FIVE PILLARS OF INTEGRATED AREA DEVELOPMENT

NO HOLDS BARRED (020) June 30, 2009
By Ike Señeres

FIVE PILLARS OF INTEGRATED AREA DEVELOPMENT

The major investors in integrated area development (IAD) know what they are looking for, and so it is really a plus to integrate planning at the area level, to make it more attractive to the fund sources. The question now is how to define the scope of the planning area, and how big it should be.

A new trend in IAD planning follows the mindset that the universe of the plan should be the natural biosphere that encompasses the area being planned; including of course all the lands, mountains, waterways, air space and watersheds around it. This approach departs from the old practice of planning along artificial political boundaries that were created by national laws.

It is my good fortune to have known top officials in local and international development organizations, and I am getting to meet more contacts now because of my TV show. Putting two and two together, it is now very logical and practical for me to bring these officials and contacts together, so that they could all support IAD planning, using of course the biosphere approach.

It seems that we often take IAD planning for granted. We often presume that local government units (LGUs) would have IAD plans and that they are probably implementing these whether we know it or not. The truth is, if we do not know or hear about it, there are probably no such plans at all.

After interviewing hundreds of local mayors, I arrived at the conclusion that they are not able to plan for the development of their local jurisdictions, because they have no money to begin with. They would often gripe about the fact that their internal revenue allocation (IRA) is too small, that is if they have not heavily borrowed against it yet.

Almost traumatized by what I heard, I have always kept my eyes and ears open for a possible solution to their problem. Perhaps due to good fortune again, I actually found not just one, but five solutions to their problems. The only challenge now is how to convey this good news to them.

The Local Government Code (LGC) allows LGUs to enter into Build-Operate-Transfer (BOT) infrastructure projects under the BOT Law (R.A. 7718). The BOT scheme does not require any money on the part of the LGUs, but they have to develop a project concept that would attract investors.

The Clean Development Mechanism (CDM), a system that was born out of the first Kyoto Protocol allows LGUs to develop and build their own projects that would produce carbon credits, enabling them to make money as they sell these credits. There are many investors for this kind of projects too.

Debt for Nature (DFN) swap, a system developed by the World Wildlife Fund (WWF), allows LGUs to earn money from the recovery of lost natural environments, in cooperation with Non-Government Organizations (NGOs). National debts are “pardoned” in exchange for natural recovery. The national government then pays the LGUs for the value they created.

Official Development Assistance (ODA) objectively targets local projects, but the LGUs have to develop good project concepts that would attract international funding agencies. As always, projects that increase access to public services are prime attractions.

The legal basis for Municipal Bond Offerings (MBO) already exists, but the LGUs have to show good reason that they could create future value added that would justify and attract foreign and local investors, including their own town mates here and abroad.

Taken as a whole, these five sources of funding namely BOT, CDM, DFN, ODA and MBO would actually become more attractive to investors if LGUs within a broader biosphere could integrate and coordinate their plans to support common objectives that would improved their economies of scale.

This is now the top priority project of the United National Integrated Development Alliance (UNIDA), to organize economic cooperation forums at the local biosphere level, based on the Asia Pacific Economic Cooperation (APEC) model. Who knows we might even get funding from APEC?

Watch my TV show “Bears & Bulls”, a daily coverage of the Philippine Stock Exchange. 9:00 am to 1:00 pm in Global News Network. Email iseneres@yahoo.com or text +639293605140 for local cable listings.

ECONOMIC AND SCIENTIFIC COOPERATION

NO HOLDS BARRED (019) June 19, 2009
By Ike Señeres

ECONOMIC AND SCIENTIFIC COOPERATION

June 18 was a very important day for my TV show. It was the day when I had the honor of having Ambassador Edsel T. Custodio as my guest. The good Ambassador is now the Undersecretary of Foreign Affairs for International Economic Relations (IER). He is also the Senior Official Minister of the Philippines for the Asia Pacific Economic Cooperation (APEC) Forum.

July 2 will also become a very important day for my show. It will be the day when Deputy Director General Rolando G. Tungpalan of the National Economic Development Authority (NEDA) will guest in my show. He is also concurrently the Official Economic Spokesperson of the government, in tandem with Prof. Gary B. Olivar who also holds the same title.

Already a regular guest in my show, Prof. Olivar will now be joined by Usec Custodio and Usec Tungpalan as regular guests, thus establishing my show as a major source of official information about economic matters, a very critical need for my audience that is generally composed of stock traders, analysts, investors, businessmen and entrepreneurs.

Economic information is one thing, economic cooperation is another. Knowing the nature of their work, I could already see that these three professionals could contribute greatly to the consensus to work towards economic cooperation, a consensus that has gradually emerged among my regular guests.

