Day by day as the pandemic continues to ravage homes, families, and the country’s chance to develop human capital, the Philippine government remains indifferent to the suffering of countless Filipinos living on the seams as evidenced by its blatant failure in its COVID-19 response and blunderous economic priorities. This situation is further exacerbated by public officials leveraging on the sorry state of the society by introducing and proposing policies that in the end would only serve their ulterior motives and leave the people hanging by the thread.
The previous administrations up until Duterte are responsible for our current disaster; them embracing neoliberal solutions for “economic development” dispossessed us Filipinos of our fighting chance for the future.
Recently, on June 1, congress approved, in the third and final reading, Resolution of Both Houses (RBH) no. 2 which seeks to allow the amendment of economic provisions of the 1987 constitution. This amendment is specifically aimed at lifting restrictions for foreign ownership and investments in the country. Although it may seem to have a noble intention in resuscitating our fledgling economy, there is a huge caveat to it.
Under the current set-up wherein most, if not all, of the public utilities, retail, and trade have been liberalized, we are far from reaping the purported benefits. Prevailing neoliberal policies have deprived Filipinos of the opportunity to improve their standard of living since the privatization and deregulation of public utilities and services have limited their consumption of public goods due to the inevitable price increase.
The inaccessibility of these primary services, which are integral in sustaining the everyday life of the general population, has diminished the quality of development for most individuals. Here, we could observe that people who do not have access to water, electricity, education, and housing are unable to contribute to the enrichment of the economy via the formal sector or even the traditional economy.
The pandemic has also revealed how the current income redistribution policies of the government are vulnerable to shocks, therefore, deeming these efforts as insufficient in tackling and alleviating poverty in the country, on top of regressive tax measures which include, but are not limited to, Comprehensive Tax Reform Program (CTRP) and its packages.
Even though we have a relatively huge advantage for economic development in relation to our significantly huge population, we cannot harness this potential as the majority of the population was denied of the investments that should have been intended for human capital development.
So how are we to tell if easing foreign restrictions would be the end-all be-all solution to the economic crisis we are currently facing and the prospect for economic development?
Hypothetically, even if a hefty flow of foreign investments would play a major role in bolstering domestic capital formation in the creation of new jobs and opportunities, it does not still guarantee that it would remain in the country in times of unfavorable market conditions or during economic shocks; rather we are running the risk of capital flight which could worsen into a financial crisis.
Looking at the history of the Southeast Asian market, the myths of greater foreign direct investments and trickle-down effect have proven otherwise. This particular region has long been susceptible to capital outflows—as evidenced by the Asian Financial Crisis and Global Financial Crisis—due to its dependence on investments coming from developed countries whose capital holdings are always influenced by the health of their home economy.
It is not a coincidence why the majority of the countries belonging to this region remain clustered as “developing countries” for the longest time despite being vastly rich in resources. In the context of the Philippines, this scenario undermines its bid in sustaining economic growth and impedes the ability of the government to allocate its resources and respond to market failures.
We should also be wary of multinational companies displacing local firms, public utilities, and domestic industries. This is no longer a relatively new phenomenon in our country since it has been the primary reason why the Philippines failed to pursue national industrialization after the American occupation. After the second world war, the abundance of surplus products and American-owned companies prevented the expansion and consumption of Philippine-made products as the former were more enticing due to their perceived quality and affordability.
In contemporary times, the imperialistic motive of China could take advantage of the unrestricted foreign control in our country and traverse the same path of its rival imperialist powers: western countries.
Although these projections may be too early to tell, the observations are not done prematurely since we are currently experiencing it under the crutches of neoliberal hegemony. The complete dereliction of duty of the government to the private sector in providing public goods and efficient distribution of basic amenities and infrastructure would in the long-run serve as an obstacle for ordinary Filipinos in attaining a decent and dignified life since the latter are only incentivized to operate for profit-maximization.
The reluctance of the government to pour its resources into public services (i.e. healthcare, education, housing) and shirking its responsibilities to oligarchs—and potentially foreign entities— have caused long-lasting damages to several families, especially in the peripheries, and robbed them of the opportunity to escape cyclical poverty and systemic oppression.
Therefore, it is in our best interests to pressure the government to create economic policies that are nationalist and mass-oriented in nature if we are to break from the curse of development deadlock. [P]
Graphics by Jermaine Valerio
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