being left behind further, the new leader has to be visionary, decisive, and a high achiever.

Who among the Magnificent Four is up to the challenge and can embark on an aggressive, doable plan for the country so it can compete with its ASEAN neighbors?

Given these formidable challenges, who wants to be President of the Philippines?