Forget About Open FDI, Let's Open #SahodItaasPresyoIbaba Stores Instead

A really disastrous decision!

Before the Buwan ng Wika ends, I want to write about those who have been demanding "Sahod itaas! Presyo ibaba!" (Raise salaries, lower prices). Back in 2022, I wrote an article discussing why the demands for higher salaries, lower prices of goods, and handouts for all are a recipe for disaster. I could laugh at people who believed in the promise of PHP 20.00 per kilo of rice promise of Philippine President Ferdinand R. Marcos Jr. Before that, people had been demanding #SahodItaasPresyoIbaba during the reigns of the late former president Benigno Simeon C. Aquino III and former president Rodrigo R. Duterte.

Image by Sabrina Jiang © Investopedia 2020

I did explain why the model doesn't work. In the cost of production, you need to account for everything that happens including salaries. Raising salaries during inflation can actually worsen the situation. It's because sticky inflation happens with cost-push factors (ex. cost of gasoline, cost of raw materials), expectations of people, wage increases, and temporary inflation (ex. tax rates). However, no matter how I might try to explain it to them, they might say that I'm just supporting some "Fascist government!" I talk about the need for open FDI, and they say that I'm just letting foreign businesses "invade" the country. Financial and economic illiteracy is more fun in the Philippines huh?

They can rally all they want demanding for #SahodItaasPresyoIbaba. However, that has never generated a single long-term job. All it has done is to fill the streets with litter. During COVID-19, they have further worsened the spread of the virus. How can they claim to rally responsibly? I refuse to believe that the rallies for #BlackLivesMatter didn't help spread COVID-19. The news of the USA having the worst cases of COVID-19 is not a joke. These clowns have been making demands. Instead of making demands that are plain economically disastrous--they better show off to everyone that they can build the businesses that they want.

How the business model of #SahodItaasPresyoIbaba should be done

They demanded cheaper prices of goods and higher salaries right? Some even demanded a raise in salary to PHP 750.00 per day. This is what I suggest they do. They better start making businesses that offer that model. They can probably start opening up shops that offer the salaries they want and the prices of goods they want. If they want to show how good they are in business--they better prove first that their demands can work.

If they want to prove Marcos Jr. wrong (and he can be proven by simple economics since not even Vietnamese rice can be that cheap)--why not start selling the rice at PHP 20.00? They should only use local rice all the time. Let's say that the price of the rice is PHP 1,650.00 for a start. Divide PHP 1650.00 by 50 kilograms and you get PHP 33.00 per kilogram. Would they be willing to sell each kilo of rice at a PHP 13.00 loss. If we're going to say they sold 1,000 packs of that rice per day--they're generating a loss of PHP 13,000.00 per day. Let's multiply it by 30 working days--can they really afford to lose PHP 390.000 per day? That's just the price of rice. What about the other goods such as other food items? Can they really afford to sell those items lower than the purchasing price? They have to pay for transportation (which involves gasoline), for employment, for utilities, and the like.

They demanded PHP 750.00 salary right? I wonder how they intend to cover up paying PHP 750.00 per employee (and they might get gullible people to work for them at first). Can they afford to pay PHP 750.00 per head if they keep selling all their goods and render their services below costing? They need to be true to the promise of paying their employees PHP 750.00 per day. Maybe, they can give all the good conveniences along with airconditioner and the like. They can start to brag of long lines of employment because they pay PHP 750.00 per day.

Business seems fine, right? There are a lot of people working for #SahodItaasPresyoIbaba right? Who wouldn't want a salary of PHP 750.00 per day? Who wouldn't want to buy rice at PHP 20.00 per kilo and other stuff like that? These #SahodItaasPresyoIbaba stores now have a lot of employees and customers. There will be customers lining up to the next subdivision. Chances are some businessmen will be temporarily incapacitated because they refuse to sell PHP 20.00 per kilo of rice and the like. Maybe, some gullible people will choose to work at #SahodItaasPresyoIbaba because of the higher salaries than what others could provide. Right now, it's just impossible to pay that much money because of supply and demand. For the founders of #SahodItaasPresysoIbaba stores--they're above the law of economics!

