By Melito Salazar Jr.
The Lenten Season is an opportunity to reflect on the travails of Philippine businessmen in a society where they who have given so much to the prosperity and progress of the nation are constantly crucified in the cross of public opinion.
When prices go up, they are accused of profiteering even when the increase is due to factors beyond their control, like increases in excise taxes or devaluation of the peso making inputs costlier.
When profits increase due to effective and efficient management they are portrayed as greedy capitalists even when they pay just wages to their employees, provide training and undertake community service projects as part of their corporate responsibility.
When natural calamities occur or when their resources are needed to address urgent emergencies like the repatration of overseas Filipino workers from hotspots, they are quickly tapped by government without thought of any compensation. Yet harsh criticism come from high government officials playing to populist sentiments.
As we follow the Philippine businessman struggling on the road to his calvary, we can commiserate with his sad state. Starting an enterprise he is challenged by the myriad of permits that both the national and local governments demand. These range from building permits, business permits, fire safety certification, BIR registration and receipts from accredited printers, SSS and PhilHealth registration, DOLE certification as to employee status, including barangay permits. Can you imagine how more challenging this will be if the country shifted to federalism?
As he puts resources together to form an organization, despite the multitude of jobseekers knocking on his company doors, he finds it extremely difficult to find skilled and trained personnel. He has to spend funds not just for reorientation but also for training and development. Financing his enterprise means depending on his own savings and those of family and friends because banks will rarely finance start ups. They are too busy running after corporate accounts that are already well established and highly profitable. Sourcing his inputs can be a problem as he finds local supplies either low in quality or insufficient in supply. Forced to buy imported materials, he has to contend not only with delays at the Bureau of Customs as greater vigilance has been imposed due to dangerous drugs from China having slipped through but also higher costs and even more delays as delivery trunks have to maneuverthrough the traffic congested streets of the metropolis.
Getting his products to the market especially when his plant is located outside the metropolitan area means negotiating a series of checkpoints set up to catch terrorists and communists but conveniently utilised to “shakedown” company delivery personnel. How he wished the Philippines had an integrated railway system where products from the plants are brought straight to the warehouses of the wholesalers and vice versa where from the piers inputs are directly delivered by rail to the manufacturing plants. In the market his products compete with cheap imports not necessarily smuggled (although one hears of tonnage coming in regularly) but emanating from countries whose costs of doing business are lower.
In the Philippines, infrasturcture that is not comparable with other countries leads to Philippine enterprises becoming less competitive. Compare the state of highways and bridges, of Internet connection and speed, of shipping ports and airports, of logistical support and government facillitated processes with those of our ASEAN neighbors and one realizes the reason why we are behind these countries when decades ago, the Philippines was No. 1 in Asia.
The recently passed TRAIN 1 and the forthcoming TRAIN 2 should result in more spending funds for consumers perking up the economy and in lowering the effective rate of taxes imposed on corporations. However a 25% tax rate will still make the Philippine businesses subject to the highest income tax rate in the ASEAN. As these will be accompanied by the drastic removal of incentives and subsidies, the net effect is to make Philippine enterprises less competitive with other ASEAN businesses. Government should focus more on introducing savings by costcutting especially in the legislature which seems to be a very expensive legislation producing entity. If one divided the benefits of the truly meaningful legislation passed over the costs of running Congress, I am positive it will show a negative cost benefit. The cost of governance at the three branches of government and at the national and local governments is too high given their performances. All these add to the “cost of doing business” in the Philippines.
As our government officials find time to reflect this Lent in the churches (hopefully not the beaches), I hope they will be enlightened on the immense contributions of Philippine businessmen which can even increase tremendously if given full support.
It is time to end the calvary of Philippine business.