Consider the story of the one-time icon of American industry: “In 1956, GE bought a parcel of leafy land about an hour north of New York City and established its Crotonville management training center. GE claims it is the oldest corporate university in the country. The first seminar Crotonville offered was 13 weeks long, which sounds absurd today—no modern manager could spend a full quarter of the year solely on professional development. But that initial course paid dividends: Among its students was Reginald Jones, a future GE CEO.” [GE’s Crotonville management campus: Where future company leaders train. (slate.com)]
Then consider: “General Electric—a household name since its founding by Thomas Edison in the 19th century—has been headed the wrong way for decades. After legendary CEO Jack Welch grew GE into a banking titan with a peak market value of $594 billion in 2000 (from less than $15 billion when he started in 1981), the following stock slide has wiped out more than half a trillion dollars in shareholder value. That was about the same as erasing Warren Buffett’s Berkshire Hathaway Inc. The dramatic decline under former CEO Jeffrey Immelt continued under John Flannery and now Culp, cutting the market value to about $75 billion as of mid-January. Over the same period, the company’s net leverage—debt as a multiple of a measure of earnings—has nearly doubled.
“After Immelt stepped down as CEO in August 2017, John Flannery took the reins. He was gone a little more than a year later as the board turned to Culp. In the new boss’s debut on a third-quarter earnings call, the company revealed an expanded federal probe into its accounting, a vastly diminished dividend, and battered power business.
“Both GE’s financial and core businesses are relatively more indebted than their peers.” [“What happened to General Electric? The rise and fall of GE,” bloomberg.com, 30th Jan 2019]
Should we Filipinos – especially the Philippine elite and chattering classes – be interested in the above story?
Indeed we must be interested because of our “materiales fuertes” culture. In other words, even American icons can fall flat on their face.
The problem is that we are so inward-looking that we can’t help but be a disaster waiting to happen.
That also explains why we haven’t matured as a democracy.
I commend CJ Panganiban for his article, “Facts and fantasies on Marcos’ estate tax.” [Philippine Daily Inquirer, 27th Jun 2022]
In other words, are we to uphold the rule of law, given that ours is a democracy?
Consider: “IN MARCOS II V. COURT OF APPEALS (5th Jun 1997), the highest court dismissed the appeal holding thus: “Apart from failing to file the required [ETR] within the time required, petitioner and the other heirs never questioned the assessments served upon them, allowing the same to lapse into finality, and prompting the BIR to collect the said taxes by levying upon the properties left by President Marcos. Assessments [of the BIR] are presumed correct and made in good faith. The taxpayer has the duty of proving otherwise. The course of action taken by petitioner reflects his disregard or even repugnance of the established institutions for governance in the scheme of a well-ordered society.”
“This decision, rendered 25 years ago by the Court’s Second Division, was penned by Justice Justo P. Torres Jr. and concurred in unanimously by Justices Florenz D. Regalado (Division chair), Flerida Ruth P. Romero, Reynato S. Puno, and Vicente V. Mendoza.
“Significantly, the petitioner was named “Ferdinand R. Marcos II”—not Ferdinand R. Marcos Jr.—in the title of the decision and, consistently, in its textual content.
“FROM THESE FACTS, WE MUST ASK: How much has the BIR collected from the levy and auction sale of the Marcos properties? How much remains to be collected? How was the P23 billion computed? How did it balloon to P203 billion? Apart from those already levied and sold at public auction, what other properties does the Marcos estate have to satisfy the original assessment and balloon? What actions, if any, will the BIR undertake to collect these? Is it open to a compromise on the balloon and the original assessment? Let’s await BIR’s answers.”
What about the US, the supposed model of democracy? How are they doing? “Cassidy Hutchinson Stuns With Testimony About Trump on 6th Jan,” The New York Times, 28th Jun 2022.
“She was 22 years old, a rising college senior who went to work as a summer intern in the Trump White House in 2018. She landed in the chief of staff’s office, an omnipresent aide with ambitions of a career in government, not uncommon in Washington.
“But on Tuesday, Cassidy Hutchinson, now 26, distinguished herself as the most potent witness yet in the House select committee’s investigation into the 6th Jan 2021 attack on the Capitol. And as one of the most forceful and compelling aides to testify about former President Donald J. Trump’s bizarre and violent behavior during his four years in the White House.
“For two stunning hours on live television, Ms. Hutchinson described an unhinged former president who, she said, was warned that his supporters were carrying weapons and expressed no concern because they were not a threat to him.”
Those familiar with the blog may recall a recurring theme: “Democracy is the mirror image of Christianity, i.e., the imperative of personal responsibility to pursue the common good.”
If America must nurture freedom, what more of us Filipinos? There is no free lunch among freedom-loving people.
Then consider: “Turkey backs NATO membership for Sweden, Finland.”
Didn’t Putin blame the West to explain his invasion of Ukraine? That Ukraine’s overture about NATO membership made it an existential threat to Russia? Don’t NATO countries now surround Russia?
