“The country should strive to move twice as fast – 'Arangkada' – which means to accelerate.”

That’s straight out of the “Executive Summary, Arangkada Philippines 2010: A Business Perspective to create a bright future for the Philippines, the 12th most populous country – and probably the 10th or 9th by 2030. 

“Arangkada is a guidebook to a better Philippines: (a) with the Per Capita Income (PCI) of a middle-income economy; (b) robust investment levels; (c) better infrastructure; (d) and higher government revenues to pay for social services, especially education and health. 

“Reduce absolute poverty by inclusive growth with less malnutrition, crime, and insurgency. And with more rewarding opportunities at home, Filipinos would have less reason to work abroad.”

And here’s the one from NEDA: “AmBisyon Natin 2040 represents the collective long-term vision and aspirations of the Filipino people for themselves and the country in the next 25 years. It describes the kind of life that people want to live, and how the country will be by 2040. As such, it is an anchor for development planning across at least four administrations.

“AmBisyon Natin 2040 is a picture of the future, a set of life goals and goals for the country. It is different from a plan, which defines the strategies to achieve the goals. It is like a destination that answers the way to get to the destination. AmBisyon Natin 2040 is the vision that guides the future and is the anchor of the country’s plans.

“AmBisyon Natin 2040 is the result of a long-term visioning process that began in 2015. More than 300 citizens participated in focus group discussions, and close to 10,000 answered the national survey. Technical studies, to identify strategic options for realizing the vision articulated by citizens, were prepared. The exercise benefitted from the guidance of an Advisory Committee composed of government, private sector, academe, and civil society.”

We’re now in 2020, which means 5 and 10 years have come and gone, and do we know if we’ve moved the needle? But first thing’s first, who is the leadership behind these ambitious plans? If we say it is the JFC and NEDA, should we despair?

The blog has time and again raised how our neighbors did it. If our instincts aren’t parochial and insular, we would know the common denominator of their efforts and successes: “Beg for Western money and technology,” so said Lee and Mahathir to Deng.

That recalls a friend who was then working on her Ph.D. dissertation. And to paraphrase her pitch, she went, “I’m working with a professor to develop my thesis. And we will soon be ready with the outline. I know we are in the same industry. And I want my dissertation to capture the real world. I don’t intend to use it to teach, but I want it to help me advance my knowledge of the industry. Which I know will positively impact my career. I would ask your assistance to guide me. And the first thing I will do is share with you the outline which should be ready very soon.”

Her significant other was a subordinate of the writer – who accepted a two-year stint to organize and lead the sales force of his Eastern European friends. The object was to expand the business beyond their small country and make it a regional and then a global enterprise. She knew the writer was bringing Western technology. And to fast-forward a bit, it also paved the way for a Western financial institution to step forward.

We Pinoys must recognize that there are several ways to tap Western money and technology. Then think of Vietnam becoming the regional hub of Samsung’s technology manufacturing in the region. Many of us looked down on Vietnam until reality hit us – and they are now poised to overtake us, and more amazing is when they do it to Singapore.

We Pinoys aren’t at the sole mercy of oligarchy. They also mirror our parochialism and insularity. That shouldn’t surprise us, given our success model is represented by monopolies and oligopolies. Sadly, collectively, they can’t match Samsung Vietnam, for example. That explains why we’re way down the abyss. Yet, what do we celebrate day-in and day-out in our media?

That is why the blog spoke to intellectual curiosity in recent postings. It is to look outward and forward to challenge long-held and assumed knowledge and beliefs. The world we live in is dynamic, not static.

Yet, even Harvard graduate students can use intellectual curiosity. “In 1997, Jeff Bezos gave a little talk to some Harvard graduate business students about his online store known as Amazon. The large-brained students began to chat among themselves as if Bezos weren’t there. Then, one of the fine Harvardians told Bezos: You seem like a nice guy, so don’t take this the wrong way, but you need to sell to Barnes & Noble and get out now. Naturally, many will chuckle at the realization that Amazon’s position is a touch more secure than Barnes & Noble’s these days.

