“We are now ranked among the most corrupt in the world. 113th among 180 countries, the lowest rank for the Philippines since 2011 when it placed 129th.
“More bad news: The Fourth quarter 2019 Social Weather Survey found that 54 percent of families consider themselves as “mahirap” or impoverished. That is 12 percentage points above (the) 42 percent in September 2019.
“The estimated numbers of self-rated low-income families are 13.1 million for December and 10.3 million for September. The latest self-rated poverty rate is the highest since the 55 percent in September 2014.” ["Teflon Duterte," Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 29th Jan 2020]
Poverty equals poorly educated children too. “You will be distraught to know that Filipino children came out dead last among its international peers, according to the evaluation of the Program of International Student Assessment (PISA). It suggests that our children are among the least learned and future-ready on the planet.
“[The] country was last among ASEAN-6 as Singapore, Malaysia, Indonesia, and Thailand took the 10th, 22nd, 41st, and 43rd spot, respectively. Switzerland, Denmark, and Sweden topped the rankings.” [How competitive is the Filipino workforce (?), Andrew J. Masigan, THE CORNER ORACLE, The Philippine Star, 29th Jan 2020]
And, of course, “Metro Manila traffic is 2nd worst in the world—report.” [Inquirer.net, 29th Jan 2020] “The economic cost of transportation in Metro Manila has risen to P3.5 billion pesos a day, and without interventions, the situation can get worse to P5.4 billion a day by 2035."
The good news: “JICA is supporting the Philippines ease traffic congestion to help make urban areas like Metro Manila and surrounding areas more livable and encourage investments into the Philippines. Transportation, among other things, is an element that can help the Philippines sustain its growth and economic gains.
“Aside from traffic management, JICA is also supporting the Philippines’ development agenda under the ‘Build. Build. Build.’ program. It includes the 38-kilometer North-South Commuter Railway for Malolos-Tutuban and the 25-kilometer Metro Manila Subway connecting Mindanao Avenue to FTI in the south and farther to the Ninoy Aquino International Airport, among others to also address traffic gridlock and attract more investments.” [JICA press release, 20th Sep 2018]
Let’s pause with the writer because the blog is going on its 11th year. And it is shared with scores of influencers and opinion-makers. Should we ask ourselves if this country that we profess to love being patriots on the right track?
The blog addresses the economy, but it is not about economics per se. And so many of us in the economic mainstream often wonder why the blog chooses the “glass as half empty” when we are doing well.
We have a challenge here and there as any nation does, but we can fix them with our simple common sense. But can we?
Take BBB or the administration’s “Build Build Build” mantra. And the Central Bank managing inflation.
The writer has lived in the US for over 30 years. The above model is very apt for this superpower. But where is our country?
We have a structural problem, if not a disaster waiting to happen.
We can’t “quick-fix” our challenges. A consumption economy is not the answer.
Consider: “CONSUMPTION will remain the economy’s main prop amid global headwinds and calamities, with investment remaining clouded due to uncertainty surrounding corporate tax reform and regulated industries like water, participants at a First Metro Investment Corp. (FMIC) briefing said.
“At FMIC's Economic and Capital Markets Briefing, the firm’s chairman Francisco M. Sebastian said: ‘What held us together last year is consumption. And the next few years could be the ‘great decade of Filipino consumers’ due to lower unemployment, underemployment, and poverty rates.” [“Consumption-led boom seen continuing into 2020 — FMIC,” BusinessWorld, 14th Jan 2020]
Consumption is our decades-old story. It is common knowledge that it is driven by an economic model that is the product of “pwede na ‘yan.” Think OFW remittances, the BPO industry, and, more recently, POGO that is propping up the property market.
With due respect to our economic managers, it is this economic model that explains why we’ve been left behind by our neighbors despite robust growth in the 6%-7% range, and why poverty and regional laggard have become our brands.
Of course, for our top 8 listed companies that are in the Forbes list, that is good news. Also, for us in the elite class. But what cruel irony. Our biggest enterprises combined can’t match the output of Vietnam’s largest company.
And for those of us proud to invite foreigner-friends over to enjoy our beautiful country, we expect them to take the good with the bad, as in we’re a third-world country. Don’t expect 5-star facilities in our many exotic isles where they can frolic in the sun and be one with nature.
Let’s resume the theme of this posting.
Vietnam – that came after the Asian Tigers and China – is on a trajectory that will make them wealthier than Singapore. What is common among these neighbors?
They pursued industrialization relentlessly by “begging for Western money and technology.” In other words, they are our opposite, being parochial and insular.
“The fact of the matter is that outward-looking economies have the best and most efficient bureaucracies. Taiwan, Singapore, Japan, Hong Kong, and China are all outward-looking economies, and they rely on their competent administrations to nurture their outward-looking economies forward.
