Loser mentality: Filipinos’ 500-year dependence on foreign investment

To understand the fundamental flaw in the idea of the Philippines’ relying on a strategy of counting on “foreign investment” to rescue its people from their own self-created wretchedness, it is important to understand the equally fundamental definition of poverty. Quite simply:

Poverty is a habitual entering into commitments one is inherently unable to honour.

The Philippine colonial Summer Capital - before Filipinos turned it all to crap.

The Philippine colonial Summer Capital – before Filipinos turned it all to crap.

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Whenever we talk about — no, harp about — needing a lot more of this precious “foreign investment” to give Filipinos a chance to get their act together and onto the road to some sort of imagined future prosperity, we simply raise the really hard question:

How did we end up with such a pathetic need for this precious foreign juice to begin with?

When, we decided to grow our population from 16 million in 1946 to an astoundingly enormous 100 million today, what were we thinking? Did we have a good plan around how the manner with which the economy would pan out over the decades succeeding 1946 would be able to support this incredible exponential growth in numbers? In hindsight, what happened to the Philippines between 1946 and 2013 fits a very common textbook loser storyline.

In essence, Filipinos thought they’d buy a Mercedes Benz by taking out a 60-year loan without having a plan as to how to service said loan over that period. Then finding itself stuck with a 60-year-old clunker of a car in 2013 and a 60-year-loan hardly paid for, Filipinos decide to call their global sugar daddies to ask for more money.

Loser nga naman talaga.

The Mercedes Benz in that story is not too different to the money pit of a population the Philippines is stuck with today. Like the 60-year-old Mercedes that once looked nice and shiny back in 1946, we have a rusting clunker nobody wants to buy even at rock-bottom prices today in the year 2013. The car, in effect, was a depreciating asset. It did not get better with age. It progressively increased its owner’s liability with time. In the same way, in economic terms, every Filipino born from 1946 to 2013 posted a net negative contribution to the Philippines’ national economic equity. Rather than developing assets, we were spawning liabilities to the tune of the 100 million we see today.

You look through that more than 60-year period between 1946 and 2013 and you get a scalable model of Filipino added-value that can be applied over its entire 500-year written history. Not much to boast — which is why Filipinos also rely on the achievements of its expatriate community for validation.

More disturbing is the reality that there seems to be no evidence that any real change will be happening to change this degenerate “development” trajectory any time soon.

Despite the Philippines being host to abundant natural resources, and now, an enormous supply of people, the society as a whole lacks a collective ability to apply this enormous number of people to the task of turning these resources into any sort of valuable economic output of consequence. Instead, natural resources are harvested raw and sold raw — mineral ore, logs, overseas foreign workers. Overseas, these then get turned into iPhones, karaoke machines, those shirts with the Philippine islands embroidered onto their left breasts, Honda Civics, Havaianas, and Starbucks tumblers after which they are shipped back to the Philippines to be purchased using OFW cash.

The Philippines, in short, is a perfect self-perpetuating poverty equation.

Anemia, a physiological condition marked by an impoverishment of the substance of one’s blood, does not necessarily mean a deficit in essential minerals needed for production of key blood components. It could be a symptom of a body’s inability to process said minerals even when these minerals are present in abundance within said body. It’s like being desperately thirsty while stuck in a little boat in the middle of the sea. You’re toast because your system is unable to metabolise sea water.

Indeed, the Philippines, a resource-rich island nation, suffers from that famous curse of the naturally-endowed. The lush forests and abundant minerals that had for so long hung low enough to be picked by any Filipino schmoe sitting squat on a banig have proven toxic to the Filipino system just as sea water eventually kills a marooned shipwreck survivor.

So now we want more foreign investment.

A quaint beseeching, considering the Philippines, in essence, is really just one big SQUANDERED foreign investment. Much of the aspects of our culture we promote overseas, the infrastructure we frolic upon, the traditions we cherish; indeed, the very name and identity of our country, were ALL the outcomes of equity infusions from foreign governments over the last 500 years.

