Our challenge is not a walk in the park.

Recall the blog’s discussion on “cognitive bias.” It explains our failure to elevate the Philippines to a first-world economy despite decades since our declaration of independence from the Americans.

“Cognitive biases are unconscious errors in thinking that arise from problems related to memory, attention, and other mental mistakes.

“These biases result from our brain’s efforts to simplify the incredibly complex world in which we live.” [www.simplypsychology.org/cognitive-bias.html]

And with us Filipinos, given our caste system, we in the Philippine elite and chattering classes won’t own up to mental mistakes.

Yet, these two quotes – one from a Filipino and another from an American – must be our caveat: We are no longer children. Until we change, our government will not.

And if we want to thrive in “self-government,” we must understand, accept, and recognize that the Philippines will be as good or bad as we conduct ourselves.

Recall why the blog came into being: Juan de la Cruz must reinvent himself.

Consider how our caste system has played out: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Sadly, Rizal saw why we would not overcome our culture of impunity: He who submits to tyranny loves it. Today’s “slaves” will be tomorrow’s tyrants.

“Corruption cases coming out one by one,” Ramon T. Tulfo, SENTINEL, The Philippine Star, 10th Sep 2022.

“One by one, they’re coming to the surface: the P12-billion Pharmally scam; the plunder of undetermined amounts for COVID-19 by some officials of the Department of Health (DOH) and the Procurement Service of the Department of Budget and Management (PS-DBM); PS-DBM’s procurement of P2.4 billion worth of low-end laptop computers for the Department of Education (DepEd); the irregularities at the Philippine Charity Sweepstakes Office (PCSO) involving one of its top officials and the plunder of government coffers by people close to him.

“And here is the latest to be uncovered: the purchase of 1,346 farm tractors by the Philippine Center for Postharvest Development and Mechanization (PhilMech) of the Department of Agriculture, overpriced by P98,000 per unit. That means that somebody got away with around P130 million in kickback!

“The irregularity happened during the time of agriculture secretary William Dar, one of the few honest officials in the Duterte administration.”

But are they “loose change” compared to infrastructure, for example?

“It’s a battle of power blocs in the administration of President Bongbong Marcos Jr. (BBM). Politically, economically, and literally.

“There are two major power blocs in the Philippines today—San Miguel Corp. and Aboitiz Equity Ventures, Inc.

“Both are venerable companies. Business savvy made them big. Bigness made them control significant sectors of the economy and also enormously politically connected.

“Born 1890, SMC is 132 years old. The first Aboitiz arrived in the Philippines in 1870. San Miguel and Aboitiz have seen revolutions, wars, coups, People Power revolts, and boom and bust times. They define what it means to be strong.

“One other quality of both San Miguel and Aboitiz is that both seem to be politically resilient. They thrive and prosper, no matter where the political winds blow.

“BBM's Energy secretary, Rafael "Popo" Lotilla, was an independent director of Aboitiz Power until 11th Jul 2022.

“Popo's appointment became controversial when the Department of Justice took the unusual step of ruling “Lotilla does not fall within the prohibition under Sec. 8 of the DOE law: “No officer, external auditor, accountant, or legal counsel of any private company or enterprise primarily engaged in the energy industry shall be eligible for appointment as Secretary within two years from his retirement, resignation, or separation from there.”

“That may be so. But in business as in politics, perception is reality.” [“Power blocs, power plays,” Tony Lopez, Virtual Reality, manilastandard.net, 9th Sep 2022]

Enter: Senator Sonny Angara.

“The bottom line is that we need to strengthen our industries, move them up the value chain so that we can produce more jobs and increase the incomes of our people. We need a whole “of government” approach and laser-like focus on this effort to achieve results.

“Our GDP per capita has been increasing but only incrementally. We must change this direction if we want more dramatic increases over the current.” [“Moving toward high-value industries and higher-paying jobs.” Senator Sonny Angara, BETTER DAYS, Manila Bulletin, 4th Sep 2022]

We need a whole government approach and a laser-like focus to achieve results.

Amen, but it must go beyond industries.

If we want to thrive in “self-government,” we must understand, accept, and recognize that the Philippines will be as good or bad as we conduct ourselves. Juan de la Cruz must reinvent himself.

And that brings us to Kurt Lewin. Those familiar with the blog may remember him. Lewin was a German-American psychologist known as one of the modern pioneers of social, organizational, and applied psychology. He ranked as the 18th-most cited psychologist of the 20th century.

“Lewin developed the “Force-field theory.” It provides a framework for looking at the factors (“forces”) that influence a situation, originally social situations. It looks at forces that either drive the movement toward a goal (helping “forces”) or block movement toward a goal (hindering forces).

“Key to this approach was Lewin’s interest in “gestalt” – an organized whole perceived as more than the sum of its parts. The totality for an individual (their life space) derives from their perception of their reality, not an objective viewpoint.” [Wikipedia]

In other words, our perception of reality suffers from “cognitive bias.”

Unsurprisingly, Juan de la Cruz isn’t predisposed to change.

Consider: How much do we admire the word “reform” – yet inherent in reform is the predisposition to change?

Lewin developed a road map for managing change: Change is a three-stage process.

The first stage he called “unfreezing.” It involves overcoming inertia and dismantling the existing “mindset.” It must be part of surviving—defense mechanisms set aside.

In the second stage, the change occurs. That is typically a period of confusion and transition. We know that the old ways are under challenge, but we do not have a clear picture of what will replace them.

The third and final stage is “freezing.” The new mindset is crystallizing, and one’s comfort level is returning to previous levels.

Let’s hold it right there.

We cannot dismantle our current mindset because of our caste system and thus our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

See above articles: (a) Corruption cases coming out one by one and (b) Power blocs, power plays.

