POSTSCRIPT / November3, 2015 / Tuesday

By FEDERICO D. PASCUAL JR.

Opinion Columnist

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Mend fences with China by direct bilateral talks?

IT WAS just a first-round knockdown, not the decisive knockout, that the Philippines scored last week at the Permanent Court of Arbitration of the United Nations when the tribunal took jurisdiction over the country’s maritime dispute with China.

While it has reason to be elated with the favorable ruling at The Hague that has opened the door for a hearing on the merits, the Philippines better not overdo its pontificating on the rule of law or appear to be gloating over its initial victory.

The Aquino administration should be careful that Beijing does not lose face over its early setback before the international tribunal. Overacting by either, or both, sides could complicate the conflict.

Already harassed by the US Navy testing the waters close to the phony islands it had built in the South China Sea and now jolted by this adverse ruling of the arbitral court, China could stiffen to a point beyond diplomatic massage.

It would be unfortunate for either Beijing or Manila to regard this passing (meaning temporary) conflict as a win-or-lose, all-or-nothing, proposition.

While ideologies and alliances in this fickle world change, we cannot alter or ignore the fact of geography. For better or for worse, China and the Philippines are neighbors forever. It is to their mutual benefit to mend fences in the most amicable manner.

The White House wants to see Malacañang threshing out the maritime dispute not through bilateral talks but by multilateral discussions such as through a common voice of the Association of Southeast Asian Nations.

President Noynoy Aquino is following this American multilateral approach reminiscent of the Cold War that gave birth to the now defunct Southeast Asia Treaty Organization designed as a security shield against communist China.

The problem is that while some of the 10 ASEAN members (Vietnam, Malaysia, Brunei) also have territorial conflicts with China that could rally them for a common front, a few other members are not ready to displease their neighbor China.

However, as President Aquino leaves Malacañang in just eight months, Beijing – with its philosophical long sweep of time – can wait for a new administration that may be less prejudiced against direct dialogue.

Already some conspiratorial minds are imagining Chinese interests putting their money on 2016 presidential candidates who are willing to open Manila-Beijing discussions on pending bilateral issues.

The arbitral tribunal has been convened under the UN Convention on the Law of the Sea, which both countries have ratified. The big question, however, is how to enforce its rulings considering that China has refused to be a party to the process.

That problem is another reason why a more pragmatic foreign policy, maybe of the next administration, should consider more neighborly options.

• It’s still the economy, not Daang Matuwid!

SOME briefing items of Market Monitor culled by veteran newsmen Ernie Tolentino and Lito Gagni:

The Philippines has the most expensive electricity, slowest and most expensive internet, unreliable phone services, a complicated and difficult location to do business in, worst traffic in the world, no significant exports except people, no commodities, no factories, no infrastructure, and no local growth except for a population that is under-skilled and under-educated, and where the 25-percent poverty rate has remained static since 2010.

Although touted by Malacañang as the second strongest economy in Asia, the Philippines is near the bottom when it comes to quality infrastructure among the 10 ASEAN members, it was disclosed during the recent 3rd ASEAN Connectivity Forum sponsored by the Korean government in Seoul.

A World Economic Forum Report in 2013-2014 ranked the Philippines eighth – ahead only of Vietnam and Myanmar – compared with other ASEAN members in terms of overall quality of infrastructure. Singapore topped the list, followed by Malaysia, Brunei, Thailand, Laos, Indonesia and Cambodia.

As for “regulatory framework” on public-private partnerships in the region, Manila was fortunately lumped with Jakarta and Bangkok in the category where there is “certainty and specific law(s)”. Cambodia, Laos, Myanmar and Brunei had “uncertainty” and “unspecific” laws when government infrastructure projects are bid out.

• Phl drops in ease of doing business

THE PHILIPPINES sank to 103rd among 189 nations from 95th a year ago in the annual Ease of Doing Business report of the World Bank. The WB ranking contradicted the claim of President Aquino that his reforms made the country business friendly.

The WB traced the fall to the bureaucratic red tape in the setting up of a new business. It noted the Philippines has among the least business friendly image in the region. Ranking of its ASEAN peers: Singapore first; Malaysia, 18th; Thailand, 49th; Vietnam, 90th; Indonesia, 109th.

Data showed that starting a business in the Philippines requires an average of 16 procedures, takes 29 days to complete, costs 16.1 percent of income per capita and requires a paid-in minimum capital of 3.3 percent of income per capita.

Malacañang via Finance Secretary Cesar Purisima said the report used “erratic, unsound methodology.”

Only 20 million or a fifth of the 100 million Filipinos        earn enough to save money, and only 10 million or 10 percent of the population have bank accounts, meaning financial inclusion (the ability of individuals or families to access banking and other formal financial services) remains a pipe dream to the majority.

This was pointed out in a new WB survey “Enhancing Financial Capability and Inclusion in the Philippines—A Demand-side Assessment,” designed to assess people’s financial literacy or capability in managing their day-to-day finances, as well as their access to formal financial institutions like banks.

The survey results highlighted the low income rate most Filipinos could generate and the pervasive poverty because of poor governance and widespread corruption in local and national governments.

The survey also showed that some 23 million adult Filipinos report their households run out of money for food and other necessary items either “sometimes” (29 percent) or “regularly” (26 percent).

(First published in the Philippine STAR of November 3, 2015)

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