“Tyrants of tomorrow”

We are getting deeper into the 21st century. Beyond a New Year’s resolution, does Juan de la Cruz need something more profound?

“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]

In other words, Duterte, just like Marcos, is a creation of our love for tyranny. “Mr. Duterte would not only shut down the country’s biggest radio and television network, which employs over 11,000 men and women all over the country, on no other basis than his claim that it did not air his propaganda materials during the 2016 campaign for the Presidency. He would also enable his cronies — one of whom is only too eager to add the network to his vast range of recent acquisitions — into taking control of it in a reprise of the crony capitalism of the Marcos dictatorship.” [“Against independence,” Luis V. Teodoro, Vantage Point, 19th Dec 2019]

The blog came into being in early 2009, and in a few weeks, it will be in its 11th year. Where are we after over a decade? We remain the regional laggard. “Pinoy Kasi,” will explain why we can’t overcome the perfect storm that has defined the Philippines: We are parochial and insular. We value hierarchy and paternalism, rely on political patronage and oligarchy that ours is a culture of impunity.

If there is one thing that can describe Juan de la Cruz, is it, he is the antithesis of dynamism? We are in a cocoon, why won’t we be the poster child of static energy? Let’s step back and figure out what living things are. Isn’t creation about dynamism and interconnectedness and oneness? Think of the universe as an ecosystem.

In other words, it is not static, nor is it absolute. And tyranny comes to mind, and why Marcos and today, Duterte, represents the perfect storm that is the Philippines. Not even Eden was an absolute paradise. Satan confirmed that perfection is not of this world and thus the second coming.

Fast-forward to the 21st century, where innovation and global competitiveness are the prices of entry. And it is not about consumerism because “innovation” is not magic but about human need. Consider: The most prominent tech companies compete to develop what will succeed supercomputers, i.e., quantum computing.

What human needs will they address? There are two examples these pioneers give. The world will be able to develop renewable raw materials more rapidly that will require lesser input in the manufacturing process. The second one is the rapid development of newer drugs, as in wonder drugs.

Are we accepting that we are archaic yet? What will it take us to shift paradigms? The 12 steps of AA and the 12 laws of karma come to mind.

“Jesus and the Twelve Steps of Alcoholics Anonymous are saying the same thing but with different vocabulary: We suffer to get well. We surrender to win. We die to live. We give it away to keep it.

“Step Three: a radical surrendering of our will to Another whom we trust more than ourselves. This program is a truth-telling program. That’s how it turns us into free people.

“When there are accountability and forgiveness as part of the process, healing will almost inevitably follow.

“Life and death are not opposites. They do not cancel one another out; neither do goodness and badness. There is room for everything to belong. A radical, almost nonsensical ‘okayness’ characterizes mature believers, often called ‘holy fools.’ We don’t have to deny, dismiss, defy, or ignore reality.” [Twelve-Step Spirituality, Richard Rohr’s Daily Meditation, 13th Dec 2019; Rohr expounds Franciscan theology in his daily meditations. Note that there is no pope named after Saint Francis until Pope Francis, i.e., is there absoluteness within the Catholic Church?]

Question: Where does Step Three stand against the 12 laws of karma? Take “The law of humility: To change something in your life, you first have to accept what currently exists. That is the premise of the law of humility. Know that no matter where you start if you’re able to own your story and the facets of it that are completely out of your control, you can also own the path for what’s next. A happy, healthy, successful future is yours for the taking.” [https://www.wellandgood.com/good-advice/12-laws-of-karma/]

The other laws will likewise hit home as far as we Pinoys are concerned. “The great law: Also known as the law of cause and effect, the ‘great law’ is what comes to mind when one considers what karma means. It states that whatever thoughts or energy we put out, we get back—good or bad. It’s like sowing and reaping.

“The law of creation is all about creating. You don’t just wait for good things to happen in your life magically; you must actively go out there and make things happen. Use your talents, gifts, and abilities to bless the world. Create something not just for our benefit but also for the benefit of others. The power to create your ideality lies within you.

