Good afternoon, ladies and gentlemen!
Thanks for inviting me to say a few words about sustaining reforms for inclusive growth. It’s a topic that fits squarely with what the World Bank is doing here in the Philippines under our Country Partnership Strategy with the Philippine government.
And the fact that this forum is being done as part of this new partnership between the De La Salle University – Jesse M. Robredo Institute of Governance and the World Bank is even more meaningful for us.
Just last week, the Filipino people commemorated the third death anniversary of Jesse Robredo, a leader who clearly demonstrated to us how effective leadership, citizen participation, transparency, efficient public service – in short, good governance – could transform local governance and change the lives of the poor. This partnership honors his legacy.
Good governance is a major focus of our Country Partnership Strategy. That's why the Bank supports the government's efforts to become more transparent and more accountable, to engage more with citizens, and to become better at delivering social services.
We believe that transparency, accountability, and citizen participation help improve the investment climate as well as generate more and better jobs and economic opportunities for more Filipinos.
Good governance helps ensure that roads, bridges, schools, the health centers, and safe drinking water reach the poor who need these services and facilities the most.
Our economists tell me that several decades ago, the main concern of the Philippines was all about the “boom and bust cycles”.
This is related to macroeconomic instability: real growth was low, inflation rates were high (at some point double digit), the current account balance was negative, budget deficits were high and national government debt soaring.
In the last several years, these issues are no longer a major concern. Real growth has been ranging from 5 to 7 percent, prices are stable, current account has been registering surpluses (one indicator of a healthy economy), and the country’s finances are stronger than ever: budget deficits are manageable and government debt measured against GDP is going down.
The conversations today are centered on how such remarkable growth can translate into significantly reducing poverty and how government can better deliver services especially to the poor and most vulnerable.
What brought about these changes?
We believe that the changes have have come because of the relentless focus on good governance reforms. Specifically, focus on improving public financial management, tax policy and administration, anti-corruption, and social service delivery.
We believe that the country now has a great opportunity to deepen reforms to secure property rights and access to land by the poor, promote more competition, and simplify regulations, while sustainably ramping up public investments in infrastructure, education, and health.
This administration of course has only few months left. Many people have expressed concern that the all these reforms might get derailed or reversed in the next Administration. But I’m not one of those who are prone to this pessimistic prognosis.
It’s because the Philippines has a good track record of having good programs and reforms being initiated by one administration that are sustained or even scaled up by the next.
Reforms in the airline industry and telecommunications are good examples. For instance, five million new jobs were created by these reforms, including 800,000 jobs in the business process outsourcing industry. By 2010, there were over 80 million mobile phone subscribers and over 20 million internet users. Travel costs have gone down significantly. 20 million Filipinos are now flying every year, up from less than five million two decades ago, with strong impact on tourism.
Another example is in the area of social protection – the conditional cash transfer program or CCT. The previous administration started CCT with only few hundreds of thousands of beneficiaries. Today, we have more than four million families enrolled in the program. There are other examples like the PPP program, the first of which was completed just recently in Luzon. This will supplement the increase in infrastructure spending.
One major strength of the Philippines as a democracy is the vibrancy of its civil society and media. We believe that major drivers of these changes are the strong and consistent advocacies of civil society, the country’s leaders from both within and outside the government, and media who serve as watchdogs.
Concerns about the need to increase spending in infrastructure, health, and education, about citizen participation in budgeting as exemplified by programs like bottom-up budgeting, among others will be a continuing advocacy for many, both within and outside the government, especially among the private sector, civil society, among others. Hence, these reforms will remain as compelling policy issues for the next administration.
This is especially so if development advocates in this country can bond together into a more cohesive network or “coalition for reforms” that could sustain demand for good governance. Participants of this network can come leaders from public and private sectors, members of civil society, private sector groups, the academe and think tanks like De La Salle’s Jesse M. Robredo Institute of Governance, and sectoral organizations.
This broad reform coalition is important for several reasons.
First, it increases the likelihood that reforms are sustained. The presence of a broad coalition makes it difficult for one sub-group (e.g., vested interests) to block reforms. Without a broad coalition, reforms made under a strong president can be reversed.
Second, because it must adopt a strategy that appeals to a wide segment of society, a package of reforms that balances trade-offs and proportionally assigns responsibilities can be formulated instead of tackling reforms one-by- one, which can generate powerful opposition from vested interests and quickly drain the energy and capital for reform.
I’m therefore pleased that this afternoon, we are going to sign this knowledge partnership with De La Salle University’s Jesse M. Robredo Institute of Governance which will form part of the knowledge for development community or KDC, now numbering 17 across the country.
There are currently 8 KDCs in Metro Manila, 4 in Luzon outside Metro Manila, 3 in the Visayas, and 2 in Mindanao. The network is composed of schools, policy and research institutions in the Philippines that promote knowledge sharing and citizen engagement on development challenges.
I understand the Institute is doing research and training in local governance, decentralization, budget monitoring, environmental governance, among others. These issues are also of primary interest to the World Bank. We believe that good governance is critical to achieving our own mission of eliminating extreme poverty and promoting shared prosperity.
With this new partnership, more voices will be added to this growing movement – nay network – in the country that is working for more effective governance.