The futility of begging for foreign investment when your country sucks

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Recent events have, yet again, highlighted the embarrassing way with which Filipinos and the government they elected to lead them are desperately scrambling to extricate themselves from systemic poverty after decades of misguided “development” approaches and serial promise breaking.

Like many many previous presidents before him, Philippine President Benigno Simeon ‘BS’ Aquino III went on a Western European junket begging bowl in hand to drum up interest in the Philippines. His timing was quite unfortunate. Just a day or two into this effort, Typhoon Mario swooped in and turned Manila again into the swamp land it originally was. And as if that weren’t enough, a video produced by business process outsourcing (BPO) firm Aegis Global that, point after confronting point, described why Malaysia is better than the Philippines went viral.

Like Malaysia, Vietnam is also using cut-throat methods to woo foreign cash to its shores.
Like Malaysia, Vietnam is also using cut-throat methods to woo foreign cash to its shores.
Put quite simply, the Philippines needs to clean its toilet before inviting guests in for a party. Perhaps, to be fair, it is, indeed, “more fun in the Philippines”. But like any fun party, you need to have industrial-strength toilets available and working to ensure your guests have somewhere to pass the chow and booze their bodies had processed through the night.

The floods that hit Metro Manila and its outlying municipalities have leptospirosis written all over it — a nasty bug that inhabits stagnant flood waters. It is often transmitted by animal urine or water containing animal urine coming into contact with breaks in the skin, the eyes, mouth, nose or vagina. In the developing world the disease most commonly occurs in farmers and poor people who live in cities. Not fun — despite all those photos of “resilient” Filipinos dealing with it in their own little ways.

The Philippines’ chronic problems cannot be solved by trumpeting Filipinos’ imagined “resilience”, continuously latching on to the tired old Bayanihan narrative, nor by going on an epic tantrum crying over the “unfairness” of Aegis’s reality videos. Certainly the tradition of upholding our world-renowned pwede na yan mentality will do nothing to get us closer to doing a repeat of Singapore’s triumphant Third World to First World metamorphosis.

Even now as this piece goes to press, Filipinos are engaged in a quaint “debate” over the wisdom of voting Vice President Jejomar Binay president in 2016, on account of allegations of corruption that have magically emerged in recent months. Funny that considering he was elected Vice President in 2010. One can’t help but wonder why, back in 2010, such allegations did not come out. Why now?

Like all of the Philippines’ laughable political convulsions, that will remain a mystery even to future generations of the nation’s foremost political “experts”.

Combine an abject scarcity of good politicians with an electorate that fails to apply an intelligent mind to the important process of choosing them, and you get a country like the Philippines. You don’t really need a strategic vision and a statesman’s skills to become president of this country. You just need a lot of money and tens of millions of needy suckers.

As the common wisdom goes, a good salesman can sell a P100,000 iPhone to a Filipino. So perhaps it is time for a bit of brainstemstorming (we at GRP, to be fair, get criticised a lot for not encouraging more of this sort of thing)…

With these realities hanging over your head, how would you, the predatory salesman, sell the Philippines?

Specifically:

How would we encourage investors, both foreign and domestic, to give the Philippines a serious second look given the reality of…

– its decrepit communications, transport, security, fiscal, and regulatory infrastructure;

– its whimsical form of “democracy” where projects can be arbitrarily initiated — and cancelled — on the basis of the latest feudal vendetta; and,

– its strategic location along the Pacific Ring of Fire and along the flight path of the planet’s most awesome storms.

Time to junk old sloppy traditional thinking habits and do a bit of world-class thinking, folks. The future awaits!

[NB: Parts of this article were lifted from the Wikipedia.org article “Leptospirosis” in a manner compliant to the terms stipulated in the Creative Commons Attribution-ShareAlike 3.0 Unported License that governs usage of content made available in this site. Preview photo courtesy CNN.]
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23 Comments on “The futility of begging for foreign investment when your country sucks”

  1. I get asked a lot and people try to pick my brain about doing business here all the time. I always tell them “don’t”. It’s as simple as that. Go somewhere else, this isn’t the place for you. As a foreigner not knowing the country and doing business here is like walking into the jungle naked. You are asking how to do it? Benign0, I don’t even know where to start and I don’t have the time to work over all the mistakes of the last 30 years. This place is just utterly hopeless.

  2. Noynoy should go to each and every foreign bigwig and use this money back guaranteed sales pitch: ” The Philippines is best suited for all your commerce needs. The climate has never been more suitable. We are ready. That’s why the locals elected me.”

  3. Less ‘how to encourage’ and more ‘how to fool investors’ into bringing their business here rather than more promising destinations where you know they’d be better off.

    I’m not sure how successful the ‘more fun’ tourism campaign has been for attracting holidaymakers from other Asian destinations. Its main ‘success’ seems to have been in providing a slogan for proud Pinoys who can’t recognise marketing fluff when they see it.