“Frankly, I don't know if there’s a solution to our dysfunctional, inefficient, and corrupt bureaucracy. The incentives in our political and economic systems don’t point toward bureaucratic reform. What I do know is that: (a) breaking up the country’s highly concentrated markets and getting more competition, especially from foreign investors, and (b) an emphasis on export tradables (manufacturing and agriculture) will raise the demand for better governance.” [“Our dysfunctional bureaucracy as a binding constraint,” Calixto V. Chikiamco, Introspective, BusinessWorld, 19th Jan 2020]
“Given the technological changes that have occurred in the last five decades, the idea of an all-around self-sufficient industrial development, as articulated by the Filipino First senators in the 1950s-1960s, may not be practical today. However, the idea of building a strong nation with a strong industrial and agricultural base remains relevant, especially in an unpredictable VUCA world that we are living in.” [“Rebalancing development strategy: Filipino First in an uncertain and volatile world,” Rene E. Ofreneo, LABOREM EXERCENS, BusinessMirror, 16th Jan 2020]
Sadly, we take our instincts for granted, blind to the damage they inflict: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.
They are the root of our inability to develop a growth mindset and forward-think. In other words, a fixed mindset is akin to a death sentence, as in a caste system. It neuters personal responsibility and entitlement prevails.
Worse, it nourishes our love for tyranny.
While altogether a different topic, it has implications on our worldview and how we frame foreign relations. For example, perfection is not of this world, and the question is, how do we determine who our friends should be?
Tyrannical systems come from a very narrow perspective, if not a fixed mindset. On the other hand, pluralism relies on the marketplace of ideas. It is beyond specialization. It explains how forward-thinking is achieved, as in innovation being multidisciplinary.
It is not anarchy, either. It demands leadership that is nurturing and encourages idea-generation, yet brainstorming remains disciplined with the desired outcome defined and embraced by the team.
In short, it is the best of all worlds. And in the case of the Philippines, our failure to leverage Western money and technology doomed our future, and it is playing out today.
Have we learned our lesson? How come we chose not to run with the ball of Arangkada? It represents the thinking of a cross-section of society, i.e., multidisciplinary, with the participation of the international community to boot. Does it magnify how wanting we are in our perceptive judgment?
Our instincts explain why the Philippines is innovation-challenged and, worse, why we can’t produce visionary leadership like a Lee or a Mahathir or Deng.
“A President who vowed that ‘not even a whiff of corruption’ would be tolerated in his term will not like what an international corruption watchdog has determined halfway through his tenure—that he’s failing at the promise big-time.
“[Dirtier] and dirtier the country’s affairs seem to be getting.” [“Legacy: more corruption,” EDITORIAL, Philippine Daily Inquirer, 30th Jan 2020]
Can we point to our “island mentality” like the British?
“Britain’s understanding of itself – its identity and its place in the world – is deeply rooted in being an island. Yet Great Britain is not an island; it is made up of at least 5,000 islands, around 130 of which are inhabited. But this geographical reality has often been ignored because the island, in the singular, brings with it the attractive characteristics of inviolability, steadfastness, and detachment. As one clergyman put it in a sermon praising the Act of Union with Scotland of 1707: ‘We are fenced in with a wall which knows no master but God only.’
“Shakespeare bequeathed a trove of vivid images of England in John of Gaunt’s speech in Richard II: ‘This little world’; ‘This blessed plot.’ But there has also been an English ambivalence about islands. In a comparably famous passage, John Donne warned of the dangers of separation in his Meditation XVII: ‘No man is an island, entire of itself, every man is a piece of the continent, a part of the main.’
“Islands don’t lend themselves to grand plans and big theories – the weather is too fickle.” [“Island mentality: how the Hebrides shaped British culture,” Madeleine Bunting, The Guardian, 8th Oct 2016]
Indeed, we are between a rock and a hard place. But where do we begin?
Whether we are in the elite class or not, we have the personal responsibility to put community and the common good above our vested interests and ego needs. See above why entitlement prevails.
Put another way, beyond our instincts of charity, is the obligation to teach Juan de la Cruz how to fish. For example, beyond a service-consumption economy, we must step up to the plate and be an industrial-investment economy.
It is high time we recognize the shortsightedness of addressing poverty per se. We are an underdeveloped economy. Recall the OFW phenomenon was a stopgap, to overcome unemployment, not a sustainable intervention.
Poverty is the effect, not the cause of our underdevelopment. It is imperative to distinguish reactive from proactive and, likewise, to forward-think and develop a growth mindset.
If that is too abstract, it is because of our parochialism and insularity. We can’t recognize our crying need to benchmark and learn from our neighbors.
For example, the higher we are in the hierarchy, the greater the challenge because leadership demands more, not less. And the lower we are, the higher the responsibility to demand transparency.
If Marcos got away with murder, we must stop the vicious circle. The sense of community and the common good demand that we do. It is called patriotism.
Gising bayan!
“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]
“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]
“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]
“National prosperity is created, not inherited. It does not grow out of a country's natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]
“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]
“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]
“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]
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