Semi-retired investment banker Leo Alejandrino proffers his version of the SONA as delivered by BBM. Alejandrino is part of the opposition but he isn’t shallow enough, unlike some of his cohorts, not to share positive inputs for the new administration.
His version is one that crosses all the T’s and dots all the I’s. It is an ideal blueprint moving forward.
My Dearest Kababayans,
Thank you for the historic mandate you have given me. I am humbled by the the honor and the challenge to lead this great nation. Thirty one million Filipinos voted for me but I intend to be the President of all 110 million of our brothers and sisters.
I start my Administration with many headwinds which I will not sugar-coat. We face a perfect storm of punishing inflation which will squeeze our pocketbooks, higher interest rates which will harm businesses, a looming food shortage, record debt and diminished fiscal space, slowing world economies, supply shocks, record oil and fertilizer prices, geo-political tensions worldwide, climate change, a possible resurgence of COVID variants and an economy still to recover from three years of the pandemic. In the last year the peso has weakened by 11% to a record low, the biggest deterioration among our neighbors, adding to inflation. Many of these are externalities beyond our control.
We will overcome the hardships but only if we unite as a nation and look out for each other. It will require trust in the social contract between Government and the public. The former has too often failed on its promises and responsibilities. It is my intention to restore that trust in Government for only then can we move forward in common purpose.
The rebuilding or should I say the renovation of our nation will be arduous but it must start today and not with words and empty policies but with action and accountability. I have assembled the best and the brightest Cabinet I could find but my Government must be measured not by what we say but what we do. We must correct years of inequity, corruption, economic elitism and failed trickle down programs that have widened the gap between the rich and the poor.
The new Philippines will be founded on the pillars of inclusiveness, honesty, accountability, sustainability, balance and trust. We must bring our economy to the 21st century with education, efficiency, environment, technology and reform of our civil service. With our limited resources we must do more with less. We must work smarter.
Education is the foundation for the long term sustainability of our country. We are the worst in the world in science, math and comprehension. Reforms will be a generational enterprise but one we are launching with the appointment of VP Sara as DepEd Secretary. Sara will bring her enthusiasm and her popularity to make the changes we need. These changes must start at the primary level and include a nutritional program, an upgrade in the quality and salaries of our teachers, a curriculum to meet the best world standards; and a rapid roll out of class rooms. We will put in place vocational programs that will employ the most number of graduates at the earliest time while ensuring the very best are brought to their full potential. We will review the current free higher education system so those who can afford will pay for those who cannot.
We will prioritize a clean environment in our cities, our tourism spots and in the exploration of our natural resources
I will be changing the way we manage Government both in mind set and organization. The Office of the President will be more engaged in governance. We will decentralize Cabinet level decision making but will hold Cabinet Secretaries accountable for results that we shall have pre-agreed. Responsibilities will be clearly defined and goals set for outcomes, quality of service and costs. I intend to take these metrics seriously. I am putting myself to the same test of accountability by heading the Dept. of Agriculture.
I am strengthening the Presidential Management Staff to be my eyes and ears on the ground and as a rapid deployment force when immediate action is needed. The PMS will be headed by a senior official. I have formed a Private Sector Advisory Council composed of respected business leaders who will work with NEDA on planning, processes and strategy. We must understand outcomes are not an end in themselves but the result of correct methodologies.
As Chair of NEDA I am restoring NEDA’s constitutional mandate to run the economy replacing the ad hoc Cabinet economic cluster now in place. This will mean better focus and coordination across the various agencies. I expect NEDA Sec. Balisacan to exercise strong leadership in the design and execution of a national economic strategy.
We must return to basics and that means defining who we want to be. We have never had a long term strategy unlike our neighbors who decided early on to leverage their strengths and be the be best at what they do be it in high value manufacturing (Asian Tigers), tourism (Thailand), agriculture (Vietnam), or as a financial center (Singapore).
Our economic managers became enamored with growth for growth’s sake not caring how we grew or where we grew or how we shared what we grew. We are now paying the price for this misguided notion in urban densities, a failed agriculture, dismal education, environmental degradation and an unacceptable wealth gap.
