Late Monday night, after a testy conversation, President Duterte fired Department of the Interior and Local Government Secretary Ismael Sueno. The trigger was suspicion of graft and corruption. Reports say Sueno grew the family business in his home province, protected a drug lord, and entertained bribes from illegal gambling syndicates. He denies the allegations, but he has lost the President’s trust and confidence.
The DILG supervises the chief executives of some 81 provinces, 145 cities, and 1,489 towns, along with about 170,000 members of the Philippine National Police, making it among the most powerful Cabinet positions.
Not counting Perfecto Yasay who was removed by the Commission on Appointments for lying, Sueno is the second close Duterte ally and friend to be fired. The first was Peter Laviña, a cabinet undersecretary and then-candidate Duterte’s campaign spokesman. He was ousted as chief of the National Irrigation Administration last March, also on suspicion of corruption.
Under Duterte’s rule, just a whiff of corruption will nail a suspect government official. He is particularly unforgiving to those close to him. He may be a killer president (against those engaged in illegal drugs) but he is also serious about fighting corruption in government.
He is also against red tape. He gives government offices no more than three working days to process work permits and applications by ordinary mortals.
Duterte should start shaming, firing if not killing outright red tape-prone government officials. I am sure they number more than the number of drug addicts he wants to drown in Manila Bay. The government employs three million people—the same number of confirmed drug addicts.
It still takes two months before one can get to file a passport application (processing is another ordeal). It still takes weeks to get a driver’s license and months to get a car plate. At the Ninoy Aquino International Airport, it takes 40 to 50 minutes (waiting time) for Immigration to stamp your passport, longer than the actual flying time to places like Hong Kong, Macau and parts of China.
Among LGUs, red tape for business permits is still the norm. A big home builder I was interviewing this week told me it now takes longer—two years —to secure all the permits for a project.
Corruption and red tape remain the No. 1 problem of most businessmen. In the World Bank’s Ease of Doing Business rankings, the Philippines has stagnated at 99th, while its perennial rival for foreign investments, Vietnam improved markedly, from 91st to 82nd.
Vietnam is the Philippines’ main rival in the race to join the ranks of the world’s 20 richest countries in terms of size of the economy measured both as the size of the economy or Gross Domestic Product in purchasing power parity (or what the dollar can buy in equivalent local goods), and in GDP per capita PPP.
In recent years, the Philippines has proved to be one of the fastest-growing economies in Asia, growing at a clip faster than that of China. The economy has expanded for the past 72 consecutive quarters or a period of 18 years—the longest economic expansion in the country’s history.
According to Goldman Sachs, per capita, the Philippines will be the 18th richest country by 2050, with per capita income of more than $16,000, and together with the Vietnamese, becoming richer than the Indians.
PriceWaterhouse has a separate study ranking the Philippines among the 20 richest countries (No. 19), by 2050. Within the next 30 years, the Philippines will jump in ranking by nine places, from 28th to 19th with GDP of $3,334 billion ($3.3 trillion), from an estimated GDP PPP of $802 billion in 2016.
The Duterte administration has announced a Golden Age of Infrastructure during its six years. Infra spending this year will be P900 billion, 5.4 percent of GDP and more than the combined infra spending of P860.7 billion during 2012 to 2015.
Even with the government’s cumbersome and corrupt bureaucracy, major Philippine corporations are bullish beyond belief.
For instance, San Miguel Corp. has raised the stakes in the bid of major corporations to participate in the massive transformation of the economy and its robust growth in the next 10 to 20 years.
On Friday, March 31, SMC president Ramon S. Ang disclosed to newsmen his P1.68-trillion ($33.6 billion) plan to undertake three major projects:
• A new and larger oil refinery, with a projected capacity of 250,000 barrels per day, capable of manufacturing allied products like petrochemicals and aromatics, at an estimated cost of $15 billion;
• A fully-integrated steel mill designed to produce steel from iron ore and other finished products from a stainless steel manufacturing facility, with an investment of $15 billion; and
• A renewable energy power plant, using ocean tides, with a capacity of 1,200 megawatts of electricity, at a cost of $3.6 billion.
The projects are to be completed in three to five years, Ang said.
Ang also disclosed that this 2017, SMC expects net profit to rise by 20 percent to about P60 billion. In 2016, the beer, food, energy and infra conglomerate increased profits 80 percent to P52.2 billion on revenues of P685 billion.
At a five-year timetable, $33.6 billion involves capital expenditures of $6.72 billion or P336 billion per year at P50 to $1 rate. This makes SMC the Philippines’ largest investor.
The Ayala Group has capital expenditures this 2017—a record P185 billion, up 13 percent, to support growth strategies for its real estate, telecommunications, and water units and ramp up its emerging businesses in power, industrial technologies, healthcare, and education.
“The aggressive capital spending we have programmed this year reflects the Ayala Group’s continued optimism in the domestic environment,” Ayala chairman and CEO Jaime Augusto Zobel de Ayala said.
For its part, SM Investments Corp. has allocated P73 billion in 2017 capex to finance the expansion of its property, retail and banking businesses.
“Our core businesses performed well and continue to grow in line with the country’s strong economic development. We are optimistic about continued development and that government plans for infrastructure, agriculture and tourism in particular will enable broader regional growth,” SMIC president Harley T. Sy said.
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