Can we move forward?

“Perhaps it’s better late than never, but it’s still dismaying to learn that it took 43 years to resolve a graft case in this country. The four public officials indicted are dead, prompting the Sandiganbayan to dismiss the graft case against them involving P71 million in behest loans granted by the Philippine National Bank during the Marcos dictatorship.” [EDITORIAL - A national embarrassment, The Philippine Star, 2nd Jun 2015]

“The Philippine Fair Competition Act (House Bill No. 5286) passed the House of Representatives on third and final reading last week, taking well over two decades to get this far—dating back to President Cory Aquino and the Eighth Congress, in fact.” [Game-changing reform, Cielito F. Habito, No Free Lunch, Philippine Daily Inquirer, 26th May 2015]

“The RFI, which has failed to pass Congress for 16 years now, is considered the twin measure of another proposed bill, the Tax Incentives Management and Transparency Act (Timta).” [DTI, DOF stall progress of RFI bill in Congress, Catherine Pillas, Business Mirror, 1st Jun 2015]

How about moving forward for a change? There have been recent commentaries about the need for liberal education. And if higher education is about critical thinking – the key to discovery – is Francis then the role model for his questioning of the Curia’s assumptions? If we are to move forward must we first learn to question our own assumptions? The good news is we’re not alone. In the West they recognized that the educational system has failed to address 3 fundamental skills set: teamwork, communication and critical thinking.

What about us? “Who are we Filipinos (?),” Teresita Tanhueco-Tumapon, The Manila Times, 24th Apr 2015. “Let’s engage on the dynamics of our values as a system rather than dwelling on each value singly. Beforehand, let’s admit that values – the mainsprings of action — are not easily understood since they are abstract in nature. We can only ‘feel’ values or realize what specific values we are witnessing when these are manifested in a culture. Let’s suppose the governor of our province helped my son to have a better-paying job. Pay from this job has made possible for the younger sister to enroll in piano; for otherwise she would have to stick only to her academic pursuit. Come fiesta, our family invites the governor. Naturally we want to show our gratitude. We lavish our guest and his staff with expensive wine – something too much for us to spend on.”

“How do we explain our action? What values are the mainsprings of our behavior? We justify our digging deep into our pockets this fiesta by the fact that our son’s new job has given a better life for our family (familia). We owe (utang na loob) this to the governor. It’s a shame (hiya) if we don’t invite him and treat him as well as we can (smooth interpersonal relations or pakikisama). This example shows that we can better explain our behavior not by referring to a single value but rather to our values system. Jesuit Filipinologist Fr. Jaime Bulatao lists four major Filipino values — familia, hiya, utang na loob and pakikisama. All the rest of the values in the values system are secondary to these four major ones.

“Examples of values secondary to the four major values are hospitality and the round-about or circumlocutory manner a person asks favors from a friend who may have bailed this person out of difficulty many times over. Under such circumstances, such as too much utang na loob makes a person hesitate (mahiya) to ask for additional favor. Since culture is dynamic, values change to certain degrees.”

Not surprisingly, we read: “Political patronage,” Editorial, Philippine Daily Inquirer, 2nd Jun 2015. “LONG CITED as a major drag on the Philippines’ development, political patronage is defined as the allocation of favors or rewards such as public office, jobs, contracts, subsidies or other valued benefits by a patron (usually an elected official) to a client (usually a donor or campaign contributor) in return for the client’s service, such as voting for the patron or providing money for electoral campaigning. Political patronage has also been mentioned in many studies as a major factor why industrialization did not happen as planned, why manufacturing degenerated, why land reform failed, and why the Philippines has been economically overtaken by its neighbors.”

“Late last month a visiting political scientist from Harvard again cited the ills brought about by political patronage—vote-buying, corruption, political dynasties—which hinder attempts to foster an “inclusive” economy that will benefit others besides the rich and the well-connected.”

Do we need a leadership that will show us the way? That it is about developing a sense of purpose as a nation? Are we mired in controversies yet?

“COA says Shell owes P53 B in royalties,” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 3rd Jun 2015. “This tax exemption issue has also recently plagued Manila Water and Maynilad Water. An arbitration panel has ruled that Manila Water has no right to deduct as operating expense the amount equivalent to the income tax paid . . . Both water concessionaires, however, insist the tax privilege is written in their concession agreements. It would probably take a Supreme Court ruling to resolve this issue for the water companies and likely, for the Malampaya consortium as well.”

“Investments and the rule of law,” Business Mirror Editorial, 23rd May 2015. “FINANCE Secretary Cesar V. Purisima knows his finance but knows his politics better.  In a recent Financial Times-First Metro-Philippines Investment Summit, the secretary read a speech saying that “the prevalence of the rule of law in the country helped in increasing the confidence of investors in doing business in the Philippines . . . The secretary was indulging in irony, for it is clear he didn’t want to appear to be lecturing his boss. The fact of the matter is that the present administration has shown little respect for the rule of law at least twice since it took over in 2010.”