“The universal law of growth is about expansion, namely within us. As we grow, change, and evolve internally, our external reality will change and grow as a result. And the growth never ends—there’s always new things to learn, shift, and heal.

“The law of responsibility is about taking ownership of everything that happens in our lives, including the not-so-good stuff. We are responsible for how we choose to live our lives—not anyone else. We are responsible for how we show up in the world, how we allow others to treat us, and how we treat other people. To put this law into action, take responsibility for the part you play in every situation you have.

“Everything and every person are connected in some way per the ‘law of connection.’ Although the past you, the present you, and the future you may seem entirely different, they are all still you. Everything you’ve experienced has led to the next thing and the next thing and the next thing. It’s all linked up. And we’re connected to other people, too.

“As we help, teach, love, honor, and respect ourselves, we do the same for others. The connection is always there. We just must be observant and tune into it.

“The law of change. If you’ve found yourself experiencing the same situation repeatedly, that is the law of change in action. It’s the universe’s way of nudging you to learn a lesson. The pattern continues to repeat itself until you learn from the experience and do something different to evolve into a better version of yourself and stop the vicious cycle.”

Let’s take a pause and ask, do the laws of karma explain why Lee, Mahathir, and Deng had foresight? Consider: “Karma describes the concept of getting back whatever you put forth, good or bad, into the universe. It is central to Hinduism and Buddhism for determining a person’s next existence based on the ethical net of their current one. But no matter which belief system you follow (or don’t), the concept of karma plays a role in your life. That’s because there are 12 laws of karma constantly at play, whether you realize it or not.”

Let’s get back to Duterte. “Duterte threatens Manila Water, Maynilad with expropriation,” Pia Ranada, rappler.com, 10th Dec 2019. There we go again: Recall the war on drugs, corruption, and Metro Manila traffic, among others; that Duterte had the quick fix. Or does he?

Consider: “The sorry state of education helps explain the fragility of what passes for democracy in the Philippines.

“[The] budget a country allots to education is only one among several other factors that decide what, how much, and how well students learn. For example, is the system focused on the quality of the learning students get? Or just to get as many students as possible through the mill?

“The dismal showing of Filipino students in reading comprehension, mathematics, and science has to be addressed.

“Ignorance and the contempt for learning are antithetical to national development and the democratization process. Citizens who know little or nothing or are misinformed about the most pressing issues cannot intelligently make informed decisions on which democratic governance depends. 

“The sorry state of education helps explain the fragility of what passes for democracy in the Philippines.

“Increasing the funding for education is a necessary first step. But rethinking the educational system, its aims, and its directions, is equally crucial.

“Philippine education’s fundamental aim [is] to produce men and women who can be ‘competitive’ in today’s world. It would be a laudable enough goal if not for the meaning most policymakers attach to it, which in sum is to enable Filipinos to be ‘worthy of employment’ as nurses, nannies, domestics, or construction workers.

“Real competitiveness should mean developing among the country’s young men and women the critical capacity and love of learning that can make them the equals of the world’s best thinkers, artists, scientists, and professionals so they can contribute to the country’s development.

“Instead, the competitiveness mantra puts less emphasis on knowledge and more on the skills the global labor market needs. Under that rubric, reading comprehension, mathematical proficiency, and understanding of science are, at best, a second priority.

“In response to the PISA report, Education Secretary Leonor Briones has thankfully declared that the system she oversees will henceforth emphasize quality rather than quantity, hopefully without limiting universal access to primary education.

“But between the wish and the fulfillment, alas, is a vast ocean of official indifference and misplaced priorities in a country that claims to be 98% literate but too many of whose citizens are grossly misinformed because they hardly understand what they read — if they read at all.” [“Rethinking Philippine education,” Luis V. Teodoro, Vantage Point, BusinessWorld, 12th Dec 2019.]

The bottom line: Our love for tyranny is not the way forward. If at all, it explains why we are the regional laggard. For example, if we are indeed a democracy, we must not forget that it is a government of the people, by the people, for the people.

See above the 12 laws of karma and Jesus and the Twelve Steps of Alcoholics Anonymous.

