THERE seems to be a consensus on the giant legacy of President Ramos. Nearly all columnists I read rank him in the highest tier of presidents and many like me consider him easily the greatest president the Philippines has had by a huge margin. Many note his maturity, temperament, work ethic, but most of all, his record. Thus, he left a huge legacy. Yet, it seems it has not resonated as much with the people at large, as compared to say President Cory Aquino when she passed away and changed the dynamic that propelled her son, previously not seen as a strong candidate for president, to become the favorite and perhaps the apex of combined necro and dynastic politics in the Philippines. That regressive politics seems to have become more widespread here than any other country. There is anecdotal evidence as three of our last four presidents are children of prior presidents. If polling holds, a good chance the next one too. Sadly, it is merely a reflection of what is the usual at provincial and local levels. President Ramos was a leader in that as well. He did not try to perpetuate a family political dynasty. Sorry for the digression as that is a topic for another time, except to note that even in that, Ramos was a positive exception to the dynastic tradition in Philippine politics.

The most knee-jerk negative reactions to President Ramos I have read on social media and comments on columns (including mine) are on his economic legacy. They seem to be primarily divided into four — he did nothing (a reflection of the ignorance of the person posting rather than the meritless argument, and even discussing it is like arguing with an anti-vaxxer on vaccines), all he did was privatize, he left us with expensive power, and by signing free trade agreements and the like hollowed out our manufacturing base (not that there was much beyond light manufacturing and assembly and much of that only existed thanks to protectionist laws). On the idiotic first complaint, please

see my column of August 2 on what the economic and social situation was in 1992 and what he accomplished in just one term. There is no other president who faced more challenges and did more to fundamentally address them in six years than President Ramos. Let’s get to the other criticisms.

Privatization only viable way

All he did was privatize. I am against the lazy economic consensus that the private sector is the answer to everything — no it is not. It may be the best choice for things with a profit motive, but that must be accompanied by appropriate regulatory supervision when we have a monopoly or oligopolistic environment in various utilities and industries. Defaulting to the private sector is far from effective in purely developmental work that has no near-term profit or is anticipatory of need rather than catching up with a bottleneck. Look at the infrastructure in Japan, Taiwan, Singapore, China and Malaysia. They are not just responding to bottlenecks and demand. They are both anticipating and spurring demand and development. Much of that is done purely by the government because there is no near-term profit and it is developmental. Don’t we agree we needed better infrastructure? Especially for irrigation and rural farm-to-market roads? Good luck getting any PPP for that on decent terms. Same with the Washington Consensus which Washington and the West did not follow when it was their turn to face a severe economic crisis in 2008.

So, while I am not a reflex intellectual ideologue whose view is incapable of nuance and analysis, I again look back empirically to what President Ramos faced in 1992 and why his privatization push then was not just appropriate, it was the only realistic option the country had. Funding was not readily available to the government. Our debt to GDP ratio was high and we were still under IMF supervision. We exited from that after 35 years during his presidency. It is not the situation today. Someone with an open and flexible mind can make a distinction between what was imperative then and may not be appropriate now. Privatization was the only viable way then. President Ramos did it with effectiveness and dispatch.

Telecoms, water, power, air transport

What did his privatization program accomplish? His government granted new telecom licenses that made phones available on demand. Haphazard water service in at least urban areas became reliable thanks to granting concessions to Manila Water and Maynilad to start with. Air transportation was liberalized with new entrants like Cebu Pacific becoming an alternative to Philippine Airlines. Now the Cebu Pacific slogan, “Any Juan can fly,” became a reality. To repeat my line from last week, happy you can make stupid and unsubstantiated posts and comments on social media from your cell phone? Thank President Ramos while you are at it.

On power costs and prices. By 1991, Metro Manila had 12-hour power outages, euphemistically called brownouts. There was a joke then, what did Filipinos have before candles? Electricity. One of the heads of the National Power Corp. (Napocor now PSALM) during President Cory Aquino’s term was even scapegoated and cruelly nicknamed “The Prince of Darkness.” How did it come to this? The first President Marcos to justify the overpriced nuclear plant discontinued other power generation projects of Napocor and there was no privately generated power at the time. Then the first President Aquino canceled the nuclear plant without having any funding or contingencies to replace the projected baseload plant. All while not repudiating or contesting the debt associated with the plant and selling the reactor for a puny percentage of its cost and value. What to do was what President Ramos faced in 1992.

We couldn’t wait years for new baseload plants, and frankly, the government was cash constrained unlike today. It took until 1993 for the government to even be able to issue a bond internationally. It was for a modest amount. President Ramos invited the private sector to bid for 10 fast-track power projects with take-or-pay contracts from the Napocor. That solved the problem in less than a year and we have not had any meaningful power outages since then though we are foolishly leaving it to the private sector and the free market only to build new capacity and our reserve margin varies between the minimum to be prudent and inadequate. Of course, that power was expensive but versus what? No power for half the day? President Ramos followed that up with bids for baseload plants like Sual and Ilijan which remain among the core baseload power plants today. If you don’t know the difference between baseload and peaking power plants, please look them up. It is critical to understanding cost and supplying power before making any comments. Peaking power plants can be completed quickly. Baseload plants take more time to put up in place and the capital cost is higher. This was done and over time power costs would go down as the fast-track peaking plants were reduced to running at peak and the baseload plants running full time. What happened to perpetuate relatively higher power costs were actions taken post-Ramos when subsequent administrations had to deal with selling off PSALM assets and making up for stranded costs.

The latter is a great euphemism for liabilities that cannot be matched to assets. One can argue the merits of that but that was what happened and post-President Ramos.

Not his fault

On AFTA and the other free trade agreements and so on. Yes, the country was and remains uncompetitive for manufacturing thanks to actions taken by the first Marcos and Aquino administrations to compete with our neighbors in attracting manufacturing and our power shortfall then expensive power and inadequate infrastructure were the knockout punches.

Corruption and red tape did not help either. Yet did we have a choice but to be part of these treaties? Did we want to be integrated to economic, trade and financial flows and be part of the mainstream or be left out? Did we want out via our own Brexit 30 years before the UK foolishly did? We did not have a choice other than to be part of what every meaningful country is part of. We did have a transition period before the various changes came into effect as many other countries were in similar or analogous situations. The transition periods were in some cases over 20 years from signing. Maybe if President Ramos had a second term, he could have prepared us better. The reality is not having a plan to deal with them is something to blame his successors and our political system on, as well as all of us. It is not President Ramos’ fault if his successors did not do what they had to do in that area. I do not belittle the challenge the country and his successors faced but that was not his to work on.

Rest in peace, President Ramos. I will always be appreciative of what you accomplished and grateful for how you improved the lives of so many, myself included.