We must reform the economy from the bottom up by disintermediating our processes so programs can be implemented with a minimum of layering and leakages. The welfare of the individual Filipino should be our primary concern. Budgets must be zero based. Using mobile technology we must find means to distribute AYUDA directly from the Budget Office to e-wallets thereby bypassing middlemen and fixers. Business permits must be simplified and expedited using online platforms. We must bring Government as close to the people as possible.
We must restore balance in our economy. We are long on policies but short on strategy and execution. In the last 30 years we have allowed unfettered free markets to dictate our economic path. This resulted in consumption rather than in investment and in an overdevelopment of our urban centers at the expense of the countryside. This triggered a mass migration to the cities leading to urban poverty, crime, pollution and congestion and the decline of our farming and fishery sectors and the loss of our food security.
We must implement a Balik Probinsiya program that will encourage the return to the countryside. However this cannot be done by fiat or unsustainable subsidies but by attraction, by offering livelihoods, schools, healthcare, internet and physical access in and to the countryside. The private sector must see opportunities for rural investments.
The relaunch of agriculture is long overdue. We must correct the faulty implementation of our Land Reform program. Farmers who have long paid their loans cannot secure their titles. Many farm plots have no road or water access. Cartels prey on farmers’ weaknesses with predatory farm gate prices. Smuggling is rampant under the Rice Cartelization Law. We will stop the mass conversion of farms for real estate development. We will strengthen and simplify the institutional sources of credit. We will review the land reform loans to ease the burden on our farmers; about half of which are estimated to be in default. We must develop modules for industrial scale farming.
Neighboring countries like Singapore and Brunei have the capital but not the land to grow crops to ensure their food security. We should partner with them in agriculture where they will be guaranteed the supply of the food they need in exchange for investment. However we must be competitive in producing key staples like rice where our cost of production is reportedly over twice that of Vietnam and 60% over Thailand. In the time of my father the Philippines was the region’s largest rice exporter. Today we are the world’s second largest rice importer after China. We must understand where and why we went wrong and how to correct our mistakes.
To redistribute the economy across the nation I have asked NEDA to study how we can relocate parts of our Government bureaucracy outside of Metro Manila.
We must identify our national priorities and leverage our competitive advantages like tourism and our human capital. Tourism is a low lying fruit but we must improve our infrastructure and international gateways. NAIA is consistently voted one of the world’;s worst airports. After years of wrangling over its development I intend to fix NAIA once and for all. I have recently vetoed the Bulacan airport proposal until we have a complete picture of our gateway strategy.
One of our biggest strengths is a young work force at a time when there are labor shortages around the world for such vital services as airport ground handling, hospitality and health services and construction. We have the labor pool to fill those vacancies but we must augment their education and skill levels so they may move up the value chain. If we are to be the work force and household help to the world let us be the best at that and proud of it.
Locally I have instructed the Labor Secretary to ensure industrial peace so as to encourage domestic and foreign investments. There is an exodus of Japanese manufacturing companies from China which have relocated to Vietnam and Thailand instead of the Philippines. Similarly for multinational head offices which have moved from Hong Kong to Singapore instead of Manila. These are missed opportunities.
In an age of knowledge we have failed to invest in technology. We need to digitize our national data base so we can manage our economic, social and fiscal programs more productively. The absence of a management information system has allowed the corrupt to exploit the gaps and leakages in our social safety net and tax administration. We need real data in real time so we can apply analytics and artificial intelligence to charting and monitoring our economy and social programs. All agencies must be able to talk to each other in a common platform.
We will expedite our internet connectivity by fast tracking the infrastructure and introducing low-flying satellites in partnership with industry players. The Government will finance its side partly through the capital markets avoiding the need for budgetary funding and partly by taxes on digital transactions and a possible levy on valuable telco frequencies that have been awarded for free to a few privileged players.
We must streamline our bloated bureaucracy and retrain those displaced so they may be hired for alternative positions in Government and the private sector. The Government employs 2 million people including the military and teachers with about 1.4 million in the bureaucracy proper. About 2/3 of the latter are contractual and non-professionals. The DBM estimates we can save PHP 15 billion annually by shedding 5% of the bureaucracy. The savings can go to raising the salaries of our public servants and investing in technology to improve Government offerings. Pending an organizational review I have asked for a 100 day freeze on hiring except for key personnel. I have already started this “right-sizing” in the Office of the President.
