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Many Filipinos Misunderstand What 100% FDI Ownership Really Means

I was browsing the CoRRECT Movement's website and found an article titled "Why Do So Many Filipinos Misunderstand System Change?" by Orion Perez Dumdum. I feel that this article needs to be written as I'm seeing lots of ignorant comments on Facebook about foreign direct investment (FDI). There are so many ignorant comments on ironically, Facebook pages, about what FDI is all about. I find them on Facebook pages like Bayan Muna, Kabataan Partylist, League of Filipino Students, Migrante International, and the Philippine Anti-Fascist League, to name a few. 

Why I emphasized Facebook is because Facebook is because it's an American platform. They're supposedly anti-imperialist, anti-American, whatever, but they're using it. When the hypocrisy or self-contradiction is addressed, they mention they only criticize capitalism because they're simply "forced" to participate in it to survive. Capitalism should remain open to criticism. It's to improve capitalism as uncontrolled capitalism can mutate into a destructive force. Capitalism is open to criticism as how people are allowed to critique what they buy and the seller, such as giving a critique on how this and that seller does, and who does better. For all we know, they're using an iPhone or a MacPRO. Did they get forced to use an iPhone or a MacPRO when they could buy other more affordable alternatives like Huawei and Xiaomi? 

When I talk about the need for the Philippines should be open to 100% FDI ownership, I can get so many answers which can be very stupid like:

  1. 100% FDI ownership means that the Philippines will be selling itself to foreigners.
  2. It would mean that the Philippines will have to borrow more money from abroad. (Read rebuttal here)
  3. 100% FDI ownership means no Filipinos will be employed in these MNCs. All the jobs will go to foreigners. (Read rebuttal here)
  4. Only FDIs will get rich if they're allowed to own 100% of their shares. (Read rebuttal here) 
The list can go on but I think I'll just stop to the three points above. The big misconception about 100% FDI may spring from a lack of literacy. 100% foreign ownership is in terms of equities or shares. For example, Communist Vietnam actually allows 100% foreign ownership, even if there are a few sectors that actually require a local Vietnamese partner with a minimum starting point of 30%. 

Does 100% FDI ownership mean that FDIs can do as they please?

Here's a good illustration of how it works. For example, the Public Services Act of 2022 (which the League of Filipino Students hypocritically called "imperialism" on Facebook of all places) means that FDIs that offer utilities don't need to get a local Filipino partner with whom they have to split most of their shares. For example, Singtel from Singapore will invest in the Philippines. They will not need to partner with any local Filipino oligarch to establish a branch in the Philippines. Instead, they can invest in owning 100% of their shares without looking for a Filipino partner. MNCs may not necessarily buy land if the law doesn't allow foreigners to own land. 

FDIs will still need to find a land or space to rent in but they don't need a Filipino partner. They still need to abide by the rules of their respective lessors. If they fail to follow rules, they become bad tenants. They will be expelled from the rented space (or land) if they violate the rules concerning what can get them evicted. These rules include (1) two consecutive months of non-payment, and (2) using the space for illegal or immoral purposes. If a Filipino tenant can be expelled from the lot for such offenses--the same rule applies to the foreigner. The foreigner may also serve jail time and persona non grata for violating the rules. 

They will still need to register their businesses through the DTI, DFA, BIR, and other related offices in the Philippines. Take note that even foreign businesses are taxed by the BIR. I bought some stuff at a foreign food chain and the BIR TIN number is blatantly placed on the receipt. There's still that "Please ask for receipt" notice on the walls. It didn't matter if the business was Filipino or foreign--the BIR was required to collect revenue from it. 

In the rule of business, follow the rules where you're investing. If one invests in a Muslim country or Hindu country--one must know these religious dietary laws. It would be stupid to open a pork chicharon business in Dubai or a beef jerky business in any predominantly Hindu (or Buddhist) country in South Asia. Investing is very different from invasion. A simple dictionary definition will tell us that to invade is to intrude and to invest is to do business. FDIs are there to invest like tenants in a mall. FDIs must follow the local laws wherever they go, even if they own 100% of their company shares in that branch. 

The meaning of investment that anybody should be familiar with if they passed through at least high school:
the outlay of money usually for income or profit : capital outlay
also : the sum invested or the property purchased

Now, for the meanings of the word invest:

  1. "to commit (money) in order to earn a financial return"
  2. "to make use of for future benefits or advantages"
  3. "to involve or engage especially emotionally"

Foreign direct investment (FDI) is an ownership stake in a foreign company or project made by an investor, company, or government from another country.

Generally, the term is used to describe a business decision to acquire a substantial stake in a foreign business or to buy it outright to expand operations to a new region. The term is usually not used to describe a stock investment in a foreign company alone. FDI is a key element in international economic integration because it creates stable and long-lasting links between economies.

 

Why do I continue to blame that lousy Filipino First Policy why such stupidity happening

I find it stupid that some people protest the burial of Ferdinand E. Marcos Sr. at the Libingan Ng Mga Bayani (Graveyard of the Heroes) while they honor Carlos P. Garcia. Sadly, the Filipino First Policy has caused the Philippines to fail. I wrote an article about how values education classes are teaching the lousy Filipino First policy in schools. Sure, people will mock me because I'm just using Blogspot. Even if I do get a domain, I will still get mocked. That doesn't matter because the more people insult me, the more I should just "laugh it off" because insults are the losers' tool, according to the great Greek philosopher Socrates.