I could imagine how these stores would crumble. Can they afford to pay PHP 750.00 per day if they hardly make a profit? They're all selling at a loss whenever they sell all their rice at PHP 20.00 per kilo. Just imagine if they were selling Ganador at PHP 20.00 per kilo when it's expensive. Can they even pay for the utility bills they may be using? Chances are these idiots would be using the airconditioner all day hence dramatically increasing the cost of electricity. They may not even conserve water which will increase the cost of water bills. At the end of the day, they start to have their utilities cut, unable to sustain their huge army. The customers will soon go back to buying more expensive rice because theirs might be poorly maintained. The employees will go on strike because they can no longer sustain the higher salaries they promised.

How FDI, not #SahodItaasPresyoIbaba stores will work better

I believe what the late Lee Kuan Yew said and what Kishore Mahbubani said not because I'm mad at the Philippines. Singapore used to be a third-world country and these two knew how to let a third-world country rise. Some say that Singapore waited for the businesses to thrive before it became a hub for FDI. That's proven wrong in the book From Third World to First. Mahbubani had already long defeated Hilario Davide Jr. before a debate could begin. Mahbubani is the founder of the Lee Kuan Yew School of Public Policy, was involved in world economic forums with the UN, and saw Singapore rise from rags to riches. That's why I trust Mahbubani over Davide Jr. Davide Jr. never founded any real school of public policy.

How can FDI help? The book From Third World to First then talked about Vietnam. LKY spoke with the late Nguyen Duy Cong aka Do Muoi. Do Muoi had the Doi Moi program which allowed Vietnam to become a major agricultural hub During times of scarcity, the Philippines even imports rice from Vietnam. Why is the Philippines becoming too reliant on imports? It's because of too many restrictions on FDI. I wrote about Vietnam as an agricultural hub. I also wrote about Masarang Foundation in Indonesia. I also wrote about whether or not FDI-friendly countries' cheaper price of onions is just a coincidence.

The idea that FDIs equals natural resources deterioration is a fallacy (read here). Any company that doesn't follow environmentally friendly practices will destroy the country. In this case, I would support an FDI that can provide environmentally-friendly investments over Filipino investors who don't (read here). LKY also had his plans for a green Singapore. The irony is that those Filipinos who protest against FDI, saying it will destroy the natural resources of the Philippines, hardly clean up after each and every rally. How can they talk about environmental friendliness if they're so fond of littering? How can they talk about preserving the environment through protectionism if they can't even follow simple environmental guidelines? Some corporations fail to follow rules but these guys are still dumping stuff here and there. They're no different than the corporations that they hate so much!

With FDIs, there can be better networks for local Filipino businesses. I wrote about how MNCs can help in a buy local campaign. FDIs can help in buying local raw materials. It would be more ideal for a milk tea company to buy sugar from Bacolod than to have it shipped all the way from Taiwan. It would be ideal for FDIs to avail of local transporation services whenever available. Having more public service providers would help local businesses build better networks. If your customers have competition the form of FDI--isn't it time to get the FDIs as your customers? For example, a rice merchant sees that his customers now have competition. It would be like selling rice to the competition. The FDIs would end up buying quality local rice because it'd be cheaper. The idea that only FDIs will get rich if you let them invest in the Philippines is very third-world (read here).

The real solution is open free markets. FDIs aren't there to destroy but help. Also, FDIs are not loans. Sri Lanka didn't get into Chinese FDI but a Chinese loan. Those hermetic countries like North Korea and Venezuela can keep blaming their richer neighbors but it won't help their suffering citizens. His majesty, President Kim Jong Un (who's more like a king) can blame South Korea and China all he wants but fail. Venezuelan President Nicolas Maduro can keep blaming the USA all he wants but fail. The blame game has never improved anybody's life. The use of FDIs as part of the whole collective scheme worked. It's because local businesses that know how to innovate, take advantage of FDIs to build better networks, and the like will survive competition. Those who don't are destined to fail.

Would you still want to open a #SahodItaasPresyoIbaba store?

