“DBCC keeps economic growth target,” Beatrice M. Laforga, BusinessWorld, 20th Jul 2021. “This fiscal consolidation strategy will continuously be adopted by the government to ensure fiscal sustainability over the medium-term and to bring back the country’s deficit to pre-pandemic levels.
“The interagency Development Budget Coordination Committee (DBCC) maintained its gross domestic product (GDP) growth targets of 6-7% for 2021. The GDP targets for the next three years were also left unchanged at 7-9% for 2022, and 6-7% for 2023 to 2024.”
There is no doubt that keeping the economic growth target is a good analysis.
Here’s the twist. That mirrors the American model – despite our denunciations of their ways – which we have been doing for decades, i.e., fiscal and monetary interventions will drive the economy and deliver 6%-7% growth rates.
But then again, the US economy is the most developed – more than China and Japan or even Germany – and delivers over $20 trillion in GDP.
Recall that “analytics” demands addressing the “entire methodology.”
And the Asian Tigers – and then China, and more recently, Vietnam – demonstrated what it means.
Beg for foreign money and technology. That is why and how these neighbors blew past the 6%-7% yardsticks.
The problem is, we learned our economics from the West, especially the Americans. And so, we keep to the American model.
But they had done nation-building before, and we have not. We’re stuck in our caste system while America, as the New World, purposely upended aristocracy.
If the education system the Americans brought us isn’t for Juan de la Cruz, all the more the economic model – absent nation-building?
We are true “insanity” defined – per Einstein.
And the blog has been raising it for over a dozen years. And why it introduced the science of “thinking.”
We will have zero chance to overcome our well-ingrained instincts if we don’t reinvent ourselves.
Those familiar with the blog will recall the 3C’s of the science of “hardy mindset”: (1) Challenge, (2) Commitment, (3) Control.
A strong mindset accepts challenges, even daunting ones. In other words, this universe is not a place for Juan Tamad or Bondying. They are not defeatists and instead embrace their commitments knowing full well that they control only themselves.
Consider: We are parochial and insular. So, we value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.
Are we finally stepping up to the plate?
“Economic bills move to the front burner in Senate,” Kyle Aristophere T. Atienza, BusinessWorld, 20th Jul 2021. “THREE MEASURES aimed at relaxing foreign investment restrictions in the country are expected to be approved by the Senate next month.
“Senate Majority Leader Juan Miguel F. Zubiri confirmed that the proposals amending (1) the Public Service Act, (2) Foreign Investments Act, and the Retail Trade Liberalization Act are a priority when Congress’ third and final session opens on 26th Jul.
“The three measures have all been certified by President Rodrigo R. Duterte as urgent and are part of a list of priority bills endorsed by business groups and foreign chambers.”
Question: Recall CREATE and SIPP and the challenge to make the IRR give us a fighting chance to compete for FDIs against our neighbors, including Vietnam. Vietnam, not long ago, was a small fry that we poo-pooed.
In other words, if we failed to compete for FDIs against the Asian Tigers and China, will the measures referenced above once and for all put us on equal footing with our neighbors?
Here’s a quote from an earlier posting re Philippine education: “Different subjects were taught ‘in almost complete isolation, one from the other.’ Worse, ‘the development of the ability to think, meet new situations, and solve the kinds of problems one meets in real life is neglected.’ [“Philippine education: 1925 vs. 2021,” Ambeth R. Ocampo, LOOKING BACK, Philippine Daily Inquirer, 14th Jul 2021]
There is no doubt that the above measures will benefit our most prominent companies. We talk about the inequality in the well-developed free markets. Are we doing anything different?
And Samsung Vietnam showed us what “different” means – because they generate far more significant economic benefits than our top companies – combined. But who cares if we created in the Philippines dollar billionaires? In short, trickle-down economics works in Vietnam but not in the Philippines.
Recall that the 21st century demands innovation and global competitiveness. That’s why the blog never fails to raise that one enterprise in Vietnam outperforms our top companies combined. And it also explains why San Miguel’s market value is merely a fraction of the typical Fortune 500 company.
But does a Philippine billionaire acknowledge our reality?
Consider: “PHL’s long-term economic prospects are getting better,” Manny B. Villar, BusinessMirror, 19th Jul 2021. Economic recovery is undoubtedly on the horizon based on recent economic indicators, such as electricity demand, exports, manufacturing, remittances, vehicle sales, and office space take-up. That is why I am not bothered by Fitch Rating's revision of our credit rating outlook to 'negative' from 'stable.'
