In last week’s column I enjoined you all to review 2022 as we take a look ahead to 2023. Indeed the lessons we have learned from post pandemic recovery practices to the responses to the challenges posed by geopolitical realities such as the Ukraine conflict and climate related disruptions provide valuable insights into how we can build resilient enterprises no matter what situation we face. There are three points worth pondering:
The first key lesson, in my view, is that we must keep the economy as open as possible despite the circumstances. It also means, that when disasters take place, getting the economy safely back on its feet as soon as possible. It means getting trade, and in turn, incomes and wages flowing to support the community’s recovery from the disaster. Being a consumption-driven economy, the faster trade and demand get back on track, the better for the economy. Economic resilience will now be roughly measured by how fast the community gets back to regular programming.
Secondly, building resilience also means boosting manufacturing. This will allow us to achieve a certain level of self sufficiency in major commodities and finished products. A major policy reform from the previous government comes to mind—the CREATE Law which lowered corporate income taxes. Along with lower costs of doing business, as well as improved the Mindanao economy attractive to manufacturing, especially as it bears the capacity to produce the agricultural and resource-based raw materials needed for manufactures. Mindanao can and must go beyond being a raw materials supplier. It can now add value to what it produces through manufacturing and innovation.
This brings us to the third point, which is creating financial inclusion especially in remote areas.
The increase in digital banks, a key Duterte era reform by the Bangko Sentral under then Governor Diokno helps make this happen. The simplified manner through which digital banks set up both deposit and loan accounts now enable more to enter the formal financial system, opening doors to lower costs of credit which can be used to create and boost entrepreneurial activity sorely needed to strengthen local economies.
The other is the Personal Property Security Act or Republic Act 11057, which lets borrowers use personal property such as equipment as collateral for loans. I am interested to see the impact of this particular reform, and as such, enjoin academic institutes and schools of economics and commerce to study how well this law is implemented. Studies on these will help us identify bottlenecks and challenges. This will see a shift from high interest, informal credit systems to cheaper business loans through banks.
To help boost the Mindanao economy, all will need to cooperate. Mindanao’s regional development councils, the Mindanao Development Authority (MinDA) and private sector partners must move in unison to continue to put together investment promotion and capture programs that can entice the global investor community to shift some of their manufacturing capacity and other investments in Mindanao. It is a time for greater partnership and cooperation to move as one Mindanao to help make this happen.
A blessed Cristmas and propsperous New Year to all!