“But there's one profound lesson here and one that’s truly glorious. When you have a business based on a vision (of the future) and not the present, chances are your critics will be looking from the perspective of the present. They see the ‘now,’ and have an absolute belief how now will influence the future. Sometimes, though, now will be rendered swiftly irrelevant by a fast-moving future. And the future we’re currently living in has moved at far too fast a pace for many people’s liking.” [A Harvard Student Told Jeff Bezos Something No CEO Wants to Hear. Worse Was the Way He Said It, Chris Matyszcyk, Inc., 1st Mar 2020]

And what about leadership? Think Lee, Mahathir, and Deng – not the JFC and NEDA.

But back to the dissertation. The writer redid the outline to highlight the desired outcome: It must be actionable from the standpoint of the Ph.D. candidate and her goal to advance her knowledge of the industry and positively impact her career. In fairness to the professor-adviser, he accepted the revised outline.

There were other instances when the writer shifted the emphasis of a piece of the dissertation. For example, “I never used the Markov algorithm over the decades I did global business – from the subsidiary level to the very top of the house. If presenting such an algorithm makes the thesis look scientific, I will incorporate several caveats borne out of real-world experiences. In other words, Markov was a great mathematician but is not a magic wand.” [Many years later, Jeff Bezos would explain that all he can show to explain the success of Amazon as far as numbers are concerned are the simple math.]

Long story short, today, the couple is based in the West. The gentleman runs the Western European business of the writer’s Eastern European friends, and the lady is the global marketing manager of a famous brand that many of those familiar with the blog must be using. 

It’s a small world, a Western brand managed by an individual that was born and raised in the East. 

Let’s digress some: In the meantime, the Eastern European friends started a fund in their hometown where their manufacturing facilities are to assist the local community deal with COVID-19 as well as share the aggressive in-house effort they implemented. And media took the cue to encourage the locals to respond in the spirit of community and the common good.

With that said, let’s recall that in earlier postings, the blog spoke to Arangkada as akin to “big data.” Ditto for AmBisyon Natin 2040. The next step is critical; that is, the analytics.

And this is where we are witness to a vast chasm between Arangkada and AmBisyon and the real world.

First, we must recognize the crab mentality that is inherent in Juan de la Cruz. It equates to shortsightedness and our rural character – aka parochialism and insularity. It is a fixed mindset and not a growth mindset.

It explains why we can’t sift through big data and pursue analytics. In Eastern Europe, the writer uses the Great Commandments versus the 613 laws to make the analogy because of their Eastern Christian orthodox heritage.

And from his global business experience, he equates the Great Commandments to these three pillars: (1) Revenues; (2) Margins; (3) Efficiency. They are the imperatives to achieve the desired outcome of an enterprise. To be a positive societal force, an enterprise must attain sustainable growth and replicate a virtuous circle.

And in the 21st century, it must satisfy the metrics of innovation and global competitiveness. Recall that “innovation” is not for innovation’s sake. It must raise the consumer’s well-being. An excellent example for us baby boomers is it must be senior-friendly.

That said, consider our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

But let’s relate the above three pillars to Arangkada and AmBisyon to extend the analogy:

(1) The Philippines needs incremental export revenues of $100 billion to at least be like Thailand;

(2) That must be translated to a shortlist of industries and products that will yield the ideal margins so that farmers, for example, will generate handsome returns;

(3) The efforts demand utmost efficiency – i.e., Juan de la Cruz must learn to prioritize and focus.

That is why the initiative of the DTI to develop 42 industry roadmaps needs a serious rethink. It reflects on our crab mentality instead of “the community and the common good.” 

Indeed, we must toss much of our instincts. We cannot tolerate incompetence and inefficiency at the national level and then say we must move to a federal system to overcome the problem. That is classic “pwede na ‘yan” and is guaranteed to accumulate and compound our challenges.

We need scale and innovation and global competitiveness. And we’re starting with the wrong foot when we fragment our efforts. Take the comprehensive agrarian or land reform and our fragmented, unproductive and uncompetitive agriculture sector. See the above pillars: revenues, margins, efficiency.