Gising bayan!

The family joins the writer in wishing one and all a Blessed Christmas and a Prosperous New Year.

“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]

It is simple: The government will just have to budget enough

“Government will just have to budget enough to get them those medicines for free. Still, having the budget and DOH being able to distribute effectively are two different things. The failure of DOH to distribute the medication COA found rotting in their warehouses is a mortal sin.

“There is room for government to expand expenditures for health care. Right now, the government’s share of pharmaceutical spending is only 15 percent compared to 91 percent for Thailand and 54 percent for Malaysia.

“Indeed, we ought to look at other costs of healthcare. Our out-of-pocket expenditure on healthcare (what we spend) is a high 54 percent compared to 12 percent for Thailand and 38 percent for Malaysia." [The other drug war, Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 13th Dec 2019]

Here’s something government perhaps knows, talking about the Philippines, Thailand, and Malaysia, for example, and their respective GDPs per capita (at PPP): (a) the Philippines has $8,400; (b) while Thailand is at $17,900; and (c) Malaysia with much more, $29,100.

In other words, when it comes to social programs, Thailand can spend 213 times more than the Philippines, and Malaysia, a staggering 346 more. The moral of the story? Given these two neighbors are wealthier than we are, we can’t expect to match their ability to deliver more benefits for their people.

Which brings us back to the challenge the Philippines faces, it is beyond tax reform: it is imperative to generate a much bigger pie or national income, as in Arangkada’s reason for being.

We must understand and accept that we can’t ignore the yawning gap in our nation-building efforts, i.e., we can’t keep silent and be in denial: We must step up to the plate and pursue industrialization aggressively like Vietnam is doing. Not only, but we must also gear our efforts to innovation and global competitiveness via foreign direct investment.

Sadly, we’ve kept our blinders and embraced a protectionist economy and wittingly or not, paved the way for political patronage and oligarchy to dictate upon the course of the Philippine economy. It comes from 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, we can’t problem-solve in a vacuum. Our instincts and mindset will always get in the way. It explains why we haven’t found the resolve to step up to the plate and acknowledge what PIDS said: “The problem with the Philippine case is that we seem to have skipped a step. We moved from agriculture to services without even industrializing. [Although] the country’s agriculture employment share was still high at 26% in 2016, its contribution to the country’s gross domestic product is declining due to the issue of productivity.

“From 2005 to 2014, a large portion of the country’s export portfolio [belonged] to integrated circuits, whose sophistication content is shallow compared to the average in the world market.

“The study found that the agriculture sector can move to produce more sophisticated goods such as woven twill and prime cuts of pork and poultry.

“[Although] production issues are plaguing the agriculture sector, we can build on the production structures of cereals, fruit mixtures, glycerol, and oils for us to produce agro-processed goods.

“[The] government can guide the shift towards industrialization, including strengthening industrial policy, as well as promoting competition, innovation, and science and technology research. [And] upgrade production capabilities by attracting investment from industrialized Asian neighbors, strengthening the link between industry and the academic community, encouraging manufacturing process innovation, and the financial sector is part of the various stages of production.” [Philippine exports’ value-added content stagnant since 1995 — PIDS, Jenina P. Ibañez, BusinessWorld, 17th Nov 2019]

In the meantime, we make do with the following income streams: (1) OFW remittances; (2) BPO industry; (3) the Top 8 listed companies in the Forbes list; and (4) we like to add POGO.

What’s the point? These income streams cannot generate what we need to get a big boost in national income.

The evidence? “Finance Undersecretary Karl Kendrick T. Chua explained this clearly: ‘We cannot dispute that the many industries receiving incentives have made valuable contributions to the economy and the Filipino people. Many of them are important. Still, given that the current system is poised to subsidize more than two-thirds of the economy. Policymakers need to make tough choices between which industries and activities to prioritize if we are to ensure that every peso we give away as a tax incentive yields a net positive benefit to society.’

