From the looks of it, the goings-on at the Subic Bay Metropolitan Authority (SBMA) have been deemed anti-business, threatening the very core of Malacañang’s push to move the economy upward, which is very much needed in the light of the huge debts that the country faces post-Covid.
SBMA Chairman and President Johnson D. Tan is now being perceived as a square peg in a round hole, which is proving to be a headache in the inner circles of Malacañang. They are concerned about the adverse effects of his policies that have rankled many businesses in the bustling port area.
We understand that companies and locators in the SBMA now face higher costs of doing business and that certificates of registration and tax exemption certificates are being revoked without due process, a key ingredient in Supreme Court jurisprudence where legal issues have to be resolved according to established rules and practices.
Due process is enshrined in the 1987 Constitution where the State is mandated to respect individual rights by setting limitations on what the State can do. This means that the Subic Bay Metropolitan Authority, as a representative of the State, cannot just order the revocation of a company’s certificate of registration and tax exemption certificate without hearing that company’s side.
Unfortunately, the very essence of due process seemed lost in the nooks and crannies of SBMA, which adversely affects the country’s march toward economic progress. This could hurt the very fabric of the economic team’s vision to move up the country’s status from low middle income as per the findings of the World Bank.
The challenge for the administration of President Ferdinand Marcos Jr. is to ensure that the engines of business continue humming to upswing the country to upper middle-income status, which means less poverty incidence. After all, a vibrant economy means more jobs and more income for the populace. That is why it is imperative for the government and its agencies to speak with one voice on business: Let it grow.
With the economic headwinds brought about by the two geopolitical shocks in the world, the wars in Ukraine and Gaza, the country can ill afford to hamstring the activities of businesses since this runs counter to the economic program predicated on making life bearable for the citizens in the light of hefty debt of the country approaching P13 trillion.
For now, the debt is still manageable, although it is near its critical stage. The debt to gross domestic product (GDP) ratio is now at a little over 60 percent and any additional economic shock will put us beyond repair since rating agencies such as Fitch Ratings, now gung-ho for the Philippines, will have to recast us in a different light and put us in a situation where additional debts to be incurred carry higher interest rates.
In this light, SBMA should not be allowed to let businesses stagnate in that all-important cog of commerce. In fact, Malacanang has to make sure that all government bureaucrats conform to the grand economic vision for that coveted upper middle-income status. No ifs or buts there.
So far, the country has earned plaudits for the way the economic team has shepherded the economy, resulting in the investment grade rating that the Philippines currently enjoy. That is crucial for the country to move forward since the government needs to borrow to fund the needed infrastructure to improve the economic well-being of citizens.
Moody’s, Standard and Poor, and Fitch Ratings all have great outlooks for the Philippine economy. Five days ago, the sukuk bonds of the government were well received with investment grade status, a Baa2 that according to Moody’s is “characterized by high potential growth and moderate government debt compared with peers.”
But there is a caveat in the enthusiasm of that endorsement. For Moody’s, as anyone else in the ratings agencies, there is that big hole created by the Covid pandemic “that led to a weakening of our broader assessments for economic and fiscal strength.” And that is the gargantuan debt that with any increase in the interest rates we have to pay carries with it the additional burden of fiscal instability.
That is why the administration cannot allow government agencies such as SBMA to go haywire.