The insanity that Einstein defines is beyond the pale. Yet, we keep doing it. Beyond land reform, think OFW remittances, the BPO industry, and, more recently, POGO. Why? Because we believe that we can make fiscal and monetary policies appreciably drive national income while staying as a service-consumption economy. See above how our neighbors did it to recognize our shortsightedness.

The bottom line: We need quick wins and mirror the Silicon Valley model of rapid prototyping by focusing on one or two industries with products that will win in the global market and yield the requisite margins to ensure their sustainability.

And here, the writer uses another analogy: photosynthesis. If we cannot replicate this ecosystem to support an endeavor, we cannot win in the global market.

That is the secret of MNCs – to drive revenues, margins, and efficiency into an ecosystem akin to nature, as in a virtuous circle.

We’re now in 2020, which means 5 and 10 years have come and gone, and do we know if we’ve moved the needle on Arangkada and AmBisyon? Are we ever closer to a better Philippines? 

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

Round and round we go

After eleven years, the blog can only sound like a broken record. Why? Our thought leaders and opinion-makers continue to recycle the same proposition time and again – aka insanity in Einstein lingo – despite our inability to overcome the embarrassment of being the regional laggard.

Consider our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity. Do they explain why dynamism is missing in Juan de la Cruz? How will he then forward-think?

There was an apparent desire to address the restrictive economic provisions of the Constitution, yet the opposing view has not gone away. Whatever one finds in our heart of hearts, our instincts inform them.

For example, we can’t seem to get over the assumption and fear that to open the economy means becoming second class citizens in our own country. Yet, that is what we did when we embraced POGO. Or when we selectively opened telecommunications and then some to foreign interests. In other words, even with our instincts, we can violate what we assume is sacred. Why? See above our reliance on political patronage and culture of impunity.

And unsurprisingly, the state of higher education is dismal. How can there be intellectual curiosity in academia with our instincts of parochialism and insularity?

When we throw in hierarchy and paternalism, it gets worse. But let’s establish a simple premise: hierarchy, when it equates to tyranny as in aristocracy, undermines the best thinking of man – which comes from diversity and pluralism.

And the consequence? An economic model that keeps hierarchy and paternalism intact as in a service-consumption economy. In other words, we have our eight top listed companies in the Forbes list, and we like to trumpet their glory. Yet, one company in poor Vietnam runs rings around them, Samsung Vietnam. Unsurprisingly, Vietnam is poised to overtake us and even Singapore. 

Why? Because in our case, the real drivers of the economy are the OFW remittances and BPO industry. They characterize a service-consumption economy that gives us the ability to pursue poverty via the 4Ps or conditional cash transfer aggressively. Early on, we even did the comprehensive agrarian or land reform program.

Still, they make us the regional laggard – with a poverty rate worst amongst the neighbors. So, what do we do? We want to drive tax revenues, but within the same economic model and without a concerted effort to move up to an industrial-investment economy.

In other words, from the same meager pie, we want to generate more, as in squeezing blood from a stone. Round and round we go.

Precisely because of our parochialism and insularity, we can’t look outward to our neighbors. Why? It is because of our faith in assumed knowledge. Classical economics teaches that fiscal and monetary policies are vital to economic development. That was until the Asian Tigers leveraged a mixed system.

And Lee Kuan Yew became the model, first by begging for Western money and technology. He ran Singapore like a company or a business enterprise, aggressively driving national income, and Mahathir and Deng, and, more recently, Vietnam followed suit. And they elevated the Singapore model (given more significant population base) by rapidly moving to an industrial-investment economy. See above becoming second class citizens in our own country. Did that happen to these neighbors that have cornered FDIs at our expense?

Because of our view of the world, how can we frame our challenges to ensure that we address them? For example, innovation and global competitiveness define the 21st century. Of course, we don’t have the heritage, as they are beyond us. But think of Vietnam becoming the regional hub for Samsung’s technology manufacturing in the region.

