Thursday, December 13, 2012


The JFC (Joint Foreign Chambers) are calling our attention for the nth time to our ambivalence re foreign investment. “During the 20 years since the important liberalizing reform of RA 6957, the Foreign Investments Act (1991) as amended by RA 8170 (1996), only two major changes have been made to the FINL (Foreign Invest Negative List): RA 8762, the Retail Trade Liberalization Act (2000) opening retail trade to foreign investors investing at least $2.5 million; and EO 158 (2010), the 8th FINL allowing 100% foreign equity in gambling in PEZA zones (by presidential proclamation).” [Manila Bulletin, 13th Nov 2012]

Is it about “Pinoy abilidad" – we open our economy some and keep it shut at the same time? Do these two measures (RA 8762 and EO 158) address the need of an underdeveloped economy – or that in fact they represent the investment policy that we badly need? Retail as an industry (is basically brick and mortar with practically nil value-added) generates 3% to 4% return versus manufacturing’s double digits. Ergo: where the multiplier effect or the economic reach is larger is obvious without even going through the arithmetic. And gambling is easy money but fraught with ethical issues . . . but not a problem: we see no evil, hear no evil and speak no evil? Or is the RH bill the greater evil? What about the inability to put to good use our God-given talents – and because of abject poverty poor Juan de la Cruz has long been dead in spirit? And how does gambling drive innovation and competitiveness – or retail, for that matter? And when we read that one of our largest conglomerates is yet to move beyond retail and demonstrate competitive advantage (and the others are in a similar boat?) that in fact tells us where we stand as a nation and as an economy: economic laggards yet rewarding to oligarchy that is laughing their way to the bank?

And the zarzuela goes on? “Flag carrier Philippine Airlines is in negotiations to acquire as much as a 50-percent equity in the national airline of the Cayman Islands in what could be the long-awaited solution to the downgraded aviation safety status that has hounded local carriers since 2008.” [Philippine Daily Inquirer, 13th Nov 2012.] It is not surprising that our largest enterprises mirror what we are: we side step a problem and then thump our chest because in the process we gain something even better?
All the Wal-Mart Moms, who never really understood that whole Cayman Islands bank account thing marking Romney not as the poster child for the 1 percent, but as the poster child for the .0001 percent of the 1 percent.” [Morris Daily Herald, 14th Nov 2012.] Cayman Islands are a red flag even to supposedly materialistic, greedy Americans! But do we recognize how circuitous a route we like to take instead of addressing our challenges head on? It’s the laws of physics! We can’t unwittingly water down the counterweight to a force especially when it is destructive. And it explains why we have become synonymous to sub-optimization? It is the kinder and gentler way of saying “synonymous to compromise” – ergo, corruption? And that is an inherent weakness we must address if we are to ever become a competitive economy – the direct way to address underdevelopment and thus poverty?

In the meantime, this is the kind of news we will wake up to in the morning: “Unemployment grew in the third quarter, the Social Weather Stations (SWS) said in a new report, reversing a steep fall seen three months earlier.” [Jobless rate up anew, Business Mirror, 15th Nov 2012.] “The latest rate of 29.4% -- recorded in an August survey and up from May’s 26.6% -- is equivalent to 11.7% jobless Filipinos."

It’s important to feel positive yet we can’t mirror a cellar-dwelling team taking for granted that they would get into the finals? No way Jose! Even the talented Lakers had to fire the coach!

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