The Government accounts for some 20% of our GDP and is the biggest service provider to the nation; yet not enough attention has been paid to the quality and productivity of our civil servants. Human resources are the foundation of good governance and our greatest asset. We must offer continuing education and value formation. We must restore pride, meritocracy and professionalism in public service.
On the fiscal side we face tremendous challenges of funding our priorities in education, infrastructure, health, military pensions and social amelioration; without raising taxes that will hurt growth and jobs. We could borrow more but we have already breached debt/GDP and deficit/GDP ratios that many consider dangerous. In the meantime the cost of our borrowings is rising. We are undertaking a fiscal consolidation which may result in a deferral of previously announced corporate tax cuts and in new taxes on assets – property, luxury vehicles, collectibles, etc. – owned by the rich but not on incomes of the less fortunate. Taxes will be targeted. We shall adopt the principle of user-pay meaning the beneficiaries of a service will be taxed for their use e.g. consumers of cigarettes and alcohol will pay for health budgets, car owners for road infrastructure, digital users for the internet investments, mining companies for environmental projects. We will seek off-balance sheet ways to fund our national priorities without having to sell our patrimony.
Government should develop more imaginative ways to partner with the private sector not only in infrastructure but in health and education. What I simply ask the private sector is that it include the social benefits of such projects in determining a fair rate of return. In the past many businesses have abused the near monopoly powers of their franchises to extract excessive profits from the consumer. This has resulted in the Philippines having the highest cost of energy in the region making manufacturing non-competitive and punishing the poor.
We must align local government initiatives with our national priorities. LGUs are a big source of funding and economic stimulus. The Supreme Court has allocated LGUs a bigger share of national revenue collections. The PPPs must invite LGUs as partners in progress since they can expedite regulatory processes like business permits for building telco towers, clean water facilities and farm irrigation. I will be hosting a summit of LGUs where this will be front and center of the agenda. I am calling for the help of Governors and Mayors in the rebuilding of our nation. If they refuse for political reasons or sheer inertia I will use the power of my office and my political capital of 31 million Filipinos to convince them otherwise.
Most of the above initiatives will take time as some will require new laws, physical build outs and a cultural mind shift. In the meantime we must provide the needy with immediate economic relief. “Fiscal consolidation” is meaningless to the vast majority of Filipinos: What they want and need now is food on the table, lower transport costs, better education, medical assistance, affordable housing and jobs. I have instructed my economic team to address these concerns by leaving their zones of comfort and personally immersing themselves in the marginalized communities. Only by internalizing the problems of the poor can our Cabinet heads appreciate the work that needs to be done. Poverty is not an economic concept it is a human condition. The public must know Government understands its concerns and will address them within the factors it can control.
Finally let me address the elephant in the room: Corruption. Corruption is culturally embedded in Government. I estimate it accounts for leakages of 10-20% of our PHP 5 trillion budget or PHP 500 million – 1.0 trillion annually. This makes the Dept. of Corruption the largest agency in Government bigger even than the next largest, the Dept. of Education. These savings could be used for social amelioration, infrastructure, teaching our children and caring for our sick.
If we cannot control corruption we cannot gain the trust of local and foreign investors and the public. To show I mean business today I have set a up an Inter-Agency Task Force under my office composed of the DOJ, DOF and DILG to investigate alleged corruption in the health system, energy and importation of key commodities like rice. This SWAT team will also pursue charges against monopolies, cartels and price gouging in the production and sale of vital goods and services. They will report their findings and actions within the first 100 days. I intend to set a new tone for my Government with this culture of accountability.
I will continue the War on Drugs started by President Duterte but the focus will be on the masterminds and their protectors and not on the victims of drug abuse.
I will run down the techno-criminals who daily are preying on the unsuspecting and the poor with false promises of employment and other scams. I will ask the telcos and social media platforms why they should not be accountable for enabling these activities.
The next few years will be difficult as we transition to new ways of doing things and fight the headwinds. Things will not always be perfect but we must start on this journey of hope and purpose, of becoming the nation we can and should be, better than we are.
Let us put all political differences aside for the benefit of the Filipino people and move forward as one. With the blessing of the Almighty and caring, belief, and trust among ourselves we shall overcome.
Mabuhay ang Pilipino. I love you all.
Tomorrow, we shall dissect the more salient points of Alejandrino’s SONA by doing a reality check – what challenges can be expected assuming this is the strategic blueprint.
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