Reminding the business sector



Dr. Jun Ynares Dr. Jun Ynares

“Where do you stand on the issue of the franchise renewal of a broadcasting network? What is your view on what’s happening to a giant water distribution concessionaire?”

These were the hot topic of conversations during the past few days following recent developments where the public saw the national government in apparent head-on collision with some of the country’s leading business conglomerates.

There were concerns that too much pressure may have been put the government on these conglomerates and that the pressure may send negative signals to the business sector. These, in turn, may have a chilling effect on the investment climate in the country and could negatively affect the economy.

Here’s the view from where we stand.

First, President Duterte’s recent actions and decisions on matters involving big business are correct and are called for.

Second, the economy remains good and is, in fact, thriving.

Don’t get us wrong. For the record, we wish the corporations involved in the concession and franchise row well. We hope they are able to continue serving the public. We believe it is in our best interest that they do so.

However, we also believe that President Duterte has done a good job in getting the business organizations concerned to account for their performance and to prove themselves worthy of having their respective concessions and franchises renewed or extended.

That, after all, is the essence of the concepts and principles of “concessions” and “franchises.”

The essence is summed up in one word: “stewardship.” Business organizations do not own the natural resources they manage and distribute. They do not own the airwaves or the band width. These are owned by the Filipino people as represented by the government. They have merely been lent to or placed in the hands of private businesses. The idea is those who have been given the concession and the franchise would manage and use them efficiently and effectively for the benefit of the Filipino people.

As they fulfill the mandate under the concession agreement and the franchise, the business organizations are allowed and are expected to earn reasonable profit. The profit allows them to sustain their operations and to continue providing the public with good service as described in the concession agreement and the franchise.

That being the case, it is government’s job to review their performance, abilities, and worthiness to continue rendering public service under those agreements. It is in the public’s best interest for the government to call the attention of the business organizations concerned when the public feels that the services they are getting fall below expectations and fail to meet the standards under their respective agreements.

So, President Duterte has scolded these concerned business organizations in public.

This is the President’s style of leadership. This is good for the people he serves. He is doing a great job at calling the attention of certain business organizations when the stewardship roles are not fulfilled in accordance with the set standards for performance. After all, the President himself is also a steward of the public office he holds – just like all elective and appointive public officials. He knows he has a job to do and he is doing it the best way he can.

It is now the turn of the business organizations concerned to prove two things -- good stewardship and performance that meets or exceeds the standards set in their respective agreements with government.

They have to prove once more that the way they have managed the public resources lent to them have advanced the welfare and well-being of the Filipino people.

As the President has these agreements reviewed for possible extension, renewal or cancellation and non-renewal, the economy remains good and stable.

This is not solely our view. This is the view and outlook expressed by economic experts.

For example, business media recently reported global debt watcher Fitch Ratings has raised its outlook on the Philippine economy, “opening up the possibility of a credit rating upgrade for the country”.

According to reports, Fitch said it “revised its outlook on the Philippines from “stable” to “positive” and affirmed the Southeast Asian country’s credit rating at “BBB” — still a notch above minimum investment grade”.

We further quote from the news item:

“The outlook revision reflects Fitch's expectations of continued adherence to a sound macroeconomic policy framework that will support high growth rates with moderate inflation, progress on fiscal reforms that should keep government debt within manageable levels and continued resilience in its external finances,” the debt watcher said.

We thank the business organizations concerned for the public service they have rendered through the concession agreements and franchises government has given them. For the most part, we have been satisfied with their services.

We also thank President Duterte for his stern reminder to the entire business community that these agreements are stewardship covenants. The resources they manage belong to the people. They must be used first to advance the public’s interest before their own.

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