Action club

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Mr Perfecto and Justin
Makati Business Club Executive Director Peter Perfecto (left) with Inside Investor’s research analyst Justin Calderon at a meeting in Manila.

The Makati Business Club (MBC) represents over 800 CEOs and senior executives associated with almost 450 of the largest and most dynamic corporations in the Philippines. MBC Executive Director Peter Perfecto, formerly executive director of Philippine Business for Education, an organisation set up by members of the business community to push for reforms in the Philippine education system, has been at his post for over two years.

Inside Investor’s research analyst Justin Calderon asked him how the business community plans to tackle the appreciating peso and which sectors can lead the Philippines’ job creation machine.

Q: A US delegation including top-executives of Citigroup, Chevron, Coca-Cola, General Electric, JP Morgan Chase, Procter & Gamble, Federal Express among others came to Manila in January 2013. The Makati Business Club helped organise discussions with Philippine business leaders. What was the outcome?

A: This was done in conjunction with a board meeting held by the US Philippine Society, the second such meeting after the society was launched in 2012. The first meeting was held in Washington during President Aquino’s visit to the US. The US delegation met with government officials, including our president, as well top business leaders from major companies such as Ayala Group. Different speakers representing the heads of the Philippine private sector spoke about the mining, BPO and manufacturing sectors to give the delegation an update on the opportunities, as well as the challenges that lie ahead.

Q: The appreciation of the peso has brought the manufacturing and BPO sectors into jitters. How are CEOs tackling this issue?

A: The MBC has always rated our central bank very highly, and among members of our organisation there is confidence that the central bank can maintain stability. It is, however, a concern in the business community and we are engaging in dialogue with the government. In fact, business groups plus monetary and economic officials from the government will discuss this matter in a dialogue two weeks from now [mid-March 2013].

Q: In line with Aquino’s ambitions to address socio-economic inequality in Mindanao, what action is the MBC taking?

A: We are working with the Mindanao Business Council and the Davao Chamber of Commerce, and we were also involved with the Autonomous Region in Muslim Mindanao (ARMM) Business Council, but they have not been very active recently. The MBC is looking at road maps and has plans to hold regular conferences on the island’s issues. We helped organise a visit by the Secretary of Finance to Davao for a conference in 2012, and Ayala Group has had two meetings with the business community in Manila showcasing success stories from Mindanao. They named vibrant companies of the island, such as La Frutera, an agribusiness company that is the largest exporter of bananas in the Philippines and runs plantations in ARMM, with Muslims making up 95 per cent of its employees, mostly rebel returnees from the Moro Islamic Liberation Front.

Q: Though the Philippine economy expanded 6.6 per cent last year, many Filipinos lament the job situation. What business sectors are likely to be the most active in job creation, looking forward?

A: First and foremost, tourism will definitely play a large role, mainly because we believe that our tourism industry has never maximised its potential due to infrastructure constraints. Additionally, the tourism sector is a perfect match for our culture and the people we have. We already export a lot of people to cruise liners and we have a brand of hospitality that can naturally offer foreigners the care they are looking for. A number of hotels and airports are also springing up in the future, speaking volumes for this sector’s potential. Our BPO industry is the other high-potential sector because they are in their second five-year road map, with well-projected numbers set to hire more and more Filipinos. In 2013, the Business Processing Association of the Philippines (BPAP) aims to hit 1 million jobs.

Q: Foreign investors often bemoan red tape in the Philippines. How is the MBC influencing policy to make the country a more attractive investment destination for foreigners?

A: We are doing this through the National Competitiveness Council (NCC), which is chaired by standing Department of Trade and Industry Secretary Gregory Domingo and co-chaired by Guillermo (Bill) Luz in the private sector, who was previously the executive director of the MBC for 15 years. A large part of what they are doing is addressing the Ease of Doing Business ranking, reducing the number of procedures required and the amount of days needed for handling permits. The MBC is working closely with the NCC on competitive issues. Together, we want give a major push to improve our Ease of Doing Business ranking. Under Mr Luz, the NCC also runs working groups that address corruption, judicial reform, education and a number more. Crucially, a government agency and private sector representative chair all of these groups, that way the government and private sector can work together.

