, March 7, 2005
(STAR) BIZLINKS By Rey Gamboa  -  Finding a solution to the country’s problems – with focus on reducing the widening inequity and poor access to resources that a growing number of Filipinos are experiencing – is a task that indubitably belongs to government.

The fact that our poverty index is fast growing in absolute terms should scare our economists. Half of the country’s population is now categorized as poor; while 18 million are among the poorest of the poor. Indeed, a ticking social time bomb.

Ironically, it is the number of have-nots that continue to increase. They have the least potential to pluck themselves from the cycle of poverty, and require massive resources to be able to make themselves productive citizens of the state.

Given these stark realities, what should government do?

While the current administration is trying its best to increase revenue collection to address the glaring P80-billion budget deficit, it may be forgetting that the more important task of governance is putting an economic plan of action together and making it work.

Nothing Appears To Be Moving

Almost a year has passed since the Arroyo government assumed leadership, and yet things are not moving in a way that will allow economic productivity to trickle down to the middle and poor segments of society. Hackneyed as it may sound, one cannot but agree that it is still the rich that get richer.

Our workers continue to prefer to go abroad to seek jobs in spite of highly publicized risks – health, oppression, even terrorism. This is happening because there are not enough jobs available locally that will give to them the opportunity earn money to comfortably support their families.

Our country has remained afloat because of the $8 billion that is remitted by overseas workers yearly. The 11-percent increase in the importations of consumer goods – computers, cameras, plastics, garments, motorcycles, vehicle parts – are being fueled by the dollar earnings of Filipinos abroad.

We are a consumer economy – not a manufacturing or agriculture economy – that relies on earnings of our exported manpower. We should lose sleep over this alarming fact. One day, we might wake up to the day when all our kababayans will have to come back home because migrant workers are no longer needed by the global economy.

Vanishing Manufacturing Capability

The emaciation of our manufacturing sector continues. We are losing one industry after another: footwear and wearing apparel, rubber, leather, and petroleum products. We are importing more items that compete with those locally manufactured: fish sauce, iodized salt, celery stalks, even tamarind candies.

While government figures point to a 4.2-percent rise in manufacturing growth, this is largely accounted for by the import-export electronics sector where value added is thin and backward linkages to the rest of the economy is almost nil.

Even local employment is not growing as fast as population growth. In fact, despite the mushrooming of the call center service sector, unemployment has remained high at 11 percent of the population. The President’s one million job commitment is pushing bureaucrats to look at quick hits – not long-term solutions. Pushing For MSME Growth There is a very serious need for government to genuinely flesh out a program that will spur the growth of micro-, small-, and medium-sized businesses. It is not enough that new loan windows are opened for the MSME program. Someone in government must take the responsibility of making sure that these loans are availed of, and more importantly, used for enterprise-building.

In fact, MSME development is the recommended centerpiece program in a policy proposal prepared by the Ateneo Economic and Political Science departments to reinvigorate the economy and generate the needed jobs. They warn however that the work should not be the concern of the trade and industry department alone, but by a host of other departments in the government machinery.

Therefore, our education system must teach entrepreneurship, local governments must encourage small businesses, infrastructure growth must be supportive of MSMEs, and our financing institutions must create channels for moving financial resources. Corollary to this, government must have the resolve to resist established businesses’ lobbies to give preferential treatment to their industries. In one study conducted among the marginalized sectors of society, the poor explicitly expressed for politicians to refrain from interfering in their efforts and "muddying the waters of economic justice with patronage politics and corruption."

Finally, the task is not government’s alone. Each and every one of us must do our roles. Laudable programs like the Gawang Kalinga, Adopt a School, Build a Home, are examples of the private sector initiatives that can help mobilize resources to help the less privileged in our society.

Collegiate Champions’ League Ends

It is always refreshing to watch college basketball, perhaps because these young energetic players are fighting tooth and nail on the hard court to make a name for themselves, as differentiated from professional basketball where players are there to do a job.

The intensity of raw talent makes every second of the game exciting. Even when an opposing team was losing by double digits with just one minute to the buzzer, players continued to play hard ball. I don’t think they were playing just for the glory of their alma mater.

The recently concluded Collegiate Champions League that pits top rated college basketball teams from the National Collegiate Athletics Association, University Athletics Association of the Philippines, Cebu Schools Athletic Foundation, Inc., National Athletics Association of School, Collegiate and Universities, and the Mayor Duterte Cup (for Mindanao) in a do-or-die knock-out format once again spotlighted the spirited plays of college basketball.

My congratulations to the Far Eastern University’s Tamaraws for bagging the Philippine Collegiate Champion Cup. Their prize money of P500,000 will go a long, long way towards providing assistance for the education of poor but deserving athlete students, as well as increasing the athletic equipment available for the school’s sports development program.

The University of the East’s Red Warriors take home P150,000, while the University of the Visayas pockets P100,000 worth of scholarship grants. Congratulations also to all the other 13 teams that qualified to participate in the search for the best collegiate team in the country.

‘Breaking Barriers‘ with Chairman V. Nañagas, DBP

"Breaking Barriers" on IBC-TV13 (11 p.m. every Wednesday) will feature chairman Vitaliano N. Nañagas of the Development Bank of the Philippines (DBP) on Wednesday, 9th March 2005.

Now more than ever, Development Bank of the Phlippines has to deliver to the economy substantial benefits in capital formation, employment generation and increased revenues.

The good news is that current DBP management appears to have in place a neat package of development programs that will not only rehabilitate but also more importantly boost and move forward the local economy.

One of these programs is the Sustainable Logistics Development Program (SLDP), an investment financing facility for a comprehensive and integrated transport system, as well as related infrastructure and support services. This program aims to improve the country’s basic infrastructure for the efficient movement of basic commodities and to bring down the cost of goods in the market place.

While DBP has made available financing facility for the construction of additional modern storage handling and transport system, the challenge is to convince the private sector investors – both local and foreign – to put their stake in these projects. And this is where other government agencies will have to pitch in and create an environment conducive to doing business in the country.

Join us break barriers and gain insights into the views of Vitaliano N. Nanagas II, chairman, Development Bank of the Philippines on the role and contribution of DBP to the growth of the local economy. Watch it.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at If you wish to view the previous columns, you may visit my website at

Reported by: Sol Jose Vanzi

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