Friday, 6 February 2009

Stimulus

Editorial
The Manila Times
http://www.manilatimes.net/national/2009/feb/06/yehey/opinion/20090206opi1.html

The Philippine economy is not exactly on a free-fall. The current year will most likely see a two percentage drop in the gross domestic product (GDP) and job losses numbering to tens of thousands. The overseas employment picture is not as bright either but the worst-case scenario—because of the fixed contracts and continuous hiring—will not result in an economic shell shock.

Still, there is no reason for government to act as if it were still times of economic stability. There is no reason to be smug and complacent. The experts’ view that we are one of the few countries to be hit by a signal number 1-type (not a category 5 economic hurricane that has hit Iceland and the United States) of tropical economic storm should not be a source of real relief.

The national government has responded to the threat of a global economic catastrophe with a P330-billion stimulus package, a spending program of several components and definitely the largest spending program by the state in recent memory. Pro-administration and anti-administration officials should drop all quibbling and support it.

It should be endorsed with unprecedented comity.

There are several noteworthy components of the P330-billion package. An P18-billion emergency employment program, which aims to provide jobs to jobless Filipinos and to recently dislocated workers, is part of the stimulus program. As complement, Domingo Panganiban, the agriculture expert who oversaw the most successful food production programs in the country’s history, should be named administrator of these emergency job programs.

The decision of the Arroyo administration to front-load the hard infrastructure components of the program with urgency is another laudable thing. The construction of school buildings, roads and bridges, farm-to-market roads, small-scale irrigation systems that can be run by farmers and that are environment-friendly, and other related public work projects will not only create additional jobs. They are necessary. In addition, serious infrastructure work—designed for the Philippines as a modern or even an advanced country—should be built. Our more economically successful neighbors—Singapore, Hong Kong, Malaysia, Thailand, Indonesia—started building multilane highways in the 60s, some of these 10-lane and 12-lane motorways—even before there was any sign of traffic congestion developing. They just thought ahead and planned for a future when their cities would burgeon, and commercial, industrial and tourism activities would escalate. We have to modernize our ageing and investor-unfriendly infrastructure network.

If the stimulus program would allot the entire P15-billion needed to fill up the classroom shortage, so much the better. With that, we can reduce the class size in our public schools—now at a dismal 50 students per class.

After extending the unanimous support the stimulus program requires, pro-administration and opposition figures alike have more duties to fulfill. Such as:

• Prod the implementing agencies of the specific projects under the stimulus program to exercise utmost transparency in the bidding and awards process. Contracts should not go to cronies and favored contractors.

• Push for a creation of an oversight body that would monitor the progress of the projects covered by the stimulus program.

• Reduce the amount allotted to tax cuts, which by the estimate of the National Economic Development Authority, would reach roughly P40 billion. Putting this amount in real spending, such as a road or mass transport program or in renewable energy, would be a better investment.

The bidding and awards work for public works contracts, for supplies and for services rendered is now governed by a much-improved law, the E- Government Procurement Act. The law generally demands transparency and accountability in the bidding process—starting with its provision to open up every bidding to the broadest pool of contractors and service providers.

The law also bans negotiated contracts or the award of contracts under the simplified bidding rules. More, it mandates the full use of ICT technologies for a more open bidding and awards process.

The full application of the provisions of the E-Procurement Law will guarantee integrity in the bidding process.

Full vigilance should be exercised by the oversight body. All leakages should be promptly corrected. Those found involved in rigging contracts should be sent to jail. Government personnel found corrupting these projects should be meted an additional lifetime ban from working in government. Private contractors and suppliers should likewise be blacklisted and made to pay heavy fines.

The stimulus program is too important and too big to be allowed to fail. We Filipinos—our government, the political opposition, civil society and ordinary people—have to do everything that needs to be done to ensure the integrity of every project under this spending program, which is nothing less than our national lifeline in these deeply troubled times.

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