We are back to square one.

“WB report: Covid scarring cuts PHL growth,” Cai Ordinario, BusinessMirror, 7th Dec 2021. 

“THE extent of the economic scarring caused by the pandemic has cut the country’s long-term economic growth potential to only 5.7 percent on average between 2020 and 2029, according to the World Bank.

“The jobs lost to the pandemic will lead to a higher poverty rate. The World Bank estimated this would mean a poverty rate of 22 percent in 2020 and 21.3 percent in 2021, based on the lower-middle-income poverty line of $3.20 a day in 2011 purchasing power parity (PPP).

“The World Bank said the social assistance under Bayanihan to Heal as One Act (Bayanihan 1) was not enough to prevent more people from falling into poverty.

“This foreshadows that the crisis will have long-lasting effects on Filipinos’ well-being.”

And as Elfren Cruz says, how can we internalize what staying in a one-star hotel means when billeted in luxury accommodation.

“The greatest challenge for those who believe in democracy is to show the ordinary people that democracy can resolve the terrible wealth inequality that exists in society. Unfortunately, most economists and the business sector are still obsessed with economic growth and GDP increase. I advise them to read Pope Francis, who has repeatedly said that the concept of ‘trickle-down’ has not worked, does not work and will never work.” [“Summit of democracies,” Elfren S. Cruz, BREAKTHROUGH, The Philippine Star, 9th Dec 2021]

Let’s dissect the assertion of Elfren. It is not to embarrass Elfren but to address the countless of us that share the sentiment.

But before we do, recall that Elfren has written about “The 4 C’s to 21st Century Skills.” They can be easily googled: “Students need these specific skills to participate in today’s global community fully: Communication, Collaboration, Critical Thinking, and Creativity.

“Communication • Students need to be able to share their thoughts, questions, ideas, and solutions.

“Collaboration • Students need to be able to work together to reach a goal while putting their talent, expertise, and knowledge in action.

“Critical Thinking • Students need to be able to look at problems in new ways and link learning across subject areas.

“Creativity • Students need to be willing to try new approaches to get things done. That leads to innovation and invention.

“To encourage the development of these skills, we must intentionally focus on the design of program activities.

“We need to allow students to take ownership for their learning. They should move toward becoming developers of knowledge rather than consumers of knowledge.

“Our out-of-school time environment should enable students to move beyond typical methods of study, such as writing an essay after reading about a topic, to tackling a relevant problem, such as bullying.

“We must encourage students to create a project that allows them to share their findings and impact change.”

Question: Where is PH in wealth inequality?

Answer: We have the worst GINI coefficient index in the region.

And so, it stands to reason that we are outraged. And here’s the perspective of Elfren: “Unfortunately, most economists and the business sector are still obsessed with economic growth and GDP increase. I advise them to read Pope Francis, who has repeatedly said that the concept of ‘trickle-down’ has not worked, does not work and will never work.”

Question: Should we not be obsessed with economic growth and GDP increase?

Before we answer that, we must first ask whether Pope Francis was speaking to the Philippines?

“Without naming countries or people, Francis condemned politicians who seek popularity by appealing to the basest and most selfish inclinations.

“The 2007-2008 financial crisis was a missed opportunity for change, instead of producing increased freedom for the truly powerful, who always find a way to escape unscathed. Society must confront the destructive effects of the empire of money.”

“Francis repeated past calls for redistribution of wealth to help the poorest and for fairer access to natural resources by all.” [“Pope says the free market, ‘trickle-down’ policies fail society,” Philip Pullella, Reuters, 4th Oct 2020]

Of course, the pope is talking to all believers. But are we solving the problem of Juan de la Cruz by making such a broad generalization?

With due respect to Elfren – and us in the Philippine elite and chattering classes – we are prone to offer solutions as though we’re demigods when they are a veiled assertion of hierarchy in our caste system?

The evidence? Recall that we (a) crafted a constitution that restricts foreign investment and (b) ignored Juan de la Cruz, who wanted the Subic Bay Naval Base to remain.

But it is unsurprising because Juan de la Cruz values hierarchy and paternalism.

And so we proudly celebrated the OFW phenomenon – despite the social costs – and the 4Ps and the continuing devolution – of our meager tax-revenue income – to LGUs.

In other words, we created a banana republic by not pursuing industrialization and restricting foreign investment and technology.

But we aren’t done yet. Look at the alliance of Marcos, Arroyo, Estrada, and Duterte. 

They will ensure that our instincts become vibrant: Parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of corruption.

Let’s pause right there.

Like a broken record, the blog plays our instincts time and again. Because if we can’t come to grips with who we are, we are no different from an alcoholic — i.e., our instincts are an addiction in Franciscan theology-speak — who failed the AA 12-steps. And they mirror the St. Ignatius discernment exercise or “examen” — God helps those who help themselves. 

In other words, to be the laughingstock of the region is not our reason for being.

But we will continue to pay a heavy price for our instincts: endemic corruption, especially in the public sector, an education crisis, unlivable urban metros, inadequate healthcare, worsening informal settlers, among countless others.

Why? Back to what Elfren is complaining about: our pathetic GDP per capita.

What should we do?

Consider why trickle-down economics doesn’t work for us: The $60 billion we generate from remittances and the call centers give us a consumption-service economy. And the multiplier effect – as in the spawning of subindustries in raw material sourcing and parts and components, among others – is much less than the $57 billion Samsung Vietnam exports or an investment-industrial economy.

