Toss “Pinoy kasi” or perish

“Was Mabini prophetic? Did he foresee our problems a century ago? Mabini’s continuing relevance proves that we have not changed much since the heady days of the First Republic,” wrote Ambeth R. Ocampo; Maharlika fund: Déjà vu.

“This setup would be worse than the Spanish regime. The Treasury supports you; if you put this in the hands of the rich, you will necessarily be in their power.”

Toss “Pinoy kasi” or perish.

Please recall the blog’s reason for being: To challenge Juan de la Cruz and reinvent himself.

Why? The Philippine caste system, which reflects our instincts, is a static phenomenon. We cannot be from another planet. We are a subset of this universe, dynamic and in constant motion and expansion.

And because we started on the wrong foot, we are bound to trip and fall flat on our faces.

We pigeon-holed Juan de la Cruz in a rigid rank structure – an object of charity. It explains why we are proud of the 4Ps, for example. And it bodes well for our professed Christianity.

The hierarchy of human needs is dynamic. Beyond basic physiological needs, Juan de la Cruz aspires to be self-actualized. He has higher-level needs, including that of being prosperous.

The average Singaporean may not be wealthy per se. Yet, a Singaporean partakes in the benefits of a prosperous nation, i.e., they are a middle-class economy common to first-world countries.

On the other hand, beyond the 4Ps, we are proud that our enterprises cater to the “bottom of the pyramid.”

How do we expect to meet the challenge of the 21st century, characterized by “innovation and global competitiveness,” when we undermine the building blocks of a world-class economy?

Look at how we kept digging ourselves into a grave, confined to mediocrity: from the comprehensive agrarian reform to the OFW phenomenon and call centers to the LGUs and party-list system.

News item: Think tank: LGUs not yet ready for devolution.

Let’s dissect that. It is not rocket science but confirms our “crab mentality.”

We assume it is wise to pluck an idea – or a technique or tool – and it is the root of the “Pinoy abilidad.” But not only. It ratifies the “ivory tower” syndrome.

Consider: We now know the folly of algorithms, for example, in social media, and how trolls can target human weaknesses.

Conversely, we need to learn forward-thinking, lateral, and creative thinking. It presupposes the ability to see the giant canvas or picture. In other words, people can fall into the trap of quantitative analysis and why the blog is critical of our penchant for “analysis” while missing the “analytics.”

Recall how often the blog distinguishes between (a) logical yet linear and incremental thinking and (b) forward, lateral, and creative thinking.

“When fed a chunk of information, a computer processes it similarly on each occasion. Whether it’s been at work for five minutes or five hours, whether located in a fluorescent-lit office or positioned next to a sunny window, near other computers, or is the only computer in the room. That is how computers operate.

“But the same doesn’t hold for human beings. How we think about information is dramatically affected by our state when we encounter it.” [“Ezra Klein Interviews Annie Murphy Paul,” The New York Times, 20th Jul 2021; here’s the link to the podcast: Opinion | This Conversation Will Change How You Think About Thinking - The New York Times (nytimes.com)]

In other words, conventional wisdom makes it unnatural for people to get out of their comfort zone.

And it explains why there is only one Steve Jobs or Albert Einstein.

Or take behavioral economics versus classical economics. Yet, Daniel Kahneman, a psychologist, won the 2022 Nobel prize in economics.

Here’s a brief history from Wikipedia:

“The Neoclassical school’s rejection of psychology from economics in the early 1900s brought on a period defined by a reliance on empiricism. The hedonic analysis had shown little success in predicting human behavior, leading many to question its accuracy. There was a lack of confidence in hedonic theories, which saw pursuance of maximum benefit as an essential aspect of understanding human economic behavior.

“There was also a fear among economists that psychology’s involvement in shaping economic models was inordinate and a departure from contemporary Neoclassical principles. They feared that an increased emphasis on psychology would undermine the mathematical components of the field. William Peter Hamilton, Wall Street Journal editor from 1907 to 1929, wrote in The Stock Market Barometer: “We have meddled so disastrously with the law of supply and demand that we cannot bring ourselves to the radical step of letting it alone.”

“To boost the ability of economics to predict accurately, economists started looking to tangible phenomena rather than theories based on human psychology. Psychology was unreliable to many of these economists as it was a new field, not regarded as sufficiently scientific. Though many scholars expressed concern about positivism within economics, models of study dependent on psychological insights became rare. Economists instead conceptualized humans as purely rational and self-interested decision-makers, illustrated in the concept of homo economicus.