“The Philippines has a long way to go before it can catch up with its ASEAN-5 peers, according to the recently released results of the IMD World Competitiveness Yearbook.” [Daunting challenges for the next President, Benjamin E. Diokno, Core, Business World, 2nd Jun 2015] “In Singapore, 80.5% of respondents see policy stability and predictability as the most attractive factor for the economy. By contrast, only 12.1% of the respondents see that as a factor for the Philippines. By inference, a great majority of respondents find policies in the Philippines as unstable and unpredictable.”

“The results of the IMD world competitive survey are a grim reminder that all’s not well with the Philippine economy. Not surprisingly, it has attracted the least foreign direct investments . . . Boasting that the economy’s growth in recent years is higher than its historical average has a good ring to it. But it’s not a guarantee that the economy might not suffer a reversal in the future unless existing problems such as policy inconsistency, unreliable infrastructure, government incompetence, an unfriendly business environment, an uncompetitive tax regime, and others are fully addressed by policy makers.”

This blog has discussed the imperative to discriminate between analyses and deliverables. [In the private sector, it’s called strategic thinking.] Because we can’t be getting the shorter end of the stick, if not left empty handed. For instance, judicial and/or academic rigor must have a purpose that informs the principles that we are to uphold. But it can’t be limited by a parochial worldview.

There’s got to be a higher purpose?

Will we find it if question our assumptions behind: (a) NAIA 3 . . . and our archaic infrastructure; (b) our economic model and persistent underdevelopment; (c) our responses to the demands of self-government; (d) our pace of maturity as a people; (e) our hierarchical system and structure?

Why has Francis been battling the Curia, for instance? The Vatican can’t be a government of the few, by the few and for the few? Because people, institutions, states and nations cannot standstill? Because anachronism has a price?

In the case of PHL, it’s poverty . . . and the laughing stock of the region, if not the world? Can we move forward?

Leadership and reform

With the 2016 presidential election looming, it is expected that the paths of analysts and aspiring leaderships will converge. Even in the US the analysts behind Clinton and Bush, for instance, have been busy pouring over “big data” to derive the platform of their respective campaigns. And as the cycle progresses, broader national and international matters will likewise percolate from big data.

In the private sector, “Big data is a collection of data – unstructured and multi-structured – from traditional and digital sources inside and outside your company that represents a source for ongoing discovery and analysis.” [What Is Big Data (?), Lisa Arthur, Forbes, 15th Aug 2013]“One thing is clear: Every enterprise needs to fully understand big data – what it is to them, what it does for them, what it means to them.”

How does that apply to PHL leadership and our concerns for reform? To simulate big data, this writer placed 16 news reports and opinion pieces side-by-side and imagined what it meant to PHL. In industry leadership is swamped with big data day-in, day-out and managers must discriminate between analyses and deliverables.

Analyses can identify a whole gamut of needs yet they still must be prioritized; and then the precise deliverables defined. How does a manager do that? Let’s take Steve Jobs. He wants to change the world. That is his mantra. If we translate that to apply to a Philippine president, it will be, “I want to change the Philippines.” That demands “a growth [and success] mindset,” not “a fixed mindset” – and the absence of a vision, if not imagination and leadership.

What follows as far as Jobs is concerned is: “There are two values and fundamentals that must guide us: (a) to make amazing products (that will be effective tools for people to change the world) and (b) to create an amazing organization (true to Apple’s mission).” And he tapped the academe to share his thoughts and Apple’s own experiences so that they could develop an intensive in-house education and training program for Apple people. Because of such clarity, their ability to set priorities is enviable. And that is reflected in their continuing new-product introductions – that have indeed amazed the world – and efficient supply chain that covers a wide geography yet is best in class.

What learning is there for the Philippines? And what are the fundamentals that must guide us? For example, we have a glaring need as spelled out in the following: “The Global Development Agenda should be the National Development Agenda,” Alvin P. Ang, PhD, Eagle Watch, Business Mirror, 21st May 2015. “There is a much larger campaign that has started for the race to end global misery that should be aligned with our local perspectives.”

“Amid the varying national agendas, we have seemed to lost track of a commitment we made in 2000 under the United Nations (UN) Millennium Development Goals (MDGs) . . . The goals are to eradicate poverty and hunger, universal primary education, gender equality, reduce child mortality, improve maternal health, combat diseases, ensure environmental sustainability and develop a global partnership in development . . . As can be noted, many of these goals are basic to human capital formation and national development. They should be implemented with or without any international commitment and achieved by a well-functioning bureaucracy at all levels.”

But how can we in fact be true to our commitment to the MDGs? Consider: “Growth without infrastructure buildup not sustainable,” Bianca Cuaresma, Business Mirror, 21st May 2015. “The country’s lack of appropriate and carefully laid-out infrastructure is a major deterrent to the country’s economic stability and sustainable growth path.”

In other words, is our commitment to the MDGs then at risk? “In an interview late Wednesday, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. told reporters this was the considered assessment of the international credit-rating agency Standard & Poor’s (S&P). They recognized the continuing good economic performance and the reforms that have been put in place that are supporting this performance…although they are also looking at further improvements in certain areas, like in infrastructure . . .”

“Power demand to outpace supply in 5 years – EIU,” Ted P. Torres, The Philippine Star, 22nd May 2015. “The EIU said the Philippines suffers from numerous unplanned electricity outages, owing to the country’s insufficient and outdated power-generation infrastructure.”

