Rep. Joey Sarte Salceda (2nd District of Albay)
Secretary Fortunato Dela Peña, my friend and partner in science-affirming governance, Undersecretary Rowena Christina Guevarra, Undersecretary Sancho Maborrang, Regional Director Rommel Serrano, members of the HEROES Award Committee, officials of the Department of Science and Technology, fellow workers in government, our partners in the private and civil society sectors, members of the academe, friends, good day.
I am beyond honored by this recognition you are bestowing upon me today – the inaugural DOST Heroes Award. I myself am not a scientist by training or profession, but I have been a graduate, teacher, and practitioner of the management – the science of rational decision-making, the ethos that nation-building requires. I take this award as affirming my commitment to evidence-based, data-driven, and science-informed decision-making, for our institutions, for government, and for society at large.
I also take this award as a platform for the kind of policies that our next administration will need to pursue.
Apart from being a practitioner of management, I am also an economist by training and practice. The first principle of economics is that resources are scarce. All other economic events and behaviors – price, competition, trade – begin and end on that premise. But there is a magic wand that has historically helped humanity overcome the limitations of scarcity.
In 1798, Thomas Malthus published his Theory of Population in “An Essay on the Principle of Population.” Malthus believed that the population could be controlled in order to balance the food supply through positive checks and preventative checks. He believed that food production will not be able to sustain growth in the human population. This, according to the theory, would result in disease, famine, war, and calamity.
If Malthus were right, then, as the population grows, so too should human misery. Malthus, at the time, was seeing the grime and drudgery of the Industrial Revolution, when he wrote his thesis. Instead, in the 21st Century, as human population continues to rise, global living standards have never been better. How come?
Malthus was not able to see what was about to come as he was writing his famous essay; for after the First Industrial Revolution came the Second Industrial Revolution: what is now called the Technological Revolution, which came about fifty years after.
The Technological Revolution was characterized by rapid developments in scientifical and technological progress. That surge enabled societies to overcome the limits of scarce resources – allowing them to support exponential population growth while creating then-unseen wealth and improvements in living conditions.
That is the magic wand in economics: science and technology. For while land, labor, and to some extent, capital will always be limited; human ingenuity and the possibilities we can imagine with human knowledge have no bounds. As I emphasized during my speech to the Economic Development Cluster, on promoting the Science for Change Program, the wealth of nations is in science.
It is thus both an honor and an irony for me to be an economist being honored by scientists, for if anything, it is we economists who should be honoring scientists. Now that I am in your debt, however, allow me to repay you by using this platform to promote scientific and technological development in the country and to boost the programs and policies of the DOST.
Before this, allow me to make some predictions for the next decade, most of which will be presided over by the President-elect.
One, trade in services will not only outpace, but will overwhelm trade in goods. We are now a service-based economy, with services accounting for 61.42 percent of GDP. With such an economic structure, you must have a smart society, populated by smart people. We need a labor force of highly technical workers who do things efficiently – in time and cost – and who can solve problems and create value for the world. They have to be scientifically-educated, technologically savvy, and equipped with research and the technology that can compete regionally and globally. To put it bluntly, a service-based economy will not survive scientific, technological, or educational weakness. We cannot suffer fools gladly.
Two, where trade in goods is concerned, manufacturing will increasingly rely on higher-tech or higher-order inputs. You will need better semiconductors, better processors, and more advanced and more precise machines at an increasing pace. That means services – especially research and development – will also be the major input in goods. To respond to that, you will need to create and attract a pool of scientific talent in manufacturing, engineering, construction, and other areas that are essential to domestic and foreign trade in goods.
Third, and this is do-or-die, our agricultural production must catch up with population and demand growth during this decade, or we will see massive social disharmony in the next – rebellion in the countryside, and crime in the cities.
This view of the future makes very clear that our nation’s survival depends on science and technology.
One would think that, with science being such a make-or-break matter for the Philippines, we would devote our resources to this critical aspect of our national life. Indeed, the global average investment in research and development is 2.2% of GDP. UNESCO says you need to invest at least 1% of GDP towards it.
The Philippines instead invests just around 0.2% of its GDP on research and development, with the Duterte administration already being the biggest investor in science and technology since 1986.
As principal author and sponsor of the CREATE Law, I made sure that research and development takes primacy of place among the national objectives that tax incentives are given for. I also made sure that the Strategic Investment Priorities Plan integrated the Pagtanaw 2050 vision of the DOST. High-tech industries will get the most tax incentives from the law, while research and development expenses get an enhanced tax deduction. This should encourage private investment in science and technology.
However, private investment is not and will never be enough for socially-imbued scientific development. Private investments in science always come with a certain expectation of immediate or foreseeable profitability or commercial value. That is not always what society needs.
In fact, much of our highly essential computing and digital technology were not the result of commercialized research, but were from research geared towards the academe or national defense. Much came out of espionage purposes during World War II. Much, still, came out of the Space Race, during the Cold War.
The historic achievement of this decade – the rapid development of vaccines – was built on research from the academe: the development of active mRNA made out of a laboratory in Harvard University in 1984. The commercially available COVID-19 mRNA vaccines came only 38 years after that discovery. So, breakthrough scientific development will not come from myopic commercial R&D. It will come from publicly funded, institutionally generated research without (at least without yet) an explicitly commercial or private interest.