I know Edsel from way back, when I was still a Press Attaché and he was still a Trade Attaché. The Department of Foreign Affairs (DFA) is very fortunate to have him, considering his wealth of experience in trade promotion, his main function now. I also know Gary from way back. We were both University Councilor in UP Diliman, although he belonged to an earlier Council. Just recently, he became my professor in Language of Business (LOB) for Journalists, a short course that I took at the Asian Institute of Management (AIM).

Dr. Ernie Gonzales, President of National Economic Protection Association (NEPA) is a native of Pateros and is among the many long term residents of his community who wants to their portion of the Pasig River come back to life again. Also a regular guest in my TV program, Ernie and I discussed the fact that both the Mekong River and the Ohio River were brought back to life, giving us the hope that the Pasig River, or at least their portion of it could also be resurrected.

What could possibly be the connection between Edsel, Ronnie, Gary and Ernie? As head of the DFA-IER and APEC-SOM, Edsel has direct access to many material and human resources that could be harnessed towards the goal of river clean-ups. As joint Economic Spokesmen, Ronnie and Gary are in a position to support economic initiatives, including environmental actions. As head of NEPA, Ernie has a large mass base that could also be mobilized towards this goal.

It was Mr. Joseph Reynolds who first told me about the fact that the Pateros River is in effect no longer a river, because it has practically become a dumpsite for garbage, with hardly any water to see. He suggested that any attempt to clean up the river should also be accompanied by massive tree planting, to prevent further erosion and to strengthen the water holding capabilities of the river banks.

As I told him about our plan to clean up the Pateros River, Joe brought forward the argument that the best place to start the clean up is the Sierra Madre mountain range, because not unless these mountains are cleaned, debris from it will always flow into the river system that includes the rest of the Pasig River, Laguna Lake and Manila Bay as well.

Joe is a man of action, and he has the real track record of actually being able to revive fifty hectares of denuded mountains, bringing it back almost to the natural forest that God had made. I believe that he is right, but now he has awakened us to the reality that it is not enough to clean our rivers, we must also clean the mountains where the debris comes from. We are facing a big task ahead of us, but with the help of Edsel, we could bring in the foreign scientists who could provide the scientific solutions to this big problem.

Watch my TV show “Bears & Bulls”, a daily coverage of the Philippine Stock Exchange. 9:00 am to 1:00 pm in Global News Network. Email iseneres@yahoo.com or text +639293605140 for local cable listings.

GRADUATING FROM THE UNDERGROUND ECONOMY

NO HOLDS BARRED (018) June 14, 2009
By Ike Señeres

GRADUATING FROM THE UNDERGROUND ECONOMY

Many Filipinos are in business, but they could hardly be called businessmen in the real sense. Many of them have no access to formal credit, and because of that, they become victims of loan sharks, some of them being caught in that trap for several generations. This is a sad reality in a country where no one can go to jail for usury, because it is no longer illegal here.

Although they are hard working, they are hardly able to make ends meet, because interest costs are too high, and they are unable to make more sales by increasing their inventories. This is also the sad reality among farmers, who work very hard all their lives, but who are practically just working for the middle men who eat their profits by way of high lending costs.

Working as vendors or farmers, they are really just working to survive the days that pass, but they could not look forward to a brighter future since they are not building something that they could own in the long term, and perhaps bequeath to their children. If only they could gain access to formal credit, they would perhaps be able to build companies that would not only beef up their own household economy, but would also strengthen the national economy as well.

Looking back in history, it was actually the small farmers and shop keepers that built the British economy, laying the groundwork for an industrial economy that came later on. There is a saying that Britain is a nation of shop keepers, and it is that reality that actually made their economy very strong up to now.

Going now into the practical realm, our own shop keepers and farmers could only graduate and build their companies if they register their businesses, if they open bank accounts, if they keep accounting records, if they establish a credit history, if they protect themselves with insurance coverage and if they pay their taxes properly. These are the six requisites that they have to have in order to graduate from the underground economy.

In reality, they could only get access to formal credit if they have a registered business, if they have a bank account for reference, if they could present their financial statements, if they could show their proof of good credit, if they show their insurance coverage, and if they submit their income tax returns.

This column that you are reading is now published by thirty community newspapers nationwide, with three of them distributing worldwide to Filipino communities abroad. More than ever, this column now has the greater potential to become a tool for the development of small business, and I am happy to report about two recent opportunities in relation to this goal.

Two computer experts who are regular guests in my TV show have volunteered their services to small and medium enterprise (SME) owners, in order to help them computerize at the least cost to them. Using old computers and free software, they could now modernize their businesses by automating it. I thank Ben Garcia and Leo Querubin for this.

