Skip to main content

How I Believe Economic Liberalization Will Help Pay Back COVID-19 Expenses

The term of President Rodrigo R. Duterte is about to end. It would be an important landmark in Duterte's term to sign the Public Services Act of 2022. However, some clueless or even dishonest people (who spread the lies to mislead people presumably for their benefit) are making up lies against foreign investment. Some of the common lies that I've read on Facebook or heard in real life can be summed up as follows:

  1. Only foreign investors will get rich if they are allowed to invest in your country.
  2. Foreign investments will increase foreign debts.
  3. First-world countries progressed through protectionism before receiving foreign investment.
I wonder have these people who made such claims even gone to school? Some people just go to school to pass (and forget everything), under parental pressure, get a degree to flaunt, or just because it's required to land a better job. I guess I'm irritated at such comments because I'm a Masters in Business Administration (MBA) graduate from the University of San Carlos' School of Business and Economics (SBE). I may be no economist but having some knowledge of it makes me want to react. Marketing classes (which includes international marketing), accounting classes, financial classes, and especially economics classes should tell me such claims are moot. Now, I've read the economics classic From Third World to First by the late Lee Kuan Yew (father of incumbent Singaporean Prime Minister Lee Hsien Loong) a few weeks ago. I would listen to Lee Kuan Yew the founder of modern Singapore over the naysayers. I would listen to Kishore Mahbubani from the National University of Singapore who is also the founder of the Lee Kuan Yew School of Public Policy. 

Instead, let's discuss how economic liberalization will help the Philippines recover

Both Lee Kuan Yew and Mahbubani knew what they were doing. The third-world mentality was that foreign investments were plunderers, rapists, etc. The language was so strong. Yet, Mahbubani said that Singapore will think differently. Singapore will accept foreign investments because it will create jobs, teach new skills, bring in capital, and bring in markets and look where it took Singapore. Some can say that Singapore has no natural resources. What about oil then? Can the Philippines truly sustain itself with no foreign capital? Can the Philippines have enough people to wisely utilize natural resources? It's not as if Lee Kuan Yew didn't make policies to green up Singapore. Reading through "Chapter 13--Greening Up Singapore" of From Third World to First can show how Singapore has policies that keep foreign investors from plundering their resources. Business laws to protect the environment have to be followed by everyone whether they be local investors or foreign investors.

Foreign investors will be bound by Filipino laws to start with. Planning to do business in the Philippines? Prepare to invest like a tenant. Some countries don't allow foreigners to purchase land even if they don't need a local partner. These foreign investors will be required to (1) find a space to lease for their business, (2) register their businesses, and (3) abide by local laws. These are very similar to a tenant's requirements to (1) register their businesses, (2) have a contract with their lessors which includes payment of rentals, and (3) follow the rules of the contract. Foreign investors will still be required to pay all necessary expenses including taxes. All businesses will be subjected to taxes whether they be local or foreign. These taxes will translate into revenues for the government. The Bureau of Internal Revenue (BIR) will collect these taxes to be used for the government's expenditures.

There's really a difference between investment and debt. To invest means to set aside money for financial return or to spend something for future gain. A foreign investor puts aside capital to invest in another country. Meanwhile, debt means borrowing a certain sum of money. Trying to confuse one over the other is just utter ignorance of economics. In short, receiving foreign investment is receiving capital which is different from receiving debt. Instead, foreign businesses will end up owing the Filipino government their taxes. Every earnings would mean it's subjected to the monthly Value Added Tax (VAT), quarterly tax, and the annual income tax. Foreign investors may even spend money on local labor, local suppliers, and local services because they want to use what's readily available. It would be like buying taro from Samar, turmeric and coconut milk from Bicol, or sugarcane from Bacolod. They would open their bank accounts at the nearest possible bank such as Metrobank or Banco De Oro. 

Besides, the stories of first-world countries' real score aren't of protectionism but economic liberalization. Mao Zedong's economic nationalism failed as the Chinese industries couldn't carry his unreasonable demands. The Great Leap Forward didn't go as planned but failed. Deng Xiaoping's approach was to invite foreign investors to China and look where it brought them. To say China progressed through Mao is really a lie. Documentaries from the Chinese themselves testify how Mao's project was a Great Leap Forward toward failure. Deng's economic programs were learned from Lee Kuan Yew. The Philippines should've learned from Lee Kuan Yew decades ago. Now, it's time to set aside that pride so we can pay back COVID-19-related expenses.  

