Economic czar

UNASSUMING. That’s the word that usually comes to mind when people meet or read about Socioeconomic Planning Secretary Ernesto M. Pernia. Despite his position, Pernia does not exude any hint of arrogance or superiority, but of a modest and decent person.

In fact, even his appointment to the Cabinet was not accompanied by complicated meetings or negotiations. In June 2016 he received a text message from Christopher Lawrence T. Go, President Duterte’s executive assistant, asking: “Are you interested in joining the Cabinet sa Neda [National Economic and Development Authority]?”

A simple question elicited a simple response: “Yes,” Pernia texted back. The following day, Go informed Pernia that his appointment had been announced by the President.

Behind the modest image is a highly trained economist recognized both in the domestic and international arena. Pernia graduated from the University of California, Berkeley in 1976 with a PhD in Economic Demography. He was former lead economist at the Economics and Research Department of the Asian Development Bank. Prior to joining the Duterte Cabinet, he was professor emeritus at the University of the Philippines School of Economics, where he specialized on development economics, demographic economics and human economics.

The Neda dates back to the commonwealth era: one of the first acts of the unicameral National Assembly, in response to a call from President Manuel L. Quezon, was the creation of the National Economic Council (NEC), which was tasked with advising the government on economic and financial matters, and formulating an economic program.

The authority is sometimes called the “super cabinet” because its governing board, which is headed by the President as chairman, includes all Executive departments, plus other agencies. More than eight decades since the NEC’s creation, Neda’s functions have vastly expanded beyond policy-making.

For example, it is now deeply involved in the implementation of the administration’s flagship infrastructure program called “Build, Build, Build,” which will spend P8 trillion to P9 trillion to construct the roads, bridges, ports and other facilities in line with the demands of the growing economy. Spending trillions within six years is a tall order; Build, Build, Build is the biggest infrastructure program in any administration in Philippine history. It is not enough that money is available; projects must roll out in synch with funding.

That is the Neda’s, or Pernia’s role in President Duterte’s economic team, and he has proven to be a good team player for the other economic managers.

Neda data show that since assuming office in June 2016, the Duterte administration has approved a total of 40 projects with an aggregate cost of P1.23 trillion. Only two projects will be funded and implemented under the public-private partnership mode. Twenty-eight projects will be financed through official development assistance (ODA), seven via local financing and a combination of ODA and local financing, and one to be financed with internally generated funds.

The biggest projects are the P355.59-billion Metro Manila Subway Project-Phase 1, the P299.4-billion Philippine National Railways South Commuter and South Long Haul Project (formerly known as the North-South Railway Project), and the P211.43-billion Malolos-Clark Railway Project.

The flagship infrastructure program does not include projects that are initiated and funded by other sources, such as local government units and the private sector.

The Duterte administration has opted not to rely heavily on private sector financing, which was preferred by the previous administration. According to the Neda, 78 percent (P7.096 trillion) of the current administration’s big-ticket projects will be financed by the national
government.

Infrastructure is only one of Pernia’s varied tasks. Guided by President Duterte’s thrust toward countryside development, he is focusing on regional development to increase the rural areas’ contribution to economic growth and reduce inequity between Metro Manila and the countryside.

Pernia also monitors the government’s performance in noneconomic areas, such as health, education and social services. The Neda is the principal monitoring agency that tracks the country’s performance in relation with its commitment under the United Nations Millennium Development Goals, which seek primarily the alleviation of poverty.

Every three months, the Neda reports on the performance of the economy. Weeks before the release of the report, individual economists, private think tanks and investment banks consult their crystal balls to assess how the economy fared.

But everything is speculative, and everybody waits for the date when the Neda would render its report. Every ear is inclined toward the chief government economist when he announces: “This is how the economy performed.”

Then everyone scampers back to their desks to review their own assessments, in order to come up with forecasts for the next quarter. Markets are quick to react to the Neda report—stock prices go down when performance is lower than expected, and investors smile when the numbers go up.

That may be one reason the country’s top economist is sometimes called “economic czar,” a title that, as per our first impression of Pernia, would be readily dismissed, or at best met with the glint of a shy smile.

For comments, e-mail [email protected] or visit www.mannyvillar.com.ph.

Turning Points 2018
Suntrust banner2
Previous articlePSE: Wait and watch
Next article‘We are sorry’
mm
Manny Villar has distinguished himself both in politics and business. He was one of the two Filipino politicians in history, who had been elected both as Speaker of the House of Representatives and President of the Senate. In business, he was the first indigenous Filipino dubbed as the first "Brown Taipan", who made it to Forbes’ list of dollar billionaires. From a small gravel-and-sand retailer, he built Vista Land & Lifescapes to become one of the country’s top integrated property developers. He built more than 300,000 houses in more than three decades, a record that remains unchallenged to this day.