And that alone will explain why Vietnam has arrested poverty. And the story doesn’t end there. Their exports are 444% more than ours.

And Vietnam is a newcomer to the game. And that is why when we travel to Bangkok or KL or Singapore, we can see with our own eyes why we’re the regional laggard.

In other words, what wealth are we going to redistribute with a GDP per person of $8,000? Compare that to Thailand = $17,300; Malaysia = $26,400; Singapore = $93,400.

And for reference, the US is at $62,530.

And so, Pope Francis was talking to the Americans more than the Filipinos.

Still, we Pinoys can do something about it.

Consider these elements that make for a banana republic: “(1) A politically unstable country. (2) Extremely stratified social classes: usually a large impoverished working class and a ruling class plutocracy, composed of the business, political, and military elites of that society. (3) Collusion between the state and favored economic monopolies. (4) An imbalanced economy remains limited by the uneven economic development of town and country.” [Wikipedia]

In other words, devolving to LGUs is not the answer in a banana republic. And that is why the blog keeps raising 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.

If LGUs are not the answer, is it CREATE and SIPP or the scores of industry road maps?

What about this news? “Congress ratifies bicameral report on amendments to Foreign Investments Act.”

“McKinsey and Co. Philippines Acting Managing Partner Jonathan Canto said the Philippines should explore a potential niche as a manufacturing hub with 80% of US companies and 67% of European companies from China to elsewhere in Asia. And Vietnam, Thailand, and Malaysia are currently gearing up to take over China.

“Mr. Canto recommended that the Philippines reassess its FDI strategy and priority sectors, build unique deal-focused value propositions, focus on investment promotion, and ensure end-to-end support for investors.” [“Foreign chambers tout FDI as key to economic recovery, poverty relief,” Bianca Angelica D. Añago, BusinessWorld, 1st Dec 2021]

Translation: Our investment policy-making and tax reform initiatives don’t measure up to the demands of the 21st century.

The evidence? Will any of our efforts match the coup Vietnam pulled with Samsung Vietnam?

Consider: It takes over 10 million OFWs and over one million call center workers to generate for the Philippines $60 billion against the $57 billion Samsung Vietnam exports.

Then consider: The total wealth of our dollar billionaires in 2020 was $35.10 billion. Say we redistribute 20% to Juan de la Cruz that will be $7.02 billion.

Put another way, if we add the $60 billion from remittances and call centers to $7.02 billion, the driver of our consumption economy will go up to $67.02 billion.

But then, recall our exports are low at $48.2 billion against Vietnam’s $214.1 billion.

That is why the blog raised the following: “Instead of a 6%-7% GDP growth metric, should we set $200 billion incremental GDP as the hurdle? That will make more concrete the exercise to prioritize industries.

“For instance, why did Vietnam attract Samsung smartphones and we did not? That is a critical benchmark because that initiative delivers more revenues for Vietnam than our eight top companies combined for PH.

“We must dig up the details of the Samsung and Vietnam partnership.”

In other words, how do we operationalize the “4 C’s to 21st Century Skills”?

Take two of them: “Critical Thinking • Students need to be able to look at problems in new ways and link learning across subject areas.

“Creativity • Students need to be willing to try new approaches to get things done. That leads to innovation and invention.”

Let’s reprise them with feelings: (a) to look at problems in new ways and link learning across subject areas; (b) to be willing to try new approaches to get things done – that leads to innovation and invention.

Recall that the blog never tires of raising the character of the creation story and this universe, i.e., dynamism and interdependence – because Juan de la Cruz spells status quo.

We are back to square one.

And so we must ask the question again: “How do we find our place in the sun?

“But before we do a knee-jerk, let’s remember that our brains could be in “reflex” mode and why our go-to solution reflects “Pinoy abilidad.” How do we switch to “reflection” mode?

“But we must first ask the question: Does finding our place in the sun mean surviving or thriving? We must ask the question because Pinoy abilidad yields “pwede na ‘yan.” And why we succumbed to the “OFW disease,” once known as the Dutch disease.”

“THE extent of the economic scarring caused by the pandemic has cut the country’s long-term economic growth potential to only 5.7 percent on average between 2020 and 2029, according to the World Bank.”

In other words, if from 2009-2019 we grew GDP at a compounded 8% (at constant $) and still suffered a poverty rate of 16.7%, “the jobs lost to the pandemic will lead to a higher poverty rate. The World Bank estimated this would mean a poverty rate of 22 percent in 2020 and 21.3 percent in 2021.”

We are back to square one, and why we quote from a recent posting:

“We have “think tanks” and world-class economists and economic managers. Why can’t they be the core of the effort to turn this nation around? They can pull other sectors too – especially the likes of the late Fr. George Gorospe, SJ, because the enterprise must be grounded in “reality” – that it is beyond any human experience or system. But they must start as a small group to figure out a game plan quickly.

“Freedom and the free market are self-government undertakings to attain the “common good.” It does not have to be a top-down process. For over a dozen years, the blog shared examples even at the risk of being immodest because we have to start somewhere.

“For example, the effort to turn this nation around could support AmBisyon and Arangkada, raise them to the next level, and facilitate execution.

“It can respond to the question, what “forces” are restraining AmBisyon and Arangkada? Conversely, what “forces” can move them forward? How do we either overcome or exploit them accordingly?

“Even more fundamental is to unfreeze our brains and free them of knowledge that we have not challenged all along despite our predicament.

“We are the regional laggard and must reinvent Juan de la Cruz.”

Gising bayan!