Can the Philippines compete in the 21st Century global economy?

When the term ‘self sufficiency’ is mentioned, what often comes to mind is food. On that alone, self-sufficiency in terms of food is already a big issue in the Philippines. The Philippines is the world’s biggest importer of rice and is a major market in the region for the agricultural exports of many countries. The Philippines also imports many packaged junk food products that it does not need.

Beyond food, however, the Philippines suffers from an even more disturbing dependence on external providers. Philippine society is not intellectually self-sufficient. Much of what drives the economy of both advanced and up-and-coming countries today is intellectual capital. Unfortunately, for the Philippines, its economic engine is not powered by intellectual capital produced indigenously. Its technology is almost entirely foreign-developed, its entertainment industry produces knock-offs of foreign concepts, and its pride is hinged upon validation derived from external thought leaders.

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Even the much-celebrated “heroes” of the Philippine economy, overseas filipino workers (OFWs), cannot be considered to be the dynamos of prosperity they are made out to be. What OFWs and, for that matter, the droves of workers that toil in the call centres sprouting all over the Philippines bring to the table is primarily labour-added-value. Indeed, the much-vaunted “heroism” of the Philippines’ OFWs owe their opportunity to be “heroes” to the capital put at risk by capitalists primarily originating in Western Europe, North America, and East Asia to create the businesses that employ them. The willingness to risk capital to create value (which in turn is what “creates employment”) is likely what sets successful cultures apart from the moribund culture that keeps the majority of Filipinos stuck in intractable impoverishment.

Much has already been said and written about how the Filipino-Chinese community, despite being subject to the same dysfunctional government and environment Filipino-Malays are subject to, have risen from being second class citizens to their place as captains of Philippine industry today. There really are no excuses. All Filipinos toiled under the same environment. Why did so many lose while so few win? Why is the reality of the general ethnicity of the winners so stark?

Already there is evidence that the Philippines, despite enjoying a decades-long head start over other formerly basketcase countries in the region, is falling behind. Vietnam, for one, is now being touted as the next Silicon Valley. But it is not the relocation of mere assembly (as opposed to true manufacturing) industries there nor the proliferation of call centres and business process outsourcing (BPO) operations that is being highlighted as the source of all this promise. What is being highlighted is entrepreneurship. Here’s an excerpt from the above BBC article that illustrates this…

For Eddie Thai, entrepreneurship is a family trait. He proudly recounts the story of his grandfather, a Vietnamese farm worker who saved up money to buy oxen, then rented the animals to other farmers. “A kind of Uber for oxen,” he says with a laugh.

His parents migrated to the US with nothing, but were able to start a restaurant and build up a small real estate portfolio, which he says allowed him to have “a normal American life”. He visited Vietnam as a teen.

“I saw how far Vietnam had come, but how far there was still to go. I knew at some point I would be back here to empower others.”

That’s a feeling shared by Quynh-Huong Duong, the French entrepreneur behind GetSpaces, a booking platform for meeting rooms and event spaces in Ho Chi Minh City. She moved to the city from Paris two years ago.

“I wanted to do something for Vietnam,” she says. “The people here are really entrepreneurial. There’s a different kind of mindset than in France. French people are very conservative. Here it’s really like in the US, like: ‘Yes, we can’.”

For starters, Vietnam ranks way above the Philippines in terms of Ease of Doing Business. Whilst the Philippines slipped from 97th to 103rd from the 2015 to the 2016 report, Vietnam moved up from 93rd to 90th over the same period. This is remarkable in itself considering Malaysia slipped from 17th to 18th while Thailand slipped from 46th to 49th.

Two things immediately come to light from this data:

(1) The Philippines ranks the lowest amongst these major ASEAN economies; and,

(2) Vietnam is moving against that general tide its peers in the ASEAN are riding, going up in rank while the others slip.

The Philippines, most importantly, is low and going lower. It is hard enough doing business in the Philippines, and it is getting harder.

On that, alone, it is difficult to imagine the Philippines stepping up to becoming a place where the best, brightest, and most creative people can find a true home. It is not a place that provides a level playing field where the best ideas could take root and flourish. Indeed, it has long been evident that the business landscape in the Philippines is rigged in a way to assure the continued domination of business by an entrenched oligarchy who, by legislation sleight of hand, carve out favourable terms for their existing enterprises.

Even then, the notion that Filipinos remain poor because of a lack of opportunity to compete is wearing thin as well. Again, it goes back to the question of why a minority ethnic Chinese community prospers while the indigenous Malay majority languishes. Indeed, this is a pattern that is quite consistent over much of southeast Asia where local Chinese-originated communities account for a disproportionate share of national wealth and output.

A key to understanding this lack of self-originating drive to succeed may lie in Philippine politics. We can see in the current national “debate” surrounding the coming presidential elections in May this year that intellectual discussion does not figure at all in discussions about which presidential candidate is fit to be Chief Executive of the Philippines.