“Citing a recent DOF study, Chua pointed out that the industries being granted tax incentives under the Board of Investments’ 2017 Investment Priorities Plan accounted for a staggering 69.4 percent of the entire economy.” [Tax reform delay, EDITORIAL, Philippine Daily Inquirer, 16th Dec 2019]

Have we forgotten Arangkada? It is one of our better chances in the pursuit of industrialization. We’re now into two administrations, so we must ask: “What happened to Arangkada?”

Consider: “The target is to create $75 billion in new foreign investment, 10 million jobs, and over P1 trillion in revenue for the Philippine economy within this decade.

“The original ‘Arangkada Philippines: A Business Perspective’ report published in December 2010 contained 471 policy recommendations that will accelerate the growth of seven big industry winner sectors and achieve certain targets in terms of revenues, foreign investments, and job generation.” [Significant gains in the plan to promote 7 ‘winner’ sectors, Amy R. Remo, Philippine Daily Inquirer, 24th Feb 2014]

On the other hand, this is what we are dealing with: “The poverty rates for 2018 has fallen to 16.6 percent of the population, from 23.3 percent during the last Family Income and Expenditure Survey in 2015. The fall is spectacular, considering that from 2003 to 2012, poverty rates have fallen only by about 5-percentage points from 30 percent to 25.2 percent.

“We are, however, challenged by another set of falls. The same factors that Habito pointed out to be the source of falling poverty have recently reversed their increasing trend. In particular, the contribution of manufacturing to gross domestic product growth has fallen to 0.5 in the third quarter of 2019. It was the lowest since the third quarter of 2011 when it contributed only 0.4.

“This is way below its average contribution of roughly 1.5 in the last 30 quarters. Similarly, investments posted its two consecutive quarters of decline from growing by an average of more than 12 percent during the same period.

“We, therefore, need to address the fall in manufacturing and investments soonest if we want to maintain the decline in poverty.” [Falling, falling…falling, Dr. Alvin P. Ang, EAGLE WATCH, BusinessMirror, 13th Dec 2019]

What are we seeing? In the private sector, it’s called “slicing the salami.” If you haven’t tried it, do it. It is another way to say, analysis-paralysis. Precisely why we must overcome our inward-looking bias and benchmark and why the blog consistently points to the Asian Tigers, China, and, more recently, Vietnam.

It also points to why our perceptive judgment is suspect; we lack the experience in development and nation-building. For example, Deng had to heed the advice of Lee and Mahathir to overcome China’s inexperience and its perceptive judgment. Thus, Deng pronounced, “To lift our people from poverty, we need Western money and technology.”

Let’s get back to the private sector to appreciate how they make performance assessments, for example. And here is one of Procter & Gamble: “Despite ten years of turnaround strategies and portfolio changes, P&G still suffers from: (1) Market share erosion and low organic sales growth; (2) Aging brands and a lack of breakthrough innovation; (3) Suffocating bureaucracy and excessive costs which create structural drags on the business; (4) Board complacency about, and rewarding management for, continued underperformance; (5) Weak corporate governance which entrenches existing problems; (6) Shareholder returns less than half that of peers’ over a decade; bottom quartile over most recent time frames; (7) Short-term thinking (selling businesses vs. fixing business, cutting ad spend last quarter, among others) that doesn’t address the root causes of P&G’s challenges” [Train Partners, 6th Sep 2017]

See above what PIDS said is the problem with the Philippine case.

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]

We can't undo our sins of omission and commission overnight

“[We] wasted decades falsely believing that indefinitely shielding our domestic producers from foreign competition would strengthen ours. For rice and sugar, our longest holdouts, we not only imposed high import tariffs but also went to the extent of exercising outright government control over all importation.

“We now know from hindsight that our traditional conservatism on trade policy took a toll on our longer-term welfare and economic performance, especially our ability to create ample jobs for our rapidly growing labor force.

“The legacy of that conservatism haunts us to this date, as we continue to have the highest national unemployment rate among our comparable neighbors, even as millions of Filipinos have found work overseas.