“(Blackouts) harm the economy by interrupting business activity. Furthermore, owing to demand outstripping supply, electricity prices in the Philippines are among the highest in Asia, which automatically increases input costs for producers . . . The shortage of electricity supply leads to structurally high electricity prices. The EIU pointed out that the high cost of electricity is also a deterrent for new foreign investment, as well as a constant hindrance for businesses that are already invested in the country.”

Can we step up to the plate? “Amendments to changes in PPP Act pushed,” Reuters, 22nd May 2015. “‘A major policy advocacy we are now pushing for is the enactment of the PPP Act… to sustain the gains of our current PPP program,’ said Economic Planning Secretary Arsenio Balisacan in a speech at the Philippine-Australia PPP policy dialogue in Melbourne, Australia on Thursday. The Philippines has a long history of reviewing and revising government contracts with the private sector years after they are implemented, especially if the contract was closed under a previous administration.”

It appears we have a credibility problem? “The fact of the matter is that the present administration has shown little respect for the rule of law at least twice since it took over in 2010. The first was when it unilaterally canceled the $434.8-million (P18.7-billion) contract of the Philippine government with the Belgian firm BaagerwerkenDecloedt en Zoon (BDZ) for the dredging of Laguna Lake.  As a result of that abrogation, BDZ is now at the World Bank International Centre for Settlement of Investment Disputes seeking $93 million (P4 billion) in damages.” [Investments and the rule of law, Business Mirror Editorial, 23rd May 2015]

“Already, the Philippine government has been told to pay $9.76 million (P420 million) for cancellation of the bank loan that was to finance the project. The second exhibition of lack of respect for commitments was the recent cancellation of the Cavite-Laguna Expressway Project (Calax) winning bid and the rebidding of the project.

“This prompted American Chamber of Commerce Senior Advisor John D. Forbes to note that the rebidding signified not just poor planning but an effort on the part of the government to ‘get more money from bidders who would recover it with higher tolls.’”

Are those examples of the imperative to discriminate between analyses and deliverables? But if the leadership is to change the Philippines, will the following be a good guide? “Constituency for Reform,” Guillermo M. Luz, Philippine Daily Inquirer, 9th May 2015. “Governance and leadership matter. They lead to competitiveness . . . In the World Economic Forum’s Global Competitiveness Report . . . governance is captured under a section called Institutions. In this section, items such as budget reform and decision-making, the judiciary, nepotism and favoritism, law enforcement and security, corporate governance, and other measures are covered.”

“Campaign finance will also need to be overhauled, if not by law then at least by practice . . . Money is the lifeblood of any campaign. Funders who want reforms to continue will need to make tough choices on who to fund and support. These decisions are vital to the success of some candidates, especially reform-minded ones with little resources to lean on . . . Often, the real and hard work of reform occurs after an election is over. It lies in the daily grind of work and interaction with leaders at all levels. To help them maintain a reform route, they will need to be helped along by a Constituency for Reform.”

The challenge of leadership and reform stares us. And the leadership that we need must have a “growth mindset” and possess critical thinking skills – i.e., is big and secure enough to question his or her own assumptions – and with a great deal of emotional intelligence – i.e., not deterred by disappointments but is results-driven and can influence Juan de la Cruz to value collaboration and embrace change – and is guided by credible values and fundamentals to be able to show us the way.

“Ships that pass in the night . . .”

“. . . and speak each other in passing, only a signal shown, and a distant voice in the darkness; So on the ocean of life, we pass and speak one another, only a look and a voice, then darkness again and a silence.” [Henry Wadsworth Longfellow]

Does Longfellow come to mind with the following news reports? (a) “Purisima invites Japan to invest in infrastructure, manufacturing,” Chino Leyco, Manila Bulletin, 26th May 2015; and (b) “Aquino urged to focus on policy reforms,” Bernie Magkilat, Manila Bulletin, 26th May 2015.

“When you talk of the Philippines, there are many opportunities in infrastructure… and opportunities in terms of manufacturing . . . the robust economic growth of the Philippines . . . the youngest country in Asia . . . with a median age of 23 years old. And we will be in the demographic “sweetspot,” that means that majority of our population are between 15 and 65 working age for the next 40 or so years . . . We are also fast growing . . . We are the second fastest next to China, a large country. We have sound macroeconomic fundamentals, we are a current account surplus country for 13 or 14 consecutive years already . . .” [Leyco, op. cit.]

That must be the credit side of the ledger while the debit side reads: “The Philippine Business Groups (PBG) and Joint Foreign Chambers (JFC) . . . urged the Aquino administration to focus its final 12 months in office to enact critical policy reforms to ensure inclusive growth.”[Magkilat, op. cit.]

“In a letter to the President on May 15, 2015, PBG and JFC have identified critical policy reforms from both the executive and legislative branches of government. The list of reforms, aimed at ensuring growth through job generation, poverty reduction and global competitiveness, was a result of a month-long consultation process with the participating organizations.

