President Noynoy Aquino may have a good reason for giving a no-go to charter change!

In a pre-emptive strike on the whole discussion around ‘charter change’ that is likely to come up after the opening of the 16th Congress in July, President Benigno Simeon “BS” Aquino III issued his two cents on the matter of foreign ownership of land in the Philippines.

“I don’t think they are necessary detriment to getting foreign investors into the country,” he told reporters in Cavite in an interview aired over the government-run radio.

The President cited China, which grew economically despite a prohibition on foreign ownership of land. He also cited past studies by chambers of commerce showing that poor peace and order, bureaucratic red tape and lack of infrastructure, more than the economic provisions, hinder investments.

philippines_charter_change

Perhaps President BS has a point. Before you sell your building you need to fix its rotten floors first lest the new owner’s furniture fall through it.

If there are fundamental problems that dampen confidence of both foreign and domestic investors, then the old reliable principle of first thing’s first applies. It’s really that simple. Unless you are one of those crooks who paints over rotting wood and crumbling concrete then places a FOR SALE ad with a photoshopped image of the property on the papers, there are things basic decency dictates you need to do before you schmooze with potential buyers.

The Philippines clearly has a chicken-and-egg problem where determining the root causes of its chronic collective wretchedness involves a toss-up between its image and its profound cultural dysfunction. Is the country’s image as a black hole where investment funds disappear forever the root cause of its lack of come-on to rich folk looking for a place to park their excess cash? Or is its people’s renowned inability to productively capitalise on the abundance of resources and opportunity within their own islands the real heart of the matter?

Harping about not having enough “foreign direct investment” in order to progress sends a simple message:

Filipinos are hopeless at creating capital indigenously.

In a pre-globalised world, people simply invented and produced what they needed locally. Being hooked on foreign capital is what frames the “debate” around what the development strategy of the Philippines “should be” today — a debate underpinned almost solely by a blanket acceptance that Filipinos are simply too lazy or too brain-dead to think their way out of the rathole they currently find themselves in. The basics of living within one’s means now simply fly over the heads of our lot who are slowly starving as the intravenous feed of foreign capital (in the form of both FDI and OFW remittances) either slows to a trickle or is engulfed by our galloping mall-hungry population. The principles are easy to grasp even for the current crop of name-brand solons who now infest the Philippines’ legislature:

(1) Self-sufficiency — being able to produce domestically what is consumed locally in order to;

(2) Reduce unhealthy and un-secure dependency on global trade and reliance on unnecessary shipping of goods.

(3) Simplification of the concept of economic value tying it squarely back to production and tangible assets all sustainably created through;

(4) Domestic capital creation — an ability to rely on one’s own inherent cleverness to create physical, intellectual, cultural, and (ultimately) financial capital indigenously.

Tough luck for us though. If we evaluate the Pinoy condition along the above four points, we get bad news spelled out for our lot. Our economic value as a people is tied squarely to the amount of capital and commercial activity that the industrialised world is able to generate (like rats and roaches who live off by-products of human activity). Now that we are seeing a withdrawal of this activity by the rich world, we will be left to increasingly rely on our own cleverness to replace this with something to keep our economy buoyant. A reliance on a cleverness that historically was never evident in us is a scary prospect. Personally I’d put my money on roaches and rats.

Protectionism, perhaps, could be a much-needed reality check and possibly the bitter pill we need.

Sometimes you need to give your 19-year-old kid an ultimatum. Get a job or start paying rent!

If we shut our ports to cheap Chinese celphone trinkets (among other useless things we import) — our consumption-driven economy will slow down.

This will have a triple effect:

(a) Pinoys start feeling the pinch and spend less.

(b) Whatever remaining Pinoys who have cash to spend will have lesser stuff to spend on.

(c) A bigger chunk of household incomes (specially incomes sustained by OFW dollars — remitted by whatever is left of the overseas labour force) will remain parked in bank accounts.

