he Philippine
Chamber of Commerce
and Industry has proposed the creation of a P100 billion fund, to be funded 50:50 by the government and the
private sector, to shield the economy from the effects of the global financial
crisis. The proposal, presented during the last Philippine Business Conference,
was enthusiastically embraced by Gloria Arroyo, who said such an initiative is
precisely what is needed to pump-prime the economy.
Those worthies at the PCCI could not raise P1 billion from
their own pockets or from enterprises they own if their lives depended on it. So
who are the businessmen or money managers from whom the PCCI officials have
secured a commitment to contribute to the "shield" fund?
The banks supposedly have been identified as the main
contributors from the private sector. Could the PCCI leadership name one, yes,
just one bank that has agreed to the proposal? This is not counting the
Development Bank of the Philippines and Land Bank, of course, which presumably
Gloria would also tap to meet the government commitment of P50 billion.
The proponents said the shield fund is meant to bankroll
projects for "human capital formation" that would address basic services to the
poor, including education, health, agriculture and infrastructure. Nobody can
argue against such noble intentions. We need to educate our youth, keep our
population healthy, feed our people and build roads to move people and products.
This needs have to be addressed in good times and in bad. And the bulk of the
government’s budget is appropriated for such purposes.
However, we have yet to hear of a bank, excepting Grameen-type
micro-lenders, organized for the purpose of helping the poor. And if we held
stocks in any bank which suddenly made it its business to be a partner of
government in providing basic services to the people, we would probably lead a
stockholders’ revolt and install a new management which would return to its
primary job of making money for us owners.
A financial crisis is no reason for business to abandon its
business. The whole society would be better off, for example, if the banks stuck
to accepting deposits and lending the money it has pooled to enterprises which
need capital for operations or for expansion. Goods are produced. Workers keep
their jobs. Government collects taxes.
