We need to open the Philippines for business. This is my ten point plan.
I am British and for the past decade have been proud to call Manila my home. During my decade-long journey, it has become clear that the Filipino people are some of the finest, most capable, resilient, smart and professional in the world. We have built amazing businesses and in the process we have touched countless lives by treating people fairly, providing opportunity and by bringing Filipinos with us on the journey.
I write this blog mainly because I am concerned about the predicament we find ourselves in. By we I mean both Filipinos and foreign business owners alike. Sadly the Philippines is on track to become the worst affected ASEAN nation both in terms of the health and economic outcomes.
In today’s hyper-sensitive environment overt challenge to policy and ostensibly policy makers is met with derision and therefore dissent is rare. I strongly believe it is time to discuss an alternative approach to help us move forward together as a country. Our business, our people and the future of my adopted country is at stake.
This ten-point plan is not a polemic against the establishment, but is a nascent framework to help analyse the steps needed to kickstart the economy and help the Philippines. There is a better way for us to live, work and trade.
I would love to hear your thoughts and ideas on my 10 point plan of action so please leave your comments!
Point 1Focus on the economy.
The Philippines economy has enjoyed remarkable economic success during the past ten years I have been in the country. Successive governments have incubated the middle classes, brought millions of Filipinos out of poverty and made the Philippines a global force to be reckoned with. Emperador, Monde Nissin and Jollibee are all paragons of this new global Filipino mindset. Before I build this point further, I must point out that I am completely apolitical: politics is frankly anathema to me in both present and future tenses.
In the space of six months, the highly prized edifice of societal progress appears to be at risk of being consigned to history. The Philippine Statistics Authority recently notified the markets of an egregious 16.5% economic contraction creating the worst crisis in decades. Tens of thousands of jobs are being lost and consumer confidence is almost non existent.
The primary tool used by Malacañang to control the pandemic is known as General Community Quarantine (GCQ) which broadly describes the modified behaviour expected from both businesses and people. In the short term CGQ might slow the spread of COVID-19 but being a lockdown, it is an indiscriminate monster that destroys the fragile and hard-fought economic progress our Filipinos deserve. They are blunt instruments that split families apart, they foster obesity, and they exacerbate mental health issues. They destroy Jobs and ruin the ability of governments to collect tax which cannot be reinvested in the economy.
Lockdowns are not kind to our bodies. I was in Manila during the two-month big-brother of the community quarantine – enhanced quarantine (ECQ) when even exercise became illegal. A forced sedentary lifestyle with little fresh-air and sunlight is definitely not what the doctor ordered! Lockdowns create strong negative sentiment loops that exacerbate the impact of viruses due to our bodies becoming weaker and less able to fight COVID-19 and other diseases. Figuratively speaking the medicine is quite possibly more destructive than the disease it is intended to cure.
This lockdown mentality cannot be our new state of normality. We cannot wait for the proverbial “silver bullet” vaccine to save our souls whilst remaining in lockdown until our collective day of reckoning arrives. Immunologists have universally acknowledged that creating a vaccine to mitigate coronaviruses (generally) is a decade long endeavour at the best of times. Creating a stable COVID-19 vaccine even when the world’s best pharmaceutical companies have it as their primary focus is not trivial and may not even happen. Will we ever accept the reality that a vaccine is not imminent?
It is the first time in human history that such large numbers of healthy people (120 million in the Philippines) have been isolated as a prophylactic measure. The reality is that a minority of these incarcerated people will ever develop symptoms even if exposed. Fewer still will succumb to COVID-19 or its complications.
We should plan for the worst (no successful vaccine being developed) and hope for the best (mass vaccination probably every year).
Point 2Authorities and businesses must communicate clearly.
We all know Filipinos love acronyms – I remember going to a dinner party where the most popular game – “name the government department” – resulted in a torrent of TLAs (three letter acronyms) coming at me (try: DFA,DOH,AFP, BOI). Don’t believe me? Try an internet search: there are some obscure government departments out there!
