Friday, March 13, 2015

When do we put a stop to things . . .?

“Our bad news for 2014 comes from our group of Powerhouse five [or major subsidiaries] . . . During the year, BNSF disappointed many of its customers. These shippers depend on us, and service failures can badly hurt their businesses.” [Warren E. Buffett, Chairman of the Board, Berkshire Hathaway Inc., 2014 Annual Report]

That’s a great example of empathy that innovative and creative and competitive enterprises demonstrate via their business conduct. A business is only as good as the products and services it provides – i.e., it must respond to a consumer’s problem or need.

Empathy generates wealth even for a Buffett who must deliver tons of it to satisfy investors that have placed their trust in him, but how do we learn from it? We have to put a stop somehow to density, smog, bad traffic and the eye sore around us, for example? What about we start with Greenbelt 1? Because Greenbelt is our showcase and the attraction we want foreigners to appreciate – thus bet on or invest in PHL. And those can’t be the features and attributes of a competitive product that is PHL. “It’s more fun in the Philippines” must be founded on the right products and services!

A Brit who is a Makati and Bacolod resident and seems to like the Philippines wrote to a local paper to say he can see smog from his 22nd floor condo in Salcedo. But we like to applaud Greenbelt despite the teeny-weeny greenspace by the chapel? Shouldn’t we raise our standards as a people? Try the basement parking in Serendra at Bonifacio (that we call) Global City. Global means world-class? Thankfully parking in Aura is the saving grace. But try driving between Makati Business District and BGC! These are enclaves of the privileged few – and should we then wonder why Metro Manila seems hopeless?

“BNSF is, by far, Berkshire’s most important non-insurance subsidiary and, to improve its performance, we will spend $6 billion on plant and equipment in 2015. That sum is nearly 50% more than any other railroad has spent in a single year and is a truly extraordinary amount, whether compared to revenues, earnings or depreciation charges. Though weather, which was particularly severe last year, will always cause railroads a variety of operating problems, our responsibility is to do whatever it takes to restore our service to industry-leading levels. That can’t be done overnight. The extensive work required to increase system capacity sometimes disrupts operations while it is underway. Recently, however, our outsized expenditures are beginning to show results. During the last three months, BNSF’s performance metrics have materially improved from last year’s figures.” [ibid.]

In the meantime, in PHL, we read: “‘For March, if demand is as projected, if supply is as projected, and if the forced outages of 631 megawatts is still the same, we’re going to be okay,’ Petilla said. However, if the forced outages go way above 631 megawatts, may be 1,000 megawatts, then we have a problem . . . [T]hey were also looking at possible ‘minor glitches’ in other plants, like whether the 100-megawatt Millennium power plant would be able to go online on time and whether the 300-watt unit of GN Power would be back on the grid.” [Petilla hopes no more power plant breakdowns occur, Alena Mae S. Flores, Manila Standard Today, 2nd Mar 2015]

“MRT-3: Only half of trains running,” Jarius Bondoc, GOTCHA, The Philippine Star, 2nd Mar 2015. “That’s why riders have been waiting longer hours at stations since Transport Sec. Joseph Abaya raised fares last Jan. 4. More trains are bound to conk out. For, Abaya keeps contracting his Liberal Party mates for the shoddy maintenance.”

“MRT-3 was serviced for 12 years . . . by Sumitomo. In Oct. 2012 Sec. Abaya, U-Sec. Jose Lotilla, and then-MRT-3 general manager Al S. Vitangcol suddenly terminated the Japanese firm. In lieu was hired two-month-old, undercapitalized PH Trams, in joint venture with long-time LRT-1 manpower servicer CB&T. Why the experienced latter needed a seemingly worthless partner to get into MRT-3 later became clear. PH Trams consisted of LP members, an uncle-in-law of Vitangcol and a high official of a government agency. In ten months PH Trams collected P517.5 million.”

