Competitiveness and Corporate Social Responsibility

Corporate Social Responsibility takes currency, and for that matter, its practice assumes urgency in our society today. Social reformers and economists have kept pointing out the fact that 20 percent of our people control 80 percent of the nation’s wealth while the rest scramble for shares from the remaining 20 percent.
Under ordinary circumstances, the role of government is to bridge the wide disparity between the few rich and the many poor. Unfortunately for our people, that gap has widened, instead of getting bridged in the past five and a half decades since after the last war.

The equalizing process would have been clear-cut. The rich share the wealth they make in a given year by paying their correct taxes. The taxes, in turn, are plowed into public education, health, social services, and key public work projects. This should have given those who have less in life the chance to improve their lot.

Somewhere along the way, the formula has not worked in the Philippines.

It is easy to dump all the blame on government, particularly our political leaders for the country’s failure to follow the footsteps of the roaring economic dynamos in the Asian region. We realized early enough that public policies that harbored monopolies and cartels protected from competition had discouraged new investments that would have created more jobs and new wealth.

A revolution in economic policy that begun during the Ramos administration has started taking roots. Only a few segments of the economy like land ownership, advertising, and media are now reserved by law to Filipinos.

Opening up the telecommunications industry to competition has proven to be the best example that investment liberalization, not protection, serves the best interest of this nation. Exposed to new players, PLDT has demonstrated it is equal to the challenge and remains the industry leader.

Most of the critical economic policy reforms are in place. Yet, economic growth has not gathered the momentum needed to make a big difference in the quality of life and the availability of new opportunities for our people. An average of 3,000 of our best, the most experienced and brightest Filipinos leave the Philippines every day for better paying jobs abroad. This could only mean that local businesses have not created the best jobs for our best people.

If leaders in government, and in business, keep on doing the same things they have been doing in the past, we are bound to see the same results. New ways of doing things must be adopted, if the social malaise our nation has been saddled with is to be reversed.

We still host the longest running communist insurgency in Asia long after the Berlin Wall collapsed and the diehard communist states like China and Vietnam are fast evolving into vibrant market economies.

PPP (Private-Public Partnership)

To my mind, the corporate world must now step in where government has been found wanting. It is only fitting and proper that the most influential groups, the Makati Business Club, the Management Association of the Philippines and the League of Corporate Foundations take the lead in evolving CSR programs that last, not just the charity-type programs that only salve the conscience of the rich and mighty.

The Competitive Agenda

It has been widely accepted that the lack of official capabilities in upgrading its obligations to deliver social services such as education, infrastructure, health, peace and order and other frontline government services – is due to the decline in investor interest in the country over the past several years.

Loss of investors’ confidence in the Philippines is a consequence of the decreasing competencies of the nation. In this age of globalization, the need to become competitive is of bigger importance since companies can go to any country if that will make them the best in their bottom lines. Domestic corporations, Filipino-owned transnationals, now have the distinct option of staying here or getting out. So do our best professionals in almost every field.

It would be disastrous for this nation to lose both.

Realizing the long-term impact of our competitive edge, we evolved last year a doable National Competitiveness Agenda calculated to reverse the tide.

The DTI and the business chambers, tasked to organize National Competitiveness Summit, went on overdrive in determining the areas to focus on and specific programs that must be done. They picked the best minds in business, the academe, and the government to come up with something concrete. We made use of Harvard Business School’s Porter Diamond model in setting the strategy for competitiveness of the nation.

In October of last year, we were ready to present to the President a six-point National Competitiveness Agenda, complete with the draft presidential executive and administrative orders for her review and signature. That same month, we held the National Competitiveness Summit in Malacañang.


There and then, the President signed Executive Order 571 that created National Competitiveness Council, a classic model of a PPP organization with the core group of five cabinet members and five senior business/private leaders.

The council’s main goal is to implement the six-point competitiveness agenda, which will lift the Philippines to become one of the more competitive nations by 2010. This will be done by the PPP approach with each working group headed by a champion from one of the business chambers and a staff that is half supported by the private sector. Every project is headed by a private sector representative working with a senior public official from the relevant departments.