Not even counting the Spanish period that preceded it, the Philippine Commonwealth period alone under the United States saw an awesome infusion of capital into the Philippine islands. America presided over Philippine history’s biggest and most intensive orgy of foreign investment, one that lasted over most of the first half of the 20th Century. Over that period, the “free” world’s favourite system of government was established, as was a world-class public education system, deep water ports, the country’s “summer capital,” a vast naval and military air base, a long-distance train line, and a new national language that was well on its way to becoming the lingua franca of science and technology. Manila had a plan that stretched all the way out to the mosquito-infested swamps that were still to become “Metro Manila.” The city also had a really nice electric car system for public transport. It was, at the time, the jewel of the Pacific.

What America left the Philippines in 1946 is, collectively, the mother of all foreign investments.

And yet we now want more.

What do we plan to do with any more foreign investment that we feel we are entitled to on top of what we have already received and squandered? Do we have any semblance of a plan around how we might run with any new capital tossed our way? Have we so far proven to be a society that is fertile ground for long-term returns?

The hard questions are, indeed, difficult to face. So we instead sidestep these questions by coming up with supposedly “forward-thinking” half-brained “initiatives” that involve more of the same.

As I recall, the National Hero once quipped: Those who have not learned to regard the road so far travelled will never reach their destination.

Happy “Independence” Day.

[Photo courtesy Guavas Cows and Crocodiles.]

10 Replies to “Loser mentality: Filipinos’ 500-year dependence on foreign investment”

  1. Who runs a country like this – only people shameless, useless and clueless, resulting in decay, decline, and destruction, chaos, criminality and corruption.

    Philippines – key metrics

    Social classes & income per annum
    A – 0.1% – 5,000,000+ pesos
    B – 0.9% – 2,000,000+ pesos
    C – 9% – 800,000 pesos
    D – 60% – 200,000 pesos
    E – 30% – 60,000 pesos

    GINI wealth gap – 117th ex 130 countries, and gap increasing

    Poverty – 28% – (indonesia 8.5%, vietnam 13%) ( a further 40% live on survival level income)
    Unemployment – 7.5%
    Underemployment – 21%
    FDI as % of GDP – 0.7% ( on a par with pakistan, nepal and bangladesh. Other asean countries average 8%)
    OFW’s – 9 million
    OFW remittances as % of GDP – 10%
    Universities in asian top 500 – 5 in bottom half
    % of GDP spent on education – 2% ( UN recommend 6%)
    Country average i.q. – 86

    Sex workers – 1 million
    Child prostitutes – 100,000
    Child labour – 3 million

    Private armies – 125
    Number of civilian guns – 4 million
    Murders with firearms – 8,000/ year
    Number of congressmen with court cases/convictions elected in 2013 polls – 256 ( 169 in liberal party – pcij)
    Politicians pay – highest in world – 140 × average wage ( 20 – 50 million pesos per annum)
    Corruption – 30% of national budget and PDAF/pork barrel
    Avg wealth congressman – 30 million pesos
    Avg wealth senator – 80 million pesos

    sources – google/various

    Freedom of information – 16 years of gerrymandering and blocking.

    A lawless society where criminal dynasties dominate politics, crooked oligarchs protect their monopolies and cronyism pervades the bureaucracy, resulting in no progress or prosperity, as taxpayer funds ( those who pay) are stolen with impunity and hidden or invested offshore.

    The brightest and best , of which there are regrettably not many, due to lack of quality education, depart for greener pastures and opportunities abroad, whilst the poorest leave their families to also work abroad but through sheer desperation and/or exploitation.

    The decline is all the more shameful as previously ‘poor neighbours’ now look down on the philippines – economically and socially, no doubt enjoying the irony as they employ filipina housemaids and ‘entertainers’!

