Beyond the “Pinoy abilidad”

We take pride in our “resilience” – the ability to overcome challenges and misfortunes.

We are not alone. National pride or patriotism, or the love of and devotion to one’s country, is universal. [A Ukrainian friend said as much in the email he sent to friends just before his family left their home to a safer place given the Russian attack.]

“I will always be proud of my Filipino roots,” said Yuka Saso, the reigning US Open Women’s champion. “The main reason I had to choose Japanese citizenship is because of the passport I will use to travel.” She has to go through hoops to acquire a visa when going to another country.

I could only smile. That arduous process is why the president of my old MNC-company chose to obtain a US passport for me. “Are we working in the same company – he must be able to travel where I travel?” He posed the question to the travel and legal departments; they didn’t leave any stone unturned.

Please recall that I was a regional manager for the Asia Pacific. And here I am, thirteen years and counting, pounding my laptop ever since I started the blog. I know these people that keep leaving us in the dust.

But why?

The wife and I were chatting about it, and she gathered that we in the Philippine elite class point to Juan de la Cruz: “tamad kasi.”

But aren’t there over ten million OFWs working their butts off and away from family. And together with the over one million “call center” workers, they bring over $50 billion to this country.

How can these “lazy” people be driving the Philippine economy? They are the ones that keep us ensconced high up in the hierarchy – enjoying the privileges that come with rank.

Then consider that our eight top companies combined can’t generate revenues to match Samsung Vietnam, for example, over $50 billion.

News item: “PHL’s exports of ‘strategic goods’ rise to $4.5B in 2021.” See above, over $50 billion in OFW remittances and BPO revenues.

Or what about this? “What it takes to get back: 7-8% GDP growth in 6 years,” Cai Ordinario, BusinessMirror, 22nd Feb 2022.

“THE Philippines needs to post GDP growth of 7 to 8 percent annually in the next six years to regain what the economy lost during the pandemic, according to an economist from the University of the Philippines School of Economics (UPSE).

“In a presentation on Monday, UPSE Associate Professor Renato Reside Jr. said this level of growth annually, or higher, could help finance future deficits.

“Meanwhile, UPSE Assistant Professor Adrian Mendoza said apart from strengthening institutions; the next regime must beef up support for Science and Technology as well as innovation to boost the manufacturing industry.

“Other guests, including Trade Undersecretary Rafaelita Aldaba, agreed with Mendoza and said efforts to push forward the country's inclusive innovation strategy.

“Aldaba said efforts to innovate are vital to helping diversify exports and bolster the domestic market base, as well as to modernize agriculture and move more workers to the formal from the informal sector.”

Question: Did we not deliver 6%-7% GDP growth over ten years, 2009-2019, yet left behind by Vietnam?

In other words, the preceding represents a textbook approach to our nation-building challenge. It is not wrong.

But does it measure up to the real world?

We have a structural problem and can learn from the private sector, i.e., enterprises that face existential risks to their business restructure like religion.

It is not easy for nations to do the same. But the Asian Tigers did. And the Latin American countries could not. If we believe “autocracy” is the common denominator in the case of our neighbors, how do we explain the “banana republics” of Latin America?

In other words, we are the regional laggard not because Juan de la Cruz is tamad.

The OFW or call center worker Juan de la Cruz brings over $50 billion to the Philippine economy. Without Juan de la Cruz, we can’t even have a consumption economy to celebrate.

Nor could we be in a position to rely on monetary and fiscal interventions.

Simply put, the difference between the Binondo Central Bank and today’s Bangko Sentral is the over $50 billion from Juan de la Cruz. [See below; our GDP capita.]

But we in the Philippine elite – with due respect to our economic managers – want to take credit, e.g., that our debt ratio was less than 40% before borrowing for Covid?

Consider: Singapore’s debt ratio is over 100%, yet its credit rating is AAA.

Why? Singapore has no external public debt, not since the 1980s. But it issues government securities to assist its national pension fund. And its GDP per capita is $93,400, even greater than that of the US ($60,200).

Moreover, Singapore allots 173.3% of its GDP to export goods and services while we do 31%.

That’s how loud our structural challenge screams.

Here’s again a quote from an earlier posting:

“We must beat the hell out of the competition, full stop. [See above; how the US lags Singapore in GDP per capita]

“Because we are a consumption economy, household consumption accounts for 73.5% of our GDP end-use. Compare that to 49% for Thailand and 55% in the case of Malaysia.

“On the other hand, we allocate 31% for export initiatives, while Thailand puts 68% and Malaysia 71%.

“Unsurprisingly, the Philippine industry contributes a low-31% to GDP, against Thailand’s 36% and Malaysia’s 38%.

“That explains why the exports of these countries are 3.3 times in the case of Thailand and 2.6 times for Malaysia.

“Finally, where it hits Juan de la Cruz, Thailand’s GDP per capita is 2.2 times that of the Philippines, and Malaysia’s is 3.3 times.”

A textbook approach to address the structural challenge posed by the Philippine economy has not worked for us. More of the same is what Einstein called “insanity.”

In other words, logical yet linear thinking generates incremental outcomes. And we have seen that after delivering 6%-7% GDP growth over ten years, 2009-2019.

Given our lack of experience in development, we can’t visualize a “quantum leap,” for example. And it comes from quantum physics or mechanics; only physicists dabble in it.

Let’s step back.

Why can’t we overcome these blinders? Do we need to master quantum mechanics?

That’s irrelevant. All our neighbors did was learn from experience. And so Lee and Mahathir advised Deng to beg for Western money and technology. And Vietnam merely did “copy and paste.”

The question then is, why can’t we “copy and paste”?

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

And we in the Philippine elite are in that hierarchy and share in the inability to overcome these blinders.

News item: EU lawmakers warn PH of losing trade “perks” due to rights records.

We are reacting negatively to that news. Why? See above; ours is a culture of impunity.

Look at what Russia is doing in Ukraine, with some help from Belarus. And we can add China.

Isn’t impunity their common denominator?

What to do?

Why can’t we do a “copy and paste” as our neighbors have done?

For example, why can’t we wrap our heads around the imperative of FDIs; but not only, they must be “humongous”! And they must come with 21st-century technology.

In other words, we must first look beyond our shores and then recognize that we can’t build 21st-century technology from the ground up.

It’s tiring to hear it, but Samsung Vietnam is a classic example.

But why can’t we think “out-of-the-box,” a 6%-7%, or even 8%, GDP growth? It’s called Grade V arithmetic.

Think of our “crab mentality.” It explains why we can’t prioritize. But it comes from the inability to forward-think given our lack of experience in development.

For example, how come we haven’t articulated that we face a “structural challenge”?

In other words, we must seek a quantum leap in national income. And it will not come if we’re stuck to GDP growth metric, be it 6%, 7%, or 8%.

Recall that the blog raised the challenge of raising GDP by an incremental $200 billion. Why? The perspective will open our eyes to the magnitude of our challenge. That we need not a drop in the bucket but a “ton of FDI.”

It will also tell us that we must prioritize. For example, CREATE and SIPP will not match Vietnam’s revenues from Samsung Vietnam.

And that’s the “real world” that we can’t visualize.

The abject poverty Juan de la Cruz suffers is beyond the “Pinoy abilidad.”

Gising bayan!