Galang, Czyrone Angelo Plan 203 April 2, 2018

I.D. # 201790728 Homework # 2

IMPACT OF PRIVATE SECTORS IN PHILIPPINE URBAN PLANNING

Economy

As the Philippine Institute of Development Studies puts it, the private sector is the driver
of growth in most ASEAN economies. It generates revenue to the economy and it brings
technology and innovation in our country. Moreover, the private sectors have dominated the
Philippine economy with a contribution of 93 percent of the country’s Gross Domestic Product,
according to the Asian Development Bank. Therefore, we expect the private sector to play an
important role in the process of economic integration.

However, it is currently not living up to its potential. The firms here in the Philippines are
found to have low operation of arrangements in the ASEAN free trade agreement. Likewise, the
investments of the private sector as a percentage of our GDP are declining over the past 20 years.
We are suffering from underinvestment from a total investment of 21.2% in 2000 to 14.0% in
2009 and are lower than other Southeast Asian countries.

Our country is now experiencing a weak investment climate. In general, competitiveness

rankings and other investment climate diagnostics reveals that the major hindrances to its growth
are corruption, ungainly business procedures, poor tax and customs administration, barriers to
market entry and competition, weak property rights, high energy costs, and the lack of equitable
and effective regulation and enforcement.

Amidst the weakening nature of the private sector in our economy, there have been
optimistic inputs in the business process outsourcing (BPO) industries. It started in 2004, where
the revenues have gone significantly high that in 2009 the country became the third-largest BPO
destination in the world. In 2011 the BPO industry employs about 550,000 and 350,000 of it
work at call centers. It is also a source of indirect employment for some 1.3 million people, with
a share of 4.8% in our country’s GDP.

Despite the challenges, the Public- Private Partnerships (PPPs) remain a favorable area in
the private sector development. But since the financial crisis in Asia in 1997, PPPs dropped
dramatically from 15.5% of GDP to 2.1% in 2000 to 2009. The country was successful with
PPPs in the power sector but caused by weak governance, private investment in other
infrastructure sectors has been limited. There have been high-profile failures in the build-
operate-transfer (BOT) contracts for the Ninoy Aquino International Airport terminal III.

In the administration of P-Noy (President Benigno Aquino III), there has been a strong
commitment to moving the PPP agenda through. One example is the reorganization of the BOT
Center into the PPP Center. Another is the renewal of the Project Development Facility as the
Project Development and Monitoring Facility to assist the implementation of agencies structure
and competitively tender bankable PPP projects. However, just like other projects initiated by
past administrations, the movement in PPPs did not remain constant as years went by.

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Society

The private sector also has a significant impact on people’s lives, a creator of jobs and
generator of goods and services. Thinking about the society is important for an effective private
sector development. It should be responsible, inclusive and brings about sustainability to the
people around it.

Sadly, some private businesses in the Philippines lack regards to their social
responsibility. Contractualization is a hot issue in our country nowadays. Endo is the practice of
repeated hiring of workers with contracts lasting up to five months, avoiding regularization.
Laborers are fed with project-based jobs without health insurance and other benefits. Currently,
our president has seemingly given up based on his statement that he cannot force capitalists if
they don’t have money or if they don’t want to, or if [laborers are] lazy.

Another issue is with regards to land ownership. On November 16, 2004, 14 people were
killed including two children and hundreds were injured when the police and soldiers
overpowered the blockade by the plantation workers. They were fighting for a fairer wages and a
greater commitment for a national land reform. The Comprehensive Agrarian Reform Program
(CARP) under President Cory Aquino only implemented a stock distribution option (SDO) for
the farmers with a total of 33% shares. Whereas, the Cojuanco’s shares are up to Php.
394,000,000.00 or 67%. Inevitably, many farmers lost their lands. Some farmers were displaced
and forced to work under contractual jobs or labandera in Metro Manila, and some are already
OFWs, according to Chairperson Florida “Ka Pong” Sibayan of Alyansa ng mga Manggagawang
Bukid sa Asyenda Luisita.

Environment

The most significant impact of private sector as a physical structure is with regards to the
environment. Private companies generally build offices, commercial establishments, residential
condominiums, educational and health institutions and other industry infrastructures to generate
income or revenue. Before and after the construction is completed, there may be a series of
issues about the environmental impact that should be reconciled or prevented through proper
planning, namely, sanitary issues, power and water shortage, congestion problems, land use
conflicts, harmful emissions and different kinds of pollutions.