Why did Vietnam beat us to the draw? Because we can’t look outward and forward being parochial and insular. That is why the blog gave the example of a Guangzhou local enterprise with a minuscule business but had the gall to approach the writer’s old-MNC company to propose a partnership.

And they were not to be pushed around. The writer had to travel to China every month for eight months; only then he saw the light at the end of the tunnel. Today they are the regional hub for this MNC’s manufacturing efforts.

Let’s pause and ask ourselves: Can we get over our instincts?

It appears we can’t. So, what we are left is to look for scapegoats. We instead want to solve the problems of the world when we have our hands full being the only one in the region that has failed to cut poverty drastically – and are the regional laggard.

To look outward and forward is to benchmark. Try our neighbors; they have awed the world. We can’t keep talking about poverty without recognizing that these neighbors have done wonders in this department.

It is not about debating isms. It is about who is Juan de la Cruz? As some would know, the writer has been a volunteer development worker in Eastern Europe for 17 years and counting.

These people were guaranteed ownerships (e.g., their respective homes or apartments) and jobs. Yet, when they opened their borders, it was one horrific scene to outsiders. Time cruelly left these people. And they were the most impoverished nation in Europe.

And because they then embraced a different worldview, the writer is impelled to continue to guide them and not leave them in the dark. Today, they are his pride and joy. Their number two brand sells in 70 countries and has become the most profitable. And beyond their portfolio of winning brands, they are continually working on up-and-coming ones consistent with their ethos to raise the consumer’s well-being.

Still, we cannot set aside their ability to prioritize and focus on their first competitive, winning brand. It gave them the critical mass they needed early on and the profitability to develop and the experience – and perceptive judgment – to expand their portfolio at a faster clip. [Recall the Silicon Valley model of rapid prototyping – aka “fast fail” – to accelerate the product development learning curve, i.e., learn and re-learn as early as possible in the innovation process.]

To us, Pinoys, to prioritize, is alien because of the crab mentality. For example, we have been developing 42 industry road maps since the Aquino administration and have yet to proclaim our first competitive industry or winning brand. Because we want to please many industries and adhere to the protocol of the academe. [Consider too that Germany’s top 10 exports account for 69.3% of the overall value of its global shipments. In other words, we must learn to recognize the “vital few from the trivial many,” aka Pareto principle.]

Conversely, instead of these Eastern Europeans being eaten alive by Western global behemoths, they became their bane – and pain. And in 2011, the EU Competitiveness Commission recognized them as a model.

The big picture is these people can give many of us, born and raised in the free market system, a lesson or two, how they dissect their new world versus the old. They’ve lived under both and, indeed, the experience is the best teacher.

For example, from entitlement mode, they shifted to personal responsibility, i.e., that there is no free lunch. But that means recognizing that there is a more significant playing field beyond their once-closed borders. That capital, technology, and market are available to those who seek them. See above Samsung Vietnam.

Indeed, after eleven years, the blog can only sound like a broken record. Why? Our thought leaders and opinion-makers continue to recycle the same proposition time and again – aka insanity in Einstein lingo – despite our inability to overcome the embarrassment of being the regional laggard.

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

Was our dynamism neutered?

Are we debating the wrong questions and why we make false choices? Should we pause for a moment and figure out if dynamism is foreign to us?

Consider our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity. In other words, they explain why we are backward- and inward-looking.

Recall Rizal’s assertion that we love tyranny, and he created the character of Padre Damaso. Did he confirm that we suffer in dynamism?

Why is the question crucial? First, we were the basket case of Asia. Then despite attaining annual growth in the 6%-7% range – that makes us one of the fastest-growing economies – we still find ourselves the regional laggard. If our neighbors are dynamic, we remain static.

Consider: “The Philippines continues to be among the laggards in East Asia in attracting more foreign direct investments (FDI). Data from the UN Conference on Trade and Development (UNCTAD) World Investment Report (WIR) show that our FDI inward stock, an indicator of cumulative foreign investments, was still below $90 billion in 2018 and only about 55% of that in Vietnam and Malaysia, 37% of that in Thailand.