Comments

Filipino First Policy Also Responsible That ONLY 2/10 Pinoys Have Emergency Funds

Yes, it's been a day since Typhoon Tino. It was a stormy, scary time, and I thought about how expenses were piling up after I was hit by Typhoon Odette . Thankfully, I had contingency savings at that time. However, with Uswan moving upwards and entering another area of the Philippine Area of Responsibility, I considered the issue of emergency savings. I thought about how Christmas can be the most stressful time of the year, with issues such as traffic caused by last-minute Christmas shopping . This time, I thought about some not-so-surprising statistics on Filipinos. It turns out that only 2/10 Filipinos have enough emergency savings . This should be considered disturbing, and this is another thing I failed to consider in my younger, more foolish years, according to the Philippine Star : Commissioned by insurance firm EastWest Ageas, the PURPLE Report conducted by consumer intelligence company NielsenIQ showed that most Filipinos only have P50,000 in emerg...

Should Noynoy Aquino be a Valid Excuse to Reject Econ Cha Cha?

Philippine Star Updated January 25, 2025 This may be a touchy post. Politics is often a source of fights during parties. That's why we're told not to talk about politics during parties. Unfortunately, some people on Facebook are now using the late Benigno Simeon "Noynoy" C. Aquino Jr. as an excuse not to execute even economic charter change. Never mind that blatant supporter of Atty. Maria Leonor "Leni" Gerona-Robredo, Andrew James Masigan, supports economic charter change . The late Charles Edward P. Celdran was also an anti-Duterte critic. As I looked at some okay boomer posts, I'm not surprised at people who still use Noynoy as an excuse to shout with all their might, "No to economic charter change!" Somebody posted on Facebook the following. As always, I won't publicly shame anyone. If possible, I will only refer to them by codenames or use the name Anonymous. I want to remain as professional as possible. This person said that under N...

Confusing Foreign Direct Investment for Foreign Imperialism for the Bajillionth Time

I guess those fools of the Philippine Anti-Fascist League (and many of its deluded supporters) either refuse to get it or are blatantly lying. Almost every rally held by what many believe are CPP-NPA legal fronts also confuses foreign investors for foreign invasion or even foreign imperialism . Once again, do I need to say that 100% FDI ownership is all about the shares and not land ownership ? What makes it even more hypocritical is that they are actually recording these things on imported media . They're sharing their anti-FDI rants using imported devices, imported platforms, and imported social media (read here ). When I do ask them on Facebook, they say how can they take them seriously and that they're "simply forced to participate in capitalism". Did anybody (especially those they call "evil capitalists") force them to buy the expensive Apple equipment when they could've settled for Xiaomi or Huawei? A simple research on the dictionary will tell us...

Why the DSWD Still Needs PRIVATE Sectors in Disaster Relief Operations

DSWD Field Office 7 - Central Visayas It's disheartening to know that after the Bogo earthquake in Cebu last September 30, 2025. Today, an earthquake Davao Oriental this day on October 10, 2025. It's sad to think that today is October 10, which is the Double 10 celebration for Taiwan . Right now, it's effortless for fools on Facebook (which is ironic) giving anti-capitalist, anti-business rants, never mind that even Vietnam is no longer solely dependent on State-Owned Enterprises! Instead, it made me think of the COVID-19 incident all over again, such as how Foodpanda and Grab, both foreign delivery services , have been helpful to Filipino businesses . Some idiots said on Facebook (and as always, I will not mention their names, they're public figures ) that it is the workers who did the work, not the owners, and that the government should provide everything. One crazy comment I got from someone on Facebook was, "Why should there be private enterprises? The DSWD is ...

Helping Others is Good But Not to One's Own Expense

I advocate for helping others. I believe in helping others but there were times I overdid it. One time, I gave up so much that I had to be stopped. I was told, "If you gave everything now, how can you help others later?" I would donate some sums here and there, without thinking much. I'm not going to write them all. Some of them left me good while others left a bad taste (and a bad record) for me to endure. Sure, I want to help people but I tend to overlook the consequences. Some of the bad habits I had in the name of helping others are like: Being too generous with buying with credit. Eventually, I lost a lot of money which was never recovered . Some seasoned entrepreneurs may admit their own falls including the credit trap pitfall. Being too willing to give a discount without thinking about how it'd affect profits. Sure, a cheap price can draw people near. However, there are times when the prices of goods and services need to be raised to keep a business running. I ...

Like Taiwan, the Philippines Can Beat China Economically But It Must Swallow "Filipino First", First!

