A recent article I wrote was focused on the not-so-surprising outcome that Axie Infinity finally crashed. I really have no reason to enter into cryptocurrency--not especially since its volatility is way too high in contrast to stocks. I've been recently monitoring my UITF investments every now and then. I tend to do it daily because I might get an opportunity to buy more or to see which UITF (from GInvest for now) would have lower NAPVU--meaning my PHP 1,000.00 for the month will buy more units. Now, I decided to give an update on my most recent post on Axie Infinity's crash with this one.
I remembered writing about the irony of turning down investments while having a gambling addiction. A "follow-up" to it was a write-up where I mentioned the irony of saying AXA is a scam while possibly playing Axie Infinity thinking it's an investment. I wrote some of my memories while living in Downtown Cebu until I was 14 years old. I could remember how gambling addiction was a real thing. Some people I knew played mahjong once a week with a very small bet. It wasn't so with the neighbors. They would gamble huge amounts of money. The gambling was almost daily. Even worse, a neighbor died and there was gambling during that person's wake. I guess a good amount of Filipinos do suffer from the irony of gambling addiction while rejecting investments. I don't know what reasons they'll have next.
One of the most famous Filipino gambling is cockfighting. I heard Axie Infinity works that way. The Axies don't fight like Pokemons. The Pokemon games have the players control their Pokemons/ Axies are artificial intelligence creatures. The chances that the Axies are actually rigged by the developers themselves. I can't be sure about that since I'm no computer science or information technology export. I think the chance of getting rigged is there like how some gambling syndicates operate. I still compare Axie Infinity to being a riskier form of cockfighting. Just because the Axies are just CPU-controlled characters doesn't mean the risk is lower. Sure, Axies aren't living beings like fighting cocks. However, like fighting cocks, you can end up losing a lot of money in a bet. What may make it riskier than the cockfighting of the days of old is the use of cryptocurrency. Though, I think it's possible that cockfighters these days may want to use cryptocurrency to avoid their spouses from easily tracking them, huh? In short, I feel the Filipino addiction to gambling had helped Axie Infinity gain such a strong foothold!
It was also no surprise that Bloomberg reported this about the Philippines and Axie Infinity:
The other key to Axie’s popularity was an economy based on a form of paid labor that has long existed in gaming: the for-profit player. People who owned Axies could rent them out to players, usually in lower-wage regions in Southeast Asia or Latin America, who treated the game as if it were a job. Players who don’t own their Axies are akin to digital sharecroppers, but they’re widely referred to as “scholars,” because they’re supposedly using their rental Axies to learn about the broader potential of investing in crypto. In Axie’s biggest market, the Philippines, the average daily earnings from May to October 2021 for all but the lowest-ranked players were above minimum wage, according to the gaming research and consulting firm Naavik. Of course, actually converting this income into usable form meant cashing out their cryptocurrencies, at a time when many people involved in Axie were saying cryptocurrencies were only going to get more valuable.
Another reason worth considering is lower-wage regions. It seems to become another point why the Philippines got hit really fast. What's the cause of the lower wage? It's because the country doesn't have enough jobs or enough economic power to do so. One should think that salaries in Japan and South Korea are higher. The Philippines' average minimum wage is currently PHP 537.00 from PHP 490.000. Japan has a minimum wage of JPY 7,520.00 (based on eight hours) which is equivalent to PHP 2,992.69 per day. South Korea has a minimum wage of KRW 73,280.00 (based on eight hours) which is equivalent to PHP 3,020.83 per day. Both amounts are barely half of what Filipino workers make in a day. That means being a janitor, a waiter, or any service sector worker in either Japan or South Korea isn't a bad thing. Meanwhile, in the Philippines, it can be regarded as shameful because of the low-level fees. There are even entrepreneurs who take advantage of this to mistreat their workers.
If the Philippines had a better economy then I don't think Filipinos would be that easily suckered. Just imagine if Filipinos were able to have at least PHP 3,000.00 per day which means they get PHP 18,000.00 per week. True, the prices of goods will go up (which is why goods from first-world countries cost more) but it'll help cope with the inflation if the economy is doing good. The lack of jobs due to overly restrictive policies is there. Even worse, you still have people who keep demonizing foreign investments are bad, that they're there to rape the country (as Kishore Mahbubani expressed it). Mahbubani called it a third-world mentality which is why some countries either become third-world countries or remain third-world countries. These two countries that I love to mention are Venezuela and North Korea. Yet, some idiots will still blame either foreign investments or US sanctions for the cause of the two countries' poor condition.
If only the Philippines didn't have the Filipino First Policy by Carlos P. Garcia--I don't think Axie Infinity would've easily clicked. Who wouldn't want to buy the promise of huge earnings better than your daily job? I guess that's why some people who got fooled into "investing" with Axie Infinity are low-level workers. Many live paycheck-to-paycheck yet they love to squander their money at the same time. It made me think somebody may even squander their money on payday with the blowouts and discover they have no more money for stuff like payment of bills. The "solution" ends up borrowing more money (and I guess these same people think the solution to an economic crisis is printing more money) and then going gambling. I guess they would borrow money to play Axie Infinity hoping to get easy money. Yet, in the long run, they're probably in the run away from their creditors who are way too angry with them.
Before saying, "Wait, foreign investment is evil and Axie Infinity proves it!"--let me finish first. I would like to say that this isn't FDI is generally evil. If you let companies like Sky Mavis (the owner of the game) then you get a lot of consequences. The same goes for online gambling. However, if you let responsible companies like Foodpanda, Grab, McDonald's, Samsung, Sony, Lenovo, Xiaomi, Lotte, and the like invest--you can develop more employment opportunities. If there were more Filipinos employed and more revenue--minimum wage will naturally rise up. Filipino investors who creatively maneuver competition will grow. Jollibee did that creative maneuvering and became a worldwide franchise. Any good businessman will choose to expand their networks such as having good service providers, and good suppliers, and viewing their customers' rivals as new customers. Some Filipino food businesses have chosen to use Grab and Foodpanda to expand their coverage. Some Filipino businesses may want to avail of better services from abroad. These businesses will grow and they may soon be able to pay PHP 3,000.00 per day and an increase in prices will not be a burden. I think prices will naturally increase in a developed economy. However, purchasing power also increases as the economy gets better. It would be good if prices of goods go up only if salaries also go up and the economy is more or less in good shape.
Hopefully, this lesson about Axie Infinity should tell us that scams like this will target countries of lower-income. The Philippines should be serious about economic development. Otherwise, more online gambling scams will hit it like there's no tomorrow.
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