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Does It Matter If Filipino Investors Use Imported Equipment and Materials?

AWESOME!

It's really stupid how some people advocate "Do everything ourselves rather than rely on foreigners." However, I want to follow Deng Xiaoping when he said, "It doesn't matter if the cat is black or white. What's important is that it catches mice." The picture above this paragraph is a picture from Bacolod by Abigail Javellana on how to make piaya. Piaya is obviously part of the cottage industries of the Philippines. To say that modernization will automatically damage the cottage industry is stupid. Unrestrained modernization and industrialization are problematic. However, the proper use of modernization such as proper waste disposal and environmentally-friendly technology would be advantageous.

I can't imagine for a second if Filipino investors will try to "do everything themselves". Deng said, "Let's stop doing everything ourselves." The introduction of new technology helped the Chinese industry. The introduction of foreign technology can help the local industry. Besides, the photo that I'm using here of Bongbong's Piaya (which is one of my favorite local delicacies) is an example. You can tell that there's imported equipment used in the making of the piaya. Bongbong's Piaya uses a lot of imported equipment in everything it does. All operating costs have been using foreign equipment. Bongbong's then gets its exposure on foreign-made social media such as Facebook. These foreign tools have been very useful indeed in promoting Bongbong's Piaya.

Think for a moment what if Filipino investors (absurdly) had to do everything themselves in the name of nationalism

When the "Filipino First Policy" came out with Carlos P. Garcia--it wasn't a very good sign. Now, some people want to advocate, "Let's just do everything ourselves. Let's stop relying on foreigners and develop our own capabilities." However, that kind of concept is actually easier said than done. It's very easy to say something. However, implementing something isn't easy to do especially if you don't have the resources. 

If Filipino investors started doing everything themselves then think of this scenario. All the vehicles are imported. All the types of equipment are imported. If one's going to start "self-reliant industrialization" then they have to start making their own vehicles. No local parts to make the vehicle? It might soon be as absurd as to look for everything local. They finally got a local hammer, local nails, and local everything. However, there's no locally produced motor. What happens is that they might consider using pushcarts in their delivery services. In this day and age--pushcarts can't compete against motorcycles and cars. Yet, in the name of nationalism, they decided that they will use everything local even if the equipment is faulty, they won't even wash their equipment if all the soap available was imported, and they will just use "Filipino-only products" to do so. 

It would result in a lot of really hilariously stupid consequences. Delivering using pushcarts will just delay while other Filipino businesses are winning big-time with imported delivery services. Their refusal to wash their equipment with imported disinfectant (and choosing to probably use charcoal smoke instead) may not come as effective. Meanwhile, the other Filipino manufacturer is using UV lights, imported disinfectants, and so on to make sure the facilities are safe. Even worse, how can these "self-reliant" Filipino businesses get people to be aware they exist? They might even stop using the Internet altogether and rely on smoke signals. It would be very funny if they try to get customers through smoke signals. Meanwhile, other Filipino businesses are now scoring big time by having Facebook, Instagram, Twitter, Pinterest, and other related social media accounts. Even worse, their refusal to disinfect their place unless only local disinfectants are used may result in their customers getting sick. To throw a hissy fit--they will blame FDIs for their losses when they themselves caused it. 

Let's think about how imported equipment and material may help Filipinos make local goods

Filipino investors who are innovative with what's available are bound to survive the competition. A Filipino investor wants to get one's cottage industry into the road. What the Filipino investor does is to pretty much reject the "Filipino First Policy". Instead, what he or she does is follow Deng's advice concerning black cats, white cats, and mice. The Filipino investor starts to look for all the valuable resources to produce what they want. Accepting foreign direct investment (FDI) isn't relying solely on foreigners. Rather, it's having any kind of help to develop one's own capabilities. The person is trying to do something himself or herself. However, the person needs all the help he or she can get. Such resourcefulness will mean getting anything legitimate to get it done. The person may buy delivery vehicles from Japan, manufacturing machines from Singapore, and the like while using local ingredients to produce their wares. 