References

Books 

"From Third World to First--The Singapore Story: 1965-2000) by Lee Kuan Yew
Harpers Collins Publishers 

Websites

Labels:

Popular posts from this blog

The Tragic Windfall of the Late Flor Contemplacion's Family

PEH.ph Last year, I wrote an article talking about Flor Contemplacion crybabies spreading fake news for 30 years . I noticed that the movie could be watched for free on YouTube (which is one hour and 52 minutes long), and the one that you had to pay for via rent or personal soft copy ( which is two hours and two minutes long). I was looking into the film and realized the "for free" version lacks the exaggerated water dunking and electrocution torture scene, which I believe is available, which is a ten-minute difference. I remember seeing the old version where Flor was tortured by Singaporean police via water dunking and electrocution, to get an answer out of her. The famous line by the late Nora Aunor was, "I did not kill anybody!" It's 31 years, and I don't expect the fake news about Flor to stop just because  it's past 30. No, fake news is that hard to kill even in the digital age. It reminds me of the fate of Flor's sons , where one of them, Sandr...
Read more

Has Passing Down Hatred for Singapore (Because of Flor Contemplacion) Economically Helped the Philippines?

PEH.ph It was on March 17, 1995, when Flor Contemplacion was executed in Singapore. I've noticed that I've been addressing her as the late many times, even if the late is a statement that may be ony appropriate if the person has been recently deceased within 10 years. It's about to become 30 years since Flor was hanged in Singapore. However, generational hatred would've been passed down from 1995 up to 2025. Some people are still tagging #JusticeFor Flor. These traits may be passed down from the Batang 1990s to their children in this generation. It may also be passed down from parent to child, even if the child was born in the 2000s to 2010s. Somebody born in 2000s and beyond might even say, "Papa and mama told me about Flor Contemplacion! That's why I hate Singapore!" Talk about a child born in 2004 who's probably angry with Singapore, because his parents kept telling him about how Flor was supposedly "unjustly treated" over there.  Some tim...
Read more

It's A Myth: First World Countries Self-Industrialized and Only Opened to FDI, After They Succeeded

The Straits Times As the battle for economic charter change goes on, another lie often spread: "First world countries, first industrialized by themselves, before they opened their economy to FDI." I'm seeing it ironically on Facebook. I tell them, "If you hate foreigners so much, why don't you get out of the Internet?" Some of them give replies like, "We're not hypocrites for badmouthing FDI on Facebook. We're simply forced to use imported equipment because foreigners unfairly own the means of production (read rebuttal here )." When I ask for their sources, they give sources like people from Bayan Muna (Nation First), the League of Filipino Students, the IBON Foundation, Kabataan Partylist (Youth Partylist), the Alliance of Concerned Teachers (ACT), and maybe even the Catholic Bishops' Conference of the Philippines (CBCP). Most of these sources (not all) are the favorite sources of those going against badly needed economic cha-cha.  I...
Read more

Why FDIs are Choosing COMMUNIST Vietnam Over DEMOCRATIC Philippines

China Daily HK Tomorrow is Ho Chi Minh's birthday. I would like to raise another FDI issue between democratic Philippines and Communist Vietnam. I remember with a certain woman I'll call Miss Clueless, to respect her privacy. Miss Clueless probably never saw a map, called FDI as Favored Duterte-China Investments, and I told her the bigger problem with the constitutional restrictions. Miss Clueless kept talking about that the late Benigno Simeon "Noynoy" C. Aquino III made us a tiger economy, regardless. However, I wrote that relying too much on Noynoy's economic legacy, is pretty much landing into the same fatal mistake that Nokia did . Relying on past successes is a surefire recipe for failure. As Miss Clueless blamed former president Rodrigo R. Duterte, the person still believes that people must change first before systems. I asked her, "Why are people choosing Communist Vietnam over the Philippines." The reason I heard from Miss Clueless was something...
Read more

Is Jollibee "Invading" South Korea Now as It's About to Acquire 70% of Shabu All Day?

I must confess that I find this new rather hilarious . It's because the word shabu is often associated with drugs. All the while, shabu shabu is a Korean delicacy! Well, I'm going to say that Jollibee Foods Corporation has now become a multinational buyer . Jollibee acquired 70% of Compost Coffee back in 2024 . This year, Jollibee as a multinational corporation is now acquiring Shabu All Day for PHP 5.1 billion pesos. Is Jollibee checkmating South Korea or is the Philippines conquering South Korea not just by OFWs but als through Jollibee? The answer is still no. From GMA News , we can read this article by Jon Viktor D. Cabuenas: Under the deal, Shabu All Day will be consolidated into Jollibee Foods Corp.’s (JFC) financial statements immediately upon completion of the acquisition for a total consideration equivalent to KRW127 billion. Completion of the transaction is subject to closing and financing conditions. The acquisition is expected to lead to a 2% jump in revenues, incre...
Read more