“To ensure these objectives are met, the business groups would like the Aquino government to focus on institutionalizing integrity and good governance, accelerating infrastructure development, ensuring massive job generation, facilitating trade, increasing foreign investment, and boosting competitiveness.”

This is not the first time such conflicting messages have been captured in the news. How many times that while we had teams doing roadshows overseas to deliver our spiel to foreign investors back at home their representatives were delivering a sobering message?

Thus in the private sector they employ the tools of marketing effectiveness to minimize such risks. Selling or marketing is two-way especially in this 21st century world that is highly competitive. Whatever we wish to sell must represent competitive advantage. And competitive isn’t defined from our standpoint but that of the prospective buyer. In one word, selling or marketing is about empathy – i.e., to understand the buyer.

It isn’t victimhood like we’re victims of history and have a “fixed mindset.” But the “growth mindset” of successful people, which can be summarized, thus: “To believe that if something is not working or is ineffective, ask: What is it that I can do differently to change the situation?” See above re Aquino urged to focus on policy reforms.

Indeed we are exerting efforts to raise our competitiveness. But it goes beyond that. There are fundamentals that international agencies have shared with us which we must internalize if we expect investors to be on our side. “In an interview late Wednesday, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. told reporters this was the considered assessment of the international credit-rating agency Standard & Poor’s (S&P). They recognized the continuing good economic performance and the reforms that have been put in place that are supporting this performance…although they are also looking at further improvements in certain areas, like in infrastructure . . .” [Growth without infrastructure buildup not sustainable, Bianca Cuaresma, Business Mirror, 21st May 2015.]

“Governance and leadership matter. They lead to competitiveness . . . In the World Economic Forum’s Global Competitiveness Report . . . governance is captured under a section called Institutions. In this section, items such as budget reform and decision-making, the judiciary, nepotism and favoritism, law enforcement and security, corporate governance, and other measures are covered.” [Constituency for Reform, Guillermo M. Luz, Philippine Daily Inquirer, 9th May 2015.]

“Researchers at University of the Americas Puebla in Mexico studied criminal impunity in 59 nations and concluded that the Philippines had the highest level of impunity after Mexico itself . . . A Rule of Law meaning that laws fairly composed, applied and enforced govern the acts of the nation and its citizens that sanctions are applied by the state and arbitrary action by individual government officials is not allowed. The Philippines sits at No. 60 out of 99 countries surveyed in the World Justice Project’s Rule of Law Index.” [Impunity, Mike Wootton, The Manila Times, 26th May 2015]

One would assume that we in fact do get it? Sadly, we’re not unanimous on who, what and where we are. If we're still debating where we are, how can we figure out where we want to be – and more so, how we will get there?

“The Philippine Fair Competition Act (House Bill No. 5286) passed the House of Representatives on third and final reading last week, taking well over two decades to get this far—dating back to President Cory Aquino and the Eighth Congress, in fact. The Senate had already passed its own competition bill (Senate Bill No. 2282) last December . . .” [Game-changing reform, Cielito F. Habito, No Free Lunch, Philippine Daily Inquirer, 26th May 2015]

“Not surprisingly, traditional opponents of the measure, not necessarily with the greatest good for the greatest number at heart, will still try to stop the law even at this eleventh hour, or failing that, find ways to water it down and render it ineffective . . . Foremost perhaps is the emotionally appealing scare tactic that says the law will break up large Filipino enterprises and pave the way for foreign firms to lord it over our economy. Along with it is the argument that we need to let large Filipino firms get even larger and become internationally competitive (yes), and it may take stifling competition in order for that to happen (emphatic no!)”

And when we read “MVP submits highest bid for Calax” (Miguel R. Camus, Philippine Daily Inquirer, 27th May 2015), one may assume we’re talking about a large Filipino firm? “Manuel V. Pangilinan-led Metro Pacific Investment Corp. (MPIC) is set to bag the 45.5-kilometer Cavite-Laguna Express (Calax) deal after submitting a surprise aggressive offer in a rebidding exercise for the public-private partnership (PPP) project that edged out rival San Miguel Corp.”

Until we read, but note the byline, it’s Bloomberg, not local media, “Ayala mulls partnership with Salim Group to bid for $3.8-B railway project,” Bloomberg, Manila Bulletin, 23rd May 2015. “Ayala Corporation, the Philippines’ oldest family-owned company, may partner with a venture of billionaire Anthoni Salim to bid for a $3.8-billion railway project, the most expensive infrastructure work to be auctioned by the government . . . Metro Pacific is the Philippine unit of First Pacific Co., which is controlled by Indonesia’s Salim Group.”

In the meantime our MSMEs have yet to embrace technology and innovation and exports; and malls (retailing) are still a major PHL industry. Of course, over $25 billion in OFW remittances will continue to prop us up. Yet our mindset can’t be anachronistic in fairness to succeeding generations. My Eastern European friends came out of the iron curtain relatively recently yet have been engaged in business-model experiments – beyond new product R&D lab work – because they’ve stepped up to global competition. While we Pinoys keep running away! How do we learn competitiveness? Yet it’s not surprising given our sheltered upbringing? Precisely the call of Francis?