“Our macro-economic fundamentals support my optimism. The inflation rate is now on a downtrend despite the uptick in petroleum prices. While the peso has recently shown weakness against the US dollar, it was mainly due to rising imports, an indication of improving household spending and investments.
“Our banks remain stable, although they could do more to extend loans to businesses. Our gross international reserves exceed $100 billion, or nearly a year worth of imports. Government debt is still one of the lowest in Asia when measured as a percentage of the gross domestic product. The Department of Finance expects the national government debt to remain manageable at 58.7 percent of GDP this year.
“What will sustain our growth in the medium term is the massive infrastructure buildup that is underway. The Department of Public Works and Highways, led by Secretary Mark Villar, inaugurated the Central Luzon Link Expressway connecting Tarlac City and Cabanatuan City. Projects such as this would boost businesses in areas along the central road and disperse economic activities to more people.
“Employment also started to recover as workers return to offices. The business process outsourcing sector is supporting the growth of the real estate sector in the provinces. That will translate into more economic opportunities in those areas. A 1,000-seat BPO center, for example, can match the income of a small rural town.
“In the long-term, I believe our young population will carry us through the next stage of global economic growth. With most of our neighbors adjusting their expectations because of their greying population, the Philippines is in the best position to take advantage of the new global economy.”
Question: Haven’t we heard all of this before?
And if we failed to compete for FDIs against the Asian Tigers and China, will the positives and measures referenced above finally put us on equal footing with our neighbors?
See above; the science of “thinking.” For example, to forward-think, beyond logical yet linear — i.e., lateral and creative thinking.
When Sen. Villar was in the Senate, he raised oligarchy as the stumbling block to FDIs.
Today, do we know who is laughing their way to the bank? “Tax perks for ‘favored’ firms hit P482 billion before the pandemic.”
Consider: “To strengthen PHL economic recovery, World Bank cites the need for more FDIs,” Gerardo P. Sicat, CROSSROADS TOWARD PHILIPPINE ECONOMIC AND SOCIAL PROGRESS, The Philippine Star, 21st Jul 2021.
“The primary structural constraint to FDI policy improvement: Constitutional restrictions. I said I agree with the judgment made that the Philippines could do well in economic growth.
“The World Bank, the Asian Development Bank, the UN agencies, and bilateral development partners will help us with advice to move the frontiers of our economic and social policies so that we can refine them to help raise our 'economic' performance.
“All such measures have to be compatible with existing policies that are compatible with our constitutional policies. Even if our external economic cooperation partners are aware that the best move is to deal with our political constitution simply by amending the portions of the ‘constitution’ that act as barriers to economic progress, they will not cross that line.
“They will not tell us how to handle our political problems. I have often said that the original sin in our development performance, concerning foreign direct investments, is in those restrictive economic provisions.
“I will say it in another form. Although those provisions sound high and noble for nationalist political rhetoric and protectionism, they represent the poison pill that makes it difficult for some foreign investors to put us high in their priorities.
“Prospective foreign investors see them as a threat if not discomfort.”
The bottom line: We have seen Juan de la Cruz sink into the abyss. We can’t kick the can as though there is no tomorrow.
Recall that the blog often speaks to the demands of the 21st century, i.e., innovation and global competitiveness. And we see it in such an essential commodity as rice. Thailand and Vietnam, for example, export rice while we import them.
The domino effect on Philippine agribusiness – especially farmers – is profound: we can’t arrest rural poverty.
Should we pause — and ponder? Why haven’t we solved poverty, especially in the rural areas? When will we step up to the reality of the 21st century?
And if we push the envelope, the fact that we also lag in industrialization will keep us behind the pack – and rely on OFW remittances and the BPO industry.
There lies the insanity. We know the outcome won’t be any different.
We are “insanity” defined – per Einstein.
Consider: In Philippine education, “We neglect the development of the ability to think, meet new situations, and solve the kinds of problems one meets in real life.”
Let’s drill that down.
How many dissertations are classroom work per se?
In the absence of experience, we fall into the trap of binary thinking. And why the blog introduced “cognitive development.” But not from a theoretical but experience standpoint.
And it is not only in Eastern Europe or less developed countries. Even in the West, because of ideology, people can fall into binary thinking. And that’s why the blog raised that despite the conservatism of US bishops, they won’t withhold the Eucharist to abortion rights supporters: Relativism applies even in theology — and is not evil.
