Balisacan’s challenge: Can he fight vested interests?

MANILA, Philippines – The keyword about the economy in recent times has been inclusive growth. And chances are you’d hear it more often than not from Arsenio Balisacan, the current socioeconomic planning secretary who next week will move on to his new post as head of the Philippine Competition Commission (PCC).

That he would be talking about inclusive growth is no surprise.

During his 3-year tenure as Director-General of the National Economic and Development Authority (NEDA), he made it the centerpiece of its plans.

Upon his appointment in May of 2012, Balisacan said: “I hope I can help in the poverty alleviation efforts of the government because that’s really close to my heart.”

As head of the PCC, the 58-year-old Balisacan will be navigating a new – and perhaps more complex – terrain.

As impressive as his achievements in public service and in the academe are, what will perhaps help him the most in his new post is his relative lack of experience in the private sector.

That is to say, away from the vested interests that often come when individuals switch to influential government posts.

This is crucial as the commission was created precisely to guard against predatory tactics by large companies. These tactics can range from price fixing to the creation of cartels that can affect consumers in the form of high food prices or slow Internet.

The end goal is to provide benefits to consumers through more choices and lower prices which market competition naturally provides.

The task of keeping the market distortion free falls squarely on the PCC, which will be an independent body with judicial powers to hand out fines or criminal cases to firms that it finds are violating fair market principles.

That will be no mean feat in a country where politics and business are so intertwined and which features key sectors such as telecommunications and energy that are dominated by only a few mega corporations.

“He will need a strong backbone to fend off entrenched special interests as his job requires curving anti-competitive practices and abuse of dominant position,” said Eddie Yap, Chairman of the Management Association of the Philippines (MAP) Transport and Infrastructure Committee.

What he has done 

While economic growth steals all the headlines, perhaps more insightful measures of inclusive growth are unemployment and social services, and both fronts have improved under Balisacan’s watch in NEDA.

The Philippines’ unemployment reached a new 10-year record low of 5.6% as the services and industries were developed. Social safety nets were also enhanced with the average social service expenditure per person from 2010 to 2014 recorded at levels 37% higher than the previous 5 years.

Under Balisacan, NEDA also literally helped prepare the groundwork for future growth as processing and approvals for public private partnerships (PPPs) and development assistance projects were sped up with 5 ones approved just last month.

The shift to the K to 12 system, the biggest reform to the country’s education system in generations, was also put in place during his term.

His efforts were noted by the principal sponsor of the Philippine Competition Act itself, Senator Paolo Benigno “Bam” Aquino IV, who noted that Balisacan “is known for his focus on pursuing inclusive growth in NEDA and his expertise in developmental economics.”

Here is the man himself discussing inclusive growth ahead of the country’s hosting of the 23rd World Economic Forum (WEF) East Asia in 2014:

 

Academic star

Balisacan honed that expertise at various levels both in the country and abroad but always with a focus on poverty alleviation.

The son of a tenant farmer from Ilocos Norte, he’s a local through and through. Balisacan studied in Ilocos Norte and graduated magna cum laude from the Mariano Marcos State University with a Bachelor of Science degree in Agriculture as a scholar.

From there, Balisacan was awarded another scholarship for graduate studies by the Southeast Asian Regional Centre for Graduate Study and Research in Agriculture (SEARCA).

He then worked as a research intern at the East-West research center in Hawaii, which funded his pursuit of a Master of Science degree in Agriculture Economics at the University of Hawaii at Manoa. Balisacan rounded out his studies by completing his PhD at University of the Philippines-Los Baños.

Balisacan then moved to Washington, DC, to serve as an economist at the World Bank before moving back to become a professor of economics at UP Los Baños.

His first stint in government was as undersecretary of Agriculture in 2000-2001 and again in 2003, a role which allowed him to serve as the Philippines’ chief negotiator for agricultural affairs to the World Trade Organization (WTO).

Balisacan then moved back to UP, this time based in Diliman, where he was the Dean of the School of Economics and the Executive Director of the Philippine Center for Economic Development. He was eventually handpicked by President Aquino to become the country’s socioeconomic secretary.

No vested interests

As head of the PCC, Balisacan will have a lot of power to decide on cases that could cost companies millions, if not billions, in fines or lost profits.

The fact that he won’t be deciding against a former company or partner should enable him to do so with a clear head.

One of the main concerns of the Philippine Competition Act is that it has “teeth” – that the commission can properly decide on cases without being puppets of big corporations.

As such, the commission members, and especially the head, have to be carefully weeded out to ensure that no one gets preferential treatment, with integrity and credibility being most prized.

7 years

Away from public responsibilities, Balisacan is said to enjoy long distance running. The mental and physical stamina needed in those pursuits should serve him well for his next challenge.

Under the terms of the new law, the appointment as chairman is to last 7 years, which should give him ample time to level the business playing field in the country.

He starts off on that score with the backing of his peers in government and the people behind the Philippine Competition Act including Senator Aquino.

“I have full confidence that Chairman Balisacan can shepherd the reforms envisioned by the Philippine Competition Act through his leadership of the PCC…  He shall surely have the interests of our countrymen in mind as he accomplishes his new mandate of creating a level playing field in our dynamic and growing markets,” the lawmaker said.

Balisacan also has the confidence of the business sector as shown by comments from the Makati Business Club (MBC), a private association that represents the country’s largest corporations – corporations whose actions he may well scrutinize in the near future.

“We welcome Secretary Balisacan’s appointment to the PCC as we recognize that he is a public servant of utmost integrity and professionalism. This, together with his expertise in development and international economics, make him a suitable leader for the Commission,” said Peter Perfecto, the MBC’s Executive Director, in a message to Rappler.

Balisacan himself described the Philippines as “a star at the moment” in terms of economic growth in an earlier interview with Rappler.

In his 3 years at the helm of NEDA, full-year growth has so far not dipped below 6%.

At the PCC, he will have more time to to make that growth more inclusive. – Rappler.com