Third worst

Malacañang, which is busy preparing to tout the accomplishments of President Arroyo during the Independence Day parade on June 12, disputed the results of the latest survey on red tape and investment in Asia.

The survey was taken among 1,373 senior and middle-level expatriate business executives in 12 Asian countries and territories by the Political and Economic Risk Consultancy (PERC).

The respondents gave the Philippines the third worst score, after India and Indonesia, in terms of bureaucratic efficiency.

Red tape, according to the survey, deterred foreign investment and was a constant bane to citizens.

Asked for comment yesterday, a Malacañang official said if the results were accurate, investors would no longer put their money in the Philippines.

Working in Malacañang must be like living in Wonderland; you quickly develop a bizarre perspective.

Of course there will always be investors putting money in the Philippines. We’ve had them even before Limahong attacked Manila and then retreated to the Lingayen Gulf in Pangasinan.

The question is whether we could have gotten more if we had a better business environment, including a more efficient bureaucracy. Another question is how we compare with the rest of the region.

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Perennial achiever Singapore topped the PERC survey, followed by Hong Kong. A surprising third was Thailand, but then I know foreign investors who decided to set up their Southeast Asian base in Bangkok rather than Manila because of what they said was the ease in doing business in the Thai capital. Perhaps the continuing political turmoil in Bangkok will pull down Thailand’s ranking in the next survey.

South Korea ranked fourth in the PERC survey, followed by Japan, Taiwan, Malaysia and China. Not surprisingly, Vietnam was rated a notch ahead of the Philippines.

In the latest World Bank survey on ease in doing business in 183 economies, Singapore was also rated No. 1, with Hong Kong placing third overall.

When it comes to foreign direct investment (FDI), we don’t have much to crow about either.

Never mind China, which is now the world’s third largest economy, or prosperous Singapore; let’s compare the Philippines with its middle and lower-income Southeast Asian neighbors.

In the past decade, or mostly under the watch of economist Gloria Macapagal-Arroyo, the country has received $14.8 billion in actual FDI. During the same period, Thailand received $49.9 billion in FDI; Malaysia, $49.8 billion; Vietnam, $38.8 billion; and Indonesia, $22.4 billion. 

With Filipinos counting down to Independence from GMA Day, June 30, you can forgive Palace officials for wanting to put a positive spin on everything these days. The GMA team is hard-pressed to come up with as many things that the President can claim as her achievement.

Recently the administration sparred with incoming president Benigno Aquino III on the positive economic growth figures for the first quarter.

Someone whose fiscal and economic assessments carry weight in this government – and will continue carrying weight in the next one – told me that the positive figures could be attributed to a combination of factors: election spending, increased government spending, “restocking” by businessmen and an increase in exports because of the general improvement in the global economy, and why not, sound fiscal management. Can the Arroyo administration take credit for the growth figures? Not entirely.

The prospect of change in a new administration is in fact boosting investor confidence and growth prospects for the rest of the year.

Among the changes that are sure to come: we won’t see the manicurist of Noynoy (or even Kris) or his personal trainer (he doesn’t have one) or the gardener maintaining what’s left of Cory Aquino’s bonsai collection at Times Street being appointed to the bureaucracy.

With government positions doled out as patronage by the highest appointing authority, we shouldn’t wonder why the Philippine bureaucracy is deemed to be the third worst in Asia.

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The retired head of the Civil Service Commission, Karina David, publicly bared her frustrations in trying to create a professional bureaucracy under this administration.

David echoed the complaints of civil servants whose careers were derailed by this entrenched system of patronage. In both the executive and judicial branches, merit-based rules on promotions and assignments are routinely disregarded for political considerations.

Why do we have so many incompetent and corrupt prosecutors, judges and justices? Because they are in office courtesy of political patrons, not because of their qualifications for the job. They owe their promotions and assignments to influential people and even religious groups.

The incompetence and venality at the top, which do not inspire effective leadership, are compounded by poor salaries and benefits down the ranks, which tend to deter the nation’s best and brightest from joining the government.

If Singapore consistently ranks at the top of bureaucratic professionalism in international surveys, part of the reason has to be the high pay received by its civil servants, from the president down to clerks.

But the pay is commensurate to qualifications. Look at the résumés of Singapore’s top-level officials and you will find post-graduate degrees all around plus long-term experience in the field related to the job, with personal records untainted by scandal.

A competent and honest boss can demand the same from subordinates. That boss will quickly see how to cut red tape and plug opportunities for “fixing” and large-scale corruption.

In government service, you generally get what you pay for. But it’s also possible, with the right leadership, to expect honest, efficient service from a bureaucracy with modest pay.

That leadership has been lacking for some time in this country. Let’s hope the next administration will be different.