There are many unreported unsanitary activities under private sectors especially malls.
Whenever I take MRT s a commute to my workplace, I pass by the side of Metro Point Mall in
Pasay where delivery trucks unload goods. Everyone can smell the mixed liquid from the
manhole comprise of floodwater, different kind of rotten wastes, meat juices, and even animal
feces. One may quickly notice how unhygienic the place is especially that it is beside Jollibee
and Chowking. And yet, most people do not care about it as if they are immuned from the smell
and pollution around them. It seems like there is a mental conditioning wherein people cannot
see or sense how hazardous their environment is.

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Some developers lack on anticipation to possible problems like power and water
shortages. Some are not planned well that their water connection compromises the supply of the
barangay or village they belong in. Even worse, is if small establishments introduce a negative
impact on power distribution like tampering electrical wires to lessen operation costs.

One of the studies developers are required to have, especially for offices, commercial
establishments and residential buildings, is a traffic impact study. Traffic congestion is
something we did not see coming when Metro Manila is still in the building stage and now we
are suffering from longer travel time, delays, and unwanted road policies. New establishments
generate and attract vehicular trips, affecting its adjacent major and minor roads and over time
the number of vehicles increase due to regional growth. Whenever there are proposed
establishments, there should be an analysis on its current condition and its future condition. If the
future condition went over the standard of road management, then the planners and developers
should propose a better plan to mitigate the future situation. However, there are establishments,
which are questionable on how they manage to push through amidst present traffic conditions.

Private Sector Development

According to the paper released by ADB, there are two private sector development
constraints in the Philippines. They are grouped under inefficient state system and inadequate
business environment. The first group is about the issues relevant to poor governance especially
the insufficient institutional and legal frameworks, which in result, expands the risk of
corruption. On the other hand, the second group covers the struggle of small and medium-sized
enterprises access to finance. This is one of the large factors affecting the environment where
businesses operate.

In order to address the issues presented above, I believe our country should:

1. Improve the Philippines’ private sector development with the LGUs during the process of
investment
2. Update the labor legislation
3. Institutionalize a law or a policy which has an anti-monopoly framework
4. Simplify taxation of small businesses to give them a better shot in the industry
5. Complete cadastral titling of land
6. Strengthen the National Competitiveness Council to become the PPP mechanism for
private sector development policy consultation, access to financing and loans
7. Increase the public investments in infrastructure to even out the business environment
8. Develop integrated transportation system which moves passengers and goods like roll-on
and roll-off infrastructures
9. Increase agribusiness investment facilities
10. Develop a sustainable system of innovation and technology development for the small
and medium-sized enterprise.

According to Heinrich, M. (2013), recognizing that there are social impacts on the society
can help strengthen the suitability of businesses, support inclusive growth, and achieve positive
sustainable impacts. Understanding the opportunities brought by social development can also

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contribute to the areas of development of the private sectors. These areas include adding social
value, addressing gender and social exclusion an incorporating human rights. Business sectors
may introduce voluntary initiatives, standards and corporate social responsibility (CSR)
approaches to help meet their human rights obligations.

They may, for example, promote an industry transparency initiative with regards to the
revenue from natural resources, including full disclosure of taxes and other fees. Another way to
also help workers is by organizing skill and technological trainings related to the private sector’s
industry. It solves the issue of contractualization at the same time private sectors are comprised
with quality-oriented workers and does not need to complain about unskilled workers.

With regards to the environmental impact of the establishments built by the private
sectors, there should be improvements in planning the different factors affecting the
surroundings, namely, energy source, water and sanitation facilities, transportation (including toll
roads, ports, and mass transit systems), health impacts, and impacts on the market around it.

Furthermore, developers should promote sustainable development. The easiest way is to

faithfully comply with the requirements on sanitary, and environmental impact. There should be
a material recovery facility for a mall or large residential establishments. There are provisions for
septic tanks and chambers. There are also standards in traffic impact studies that may guide the
developers into creating a friendly environment for the motorists.

To summarize, the private sector is the biggest contributor in relation to income. We

should integrate the planning processes based on economy, society and environment.

References:

Rosellon, Maureen Ane D., et.al. (October, 2010) The Role of Private Sector in Reginal
Economic Integration: a View from the Philippines. Retrieved last March 31, 2018 at
https://dirp4.pids.gov.ph/ris/dps/pidsdps1023.pdf

Haydarov, Aziz. (August, 2011). Philippines: Private Sector Development- Challenges and
Possible Ways to Go. Retrieved last March 31, 2018 at
https://www.adb.org/sites/default/files/publication/28987/sea-wp5-philippines-psd.pdf

Mia, Ian Benedict. (July 12, 2016). 28 Years of Agrarian Reform in Hacienda Luisita. Retrieved
last March 31, 2018 at http://thelasallian.com/2016/07/12/28-years-of-agrarian-reform-in-
hacienda-luisita/