“The only neighbors that we can ‘beat’ as having lower FDI stocks are Myanmar, Cambodia, Laos, and Brunei.” [PSA, PCC, and competition, Bienvenido S. Oplas, Jr., My Cup Of Liberty, BusinessWorld, 10th Feb 2020]

In other words, we have a challenge; that is, our inability to match our neighbors attract foreign direct investments. Moreover, while they have become industry-investment driven economies, ours is a service-consumption one.

Recall what Lee and Mahathir said to Deng, “Beg for Western money and technology.” Unsurprisingly, China followed the footsteps of the Asian Tigers, and, more recently, Vietnam did as well. Do they still talk about poverty as we do?

Or do they ever talk about their respective Constitutions and the fear of becoming second class citizens in their countries while attracting unbelievable levels of foreign direct investment? Can we name a neighbor where this “fear” that has consumed us for the longest time ever turned real? Should we examine how we conduct foreign relations? Recall the 1972 bestseller, “I’m OK — You’re OK.” See above our instincts. Are they behind our damaged culture?

If we think of Russia and China and how they managed to progress and develop, China embraced the free market while Russia kept to their politics. For example, Putin continues the aspiration of restoring the old glory that was the USSR with its satellite countries. Think of the conflicts they created in Georgia and Ukraine, to name just two and why the Baltics states, among others, are reaching out to the West.

The bottom line: While China has evolved into an economic power, Russia remains a developing country. Like the Philippines, it has kept crony capitalism and oligarchy with no industrial thrust – like that of China and the Asian Tigers – and heavily dependent on oil.

Are we in the Philippines debating the wrong questions that we make false choices? Should we pause for a moment and figure out if dynamism is foreign to us?

That is why the blog keeps teeing up Arangkada. Recall how Lee Kuan Yew ran Singapore, like a company or a business enterprise. And Mahathir and Deng, and Vietnam followed suit.

In other words, we ought to do something similar, map out an industrial-investment economic model that will aggressively drive national income, and not just be elated by a 6%-7% growth rate driven by a service-consumption economy. 

As well as by “pwede na ‘yan” – e.g., the OFW phenomenon, BPO industry, POGO – that as we know yields a meager per capita income. And that reveals a failure to reframe the challenge of poverty. For example, an industrial-investment economy will generate far more quality employment beyond vastly enlarging the economic pie and therefore address poverty more forcefully as demonstrated by our neighbors.

What to do? We can:

(a) start with the need to raise exports by over $100 billion to at least be like Thailand as defined by the DTI;

(b) be focused – via prototyping – on a couple of industries with products that have a market so we can rapidly gain experience and perceptive judgment; and as necessary, be equipped to upgrade future sector and product development efforts continually;

(c) that they generate the desired margins to make our farmers, for example, realize handsome returns.

We can then assemble and pull together the essential support elements like:

(a) infrastructure development;

(b) reinforced by investment and industrial biased Constitution;

(c) seek partner nations and enterprises that lead in the requisite technology, think of Vietnam becoming the regional hub for Samsung’s technology manufacturing in the region – and which won’t make us second class citizens in our own country.

In other words, we must not be bogged down by the chicken-and-egg debate. Think the Asian Tigers, China, and Vietnam versus Russia. 

Consider: Because of our failure to be ahead of the curve in infrastructure development, we are spending nine times more in the economic cost of Metro Manila traffic than on our flagship poverty program, the 4Ps, or conditional cash transfer.

Recall the comprehensive agrarian or land reform that was to deal four-square with rural poverty. Now we know it has undermined not just agriculture productivity but its competitiveness as well. 

The bottom line: A dynamic mindset as opposed to a static one will equip us to reframe the challenges we face, ask the right questions and look forward and outward – and, as necessary, be able to forward-think.

We are in the 21st century but still pulled into archaic thinking and concerns even when the world is into quantum computing and AI, among others.