Q: The MBC has supported a bill that mentions the legalisation of abortion. What other social issues is the group tackling?

A: We did not support this, but we do support the Responsible Parenthood and Reproductive Health Act of 2012. We want this to be about choice. If a family is poor, then they must have access to contraceptives. That is our main point. We have insisted that there is nothing in the bill that requires corporations to teach safe sex or require families to adopt contraceptives. It should be voluntarily, but access should also be given. Other social issues we push for include the Freedom of Information Bill, but it has not been passed, though it did get to a third reading in senate. President Aquino supported this bill when he was a senator, but in fact the current government has concerns over it and has not pushed it as far as we would want. We have committed to continue pushing for it in the future.

Q: As a club that represents the unification of the private sector over lobbying, does lobbying still occur despite it? In what volume and form?

A: I don’t think the business community is unified. But the MBC does enjoy prestige and trust. We are close with this government and that’s because we are supportive of its good governance and anti-corruption thrust. In the past, the MBC publicly called for two presidents to resign, including former Presidents Joseph Estrada and Gloria Arroyo. In terms of lobbying, I think businesses here tend to be more willing to wait and see who wins an election, then try and work with whoever wins. This has been the more general tendency. It’s organisations like the MBC that have gone against the grain. But there is a danger in this: Once we fired against former President Gloria Arroyo, we were excluded from everything. The larger part of the business community waits and observes. They shy away from taking a strong position against the president, and aim to affiliate themselves with winning parties. Businesses tend to be more active in sectoral lobbying.

Q: Finally, what other organisations are similar to the MBC in the Philippines?

A: The Mindanao Business Council, the Cebu Business Club, the Iloilo Business Club and the Management Association of the Philippines.

 

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Reading Time: 5 minutes

Makati Business Club Executive Director Peter Perfecto (left) with Inside Investor’s research analyst Justin Calderon at a meeting in Manila.

The Makati Business Club (MBC) represents over 800 CEOs and senior executives associated with almost 450 of the largest and most dynamic corporations in the Philippines. MBC Executive Director Peter Perfecto, formerly executive director of Philippine Business for Education, an organisation set up by members of the business community to push for reforms in the Philippine education system, has been at his post for over two years.

Reading Time: 5 minutes

Mr Perfecto and Justin
Makati Business Club Executive Director Peter Perfecto (left) with Inside Investor’s research analyst Justin Calderon at a meeting in Manila.

The Makati Business Club (MBC) represents over 800 CEOs and senior executives associated with almost 450 of the largest and most dynamic corporations in the Philippines. MBC Executive Director Peter Perfecto, formerly executive director of Philippine Business for Education, an organisation set up by members of the business community to push for reforms in the Philippine education system, has been at his post for over two years.

Inside Investor’s research analyst Justin Calderon asked him how the business community plans to tackle the appreciating peso and which sectors can lead the Philippines’ job creation machine.

Q: A US delegation including top-executives of Citigroup, Chevron, Coca-Cola, General Electric, JP Morgan Chase, Procter & Gamble, Federal Express among others came to Manila in January 2013. The Makati Business Club helped organise discussions with Philippine business leaders. What was the outcome?

A: This was done in conjunction with a board meeting held by the US Philippine Society, the second such meeting after the society was launched in 2012. The first meeting was held in Washington during President Aquino’s visit to the US. The US delegation met with government officials, including our president, as well top business leaders from major companies such as Ayala Group. Different speakers representing the heads of the Philippine private sector spoke about the mining, BPO and manufacturing sectors to give the delegation an update on the opportunities, as well as the challenges that lie ahead.

Q: The appreciation of the peso has brought the manufacturing and BPO sectors into jitters. How are CEOs tackling this issue?

A: The MBC has always rated our central bank very highly, and among members of our organisation there is confidence that the central bank can maintain stability. It is, however, a concern in the business community and we are engaging in dialogue with the government. In fact, business groups plus monetary and economic officials from the government will discuss this matter in a dialogue two weeks from now [mid-March 2013].