No one will give us slack for the ambivalence in our traits and values. For instance, efforts to entice foreign investors cannot be an exercise in isolation. And indeed foreign investment is fundamental to economic growth and development as the Asian Tigers demonstrated.

Yet even more fundamental is for us to market a truly competitive PHL. Not as we defined it but as others have. It is all about empathy: “To believe that if something is not working or is ineffective, ask: What is it that I can do differently to change the situation?”

Outstanding achievement versus wasted potential

“I have always been deeply moved by outstanding achievement and saddened by wasted potential.” [Carol Dweck, PhD; one of the world’s leading researchers in the field of motivation; the Lewis and Virginia Eaton Professor of Psychology at Stanford University]. “Her research has focused on why people succeed and how to foster success.” That’s from her website: mindsetonline.com.

Dr. Dweck came to mind after coming across these news reports re APEC: “PH proposes ‘Boracay Action Plan’ for APEC,” Chino Leyco, Manila Bulletin, 24th May 2015; “Making ASEAN economic integration a reality,” Manila Bulletin, 23rd May 2015; and “APEC backs ‘Boracay Agenda’ to globalize small enterprises,” Business World, 24th May 2015.

I happened to be covering North America at my old MNC company when NAFTA came into being. And was invited to Bulgaria 12 years ago when Bulgaria and Romania were working on their accessions into the EU. The Canada of today appears to me more confident [and I am doing business there again through my Bulgarian client] while the Canada I knew then was more like the poorer of the two cousins, the other being the US. And Puerto Rico today is reported to be akin to Greece. While Bulgaria and Romania in a relatively short period have experienced the ups and downs of their economies.

This blog has discussed the power of the mindset before. And given my respect for academic rigor, I make it a point to compare notes with academe even when my perspective comes from the real world. For instance, my old MNC company, once a takeover target, is today the number one brand in the category globally. And is the only brand – out of 11,000 brands – that has penetrated more than 50% of global households (in the sector at 63.4%, with the next brand doing 44%.)

But perhaps more relevant to PHL’s MSMEs would be my Bulgarian client – and they were the ones that inspired me to start this blog 6 years ago. “We’re poor Bulgarians, we cannot sell products at more than 50 euro cents. The world has left us behind – 500 years under Ottoman rule and 50 years under Soviet rule. We take things as they come. A bright future is beyond our perspective.” But then my now Bulgarian friend had another idea. “I want to move up to the next level. I’ve been in the business for 8 years and I know what I know but there are things I don’t know. How do we move up to the next level? We’re not profitable and must become one sooner than later.”

Those are examples of what Dr. Dweck calls a fixed mindset on the one hand and a growth mindset on the other. What do they mean? Those with a fixed mindset look outside self with very little sense if their situation could be any different. While those with a growth mindset challenge self to grow and develop.

“Internationalizing small firms,” Cielito F. Habito, The Philippine Inquirer, 19th May 2015. “Across the Apec region, small firms consistently account for more than 97 percent of all enterprises; for the bulk of the region, including the Philippines, the share is in fact 99 percent or more. But there is a wide divergence of their contribution to the economy. Contribution to gross domestic product varies from a low of 21 percent in Russia to a high of 59 percent in China and Indonesia; the Philippines is lower than average, at 36 percent. Contribution to total employment ranges from a low of 25 percent in Russia to a high of 92 percent in Indonesia (with Canada a close second at 90 percent); we are again below the average (67 percent) at 61 percent.”

“As for exports, the small firms’ contribution ranges from below 15 percent (Australia, Chile and Peru) to nearly 70 percent (China). Unfortunately, we lack reliable data to be able to determine exactly where the Philippines lies in this range, but indications point to our MSMEs’ export contribution being near the bottom end. What we know from sample survey data is that the bulk of Filipino enterprises do not export at all.”

How do we develop a growth mindset? We must first recognize that many of our neighbors, even before and without APEC, became Asian Tigers. Because they didn’t point at others to sugarcoat their weaknesses. And instead would draw upon their inner strengths. In short, they wanted to grow – and succeed!

There is no denying that the platform and mechanisms made available by the formation of economic blocs like NAFTA, EU or even APEC would be helpful. But at the end of the day, the game is all about competitiveness. For example, both the US and Singapore have taken the mindset that they are falling behind in competitiveness. On the other hand, we Pinoys like to harp on what we’re good at or the positives in our culture. Those are examples of the two mindsets that Dr. Dweck talks about.

Where would they come from? Critical thinking which means we must question our assumptions. And emotional intelligence which means we must manage our disappointments and be results-driven. To be focused on outcomes while influencing the rest of us – with fixed mindsets – to attain collaboration. It is the exercise of leadership such that change is embraced by the people. 

Similarly, it is not enough to know the techniques of how things must be pursued, say, via a well-thought out strategy and be under the umbrella of an APEC. In fact successful change comes from autonomy, self-mastery and a sense of purpose. In other words, we have to paddle our own canoe and develop mastery in competitiveness and demonstrate that as a people we share a common purpose.

For example, we should have had a collective agreement as a people re power generation and vital infrastructure like yesterday if we wanted to move forward as an economy? What about the FOI and the competition law and peace in Mindanao? Or has our hierarchical-parochial bias made us gloss over these imperatives? In other words, APEC cannot keep our house in order for us; we have to do that ourselves!