  4. This has gone viral and I can’t believe how crazy people have gotten over this. They actually think that what they said is so over the top that the business should go out of business because of it. The Philippines keeps trying to get more and more foreign business but there is a problem here. First off, the Philippines owns absolutely NO part of these businesses. These businesses have no obligation to do business in any country, especially the Philippines. Foreign business cannot own any buildings or any business at all in the Philippines because of the filipino majority ownership law. There is no protection for these companies. So when a company decides to leave and tell the truth about the Philippines people got sensitive. These companies dont care about anything except the dollar thats why the left the US, then India and now the philippines. Even South Africa has amazing incentives, a very supportive government and even an accent that is easier to understand than the filipino accent. I believe the call center industry is at its peak right now and will start to slide down. By 2020, Philippines will not be the majority anymore. This is just the start with this Aegis video.

  5. Hey, I like this new brainstemstorming GRP. So let me give it a go:

    Selling the Philippines in spite of:
    1. its decrepit communications, transport, security, fiscal, and regulatory infrastructure
    Reply: Its character-building just to work here.

    2. its whimsical form of “democracy” where projects can be arbitrarily initiated — and cancelled — on the basis of the latest feudal vendetta;
    Reply: Whimsical, schwimsical, we’re being ruled by a dictator, the way around arbitrary cancellation is to get on the good side of the bureaucrats and politicians (i.e. grease money). If you manage that, I assure you that you will get preferential treatment here. Here in the Philippines, everyone has their price.

    3. its strategic location along the Pacific Ring of Fire and along the flight path of the planet’s most awesome storms.
    Reply: the people are resilient. Natural disasters build character and facilitate teamwork.

    But seriously, if I would try to get a foreigner to invest in the Philippines, I’d just put my best foot forward, give the pro’s and cons, try to impress him with my sincerity and not to promise anything that you know you can’t give. And if an agreement is reached, just remember, a contract is a contract I’m convinced that if we just try to stick “sa kung ano ang pinag-usapan,” people will be impressed and they’d hear good things about the Philippines.

  6. BS Aquino is just mimicking Gloria Aquino regarding travels abroad.

    They’re all busy bodies. Just trying to look busy.

    They declare several millions of pesos in each travel. How much of these are being diverted into their personal pockets? Perhaps this is another diversionary technique to divert some considerable amount of government funds.

    It is evident that every time a politician in office does something, it means some government funds are disappearing.

    This is a very obvious evidence how shameless the political leaders government officials and some employees are.

    What nerve do they have to persuade foreign investors into this country when they can’t even solve the perpetual problems in NAIA, sky high price of electricity, almost daily increase in prices of basic commodities, rotting and stinking government offices, very inconsistent tax system for businesses, flooding of the NCR, etc.

    These people are simply pure unadulterated evil.

  7. The attracking of FDI approach is not good at all. We will never have a strong economy if we rely too much on FDI. We need to develop our economy that is anchored on sustainability. We have the natural resources. And, we have too many people, but lacking with right attitude and skills. Our country has a rich natural resouces and raw materials. Sadly, the Filipinos mindset is still limited and unimaginative. sThe government should invest in education and training. Hire the best instructors. Study foreign technology. Invest in science, product development, scout young best minds, encourage new ideas and embrace modern principles. Museums are good, but we need high tech labs, real schools, real teachers and intelligent people. Then, we could improve our economy, our country, and start to sell our products abroad.

    In short, Filipinos lack the right attitude and approach. Look, try to open our banking sector, say to the Americans, and they would leave our money vaults empty. Education, discipline, creativity, ambition, hardwork, and honesty are keys to succeed. Queston is, can we change our attitudes? Stop being dumb and lazy.

    1. Quite right – but importing knowledge is actually a form of investment. It’s the sort of investment the Philippines needs most at the moment: foreign $ is irrelevant when, in practice, a businessman is forbidden to spend that money on building a profitable business.

      The fact is, the government doesn’t want investors – and certainly not investors who will demand things being done differently. It wants sugar daddies. It wants foreigners to bring in money, but refuses them the opportunity to decide how that money is spent, or how the business is managed.

      In other words, it’s not an investment. It’s a donation.

  8. You can invite foreign investors to come to the Philippines, but they will never come…It is too much of a risk to invest in our country…Prevalent corruption; Feudal Oligarchs controlling the political and economic conditions. Peace and order…you cannot distinguish between Police and Criminals. Insurgency and political warlords.

    Anyway, the country’s OFW are already working in those foreign countries, with low-low pay (underpaid , abused, overworked)…the brains in our country have already migrated to foreign countries; where they are very much welcomed…

    Unless, we put our country in order…no foreign investor is buying our investment schemes…

  9. Within the BPO sector, selling the Philippines to Fortune 500 companies requires a high degree of professional honesty coupled with concrete risk assessment and business-readiness solutions for critical scenarios like infrastructure downtime, security breaches, natural calamities, etc.

    Most Fortune 200 companies won’t outsource unless you’ve undergone due diligence measures and audits on PCI-DDS, alignment to Sarbanes Oxley 404, and even Dodd Frank. More importantly, Business Continuity & Disaster Recovery Plans boost client-investor confidence. That is why JP Morgan Chase, American Express, Wells Fargo, First Data, Western Union, Thomson Reuters — all have their global shared services hubs in the Philippines.

