Dindo Manhit, President, Stratbase ADR Institute
The year 2020 turned out to be another indelible page in history; a period of great disruption not only for the Philippines but also for the rest of the world. According to the International Monetary Fund (IMF), the global recession resulting from the COVID-19 pandemic averaged -3.5% in 2020. However, the average Philippine contraction was even deeper at -9.5%, the worst in the ASEAN.
While the government’s long and restrictive lockdowns were intended to contain the spread of the virus, these measures also took a heavy toll on the economy as thousands of businesses were forced to shut down temporarily or permanently, throwing some 4.5 million workers out of work last year.
This dismal situation was not rooted entirely in the COVID-19 pandemic. It mirrored a complicated string of unexpected problems borne by the pandemic and government gaffes in responding to the emergency. Hence, the country lagged behind its peers in the region in recovering from the pandemic.
A survey by the Social Weather Stations (SWS) in November 2020 revealed that 62% of Filipinos said that they were worse off in the past 12 months. Among the people of Southeast Asia, Filipinos were also the least satisfied with how their government addressed important issues in responding to the COVID-19 pandemic.
The situation could have been much worse were it not for the timely and concerted effort of the private sector, which gave unsolicited assistance in all fronts since the lockdowns were first imposed. They went beyond their core business to provide support to the most vulnerable members of society, who were the ones most affected by the lockdowns.
A year ago, when Luzon was placed under enhanced community quarantine, brothers Jaime and Fernando Zobel de Ayala rallied an unprecedented assembly of the country’s corporations and business families under Project Ugnayan to mobilize resources for immediate food assistance to the poorest communities in the Greater Manila Area. A stellar demonstration of how the private sector was able to work effectively with a network of parish priests, local governments, and the police to distribute urgently needed food assistance to 2,837,367 families or 14,186,835 individuals through its various distribution channels.
Since then, business groups all over the country have been mobilizing their resources to distribute food and medical supplies to people in need, provide free transportation for frontline workers, and even used their networks to gain access to vaccines. The private sector also extended assistance to the government for the logistics required to store the stocks of COVID-19 vaccine delivered.
A great development is the acquisition of 20 million COVID-19 vaccines, the biggest batch so far, expected to be delivered by May as a result of year-long negotiations led by International Container Terminal Services, Inc. (ICTSI) Chairman Enrique K. Razon, Jr. This tripartite agreement recently sealed between the Philippine Government, the private sector, and US drug manufacturer Moderna, Inc. secures 13 million doses for government and 7 million doses for private sector workers.
Moreover, the country’s COVID-19 testing capacity and quarantine facilities improved significantly because of the collective actions extended by the private sector. These interventions have eased the burden of the government, which still struggles with this health crisis.
Filipinos are well aware and greatly appreciate the value of public and private collaboration. A survey conducted by Pulse Asia last September revealed that 85% of Filipinos agree that the government should engage with the private sector to hasten economic recovery. The general public sees the private sector as a decisive driver in the creation of investments, jobs, and income security that are needed to alleviate poverty, inequality, and other economic insecurities resulting from the global pandemic.
The principal lesson learned in this experience is that the private sector is an effective and reliable partner during times of national emergency. The partnership between this sector and the government demonstrates how pandemic challenges can be transformed into opportunities to achieve recovery and shared prosperity.
Last March 26, we at Stratbase ADR Institute gathered industry leaders and policymakers here and abroad in a business virtual roundtable entitled, “The Private Sector as the Reliable Partner for Economic Recovery”, industry thought leaders shared their insights on how to better navigate the pandemic’s challenges through a shared prosperity that will help uplift the lives of Filipinos over the long haul. Discussions revolved around the ongoing and prospective trends that exposed the risks and presented opportunities for both industry and government actors.
What made this event particularly interesting were the discussions on spurring employment and sustaining business growth in the face of restrictions brought about by the pandemic, achieving post-pandemic prosperity through the promotion of management excellence, policy advocacies for inclusive recovery, and prospects for Philippine businesses in the global supply chain.
I believe that as we move forward in 2021 and beyond, the private sector is key to creating a more sustainable and inclusive economic recovery through eight strategic initiatives: (1) addressing inequality through job creation; (2) reducing the digital divide through digital transformation; (3) addressing climate change; (4) helping strengthen the country’s health system; (5) pushing for public-private collaborations driven by public interest; (6) promoting stakeholder capitalism for inclusive recovery; (7) creating more opportunities for all, such as quality education and social protection; and (8) demanding transparency and accountability in governance and encouraging an entrepreneurial state with “smart” local governments.
According to Makati Business Club (MBC) Chairman Mr. Edgar Chua, a crisis should never be wasted. Business and government should make use of this ongoing crisis―with a sense of urgency―to identify, prioritize, and quickly implement policies for inclusive recovery. Amb. Benedicto Yujuico, President of the Philippine Chamber of Commerce and Industry (PCCI), added that the private sector needs to work with the government in assessing where we are, especially since we need to be better prepared in taking care of our people and not to depend on other countries. Interestingly, Mr. Ernest Bower, President and CEO of BowerGroupAsia (BGA), stated that harnessing the country’s strengths―especially its well-educated and resilient workforce―and pushing for reforms will contribute to faster economic growth, provide new jobs, and open more doors for opportunities, which could usher to a “Golden Age of Prosperity” for Filipinos.
Stratbase ADR Institute Chairman Amb. Albert del Rosario stressed that the biggest lesson from this crisis is to work as one whole society in striking a balance between our health and the environment in sustaining our economy. Mr. Aurelio “Gigi” Montinola III, President of the Management Association of the Philippines (MAP) assured that while the ongoing pandemic today looks gruesome, it can be overcome quickly when everyone does their part. As Mr. Jaime Augusto Zobel de Ayala, Chairman and CEO of the Ayala Corporation emphasized, the private sector is a “force for growth and a force for good.” According to him, the strengths of the private sector―its resources, ingenuity, energy and performance management discipline―are crucial to augment the government’s efforts for recovery.
Mr. Sergio Ortiz-Luis, President of the Employers Confederation of the Philippines (ECOP), expressed hope that the coming national elections in 2022 will not distract relevant players from priorities that will help in achieving recovery and growth targets. Mr. Chua also stressed that growth and democracy can only be sustained if the economy is truly inclusive.
The private sector believes that achieving business goals and mandates goes beyond shareholders’ interests and must integrate society’s stakeholders in the journey toward recovery and growth.
A full recording of the proceedings may be viewed here: