MANILA, Philippines – The administrations of both presidents from the Aquino clan — the late Corazon and only son Benigno III — have something in common: dramatic reforms.
This was according to Cayetano Paderanga, who served both administrations as economic planning secretary. At an event of the Economic Journalists Association of the Philippines on Friday, February 17, he said the reforms pushed by Mrs. Aquino, and now by her son, are “politically difficult” but will eventually bear fruit.
“As one of the few Cabinet officials who have had the privilege of working under both Aquino presidencies, I am always asked what’s the difference between the first and the current one,” he said in his keynote address.
“I always answer that our country’s economy then was in dire straits. The vital signs suggested that the Philippines was in near-stagnant stupor, with double-digit inflation rates, high foreign debt, and massive poverty and unemployment.
“To manage our coffers then, we had to count conscientiously how many pesos and dollars were left. We in NEDA at that time had to advocate for politically difficult economic reforms. This we did, and the fruits of such reforms were later enjoyed by succeeding administrations,” he told the journalists in the audience.
Paderanga served as director general of the National Economic and Development Authority (NEDA) from 1990 to 1992, the last years of the Corazon Aquino administration. He was appointed to the same position in July 2010.
“This time, with President Cory’s son at the helm, we are again at the cusp of democratic reforms,” he said.
In 2011, the 1st full year of the current Aquino administration, the economy grew at a much slower pace of 3.7% compared to 7.6% in 2010.
While Paderanga acknowledged that government underspending and a narrow exports base that made the economy vulnerable to global woes were reasons for the dismal performance, he said the these are part of the “birth pains” as the Aquino government pursues its transparency and reform agenda.
“What happened last year was what I would call the “birth pains” of institutional and governance reforms that this administration has been aggressively pursuing since day one… This slowdown in process is only temporary.”
He said the end goal is “a stable macroeconomy that is politics-proof and does not depend on parochial spending.”
“If these are the side effects of course-correction, then we hope that we are on the right track. By eradicating graft and corruption, the government is preventing leakage of resources both on the revenue and expenditure side. And this, in turn, encourages investments and reduces the cost of doing business over the medium and the long term.”
Infrastructure and exports
As for the delayed implementation of plans to roll-out infrastructure projects, Paderanga said the government will bid out the projects in the pipeline this year.
“I believe that the initial hesitation by government agencies to approve projects is now over… As the seeds of public-private partnerships PPPs and the other projects were already planted in the previous year, both the private sector and the public constituents will be able to taste the fruits by the 2nd or 3rd quarter of this year.”
As for the vulnerable export sector, he said officials are set on China in their diversification program aimed to reduce dependency on the west.
“In terms of diversifying recipient countries, we are looking at “penetrating” China, among others, in support of their plan to rebalance their economy to become more consumption-oriented and import-based,” he shared.
“In terms of diversifying our products, we need to temper our dependence on electronics, since recent data for 2011 exports shows double-digit growths in the value of exported agro-based products, forest products, minerals, and petroleum were clearly dragged down by electronics and manufactures as a whole,” he said. – Rappler.com