And here’s a Philippine example: “Social democracy versus capitalism,” Elfren S. Cruz, BREAKTHROUGH, The Philippine Star, 22nd Jul 2021. “Capitalists believe that the most crucial target is economic growth or GDP. Social democrats believe that the most important goal is achieving income or wealth equality.
“The answer hopefully lies in the social democratic movement that President Biden is slowly espousing in the United States.
“The next country where social democrats could take over government is Germany.”
With due respect to Elfren, let’s dissect the above.
Firstly, are we solving the problem of Juan de la Cruz? On the other hand, recall what the blog has said about the US. They take one misstep after another, yet they keep reinventing themselves.
What Biden is doing is borrowing from the playbook of FDR. It is a demonstration of dynamism.
And if we are solving the problem of Juan de la Cruz, America cannot be the model.
But we must take the sense of dynamism — which the Asian Tigers, and then China, and most recently Vietnam, have embraced.
Let’s ponder on that one word, dynamism.
And they did not invoke a system — and they each have their own — but begged for Western money and technology.
On the other hand, we’re stuck to force-fitting a system because of our failings. Even in the private sector, it happens. How many local companies have installed ERPs like SAP, yet our top companies, combined, can’t match the revenues of one Vietnam enterprise?
As Deng said to the West, “We need Western money and technology if we are to raise our people from poverty.”
Philippine GDP is a pathetic fraction of the US, Germany, Denmark, Finland, Norway, and Sweden. These countries are indeed wealthy. They can speak to wealth inequality.
While our GDP is that of an underdeveloped nation, and we are the regional laggard to boot.
Let’s hold it right there.
We must generate much more economic output.
And we need it in a hurry, like yesterday. That is why the blog has raised the imperative to raise Philippine GDP by $200 billion rapidly. See above; what the IRR for CREATE and SIPP must deliver.
Why? To leapfrog the economic output of our neighbors — which is why they were able to put poverty in the rearview mirror.
And we cannot if we keep to our instincts: We are parochial and insular. So, we value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.
That is the crux of our “inequality.”
And unless we reinvent ourselves, we won’t raise Juan de la Cruz from poverty.
For example, why hasn’t “Philippine education developed the ability to think, meet new situations, and solve the kinds of problems one meets in real life.”
Consider the referenced articles in this posting: (1) DBCC keeps economic growth target; (2) Economic bills move to the front burner in Senate; (3) Philippine education: 1925 vs. 2021; (3) PHL’s long-term economic prospects are getting better; (4) To strengthen PHL economic recovery, World Bank cites the need for more FDIs; (5) Social democracy versus capitalism.
Then consider the continuing themes of the postings, for example: (1) Why haven’t we solved poverty especially in the rural areas; (2) We lag in industrialization — and rely on OFW remittances and the BPO industry, our top companies notwithstanding, i.e., together, they can’t match one Vietnam enterprise ; (3) America cannot be the model — but we must take the sense of dynamism; (4) We must benchmark against our neighbors — the Asian Tigers, China, and Vietnam; (5) Our neighbors have embraced dynamism and interdependence — which characterize this universe — they begged for foreign money and technology.
Indeed, they are a mouthful. That’s why the blog speaks to these themes too: (1) Human undertakings are subsets of larger sets, i.e., the universe and the ecosystem that makes organisms thrive; (2) Why do freedom-loving nations need a hegemon to lead them in their commitment to pursue the common good.
Furthermore, the blog introduced neuroscience: (1) The science of “thinking”: it is beyond logical and incremental thinking, i.e., lateral or creative and forward-thinking; (2) Cognitive development — the spectrum of binary to relative thinking — comes from experience; (3) The 3C’s of the hardy mindset: challenge, commitment, control.
And that is why learning is crucial, i.e., recall these themes: (1) Education is experiential; (2) The 21st-century skills: critical thinking, creativity, collaboration; (3) The 21st century demands innovation and global competitiveness — e.g., Thailand and Vietnam export rice; PHL imports them.
At this point, indeed, we need a “compass,” and hence these topics: (1) The GPS model: where are we; where do we want to be; how do we get there; (2) Steve Jobs’ definition of creativity: connect the dots; he tapped a Japanese technology in moving the world from analog to digital with the iPod.
In the final analysis, we must ask ourselves: Do we know Juan de la Cruz?
Our instincts reflect a caste system: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.
The bottom line: Juan de la Cruz’s place in the sun is to traverse poverty to prosperity. But Philippine education hasn’t developed the ability to think, meet new situations, and solve the kinds of problems one encounters in real life.
Unsurprisingly, we are “insanity” defined — per Einstein.
Gising bayan!
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