They confirm the prescience of Rizal. We are caught in a vicious circle that unless we recognize that (a) we are no longer children and (b) until we change, our government will not.

See above; for Lewin’s hindering or restraining forces. They will undermine our journey from poverty to prosperity.

Here’s a quote from an earlier posting: Surprise, surprise; we proudly declared our economic smarts delivering the World Bank-endorsed metric of 6%-7% GDP growth.

Those numbers don’t mean a thing if we don’t do our homework.

Cognitive biases result from our brain’s efforts to simplify the incredibly complex world in which we live.

And they explain why we find comfort in logical yet linear and incremental thinking.

But given our complex world – that is in constant motion and expansion – we must learn forward, lateral, and creative thinking.

That is how we can measure up to Daniel Kahneman’s treatise, “Thinking, fast and slow.”

For example, instead of setting a 6%-7% GDP growth target, we must set $200 billion in incremental exports to be on equal footing with our neighbors given their bigger pies: Thailand is over two times, while Malaysia is more than thrice ours.

We keep slicing the salami, seeking a couple more points for the education or agriculture budget, for example, because we want to match the spending ratios of regional peers. But that is a fallacy, given our smaller tax base and revenues. It’s Grade V arithmetic.

In other words, we must (a) step back so that we don’t miss the forest for the trees, (b) forward-think, and (c) gear up for a quantum leap in GDP – i.e., $200 billion in incremental exports.

And then, we can follow the lead of Mr. Ramon Ang of San Miguel and Senator Sonny Angara.

Mr. Ang, beyond Bulacan airport, is looking at specific industries that, when pulled together with his infrastructure initiatives, will create an “ecosystem” that will mirror the “long-term value creation” metric of McKinsey. In other words, we must stop celebrating our economic smarts because of the over $50 billion we generate from OFW remittances and call centers.

But that is too highfalutin for Juan de la Cruz.

See above; the Lewin change process: We are in a period of confusion and transition. We know that the old ways are under challenge, but we do not have a clear picture of what will replace them.

Benchmark. Benchmark. Benchmark.

In other words, NEDA, DTI, our think tanks, and legislators must dig as much as we can to understand why the Pearl River Delta Economic Zone is the best in class.

Here’s what Wikipedia says:

“In 1979, the Central Government of the People’s Republic of China announced that Guangdong Province would be allowed to follow less restrictive economic policies. That includes setting up three Special Economic Zones (SEZs), two in the Pearl River Delta, Shenzhen, and Zhuhai.

“Preferential policies in the SEZs included features designed to attract foreign investment, such as a 15 percent tax rate, tax holidays of up to five years, and the ability to repatriate corporate profits and repatriate capital investments after a contracted period. They also included duty-free treatment of imports of raw materials and intermediate goods destined for exported products, as well as exemption from export taxes.

“The region's GDP grew from just over US$8 billion in 1980 to more than US$89 billion in 2000 and US$221.2 billion in 2005. During that period, the average real GDP growth rate in the Pearl River Delta Economic Zone exceeded 16 percent, well above the People's Republic of China's national figure of 9.8 percent.

“Since the onset of China's reform program, the Pearl River Delta Economic Zone has been the fastest growing portion of the fastest growing province in the fastest growing large economy in the world.

“In the process, a region that was once largely agricultural has emerged as a manufacturing platform of global importance. It is a world leader in producing electronic goods, electrical and electronic components, watches and clocks, toys, garments and textiles, plastic products, and various other goods.”

In doing our homework, we must also find answers to questions like: Why did Vietnam leave us in the dust despite delivering 6%-7% GDP growth? How did they figure out the “vital few” – or Pareto – over the “trivial many”? How did they attract Samsung and Apple?

Mr. Ang has done the spade work identifying industries, foreign investors, and technology that will deliver $200 billion in export revenues.

NEDA, DTI, and our think tanks can make a more granular effort in this regard because we must learn to distinguish the “vital few” from the “trivial many” to prioritize and overcome our crab mentality.

And we can learn from Fortune 500 companies too. While they are not as complex as the public sector and national governments, their markets can be as many as over 200 countries. They can have countless business entities, subsidiaries, and brands.

Yet, they can be genuinely efficient and effective – because they have mastered the art of Pareto.

In other words, we must make AmBisyon Natin and Arangkada actionable. And a simple benchmarking exercise must check our crab mentality, especially among our economic managers that have employed the same mental model – e.g., fiscal and monetary interventions – going decades. And EPZA is an excellent example of why we've fortified our parochialism and insularity.

We need a whole government – in partnership with the private sector – approach and laser-like focus on this effort to achieve results.

In other words, the numbers we are quoting don’t mean a thing if we don’t do our homework.

Benchmarking will make us appreciate and recognize the “state-of-the-art” if we are benchmarking against the best in class.

But we must aim beyond being “consumers” of knowledge. We must seek to “create knowledge.” That is what innovation is.

For example, if we do an honest-to-goodness benchmarking exercise, we must also dig into the “driving and restraining forces” that our neighbors exploited and overcame. And that can include slaying corruption.

See above articles: (a) Corruption cases coming out one by one and (b) Power blocs, power plays.

Our challenge is not a walk in the park.

Recall the blog’s discussion on “cognitive bias.” It explains our failure to elevate the Philippines to a first-world economy despite decades since our declaration of independence from the Americans.

“Cognitive biases are unconscious errors in thinking that arise from problems related to memory, attention, and other mental mistakes.

And with us Filipinos, given our caste system, we in the Philippine elite and chattering classes won’t own up to mental mistakes.

Yet, these two quotes – one from a Filipino and another from an American – must be our caveat: We are no longer children. Until we change, our government will not.

Gising bayan!