As we seek to find our place in the sun, we must keep the dynamism of the universe in mind. For example, aristocracy, as in tyranny, is antiquated while diversity and pluralism leverage the best thinking of man. This world is not about perfection and permanence precisely because it is dynamic. It confirms man’s ability to respond to the challenges he continually faces.

For example, they call the America model as an experiment – and aspirational. And so, because of the lesson from WWI, Uncle Sam did not want to be part of WWII. He had to be convinced by allies and friends that it is in the best interest of the community of nations for the US to exert its influence. Otherwise, Hitler could have run over Europe and the rest of the world.

Today, America continues to evolve. It has never claimed perfection; we cannot think of them as stuck in the mindset of the past or why Trump’s support comes from the minority, not most Americans.

That is not to promote an ideology, but to recognize the milieu, this world we live it – it is dynamic and not static. In other words, we can’t keep our head in the sand with our parochial and insular bias; else we shall be like a fish out of water.

Our future is even bleaker with the state of higher education. Intellectual curiosity teaches the young:

(a) how to view the world;

(b) how to frame and reframe a problem;

(c) and how to forward-think.

Rank does not bestow this privilege. Experience does, as in perceptive judgment.

Practice. Practice. Practice. It is not about pulling rank.

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

Making false choices

Will we ever agree on where the Philippines is, as in a baseline, so we don’t start with making wrong choices?

How sound is the question, do we want to be a territory of America or the province of China – if we cannot stand on our own?

Take Vietnam. They are poised to overtake not just us but Singapore, too, given their explosive growth reminiscent of the Asian Tigers.

Do we even think they posed a similar question to themselves like we are doing now? It speaks volumes compared to how uncertain we are. It is not a surprise.

Vietnam’s largest enterprise, Samsung Vietnam, runs rings around our eight biggest listed companies that are on the Forbes list. And if we had a higher “Competitiveness Quotient” – or CQ as opposed to IQ – we would not take that sitting down.

In other words, Vietnam vigorously drives its economy much more than we do and why poverty haunts us.

Consider: The Vietnam War officially ended in 1975, while WWII did in 1945.

The Philippines has not been in a war for thirty years before Vietnam finally got rid of the Americans. Theirs is more recent such that their economic development started much later than ours. Yet, today they generate far more FDIs and exports.

Worse, against the rest of the neighbors, our per capita income pales in comparison – Thailand has more than twice. In contrast, Malaysia has over three times ours, and even Indonesia, with a far greater population base of 2.5 times, has a per capita income of 1.5 times.

Those facts are so damning that we ought to be ashamed that we can’t take care of our people instead of cherry-picking our pluses. For example, we have been right in harnessing monetary and fiscal policies. Net worth-wise, counting our assets and liabilities, we are the laggard.

And for the umpteenth time, thanks to our OFWs and the BPO industry that we have this windfall to cover foreign exchange needs, manage inflation and get credit rating upgrades.

Sadly, they all still make for a weak structural economic model. That is the crux of the matter. It is not rocket science.

That is where our problems start because Juan de la Cruz is yet to figure out if he is coming or going.

“The sad, never-ending story of PH utilities,” EDITORIAL, The Manila Times, 27th Feb 2020. “The most pressing need of the Philippines right now in terms of infrastructure is more electricity generating capacity and additional sources of water. We are developing power plants, but they are too few to prevent the country from rising above the unsustainable position of continually trying to catch up. Likewise, the Kaliwa Dam project, which would stabilize Metro Manila water supply for several years, is in a practical sense no nearer to be a reality than it was last year, or the year before that, or the year before that.

“Through at least three successive administrations, everyone in the Philippines, from the most casual utility customer up the ladder to the President of the Republic, has known that the country’s utility resources and infrastructure are woefully inadequate. Yet the response by those whose job descriptions include the responsibility to find or create solutions to utility shortcomings consistently is nothing more than to react, largely ineffectively, to the crises once they begin.”

Is that an element that must be part of; however, we define our baseline?

