Aquino’s SONA Grounded on a Defective Development Plan

President Benigno S. Aquino’s first State of the Nation Address promises to be nothing new if his 2011-2016 Medium Term Plan is any indicator.

Dr. Rene S. Ofreneo, member of the National Economic Protectionism Association’s Board of Director, blasted the administration’s medium term plan as a rehash of 40 6years of medium term plans in a professiorial lecture sponsored by NEPA last July 17, 2011 at the UP School of Labor and Industrial Relations Auditorium.

“Without exception, all development plans since 1972 have featured a labor-intensive export orientation, and 40 years of failure is enough,” Ofreneo declared to some 300 UP students and NEPA members.

According to Dr. Ofreneo, the country’s economic planners notably that of NEDA Director-general Carlos Paderanga have been schooled in the Gerry Sicat – Ford Foundation type of economics. This type of economics features a labor intensive manufacturing and export orientation strategy that is heavily dependent on foreign direct investments.

“The Aquino administration is not served well by the likes of NEDA director general Carlos Paderanga.  Those in NEDA shouldn’t even be in public service!” added Ofreneo.

“The Conditional Cash Transfer Program started by the Pres. Macapagal-Arroyo’s and continued by the Aquino Administration is a poor copy of its Latin American original. What made it successful in Latin America was that the conditional cash transfer is on top of several job generation programs,” Ofreneo added.

Salvador M. Enriquez, NEPA Chairman Emeritus and panelist to the professorial lecture bemoaned the lack of creative initiatives among cabinet members.

“I believe that Pres. Aquino is well meaning but his cabinet is not serving him well. There is a dearth of creative programs. Instead of CCT’s, the DOLE or the DSWD could have made jobs and productivity the precondition of cash transfers.” Enriquez added.

Dr. Ofreneo underlined the irrelevance of Paderanga’s NEDA by saying that the OFW and OFW remittances comprise the most significant aspect of the GNP and yet the medium term plan is curiously silent on the matter.

Ofreneo proposed that an India-type of economic planning commission be created in place of the mafia-type of organization NEDA is right now. This, he said, will provide for a broader perspective and participation.

On FFF

The National Economic Protection Association (NEPA) takes exception to the statement of the Foundation for Economic Freedom that “special exemption of all oil products from VAT, re-establishment of the oil price stabilization fund, or worse, price controls, will surely lead to price distortions, misallocation and inefficiencies.”

NEPA believes that it is precisely the EVAT on oil, along with various taxes and add-ons on the final oil price that create the price distortions.

The FFF would have made us believe that EVAT is a natural cost. Well, it is not. The talented FFF surely must have known that EVAT is a late comer in the government’s effort to shore up revenues to the detriment of, well, the economy.

Instead of plugging loopholes in the tax code that allows corporations to evade paying correct taxes, the government took the easy way out thru the EVAT thereby making our tax structure more regressive – the poor carrying more of the tax burden rather than the rich.

There is something amiss when taxes on corporate profit – profit created via tons of government support – is actually reduced while the common tao is taxed for every single noodle pack he buys at the sari-sari store and have for his meal.

FFF call for more transparency from oil companies and more discussions among consumers is well intentioned but ultimately lame.

At a time like this, can we really justify tax-heavy petroleum prices so that the government can rake it in every time petroleum prices skyrockets?

If removing EVAT from oil prices so that the burden on the common tao bears is populist, what do we call the policy that allows oil companies to profit billions during crises?

Statement of Presidential Spokesperson Edwin Lacierda on Business Optimism and Investor Confidence in the Philippines

Recently Presidential Spokesman Edwin Lacierda stated that “newfound trust in our government… remains positive.”

Certainly, he is not commenting on increasing investments by Filipino corporations abroad like Manny Pangilinan’s purported interest in the Sacramento Kings or Century Tuna investing in the Marianas Islands.  Surely Pangilinan have his own reason why he plans to spend $250 million upwards of his own money in a basketball franchise rather than invest it here in the Philippine and help boost local economy.

And the Lacierda’s statement that public-partnership projects are “well on their way to fruition” despite the fact that none of the PPP projects lined up since last year have been signed (note to mention implemented) reveals far more on the “communications problem” that is the Communications Group.

The National Economic Protectionism Association (NEPA) believes that more than bandying about business optimism, the Aquino Administration must address the disconnect on why Filipino corporations and individuals are investing abroad (from profit created doing business locally) while the government continues to wrack its brains on how to increase foreign investments.

One thing is certain though, only Mr. Lacierda is optimistic about business optimism.