I do not know anyone that truly understands the difference between the smorgasbord of Philippine quarantine variants: ECQ, MECQ, GCQ, MGCQ let alone EECQ. It is possible two locations within meters of each other can be classified differently almost as if the virus respects political boundaries. If an average person fails to know what is expected of them, logic describes the impossibility of expecting the ignorant person to provide the required outcome. It is not just civilians that don’t know the rules. If the lowest level of law enforcement cannot articulate the rules effectively, exceptions will be introduced, therefore lowering effectiveness of regulation. Less is more; rules must be simplified so that even children understand them. It is easier to gain buy-in to rules if the reason for them is clearly explained; generally, honey attracts more flies than vinegar as they say.
Quite worrying important government decisions tend to be made at the last minute with very little time for businesses to prepare. From experience, not being able to plan effectively creates a view whereby businesses are overly cautious and risk averse. This contributes to a “negative sentiment loop” which is dangerously damaging for the country.
There is a need to give businesses clear notice of action which allows them to utilise resources more efficiently.
Point 3Foreigners must be allowed to return to work and stimulate the economy.
I am writing this article in exile: despite holding a special investor visa for employment generation (SVEG) issued in 2014 the Philippine Government refuses my return privilege to Manila where I own a property, pay tax and have a business employing over 100 Filipinos. This is to prevent me making the COVID19 situation worse apparently.
There are some amazing foreign entrepreneurs and organisations that contribute to the Philippines economy and provide livelihoods for Filipinos and tax revenues for the government. Many tech businesses I am familiar with have been founded by foreigners and quite a lot of businesses Filipino or foreign alike rely on overseas capital. Many if not most employed foreigners hold valid employment visas and their salary taxes fill the treasury coffers.
In my case I am unable to return to my home even though I have a valid investment visa. My team needs me to be back in the country to show leadership. I want to invest further in the Philippines but I cannot sign documents, meet partners and commit capital while away.
We must follow all other foreign governments and allow the diaspora of foreign investors and workers to get back to work. Hear the cry: “Your country needs them!”
Point 4Remove the COVID-19 Stigma.
Recently we heard a new rule that asymptomatic patients are now prevented from self-isolating at home, even if they have the facilities such as a private room, washroom and kitchen. The rumor-mill is grinding out stories of healthy people “taken” by government officials to squalid internment camps for a fortnight of treatment. While I don’t believe everything I hear, those rumors exist and even if they remain uncorroborated, the average person may fear that if they are COVID-19 positive and they do not wish internment they will hide symptoms and go underground.
The fact of the matter is very few people die of COVID-19 as a percentage of population in the Philippines. Patients do not deserve being criminalised and stigmatised because a PCR test result is beyond a threshold. History tells us what happens if diseases are pushed underground, invariably they become less controllable and hidden from view.
There is a fear here of Covid and a fear that if you get it you will not just be left with a large hospital bill and isolation from family – but also people viewing you differently. There are many viruses in the world, let’s not publicise who has been diagnosed with Covid and ostracise them. Let them recover and go about their lives and move on. Do not create more fear than there already is when it is unnecessary, especially when recovery rates are so incredibly high.
Point 5Aggressively digitize government functions.
There are very few government functions that require a physical presence in this age of digital technology. Put this in content: in the UK I can perform most government functions online without leaving the house: renewing my driving licence or passport, applying for citizenship, availing of most government services and filing personal and government taxes. These processes are well-established globally and there are no barriers for the Philippines to adopt those innovations.
The reliance on paper based everything here is unbelievable and is just simply not required. We don’t need to have anywhere near the paperwork volumes we have in this country nor do we need to be face to face for most things. Please let’s update the system and embrace the technology that is out there. There are so many technology companies here creating cutting edge things yet the Country is still very reliant internally on paperwork and face to face meetings when the internet is fine or an email. Banks are improving but we need the Government to move forward as well. What better time than now to embrace this and change the rules. I for one will celebrate not needing to sign every single page of a document.
This is the golden opportunity to force the Philippine government to digitise. By digitising it will remove the opportunity for “off policy” transactions to happen and of course maximise the collection of taxes and reduction in “shrinkage”.
Point 6Improve public transportation.
I have made the decision for our company to continue our working-from-home arrangement into 2021, largely due to the general inability of the public transportation industry to carry our employees to work effectively. It is wholly unacceptable that employees wait hours for a bus with a vacant seat to arrive. The Philippines has a high unemployment rate and there is no reason why there cannot be a retraining program to get more buses, jeepneys and electric vehicles on the road. This is a national crisis and we need our employees and their peers to re-populate the cities and re-employ cafeteria, bar and restaurant workers.