As oligarchs who once earned their fortunes by convincing hollowheads to part with their hard-earned OFW dollars in exchange for useless trinkets and over-priced restaurant meals shift their businesses (hopefully) back to manufacturing and farming (activities that actually produce stuff), our society then gets back to building a nation the old-fashioned and sustainable way. And, guess what, all that money parked in the financial system that would have been spent on cheap Chinese trinkets becomes available to fund our next-generation sustainable capital expansion!

The formula is simple, really.

Reliance on foreign capital and foreign commercial activity is an obsolete concept embraced by losers. The trouble with the Philippines is that it is a long loooonggg way down the road in its addiction to foreign capital. It is physically incapable of surviving without it.

What is the usual and most effective treatment for drug addicts? You lock them up in a room and hope they make it through the night without hanging themselves.

[Photo courtesy Sulekha.com.]

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Post Author: benign0

benign0 is the Webmaster of GetRealPhilippines.com.

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45 Comments on "President Noynoy Aquino may have a good reason for giving a no-go to charter change!"

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Alfred del Monte
Guest

Orion’s solutions sucks. You have become the image of GRP so you have to go down along with your cha cha advocacy. Benigno must be the face of GRP. All solutions of Orion has to be deleted. Long live the no solution, pure criticism articles of GRP!! The solutions in our no solution, pure criticism articles can be found when you read between the lines! Pure critical thinking rules!

OnesimusUnbound
Guest

Err . . . have you read this?

Tulta Munille
Guest

Are you guys so insecure that you throw titanic hissy fits each time other people voice out the slightest hints of doubt towards your ideas?

libertas
Guest
The way to solve the chicken and egg and also attract foreign investment is to both phase and target industry sectors and geographic areas where overseas companies can own more than the existing 40% ( IBM quietly has a special dispensation of the law, so it can apply to others). It does not have to be all or nothing. The most important aspect is investor confidence, and clearly that is not there at the moment and will not increase until positive steps are taken. Motherhood statements from pnoy cut no ice. If protectionism remains the no. 1 policy, supported by… Read more »
Johnny Saint
Guest

Pretty sure new, smaller Filipino Chinese entrepreneurs would adapt more readily to challenges from foreign companies willing to work with local talent than calcified oligarchies.

libertas
Guest

I am seriously considering personally funding a 2 year study into the interwoven issues of dynastic politics and charter change, issues which i think could be central in 2016 ( if not before with TPP, Millenium Development Goals, ASEAN 2015).
It would build upon rather than replicates work already done, but fill in the gaps, and differ by adopting a comparative and competitive analysis across ASEAN countries, and use advanced and rigorous analytical models for economic projections/scenarios.
A good paid PhD project/book for someone.

Johnny Saint
Guest
AIM economics professor Ronald Mendoza, who also writes for RAPPLER.COM, cites a lot of circumstantial evidence that suggests a strong correlation between political dynasties and poverty in the Philippines. Dynastic succession is another sticking point in the constitution that hasn’t been acted on in nearly 30 years. Mendoza writes “what causes concern here is that political dynasties in the Philippines thrive in regions with relatively higher poverty, lower human development and more severe deprivation. Our initial study does not yet allow us to conclude causality, but the two competing explanations already paint a worrying picture. Either poor people continue to… Read more »
libertas
Guest

thanks
i have him on my contact list

michael
Guest

The president has a point. It is unnecessary at this time.

michael
Guest

Instead of charter change, the president is focused more to fight poverty, corruption and safety.

libertas
Guest

well, pnoy is failing on all counts
and knows about as much about economics as you do about intelligent comments

WinterSoldier
Guest

TROLL.

Ang dulot ng kahirapan ay hindi corruption kundi katangahan, sobrang pag-party at katamaran.

Your call. 😀

Johnny Derp
Guest

Propaganda fail yet again.
Is that all you guys at the malacanang miscommunications group can post here? Nothing but recycled propaganda crap?
Troll harder, eduardo

C4
Guest

I have noticed in every response you post, always has to do with trolls. Are you in-charge of it, every time an optimist shows up?

Commiecs
Guest

That’s probably the most sensible statement Noynoy has made as president so far. And that’s saying a lot because he hasn’t said much sense three years into his presidency. But of course he has vested interests in it. It just so happens his interests fell in place with practicality. How convenient.

mcalleyboy
Member

Very little cry for change because it don’t affect anybody here…? So the same foreigner deal of joint ownership in business even though he’s married to a Philippina, no large companies will do this.