Let’s get back to the Philippines. Aren’t we going in the wrong direction?
“The Philippines faces various economic, environmental, and social problems due to increasing population, rapid urbanization, vulnerability to disasters, and substantial infrastructure gaps to address immediately.
“Infrastructure spending as a percentage of gross domestic product was at 5.8% last year and considered by the current government to drive the economic recovery, a policy which the next government has signaled may continue.
“NEDA has commissioned 13 sector-wide “master plans” in urban areas nationwide funded through the NEDA project development and other related studies fund. These will guide the preparation and implementation of sustainable infrastructure development.
“The next PDP must pay further attention to transport, water resources, energy, social infrastructure, and information and communications technology infrastructure.” [“NEDA: Unsolicited proposals, development plans need to be aligned,” BusinessWorld, 27th Jun 2022]
It’s heartening that NEDA acknowledges that we face various challenges.
What do we do?
In other words, shouldn’t we Filipinos – especially the Philippine elite and chattering classes – be interested in learning from others beyond strapping our booth straps?
Consider: “Pandemic sets back PHL’s targets to wipe out poverty,” BusinessMirror, 5th Apr 2022.
“The latest official data from the Philippine Statistics Authority (PSA) showed poverty incidence increased to 23.7 percent in the first semester of 2021 from the 21.1 percent in the first semester of 2018.
“That means 26.14 million Filipinos lived below the poverty threshold—estimated at P12,082, on the average, for a family of five per month—in the first semester of 2021.”
And from the 16th Jun 2022 post of SWS, we read: “34% of adult Filipinos got worse off in the past 12 months.”
Let’s hear from a preeminent Filipino economist, Bernardo M. Villegas, BusinessWorld, 28th Jun 2022: “I made sure that before I projected the state of the Philippine economy that I would heed the advice of George Santayana, another famous professor who taught at Harvard. Santayana gave the world the following advice: “Those who cannot remember the past are (condemned) to repeat it.”
And here’s another noted economist: “How we wish our next secretary of the Department of Trade and Industry (DTI) would be known as the champion and booster of Philippine exports,” someone mused in a conversation. He was coming from knowing how far behind our comparable Asean peers have left us in export performance.
“The numbers are indeed glaring: over the last five years, we averaged only $70 billion a year in merchandise exports, while Indonesia earned $182, Thailand $246, Malaysia $248, Vietnam $268, and Singapore $401 billion. We're not even near half of what Indonesia made the closest neighbor we trail.
“The new government simply must give focused and determined attention to this abysmal export performance, as in it lies the key to solving the major perennial challenges our economy keeps facing, namely: (1) lack of quality jobs, (2) low incomes and high levels of poverty, and (3) higher prices, especially of food, leading to wide food insecurity and malnutrition among our poor—in short, the basics of presyo, trabaho, and kita.” [ “Doing a Vietnam,” Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 31st May 2022]
What is the bottom line? The Philippines has a structural problem that we keep sweeping under the carpet.
Whether we speak to the Asian Tigers, the latest being Vietnam, and the Nordic countries that we like to talk about, these countries became first-world nations by aggressively pursuing industrialization.
On the other hand, we like to pat ourselves on the back for being the fastest growing economy yet stuck as a first-world economy and, worst, the regional laggard – for the longest time.
Indeed, we delivered 6%-7% GDP growth from 2009 to 2019, yet Vietnam still overtook us. What is so mysterious about our fate?
We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.
Unsurprisingly, here’s the latest word from The Economist: “By electing another Marcos, Filipinos show they have forgotten history,” The Economist, 29th Jun 2022.
“But forgetting is not all new, nor all social-media magic. Filipinos forgot as early as 1995, barely a decade after Marcos senior was deposed. In May 1986, three months after the revolution, 41% of those surveyed by Social Weather Stations, a respected pollster, thought he had been “true to the duties of a patriotic president.” By October 1995, the number was 57%. In 1986, 44% agreed that he was a “severe, brutal or oppressive president,” and the same proportion disagreed. A decade later, just 38% agreed, while 60% disagreed. “Not many of us would care to hold a grudge against someone long dead, not even someone like Ferdinand Marcos,” reckoned the pollsters.
“If the forgetting has come to pass, might the repetition of history, too? Bongbong is, in many ways, a fairly standard figure. Like two of his three immediate predecessors, he is the offspring of a former president. Like every president of the Fifth Republic, bar one, he represents a political dynasty.
“A new constitution was to keep another Marcos-like figure out of power. Some in Manila’s political circles argue that the rise of Bongbong marks the end of that era and the rise of a sixth republic.
“Others, such as Manuel Quezon III, a columnist (and grandson of a former president), say the values of the Fifth Republic were lost much earlier, with the election of Mr. Duterte, who openly urged the murder of criminal suspects. Either way, the era defined by the idealistic revolution of 1986 has ended.”