“The re-emergence of psychology, which allowed for the spread of behavioral economics, has been associated with the cognitive revolution. In the 1960s, cognitive psychology began to shed more light on the brain as an information-processing device (in contrast to behaviorist models). Psychologists in this field, such as Ward Edwards, Amos Tversky, and Daniel Kahneman, began to compare their cognitive models of decision-making under risk and uncertainty to economic models of rational behavior. These developments spurred economists to reconsider the relevance of psychology to economic models and theories.”

Recall that the blog often speaks to the elements of cognitive development: dualism or binary thinking, multiplicity, relativism – or the imperative of context.

And “Pinoy abilidad” keeps us at the level of binary thinking and misses out on (a) generating options and (b) establishing context. And why we’re stuck with addressing poverty, jobs, and inclusion, i.e., to be a Singapore, is way beyond us.

And the culprit? The Philippine caste system.

While not an academic, my background and experience in innovation and global competitiveness made me revisit the decades I worked in over 200 markets or countries. I realized that I am a student of the 21st century. And I passed on the mindset to my Eastern European friends.

The free market is not about rules but principles. And so I refused to spoon-feed them and let them fall flat on their faces while figuring out the distinctions between them. “I cannot teach you better than your experience.”

And so when I started the blog, I chose the title “Philippine Economy: Reinventing Ourselves.”

Why? Born and bred a Pinoy, I figured out who we are and what we are, captured in our instincts, a reflection of the Philippine caste system: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Let’s get back to the hierarchy of human needs. Beyond the need to survive, Juan de la Cruz must also be prosperous.

And the need to be prosperous cannot be met by our crab mentality, i.e., it goes against the common good – which in quantitative lingo is “economies of scale.”

And I found a great example in Axelum Resources.

Here’s a quote from an earlier posting: I was impressed by Axelum, highlighted by the Bernie Villegas article (Hope for coconut farmers.) For example, of their $125 million revenues, 33% still comes from desiccated coconut. But coconut water accounts for 25%, with coconut milk at 15%, sweetened coconut at 14%, and coconut milk/cream at 3%. Also noteworthy is that 75% goes to the US, and only 8% remains in the Philippines, with the balance shared by Europe, Australia, and Asia.

They are a great example of getting Philippine agribusiness on the world map. They employ over 5,000 people and support coconut farmers and their communities.

They are a best practice model. 

If I were doing the one-day DTI event on the 6-year industrialization plan, I would highlight Axelum Resources. That would translate the digital transformation lingo into a successful real-world enterprise for the rest to emulate, if not replicate.

The Axelum website illustrates the continuum of their product architecture, traversing the hierarchy of human needs from basic to self-actualization: “Axelum is a fully-integrated manufacturer and exporter of premium coconut products for leading domestic and international food and beverage companies, confectioneries, bakeries, private label supermarkets, grocery store chains, food service enterprises, and “nutritional” and personal care brands. The Company offers an extensive line of products, including desiccated coconut, coconut water, sweetened coconut, coconut powder, coconut milk/cream, coconut oil, and reduced-fat coconut.” 

They are a departure from the typical Filipino enterprise that caters to the “bottom of the pyramid,” meaning low-quality economy products. Note that they emphasized “exporter of premium” products.

That is how to meet the 21st-century challenge of innovation and global competitiveness. And the Company’s industry-leading net-margin performance (i.e., double digits) proves its world-class caliber — the outcome of its ability to drive revenues double digits in the first place because of the superior “ecosystem” they pulled together.

In other words, Philippine enterprises — big, small, micro, or mini — must shift paradigms. It must not be to create jobs to address poverty and “inclusion” but to be a first-world economy and nation by being the epitome of innovation and global competitiveness.

We undercut economies of scale and, worse, shut out the imperative to industrialize whenever we fall into the knee-jerk trap or “Pinoy abilidad.”

And we higher up in the hierarchy must take responsibility because we are reaping the rewards of a dysfunctional economy and nation – given our tacit and feeble attempt to attain social equilibrium.

How? We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Our caste system explains why we keep shrinking our playing field. And why the knee-jerk is all left to us – and why we can’t imagine the limitations of logical yet linear and incremental thinking.

And so we go around in a vicious circle rationalizing our shortcomings – instead of recognizing that we are bereft of the characteristics of a hardy mindset: Challenge, Commitment, and Control.

In other words, as a people, we have failed to pull together against a common destination – to be a first-world economy and nation – and acknowledged that we hold the future in our hands, nobody else’s

If we can’t embrace our reason for being, we are bound to be a failed nation if we’re not there yet.

Toss “Pinoy kasi” or perish.

“Was Mabini prophetic? Did he foresee our problems a century ago? Mabini’s continuing relevance proves that we have not changed much since the heady days of the First Republic,” wrote Ambeth R. Ocampo; Maharlika fund: Déjà vu.

We’re in the 21st century. We cannot let the world leave us behind.

Gising bayan!