Malls(they all look and carry the same things) and buildings/condos continue to be built and at best the only money coming into the Philippines is the OFW, and pensioners, tourists, not a good plan, same plan no stradgedy for business or sharing it’s all one-way.

Barter as a way of life continues as usual for many citizens here.

libertas
Guest

Pnoy is seen as an incompetent puppet and those who side with him simply as weak self-interested turncoats who will just as quickly change allegiance as power shifts. Result – nothing substantive is ever achieved, simply people jockeying for posituon/pork barrel, keeping their head below the parapet, and avoiding work at all costs.

ChinoF
Member

I for one disagree for the president. While it’s true that we have a terrible bureaucracy, which also affects Indonesia, Malaysia and other Southeast Asian nations… I do still remember what the American Chamber of Commerce itself said. Change the Constitution, or you’ll suffer for it.

But you have to wonder, are we reminded, as Benign0 indicated… are we made to endure protectionism so we could be more thrifty and less wasteful? Remember what I wrote about Filipinos’ bad money habits.

Ruel
Guest

We must remember that we were not made to endure protectionism. Protectionism was enshrined by those who have big businesses just so they won’t have competition. If there are less jobs, then there is nothing to save if the costs of basic goods keeps on rising.

kayleemegan
Member

Agree with Ruel.

manong guard
Guest

Agree with kayleemegan.

Johnny Saint
Guest
“‘He also cited past studies by chambers of commerce showing that poor peace and order, bureaucratic red tape and lack of infrastructure, more than the economic provisions, hinder investments.'” All of which have either failed to improve or have arguably gotten worse under BS Aquino’s watch. What the president fails to realize is that these factors are not mutually exclusive. Full ownership for foreign business interests will mean nothing if there are running gun battles in the street, knife wielding drunks knocking at your door, warrant-less arrests and illegal detentions by police and the military and kidnap gangs operating with… Read more »
Bangkaw Itomon
Guest
The usual nationalistic jargon of NONSENSE coming from that author did not fail to astound me, like it did by others who said the same thing, everytime What BSA has said is that the limits by law on foreign ownership, such as the 60-40 in the Constitution, is not a hindrance to FDIs. He has cited China as the prime example for his stand. It is the approach of “Cha-cha” and amending the constitution in allowing foreign ownership as a solution to attract foreign capital is where he has a disagreement. This is because to BSA – and he cited… Read more »
Goody Baja
Guest
Here the points that Benign0 missed about “economics”; 1.) Protectionism, perhaps, could be a much-needed reality check and possibly the bitter pill we need. Sometimes you need to give your 19-year-old kid an ultimatum. Get a job or start paying rent. My answer; Protectionism cannot be compared to the 19 year old kid force to get out from parent’s house and be independent. And that’s wrong. I will say, our government is over protectionist about our assets that supposed to be marketed long time ago inorder to help the majority of the population to get a job. For a very… Read more »
ChinoF
Member

If anyone wants to oppose BSA3’s points (which are not necessarily Benign0’s), here is one for it by Boo Chanco: http://www.philstar.com/business/2013/05/24/945558/those-restrictive-economic-provisions

Johnny Saint
Guest

I agree with Boo Chanco. The whole idea is to stimulate investment, not drive it away. The anachronistic provisions of Article XII are doing just that by creating a system that’s rigged against foreign competition. Who’ll want to invest/trade in that kind of environment?