Then consider: “The Philippines continues to be among the laggards in East Asia in attracting more foreign direct investments (FDI). Data from the UN Conference on Trade and Development (UNCTAD) World Investment Report (WIR) show that our FDI inward stock, an indicator of cumulative foreign investments, was still below $90 billion in 2018 and only about 55% of that in Vietnam and Malaysia, 37% of that in Thailand.

“The only neighbors that we can ‘beat’ as having lower FDI stocks are Myanmar, Cambodia, Laos, and Brunei.” [PSA, PCC, and competition, Bienvenido S. Oplas, Jr., My Cup Of Liberty, BusinessWorld, 10th Feb 2020]

But to truly establish our baseline, we can skip bragging about the history of our credit ratings. They blind us to the structural weakness of our economic model, i.e., it is a service-consumption economy against an industrial-investment economy that our neighbors share.

“The Philippines scored its highest credit rating in history from Standard and Poor’s Global Ratings (S&P), now at BBB+ and a notch away from the A category. S&P said it upgraded the country’s credit rating on the back of consistent economic growth and prudent spending.

“What is the Philippines’ credit history? The Philippines got its first credit rating in 1993 under then-president Fidel Ramos. The BB- rating it received then was under the ‘speculative-grade,’ which meant that investing in the Philippines was very risky.

“The rating was then upgraded to BB+ during the later years of Ramos and the term of his successor, Joseph Estrada. Due to various political and economic factors under the presidency of Gloria Macapagal Arroyo, we were back to BB-.

“It was during the administration of Benigno Aquino III that the country gained traction. In just four years, the Philippines climbed four notches to BBB,  considered ‘top-notch’ or an investment-grade rating. That sent a signal to investors that doing business in the country had much potential, as the government proved that it could pay off loans.

“In April 2019, under President Rodrigo Duterte, the country climbed to BBB+, the highest credit rating ever for the Philippines.” [rappler.com, 9th May 2019]

Enter, Arangkada. If the Aquino administration did not run with this ball, how come the Duterte administration doesn’t seem to do any better?

The simple answer is we don’t have an industrial-investment heritage focused on driving national income – not tax revenues per se, but the tax base that is derived not from consumption but manufacturing, which in the 21st century presupposes innovation and global competitiveness. See above, Samsung Vietnam runs rings around our most significant enterprises.

It boils down to our parochial and insular bias. Why would Samsung choose Vietnam to be the regional hub of its technology manufacturing in the region?

Many postings ago, the blog shared how a Guangzhou enterprise with a significant share in the local market approached the writer’s old-MNC company being the global industry leader in their business to propose a partnership. “You are the number one brand globally; we are too but limited to the local market. We want to partner with you.” Unsurprisingly, this once local Guangzhou company is today the hub for this MNC’s regional manufacturing efforts.

In the Philippines, we rely on political patronage and oligarchy and don’t look outward to conquer the world. Because our success model is one of monopolies and oligopolies, aka rent-seeking. It comes from our hierarchical and paternalistic bias – and they connote entitlement, not personal responsibility. 

“Rank” has its privileges, while “paternalism” implies “hierarchy” is to dispense favor. Why do we think corruption is second nature to us?

The bottom line: We can’t imagine being more prominent than how our rank defines us. Why do we think we lag our neighbors in higher education too? We cannot overstate that the prognosis for this nation is bleak as bleak can be.

That is why the blog has discussed Arangkada for the longest time. It can be the right launching pad for us to develop an industrial-investment economic model finally. But just as the world has learned from the Asian Tigers, we must beg for Western money and technology.

Why is Arangkada a good platform? Think of why we have miserably failed with something as essential as water and electricity. Parochialism and insularity won’t make us look outward and forward. In other words, we can’t forward-think as our neighbors do.

That is why we cannot imagine an industrial-investment economy. The DTI defined our need to generate incremental exports of over $100 billion so that we can at least be like Thailand. That is a better perspective and offers a better way to address our water and electricity needs and infrastructure development in general.

