Transcript of Q&A with Senator Mar Roxas (excerpts)
11th FOCAP Conference on Prospects For the Philippines

On Sen. Roxas' SB 1962, seeking to suspend the VAT on oil products for six months:

Q: The IMF said that backsliding on the fiscal policy and EVAT could affect investor confidence in the Philippines. Are you taking this more populist stand because of events leading up to 2010?

MAR: It's natural for the IMF to take that position, and it's also natural for political pundits to refer to motive or potential motive rather than the proposal itself. As I discussed in my speech, the situation today is very different today from the situation in 2004 and 2005, when the EVAT debate first started. At that time, our annual budget deficit was in the P250-P260 billion range, and there was no indication that it would stop. Oil was also $30 a barrel. The situation is substantially reversed today. Government crows about a budget balance, and oil is at $100 per barrel. The prescription for a healthy state in 2004 and 2005 may or may not be appropriate today. I say it is not appropriate because the situation has changed. Sticking to old formulae when the situation has changed is like sticking to the old antibiotic when the germ and infection have mutated into something else. It is for that reason that I am advocating this. For the record, as early as 2005, when oil hit $75 a barrel, I filed a bill for removing oil on VAT, so it has nothing to do with the timing, it being 2008 versus 2010.

One other factual event. While we were discussing EVAT at that time, I and nine other senators - it was a close vote, 11-10 or thereabouts - were advocating for excluding electricity from the VAT. The point I'm trying to make here is that there's an economic orthodoxy, yes. But governance, statecraft is not sticking to the book. We know what the rules, we know what the orthodoxy is, but we must also respond to the challenges of the times. In many instances all throughout history, successful policy advocacies were those that took the orthodoxy and made something more of it, rather than just blindly sticking to it.

On Charter Change:

Q: What is your take on moves to amend the Constitution at this time?

MAR: I am not in favor of amending the Constitution now. I'm also conscious that any amendment to the Constitution must happen in an otherwise relatively tranquil environment - not as a result of some crisis but as a result of sober, well thought out contemplation as to where we want to bring the country. Our problems are not in the Constitution. I was Trade Secretary for four years, from 2000 to December of 2003. I have met with all the trade associations of the countries represented here in our country, including the Philippines. I met with them nearly monthly. At no time were the problems they brought forward related directly to constitutional issues. Their problems were hijacking of shipments, harassment by local government officials and/or national government officials, unequal or subjective application of the rules, and so on and so forth. None of these have to do with constitutional issues.

I was talking with Robert Kuok [Shangrila Group] before he started out on his latest investment in Boracay, and he said, 'we're going to be there whether or not we can own the land. It's not as important as our being able to be there, to have access to clean water, to have access to the airport, to sewage systems, and other stuff relative to having a successful operation.' I don't think that constitutional issues are holding us back from what is otherwise an economic takeoff.

Q: How about simply for shifting to federalism for the situation in ARMM?

MAR: I don't think cha-cha is timely. As regards to federalism, we have to think about that very, very carefully. I am in favor of greater local autonomy. I am in favor of greater pushing of resources from the central government to the local government units. Whether that extends all the way up to federalism, I'm not yet fully convinced. I am fearful for our nation's fate. The nature of the Filipino is such that the centrifugal forces that federalism will unleash will serve to tear our country apart. The sense of nationhood, the sense of being of one community is so vulnerable that officially and fomally, telling people to go and chart your own Constitution may be detrimental, not only in the long run but also in the short run. I think we have to give that a lot of thought. By the way, there are many forms of federalism, so let's take a look at the proposal, but federalism per se, just to be parachuted on to the country, might not be such a good idea.

On the opposition needing a single contender in 2010:

MAR: I think that the dynamics for 2010 will be closer to that of 1992, where there was an incumbent who was no longer eligible for reelection, so therefore there were multiple candidates. I don't think that, given the direction the country is going, given the Internet, given the awareness of the youth, given the sentiment of the people, I'm not so sure that the dynamic will be opposition-administration. I think that the dynamic will be who has the best plan for the country, and who's going to make it happen, where will they bring the country. It's not oppo-admin, left-right, up-down, that's a possibility in 2010. Suffice to say that the Liberal Party will rise to the challenge of 2010, and we will be fully engaged in 2010.

On corruption in the government:

Q: How would you address corruption if you were head of the government?

MAR: I think one of the most important characteristics of leadership at any level is the ability to say no. No to one's self, no to one's circle, no to one's friends, and so on down the line. Simply by behaving in a more straightforward and less convoluted manner, one will be able to begin the process of curing corruption. Say no - it is simple. It is very difficult to discipline all the way down the line in the bureaucracy if you yourself are vulnerable. By not being vulnerable, you're then able to impose such discipline, of being able to say no. That's the most basic element, the rest is operationalizing - you'll have greater transparency, you'll have less subjectivity in decision-making, always subjecting government procurement to bidding and therefore have market challenge in all of the expenditure of public money. But the most important characteristic is the leadership, by being able to say no.

Q: On removing corruption through Charter Change

MAR: I don't think the solution is amending the Constitution. How many times can we say corruption is bad, red tape is bad. For example, in cutting red tape, the thing is to go down there, roll up your sleeves, and actually sort out in an organized and coherent manner what all of these steps are, why are they required, whether in fact the same document that one government agency requires can be used by another government agency.

One of the things that impressed me when I was in Singapore was how they made it the government's problem, and not the citizens' problem. At the DTI, we were able to apply some of those lessons. In Singapore, rather than have the citizen go and bounce around from agency to agency, they sat around in a table and sorted out, 'what's the information that agency A needs, and B, C and D; put them all together in one coherent form, and the citizen or the business only has one application, while the government then distributes the information to the relevant agencies pertaining to the application being sought by the individual or the business.

In our system we have the citizen bouncing around from agency to agency, waiting lines and going through the mill. How did they do it at the DTI? Well, at DTI, to the extent that it was under my purview, all of the agencies involved in the business and registration process sat down and it was really quite a bloody exercise, because no one wanted to give up their turf, their design or particular form. But we sat down and we actually put together a form that several agencies in DTI could use jointly, so the citizen wouldn't have to go to the provincial office, which would have a different set of requirements and forms from the central office and regional office and so on and so forth.

I then branched outside of the DTI, we had an SME unified lending program.We said we wanted to help small and medium enterprises. They don't have time to go to Landbank and back to their office then go to the Small Business Corporation then back to their office. So what did we do? We got the Landbank, the DBP and other government agencies that are lending and mobilizing money to the SME sector, to sit down, to put them in a room, and said, what are the forms that you need? We put them together, we found the commonalities, put them all in one document, and so we created unified lending so that regardless of whether you go to Landbank, to DBP, to SB Corp. or to Credit Corp.

We would have one form, one set of requirements, one interest rate, one tenor, whether it's three years, five years, you're not confused and not bouncing around between government agencies. I think these models, to the extent that they worked, could be applicable to the broader bureaucracy, and in that respect, that's how you address and actually solve red tape, all this subjectivity and frustration about doing business in the Philippines. It's certainly not putting out a pronouncement of, 'let's cut red tape.' We've been doing that for the last twenty years.