It's one thing to criticize presidents for their performance. It's another without analyzing the data. Sure, we need to study mathematics but the way it's presented can be a reason why it's hated. I felt that high school mathematics focused too much on numbers. Mathematics, in all its aspects, is part of life. Trigonometry is part of life. Calculus is part of life. Statistics is part of life. Speaking of statistics, I was thinking about how IBON Foundation has given its assessment of Duterte's administration. This isn't to say that outgoing President Rodrigo R. Duterte hasn't made mistakes. Rather, this is to point out how IBON Foundation has that tendency to be illogical.
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| IBON Foundation (click to enlarge) |
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| Malaya Business Insight |
The big difference between Andrew J. Masigan and IBON Foundation
So why can’t the growth of exports keep up with the growth of our imports? Apart from the relative failure to nurture local industries to be competitive enough to export, the Philippines has also been hard-pressed to attract foreign direct investments (FDIs). As we all know, FDI’s have a direct correlation to our capacity to export. Following our peak in 2017 when we attracted $10.26 billion worth of FDIs, foreign investments declined to $9.95 billion in 2018, $8.70 billion in 2019 and $6.4 billion in 2020. Mind you, our FDIs are about half of what Vietnam realizes.There are many reasons why we lag in FDIs. Among the principal reasons is the negative list of industries where foreign participation is prohibited by the constitution, (un)ease in doing business, gaps in our supply chain, corruption in government, policy instability, the weak rule of law, uncompetitive fiscal incentives and the dearth of outward investment missions to woo foreign investors. Worsening matters is President Duterte’s animosity towards the west which dissuaded many American, European, Japanese, and Australian investors from setting up shop in the country.
What even amazed me is when Masigan also wrote this one in the same article where he discussed why he felt Dutertenomics was flawed:
As usual, the dollar inflows from OFW remittances and service exports (IT-BPO industry) save us from financial ruin. Between 2016 and 2020, OFW remittances pumped-in an average of $32 billion a year while our service exports contributed an average of $36.5 billion a year.
Have OFW remittances and service exports been enough to cover our deficits? No. There is a still a gap and it is funded by debt.
Which, later, Masigan even went as far as to say that laws concerning foreign investments were "long overdue". In short, I felt that Masigan was giving an objective criticism of Duterte. It's very different from how IBON Foundation does it by just mentioning digits without understanding some factors are beyond the country's control. That's why I still feel like recommend reading Masigan's articles and analysis. Masigan wrote this one also at Business World where he believes the need for economic charter change is really there:
The same is true for the economic provisions of the constitution. We all know that by reserving certain industries exclusively for Filipinos (or Filipino majorities), we deprived the nation of valuable forex investments, technology transfers, tax revenues, export earnings and employment opportunities. Yet, amendments to the economic provisions of the constitution (Eco Cha-cha) have never made it to law simply because certain families stand to lose their stronghold on industries and the lingering doubt that once the constitution is opened for amendment, dubious legislators would push for lifting term limits.
The good news is that Eco Cha-cha is presently being deliberated in the legislature, thanks to the leadership of Speaker Lord Allan Velasco. This is a rare but welcome development which we should all support. Not only will Eco Cha-cha accelerate our economic recovery, it will also increase our competitiveness relative to our regional neighbors.
The restrictive provisions of the constitution have held back the country’s development for more than 30 years. From the 1980s up to the close of the century, countries like Singapore, Malaysia, and Thailand leapfrogged economically on the back of a deluge foreign direct investments (FDIs). During that period, the Philippines share of regional FDIs was a paltry 3% in good years and 2% in normal years. The flawed economic laws of the constitution are largely to blame for this. Lately, Vietnam has taken the lion’s share of FDIs, leaving the Philippines in the dust.
Meanwhile, I feel IBON should be disregarded. They're still presenting solutions that I call an insult to my degree. I feel like I could still have a bachelor's degree, not get my master's degree, and still disagree with what IBON Foundation says. A lot of stuff I'm writing right now is taken from a bachelor's degree education such as accounting and finance. IBON probably still wants to think in economic nationalism (which hasn't worked) accompanied by cash handouts will save the economy. Yet, basic economics proves that overprinting of money is bad for the economy and that isolationism isn't good as proven by Venezuela's really bad situation today.
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