Wasting a crisis

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January 23, 2026 | 12:00am

BSP Governor Eli Remolona Jr. said it right. We should turn our current challenging times into opportunities for reform. “Last year’s crisis can be the jolt we need to pursue the bold reforms we want.”

The Governor said reforms are essential to restoring investor confidence and sustaining strong economic growth. This is not new. My colleagues at the Foundation for Economic Freedom have long believed that we should never waste a good crisis as an opportunity to introduce reforms.

But our politicians are resistant to such reforms that reduce or eliminate their ability to steal from the government with impunity. I am afraid our politicians now feel the public anger over corruption has cooled down so it is back to normal.

BBM’s economic managers called a closed-door meeting with the business sector to announce what they call Big Bold Reforms that strengthen good governance and drive sustainable development.

Finance Secretary Frederick Go said in his keynote speech that they aim “to inspire optimism, encourage greater investment and move forward with confidence after the extraordinary year that just passed.”

Sec Deck Go further said that advancing these reforms is aligned with the government’s firm commitment to fiscal discipline and wise spending — principles that will continue to guide policy as the government works with the private sector to strengthen confidence and drive sustainable growth.

All very nice words. But in the context of a sub-zero trust rating for BBM, words are no longer enough.

For example, one of the announcements made was about the funding gap for the Comprehensive Automotive Resurgence Strategy program of about P4.32 billion that was vetoed by BBM in the 2026 budget, along with P250 million for the Revitalizing the Automotive Industry for Competitiveness Enhancement program.

The BBM veto was seen as the government reneging on an obligation that was part of an incentives program that made Toyota and Mitsubishi invest in some manufacturing here. With the strong negative backlash, BBM’s minions are now saying they will fund the obligation from unspent allocations from the 2025 DPWH budget.

Given the government’s murky reputation on the fulfillment of such incentives, it is not enough for DOF and DTI to say they have found the money to pay Toyota and Mitsubishi. They should have handed over the checks to the Japanese carmakers in the presence of 300 top business leaders. Babayaran din naman pala, bayaran na kaagad.

Right now, the promise to pay is neither here nor there. The track record of our government in such matters has not been good. Foreign investors frequently encounter significant challenges and delays in obtaining reimbursements for tax overpayments, particularly Value-Added Tax and import duties.

The European Chamber of Commerce of the Philippines and Japanese investors have previously raised alarms regarding the difficulty of getting VAT refunds, calling it a “black eye” for the investment environment.

These issues are often cited as a major pain point, causing cash flow problems and in some cases prompting investors to consider reducing operations or withdrawing.

If that’s in the past, Sec Deck should schedule handing over the checks to Toyota and Mitsubishi within the next week. Words no longer have value when trust has been badly eroded. Quick action is required.

The private sector business leaders may have been politely supportive of the economic managers but their skepticism about the government’s ability to execute their plans and produce promised reforms is still there.

Diwa Guinigundo, writing as an analyst for New York-based Global Source Partners, said that the promise of “big, bold reforms” to win over investors may not be enough unless deeper governance problems, not just regulatory delays, are tackled.

There is also a need for the administration to know when to be exuberant over a development and when to be simply realistic about it. This affects credibility. The Malampaya story is a good example.

BBM announced a successful drilling in the periphery of Malampaya as if it was a major find. It was not.

They made BBM look extremely ecstatic but it was obvious he had no idea what he was talking about. But it was good news to learn the investment risk taken in a step-out well proved there was some gas there.

But it is small. From what we know now, it is estimated to increase the existing field’s remaining recoverable volumes by about three percent of the original Malampaya reserves. It will not likely help reduce power rates significantly as press releases claim.

Two additional wells are to be drilled, Camago-3 and Bagong Pag-asa-1. The entire three-well drilling program is part of the $893 million investment of Ricky Razon to counteract the declining output from the original wells and ensure a continued supply of indigenous natural gas to the Luzon power grid.

The more promising gas field is the Recto or Reed Bank. It is the only long-term solution to avoid reliance on expensive imported LNG once Malampaya is fully depleted around 2027. But we need a deal with the Chinese.

BBM and his officials must learn it is better to underpromise but overdeliver. The reverse hits credibility, something they don’t have much left of. Repairing their damaged reputation entails a lot of trust building. Right now, they are messing things up some more just to earn a few brownie points.

Francisco Motors

Elmer Francisco wrote to say that PEZA, particularly its current director general, is very supportive of the ambitious Francisco Motors project. This is contrary to the information a Viber colleague of mine got about their financial capability to carry out the project. The Fiscal Incentives Review Board is another story.

I want them to succeed even if it means going to China to prove there is something wrong with our system for encouraging investors. Good luck, Mr. Francisco! Do well for the country!

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco