"Past mistakes and wrong judgments."

That is lifted from Andrew J. Masigan's article, "What went wrong, and what can we do?" [The Philippine Star, 2nd Dec 2020]

Andrew is an economist, and here's another perspective from another economist: "The CREATE tax reform enters the scene at an opportune time, although we needed it many years ago." [CREATE passage – A "major" achievement, Gerardo P. Sicat, The Philippine Star, 2nd Dec 2020]

"To be equipped with a better weapon is better than without, but there are other hurdles. It removed the uncertainty concerning the country's competitive position about the corporate income tax and the nature of transitional measures for export firms and foreign investors.

"But immediate attention will have to be made about the next essential steps. The government's fiscal branch must pay attention to the suspicion that creating a super-body on fiscal incentives will impede speed and encouragement in promoting investments.

"It is also vital to be aware that the improvement of tax and incentives legislation is just one element of the problem in creating a highly progressive, vibrant investment community. [There are other issues, e.g., the peso exchange rate and reform in labor markets.]

"Remember, too, the constitutional restrictions concerning foreign investments!"

After two economists, let's hear from a humanist. "The term 'humanist management' is now beginning to be popular in academic circles. Amid the economic crisis caused by the pandemic, some business leaders are exploring this idea.

"One of the core issues in this debate is the issue of economics and its goal. The traditional economists hold that the primary goal is to grow the economy and use the 'gross domestic product (GDP)' as the barometer for economic progress. After the last global financial crisis, the mantra was to maximize GDP or 'grow the pie.'

"The traditional thinking was that the bigger the economic pie, the bigger the portions of the 'pie' for the 'common people.' Traditional economists, therefore, focused on the aspects of economic thought that could grow the 'pie.' This was the reason that the market economy and globalization became the mantra for most economists.

"The problem was that the concept and premise of capitalism – 'trickle-down' – did not happen. Instead, the rich became 'richer,' and the poor stayed poor. Even incomes of the middle class stagnated." [Elfren S. Cruz, Humanist economics, The Philippine Star, 3rd Dec 2020]

With due respect to Elfren – and his perspective is not isolated; so, let's dissect it for the benefit of the wider audience – are we problem-solving the Philippines like the economists quoted above, or are we doing an academic dissertation?

How do we see the economic miracle that Vietnam demonstrates – including overcoming poverty via rapid GDP growth? And before Vietnam, China and Malaysia and the Asian Tigers? As McKinsey expounded, capitalism lifted a billion people out of poverty. Are we hard-pressed to acknowledge reality because we were left behind?

For example, how can our top eight companies not generate a combined revenue to match Samsung Vietnam? Is humanist management the answer? Consider: The best we can do in the electronics industry is to be a third-party computer chip producer. At the same time, Vietnam is the regional manufacturing hub for Samsung smartphones, and soon, Apple AirPods.

Given the plight of Juan de la Cruz, shouldn't we be problem-solving?

The 2008 Global Recession came from greed. And that's the human condition we saw even in Eden.

No system can eliminate greed. And despots, for example, are the poster boys of "greed." Yet, they let people suffer abject poverty.

The wife and writer saw how ostentatious the world of these despots was during the heyday of the Russian tsars and Soviet empire — that is now extinct, for over-promising yet under-delivering. They also saw the "before and after" of China's ascent to superpower status.

On the other hand, the Philippines' backwardness stems from our closed economy – compared to our neighbors. And that instinct explains why we can't get industrialization going, e.g., Arangkada. But the blog won't tire of plugging Arangkada because it is one of our very few chances to overcome our backwardness.

What is Arangkada, again? Here's the Executive Summary from its website:

"Arangkada Philippines 2010: A Business Perspective is about creating 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, with the Per Capita Income (PCI) of a middle-income economy, robust investment levels, better infrastructure, and higher government revenues to pay for social services, like education and health care. Absolute poverty would recede via inclusive growth with less malnutrition, crime, and insurgency. With more rewarding opportunities at home, Filipinos would have less reason to work abroad.

"Richly illustrated with numerous graphics, Arangkada Philippines 2010 contains 471 recommendations from Filipino and foreign businessmen and women for building a more competitive economy, reform-by-reform, leading to high growth and millions of new jobs. Catching up and keeping up is an imperative, not a choice. The Philippines has lagged for too long, losing competitiveness, despite its immense potential and location in the fastest-growing region with 60% of the global population. More than ever, opportunities abound for the Philippines to improve trade and investment ties in Asia and elsewhere and advance towards high-income status.

"Despite a dynamic population and a land blessed with natural resources, economic progress has been slow. In most international ranking surveys, the Philippines is slipping. The country has not improved its competitiveness as much as others and continues to slide despite recent GDP growth and rising PCI. The country should strive to move twice as fast – 'Arangkada' – which means 'to accelerate.'"

Still, there is no perfect system. If we want to talk of the West and the wealthy nations, they are going through the post-industrialization era. And that is irrelevant in the case of the Philippines. We have yet to move up to an industrialized economy.

Recall that capitalism was the response to the ails of feudalism. And given capitalism has its imperfections, the world thought socialism was the answer.

Consider: If socialism is to supplant capitalism, why did the Soviet empire go extinct, and why did China embrace capitalism? But then, because China remains an autocracy, the world is witnessed how misplaced it can be amongst the community of nations – or the free world. Unsurprisingly, even Duterte is hedging on the VFA.

In other words, a system that doesn't respect individuals and the rule of law and transparency can't be a good neighbor and be trusted. And that is why feudalism is passe. On the other hand, despite its flaws, the US demonstrated to the world that it wouldn't tolerate "fascism." Translation: Trump became a one-term president.

For example, why are there Republican senators supporting Biden's call for another stimulus? Recall Trump did not want to hear the Covid-19 disaster experts predicted because an economic slowdown would undermine his reelection.

And with red states today reeling from the pandemic and straining state and local economies that under the law must keep their budgets balanced, a federal response is imperative. It is ironic punctuation to Trump's election defeat.

In the meantime, the wife and writer's friends in Eastern and Central Europe haven't stopped sharing with them how imperfect socialism is.

And so, one can't do an armchair assessment of these significant isms. They are too complex to assume expertise, even for us in the Philippine elite.

That's why the blog has spoken to "Design Thinking," which has become the heart of "innovation" models. It is a step up from "brainstorming," although cross-functional thinking is critical in both cases. Recall "behavioral economics" and see below; beyond classical economics, a nation's competitiveness depends on its industry's capacity to innovate and upgrade.

To appreciate design thinking, even lawyers participate in design thinking exercises. Yet in the Philippines, we are still into particular expertise akin to silos instead of harnessing the impact of varied experiences – to attain dynamism. Consider: Big Tech companies no longer put a premium on college degrees; instead, they seek real-world experiences from those they want to hire.

Whatever we do, if we can't wear dynamism's hat, we will always fall short. See below; why the writer – doing marketing and advertising globally for decades – is talking to a young person much younger than his daughter.

Recall too that despite the writer's recognized expertise, he preached principles instead of rules to his Eastern European friends. Why? He has lived through a highly competitive industry where "today's excellence is tomorrow's commonplace."

Consider: The Americans have their job cut out for them. The good news is that innovation is in their bag of tricks. Eureka may not come overnight, just like the vaccine for Covid-19, but they don't shrink from challenges.

They recognize that the universe does not stop – for a perfect system to be tailor-made. For example, the writer started a conversation with a 27-year old American who recently graced the Forbes magazine pages as among America's future.

He and his roommate, while in college, started a project on how to encourage Americans to vote. And after graduation, they turned the idea into a business undertaking in advertising and marketing. Unsurprisingly, they attracted investors and are today a $10-million enterprise.

And the writer shared the story of his Eastern European friends that he met when their business was even less than $10-miilion – and became one of Europe's fastest-growing companies.

The word is dynamism.

But since dynamism is Greek to us Filipinos, we can't get over the reality that perfection is not of this world. Recall "materiales fuertes" that we grew up with; it also explains why innovation is not our cup of tea.

Consider: Trump kept pointing at China, forgetting that Nixon opened the doors to China. And that was the beginning of the era that lifted China's people from poverty. It made Wal-Mart even more prosperous across the Pacific because they found a source of cheap products that Americans loved.

Of course, in the process, American manufacturing declined. Ditto for coal, although it accelerated given the concern for the environment and why mining turned south – in West Virginia and Pennsylvania, for example.

But even Japan, despite their manufacturing prowess, suffered. Today, given the pandemic, suicide is on the rise. People losing jobs are desperate.

The universe will not stop. For example, China is not the first to undermine the US economy. Recall how Japan was once the supposed culprit.

And that is the problem we have in the Philippines. We are so wedded to the past – that dynamism isn't in our vocabulary – because of our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

And that is why the blog has quoted Fr. George Gorospe several times. We can't step up to the plate and problem-solve. Messrs. Masigan and Sicat deserve kudos, indeed.

Given the plight of Juan de la Cruz, our decades-old inability to problem-solve is a disservice to the nation.

And if we don't stop and acknowledge our instincts, we stand very little chance to move forward.

And it must come from us in the elite class. We can't continue to justify the status quo even if it benefits us. Nor search for systems and nations and whatever else to blame instead of owning our failings.

Recall the 3 Cs of a hardy mindset, e.g., we control only ourselves, no one else. So, we better figure out how to raise Juan de la Cruz from abject poverty.

When Filipinos have to become OFWs to make both ends meet, there is something utterly wrong. And it comes from our tiny economic pie, as in Juan de la Cruz surviving in less than $2.50 per day – per the World Bank's definition of poverty.

That's why the blog keeps saying we must keep our eyes on the ball. We must industrialize.

Humanist management in an economy dependent on consumption and driven by OFW remittances and the BPO industry will not raise Juan de la Cruz from poverty. We are over a hundred million. Indeed, we need a much bigger economic pie – or more than $2.50 per day.

The posting is not to malign humanist management.

Recall the writer's old MNC-company was a model employer, both in the Philippines and among Fortune 500 companies. And his Eastern European friends were recognized as well – i.e., beyond one of the fastest-growing companies in Europe, they pay factory workers at the 75th percentile amongst comparable companies, including Western ones.

The posting is to stress that we cannot be mixing apples and oranges. See above; what Arangkada says and why the Philippines must accelerate economic growth.

And the challenge in front of us is a tough one given our instincts and lack of development experience.

For example, we can't wrap our heads around the demands of self-government and personal responsibility in the pursuit of the common good – the heart of democracy and free enterprise.

Even the US has to get back to the American experiment's foundation because it is not about tribalism as conservative or progressive but being one nation, aka the common good.

And that is the challenge for the Biden administration. Thankfully, he is sending the right signal, e.g., he is neither left nor right but a centrist. And that is the way he can expose any hypocrisy from McConnell, i.e., is he out to obstruct like he proudly proclaimed during Obama's time or to solve America's problems?

The signal from his caucus is alarming. They expect rigor from the Biden team's governing style, but which they tossed out the window to kowtow to Trump. For example, Trump holds the title for generating the highest deficit ever, and why honest-to-goodness conservatives worked against Trump's reelection.

Let's get back to the Philippines. The common good is contrary to the crab mentality. And the latter comes from a lack of development experience. In layman's terms, all it says is, "experience is the best teacher." Absent experience, we are at the dualism level – as in either/or – and through experience, we move up to relativism.

For example – and let's pause again right here; it explains the Pinoy crab mentality in more ways than one:

We can't prioritize because we have not experienced how focusing on the vital few over the trivial many will generate a much bigger bang for the buck – aka the Pareto principle.

It also explains why our decades-old approach to fiscal and monetary policies, while logical were linear.

That is why the blog reminded the business community that the PBSP (Philippine Business for Social Progress) is half a century old, and we're still focused on sharing prosperity. We can't imagine we can traverse "poverty to prosperity" with Juan de la Cruz. He isn't a second-class citizen.

Consider: Mahathir – who came to the scene eleven years after the PBSP – has successfully led and turned Malaysia to be "One of the most open economies globally, with a trade to GDP ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth, with about 40% of Malaysia's jobs linked to export activities. After the Asian financial crisis of 1997-1998, Malaysia's economy has been on an upward trajectory, averaging 5.4% since 010. It's on the way to achieve its transition from an upper-middle-income economy to a high-income economy by 2024." [World Bank]

Malaysia and the rest of our neighbors hold the mirror for us to see and recognize past mistakes and wrong judgments. But that will only keep if we in the elite class lead the nation to respond to the demands of self-government and personal responsibility in the pursuit of the common good, i.e., the heart of democracy and free enterprise.

And we can't if we are committed to our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

Gising bayan!

“Here is a land in which a few are spectacularly rich while the masses remain abjectly poor. And where freedom and its blessings are a reality for a minority and an illusion for the many. Here is a land consecrated to democracy but run by an entrenched plutocracy, dedicated to equality but mired in an archaic system of caste. 

“But the fault was chiefly their own. Filipinos profess the love of country, but love themselves – individually – more.” [Ninoy Aquino, Foreign Affairs magazine, July 1968; Stanley Karnow, New York Times Magazine, “Cory Aquino’s Downhill Slide,” 19th Aug 1990.]

“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]

“True social reform has little to do with politics. To unmoor ourselves from the burdens of the past, we must be engaged in the act of continual and conscious self-renewal. All men are partially buried in the grave of custom. Even virtue is no longer such if it is stagnant.

“Change begins when we finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us, often unquestioned, by the past and its power structures. It is essentially an act of imagination first.” [David Henry Thoreau; American essayist, poet, and philosopher; 1817-1862]

“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]

“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]

Beyond words, deeds.

With due respect to the business community, the above came to mind when the writer read this article: “Shared Prosperity: The business groups’ response to inequality and the pandemic,” BusinessWorld, 23rd Nov 2020.

“A historic event in the annals of Philippine Business happened on 5th Nov. In that event, 26 of the country’s largest business and professional associations signed a Covenant for Shared Prosperity.”

Over three decades ago, the writer sat in a committee under the umbrella of the PBSP (Philippine Business for Social Progress) to figure out how the business community can share prosperity.

But first, what is the PBSP? Says its website: “Philippine Business for Social Progress is the largest business-led NGO at the forefront of strategic corporate citizenship and business sector leadership, contributing to sustainable development and poverty reduction. Established in 1970, PBSP remains a consultant and partner of choice of companies and donors.

“PBSP scales up ‘impact’ by adopting the Collective Impact strategy to solve large, complex, systemic problems. PBSP organizes Platforms for Collective Engagements (PLACEs) to ensure alignment and sustainability of initiatives by multiple stakeholders.

“Responding to the changing landscape of CSR, PBSP’s brand of corporate citizenship taps into the core business competencies of companies and promotes inclusive business as a strategy. PBSP also continues to strategically engage companies through social investment, responsible business practices, and philanthropy.

“PBSP creates sustainable solutions to societal problems in its core program areas, which are Health, Education, Environment, and Livelihood and Enterprise Development. It also provides off-the-shelf options for the engagement of companies and their employees.

“With a proven track record, PBSP provides end-to-end services in development consulting which include project and grants management, events, and backroom management.”

The PBSP is half a century old. On the other hand, Mohamad Mahathir first became prime minister of Malaysia in 1981, eleven years after the Philippine business community created PBSP.

Where is Malaysia today?

“Since gaining independence in 1957, Malaysia has diversified its economy. From one that was initially agriculture and commodity-based to one that is host to robust manufacturing and service sectors, which have propelled the country to become a leading exporter of electrical appliances, electronic parts, and components.

“Malaysia is one of the most open economies globally, with a trade to GDP ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth, with about 40% of Malaysia’s jobs linked to export activities. After the Asian financial crisis of 1997-1998, Malaysia’s economy has been on an upward trajectory, averaging 5.4% since 2010. It’s on the way to achieve its transition from an upper-middle-income economy to a high-income economy by 2024.” [World Bank}

And where are we, the Philippines? Indeed, our GDP has been growing. Yet, we can’t claim a most open economy like Malaysia with a trade to GDP ratio averaging over 130% since 2010. Because we remain a consumption-service economy, driven by OFW remittances and the BPO industry. And we are way too far from becoming a high-income economy.

Have we in the business community ever stopped to wonder why we can’t see what is going on within and around us? Try looking outward and ahead of the curve. But it demands beyond logical and linear thinking, forward and lateral thinking. 

Here’s a bit of anecdote: Colleagues at ECOP (Employers Confederation of the Philippines), another organization of business enterprises, founded in 1975, had just briefed Marcos following a trip to Malaysia. “That guy Mahathir is aggressively pushing the development of his country. You will not believe how magnificent the highways he is building. And you won’t know it until you drive on them. They are rubberized, and you can’t find anything like it, comfort-wise when you’re traveling.”

And there was also China, doing its thing. “In 1979, the Central Government of the People’s Republic of China announced that Guangdong Province would follow less restrictive economic policies and would be permitted to set up three Special Economic Zones (SEZs), including two in the Pearl River Delta, Shenzhen, and Zhuhai.

“Preferential policies included a 15 percent tax rate, tax holidays up to five years, the ability to repatriate corporate profits and capital investments after a contracted period. Plus, duty-free treatment of raw material imports and intermediate goods destined for exported products and exemption from export taxes.

“The Pearl River Delta Economic Zone accounted for 19.9 percent of GDP and 38.9 percent of total trade in 2005. As the most dynamic region in the Chinese Mainland, it is increasingly important as a market. Given the massive scale of its export sector, the region has become an important industrial market for all sorts of inputs, materials, and capital goods.” [Wikipedia]

And, of course, there is Singapore.

“Upon independence from Malaysia in 1965, Singapore faced a small domestic market and high levels of unemployment and poverty. Seventy percent of Singapore’s households lived in badly overcrowded conditions, and a third of its people squatted in slums on the city fringes. Unemployment averaged 14 percent, GDP per capita was US$516, and half of the population was illiterate.

“The oil crises (1973-1979) raised government awareness of economic issues. It slated the government to create a new form of economic change. The government highlighted a focus on technology and education to be the new wave of economic growth. It managed to minimize inflation and provide workers with the proper machinery to sustain growth.

“The Singapore government established the Economic Development Board to spearhead an investment drive and make Singapore an attractive destination for foreign investment. FDI inflows increased significantly over the following decades, and by 2001 foreign companies accounted for 75% of manufactured output and 85% of manufactured exports. Meanwhile, Singapore's savings and investment rates rose among the world's highest levels, while household consumption and GDP's wage shares fell among the lowest.  

“The economy of Singapore is a highly developed free-market economy. Singapore’s economy ranks as the most open in the world, 3rd least corrupt, most pro-business, with low tax rates (14.2% of gross domestic product (GDP)) and has the third-highest per-capita GDP in the world in terms of purchasing power parity (PPP).” [Wikipedia]

Sadly, beyond Malaysia, China, and Singapore, even Vietnam has overtaken the Philippines.

“Vietnam’s development over the past 30 years has been remarkable. Economic and political reforms under Đổi Mới, launched in 1986, have spurred rapid economic growth, transforming one of the world’s poorest nations into a lower-middle-income country. Between 2002 and 2018, GDP per capita increased by 2.7 times, to over US$2,700 in 2019, and over 45 million people overcame poverty. Poverty rates declined sharply from around 70 percent to below 6 percent (US$3.20/day PPP).

“In 2019, Vietnam’s economy continued to show fundamental strength and resilience, supported by robust domestic demand and export-oriented manufacturing. Real  GDP grew by an estimated 7 percent in 2019, similar to 2018, one of the fastest growth rates in the region.” [World Bank]

Let’s get back to PBSP. 

The writer represented his MNC-company that was recognized as a “Model Employer” for developing employees to attain their potentials, including getting them into its global management pool and paid well-above-average compensation. It had a worldwide program to promote dental health in grade school that conforms to its clinical norms in product innovation. Also, it supported track and field sports for the youth, among others.

What else? He didn’t have to think hard; Fr. Ben Beltran had approached the Christian community the writer and wife headed and suggested a livelihood project for the young folks in Smokey Mountain.

And it was easy given the writer’s MNC-company was in household products. Fr. Ben explained: Why not provide this youth group some inventory of your products that they can peddle to the Smokey Mountain residents, and they get the markups. And the cycle can continue because they will be able to pay you for the costs. The benefit to them is that they don’t have to raise the capital for the inventory. And if you give them for the least costs so much the better.”

Let’s stop right there.

We Filipinos, including those of us in the business community, see the challenge of Juan de la Cruz as poverty, period. 

In fairness, neuroscience says the chamber of the brain that triggers pleasure likewise triggers pride in charity-giving.

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

In other words, we are yet to internalize the heart of democracy and free enterprise. They demand self-government and personal responsibility in the pursuit of the common good.

The common good, as our neighbors demonstrated, is to traverse poverty to prosperity.

It is not to share prosperity. That is insulting and patronizing. But we don’t recognize it as such because of our value of hierarchy and paternalism.

And how do we traverse poverty to prosperity?

Benchmark. Benchmark. Benchmark.

Recall the posting on “behavioral economics.”

“Very little can surprise me anymore. But perhaps the most surprising is that many people, particularly economists, believe that we are perfectly rational. The interesting thing about economics is that it has become the main guiding principle for policymakers, lawmakers, and businesses.

“My hope for the kind of work I do, and for behavioral economics in general, is that by augmenting standard economics, it could help design better policies that work with what people can compute and the ways they reason.

“What motivates me the most is trying to take what we’ve learned from cognitive psychology and apply it to real-world problems to improve the way we live. 

“To remain aware of our irrationality.

“That is easier in situations where we have a history of acting irrationally.” [The Science of Irrationality: Why We Humans Behave So Strangely; Dan Ariely, scientificameric.com, 21st May 2008; Ariely is a behavioral economist at the Massachusetts Institute of Technology and author of the best-selling book, Predictably Irrational]

“Those familiar with the blog may recall it discussed the book, Thinking Fast And Slow by Daniel Kahneman, a Princeton University psychologist who won the Nobel prize in economic sciences in 2002 ‘for bridging economics and psychology.’

“And here are two of the three points Kahneman reinforces: (a) “2 systems determine your behavior in your mind – one conscious and the other automatic, (b) Your brain is lazy and causes you to make intellectual errors.”

See above; our instincts as Filipinos.

That is why the blog keeps speaking to our neighbors.

Given the sorry plight of Juan de la Cruz, it behooves us to figure out the way forward. 

Instead of PBSP 2.0, shouldn’t we rally the country behind Arangkada? 

And we can start by speaking up for a more open economy as our neighbors have done. If amending the Constitution is a long shot, why not lobby legislators and economic managers to move beyond our decades-old approach to fiscal and monetary policies? 

We have to overcome the shotgun model for a more targeted one. 

Prioritize. Prioritize. Prioritize.

It means going to school on the vital few over the trivial many.

Or, get over the crab mentality. But can we? See below; what Ninoy Aquino said of our fault.

That is why the blog raised these two priority initiatives that can be models for public-private partnerships. Neither can go it alone, i.e.,

(a) Replicate Vietnam's efforts, drive exports to the hilt, focus on the next electronic device after the smartphone and the Apple AirPod. That means attracting FDIs via an aggressive tax regime, among others, and

(b) Replicate the Pearl River Delta Economic Zone, which is several steps above the Philippine model.

See above; forward and lateral thinking.

In other words, we must find a way to traverse poverty to prosperity. 

Beyond our respective industries, we want a much larger economic pie, given we are over a hundred million people. We have been rationalizing the positives of a much smaller one, calling for inclusion.

That’s empty rhetoric. See above; the science of irrationality.

Gising bayan!

“Here is a land in which a few are spectacularly rich while the masses remain abjectly poor. And where freedom and its blessings are a reality for a minority and an illusion for the many. Here is a land consecrated to democracy but run by an entrenched plutocracy, dedicated to equality but mired in an archaic system of caste. 

“But the fault was chiefly their own. Filipinos profess the love of country, but love themselves – individually – more.” [Ninoy Aquino, Foreign Affairs magazine, July 1968; Stanley Karnow, New York Times Magazine, “Cory Aquino’s Downhill Slide,” 19th Aug 1990.]

“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]

“True social reform has little to do with politics. To unmoor ourselves from the burdens of the past, we must be engaged in the act of continual and conscious self-renewal. All men are partially buried in the grave of custom. Even virtue is no longer such if it is stagnant.

“Change begins when we finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us, often unquestioned, by the past and its power structures. It is essentially an act of imagination first.” [David Henry Thoreau; American essayist, poet, and philosopher; 1817-1862]

“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]

“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]

Overcome “Pinoy Kasi” or perish

“No new laws, such as the creation of a separate disaster management department or yet another task force, will make much difference without, for starters, the necessary competence and will to implement critical plans to completion.

“The Commission on Audit (COA) has a pertinent reminder on this in a recent report: Flooding in the metro could have been prevented, or at least mitigated, had the Metropolitan Manila Development Authority (MMDA) completed crucial flood-control projects planned for 2018 and 2019.

“In 2012, its annual audit report noted that the MMDA—whose mandate includes the formulation and implementation of policies and programs for an integrated metro-wide flood control system—completed more than 80 percent of flood-control projects only in the third and fourth quarters of that year. That defeated its purpose: mitigate and prevent the damage from the heavy rains.

“The COA recommends that procurement for flood-control projects be done by the first quarter before the start of the rainy season from June to November.” [Hold MMDA to account, EDITORIAL, Philippine Daily Inquirer, 22nd Nov 2020]

The above Editorial raised the challenge of basic competence and will to implement critical plans to completion.

What else is new?

Enter: Behavioral economics. “Very little can surprise me anymore. But perhaps the most surprising is that many people, particularly economists, believe that we are perfectly rational. The interesting thing about economics is that it has become the main guiding principle for policymakers, lawmakers, and businesses.

“My hope for the kind of work I do, and for behavioral economics in general, is that by augmenting standard economics, it could help design better policies that work with what people can compute and the ways they reason.

“In particular, I think that this approach in behavioral economics can have a substantial impact on savings, health care, and a tendency to engage in risky behaviors. What motivates me the most is trying to take what we’ve learned from cognitive psychology and apply it to real-world problems to improve the way we live. 

“To remain aware of our irrationality. That is easier in situations where we have a history of acting irrationally.” [The Science of Irrationality: Why We Humans Behave So Strangely; Dan Ariely, scientificameric.com, 21st May 2008; Ariely is a behavioral economist at the Massachusetts Institute of Technology and author of the best-selling book, Predictably Irrational]

Those familiar with the blog may recall it discussed the book, Thinking Fast And Slow by Daniel Kahneman. A Princeton University psychologist, he won the Nobel prize in economic sciences in 2002 “for bridging economics and psychology.”

And he reinforces the following points (a) “2 systems determine your behavior in your mind – one conscious and the other automatic, (b) Your brain is lazy and causes you to make intellectual errors, (c) When you’re making money decisions, leave your emotions at home.”

But let’s get back to Dan Ariely and his examples on behavioral economics’ impact on personal savings and health care.

Like countless US companies, his old MNC-company has the 401-K or savings and investment plan for employees to invest in the market that they can draw down upon retirement. To be guaranteed retirement health insurance, they instituted a program where employees pay the insurance over ten years.

Here’s another disclosure: The writer’s interest in economics and psychology came from his private-sector practitioner experience. It evolved rapidly at first but a mere sliver of the challenge he was continually figuring out.

His first job, which was all of ten months, made him realize what it feels to be at the bottom of the hierarchy. Thankfully, on the next one, he was given the task of creating a function in a young company, i.e., what we know today as “shared services.” He hired three subordinates to manage different areas, and one of them he called “Systems.”

It was before the age of IT. It was the “big box” era from IBM, and Phil Am Life had one of the largest. His stock in the industry had risen after people learned he turned down the job of a programmer. It was a career unknown to him. And he may have made an irrational decision. He could have been in Silicon Valley instead of Park Avenue.

What did he learn while at the bottom of the heap? That information is power. He did not have it and was moving like a robot. That explains why he told his boss that the job was not for him in the sixth month, i.e., he wanted more challenges. He suggested for the writer to explore a programming career given the company had decided to computerize.

He passed the required tests and shown around the cubicles of the programmers. A stall was not his image of a promotion, but a real office. And that’s what he got on his next job. How irrational can that be?

Fast-forward to the present: He introduced his Eastern European friends to 21st-century innovation and global competitiveness. For example, their portfolio of products is world-class and, in specific cases, bested those from giants.

“The free enterprise system is not ‘rules but principles.’ It must satisfy the fundamentals of (a) human needs, (b) the common good, and (c) innovation – given the real world’s demands of sustainability and dynamism.

And so, he kept feeding them with principles instead of “rules and specific answers.” In the beginning, they were “angry” because they assumed that given the writer’s experience, he had answers for them.

But the “primacy of principles” is also why he was able to change the planning and budgeting system of a 200-year old Fortune 500 company – despite not being an accountant or a finance person. And today, he teaches big data and analytics to his Eastern European friends. 

“If you understand the principles, you can create your algorithms. And you can figure out whether to buy a business or not or when to sell one.“

Simple as it sounds, it demands forward-thinking. Because without forward-thinking, one is reduced to “analysis” and can fall into the trap of “analysis-paralysis” without first figuring out “the object of the exercise.”

Consider these simple parameters to figure out the object of the exercise: Where are we? Where do we want to be? How do we get there?

For example, we cannot keep brushing aside that we’re the regional laggard. In other words, while there will always be the low-hanging fruit that we must exploit, we have a structural problem. And we can’t take our eyes away from the ball.

Industrialize. Industrialize. Industrialize.

Yet, we can’t go it alone.

We must “beg for foreign money and technology” – as our neighbors did – and not let political patronage and oligarchy shut the rest of the world – and Juan de la Cruz – out.

We must traverse poverty to prosperity.

The Church can be a significant stumbling block when it stops at poverty – as the be-all and end-all. As the blog raises tirelessly, poverty is the effect of underdevelopment in the case of the Philippines.

The Church has to move beyond selling salvation in the afterlife as its reason for being. That is why the blog speaks to Franciscan theology. “The Kingdom of God is within you. The Kingdom of God is at hand.”

And it comes from the creation story that we are in the image and likeness of the creator – and that it is good.

And the sciences confirm that development is a dynamic phenomenon. Like the rest of humankind, we Filipinos need not be in a rut, in poverty. We can be prosperous as our neighbors demonstrated.

Prosperity is not exclusive to the West. That is why the writer has spent most of his retirement years with his Easter European friends, to help them overcome decades of tyranny and abject poverty.

We, in the East, are free to partake of these spoils.

But it presupposes harnessing our God-given talents and not let our brain stay lazy. [See above; behavioral economics.]

Sadly, our caste system adds fuel to the fire.

We in the elite class must be leading and showing the way to Juan de la Cruz. But why should we when the system benefits us?

It is the human condition, and that is why, even in the US, the caste system holds on the average Joe. And that is why the writer has no respect for US politics. 

Democracy demands self-government and personal responsibility in the pursuit of the common good. Recall the Two Great Commandments. It is not about being conservative or progressive.

If the Vatican cannot take on the minority view and remains wedded to tradition, what more Americans? They should have learned from the Gilded Age.

