Ombion: Rethink and reorient local economic development


ONE important lesson I’ve drawn from the Covid-19 pandemic is not only that it demonstrated how weak and unprepared our entire health system is in dealing with pandemic and other contagious diseases, but it also exposed our local economy as anti-local with no solid and sustainable foundations and, therefore, highly vulnerable to macroeconomic pressures and global crises.

At the onset of May, the impact of the Covid crisis on the local economy was already visible and disturbing.

Filipino-Chinese taipan and foreign-owned big and medium retail and utility service businesses like big energy, water, supermalls, telecoms and foreign ownership-based fast-food chains are closing shops, downsizing, and have reduced operational hours.

Manila-based big real estate developers, contractors and supply companies have also slowed down on their business projects.

Big resorts and hotels which are dependent on foreign and national tourists have likewise either ceased operations or downsized. Others who hope to get an arrangement with the local government unit (LGU) on quarantine accommodation for returning overseas Filipino workers likewise declared closure.

They alone have already been causing massive dis-employment and dislocation of workers, regular and contractual ones, which constitute a big chunk of our local labor force. A big headache now for the LGU and national government agencies (NGAs), if they care at all.

Practically, only the small and medium businesses, the most numerous locally and mostly owned by local families and social entrepreneurs, are still operating. But they could only serve far less than the big ones.

What does this picture mean?

It speaks of our local economy that is largely dependent on non-Negrense big companies and businesses, dependent largely on imported goods and items, reliant on domestic cheap labor, dependent on foreign tourists, and yet leave little of their profits in local government treasury and local money circulation.

They enjoy a wide range of tax holidays and other incentives from the LGU, yet they only pay a fraction of their taxes to the local government. They are also often complained about their non-compliance with labor wages and benefits and occupational standards.

On the other hand, the small and medium businesses--the most numerous locally owned by local families and social entrepreneurs and cooperatives, dependent on local raw materials and locally developed processing systems, local manpower, and most compliant on labor wages and standards--don’t enjoy the same support that the big companies and businesses get.

So when the Covid crisis struck, the big companies and businesses caused more damage than the small and medium ones. Yet the former easily survives the crisis by just cutting down on their expenses and still operating profitably through the new normal.

The local businesses of small and medium categories continue to operate, as small as they have always been. Still, they are more compliant with many government standards and have proven more resilient than the big and foreign ones.

Had the LGU and NGAs been right on their local economic development thrust and priorities, and had given more support and incentives to the locals, they could have strengthened local businesses and social enterprises and could have turned them to be more competitive.

When the local economy is driven by local companies and social entrepreneurs from the middle class and basic sectors, reliant on local materials and resources including technologies and equipment, absorptive of local manpower, both skilled and blue collars, and strong mechanisms and safeguards for local circulation of profits or surplus in support of modernizing production and machinery, and all strongly backed up or even led by the LGU – the local economy is certain to be more vibrant, progressive, solid, sustainable, resilient, and more pliant to the national and global crisis.

The pain and agonies caused by the Covid crisis to our local population could have been eased or managed well had the LGU thought and acted beyond their usual mechanical and routinary and often vested obligations of a little of revenue generation and more of dependency on IRA, tax collections, token social services, infrastructure construction and maintenance, and donations-giving.

For this, I forward the strong challenge to the LGUs and the NGAs operating here: please put public interests above your petty political careers and do rethink and reorient the thrust and priorities of your local economic development thrust.

Leading and managing right, well and good, an LGU is about ensuring the welfare and well-being of the people and not about disposing your political functions and ensuring your political sustainability in power.

Now is the opportune time to make a difference in local governance and economy, and the plight and aspirations of the people.

I also challenge the civil society organizations, NGOs and people’s organizations, to transcend their petty sectoral politics and assorted entrepreneurship, towards a more comprehensive view of planning, leading and managing territorial economic development hand in hand with the struggle for empowerment in local governance.

Of course, I don’t mean that we forget our national responsibilities for transforming our nation into one that is truly sovereign, democratic and progressive.

All this is just a matter of thinking big, doing local, and making a wider and deeper impact.


SunStar website welcomes friendly debate, but comments posted on this site do not necessarily reflect the views of the SunStar management and its affiliates. SunStar reserves the right to delete, reproduce or modify comments posted here without notice. Posts that are inappropriate will automatically be deleted.

Forum rules:

Do not use obscenity. Some words have been banned. Stick to the topic. Do not veer away from the discussion. Be coherent. Do not shout or use CAPITAL LETTERS!