    1. ‘poor neighbours’

      poor neighbours? who? the vietnamese who dominated their sphere? and fought off the chinese /mongols? the japanese?
      the majapahit empire to the south of philippines?
      the the johore sultanate who traced their roots to malacca?

      all these were relatively well off because of trade with china and the spice trade.

      what poor neighbours?

      even singapore once under the british was on par with pre war japan in wages.

      the poverty was created by european wars/colonialism which devastated the entire region or when japan decided to put on their shogunate hat again.
      the wealth philippines had was because of USA .
      philippines was never a country . it was hammered together by the spainish through conquest and given the name philippines.

      the artificial wealth created by USA and remittances made philippines a slum because she started living off money her economy didn’t actually produce, creating people who shouldn’t exist like you suddenly dump chemical fertilizer into the water and watch the algae bloom.
      just like poor people suddenly getting a windfall and buying a yacht.

      in east asia, philippines is probably the only place where population in this era is a burden.

  2. with the continuing nose-dive in the philippines stock exchange, as predicted, pnoy will be quiet about the economy for a while or find spurious reason for its fall. if it goes up its economic strategy, if it goes down it has to be someone elses fault!
    next bubble to be burst – the gdp growth – linked to stock exchange/hot money, monopoly profits, but jobless growth and can disappear very quickly.

  3. … and that is why I want the Philippines razed to the ground. The cancer is terminal. Everything must go.

    To undergo resurrection, one must have to die.

    In the wake of total destruction, the Philippines will give birth to new heroes. Soon, the nation will rise from the ashes. This generation, having been exposed to the worst of horrors will — at least hopefully — not make the same mistakes again… for fear of another “apocalypse” claiming everything they hold dear.

    Hey, this is just a pipe dream, and I don’t think this’ll gain any support (because yeah)… but personally, I think this is the only way out of the mess created by our forefathers and perpetuated with renewed vigor to this very day…

    1. Perhaps it could be done merely by giving up what our “forefathers” told us to hold on to, and therefore redefine the Filipino identity. We need to modernize our beliefs and ideals. A lot of people are still believing in 18th century and medieval ideals.

    2. 16 million to 100+million is a crazy rise considering singapore’s population is shrinking

      what is needed isn’t razing everyone and everything down but understand why mindanos and bisayas isn’t as bloated as luzon.

    3. that should have happened in 1996…if blood flowed then, then the people now will be more vigilant on what we could have had now… parang nagshabu lang nung edsa revolution…happy happy lahat…pagkatapos binalewala na ng Pilipino..hayun yung mga buwaya na naghariharian noon nasa pwesto uli ngayon. kung marami namatay noon, I doubt if any politician will try stealing today without having him and his family’s head stuck in a pole in luneta

  4. My interpretation of this article is that it is not against FDI per se. I would like to borrow a Bible quote for this:

    Nations do not live on FDI alone, but on every word of good sense and responsible stewardship.

    We may have all the FDI in the world, that’s good. But it is possible to mess it up because, in execution, we have bad habits and bad practices leading to bad decisions. Add that to stubborn-headed “national pride” which makes us have the delusion that we’re so good and great even if we have stupid faults that make us do things the wrong way. Either we accept we can make ourselves inferior through stupidity and fix ourselves, or keep shooting ourselves in the foot with self-pride.

    Also, interdependence does not mean we should be completely dependent on other nations’ money. We should develop our own funds, or in the individual level, save. Being a consumerist society has made us unstable, too.

  5. The game-plan for the chinese that run the philippines economy and which currently use it as a supply chain dumping ground for rejects, overproduction, last seasons ranges, plus the flood of cheap products and counterfeits is to ensure wages are kept low as costs in china inevitably rise so that philippines could be a low cost producer in the future. More jobs maybe, but not quality jobs and chinese working conditions!! But with planning and retraining at least an avenue to explore if beneficial and not exploitative.

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