In effect, Filipinos tend to sit ildly and allow the current options to frame their future. There is no thinking outside the square, for Filipinos it is about dealing with the current crop of idiotic candidates and choosing the least evil amongst them. The thought of rejecting the lot and demanding a qualified presidential candidate in absolute terms either (1) does not occur to Filipinos or (2) is, simply, not an option.

It’s the same with the way Filipino regard their economic fortunes. Much of what Filipinos consider to constitute their “hope” for a “better” future lies in employment. Their choices are limited to employment options and opportunities. And these options and opportunities are always ones created by forces external to themselves — foreign investors and, you guessed it, the government. The idea that people need to go out and create their own fortunes does not seem to form a strong part of Filipino intellectual tradition. Unfortunately the Silicon Valley dream is precisely all about that — start-up culture, venture capital, driving innovation, and an obssession with solving problems.

The message then is quite clear.

For Filipinos to be part of the 21st Century economy, they will have to acquire a culture of starting things, venturing into the unknown, and solving problems using innovative solutions.

A national character based on these abilities is what will spell success for the Philippines in an increasingly competitive global economic landscape. Anything less than that will set Filipinos down the same path of more of the same poverty and mediocrity.

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12 Comments on “Can the Philippines compete in the 21st Century global economy?”

  1. During Apo lakay Marcos times, the PHilippines was an exporter of rice and sugar, this was in relation of his MASAGANA99 legacy of converting a quarter of a million peasants to landowner farmers. while in this 32 years of MADpnoy hacienda luisita self interest yellow oligarchs deception, the Philipines is the number one importer of rice of the third world status making of this mad Pilipino whose aimed was to never give up their stolen hacienda luisita to the 99 leased agreement of Mambo Mambo Magsaysay our democracy will die kung wala ang pangako ng white horse Magsaysay.

  2. Want to see how Failippines compete globally? Go inside BPI bank and try to withdraw your money and you will get it after 4 hours of sitting inside.

    1. How can the Failippines and Failipinos compete on a global scale, when there is no sense of responsibility and accountability from the president to the poorest person in the street?

  3. NO:
    The Philippines can not.
    No discipline without perseverance, no education, to learn not interested.
    But this purpose – corruption, intrigues, perfidy, injustice, malice, stupidity.
    With these features, you can achieve anything.

  4. 2 underlying factors contribute to the general lack of creativity in native Pinoys:
    1. Education that is based on spoon-feeding and rote memorization
    2. Media /TV programs that do not spur inquiry and analysis

    Parents can take matters into their own hands by buying their kids Lego and reconfigurable electronics kits. Programming, web design, 3D graphics/printing are also good areas to venture into even as a hobby.

    Many Pinoys are not really happy with their jobs. I can understand – what’s so creative about being a sales lady, jeepney driver or security guard. The win-win job is getting paid to do your hobby that you enjoy. And it’s usually those who do design and exercise their creativity that are the most fulfilled. Only few reach that level in PH / they are the sharks and lions of industry – on Top of the workspace “food chain”. Strive to be one if them!

  5. Too much awful corruption in the government, the courts and the people. They have a culture that they believe the only way to get ahead is to cheat and steal. And this is evident based on the wealth of the country goes to those in the government and the corporations that can buy court decisions and keep people enslaved in a shitty system.

    As a USA citizen who has spent a lot of time in the philippines, or failippines, I only see the wealthy succeed and the rest get poorer. I would never attempt to try to do business there again. I have seen how it works, or doesn’t work.

    The court system is a cruel joke that only serves the oligarchs and wealthy who can buy the court decisions.

  6. The Oligarchy, headed by the Aquinos is making the Philippines mired in : Feudalism, lack of opportunities, politics as usual, etc..

    These factors are stagnating the Philippines. The rich are entrenched; there are insurrections inside the country (NPA, MILF, Abu Sayyaf, ISIS, Al Queda, etc…)

    Try to have business in the rural areas…the NPA, acting as a de facto outside government will come to collect “revolutionary tax” on you. They are no more than , MAFIA like extortion crime ring.

    The next President must remove all these stupidities. He must defeat these insurgencies, not collaborating or placating them.

    The business environment must be suited for entrepreneurs, to start industrial businesses (light, medium and heavy industries). Not Call Centers, or labor intensive industries.

    Only then, will the Philippines emerge out , from being the Basket Case of Asia.

  7. Everybody does his or her own thing in the Failippines. Everybody–including Failipinos abroad–do not trust one another; it is “every man [women] for himself” when it comes to Failipinos.

    So Fucklippines.

  8. What does it mean to be the best? It means you have to be better than the number two guy. But what gratification is there in that? He’s a loser—that’s why he’s number two.

  9. Failipinos will never be an innovative people and were never meant to be. When has any predominantly brown-skinned islander nation been innovative? None, and it’s due more to genetics than environment. There are just some things you cannot change in a certain people. In this case, they cannot move forward unless they’re shown how to or if another people does it for them. If left on their own they will go nowhere. That’s the sad reality.

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