May 1, 2022 | 5:47 pm
Introspective By Romeo Bernardo
(Part 1)
It has often
been observed that our best qualities as a people emerge during times of
national catastrophe — typhoons, flooding, volcanic eruptions, earthquakes,
tsunamis. This spirit is expressed in a word that does not directly translate
to English: “bayanihan.” Defined as the enduring value of the Filipino
“to help fellow countrymen in times of need without expecting anything in
return,” this comes from the word “bayani” (hero). Bayanihan is
an invitation for heroes from all walks of life to work together.
The once-in-a-generation COVID-19
pandemic is perhaps the mother of all catastrophes in terms of duration, global
reach, and the suddenness and severity of its impact on peoples’ lives and the
economy — truly an existential threat to individuals and institutions. It is
fortunate that our national response, both public and private, has been
proportionate to the disaster, showcasing the best of public-private
partnerships (PPPs).
In April 2020, responding to a call
from the government for a partnership to manage COVID, the private sector
created Task Force T3 (Test, Trace, Treat). Starting initially with a small
group composed of Ayala, AC Health, McKinsey, MPIC Hospitals, the Philippine
Disaster Resilience Foundation (PDRF), Unilab, and Zuellig Pharma working with
the Inter-Agency
Task Force for the Management of Emerging Infectious Diseases (IATF), Department of Health, the Asian
Development Bank, Presidential Adviser for Entrepreneurship Joey Concepcion’s
Go Negosyo, and the Foundation for Economic Freedom, under the baton of Bill
Luz and Fred Ayala, T3 quickly expanded to cover the entire business community
in a consortium working with government across many different fronts of the
COVID response.
At the outset, the work focused on
expanding the RT-PCR testing capacity nationwide, from 4,500 tests per day in
the third week of April 2020 to 30,000 by the end of May (and eventually to
over 100,000 tests daily). A second job of increasing PPE (personal protective
equipment) inventory was also given to the task force. Eventually, T3 worked on
over a dozen projects, all the way to the national vaccination rollout with
Secretaries Charlie Galvez and Vince Dizon.
COVID-19 showed, in
a tremendously tangible way, the power of bayanihan in
successfully meeting a massive challenge. I share the belief that this same
spirit of partnership can likewise propel us to solve our most burning,
persistent problems, and truly create a Progressive Philippines.
KEY THEMES AND LESSONS OF T3
Partnerships work. Both sides of the
partnership complemented each other’s strengths and covered for each other’s
limitations. For instance, the agility of the private sector made immediate
response measures possible as the government realigned its budgets and
mobilized its machinery. Meanwhile the public sector’s size, reach, and
resources made massive impact at scale possible, supplementing what the private
sector had started. Building on these, key themes begin to surface on what
truly made T3, as a cooperation model, successful:
Speed is of the
essence. As
noted, the private sector’s agility was crucial during the early stages of the
crisis, while the more bureaucratic and massive ship of the State undertook the
required legislation and organizational effort. We saw this quite clearly
across all the partnership initiatives, from the earliest relief undertaking
(Project Ugnayan) and in expanding testing capacity, building quarantine
facilities, building up PPE supply, data management, communications, and
vaccine deployment, among others.
Private sector investments in
technology, supply chains, and human capital made the difference. The resource base, capabilities, and access
of the private sector taken together across industries, and, most especially,
globally, appears to be at an advantage versus most governments. This was most
evident in vaccine logistics and administration, data management and analytics,
communications, and the development and application of internationally
recognized best practice protocols and the latest scientific findings
on the virus.
Taskforces over traditional reporting
lines. A multifaceted catastrophe such as
COVID-19, cannot just rely on official “boxes and
lines” on who is responsible for what. In this case, this is not just a “public
health crisis” that would normally fall under the Department of Health, which
has historically been limited in its resources, but also a “socioeconomic
crisis,” as severely affected livelihoods, ultimately translates to lives
impacted. We have heard many stories of Filipinos who were risking infection by
continuing to make ends meet outside of quarantine: say in many ways, “Hindi
nga ako mamamatay sa sakit, mamamatay naman ako sa gutom” (Yes,
I won’t die of disease, but then I’ll die of hunger).