In other words, we must visualize the big picture, as in an industrial ecosystem. That will open our eyes to the pursuit of a viable undertaking because an industrial ecosystem must generate enough income to make it a sustainable enterprise.

Here’s a quote from an earlier posting: “Our paradigm is that of a consumption economy. What to do? In this era of ‘rapid technology and innovation,’ there is such a thing as ‘fast-fail,’ which we know from Science 101 as ‘experimentation.’ Therefore, Silicon Valley is the center of rapid technology and innovation.

“In other words, we don’t have to cross all the t’s and dot the i’s. There is such a thing as ‘prototyping.’

“And we have an excellent example in Arangkada. There is enough thinking that went with it yet may not pass as a Ph.D. dissertation for educators to embrace. Still, there are lots in Arangkada akin to ‘big data.’ The hard part is the analytics.

“The writer, as a practitioner, always uses the Great Commandments to introduce analytics to his Eastern European friends. Forget the 613 commandments. 

“The key is not to develop 42 industry road maps like the DTI is doing but to pick one or two industries and aggressively pursue prototyping. The two that give the biggest bang for the buck will be a good starting point. 

“But that hypothesis is outside the paradigm of DTI – i.e., that is not how they frame the challenge. They work on the premise of driving efficiency and productivity.

“That comes from linear thinking, given our assumed knowledge, i.e., the factors of production. It also explains why we view poverty from the supposed wisdom of the 4Ps (or conditional cash transfer.) 

“We don’t turn the challenge on its head, that ‘poverty’ is the effect of our underdevelopment, characterized by our meager per capita income.

“We have been racking our brains to raise the productivity of farmers without first figuring out the right product, one that has a market and command the requisite margins to make the farmer’s undertaking viable. That is why Malaysia turned from rubber to palm oil.

“But even more fundamental is to define the desired outcome. For example, the DTI started on the right foot. We need an incremental $100 billion in exports like yesterday to at least be like Thailand. 

“If these industries come from Central Luzon or Cagayan de Oro or Davao, so be it. The key is to do a ‘fast-fail’ so that we learn very quickly and gain perceptive judgment to then upgrade the effort. We don’t have first to debate federalism.

“Take China. China has over a billion people. They did not debate the system of government. They acknowledged that the three regions of Guangzhou, Shanghai, and Beijing would be the epicenter of rapid economic growth because of population and existing commercial activity.”

Will we ever agree on where the Philippines is, as in a baseline, so we don’t start with making wrong choices? Does Juan de la Cruz know if he’s coming or going?

Consider: Beyond electricity and water, we keep tripping ourselves.

“After 33 years of litigation, the coconut levy funds (CLF) in the National Treasury and the sequestered stocks of San Miguel Corporation and other assets acquired from the taxes collected from coconut farmers and the coconut industry remain inaccessible to the intended beneficiaries.” [Here’s how to resolve the legislative impasse over the coconut levy funds, Dr. Emil Q. Javier, Manila Bulletin, 29th Feb 2020]

“A subsidiary of conglomerate San Miguel Corp. (SMC), SPPC owes PSALM P24.6 billion. It has refused to pay the debt and instead filed a case before the Mandaluyong Regional Trial court asserting a different formula for computing its payables to PSALM. [This came out in a public hearing at the House of Representatives.]

“SPPC’s continued non-payment will compel PSALM to contract new borrowings to liquidate NAPOCOR’s maturing obligations. We risk getting into a vicious cycle that will result in PSALM absorbing additional interests and other finance charges. That can be as much P1 billion in borrowing costs per year, which could go a long way in building new roads and modern agricultural facilities for the country’s farmers.

“Curiously, the hearing did not involve the House committee on energy even when the issues were right down its alley. And this leads back to Quezon’s quotable quote that could now be further paraphrased: ‘My loyalty to my country ends where my loyalty to my patron begins.’” [Hierarchy of loyalties, J. Albert Gamboa, Manila Bulletin, 27th Feb 2020]

Will we ever agree on where the Philippines is, as in a baseline, so we don’t start with making wrong choices?

How much deeper do we want to bring this nation down?

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]