“I was a direct participant back in 1991 in the negotiations for the ASEAN Free Trade Agreement, as part of our government panel of senior economic officials led by then Trade Undersecretary Lilia Bautista. ASEAN still had only six members, and the Philippines, together with Indonesia, were the spoilers pulling everybody else back and prolonging negotiations.

“Our official stance, determined by the prevailing domestic political sentiment then, was to resist lowering our trade walls at the pace our more aggressive neighbors Thailand, Singapore, Malaysia, and Brunei wanted. As a way forward, they invented the ‘Asean minus X’ formula: Those members who wished to adopt coordinated reforms to open their markets could forge right ahead without the others if they so choose.” [When infants won't grow up, Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 6th Dec 2019]

In other words, we can’t undo our sins of omission and commission overnight. Yet, we like to throw quick fixes with abandon. The sad reality holds whether it is poverty or Edsa or water or electricity or our dismal record in education, among others.

The evidence? Did we not elect Duterte because he was to fix the drug problem and corruption and Metro Manila traffic in six months? We like to quote Einstein, yet we succumb to insanity time and again.

As the blog has repeatedly discussed, it takes leadership, foresight, and values to pursue development and nation-building. Sadly, we fall flat in every respect. For example, leadership to us equates to emergency powers, aka quick fixes, and worse, tyranny. Or at best, it is falling into the trap of political patronage and oligarchy. It explains how juvenile we are when it comes to democracy, i.e., it is a government of the people, by the people, for the people.

Think Marcos and today, Duterte. On the other hand, think Lee, Mahathir, and Deng. What did they have beyond being strong men?

Try foresight? See above re “when infants won’t grow.” Still, it is beyond shielding our domestic producers. It is about benchmarking against what our neighbors have done so we can learn from their successes. 

For example, after the Asian Tigers, today we are witness to how Vietnam employs the same playbook, i.e., beyond rapidly making agriculture productive and competitive, it is about aggressively pushing industrialization and the pursuit of technology, innovation, and global competitiveness via foreign direct investment.

And try values? Consider: We are parochial and insular. We value hierarchy and paternalism and political patronage and oligarchy that ours is a culture of impunity.

In other words, because we speak from both sides of the mouth, FDI has chosen Vietnam after China, and not the Philippines. And the more the years pile on, the deeper we are digging our own grave. 

Gising bayan!

But let’s get back to “foresight.” The posting will continue to quote Ciel Habito, but from a different article, “Why poverty has declined, Cielito F. Habito,” NO FREE LUNCH, Philippine Daily Inquirer, 10th Dec 2019.

“[The] impressive drop in poverty finds a ready explanation in the other economic data we've seen over recent years. Foremost is the relatively rapid growth since 2010 in our manufacturing sector, the source of the best quality wage and salary jobs in our economy, especially for lower-skilled workers. 

“This manufacturing surge came about since Asean import tariffs went down to zero in 2010, and the rise of regional cross-border value chains spurred higher manufacturing activity in electronics, chemicals, and other export manufactures. The unemployment rate is now under 5 percent, while the 13-percent underemployment is also way below the 18-20 percent we persistently had for many years.

“Wage and salary jobs now make up two-thirds of the employment in the economy, while unpaid family workers and those who are individually self-employed (like vendors, pedicabs drivers, among others) have been accounting for falling shares of total jobs.

“These trends are further supported by consistent double-digit growth rates since 2010 in overall investment in the economy, especially private domestic investments that create more jobs and livelihoods for Filipinos. Conditional cash transfers, while long term in intended benefit through their effect on the education of children in poor families have also made a significant dent on poverty even in short to medium term, especially now after ten years of implementation.

“For sure, many boats have not been lifted by the rising tide of the Philippine economy. But signs are clear: we lifted many more in recent years than in the past.”

With due respect to Ciel, this is classic, “The glass is half-full,” and the blog consistently argues against it.

Foresight. Foresight. Foresight.

We can’t develop foresight if we continue to justify our predicament.

Benchmark. Benchmark. Benchmark.

Beyond leadership, foresight, and values as discussed above, it is not instinctive for us to benchmark. That comes from our inward-looking bias.