Initially, the IATF used what was
once considered as the strictest quarantines to control contagion, driven by
understandably cautious health professionals. However, through well-organized,
targeted consultations involving the government economic managers; and the
severely impacted, but committed private sector groups across industries
(healthcare, retail, transportation, construction, education, etc.); while
drawing on the experience and expertise of other countries secured from global
knowledge banks (the Asian Development Bank, McKinsey, and Boston Consulting
Group), the strategies and policies were refined that allowed us
to eventually “dance with the virus” and minimize the adverse impact on our
people. Proposed measures now had to go through this multistakeholder group
during their regular cadences before implementation. Thus, after a severe 9.6%
contraction of the GDP in 2020, we have bounced back and are enroute to full
recovery.
Public sector scale augments private
sector speed. While the private sector can
contribute early and quickly, especially technological resources not available
to government, the reality is that for adversities of this magnitude, only the
public sector has the massive financial resources, and legislative and
executive powers needed to address them systematically. This is especially
relevant as the private sector itself was severely impacted commercially and
needed fiscal support from the government.
This was highly evident in the government’s
large-scale, and wisely diverse vaccine procurement — which built upon the
initial vaccine procurement effort of the private sector for their stakeholders
— the “ayuda programs,” and the actual vaccination at the local
government level, after private experts helped develop data-based strategies.
All told, counting public spending, lending, fiscal
stimulus, and the government’s COVID-19 response amounted to P3 trillion or
15.6% of GDP from March 2020 to April 2022, according to the Department of Finance.
Inclusive Capitalism emerges as an
idea whose time has come. As these
partnership efforts materialized alongside government, a heightened sense of
social responsibility and a greater appreciation of stakeholder impact appeared
to manifest within private institutions. These have certainly long been present
within the Philippine private sector and have been building up for many years
through coalitions and alliances, such as the Philippine Business Groups
(FINEX, MAP, MBC, PCCI, PBEd, PBSP, etc.), and the Philippine Disaster
Resilience Foundation, among others.
Amidst COVID-19, further
strengthening its alignment to a stakeholder-centric model of doing business
became a compelling proposition to the private sector. As a tangible expression
of this, in November 2020, more than 20 business associations launched the
Covenant for Shared Prosperity, inspired by a similar movement of the Business
Roundtable in the United States.
PPPs AS A PLATFORM FOR NATIONAL
DEVELOPMENT PRIORITIES
The pandemic was certainly an
existential crisis. It’s almost impossible to consider anything else that may
be as severe, immediate, and all-encompassing in its impact on the nation and
its people. Yet there are disaster-proportion adversities already upon us that
are perhaps not so apparent, since they do not come in a big blow, but creep up
on us slowly — the proverbial thief in the night, or the lobster in the boiling
pot. I can point to subpar education and healthcare quality, outdated
infrastructure, poor child nutrition, lethargic FDI, poor ease of doing
business metrics, and many others, as fundamental and persistent challenges
that the country continues to suffer from.
There may be opportunities for
harnessing more PPP to address these, based on more long-term commercial
contracting commitments, rather than pure altruism for one-shot short-term
undertakings during an existential crisis.
Fortunately, we have in place one of
the more advanced PPP legal, regulatory, and governance frameworks that has
yielded globally cited examples of successful partnerships benefiting the
public. Since the passage of the Build-Operate-Transfer Law, we have seen
multiple examples of success in the expansion of our power, water, expressway,
and airport infrastructure.
T3 only cemented the value of this
engagement model with the private sector, given its tremendous contributions to
the fight against COVID and in bringing much-needed attention to our healthcare
space.
Looking forward, we
can build on these PPP successes in physical infrastructure and, in light of
the COVID crisis, the social sector to address some of these fundamental
problems that we face.
(To be continued. Part 2 covers
possible PPP interventions in health services and education and suggests
revisions in government mindset and policies for a more enabling PPP
environment.)
I am grateful for
the valuable input from Fred Ayala, Paolo Borromeo, Bill Luz, and Paolo
Monteiro. Mistakes are all mine, the author.
Romeo Bernardo served as finance
undersecretary during the President Cory Aquino and President Fidel Ramos
administrations. He currently sits on the boards of the Foundation for Economic
Freedom, the Management Association of the Phil. and the FINEX Foundation.
romeo.lopez.bernardo@gmail.com
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