Great Speeches: Credit Management- Key to Philippine Global Competitiveness

From the author: Oftentimes, the key to formulating a great speech is including stories that will touch the hearts and funny bone of your audience. Look at how the anecdote on the tiger in jungle was used to drive home the point about competitiveness.

Distinguished guests,

Ladies and Gentlemen, good afternoon.

When I hear the word competitiveness, one story always comes into my mind. It is the story of two friends who were trapped in a jungle. When they were about to stand up and find their way out of the jungle, a tiger appeared from out of nowhere and gave them an angry and threatening look. One guy immediately put on his running shoes. The other guy was startled to see his companion putting on his rubber shoes. He asked “ What is the point in putting on your running shoes when we know fully well that we cannot outrun the tiger?” The guy smiled and said, “ Well, I don’t need to outrun the tiger. I only need to outrun you.”

(Laughter)

A look at the global scenario would dictate that the Philippines has been outrun and outranked by its neighbors in Asia. Globally, the Philippines has been ranked by the latest World Competitiveness Council at 49th place out of 61 economies that were rated. In the 2005-2006 Global Competitiveness Report, the Philippines ranked a poor number 77 overall, out of 117 countries. In the neighborhood in the GC Report, it ranks second lowest at number 73 beneath Hong Kong, Indonesia, Korea, Malaysia, Singapore, Taiwan and Thailand. It is only a notch over Vietnam that landed on 74th place. In short, it has slipped to the lowest one-third of all developed and developing nations in the world trade and investments Olympics.

The easiest and most convenient way out would have been to point fingers and blame others for the dismal performance. However, we at PCCI saw this as an opportunity to unite the different sectors of our society to rally behind a common goal. We have decided that what we need is a national action program based on well-defined and doable goals measured against a specific timeline.

All these efforts towards charting a roadmap for competitiveness culminated into the National Competitiveness Summit.

One of the outputs of the Summit was the determination of eight major pillars that needed to be developed in order to quench our thirst for competitiveness. These are the following: Competitive Human Resources, Efficient Public and Private Sector Management, Effective Access to Financing, Improved Transaction Costs and Flows/Anti Red Tape, Seamless Infrastructure Network, Energy Cost Competitiveness and Self Sufficiency, Ombudsman and the Judiciary, and Legislation. Let me briefly discuss some of these pillars and update you on what has been done to address the issues surrounding them.


People:

With regards to Competitive Human Resources, the first step we took was to address the problem of mismatch not only between skills needed by different segments of the economy and those held by able-bodied Filipinos but also the mismatch between where the jobs are and where the qualified jobseekers are. A BALIK-PINAS program that offers competitive pay to the best and brightest among Filipino expats has now been worked upon to serve as an anchor to rejuvenate a brain-drained nation.


Transaction Costs and Flows:

In terms of Transaction Costs and Flows, we, at the Anti Red Tape Task Force, together with other front-line government agencies, have made it our mission to streamline systems and remove red tape in local government units and in all national agencies dealing with business-related matters.


Financing:

Financing is one of the identified sources of competitiveness. It cuts across the factors of competitiveness since it covers both public and private investments. Public Finance in the Philippines ranks 58th in the 2006 World Competitiveness Yearbook, while Finance under Business Efficiency ranks 55th. PCCI has become the most ideal conduit in bringing forward government’s various policy reform initiatives and services for the benefit of the small and medium enterprises in the country. We will continue to be so

Management:

Along with the other sources of competitiveness, Philippine management practices, which is ranked 40th in the World Competitiveness Yearbook, is considered as one major weakness. Management issues were divided under public and private sector classifications.

Under the public sector, issues on government inefficiency in terms of transparency, bureaucracy, judicial system, local governance, peace and order and policy direction were identified.

For private sector management, common issues on labor, productivity, entrepreneurship, health, safety and environment, credit, attitude/values and credibility of managers were persistent factors.


Judiciary:

The problems in our judicial system are also a matter of concern in our drive for competitiveness. In the business sector, unnecessary expenses caused by unending litigation, not to mention payment of attorney’s fees, place a heavy burden on the cost of doing business. The slow turning of the wheels of justice through endless postponements of cases and legal maneuverings discourage foreign investors from doing business in our country.

Indeed, there is a need to reduce, if not totally eliminate, delay in the adjudication of cases in all levels. With the appointment of Atty. Mike Varela as the champion for the Judiciary in the National Competitiveness Council, we are assured that the business sector’s voice will be heard.

Definitely, it will take everyone’s collective effort to make our lofty goals a reality. Any task, no matter how daunting, will seem small if everyone will pledge their dedication for competitiveness. This is why we are very glad that CMAP has chosen the theme, Credit Management: Key to Philippine Global Competitiveness.

During the past years, the international marketplace has become increasingly competitive as more and more companies worldwide are finding it necessary to innovate and adapt global standards in order to maintain profitability and growth. This has required continuous vigilance of organizations in ensuring that every organization’s credit management system is able to meet the demands and expectations of clients.

We laud the CMAP for being instrumental in enhancing the current stability and commercial use of credit cards and other credit facilities in Philippine business.

Credit management today plays a crucial part in the value chain of businesses. It needs to be continually improved to cater to the general preferences of consumers and, at the same time, ensure a continued flow of capital for merchants.

Presently, 12% of the consuming public are credit card holders. The industry is expected to grow exponentially within the following years along with the growth of the Philippine economy as our per capita income improves. It is imperative that we formulate effective mechanisms that would promote and encourage credit card use as a widely acceptable alternative mode of payment for consumers. It is now up to the excellent leadership of CMAP to sharpen the skills of its members into an innovative level for them to successfully implement credit systems at par with global standards.

In the long run, I am cautiously optimistic that we will rise to the challenges as we had done so since the dawn of our country’s history. I know that it will not be easy, but, as always, I know that we never turn from adversity. We always rise to the occasion no matter what the circumstances, a quality it seems integrated in the character of every Filipino.

Again, the PCCI congratulates the CMAP in its Diamond Jubilee. The Chamber is more than willing to partner with you as we chart and thread a common direction towards economic growth and a better life for the Filipino people.

Thank you and mabuhay!