In other words, the Asian Tigers and, more recently Vietnam, did not become the envy of the world by focusing on poverty. They knew that it is the effect of underdevelopment.

After Deng had heard from Lee and Mahathir, Deng then pronounced, “If we are to lift our people from poverty, we need Western money and technology.” It was precisely the message he got from the two.

It is forward-looking and forward-thinking. And Juan de la Cruz can’t seem to figure it out. Consider our values one more time: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

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]

“Band-aid solutions are no longer enough”

“We are doing everything to speed up the work and improve vehicle flow. It’s difficult but necessary. Band-aid solutions are no longer enough. We need long-term measures, Mr. Ang said.” [SMC opens Alabang ramp to Skyway, Arjay L. Balinbin, BusinessWorld, 1st Dec 2019]

Let’s pause and ask: Can we internalize the import of the above statement? Of course, we believe the question is superfluous. There lies what the blog consistently raises, i.e., Pinoy instincts.

Consider: Today, there is agreement that OFW remittances and the BPO industry, the two drivers of the economy, have not moved us beyond a developing economy. Yet, we like to believe that the glass is half-full, not half-empty.

Let’s even add the combined revenues of the Top 8 listed local companies in the Forbes list, which are only a fraction of what Samsung Vietnam exported in 2017 from its cumulative investments of $17-B. Unsurprisingly, we remain the regional laggard.

Sadly, such band-aid solutions have become our go-to initiatives and are proud of it. “Beggars can’t be choosers,” is how we want to rationalize our inability to foresee – or lack of foresight.

“THE Samsung Electronics factory in Thai Nguyen, in northern Vietnam, employs more than 60,000 people. [The] company has invested a cumulative $17bn in the country.

“But Samsung is as important to Vietnam as Vietnam is to it. Its local subsidiary’s $58bn in revenue last year made it the biggest company in Vietnam, pipping PetroVietnam, the state oil company. It employs more than 100,000 people. It has helped to make Vietnam the second-biggest exporter of smartphones in the world, after China. Samsung alone accounted for almost a quarter of Vietnam’s total exports of $214bn last year.” [Why Samsung of South Korea is the most prominent firm in Vietnam: It makes most of its smartphones there, The Economist, 12th Apr 2018]

Industrialize. Industrialize. Industrialize.

Short-term thinking has already desensitized us that we accept it as a given. For example, “Think tank touts online gaming’s global potential,” Beatrice M. Laforga, BusinessWorld, 1st Dec 2019.

In other words, we can’t see beyond nurturing the following revenue streams: (1) OFW remittances; (2) BPO industry; (3) the top 8 listed local companies in the Forbes list; (4) POGOs.

On the other hand, “The Philippine Institute for Development Studies (PIDS) said [export] performance has barely improved between 1995 and 2014, citing a study published in November 2018.”

“The problem with the Philippine case is that we seem to have skipped a step. We moved from agriculture to services without even industrializing. [Although] the country’s agriculture employment share was still high at 26% in 2016, its contribution to the country’s gross domestic product is declining due to the issue of productivity.

“From 2005 to 2014, a large portion of the country's export portfolio [belonged] to integrated circuits, whose sophistication content is shallow compared to the average in the world market.

“The study found that the agriculture sector can move to produce more sophisticated goods such as woven twill and prime cuts of pork and poultry.

“[Although] production issues are plaguing the agriculture sector, we can build on the production structures of cereals, fruit mixtures, glycerol, and oils for us to produce agro-processed goods.

“[The] government can guide the shift towards industrialization, including strengthening industrial policy, as well as promoting competition, innovation, and science and technology research. [And] upgrade production capabilities by attracting investment from industrialized Asian neighbors, strengthening the link between industry and the academic community, encouraging manufacturing process innovation, and the financial sector is part of the various stages of production.” [Philippine exports’ value-added content stagnant since 1995 — PIDS, Jenina P. Ibañez, BusinessWorld, 17th Nov 2019]

Enter: The war on poverty. Sadly, our perceptive judgment is suspect at best. Band-aid solutions are no longer enough.