Part of the Filipino First Policy that Garcia wrote is really laughable:

The ”Filipino First” policy of this administration re­ceived a resounding popular indorsement in the last election. Politically we became independent since 1946, but econom­ically we are still semi-colonial. This is especially true in our foreign trade. This policy is therefore designed to regain economic independence. It is a national effort to the end that Filipinos obtain major and dominant participa­tion in their own national economy. This we will achieve with malice towards none and with fairness to all. We will accomplish this with full understanding of our inter­national obligations towards our friends of the Free World. We will carry this out within the framework of our special relations with the United States to whose citizens we granted until 1974, by Constitutional provision, equal rights as Filipinos in the exploitation of our natural resources and public utilities, and to whom we also granted trading parity rights under the Laurel-Langley Agreement. Under this policy we will welcome friendly and understanding foreign capital willing to collaborate with us in the exploitation of our vast natural resources preferably on joint venture basis.

The quest for Filipino First, it would've made the Philippines last. This is all about having a craze over Filipino pride. There's the statement that pride comes before the fall. The Philippines is experiencing it. Last year, I wrote an article asking whether or not Pinoy Pride can pay back trillions worth of debt. People who keep shouting "Pinoy Pride!" need to realize the socioeconomic cost of Pinoy Pride-based economics (read here).

This has allowed people like Atty. Teodoro A. Casiño to write nonsense. The problem is people believed people like him (and Atty. Neri Colmenares) for a long time. Both are from Bayan Muna. One of the dumbest things that Casiño wrote on Rappler was this: 

Without definite limits on foreign ownership and with no preference for Filipino citizens and corporations, the Constitutional provisions on the national economy and patrimony would become a tabula rasa. It would now be up to the Federal Assembly to determine policies on foreign equity sharing and just about anything there is about the economy and our natural resources. This, of course, creates an entirely new window for corporate lobbying, putting small, underfunded Filipino citizens and corporations at a great disadvantage.

Worse, by totally removing the State’s role in developing an industrialized, self-reliant economy, in implementing agrarian reform, in promoting and protecting Filipino enterprises and producers, and in reserving our natural resources for Filipinos, Duterte’s Cha-Cha will leave small enterprises, workers and farmers having to fend for themselves from the onslaught of even more globalization.

These amendments are the culmination of 3 decades of “economic reforms” toward a totally free market, neoliberal economy. Combined with the existing policies of economic liberalization, deregulation and privatization, the amendments remove the last impediments to the total domination, control and plunder of our economy and natural resources by foreign corporations and banks.

Decades of Filipino First allowed such lies to flourish. When I ask those who argue against 100% FDI, their "best sources" happen to be the likes of IBON Foundation (who even dare to lie that Marcos Sr. was a neoliberal when economic protectionism was so strong during the first Marcos administration) or Bayan Muna. If not, they can also cite Atty. Hilario G. Davide Jr. It's best to ask if Davide Jr. knows how to bring the Philippines to stand out in the Asian Century (read here). 

What's worse is that when I cite certain foreign sources to back my argument, they can easily break into Ad Hominem arguments like, "Puro lang ba mga foreigners mga sources mo?" It means, "Are all your sources, all foreigners?" It might be ironic if they replied to me on a brand-new iPhone which costs that much, that I'd rather buy more units in a technology feeder fund (which has Apple stocks as part of its portfolio) than it would be to buy an Apple phone. Maybe, that's why there's a possible stock market rally because of the ongoing purchases of brand-new iPhones and new iPads. Google may now be seeking to increase its value as Apple is the competitor. Hypocritically, they would sometimes use foreign sources (such as Jacobin or some random commie idiot on YouTube) if they agree with them. In short, I wonder if they can make up their minds and I don't expect them to make up their minds. 

The Filipino First Policy may have also caused business schools to rot. Unfortunately, the meme above may explain why a person can get a doctorate, even from a very hard-to-enter school, and still be an idiot. I wrote about how the education system is producing idiots over intellectuals. I blame it on the school system cares more about grades than learning. Parents tend to brag to their children about their high grades from decades ago. Even worse, some parents quarrel with the schools asking why the school isn't using the same books they used decades ago. I'll confess that none of my MBA classes ever taught me about how Cash 2 Go installment works or how to invest in stocks. I had to reach through Warren Edward Buffett's basic investment (Jeff Bezos of Amazon even says anyone can understand it) to learn how to invest in stocks. Sure, I'm not stock-picking but I decided to take UITFs because they're more diversified. It would mean I only get into a good company such as Jollibee (for an index fund) or Apple (for a technology fund). 

What's stupider is that I even ran into a business administration graduate who believes in IBON Foundation, which I consider nothing more than a joke (read why here). I was even studying in the MBA program when I lost money in bad credit. I was even in the MBA program when many people bought into the double your money scam. They were also business students. You have to even wonder what's wrong with the Philippine education system. It's good I decided not to teach undergraduate or pursue a doctorate. Maybe, I would only get prestige but prestige with no wisdom is useless. Business administration but believing in IBON Foundation's nonsense rants? I really find that really very stupid but it happens. It shows that you can't buy wisdom with money. It also shows a lot of stuff wrong with the Philippine education system. What may even be more ironic is that a business administration graduate has high grades while he believes in the half-truths of the IBON Foundation. 

This is why this truth must be fought for aggressively. It's likely not going to be easy. I'm going to run into ridicule. The philosopher Epictetus later mentioned how Socrates endured insults while never returning insults for insults. This information needs to be done. That's why I'm blogging while citing several sources when need be. I may receive ridicule but as said, ridicule (and shaming) can alter the facts of business and economics. 

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