Taiwan Economic and Cultural Office in the Philippines It's Chinese New Year's Eve tomorrow and this is an essay I felt like writing before the festivities begin. I did write about how Taiwan bested China back then during the time of Mao Zedong . Mao was running his planned utopia via protectionism and it failed miserably . The Great Leap Forward was nothing more than a spectacular failure. Deng Xiaoping had to learn from Singapore in order to bring China forward. I'm afraid that China is going backward at the cost of the Chinese citizens. I don't blame all the Chinese citizens but their government for any tensions. Meanwhile, Taiwan, according to The Heritage Foundation has a score of 80.1% in terms of economic freedom . It's noted as follows: Taiwan’s economic freedom score is 80.1, making its economy the 6th freest in the 2022 Index. Taiwan is ranked 3rd among 39 countries in the Asia–Pacific region, and its overall score is above the regional and world averages...

Profood International Corporation's Calamansi Ginger Grean Tea Concentrate

I'm someone who always buys local and imported food products. However, I tend to buy local where I go because eating local is usually more beneficial. I was buying some stuff last Sunday. I found this product which I haven't heard of yet. It's called Calamansi Ginger Green Tea. If South Koreans have their Honey Citron, then maybe we can say Filipinos have Calamansi Ginger Green Tea concentrate, which also contains honey. I gave it a shot, and it gives some relief for the throat. I drank Ginga Ginger Brew after I caught Omicron. That was the time when COVID-19 would eventually "get us all". I was looking for Ginga ginger powder but I wasn't able to find it. Fortunately, this food product ws available and it's helping me. I tend to get throat problems whenever the weather changes too much! I would drink it either lukewarm or cold, due to the weather conditions. The combination of ginger and calamansi helped me feel better. I would like to recommend this foo...

GrabFood vs. FoodPanda--How Foreign Delivery Services Help Grow Filipino Businesses

Moneymax I could remember the pandemic when ordering from GrabFood and Foodpanda became the thing. The COVID-19 pandemic would've totally stifled the restaurant and food businesses, especially before the vaccinations. Right now, I've had my three Pfizer shots in total. As restaurants began to re-open, dine-in was still strictly not allowed until a certain percentage of Cebu City was vaccinated. I began to order some food whenever I need to (or want to) even with such limited choices. This had me thinking about how imported services can help local businesses. Whether those "nationalists" want to admit it or not--neither GrabFood nor Foodpanda are founded by Filipinos. Instead, GrabFood is founded in Singapore and Foodpanda is founded in Berlin, Germany. If it wasn't for the fall of the Berlin Wall--there would be no Foopanda. Back then, I remembered dining in my favorite local restaurants. However, the delivery service came and there were times I felt too lazy to ...

Trying to Get Rich Quick, Aren't We?

There's a saying that there's no elevator to success--take the stairs! It's a problem when people overspend--they ignore basic economics. I confess that I was an overspending teenager, I did flunk my first grading in economics back in high school (though I got better in college with economics during my stay at the University of San Carlos-Main Campus), and I only have a total of 12 economic units in my academic life. My thrifty parents had the habit of not giving me more allowance which caused me to re-evaluate my spending habits. It made me eat canteen food and re-evaluate my actions. Though, I also nearly fell for some get-rich-quick schemes too. Then I almost participated in one but withdrew earlier than expected. This brings me back memories of cartoons that I watched as a kid. Maybe, one can remember some Hanna Barbera sitcoms such as Top Cat and The Flintstones to name a few. Top Cat was always up to some idiotic schemes which usually backfire at the end of the epi...

Protectionists' Scare Tactics Against Free Trade for the Philippines

Happy Halloween, I guess? I decided to write this article just today to tackle scare tactics against economic liberalization. A scare tactic is defined as a strategy intended to manipulate public opinion about a particular issue by arousing fear or alarm. Economic liberalization is defined by Investopedia as: Trade liberalization is the removal or reduction of restrictions or barriers on the free exchange of goods between nations. These barriers include tariffs, such as duties and surcharges, and nontariff barriers, such as licensing rules and quotas. Economists often view the easing or eradication of these restrictions as steps to promote free trade. This is also where we have free trade . I've read protectionist scare tactics during the times of former Philippine presidents, the late Benigno Simeon C. Aquino, and Rodrigo R. Duterte. I found a lot on Facebook and Twitter . It's not uncommon really that stupid people abound on social media and write the stupidest thin...

Business & Economics Perspective Blogger

Search This Blog