Let’s again pause and ask: Can we internalize the import of the above statement?

Unfortunately, Juan de la Cruz can’t turn on or dime and shift his paradigm: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy, that at the end of the day, ours is a culture of impunity.

How should we then react to the following? “PEZA is seeking to insert grandfather exemptions in CITIRA legislation,” Jenina P. Ibañez, BusinessWorld, 28th Nov 2019.

“THE Philippine Economic Zone Authority (PEZA) said it hopes to grandfather more locators and impose a 15-year transition period in its proposals to modify the bill seeking to rationalize investor incentives.

“PEZA in a statement Thursday laid out its proposed amendments to the Corporate Income Tax and Incentives Rationalization Act (CITIRA).

“CITIRA aims to cut corporate tax incentives from 30% to 20% in 10 years and rationalize fiscal incentives, which PEZA has warned will deter investment and drive current locators away.

“PEZA had earlier sought exemption for its locators from the CITIRA bill, fearing the exit of foreign investors.”

Does CITIRA fall under the umbrella of Band-aid solutions? There is no doubt that we must rationalize fiscal incentives while lowering tax rates and still generate incremental tax revenues. 

With due respect to our economic managers, our challenge is beyond tax reform. There is wisdom in what PIDS says: “The problem with the Philippine case is that we seem to have skipped a step. We moved from agriculture to services without even industrializing.”

The Philippine pie, i.e., GDP per capita or national income, is a small one. We need a significant boost in national income – which will also raise our tax base and tax receipts – well beyond what we expect from CITIRA or our current mindset.

If those dots don’t connect, we are indeed a disaster waiting to happen.

What is our current mindset? For example, we must be proud to read “NEDA Board approves tycoons’ NAIA rehab proposal,” Beatrice M. Laforga, BusinessWorld, 29th Nov 2019.

“[The] NEDA Board’s approval of the revised list of infrastructure flagship projects showed how serious the government is in implementing the Build, Build, Build program.

“With the approval, the NAIA rehabilitation will be subjected to a Swiss challenge. Under the ‘Swiss challenge,’ companies are invited to submit counterproposals to the project, which the original proponent may then match.

“A ‘super consortium’ composed of seven conglomerates had offered to rehabilitate and expand NAIA over 15 years at a project cost of P102 billion. The conglomerates involved are Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia's Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc.; and Metro Pacific Investments Corp.

“The NAIA rehabilitation is expected to increase its capacity to handle passengers to 47 million a year in the first two years and further expand this to 65 million after four years.

“The international airport was operating beyond its 30.5-million passenger capacity with 45.3 million passengers last year, 42 million in 2017, and 39.5 million in 2016.”

Of course, that is welcome news. Sadly, it also reinforces our instincts. See above; we can’t turn on a dime.

Infrastructure development – as in Build-Build-Build and the NAIA rehabilitation and then some – is truly a must. Still, we must move beyond linear thinking to simultaneously drive industrialization, as in Arangkada.

We are the regional laggard and playing catch up. We can’t be celebrating with a half-full glass. That is why we like the war on poverty. Sadly, we keep forgetting the reality of cause-and-effect. “Philippine poverty” is the effect of underdevelopment. Even if we add the war on drugs, poverty will persist.

On the other hand, why is Vietnam, despite its lower GDP per capita than the Philippines, on track to be wealthier than Singapore, according to international institutions?

It is not rocket science. Vietnam is more productive and competitive in agriculture and aggressively pushing industrialization. Why we haven’t figured that out over decades is something we must ponder.

Our national pride must be in the right place. It must not be to nourish our instincts.

What about this other welcome news? “Manufacturing summit hoping to address growth decline,” Jenina P. Ibañez, BusinessWorld, 28th Nov 2019

That is classic, i.e., “reinventing the wheel.” For one, Arangkada is well down the road. For another, we can’t keep our inward-looking bias. Ergo: We must benchmark against our neighbors. This game we play is playing out the remaining period of the ballgame; it will ensure we’re stuck in the status quo. It is how we manifest our reliance on political patronage and oligarchy.

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]