Sadly, in the 21st century, they are backsliding.

The change can come from the dynamism of the Americans.

For example, are the millennials doing a reprise of Woodstock?

“In the early morning hours of Monday, 18th Aug 1969, the Woodstock weekend concluded spectacularly with Jimi Hendrix’s performance. Hendrix played for nearly two hours – the most extended set of his career.

“Forty-five minutes into his set, Hendrix broke into his rendition of ‘The Star-Spangled Banner,’ injecting the national anthem with new meaning for a new generation. 

“The guitarist performed his most famous solo, channeling the atmosphere of beauty and love amid anger and aggression that defined the culturally-tumultuous era.  

“You can hear the Air Force dive bombers staking their lives for the country in Vietnam through Jimi’s whammy bar dives.

“You can feel the mourning of American mothers and fathers in the fragments of military funeral hymnal ‘Taps’ he added near the song’s end. You can hear the nation’s chaos in the atonal distortion.

“And you can hear the hope shine through as Hendrix hits the anthem’s final notes with optimistic purpose.

“The concert officially closed with comments by stage announcer Chip Monck, imploring the stragglers to grab a plastic bag and help clean up–to do ‘anything you can do to give us a hand to leave this area somewhat the way we found it. I don’t think it will ever be quite the same.’

“Everyone dropped their defenses and became a huge extended family. Joining together, getting into the music and each other, being part of so many people when calamity struck – the traffic jams, the rainstorms – was a life-changing experience. 

“None of the problems damaged our spirit; in fact, they drew us closer. We recognized one another for what we were at the core – as brothers and sisters, and we embraced one another in that knowledge. 

“Woodstock declared that a young generation could take on the issues of personal freedoms, stopping an unjust war, creating respect for the planet, and work for human rights. Woodstock showed that the world could be a better and more peaceful place, and that view keeps resonating.

“Because of Woodstock, we’re always aware that the issues we thought disappeared in the ‘60s will ever need attention. Like the Civil Rights Act, signed in 1964, we thought everyone’s right to vote is a given, but that issue needs attention now more than ever. We made much progress on the environment, but global warming and new forms of pollution are growing.

“There was a level of shared consciousness that occurred that weekend – that we need to stay involved and be sure that the next generation knows that it’s their turn to be involved.

“Despite the rain, lack of food, and limited sanitation, those at Woodstock found genuine respect, kindness, and unconditional acceptance of others. When eyewitnesses recall Woodstock’s memories, they seldom – if ever – linger on the drugs or the sex. What they do treasure are the three days of unity – chatting happily with local cops, or sharing oranges with strangers, or standing on a street corner handing out lollipops – the simple human dignity of sharing and caring. 

“The impact of the remarkable growth of the counterculture and social consciousness spawned in the 1960s would ebb and flow over the decades, in tandem with the ongoing seesaw of political viewpoints and national agendas across the nine presidential administrations since then.

“Woodstock vividly represents the intangible best qualities of the American experience. Apollo 11 demonstrated US achievement’s most tangible expression; Woodstock symbolized a new generation's possibilities and dreams – whether those dreams could be achieved or not.

“What Woodstock represented, and what it still represents today, is hope. Woodstock gave the hope that things could be different.

“Woodstock showed that people could take care of each other. For that reason alone, it reaffirmed our faith in people.” [“The Cultural History of Woodstock and a Message of Hope,” https://historynewsnetwork.org/article/172879]

We Filipinos may not have the dynamism of the Americans. But we must unlearn our instincts.

We must overcome “Pinoy Kasi” or perish.

Gising bayan!

“Here is a land in which a few are spectacularly rich while the masses remain abjectly poor. And where freedom and its blessings are a reality for a minority and an illusion for the many. Here is a land consecrated to democracy but run by an entrenched plutocracy, dedicated to equality but mired in an archaic system of caste. 

“But the fault was chiefly their own. Filipinos profess the love of country, but love themselves – individually – more.” [Ninoy Aquino, Foreign Affairs magazine, July 1968; Stanley Karnow, New York Times Magazine, “Cory Aquino’s Downhill Slide,” 19th Aug 1990.]

“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]

“True social reform has little to do with politics. To unmoor ourselves from the burdens of the past, we must be engaged in the act of continual and conscious self-renewal. All men are partially buried in the grave of custom. Even virtue is no longer such if it is stagnant.

“Change begins when we finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us, often unquestioned, by the past and its power structures. It is essentially an act of imagination first.” [David Henry Thoreau; American essayist, poet, and philosopher; 1817-1862]

“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]

“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]