We pay significant amounts of tax to all levels of the Philippine government (barangay upwards) and I expect the best quality public transportation to be provided to enable me to operate effectively.
Point 7Provide support for businesses, especially those in the middle of SME.
At the time of writing, there are no programs available from the government to companies like mine to support our cashflow or help us deepen our investment in the Philippines. In other markets we operate the government is providing significant assistance packages to businesses.
Hong Kong has provided government backed loans to SMEs up to 25 million pesos to companies affected by Coronavirus to help them survive the crisis. Likewise the United Kingdom government has a very generous Furlough scheme that pays the salary of employees displaced by the crisis in addition to cash grants and loans being available.
As a taxpayer I expect the government to support those creating value in the economy – those innovative companies generating employment and tax revenues. Cashflow support, long-term capital investment programs and tax holidays are affordable and do have positive business cases for the economy if designed effectively.
Businesses come in all shapes and sizes. This pandemic is stretching even the most successful businesses at the moment so spare a thought for the self financed companies. Can there be financial aid provided to small businesses and owners to help them and their employees through this crisis. This would help immeasurably and provide stability in a volatile market right now. From cafe owners and shop owners to small technology start ups and restaurants, please create an injection of finance strategically into these areas.
Point 8Provide tax incentives to attain “COVID-Secure” for businesses and their employees.
COVID-secure means having social distancing, hand hygiene facilities, contact tracing and other provisions to prevent the spread of the virus. This all costs money to implement and with the reduction in physical footfall this creates an existential crisis for most businesses with a customer-facing aspect.
Providing tax incentives such as tax credits for a “COVID secure” workplace will hasten the implementation of such measures. The workforce would welcome tax benefits of working-from-home equipment such as desks, chairs and office furniture.
Point 9Invest heavily in utility and internet infrastructure.
The crisis has exposed holes in the provision of electricity and internet to those outside of the major business districts. I have been on several video calls recently where employees have had electricity blackouts and interruptions in their internet service. This is of course not the faut of the employee productivity is severely hampered if this happens multiple times in one day.
It is clearly the responsibility of the telecommunications companies and government to provide affordable & reliable broadband to employees wherever they are in the country. This is also in the context where the Philippines has some of the highest electricity and internet rates across SE Asia.
Strengthening the internet across the country will pay significant dividends.. This is a beautiful country with highly talented professionals that are outside of Manila – by doing this you will find people will not live in the business district any more, they may spread their wings and work remote from Cebu, Siargio, Bohol, Davao, Zambales, Boracay but to name a few. If there is reliable strong internet connection people will work there and thus inject money into the communities across the country which would be amazing.
Point 10Get the nation back to school and college.
At the time of writing this blog, the schools and universities are still not operating physical classes. It is a travesty for the children and young adults prevented from going to class so far as it is creating a “lost generation”. Practically speaking for businesses the lack of reliable daytime education means parents are having to sacrifice work productivity to take care of their children. For the sake of businesses that are unable to go to work due to the permanent state of lockdown there must be reliable education for children.
Parents are having to juggle working back in an office but children not being at school, this is so tough on people. Please get the children back to their schools. If people can go back to the offices to work, go to the malls, swim in pools then I am certain they can safely go back to their classes. This will relieve a lot of stress on families and help restore a balanced routine.
Finally, be positive. There are stories of success coming from other countries.
The news coming out of Sweden at the time of writing is particularly positive. Arguably Anders Tegnell is one of the global heroes of the 2019 Coronavirus outbreak and has proven that contrarian thinking can produce positive results. On a per capita basis, Sweden is now 90 per cent below their peak in late June and under Norway and Denmark’s (both having a serious lockdown) for the first time in five months.
The Sweden model apparently relies upon herd-immunity which is the polar opposite of the lockdown mentality that has prevailed in almost all other countries. Only time will tell whether Sweden is right and the remainder of the world is wrong.
For the Philippines, it is not too late to change tactics and try something new. The country is geographically diverse and is very aligned to experimentation in this way.