Let’s get back to Bernie Villegas: “During these last 30 years, the world experienced three severe global crises (the East Asian Financial Crisis of 1997 to 2000, the Great Recession of 2008 to 2012, and the more recent global economic crisis precipitated by the COVID-19 pandemic and further aggravated by the Russian invasion of Ukraine, the Philippine economy was among the most resilient in the world.
“Given the incoming Administration of President Ferdinand R. Marcos, Jr.’s choices for his economic team of very competent and experienced technocrats, one can expect a continuation of the yearly GDP growth rate of at least 6% to 7%. If the next administration can significantly improve governance and minimize corruption, there is an upside: the growth rate can accelerate from 8% to 10%.
“Those who cannot remember the past are (condemned) to repeat it.”
Who can disagree with that? For example, which of the following can’t we remember?
- The comprehensive agrarian reform program failed to “connect the dots,” i.e., is Philippine agriculture a dismal failure?
- The party-list system did not even the playing field, i.e., local lords continued to rule local governments.
- The OFW phenomenon created over 10 million “high-paying” jobs; it is today a pillar of the Philippine economy. Yet, poverty and joblessness remain.
- The call centers – nor the OFW phenomenon – did not eliminate the challenge of industrializing.
- The Philippine Competition Commission did not undo our oligarchic economy.
- The Duterte war on drugs did not eradicate the drug menace.
- The tax rationalization measures – from GMA to Du30 – did not raise our FDIs to match our neighbors.
- To add insult to injury, we are not acknowledging the toils that Juan de la Cruz expended to bring to the country over $50 billion in remittances; instead, we want to claim credit because of our “outstanding economic managers.”
“People now like to say that an “all-of-government” effort is imperative on this-or-that initiative; for the PEDP, an “all-of-nation” push is what the country needs. That is because achieving export expansion entails far more than what the DTI does. The PEDP should not be merely a DTI plan. It requires unison among all the moving parts—including exchange rate policy, infrastructure development, agricultural development strategy, human resource development, fiscal and monetary policies, and many more.
“Vietnam, it seems, has conducted the complex symphony orchestra better than everyone else has. Can our sterling new economic team manage to do a Vietnam in a country where unity, solidarity, and teamwork have traditionally been in deficit?” [Habito, op. cit.]
The problem is, can we Filipinos easily forget?
Why? As the blog argues, our parochialism and insularity are beyond the pale. Unlike our neighbors, we never outgrew our inward-looking bias.
But since I have been out of the country for a third of a century, I am an exception.
Those familiar with the blog may recall that when the family moved to New York, Japan Inc. posed a threat to America. Even the wife did not want to drive an American car. And I found myself in the middle of Corporate America’s efforts to address the shortcomings of higher education – because America’s manufacturing prowess evaporated; and saw the rapid decline of Detroit, for example.
Disclosure: I then learned from prominent American educators about the differences between “adult learning or andragogy” and “children’s learning or pedagogy.” I was with the team tasked with rapidly developing the company’s education and training curriculum, recognizing that we were dealing with “adults” – and experienced professionals.
Fast-forward to the session I did for the senior managers, my friends in Eastern Europe, a couple of weeks ago. “I cannot teach you better than your experience.” That was the message I gave when they asked me to do a session in “crisis management.”
“If they took them for granted, I recalled the success stories under their belt. “You have gained an enviable depth of experience over the years.” Over 30 of the senior managers listened to me. Yet, they didn’t expect that I would call on specific individuals to narrate the details of these success stories.
“In turn, I challenged them to be a one-billion-dollar company. “You were less than a ten-million-dollar company and unprofitable for eight years, yet you over-delivered beyond the challenge to be a one-hundred-million-dollar company.”
The above example is a way to explain andragogy. “Adults are independent. They strive for autonomy and self-direction in learning. They use their own and others’ experiences. Adults learn when they experience a need to know or perform more effectively. Adult learning is task or problem-centered. Their motivation stems from internal resources – the increased self-esteem, confidence, and recognition from successful performance.” [Pedagogy, Andragogy, & Heutagogy _ University of Illinois Springfield]
In other words, my role when my Eastern European friends asked me to do a “crisis management” session was to be “an enabler and create a climate of collaboration, respect, and openness.”
But let’s get back to the Philippines.
We have a couple of barriers: (a) We don’t have the experience in development to match that of our neighbors; (b) Because of our inward-looking bias, we haven’t internalized the “bigger world” that we are a subset of this universe in constant motion and expansion. And “Pinoy kasi” and our “materiales fuertes” culture have no place in a dynamic world.
Whether General Electric or the United States, every entity – beyond individuals – must embrace dynamism as an unpleasant fact. And especially in the 21st century, defined by innovation and global competitiveness.
Shouldn’t Filipinos – especially the Philippine elite and chattering classes – be interested in learning from others beyond strapping our booth straps?
Gising bayan!
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