Wrong signals

The PIATCO fiasco, na bulgar-ri AMARI, and the reversal of the Manila Hotel sale are examples of deals made by foreign investors that have gone sour. One can only guess from a whole list of reasons why these deals did not work out. But one thing is certain: the negative outcome gave wrong signals to the international business community that could have long-term effects on foreign investments coming into the country. Three BIG strikes, and we may be out! In which case, we should never have gone into these deals in the first place involving foreign investors if they were bereft by legal questions. The people responsible for this should be held liable because of the long-term negative effects on the country.

Another case in point is the bidding for the motor vehicle inspection project under the MVIS program which was won by Parsons Engineering. We all agree that at this point, there is an apparent lack of effective air quality control in the country. It’s very disheartening that something as important as controlling air pollution, which affects everyone, is beset by politics and corruption. As it turned out, the Parsons deal got tied up in politics and litigation. After spending millions of dollars in making the study, and eight years of problems and more problems, the company finally decided to just pack up and leave.

This is the kind of negative publicity that’s more self-inflicted than anything else. It sends the signal that businesses have no solid and legal ground to stand on in the Philippines all because something as binding and exacting as a signed contract could not hold water. Potential foreign investors have already redirected their capital to Thailand, Vietnam and even China where they feel legally protected. In the end, if Afghanistan will surpass the Philippines in foreign investments, then we really have a problem.

Perhaps it is time for the country to consider making changes in the Constitution. We can start by putting together a two-phase plan that would push for economic amendments as our initial step. Investors would naturally like to have more control over their investments here in the country, so why not allow foreign corporations to have more than the usual 40 percent ownership of businesses? This will give foreign partners direct charge over capital and operations. For a service-oriented company like an advertising firm, foreign partners are granted no more than 30 percent ownership of the firm. This should not be if we would only consider the global character of the advertising business. Advertising firms, by the nature of their work, bank on a network of contacts around the world. Work for new businesses are coursed through affiliate offices in specific countries, depending on the need and the client involved. By itself, an advertising firm with no foreign partners would less likely survive the stiff competition among advertising companies.

Another amendment we can consider is on ownership of real estate. Foreigners should be allowed to buy and own lands on a limited basis in the Philippines. They can never take it with them anyway. Japan, for instance, bought most of the prime real estate in New York and Honolulu. But when Japan’s economy went into a recession, they unloaded most of it back to Americans, at bargain prices. Government could probably limit real estate ownership to investors in areas where tourism-related activities are more prevalent. The point is, we should offer more benefits to potential investors in order to attract them. Our Constitution should see to it that it enriches both foreign investors and the country. This would give our international partners more confidence and assurance about their money, and us, more security in our status in the global business community.

Let’s face it: the big bucks come from foreign capital.

For the long term, we can start looking into having another form of government, something that’s perfectly suited for Filipinos. Instead of the parliament of the streets, we could have a formal parliament that would allow us to change leaders whenever the need arises. We could also adopt the British style of litigation, where a litigant is obliged by law to pay for all expenses incurred if he loses a case. This would surely discourage people from whimsically filing frivolous suits and TROs. These changes can probably take effect in 2010. At the very least, we could begin to discuss and debate on it today.

A political analyst concluded that the presidential system patterned after the United States is not suited for the Philippine political climate. For one thing, it is very expensive. Today, it takes roughly two to three billion pesos to run for president. A senatorial candidate can easily spend P50 to P100 million for his or her candidacy. The US presidential candidates receive federal funding, which obviously the Philippines cannot afford. Fact of the matter is, the system we have today spawns patronage politics, and in the end, big-time graft and corruption.

The world has moved and revolved around its axis many times, but we seem to be stuck at the bottom. It’s worthwhile to go with the flow, take a chance and make the change.

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Strong efforts are now being undertaken by 20 organizations from non-profit and professional sectors led by the Philippine Non-government Council on Population, Health and Nutrition (PNGOC) to promote a multi-media family planning campaign. The project is aimed at increasing practice and social acceptance of family planning among married couples. The campaign is being implemented with technical assistance from Johns Hopkins University and funding support from the United States Agency for International Development, among others.

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The latest Philippine Tatler magazine shows the President with her favorite cabinet secretaries posing in black with black sunglasses. Could her image-makers tell us what this is all about?

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