We’ve always assumed – over decades – that we weren’t prepared to face the world? And thus embraced import substitution, shunted foreign investors, and vacillated in putting up new power generation given its impact on electricity prices? They were juvenile tendencies when compared to what the Asian Tigers embraced? Both Lee Kuan Yew and Mahathir Mohamad advised Deng Xiaoping to seek Western money and technology!

Admittedly, for a people to develop and embrace a sense of purpose is not a cakewalk. And autonomy and self-mastery are not a given either. Yet the reality is performance cannot be dictated and compelled from above. Team members must develop the impulse to perform at peak performance.

And between the West and my Eastern European friends, if there is a common denominator that makes them able to demonstrate competitiveness, it is that bosses and subordinates can be “in your face.” Still, bosses know they can’t pull rank whether brainstorming new product ideas or marketing or sales initiatives, while subordinates don’t pull their punches.

Very recently my Bulgarian friend who owns his company came over to explain an idea that didn’t fly with a subordinate. He was not lobbying for me to get on his side but to explain where he was coming from. And as the discussion went on, he realized that he was off-base and came around to support the subordinate. And this happens all the time! And it is all about the imperative of competitiveness. Simply put, rank does not bestow competitiveness. It is earned collectively by a group or an organization committed to attain peak performance.

Given today’s highly competitive world, what is our option? “You can’t stop the machine,” Fareed Zakaria, Washington Post Writers Group, The Manila Times, 23rd May 2015. “The two most powerful forces that have transformed the world in recent decades have been the expansion of globalization and the information revolution. These two great engines have been chugging away, integrating Asia into the global system and ushering in a digital age that is now invading every corner of life . . . You can’t stop China from growing. You can’t prevent Africa from deepening its integration into the global system. These forces, now deeply entrenched, will continue to gain steam.”

Fareed Zakaria may be a pundit. But what about the real world? My Eastern European friends just developed a couple of new products while tapping and leveraging technologies in the US and Italy and designers in New York and Rhode Island. “It’s a small world,” indeed, Mr. Walt Disney!

Stop corruption and . . . say no to “drugs”

. . . The ones of listening to what we want to hear [and parochialism]? “Pope to bishops: Stop ordering faithful around, fight graft,” AP, Manila Bulletin, 18th May 2015. “Pope Francis is giving marching orders to his bishops, telling them to strongly denounce corruption and to act more like pastors than ‘pilots’ ordering the faithful around.”

“He also complained that the Catholic Church often organizes conferences where ‘the same voices’ are heard over and over, an apparent reference to the practice of hosting only like-minded speakers. Francis said such a practice ‘drugs the community, homogenizing choices, opinions and people.’ He urged bishops to instead go ‘where the Holy Spirit asks them to go.’”

But what to do with corruption? “Roots of corruption, Ana Marie Pamintuan,” SKETCHES, The Philippine Star, 20th May 2015. “Recent corruption controversies should give urgency to the passage of a law overhauling and regulating campaign finance. Many sweetheart deals and other transactions involving large-scale corruption have their roots in campaign donations and expenditures. Even election violence can be blamed partly on the huge cost of mounting a campaign.”

“Corruption must be fought relentlessly,” Former Senator Atty. Joey D. Lina Jr., 20th May 2015. “Not a few were horrified at what seemed like a cruel joke, but were somehow relieved days later when Justice Secretary Leila de Lima made an apparent turnaround as she clarified last week that the third batch of cases pertaining to the pork barrel scam would still be pursued in court.”

“The continuing clamor for accountability and punishment for crimes concerning the infamous pork barrel system should serve as a litmus test for our legal institutions to rise to the challenge of dispensing justice to appease an enraged citizenry. Let us always bear in mind the words of Pope Francis, when he came to visit our country four months ago, as he challenged ‘everyone, at all levels of society, to reject every form of corruption which diverts resources from the poor.’ It takes commitment to safeguard government from thievery and plunder. Let us be unrelenting and fight corruption to the finish!”

Beyond corruption, what else should we guard against? While good news is always welcome, we can’t fall into the trap of listening only to what we want to hear? “PIDS flags risks as economy seen to miss growth target,” Danessa O. Rivera, The Philippine Star, 20th May 2015. “The biggest drivers for growth will be private and government consumption . . . The state think tank’s forecast is a tad lower from the official target range of seven to eight percent this year.”

“Last year, gross domestic product (GDP) grew 6.1 percent, slower than the previous year’s 7.2 percent. Among the risks PIDS highlighted for the economy is the decline in government revenues. This is attributed to the lower oil importation, tax exemptions on de minimis benefits and productivity bonuses of workers and higher tax exemption ceiling on the 13th month pay . . .

“This has serious implications on government spending for infrastructure and social services . . . While the Philippines exhibited resiliency when the US Federal Reserve announced it will start easing its multi-billion dollar bond purchases in 2013, the PIDS still counted equity price risks and capital outflows among threats to economic outlook. It also stressed that the long problem in infrastructure, weakness in exports and the impact of the El Nino phenomenon are among the major risks this year . . .”