The other good news is that the Development Academy of the Philippines is now working on a program that would offer training seminars to SME owners who would like to graduate from the underground economy, by teaching them how to bring about the six requisites that I mentioned. This will be done in cooperation with my TV show, and I thank Trygve Bolante for this.

What is the connection between small businesses and the stock market? Despite its many years of existence, the trading volume in our stock market is still relatively small, in relation to the foreign markets around us. Sad to say, less than 1% of our people are investing in the local stock market, compared to Japan where over half of the population do invest.

In the case of Japan, many of the investors are farmers and small business owners. It would be logical to think that as soon as our farmers and small business owners are able to graduate from the underground economy and are also able to grow their own companies, they would be able to invest in the stock market as well. In a related development, I will soon be announcing in my TV show and in this column two breakthrough technologies that will boost the business of our local farmers.

Watch my TV show “Bears & Bulls”, a daily coverage of the Philippine Stock Exchange. 9:00 am to 1:00 pm in Global News Network. Email iseneres@yahoo.com or text +639293605140 for local cable listings.

BUY PHILIPPINE PRODUCTS

NO HOLDS BARRED (017) June 6, 2009
By Ike Señeres

BUY PHILIPPINE PRODUCTS

The Federation of Philippine Industries (FPI) and the Federation of Filipino Chinese Chambers of Commerce and Industry Inc. (FCCCII) are set to launch a new “Buy Pinoy Campaign” on June 10, and the Trade Union Congress of the Philippines (TUCP) has already joined this campaign that seeks to encourage Filipinos to favor the consumption of locally produced goods and services, over those that are “imported or smuggled” into the country, in order to stimulate the local economy and create new jobs, according to the TUCP Secretary-General, former Senator Ernesto Herrera.

“Never say die” I should say, because we have tried many times to launch several “Buy Filipino” campaigns, but to no avail. This idea was first proposed by the late President Carlos P. Garcia, but hardly did it take root, and neither was it sustained. I am not about to oppose the resurrection of this noble campaign, but I say that this time around, we should make it take off, and then make it last forever.

According to my TV guest Dr. Ernie Gonzales who is President of the National Economic Protection Association (NEPA), the drive to buy local products is even more important now, because of the upcoming implementation of the ASEAN Free Trade Agreement (AFTA) this coming January 2010. This date is just around the corner, and the move of the government to postpone it may just be too late.

NEPA is already more than 70 years old, and it is practically the oldest non-government organization in the country, established long before the acronym NGO was made popular. Come to think of it, the NEPA campaign to buy local products has actually antedated the campaign launched by President Garcia. Since we have failed before in the past in this regard, we should make every effort now to make it succeed this time.

My other TV guest Dr. Dieter Benecke of the Konrad Adenauer Foundation (KAF) says that the philosophy of the social market economy (SME) is inextricably related to the preservation of the environment, because the issue of environmental preservation is always connected to the responsible production of goods and services.

Ms. Margo Mercado, my contact at the Asian Institute of Management (AIM) who arranged the interview of Dr. Benecke was quick to point out that his SME subject was not the same as the commonly known meaning of small and medium enterprises. As it turned out, his definition of the social market economy actually favors the promotion of small and medium enterprises.

To some extent, it could be said that the big companies are partly responsible for our failure to globally competitive products, with a few exceptions. It is the government that has practically spoiled them with too many incentives that were just used to increase their profits, but not improve their global competitiveness.

This time around, it may be best to spread over these incentives to the small and medium enterprises, as a way of growing the social market economy, a “set of thinking” that is being promoted by Christian social democrats worldwide. Small is still beautiful, and I fully agree with that.

How are we going to make the “Buy Pinoy” campaign succeed this time? The best way to start I think is to strictly enforce the markings of all products that are sold in the local market, both local and imported. After that, it would make a lot of sense to come up with a database of all products that are truly locally made, based on their approved markings.

As we revive the campaign to buy local, we should be wary of the fact that because of globalization, many Filipino companies are now sourcing their products from abroad, while at the same time using or keeping their local brands. This would often confuse Filipino buyers into thinking that their products are locally made, but are actually imported.

For example, Shoemart is using the SM brand in selling shoes in their stores, a brand that is known to be local. Sad to say however, most if not all of their shoes are now made in China, a move that has happily brought life to their bottom lines, but has sadly caused the death of the local shoe industry. This is apparently true in the case of “Kamiseta” and “Bench” also.

Watch my TV show “Bears & Bulls”, a daily coverage of the Philippine Stock Exchange. 9:00 am to 1:00 pm in Global News Network. Email iseneres@yahoo.com or text +639293605140 for local cable listings.