Bernardo M. Villegas
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No Longer A Basket Case (Part II)

          The fourth major source of growth has been the increasing success of the tourism program of the Government.  Putting together the foreign tourists, estimated to be at 5 million in 2013, and domestic tourists who exceed 20 million, the economy is expected to get another big boost in the coming months when the dry season begins all the way up to the middle of 2014.  Even if Bohol and Palawan--major tourist destinations--were adversely affected by the two calamities that came one after another (earthquake and super typhoon), there are enough alternative sites in Luzon, Central Visayas and Mindanao that can at least temporarily replace the damaged resorts.  I can think, for example, of the many attractions of Cagayan de Oro and the surrounding areas of Bukidnon and Camiguin Island that are now becoming more popular to both foreign and local tourists.  The Government is also fortunate that the Department of Tourism is under very enlightened leadership that has done a fantastic job of marketing the Philippines, first to its people, and to the world at large.  Over the longer run, the focus that people will now have on helping Eastern Visayas to recover can lead to the construction of a modern airport in Tacloban and the reconstruction of the many tourism treasures of Eastern Visayas, especially in the hard-hit Tacloban, Leyte and Guian, Samar which have some of the most beautiful beaches as well as historical and cultural treasures close to the hearts of Americans (Guian is where General MacArthur first landed when he returned to the Philippines to reconquer it from the Japanese).

          Finally, as Director General Lilia de Lima of the Philippine Economic Zone Authority (PEZA) has repeatedly announced, there is a veritable renaissance of manufacturing happening in the industrial regions of Luzon, Visayas and Mindanao because of the keen interest of Japanese companies to relocate many of their plants from Japan and China.  The very high rates of electricity that have resulted from the closing down of practically all the nuclear plants in Japan and the continuing shortage of manpower are compelling the Japanese to look for alternative sites for their manufacturing ventures.  In the past twenty years, it was an easy choice for them to relocate to China.  Today, however, China is already suffering from severe labor shortages and skyrocketing wages so that there is a very noticeable tendency of the Japanese to look at Southeast Asia (especially Vietnam, Indonesia and the Philippines) for possible relocation sites for their manufacturing enterprises.  The Philippines has at present the  competitive advantage of enjoying industrial peace, as labor unrest now is plaguing both Vietnam and Indonesia.  In 2011, for example, while China experienced 222 strikes and Vietnam 978 strikes,   the Philippines only had 2 strikes.   Fortunately, the areas devastated by Haiwan are not among the potential sites for the relocation of these Japanese (and their competing South Korean) enterprises.

          Again, because the Philippine economy is now economically stronger in addressing the needs of the poorest of the poor, a blessing in disguise of the recent natural disaster could be a greater resolve of both the State and civil society to address more effectively the long-standing situation of Eastern Visayas as among the poorest region in the country.  Whereas the national average of households falling below the poverty line is about 25%, in Eastern Visayas, especially Samar, the figure could be as high as 50%  or more, especially in the fishing villages and coconut regions.  It is well known that the poorest of the poor anywhere in the Philippines are the sustenance fisherfolks, the small coconut farmers and the landless rural workers.  The populations of Leyte and Samar are made up mostly of these people.  With higher economic growth and the attention of the world on them, we may still find effective means of directly addressing their poverty, thus attaining inclusive growth.  Some of the most effective means tried all over the world are improving the quality of the public schools in which the children of the poor study; increasing the number and quality of barangay health clinics; giving access to the poor households to potable water; and building rural infrastructures, such as farm-to-market roads, irrigation systems in the coconut growing areas, post-harvest facilities; and providing agricultural extension services and access to credit.  The funds of the Conditional Cash Transfer should be especially allocated to providing the children of the poor with adequate nutrition from the age of zero to six years.  Fortunately, milk companies like Alaska and Nestle have been quick to donate milk products for the consumption of the poor children.

          I hope that all Filipinos and their friends from abroad will unite to help Eastern Visayas and other areas damaged by typhoon Haiyan to recover by first addressing the needs of the poorest of the poor in the key result areas mentioned above.  Over a longer time period, let civil society and the business sector improve the investment climate in these areas so that economic growth can be restored.  That would be the only way to ensure sustainable human development in these hapless regions.  Again, we should give thanks that this tragedy occurred when the Philippines is no longer an economic basket case.  It is the new Asian tiger, the breakout nation, the rising star and one of the emerging markets that will lead the world in economic growth in the coming decades.  For comments, my email address is bernardo.villegas@uap.asia