Johnny Saint
Guest
Just wanted to clarify some things. To start off, BS Aquino’s position is flawed from the outset. Perhaps he was again too lazy to do the proper research or maybe it’s a deliberate attempt at obfuscation. The argument holds that “China…grew economically despite a prohibition on foreign ownership of land. The president implies that the same situation prevails in the Philippines as in China. That is untrue. The constitution of the People’s Republic of China DOES NOT PREVENT FOREIGN OWNERSHIP NOR RESTRICT FOREIGN INVESTMENT. Article 18 states: “The People’s Republic of China permits foreign enterprises, other foreign economic organizations and… Read more »
Gerry
Guest
IDK/don’t care about charter change but your contention bout “America’s ‘Founding Father’s'” and their desire to create “the best framework to serve as the law of the land and then be crafted by the legislature composed of elected representatives of the people”, is way off! The way the whole U.S. gov’t. was originally set-up was to protect the wealthy land owners of the South and the industrialists of the North, that is RICH, WHITE MEN. The illusion of a gov’t. run by ‘elected representatives of the people’ is just that,an illusion. Woman had no rights until the 20th century, slavery… Read more »
Johnny Saint
Guest
“Thou hath not so much brain as ear wax.” Gerry’s unparalleled stupidity, his tendency to believe anything that bolsters his conviction that there is a grand conspiracy to keep him poor and his unreasonable loathing towards what he considers the “elite” is astounding. His comment reveals that he has never bothered to read the US constitution. Article 6, clause 2 states “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the… Read more »
Gerry
Guest
Wrong again, as you always are when it comes to thinking you know anything about me!OR THE U.S.A.OR just about anything else! A poor MAN? NO, not by a long shot. The framers of the Constitution wanted to keep what they fought so hard for and it certainly is no accident that black people could not vote, nor woman either until sweeping reforms were ushered in a century after the country was formed and not a single ‘founding father’ was still alive.Then again a century later w/the civil rights act of 1964. You are the clueless one and your insults… Read more »
Johnny Saint
Guest
WARNING: Please watch your step. Someone forgot to clean up after their dog and left GERRY all over the sidewalk. So now its about slavery? The subject of the article was the debate on charter change to effect economic liberalization. However, this pile of ordure — Gerry — now decides to rant about a topic completely extraneous to the matter at hand in a misguided attempt to prove how limited his knowledge is. As usual there are the lies to make history conform to his twisted picture of the world and the gratuitous profanity to puff up his microscopic ego.… Read more »
Johnny Saint
Guest
The predilection shown by the pile of ordure calling itself Gerry for radical, even anarchist writings explains why it resorts to name calling, petulant tantrums and recitations of irrelevant factoids when someone challenges its position. Case in point — Howard Zinn. As a historian his work is utter hogwash. Zinn himself admits he cared less for historical analysis than political opinion. He assessed a work of history by its author’s partisan loyalties, not its arguments about causation, influence, motivation, significance, or experience. Zinn takes the position that objectivity and empirical responsibility do not matter, and makes the dubious leap to… Read more »
Johnny Saint
Guest
Here’s another bit Gerry will never mention because it doesn’t fit with his selective view of history: The FIRST TRUE SLAVE OWNER: that is, the FIRST to hold a BLACK AFRICAN SERVANT AS A SLAVE in the mainland American colonies was A BLACK AFRICAN MAN. Anthony Johnson was an Angolan held as an indentured servant by a merchant in the Colony of Virginia in 1620, but later freed to become a successful tobacco farmer and property owner. By July 1651 Johnson had five indentured servants and owned some 100 hectares of land. A court case was brought against Johnson in… Read more »
Gerry
Guest
HA, you and that JACK@$$ liberty-ass always come off as if you know it all and I’ve been sitting back waiting for one of you to stick your foot in your mouth and IT DID NOT TAKE LONG! Always patting each other on the back, AS IF…WELL,LMAO at both of you! IDK who is a bigger laugh, YOU, thinking you comprehend what the framers of the U.S. constitution set out to do, or him with his “I’ve been thinking about funding a two year study”, OH YEAH! SURE YOU ARE AHAHAHAHAH!!! at any rate, YOU BOTH MAKE ME LAUGH!!!! SO… Read more »
libertas
Guest

Ah, the class dunce is back.
Always wanting to vent personal anger and envy in the absence of any relevant thought or meaningful contribution.
Some of us are rich and successful through hard work. Try it sometime.

Johnny Saint
Guest

Here’s a joke:

Gerry’s family tree is a straight line.

libertas
Guest

What an obnoxious and envious twat.
Self evident why he has a chip on his shoulder, and an attitude which keeps him at the bottom of the heap – whatever the system.

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