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Have I lost my optimism about the future of the Philippine economy?  This is a question I have been asked by friends when they compare my GDP forecast for 2021, which is at 4.0 percent, to others which can range from 4.70  percent (ING Bank)  to as high as 7.60 percent (Fitch Solutions), the median of  14 forecasts being 6.55 percent.  Why have I temporarily relinquished my usual monicker as the “prophet of boom”?  The plain and simple answer is that I foresee that our Government (both at the national and local levels) will continue to do a poor job of handling the COVID-19 pandemic.  If we had the worst GDP performance of a negative 9.5 percent  in the whole of East Asia for the year 2020, it was mainly because we had the longest lockdowns and the slowest response to the pandemic.  I have reasons to believe that we have not seen the worst of the negative impact of COVID-19 on the Philippine economy.

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There is nothing wrong in the desire of those who drafted he Constitution of 1987 to ensure that the “national economy is effectively controlled by Filipinos.”  This is authentic nationalism.  Limiting equity ownership of foreigners in strategic and capital-intensive industries, however, is not the only and rather a weak measure to ensure effective control of Filipinos of the national economy.  The State, the ultimate protector of  the common good of Philippine society, has many means of controlling the behavior of enterprises owned by a majority of foreign interests.  Through the Philippine Competition Commission, any monopolistic or oligopolistic act of a foreign-owned company can be penalized.  The raising of prices to unreasonable levels by these corporations can be prohibited by legislation or by an executive decree during times of crisis.  Any abuse of our human resources by foreign companies can be sanctioned by labor laws.  It has also been demonstrated that there are sectors where enterprises fully owned by foreigners have played second fiddle to  strong and mighty enterprises   owned by Filipinos, such as United Laboratories in the pharmaceutical industry, the SM Group in retailing, San Miguel Corporation in food and beverage,  ICTS in international logistics, and many others.  There is no need to limit foreign equity participation in such sectors as telecoms, airports, educational institutions, media and other public utilities to ensure that the national economy is “effectively controlled by Filipinos.”

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Those who are objecting to the removal of the restrictive economic provisions in the Philippine Constitution of 1987 are well intentioned nationalists.  They are actually faithful to the spirit of what the majority of the members of the Constitutional Commission of 1986 imbued in the final draft of the Constitution that was ratified by the Filipino people in 1987.   This spirit is embodied in the  phrase that appears in the Declaration of Principles:  “The national economy shall be effectively controlled by Filipinos.”  As the Chairman of the Committee on the National Economy of the 50-member Commission, I beg to disagree that  the economic provisions of the Constitution  were able to promote the national common good by limiting vital economic sectors of the economy to Filipino citizens.  It is about time that we redefine economic nationalism as meeting  the needs of the Philippine economy in the twenty first century.  The evidence is so clear that limiting the ownership of large, capital-intensive industries to Filipinos or enterprises with majority Filipino ownership has nothing to do with Filipino-First but is actually equivalent to “Rich Filipinos First and damned the rest of us, especially the poor.”  Only the very rich Filipinos belonging to the top one percent of the population in terms of income class can afford the capital needed by such capital-intensive sectors as telecoms, airports, public utilities, media and higher educational institutions.  That is why we continue to have an elite economy.  To make matters worse, by limiting the majority ownership of these strategic industries to Filipinos, we are unable to capture much needed long-term capital from abroad, making it harder for the economy to address the problems of massive unemployment and dehumanizing poverty among the masses.   We cannot talk about the common good or the national good of Philippine society without giving the highest priority to eradicating mass poverty.

The winning of the economic marathon by the Philippines over the next decade or so will be further made possible by major reforms in the  educational system.  Parents and the youth must be convinced that their chances of being gainfully employed will increase significantly if they take less interest in diploma-oriented college courses in the traditional universities and colleges that have proliferated in the Philippines—aping the American model.  They should be taking technical courses that will prepare them for employment in the construction industry, health and wellness sector, agribusiness sector, tourism and travel and other labor-intensive industries which do not require college diplomas but practical skills that are better honed in technical institutes modelled after the European educational institutions when Europe was in  a stage of development similar to where we are now.  For example, the educational institutions owned and managed by one of the largest investors in education, the PHINMA group, are really more technical in nature, producing people for the security industry ( i.e. courses in criminology), health and wellness, and other technically-oriented rather than purely academic courses.  There should be more schools for sea farers, care givers, automotive repair and maintenance workers, electro-mechanical workers, etc. like those produced by such schools as DUALTECH in Canlubang, the Centre for Industrial Technology and Enterprise (CITE) in Cebu, MFI Institute in Ortigas, and in-house training programs put up by  firms like the DMCI group, the Makati Development Company, the Monark Equipment Corporation, the Transnational Diversified Group, the Magsaysay Lines, etc.  It is hoped that the major restructuring of Philippine education that will result from the pandemic will de-emphasize the pursuit of a college diploma for its own sake but will lead to greater interest in the cultivation of  practical skills needed by an industrializing society.