The NCC is co-chaired by Trade Secretary Peter B. Favila and by myself. Other private sector members are Ambassador Donald Dee of PCCI, Ambassador Roberto Romulo, Dr. Federico Macaranas of AIM, and Mr. Gil Salazar of PBSP.

The NCC is not a lobby or advocacy group. There are so many organizations doing that now. Our value-added is on the action or assistance that the private sector can offer to enable public officials to achieve competitiveness.

The NCC has determined the key action points that must be pursued between now and 2010, the metrics for results, the timing involved, and the persons responsible. Allow me to go quickly through the priority action agenda of each task groups and illustrate how the private sector is participating in achieving the targeted results.

Human Resource Competence

The projects to improve HR competence are about better basic education and developing an alternative route for vocational-technical training, in line with the strategy of the Department of Education. As one expert stated, “Education is too important to be left in the hands of government alone.”

Efficient management in public offices

We intend to initiate the implementation of quality management systems such as ISO 9001 in those national government offices that have influence on the competitiveness of our enterprises. This year, there will be three offices that will be certified by the normal ISO agencies. Subsequently, it is expected that a combined government-private team can be trained to perform such certifications. MAP has been defining the areas where different institutions can be tapped for assistance.

Transaction flows with government

The simplification in the entry and exit of foreign business people is one of the early wins of the NCC. At the representation of the BPO companies, the granting of visas to prospective investors such as Indians has been made simpler by giving these permits at their port of entry provided they are sponsored by a local business chamber. At the same time, the stay of aliens in the Philippines was made more convenient with the operation of an ACR electronic card.

Cheaper and Sufficient Energy

Seven out of ten business leaders say that energy is our biggest source of uncompetitiveness. They feel that if the NCC will just focus on the subject of Energy and nothing else, the Philippines will surely move up in the competitiveness rankings. This field is fraught with the allegations of monopolies, unchecked wastages, government corruption, rent seekers, and regulatory competence. Many private groups are active in giving support to shaping up the power industry specially the PCCI, the AmCham, the PFI, and the industrial zone locators.

More Financing To MSMEs

Everyone agrees that MSMEs have to be competitive since they serve the needs of the bigger enterprises as well as expand the nation’s economic base. However, the current situation is still good enough to bridge the financing gaps for this sector. Outside of a few success stories such as Planters Development Bank, the refinancing models of Opportunity Int'l., etc., we still have to see a working model, which can address the above concerns nationally.

Improved infrastructures on Transport during the next three years

The role of ports, both air and sea, is being studied by a logistics services cluster of businessmen who are into supply chain niches with partners such as China, Japan, ASEAN, etc. Gone are the days when these ports are transshipment points since we do not have the size of our competitors such as Singapore, Malaysia, etc. The role of such ports is concerned with value-adding activities, which calls on the skills of our people. A wide range of experience from agriculture, services, industry, and logistics is involved.

CSR is Governance

The above goals are modest, perhaps, but they will remain unachievable without the participation of the private sector in the form of either CSRs or specific business tasks. Some of us may be doing a socially relevant project such as sponsoring a teacher recognition program in a certain school. However, it will be so much more effective if such projects are part of a bigger, regional undertaking hand in hand with government where the economics of scale will yield the desired quantum improvements by 2010.


In a way, it is not surprising if the top 1,000 corporations in the Philippines can easily get ISO certifications to show they are at par with the best in the world. They have the wherewithal to recruit and train the best workers they need even if they are operating in the middle of a desert. Some of these companies are probably active members of the Makati Business Club, the Management Association of the Philippines and the League of Corporate Foundations. They are aware that they have to extend their influence beyond their operations if they want to ensure their competitive positions in the future. The real victims of uncompetitiveness are the smaller enterprises, the poorly trained workers/graduates, the low-income group, those dependent on the nature and the environment, in other words, more than 80% of the Filipinos.

It is said we are a great people. Magaling ang Pinoy. Working as a national team, developing a mindset of being part of the whole, we can still build a great Philippines.

by Ambassador Cesar B. Bautista