Bernardo M. Villegas
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Economic Recovery Program for Leyte

           I have been meeting with selected groups of industry leaders and NGO officials to craft a long-term economic recovery program for the island of Leyte, especially in those communities most adversely affected by the super typhoon Yolanda (Haiyan).  In these consultations, I have emphasized the importance of communicating to one another our individual efforts towards long-term economic recovery so that we do not work at cross purposes and so that we can discover synergies among our private initiatives.  At the same time, I have cautioned about the danger of over coordination and the possibility of paralysis by analysis.  Here, the principle of subsidiarity should prevail:  what can be done by individuals and small groups on their own should be implemented as quickly as possible, only subject to whatever reasonable regulations the national or local governments may issue (e.g. land use policy).

          It is clear in the minds of the Tacloban-based entrepreneurs that, despite their willingness and ability to resume their business operations, there are some actions and functions that only the Government--both national and local--can carry out.  The most obvious is the rehabilitation of infrastructures, especially farm-to-market roads, irrigation facilities and other public works.  There was a general mood of optimism about this indispensable role of the Government because of the impressive track record of the Department of Public Works and Highways under this present Administration.  There was equally a positive outlook about the reconstruction of school buildings and classrooms, not only because of the very generous offers of foreign governments and NGOs to fund these facilities, but also because of the ongoing synergy established between two equally honest and competent departments:  DPWH and the Department of Education.  Rural infrastructures and primary education for the children of the poor are two of the most effective means of assuring inclusive economic growth.

          Needless to say, only the Government can maintain peace and order.  In a list of expectations by local entrepreneurs presented by Mr. Oliver Cam, the manager of a hotel-pension that suffered only minimal damage and is being used as headquarters by national government officials, emphasis is laid on the importance of police presence and visibility through checkpoints and the maintenance of curfew.  In the words of Mr. Cam:  "Augmentation of the local police force must be continued until such time that the local Tacloban police force goes back to its full complement prior to the supertyphoon.  Any attempt to reduce the augmentation shall result in the outbreak of lawlessness again, especially in the outskirts or areas outside Tacloban City downtown commercial district.  Most of the warehouses and other industries critical to reestablishing the food supply chain are located in the outskirts."

          As regards agribusiness, the members of the various chambers of commerce and industry in the various communities stressed the role of the Department of Agriculture to immediately assist within 30 to 45 days after the typhoon the farmers and entrepreneurs through cash subsidies needed to buy equipment, boats, nets, fertilizers and other farm tools as well as seedlings for short-gestating crops (e.g. rice, corn, root crops, vegetables).  Such a direct assistance from the DA will enable farmers to immediately till their lands, planting appropriate crops within the month of December so that they can harvest their produce within the next 24 months (depending on the type of crops).  In this regard, private companies like East West Seed and Harbest that market seeds of high-value crops such as sweet papaya, honey-dew melon, eggplant, lettuce, cabbage, etc can be tapped by the Government to help out in extension services to the farmers who may be familiar only with coconuts. 

          There is also a role for the Department of Finance envisioned by the Leyte entrepreneurs.  They are requesting the DOF to immediately provide and release very low or preferably interest-free government-guaranteed soft loans via the GOCC's like SSS, Pag-Ibig, DBP or through commercial banks for capital to rebuild or repair their respective businesses.  It is estimated that less than 10 percent of total registered businesses in Tacloban City have resumed operations.  In this regard, the local chambers are requesting the Bureau of Internal Revenue to issue a formal memorandum and implementing guidelines that clearly mandate the Regional District Offices (RDO's) in the affected areas, especially Region 8, to be lenient with and relax the documentary requirements for withholding taxes.  The storm surge resulted in the partial/total destruction/loss of critical documents/receipts of the business establishments within the ravaged territories. In addition, the BIR is requested to offer deferred payment terms sans penalties/interest for late payments of income taxes. The local government is also being requested to suspend or defer real property taxes for land and its improvements during the projected rehabilitation period of up to five years.  Should this not be economically feasible, at the very least the local government should forgive/lift penalties on late payments.  Although the local chambers are also asking for some kind of a tax holiday or the waiving of the VAT, my advice to them is not to insist on this point, considering the P300 billion of uncollected taxes over the last few years.  Rather than tax exemptions, entrepreneurs should ask for infrastructural support and soft loans, considering the prevailing low rates of interest caused by excess liquidity in our banks. 

          The business people in Leyte have identified the appropriate role of former Senator Panfilo Lacson who has been appointed to be overall coordinator of the rehabilitation plans:  "National and local governments must spearhead the formulation of a master rehabilitation plan and closely involve the private business sector for inputs in the process.  Tacloban City must not only be restored to what it was prior to the supertyphoon.  It must rise and recover to a level even better than before.  This can only happen when all stakeholders are included and involved in the rehabilitation process."  Their battle cry:  "We shall rebuild.  We shall recover.  We shall return!"  For comments, my email address is bernardo.villegas@uap.asia