That is our reality; and what are we being told? “Multi-decade 6% GDP growth seen,” Kristyn Nika M. Lazo, The Manila Times, 26th Feb 2015. “The Philippines may sustain its current pace of growth in gross domestic product (GDP) at more than 6 percent for several decades, and could even step it up to 8 percent this year if oil prices stay below $60 a barrel, the head of the Department of Trade and Industry (DTI) said.”

“Economic growth is forecast to be sustained at above 6 percent if the government aims at level playing fields for investors, continued reform and calibrated liberalization . . . If we liberalize, there is long-term growth and competitiveness for our industries.”

If and more ifs is not reality? How can we learn reality? First we must learn to take in news – good and bad. [See above re Buffett.] Then we must seek them out. For example, “Benchmarking Australia-Asean food, agriculture trade,” Roland T. Dy, Mapping the future, Philippine Daily Inquirer, 2nd Mar 2015. “Australia is . . . an important market with a population of 24 million and a high income per capita of US $65,000 – among the highest in the world . . . The country is one of the largest agri-trade partners of Asean . . . Who are the Asean winners and losers?”

“The Philippines is an insignificant player in the Australian market. This was also confirmed by a Davao exporter who visited Sydney supermarkets in October . . . Thailand, Singapore and Malaysia are the largest Australian suppliers . . . The Philippines has the smallest two-way trade among the Asean countries . . . [T]he Philippines faces an uphill climb in the Australian market. For a while, the country was too focused on penetrating the protected (non-tariff barrier) Australian banana industry. Other fresh and processed products were neglected.”
“Export is a strategic avenue to expand markets and, therefore, rural incomes and jobs. But export is not a “walk in the park” if competitiveness factors such as cost, scale, quality and supply reliability, are not addressed. Export is the game of businessmen and entrepreneurs. But the government can help open up markets and improve goods logistics. Local governments can help by being enablers, rather than rent-seekers.”

And there is the reality of agribusiness – or enterprises and undertakings – for that matter. “Agrarian reform in the Philippines has failed because it has never been tried,” Agrarian reform can work, Ernesto Ordoñez, Philippine Daily Inquirer, 3rd Mar 2015. “The solution is for the government to follow the law and provide the necessary support services. But realizing the government’s poor track record in this area, the private sector must now get involved.”

“Economies of scale, optimal technologies and market access must be promoted aggressively by the private sector. There is no contradiction between economies of scale and small farmer land ownership. What needs to be done is to organize small farmers and consolidate them into an integrated agribusiness enterprise with the necessary economies of scale in production, financing and marketing.”

What about the government, can it be less dysfunctional? Indeed we must talk public-private partnership as though it's a mantra . . . but what we see is what we get? Impunity can’t run amok or “kanya-kanya” will push us to the abyss? And so while we're developing 30 or 50 industry roadmaps are there forces undermining our ability to prioritize and focus? For example, “Steel sector laments non-inclusive industry development priorities,” Manila Bulletin, 2nd Mar 2015. “The steel sector has already its roadmap, but it is not enough. A roadmap is a continuing tool of where we are, where we want to be and how to get there . . . The steel industry roadmap showed that the Philippines is the lone country among five ASEAN countries . . . with no domestic steel industry to speak of.”

We want to help ourselves? Then we can’t succumb to painting a rosy picture when we can be are our own worst enemy? Nor should we keep using the crutch “if and more ifs” – it’s so lame! We have to start chipping away at feudalism and backwardness – if we can't make a dead-stop – to overcome regional laggard!

Poverty, that we all like to headline, is not the enemy that we keep fighting! Why do the Singaporeans not want to touch populism with a ten-foot pole? They are a First-World nation for a reason? Try cause and effect?

When do we put a stop to what is wrong – and focus on the right things? Rome wasn’t built in a day as Buffett acknowledged, but demonstrates his commitment to empathy by putting his money where his mouth is – beyond being holier-than-thou (like our concern for poverty?) he is pursuing more wealth, tons of it!

No comments:

Post a Comment