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This bright long-term forecast of CEBR is only one of the many optimistic prognostications of independent think tanks  and financial institutions about the long-term future of the Philippine economy.  Within the last year or so, the Philippines was rated by the Oxford Economic Institute to be the second most attractive emerging market in the next decade or so, next only to India and ahead of Indonesia and China in third and fourth places, respectively.  It was ranked by The Economist publication as the sixth in financial strength ahead of countries like Vietnam, Thailand and China.  The Japan Credit Rating Agency upgraded its credit standing  to triple B Plus.  These and other long-term projections of a bright prospect for the Philippine economy are based on strong fundamentals that are literally immune to the damage done by COVID-19 whose impact on the Philippine economy will be short-lived.

Anyone who wants to “contribute to the common good” of Philippine society cannot go wrong if he or she starts planting trees, either as an ordinary citizen, a civic leader, a government official, a businessman, a social entrepreneur or in any other capacity whatsoever.  There is so much evidence that trees have a lot to do with sustainable development and integral human development.  As has been demonstrated by abundant studies sponsored by international organizations, such as the United Nations, “deforestation and desertification—caused by human activities and climate change—pose major challenges to sustainable development and have affected the lives and livelihoods of millions of people.  Forests are vitally important for sustaining life on Earth, and play a major role in the fight against climate change.  Investing in land restoration is critical for improving livelihoods, reducing vulnerabilities and reducing risks for the economy.”

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Every Filipino citizen is mandated to promote the “common good” by the Philippine Constitution.   To most Filipinos, however, the concept of the common good is something very vague and even mysterious.  What is the common good?  Social doctrine of the Church defines it as a social or juridical order which enables every member of society to attain his or her fullest integral human development. In more practical terms, however, one can still ask how can every citizen contribute to the good of all members of society, many of whom he or she does not even know.  The recent  encyclical of Pope Francis entitled “On Fraternity and Social Friendship” (Fratelli Tutti) has shed clearer light on what it means to promote the common good for every citizen of a nation.  He introduced the concept of “political love”.  According to him, there is a kind of love that is “elicited”:  its acts proceed directly from the virtue of charity (love of neighbor in this case) and are directed to individuals and peoples.  Through this type of love, we promote the good of individuals or peoples whose faces we recognize.  They are not anonymous to us.  Pope Francis, however, points out that there is also what he calls “commanded” love, expressed in those acts of charity that spur people to create more sound institutions, more just regulations, more supportive structures,  more individual initiatives, etc.  which promote the welfare of people we have never met and will never meet in our entire lives.

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Blended learning may be part of the new normal as educators and pupils will continue to use online learning even when face to face classroom instruction will already be permitted once the pandemic is put under reasonable control.  For those belonging to the and D and E households (about 60 percent of the population), because of lack of internet facilities, much of the work at home may still be done through printed modules which may actually help some of the parents (and grandparents) in these households improve their own literacy and numeracy as they struggle to assist their respective children (grandchildren) cope with their homework. For those households belonging to the A, B, C market segments (with monthly family income of P20,000 or more), there will be a greater challenge to help children moderate their use of all types of digital devices as they progress in the educational ladder from elementary to high school.  Especially for these more  economically endowed families, it should be considered that childhood is the time to begin practising the virtues and the right use of freedom to help them derive the greatest benefit from the new technologies and avoid the pitfalls.  I summarize below some very important guidelines found in the e-Book entitled “New Technologies and Christian Life” found in the website opusdei.org. 

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The Philippines may have one of the lowest GDP per capita figures in East Asia (higher only than Myanmar, Laos and Cambodia).  What is amazing is that Filipinos spend the most time using social media, according to a recent report of Stastista, a German market and consumer data company.   Among 46 markets, the Philippines spent the most time connected to social networks, devoting an average of four hours daily to digital social space.  Nigeria comes second with 3.75 hours, India 2.5 hours and China 2 hours.  It is interesting to note that people in developed countries spend less hours on the average, principally because they are rapidly ageing.  Countries like the Philippines with a young and growing population  have a much larger segment of their population who are from 16 to 24 years old, the ones who drive the growth of demand for social media.  One would be hard pressed  to find more than 3 out of 100 Filipinos who do not have a Facebook, Instagram or Twitter account!

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Filipino workers abroad have once again saved the day for the Philippine economy during the ongoing pandemic.  As they did during the Great Recession of 2008 to 2012, they are softening the blow of the world-wide depression caused by COVID-19 by continuing to send a good portion of their earnings to their loved ones in the Philippines.  Already in September and October 2020, the remittances they sent home had started to climb despite the fact that hundreds of thousands of them were forced to return home as they were laid off from work, especially in the Middle East.  Thanks to the land-based  OFWs who have kept their jobs, their extra generosity during these hard times is limiting the decline of remittances to less than one percent decline on  a year to year basis.   In fact, they may still surprise us during the months of November and December since as Christmas approached,  their generosity could even prevent an actual decline of remittances for the whole year.  There is no question that without them, the GDP of the Philippines would have suffered worse declines, not only for the entire year of 2020, but even in the first quarter or so of 2021 when second or even third waves of the virus are expected to  lead to more economically paralyzing lockdowns.

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