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Given
present-day world economic concerns, such as surging oil
and food prices and slowing growth, there is urgent need
for the Philippines to maintain production and
consumption patterns if only to sustain its economy’s
growth momentum.
Obviously, with rising prices and diminishing purchasing
power, local consumption tends to slow. Couple this with
export markets on a similar downturn, as well as higher
costs both here and abroad affecting production, an
economic slowdown is inevitable.
Luckily,
there is pump-priming—the common reference to sustained
but calibrated government spending to stabilize
consumption and production—if only to keep the economy
going. Over the years, the government has relied on
pump-priming initiatives to sustain the economy’s growth
momentum, and, in several instances, such has proved to
be both a necessary and successful intervention. To a
certain extent, the current subsidy regime—in response
to high food and fuel prices—can be deemed a primer to
economy activity as it improves purchasing power and
subsequently sustain consumption patterns.
A more
interesting mode of economic pump-priming, which does
not necessarily entail significant public spending
particularly on infrastructure, is the introduction of
new regulations that invariably spur the creation of new
industries. The government has long been doing this,
albeit unwittingly, and among the more successful
interventions include the phased introduction over the
last 30 years of new regulations relative to
motor-vehicle registration and the licensing of drivers.
Prior to
martial law in 1972, vehicle registration, as well as
driver licensing, involved relatively simple procedures,
perhaps owing to the fact there were fewer cases of car
theft as well as fraudulent license applications at the
time. Since the mid-1970s, however, new regulations have
been introduced that, to a large extent, likewise
spurred the creation of new businesses. And, obviously,
additional income was created as new regulatory fees
were collected not only by the government but also by
capitalists—legally or otherwise.
It
started with the requirement for a Compulsory
Third-Party Liability Insurance, or CTPL. And the
overriding consideration in compelling motor-vehicle
owners or operators to purchase CTPL insurance was to
assure third-party victims of motor- vehicle accidents
and/or their dependents, especially when they are poor,
of immediate financial assistance or indemnity
regardless of the financial capability of motor-vehicle
owners or operators responsible for the accident
sustained.
It was a
good idea, without doubt. The insurer’s liability, after
all, is primary and accrues immediately upon the
occurrence of the injury or event which the liability
depends, and does not depend on the recovery of judgment
by the injured party against the insured. Thus, an
innocent bystander injured by a motor-vehicle collision
can immediately collect compensation without having to
go to court.
Invariably, with the new regulation, new insurance
companies sprouted, specifically to cater to
motor-vehicle owners. CTPL, probably little known at the
time, then became a new cash cow, in response to the
government’s creation of a ready and steady long-term
market for the insurance product through the new
registration regulation. Brunt of the expense, however,
went to motorists required to purchase insurance cover.
And then
came the requirement for an early-warning device, or EWD,
a “tool” that is to be always carried in a motor vehicle
and to be placed several meters in front and in the rear
of a vehicle in case it stalls on the road. Until the
EWD became a registration requirement, it was as little
known as CTPL, with very little value to the public. But
as the new registration requirement was implemented, a
number of EWD manufacturers sprouted, again as the
government created a ready and steady long-term market
for their products. And the expense was also passed on
to motorists required to purchase the EWD product.
Also
introduced was the requirement for a police clearance
every time vehicle ownership changed hands, or every
time car particulars change such as car color,
car-engine number and car-chassis number. This was all
with the intent of preventing the registration,
particularly of stolen vehicles, or for unscrupulous
groups to be changing vehicle identities for illegal
purposes. Necessarily, this requirement also spurred the
creation of the “stencil” industry peopled by
“specialists.” The clearance was also an additional
expense for motorists, as well as the unofficial “fee”
charged by stencil specialists for their craft.
A more
recent introduction is a “computerization fee” charged
motorists starting 2000 to help parlay the cost of
encoding into computers all motor-vehicle registration
data. And then there was the requirement for drug and
medical testing for license applications, as well as for
license renewal, both for driving and for firearms. This
spurred the birth of hundreds of drug- and
medical-testing centers nationwide as the government
again created a ready and steady long-term market for
their services. Invariably, the expense was shouldered
by license applicants.
More
recent initiatives include motor-vehicle emission
testing, in January 2003, which spurred the birth of
hundreds of emission-testing centers nationwide, and
just last year, as emission testing was made real-time
online, an interconnection fee was charged motorists, in
addition to the testing fee.
The
latest initiative is to centralize CTPL sales under the
Government Service Insurance System, and this proposal
reportedly entails an additional expense on the part of
vehicle owners. Aside from the CTPL insurance premium,
motorists may have to pay an interconnection fee for the
real-time and online validation of the insurance cover.
In all
these initiatives, economic consumption receives a
boost, with consumers forced to fork out more money to
the government and to its intermediaries, as well as the
“industries” spawned by regulations over the years. In
turn, the economy gets pumped, with little or no expense
on the part of the state. And while people grin and bear
the burden, the government claims credit for priming the
economy.
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