Take this binagol business from Samar as a good example. This interview by Kara David on GMA-7 makes me think of creative thinking. The owner has admitted that he still boils the binagol by wood. Some modern restaurants still use wood ovens even if they accept modernization. Yet, you can see in the video that the owner uses modern steel pots, using a modern-day grinder in converting the giant taro into the material used for binagol, and the person promotes his product on the Internet. I wouldn't be able to get that binagol shipped from Samar if it wasn't for foreign influence. The person's use of the grinder allowed him to make and sell binagol by the numbers. 

One could also expand to other native delicacies. Native Filipino delicacies are sold at the malls. I could remember getting some Filipino delicacies when I want to. I could be impressed by the imported equipment used to keep it fresh. I would see several vans having the marks of various Filipino delicacy manufacturers. Surely, those vehicles weren't locally made. They were all using imported equipment to make their delicacies. I would assume that anything made with rice or sticky rice may have imported some of them during the dry season. Local rice becomes expensive during the dry season. The solution is to import cheap rice from neighboring countries. Eventually, imported rice becomes scarce and local rice becomes cheaper. It's al about the law of supply and demand. One may buy Thailand or Vietnam rice during the dry season and Filipino rice during harvest season. It would be more logical to make Filipino rice cakes using cheap imported rice during scarcity to keep the selling price advantage. It would be illogical to use expensive Filipino rice (during scarcity) which in turn will force the prices of the rice cakes to increase. The competitive advantage gets killed along the way. It's because higher cost of ingredients will contribute to higher costs.

The wise Filipino investor gets creative. I could imagine the combination of local and imported goods and services. The Filipino investor gets all the raw ingredients in their availability. He or she may get sugar from Negros Occidental (since getting sugar from Okinawa requires shipment), get whatever lower-cost quality rice is available, get the giant taro crops from Samar, get some tableya from Argao, all the while getting quality Japanese kitchen equipment for their durability. The wise Filipino investor could care less about the origins. Instead, he or she cares about if results can be delivered. The Japanese steel pots may be boiling some delicious binagol. The Japanese kitchen equipment may be used to mass-produce piaya. The Honda motorcycles and Mitsubishi vans are used to transport equipment and goods. The wise Filipino investor then uses Instagram, Twitter, Facebook, and the like to get his or her business known. Quality services are used in order to get the business known. The wise Filipino investor gets a high-quality Internet provider to make sure all orders arrive on time. Just think that both Food Panda (German) and Grab (Singapore) can help restaurants that don't have the capacity for delivery service.

What happens is that foreign equipment and materials are used to help produce Filipino goods. High-quality manufacturing methods can help produce quality Filipino products. The use of delivery services will help Filipino investors to get their wares across. I could enjoy ordering quality Filipino food via Food Panda and Grab even when they're both founded by foreigners. The use of proper sanitation such as UV disinfection during COVID-19 will increase confidence. What the Filipino investor cares about is that their quest to make quality Filipino products is met and delivered. The Filipino investor is more than happy to use a UV lamp from Taiwan, a foreign delivery service, foreign equipment, and the like to make the business operate. If these businesses are good then FDIs themselves may be more than interested. Besides, FDIs themselves can be part of the buy local campaign when they avail of local products and services. It would be worth it to get quality imported stuff if it makes your local products of export quality. 

This pretty much fits what the late Lee Kuan Yew also said. Let's stop trying to do everything ourselves and learn new things. Kishore Mahbubani of the Lee Kuan Yew School of Public Policy said that foreign investment creates jobs and teaches new skills. In that case, an FDI-friendly Philippines will encourage Filipino investors to be better. It could be by trying to be on par or providing a unique advantage. It could be by inviting FDIs to be their new customers or new service providers. The use of imported equipment materials won't make the products any "less Filipino". What it will do is help make Filipino products worthy of the label as quality Filipino products. That knowledge will cause exports to eventually exceed imports (or sales to exceed purchases) only if one has an open mind. 

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