Why the government should copy the private sector

The best management practices of the private sector should be implemented by the government. Thailand, which was way behind us before, is now far ahead partly because its government uses its private sector’s successes. Let us compare:

In 2021, Thailand’s poverty level was at 6.3 percent. Ours was triple at 18.1 percent. Last year, for total exports, Thailand had $287 billion, or 3.6 times our $79 billion. For agriculture exports alone, they produced $35.6 billion, or 5.2 times our $6.8 billion. When I was president of the Asean Federation of Cement Manufacturers, I personally observed how the management practices of its government were similar to the private sector’s.

Last Sept. 12, during the 21st Management Association of the Philippines International CEO Conference ably led by MAP president Benedicta Du Baladad and conference chair Alma Jimenez, the CEO of an agribusiness-based organization asked: “How can the successful private sector management practices be implemented in the government?” Answers ranged from direct training to skills sharing in joint projects. Here are three additional suggestions:

Management systems

When I was a Xerox Corporation executive for eight years in the United States at its national (and eventually, its global) operations, I discovered that many countries were not buying Philippine products because of inconsistent and unreliable quality.

When I joined the government in 1986 as undersecretary of the Department of Trade and Industry (DTI), we introduced to exporters the International Standards Organization (ISO) 9000 Management System. Those who got the globally recognized ISO certification are now better able to export their products.

Within two years, the DTI had all its units certified. Whereas after 23 years, the Department of Agriculture (DA) only has less than one-third of its major units ISO-certified. The consistently high citizen satisfaction ratings of DTI suggest that government should implement management systems like ISO 9000.

Transparency

In the private sector, the Securities and Exchange Commission requires corporations to make transparent their submissions to stockholders. In government, the Commission on Audit (COA) makes their audit findings available to the public. But last Sept. 11, Ombudsman Samuel Martires recommended that this kind of transparency be stopped.

Consider this case. Because the Alyansa Agrikultura (AA) had access to the 2020, 2021 and 2022 COA reports, it had basis for asking the Senate to investigate the DA’s expenses.

In all three COA reports, the DA’s unliquidated and unexplained expenses exceeded P20 billion visa-a-vis its budget of less than P70 billion. This means that one-third of the budget is suspected to have gone to waste or corruption.

AA also used the COA findings to make the restoration of private sector monitoring of the DA budget a conditionality in the Regional Comprehensive Economic Partnership (RCEP) ratification document. This will be instrumental in preventing further corruption. For this and so many other cases, the private sector practice of transparency in government should not be threatened, especially at this time.

Meritocracy

In the private sector, meritocracy plays an essential role. A selection committee reviews candidates for positions and decides on the basis of merit.

Too often in government, key management positions are decided based on political considerations. Thus, good performers are not recognized nor rewarded, while bad performers are not penalized.

Several cases prove this, such as in the Bureau of Customs, the Department of Health and the DA. Our government should implement the private sector’s practice of merit-based decision-making. This will increase our government personnel’s motivation and morale, which they deserve for their hard work and numerous sacrifices.

What is a possible next step? In approving the 2024 budget, Congress should consider using its power of the purse and its oversight function to make the above happen.

Congress can require that management systems such as ISO 9000 be implemented in all departments. Transparency can be actualized through required private sector budget monitoring. A clear merit-based system should be shown before budget approval.

The best private sector management practices can be implemented systematically in government, for everyone’s benefit.