    Now this is not a walk in the park. The BPO sector lobbies and coordinates intensely with the likes of PLDT to secure “right-of-way” infrastructure and linkages with Sprint and AT&T to enable greater connectivity. This is where we seek government intervention as PEZA/BOI certified companies.

    Labor background checks are more and more important due to privacy law issues of Western customers whose private information can be outsourced to service centers in the Philippines. This requires collaboration with government agencies in terms of upholding identity and business cyber hacking deterrent laws; better training programs on fraud prevention; as well as ensuring that our HR policies do not put a blind eye on business-related fraud. There has been quite a number of identity theft as well as phishing cases involving Indian-managed centers that places a great deal of risk in outsourcing, so much so that companies penalize outsourcing centers up to 2M USD per breach.

    What goes well for the BPO industry though is that when it comes to multi-million investments, the government is particularly generous in terms of taxation. It is not the same for so called “protected businesses” such as telco, mining, real estate, education, etc.

    The financial services industry is cautiously optimistic that the recent RA 10641 (allowing full entry & ownership of foreign banks to operate in the country)signed last July is a step in the right direction. Together with the American Chamber of Commerce, the ECCP, and the BPO industry, we are still hoping for an easing of restrictions of the FINL.

    On a related note, i would like to disabuse the notion that the outsourcing industry is mainly call centers. BPAP, i believe, sorely needs to educate non-BPO practitioners on this. We have a growing KPO on financial services that delve into investment banking, mortgage banking, auto loans, insurance that are non-voice in nature. Call centers are what i would call “Tier 1” services.

    Selling the Philippines requires a great deal of gravitas, and not one grounded on emotional hype.

    A good benchmark is the Singaporean 2-pronged approach: Liberalize regulations on FDIs but ensure that the domestic markets are used by the same foreign owned companies as “source inputs” into their supply chain. This way competition and collaboration exists. Enhancing FDIs only is a shortsighted approach, while growing the domestic market is a long term initiative. In essence, the BPO sector is doing this for supplier inputs for plug and play facilities/real estate services, 24-hour fast food establishments, etc – but it is more of an emergent byproduct than a conscious strategy.

    1. By far the most intelligent comment that I’ve read on posts about this Aegis thing (I write this only after I understood Aegis’ corporate (mal)practices. Hopefully, I learned correctly the real intent for making the video).

      This is good work. In any business, risks abound and you have to have your radar over all of these. A single pinprick will burst the bubble. As indicated, the industry is looking after themselves and is trying its best to succeed. I honestly hope they do.

      As an example, active mergers and acquisitions going on in the industry, to me, is a sign that the industry is healthy and that everyone is recognizing business opportunities within. ‘Successful’ M&As would only result in better business interactions with clients, locally and abroad. This bodes well for the industry.

      If everyone (not just the government) sees that this approach by the industry, e.g. changing outdated regulations and self-policing thru adherence to good corporate governance and international practices, is actually benefitting everyone, it could very well trigger the changes we have been longing for. I suggest we support these initiatives from this sector.

  10. LOOK, the Philippines got lucky and happens to be an English speaking country. However in many places I’vve been to, the people who call the Call-centers are sick of deling with the Filipino’s who, while being well-spoken and courteous, are unable to make any decisions and do not know the answer’s to most questions posed to them. Thereby leading to many, like myself, to demand to be connected to an ‘HOME’ country operator. Whenever I dial a 800#, it does not go into India, The Philippines or any other foreign country due to what was just mentioned.
    To make matters worse, the Call-centers only exist because Filipino’s will work for one-tenth the wages that Americans/Europeans NEED to be employed at and due to the poverty level wages the out-sourcing provides, it offers little to the potential wealth of the Nation of Filipino’s and only offer’s multi-million Peso bonus’s to the political hacks that accept the scarce wages the out-sourcing Corporations are willing to pay Filipino’s.
    IT IS ,INDEED, PATHETIC !
    THE PHILIPPINES IS SOOOOOOOOO FAR FUCKED, it will be submerged in the Pacific Ocean before anything there changes.

  11. I don’t see anything wrong with the Ad. Its the same as McDonald’s comparing themselves with other fast food chain. Highlighting how theirs, in terms of ingredients and management is better than the others. Its unfortunate that Aegis capitulated and issued an apology, if only to end the whining. The same could be said for professionals in the Philippines who emigrate to other countries because that country has been known to welcome foreign workers. Or why major corporations in the US has moved their operations to china. It’s about cost effectiveness. Anyone with common sense knows that.
    Aegis is promoting itself to the Malaysian Government for providing them or in this case allowing them to establish a state of the art facility within their borders. Similar to companies in the US who highlight the companies decision to build a factory in one town or state compared to the others.
    Im sure for being a big company, Aegis canvassed the region and went with the one who will provide them with the best bang for their buck which any company who wish to succeed and thrive in business is willing to do.
    The Philippines, instead of crying like a baby, should have responded to the Ad by providing contradicting evidence why that Aegis Ad should be ignored. Whining, only proves to the international community that the Philippines has no business competing in the world stage.

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