‘They are tackling a big festering sore called infrastructure’ — CNN International’s Andrew Stevens on ‘Dutertenomics’

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The veteran journalist shares his thoughts on the country’s big infrastructure program and its foreseeable challenges, as well as where the Philippines is at in the global economy. Photo by JL JAVIER

Manila (CNN Philippines Life) — In CNN Philippines’ “Build for the Future” forum, CNN International Correspondent Andrew Stevens, who facilitated the discussion with CNN Philippines chief correspondent Pia Hontiveros, asked the panel consisting of government agency heads about a Forbes report stating that the “Build, Build, Build” program is going to blow up the Philippines’ national debt.

Budget Secretary Ben Diokno dismissed this claim as fake news and that the government forecast is that economic growth will outpace the level of debt.

“It was interesting because we put that back to Ed Francisco [President of BDO Capital and Investment Corporation, who was part of the private sector panel] and he concurred, so he agreed [with Diokno],” says Stevens. “It was a good issue to highlight. You have the government's view, was it supported by ‘independence’ if you like, and they said yes it was.”

In the panel discussion, Stevens says that he admired how the panelists from the private sector didn’t shy away from questioning the government. “What I was impressed with is that we had some heavy hitters from the private sector who were prepared to push back against the government and ask questions and particularly concerned about whether the private sectors are being squeezed out of ‘Build, Build, Build,’” he says. “It's actually a very healthy forthright discussion between the government and the private sector. It looked like it was a discussion that needed to be had.”

In 2013, Stevens was also in the Philippines to cover Typhoon Haiyan, where he raised concerns to then Department of Interior and Local Government Secretary Mar Roxas about the inefficiency of the relief operations. CNN’s coverage went on to win Best International News story at London’s Royal Television Society awards. A year later, he covered the Umbrella Revolution in Hong Kong, a political movement that was mainly driven by students who wanted to be heard politically and democratically. He recalls being in Mongkok, one of the areas that protesters occupied, and seeing the manifestations of democracy.

While Stevens has covered major events across the Asia Pacific region, his specialty has been on reporting finance and business stories, having anchored CNN’s “BizAsia” program which also won him the Asian Television Award for Best Business Programming. When asked if he’s seen the kind of discourse in the “Build for the Future” forum, where private sectors and government agencies actively talk about economic plans, in other parts of Asia, he says that there are some countries that are more autocratic than other and others that are less so.   

“In some countries, there's more dialogue, like say, in Hong Kong,” he says. “I think the ‘Build, Build, Build’ program, this is obviously fairly key policy for the Duterte government. It's very ambitious and they gave every indication that they want to do it right and they want to do it now. And they want to keep the private sector in the loop, so to speak.”

The “Build, Build, Build” program has promised Filipinos six airports, nine railways, three rapid bus transits, and 32 roads and bridges, and the government has claimed that this program will usher in the “Golden Age of Infrastructure” in the Philippines. Whether or not these plans will materialize still remains to be seen.

CNN Philippines Life talked to Stevens to mull over the insights that came out of the “Build for the Future” discussion, where the Philippines is at in the global economy, and if Duterte’s drug policy can be separated from the administration’s seemingly promising economic policy. Below are edited excerpts from the interview.

Photo-46.jpg CNN International Correspondent Andrew Stevens and CNN Philippines chief correspondent Pia Hontiveros facilitated the discussions among government agency heads and panelists from the private sector at CNN Philippines' business forum, "Build for the Future." Photo by JL JAVIER

During the “Build, Build, Build” forum, you asked about the Forbes report stating that the project could balloon our national debt, but then this was contested by Budget Secretary Ben Diokno. Why is there this gap between Forbes’ report and what the government agencies [and the private sectors] are saying?

That happens. Economics is a dismal science. If you put all the economists in the world, end to end, line them up end to end, they still wouldn't reach a conclusion. So [in] economics, there is various sort of 'This is what we think is going to happen' and another would probably say 'This is what's gonna happen.' So you get these diverse opinions. So this is an opinion from Forbes, which is going to be [over] 150 percent [debt-GDP ratio] in 10 years because of “Build, Build, Build.” Government says no that's not the case, in fact, it's going to drop from the current level of 42 because of economic growth, that was their rationale for it.

We don't know what the economic growth is going to be but there are forecasts out there, that's what the government is standing by and like I said, BDO, private sector guys, they tend to agree with it. I don't think there was any sort of huge disconnect there and I don't think it was the government really sort of peddling a lie. And again, if they're wrong, they're going to have to confront it in some stage anyway because you can't hide that sort of thing.

I watched an interview in 2012 where you said that when you were meeting business leaders at that time, they seemed to be very optimistic of the Aquino administration. Have you seen that change in the last couple of years or maybe having heard from business leaders in the forum, do you see that optimism changing under the Duterte administration?

Obviously there are issues about the drug policy, for example. But on the economic side of things, with ‘Dutertenomics,’ there doesn't seem to be nearly the same level of controversy or concern and let's face it, the Philippines needs a lot of infrastructure. It's always falling behind in that and poor countries pay the price so people wanna see that.