“. . . [T]he Philippines could sustain a seven percent growth beyond 2015 by working on several policy responses. Among the policy responses recommended by the PIDS include ensuring the reliability of power supply and transport infrastructure, facilitating the transmission of resources from the financial to the real estate sector and closely monitoring regional and global developments. . . [T]he Philippine government should take steps in narrowing down the saving-investment gap. Mobilizing long-term capital could be done through massive market research and project development under infrastructure and agribusiness at the local government level . . .”

The above policy responses recommended by PIDS are not new! But would they reflect the need for us to leverage the power of the mindset (i.e., develop a sense of purpose, respond to challenges and focus on what we can control because the buck stops with us) and dig deep into our emotional intelligence (i.e., the capacity to manage shortcomings and demonstrate results orientation, collaboration, leadership and change) and look beyond our borders and overcome parochialism?

For example, “Internationalizing small firms,” Cielito F. Habito, The Philippine Inquirer, 19th May 2015. “It is often said that small firms are the backbone of any economy. If they are, then we don’t seem to be taking care of our backbone too well, and unless things change, our economy may find itself stooped and bent some time in the future. If it’s any comfort, we are not necessarily alone in this situation. Across the Apec region, small firms consistently account for more than 97 percent of all enterprises; for the bulk of the region, including the Philippines, the share is in fact 99 percent or more.

“But there is a wide divergence of their contribution to the economy. Contribution to gross domestic product varies from a low of 21 percent in Russia to a high of 59 percent in China and Indonesia; the Philippines is lower than average, at 36 percent. Contribution to total employment ranges from a low of 25 percent in Russia to a high of 92 percent in Indonesia (with Canada a close second at 90 percent); we are again below the average (67 percent) at 61 percent.”

“As for exports, the small firms’ contribution ranges from below 15 percent (Australia, Chile and Peru) to nearly 70 percent (China). Unfortunately, we lack reliable data to be able to determine exactly where the Philippines lies in this range, but indications point to our MSMEs’ export contribution being near the bottom end. What we know from sample survey data is that the bulk of Filipino enterprises do not export at all.”

“We need to continue to build financial institutions... We need to uphold transparency, be mindful of contagion and risks...,” the BSP chief said. And as banking systems in Southeast Asia are set to integrate as part of the planned ASEAN Economic Community, Mr. Tetangco said there should be “effective management of risk exposures and enforcement of governance culture at the bank level.” [No room for complacency despite economic gains, Daryll Edisonn D. Saclag, Business World, 20th May 2015]

No room for complacency? Is that a commitment or a rhetoric?

“Ugly politics and why we have to change now (!),” Bobit S. Avila, SHOOTING STRAIGHT, The Philippine Star, 21st May 2015. “ANC reported that the Liberal Party (LP), the reigning or party in power is starting to break up simply because many LP members cannot agree with DILG Sec. Mar Roxas as their standard bearer. Rep. Edgar Erice wants a Roxas-Poe tandem, while other LP members want a Poe-Escudero tandem . . . How many times have we written that political parties today have become irrelevant to our people and have given way to personality politics? This is why we need to change our system of governance right now…not tomorrow!”

Have corruption, being inward-looking and parochial drugged us? Sadly beyond them, there are fundamental skill sets (e.g., visionary and strategic thinking and priority setting, critical thinking and problem solving, among others, which in one word is creativity and defined simply as connecting the dots by Steve Jobs) in nation-building that we need but will miss?

For example, we take it for granted that the elite class can do no wrong given our hierarchical culture – and they call the shots? But should the right to pontificate and moralize come with the responsibility and accountability to answer for our failings? See above re Pope to bishops.

Human capital development

“Philippines ranks 46th in human capital report,” Alden M. Monzon, Business World, 13th May 2015. “THE PHILIPPINES ranked 46th among 124 countries surveyed by the World Economic Forum (WEF) as those nations conducive to developing its human capital, particularly in the fields of education, skills development, and deployment.”

46th sounds good until one reads “in the 15-and-under age group, the Philippines ranked 73rd . . . 51st in the 25-54 age group.” Pleasingly, we do better, “20th in the 15-24 age group . . . 40th in the 55 to 64 age group, and 33rd in the 65-and-over group.”

The 15-and-under ranking so poorly at 73rd should deeply bother us. These kids haven’t done anything except to wake up in our broken system. And while not doing as badly, to be 51st in the 25-54 age group means that those that are more recent entrants or well into their careers need a get fairer shake. Which can only be a reflection of our inability to be competitive and attract FDI and industrialized and overcome underdevelopment.

And indeed we should miss the good old days: I averaged 13 months doing my first 4 jobs because jobs were aplenty. [And I was not even a diligent student, voted least likely to succeed by my high school class.] That must be what Steve Jobs meant when he spoke to Stanford graduates in 2005, “Stay hungry, stay foolish.” But our young people may not be getting that chance today? And we can’t just keep failing them!

Thankfully, this writer came across the following: “House OKs school feeding program,” Jess Diaz, The Philippine Star, 17th May 2015.“Approved on Wednesday night was House Bill 5618 or the proposed National School Feeding Program Act that aims to address incidence of malnutrition, declining academic performance and dropouts among school children.”