Q: In line with Aquino’s ambitions to address socio-economic inequality in Mindanao, what action is the MBC taking?

A: We are working with the Mindanao Business Council and the Davao Chamber of Commerce, and we were also involved with the Autonomous Region in Muslim Mindanao (ARMM) Business Council, but they have not been very active recently. The MBC is looking at road maps and has plans to hold regular conferences on the island’s issues. We helped organise a visit by the Secretary of Finance to Davao for a conference in 2012, and Ayala Group has had two meetings with the business community in Manila showcasing success stories from Mindanao. They named vibrant companies of the island, such as La Frutera, an agribusiness company that is the largest exporter of bananas in the Philippines and runs plantations in ARMM, with Muslims making up 95 per cent of its employees, mostly rebel returnees from the Moro Islamic Liberation Front.

Q: Though the Philippine economy expanded 6.6 per cent last year, many Filipinos lament the job situation. What business sectors are likely to be the most active in job creation, looking forward?

A: First and foremost, tourism will definitely play a large role, mainly because we believe that our tourism industry has never maximised its potential due to infrastructure constraints. Additionally, the tourism sector is a perfect match for our culture and the people we have. We already export a lot of people to cruise liners and we have a brand of hospitality that can naturally offer foreigners the care they are looking for. A number of hotels and airports are also springing up in the future, speaking volumes for this sector’s potential. Our BPO industry is the other high-potential sector because they are in their second five-year road map, with well-projected numbers set to hire more and more Filipinos. In 2013, the Business Processing Association of the Philippines (BPAP) aims to hit 1 million jobs.

Q: Foreign investors often bemoan red tape in the Philippines. How is the MBC influencing policy to make the country a more attractive investment destination for foreigners?

A: We are doing this through the National Competitiveness Council (NCC), which is chaired by standing Department of Trade and Industry Secretary Gregory Domingo and co-chaired by Guillermo (Bill) Luz in the private sector, who was previously the executive director of the MBC for 15 years. A large part of what they are doing is addressing the Ease of Doing Business ranking, reducing the number of procedures required and the amount of days needed for handling permits. The MBC is working closely with the NCC on competitive issues. Together, we want give a major push to improve our Ease of Doing Business ranking. Under Mr Luz, the NCC also runs working groups that address corruption, judicial reform, education and a number more. Crucially, a government agency and private sector representative chair all of these groups, that way the government and private sector can work together.

Q: The MBC has supported a bill that mentions the legalisation of abortion. What other social issues is the group tackling?

A: We did not support this, but we do support the Responsible Parenthood and Reproductive Health Act of 2012. We want this to be about choice. If a family is poor, then they must have access to contraceptives. That is our main point. We have insisted that there is nothing in the bill that requires corporations to teach safe sex or require families to adopt contraceptives. It should be voluntarily, but access should also be given. Other social issues we push for include the Freedom of Information Bill, but it has not been passed, though it did get to a third reading in senate. President Aquino supported this bill when he was a senator, but in fact the current government has concerns over it and has not pushed it as far as we would want. We have committed to continue pushing for it in the future.

Q: As a club that represents the unification of the private sector over lobbying, does lobbying still occur despite it? In what volume and form?

A: I don’t think the business community is unified. But the MBC does enjoy prestige and trust. We are close with this government and that’s because we are supportive of its good governance and anti-corruption thrust. In the past, the MBC publicly called for two presidents to resign, including former Presidents Joseph Estrada and Gloria Arroyo. In terms of lobbying, I think businesses here tend to be more willing to wait and see who wins an election, then try and work with whoever wins. This has been the more general tendency. It’s organisations like the MBC that have gone against the grain. But there is a danger in this: Once we fired against former President Gloria Arroyo, we were excluded from everything. The larger part of the business community waits and observes. They shy away from taking a strong position against the president, and aim to affiliate themselves with winning parties. Businesses tend to be more active in sectoral lobbying.

Q: Finally, what other organisations are similar to the MBC in the Philippines?

A: The Mindanao Business Council, the Cebu Business Club, the Iloilo Business Club and the Management Association of the Philippines.

 

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