Photo-38.jpg At the forum, Stevens brought up a Forbes report stating that the “Build, Build, Build” program is going to blow up the Philippines’ national debt. Budget Secretary Ben Diokno contested the report, saying that the government forecast is that economic growth will outpace the level of debt. Photo by JL JAVIER

And that's why they were supported by the business community. Like I said before, they just want to get more involved in it. But [...] I haven't detected any big dissent about the government's economic policy. And you know those people were optimistic about the previous administration's development, but it was a very slow process. Noynoy was very careful on signing off contracts because corruption was a big issue and he wanted to make sure everything was fine but it was a very slow process, likewise [what] the government was saying [in the forum]. And [...] there is no concern, major concern on corruption involving this government that I had seen or I've heard. And they were very clear about their policy on corruption. So the Aquino administration is slow, this administration, they want to make it faster, they want to get it going, and there seems to be a general level of support for that, a big support.

You mentioned the government’s drug policy. Is that something that can be entirely isolated from economic policy?  

Basically, yes. The drug policy is what the government is doing. As we know, there's been real, international outcry. But the economic policy is a completely different agenda.

In that same 2012 interview, there were several comparisons between Indonesia and the Philippines. But it was discussed that before Indonesia went into this economic growth, it was led by Suharto, a strongman who created a very unsustainable economy. Do you think the Philippines could go down that path? Or do you see any foreseeable challenges about “Build, Build, Build?”

I actually covered the downfall of Suharto and it was sort of sparked by, as I remember it, sudden sharp rise of fuel prices which affected small local traders. And there was a general dissatisfaction. I mean it was a very, very corrupt regime. There was an elite which ruled and the people of Indonesia didn't see much improvement in their lives.

We're only two years into this administration and you would know better than I how much resentment or disillusionment there is when it comes to economic policy. And what I've seen when I'm speaking to people abroad, I haven't seen much disillusionment at all. Maybe that will change after six years but at the moment, the economy is performing strongly, it's getting better, the peso is weaker but that's for this whole “Build, Build, Build” program. So in the moment, it's way too early to say that they're going down the wrong track or it's not working, it seems to be there [are] these tailwinds of optimism.

The World Bank reported though that while the Philippine economy is growing, poverty is still high. How do you think can that be addressed?

The government says that [poverty alleviation] is its target. As you said poverty is growing, it's about 21.6 percent I think. The government says they’re going to bring down to 14 percent through this “Build, Build, Build.” Now if that works, and it's still an if at this stage, but if they build the roads, they decentralize to a degree, that's what happens.

Photo-39.jpg On the panel discussion at the forum, Stevens says that he was impressed by how the panelists from the private sector were prepared to question and ask the government. In photo: San Miguel's Chief Finance Officer Raoul Romulo suggesting for better manpower in different levels of government agencies as well as raising concerns about how they feel that the private sector is being squeezed out of the "Build, Build, Build" program. Photo by JL JAVIER

A good example to look at is China. China is a one-party State and the Philippines is a democracy, but China lifted hundreds and millions of people out of poverty through economic development, through infrastructure … The infrastructure in China is really quite extraordinary now. So I don’t know if it's a model they're following, but certainly, the impact on investment in the economy on infrastructure does have the effect of raising all boats, lifting people out of poverty.

There was also this report by the International Monetary Fund saying that the global economy is worse than before the financial crisis. How do you think can this impact a country like the Philippines?

My understanding of the global economy at the moment is ... Apart from last week where we've seen these wobbles in Europe and now the U.S. is once again in trade sanctions in China. But the general feeling is that the global economy has been in quite a sweet spot in the last 12 months or so because it is shaking off the effects of the global financial crisis. The banks are slightly better regulated, they're certainly better prepared to weather another downturn. World traders are picking up, Japan was looking good, the U.S. as we know is performing pretty well, even the Eurozone was looking better. Asia was chugging along, China was chugging along.

So everything looks pretty good. And then we started getting these almost self-inflicted crises like the trade war almost with China. And there are still the extreme political movements in Europe, which we're seeing in Italy. But generally, compared with 2008, where the global economy stopped, we're in a much better place.

Photo-9.jpg "What I've seen when I'm speaking to people abroad, I haven't seen much disillusionment at all," says Stevens. "Maybe that will change after six years but at the moment, the economy is performing strongly, it's getting better, the peso is weaker but that's for this whole 'Build, Build, Build' program. So in the moment, it's way too early to say that they're going down the wrong track or it's not working, it seems to be there [are] these tailwinds of optimism." Photo by JL JAVIER

And the Philippines is making its own headway. The growth is strong. The Aquino administration should be sort of applauded for at least laying the groundwork for the Philippine economy to start moving again. You look around, the construction here. The question is if it's trickling out from the population centers across the country. I don't know. But the Philippines is one of the best performing economies in Asia now. And it doesn't look like it's built from sand. This economic push isn't built on sand, there's actually some substance to it and things seem to be moving in the right direction. And hence, this “Build, Build, Build,” it's going to create a lot of jobs and put a lot of money into the economy, and it's also going to create the structure that will allow the Philippines to continue this economic growth, ideally.

What do you personally think about the “Build, Build, Build” program?

What I see is it's desperately needed so they are tackling a great big festering sore in the Philippines called infrastructure. They're actually doing something about it in a mega way. That's got to be a good thing — whether it happens, whether it works according to plan, we'll have to wait and see. But I think having the plan to start with is better than not having a plan at all.


Catch the initial telecast of the “Build of the Future” forum on Friday, June 1, at 7 p.m.