But we need more than that to fix a broken system. Again, thankfully, two articles somehow have thrown a ray of hope. “Bill seeks to shore up budget reforms past Aquino tenure,” Mikhail Franz E. Flores, Business World, 11th May 2015. And “Speaker: Economic Cha-cha among gov’t priority measures,” Paolo Romero, The Philippine Star, 16th May 2015.

“Clearly, the passage of this bill will fortify the government’s accountability to the people for its use of public funds through a more efficient public financial management that facilitates greater transparency and delivery of direct, immediate and substantial services . . . the measure seeks to bring the country’s public financial management system up to international standards.” [Flores, op. cit.]

“What matters now is to ensure that PFM reforms are sustained and even further escalated beyond the present administration . . . Under the proposed law, Congress will take on additional powers: monitoring and review of agencies’ spending performance; review of fiscal policy strategies and consider annual financial statements. Economic agencies such as the Department of Budget and Management, Department of Finance and the National Economic and Development Authority will likewise prepare reports which will outline the government’s fiscal strategy in the near-term, medium-term and long-term.”

“The proposal to ease the restrictive economic provisions of the Constitution is just one part of a bundle of reform measures prioritized in the House of Representatives to ensure the economy will not slide back into a boom-bust cycle, Speaker Feliciano Belmonte Jr. said.” [Romero, op. cit.] “We need a well-crafted law that focuses on economic efficiency rather than on size and market structure alone, and which address improper business conduct and excessive and harmful market power that result in the reduction of output or increase in price,” Belmonte said.”

“While I understand that such amendments do not constitute the only solution in attracting more investments, I believe that it is high time that we worked to attune and adjust our economic policies more strategically to the needs and demands of our time,” the House leader told members of the Philippine Bar Association on Thursday.

“On the final stages of approval is the Anti-Trust Bill or the proposed Philippine Competition Act, which seeks to dismantle monopolies and prevent unfair competition.”

It may be too early to celebrate these new initiatives by our legislators. Beyond the credibility issue that they can’t just shake off, a similarly big question is are we as a people indeed predisposed to reform? Or does ideology remain a stumbling block as well?

“Politics is big ‘business’ here at home (!), Bobit S. Avila,” SHOOTING STRAIGHT, The Philippine Star, 14th May 2015. “A good friend, Romy Ronquillo sent me a report from Money Magazine where its editor Kurt LaVine said, ‘If Philippine Politics can only be listed as a public corporation, more investors will pour their money to more of the most profitable businesses in Asia.’ Phil. politics listed at US$10 Billion is the 2nd most profitable business in Asia, beating Toyota and Samsung.”

“Department of Justice (DOJ) Secretary Leila de Lima already said that she is not prioritizing the filing of cases against the 3rd Batch of Senators and Congressmen who are in the list of the so-called Janet Lim Napoles files. This is why corruption in this country especially the ones committed by those so-called “Honorable” politicians (and allies of Pres. Aquino) could never be eliminated because the people tasked by the State to hunt down the corrupt and the damned and throw them to jail just don’t care.”

As if politics aren’t hurdles enough, we also have questions like “Why we should want free trade,” BusinessMirror Editorial, 10th May 2015.“There are also those that believe that the oligarchs, the large companies that have a ‘too-large’ a share of Philippine business, do not want the competition from free trade. If that is true—and we are not saying it is—then both the Left and the oligarchs have the same goal of wanting the people to be dependent on either ‘big business’ or the government for their economic prosperity.”

“Without free trade between nations, we face the condition of autarky where an economy depends on consuming only what it produces and producing only what it consumes. That generally works badly as North Korea is the best example of autarky. People and nations depend on each other through trade for their economic well-being. Try raising your own chickens if you doubt that truth. The division of labor among people and among nations is the essence of civilization.

“Trade is the ultimate example of cooperation between nations. Otto T. Mallery, a late 19th-century economist in his 1943 book Economic Union and Enduring Peace, states, ‘If soldiers are not to cross international boundaries, goods must do so. Unless the Shackles can be dropped from trade, bombs will be dropped from the sky.’”

Conflicted as we are about trade is, surprise, surprise: “The Philippines is experiencing continued declining competitiveness despite the passage of the AFMA 17 years ago. And while agricultural exports are increasing, the pace of importation is so much faster, thus widening the trade gap even further.” [Lame efforts to reform agriculture sector, Rey Gamboa, BIZLINKS, The Philippine Star, 14th May 2015.]

“An in-depth look at the situation reveals only one problem: inadequacy of government to deal with the challenges and issues. We have a law – in fact, several laws covering agriculture, some of which have been on the verge of conflicting – that has remained lame through the years. Despite the many studies in past years that attempted to pinpoint the major problems and their solutions, nothing substantial has happened.”

How do we learn to change?

“The pope said that he was, indeed, a changed man, as John L. Allen recounts in his new book, ‘The Francis Miracle.’ The pope said he was filled with ‘interior freedom and peace, and that sense has never left me.’” [Pope Francis and the Art of Joy, Timothy Egan, The New York Times, 15th May 2015]