More work on good governance, financial inclusion, infra sought
THE Philippines has made remarkable progress in the last few years, but it needs to do so much more in strengthening three pillars—good governance, financial inclusion and infrastructure investments—to sustain its growth story, Ayala Land Inc. chair Fernando Zobel de Ayala said.
Speaking before the Financial Executives Institute of the Philippines (Finex) recently, Zobel de Ayala said while the platform of anti-corruption and good governance had unleashed so much growth, led to so much confidence in business and brought access to so many products, much more would have to be done to support the country’s economic agenda.
“Our major indicators and economic drivers remain solid amid the global slowdown and the political and fundamental headwinds that beset some of our peers in the region,” Zobel de Ayala said.
The country’s improvement in competitiveness rankings is welcome news, but work still needs to be done in cutting bureaucracy and improving efficiency, specifically in key processes such as starting a business, registering property, getting credit and protecting investors, he said.
“Currently, starting a business in the Philippines entails a grueling 15 procedures spanning over 35 days. In contrast, Malaysia only requires three steps spanning six days,” Zobel de Ayala said.
Moving forward, he said, it is imperative that the current momentum of structural and governance reforms that the current administration has put in place be continued.
“The highest standards of governance must be maintained and reform measures must be continued in the next administration if we want to sustain our growth momentum,” he said.
“Beyond the country’s governance structure, it is likewise imperative that enterprises create and enforce stronger ethical standards in the governance of business. This will go a long way in building investor confidence which, as we all know, translates to tangible benefits such as lower cost of capital, better valuations and ultimately, sustained growth.”
While local publicly listed companies have made significant strides in corporate governance in recent years, he said, Southeast Asian peers have improved as well, thus putting corporate Philippines well behind Singapore, Malaysia and Thailand.
On financial inclusion, Zobel de Ayala said the country would not be able to achieve sustainability or become a truly progressive country unless it could pull a much larger segment of the country from poverty and ensure broader based development.
“It is unacceptable that over 70 percent of Filipinos do not have access to any form of saving or lending mechanisms. It is equally discouraging to note that 40 percent of municipalities in the Philippines do not have any physical access to a bank,” he said.
“It is worth noting that some innovative credit and microfinance solutions are gaining traction, leveraging technology to make basic banking transactions accessible to these segments of the population. But much more needs to be done so that a larger percentage of our population has access to basic financial products and services.”
Meanwhile, Zobel de Ayala said the Philippines can not expect to continue to grow at this pace without a massive increase in infrastructure expenditure, which would in turn entail collaborative efforts between the government and private sector.
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