That is why I filed and championed the Science for Change Act, which I hope the next administration will prioritize. Besides setting a national framework for scientific development, the proposal commits the Philippines to a public spending program for science and technology. The Science for Change framework is now being implemented by the DOST, and the Science For Change Facility that we just broke ground for a few hours ago here in Legazpi City will concretize this framework into actual innovation and support for Futures Thinking.
Given our current starting point, and assuming the next administration enacts the bill on its first year, by the end of its term, we can reach the 1% of GDP prescribed by the UNESCO as the minimum R&D investment for a country to be competitive.
The noisemaking may have worked a bit. The 2022 research and development sector budget is 18% higher than it was in 2021. But we need to grow our R&D budget faster than that. It has to increase by 600% to get to a competitive level. In other words, the budget needs to compound by around 30% instead of 18% every year.
At the same time, we need to invest heavy research and development on three areas where we do not have adequate scientific exposure: agriculture to feed our people, mining and commodities to feed our industries, and energy to feed our economy.
On agriculture, the growth in agricultural output has to outpace the growth in population and income combined. That means agricultural output has to grow by around 9% every year for the country to stop bleeding money to imports.
Currently, we import around 15.1 trillion metric tons of plant products to support our population and economy. With our arable land at only 18.1 percent, below our regional competitors and import sources of Vietnam (at 22.5 percent) and Thailand (at 32.9 percent), we need to maximize yield with whatever farmland we currently have. Add to that the pressures of land conversion due to population growth and urbanization and we cannot afford to maintain low-yield or idle farmlands.
To that end, I am suggesting to the next administration that we review the Rice Competitiveness Enhancement Fund programs to include some flexibility for research, technology, and precision agriculture programs in revenues in excess of the earmarked P10 billion. I am also calling on the DOST, PhilMech, and PhilRice to work more closely together, particularly on climate sciences and biosciences, so that we avoid disasters such as reports of hybrid seeds causing greater incidences of Tungro virus.
We also need to produce more food out of our waters, given the limits of arable land. We may need to invest more research and development on seaweed farming, both as food and as marine conservation efforts. Fish output has also stagnated and I fear it will continue to do so due to climate change, unless we invest in R&D towards more environmentally-friendly but efficient fish production. We need to import around 60,000 metric tons of fish this year to cover our sufficiency gap. That is outrageous for one of the world’s most marine-rich countries.
Second, we are seeing a decade of high commodity prices, including extractives. I commend President Duterte for lifting the moratorium on new mining agreements, but we need to do much more to keep mining fiscally rewarding, commercially viable, and ecologically sustainable.
Most of our metallic exports are still in ore form. That means value is added and created to our mineral products elsewhere. Our communities bear the brunt of the ecological damage, but the economic value is created elsewhere.
I will be proposing an export tax on mineral ore, so that we can at least gain some revenues out of this dismal practice. After all, it is economic idiocy to export ore and then import steel or processed minerals in batteries and other metals. Our industries will always be hungry for such processed mineral products. Still, without the technology and industrial ecosystem to process ore domestically, miners will be happy to just pay the export tax and ship ore out of the country anyway. Taxation will not be enough, and the DOST must invest in mining and metallurgical technology to encourage the processing of much-needed minerals here.
I make this emphasis because in a decade of high global commodity prices, especially for metals and fuels, the only balancing factor for our economy is to at least benefit from higher prices in the commodities we produce and export.
Third, we need to invest in energy independence. It has both economic and geopolitical consequences.
The economic front is obvious. A service-based, digital economy cannot function without reliable energy sources. Our energy needs grow by around 8% every year, outpacing even our own economic growth. Over the past two years, we constructed around 4000 MW of new generation projects. The problem is we may need to retire more coal power plants as we meet our nationally-determined commitments to COP26. For starters, our coal power output is 11,000 MW, around 52% of power generation in the country. Although I assert that the country has a right to pollute, given its measly per capital carbon emissions, at some point, our dirty energy generation will have to go.
That is why I am very pro-nuclear energy. It is the cleanest, most reliable energy source currently available to mankind. To me, it is our best chance at medium-term energy sovereignty. That is why I am championing the Philippine Nuclear Regulatory Commission, in preparation for a deeper dive into nuclear energy.
That has geopolitical consequences. Let Russia-Ukraine be the cautionary tale. Because Germany rolled back its nuclear energy program over the past decade in favor of natural gas from Russia, its ability to sanction Russia has been severely curtailed by its own economic dependence on Russian gas. We, too, are moving towards imported Liquefied Natural Gas or LNG in our transition from coal and as Malampaya runs out. Let us proceed with caution and our eyes wide open.
These are the concerns that keep me up at night and keep me moving as a legislator. I hope no one misconstrues my words of caution and advice as doomsaying. If anything, I view our ability to respond to these challenges with optimism. Bad news is only bad news if you can no longer do anything about it. We can still respond to our challenges. Let us do so vigorously.
Our response must be informed both by science and technology and the scientific ethos. As in the scientific method, we policymakers and workers in government must learn to work based on well-informed and evidence-based guesses, fail fast, learn fast, and try again. Most post-colonial development success stories – from Singapore to Botswana, from Poland to the Baltics, from Costa Rica to South Korea – happened because the government committed to, and decided with science.
Dios Mabalos po, for this award, and mabuhay ang Pilipinas.
