Millions of Studies from the Trust Me Bro School of Economics Show #SahodItaasPresyoIbaba Business Model Works

Happy Labor Day anyone? It's this time of the year when labor groups like Kilusang Mayo Uno (literally the May One Movement) would protest. They would raise banners demanding #SahodItaasPresyoIbaba. For those who don't speak Tagalog, it means raising salaries and lowering the prices of goods. However, basic cost accounting will tell you that salaries are part of the cost of production. People ignore facts and choose their feelings a lot. I tell them that salaries are part of the cost of production (no need for a Ph. D for that, which I no longer aim to get) but they just sneer at it. They think the government has absolute control over the economy like magic. Members of Filipino labor groups may even say that wage hikes aren't inflationary even when evidence shows otherwise.

The Economics Help website presents why doing so can actually worsen inflation:

Wage Push Inflation. If labour is able to push for higher wages, despite lower growth, then we could get a combination of rising inflation, but slow growth. This is especially a problem if a country is part of the single currency. If wages rise, they become uncompetitive leading to lower demand. Therefore there is an unwelcome combination of rising prices, but lower growth. If countries were not in a single currency, the uncompetitiveness would lead to a depreciation in the exchange rate to restore competitiveness and increase demand.

I wrote an article where I talked about opening #SahodItaasPresyoIbaba stores. This article will be a follow-up to it because it's May 1. I'm still seeing the same old nonsense of demanding #SahodItaasPresyoIbaba. They say it will not cause companies to go bankrupt and it will encourage economic activity. It's easy to say something but can they do it? That's why I'm daring them to open businesses with that model. Yes, call them #SahodItaasPresyoIbaba stores.

I criticize President Ferdinand "Bongbong" Romualdez Marcos Jr. for his preposterous promise of PHP 20.00 per rice. That's one of my arguments against the presidential system--make a preposterous promise and candidates win. I wonder if Atty. Maria Leonor Gerona Sto. Tomas-Robredo would've won if she promised free food every day for the poor. Back on the topic, these labor groups demand for the PHP 20.00 kilo per rice from Marcos Jr. instead of protesting that it's impossible. It's because of a supply and demand problem. Now, they better show they can do it and fulfill Marcos Jr.'s promise. Yes, take the initiative to do so, so they can say to the president, "See Mr. President, we can do it."

Let's say that they finally start their #SahodItaasPresyoIbaba stores. Their business' premise is to sell lower-priced goods to customers while giving higher salaries to their employees. They should sell their rice at PHP 20.00 per kilo and eggs at PHP 5.00 per piece. They should offer their employees PHP 750.00 per day salary. They should keep the same business model consistently even if the price of rice per sack increases, even if the price of gasoline in the world market increases, even if the cost of egg production increases, etc. After all, they've been demanding it so why not show the public that it works?

In business, sometimes you need to increase costs to continue giving the best for your customers. If a company offers quality services--customers are more than willing to pay higher whenever a price increase becomes necessary. I'd like to use Tealive as an example. I was shocked to find out that prices suddenly increased. However, I understood why because of factors like inflation and operational costs. Tealive in Ayala IT Park is now operational for 24 hours. That means electricity and water are used more often than their former schedule. To make up for the costs--they needed to increase the costs of their items. When you eat in a restaurant--you pay for both the food and the ambiance. After all, the coffee shop's tea and coffee are premium quality. The coffee shop doesn't serve coffee from a canteen but premium coffee. Coffee shops have longer operating hours--meaning there are higher bills to pay.

I could imagine how #SahodItaasPresyoIbaba stores may operate. They might even use air conditioning units (and there's no local brand of airconditioner, by the way) even when they can't afford higher electricity. They may even offer ridiculously cheap delivery services to their customers. Soon enough, they may offer 24/7 services even if they lack profits. If their electricity and water bills get ridiculously higher--they should protest in the streets demanding cheaper electricity and water. However, they should retain the low prices of goods and continue paying their employees PHP 750.00 per day. However, they've been opposing FDIs, went against the Public Services Act of 2022 calling it an "act of imperialism", and any move that could've significantly reduced the costs of public services. Once again, it's a supply and demand problem.

In short, these businesses are operating at a loss. They're ignoring basic cost accounting. It doesn't take a doctorate in economics to understand that labor costs add up to the final product's cost. How is it that some graduates of courses related to business and economics even believe the likes of the IBON Foundation or other related groups? I blame the poor education system of the Philippines. I also blame people who want rewards without a struggle. People fall for scams because they want to get rich quick fast and/or financial illiteracy. Can these businesses pay for the costs they've accumulated because they refused to raise prices when the need arises?

If these people were so smart, they would be generating better services and employment for Filipinos. Instead, they spew nonsense rallying all day. I don't need to be an economist to understand they're wrong. All I need is basic knowledge in accounting and economics. I can understand what economists are saying and with knowledge from Economics 101--I can really say that #SahodItaasPresyoIbaba business model is doomed to fail.

Get Stuck with EDSA, End Up Like Nokia

Yes, we should never forget what history teaches us. A classmate of mine, back in high school, wrote a simple and blunt essay called "History: A Teacher". I doubt he still has a soft copy, given it was already more than 20 years ago. I'd like to quote Duterte critic Andrew James Masigan wrote this in Philippine Star --something that should remain relevant: I would never undervalue the 1987 Constitution. It dismantled the legal framework of a repressive regime and established the democratic institutions we enjoy today. For this, I am grateful. The 1987 Constitution was crafted with the best of intentions. It sought to put the Filipino first in all aspects of governance and to level the playing field amongst sectors and peoples. But it is far from perfect. It failed to consider the importance of foreign capital and technologies and the stiff competition we would have to face to obtain them. In short, its economic provisions were short-sighted . So despite the Constitut...

#SahodItaasPresyoIbaba Economics' Bad Accounting

I would like to apologize in advance to my readers. The picture I'm presenting is in Tagalog, and not all my readers speak Tagalog. I would translate the picture's text into English for convenience. It says: "Ano ang bumubuo sa mga presyo?" means "What comprises the price?" "Gastos ng materyales" means materials expense "Gastos sa kasangkapan" means depreciation expense ""Gastos sa pasahod" means salary expense "Kapitalista" means capitalist Renta is well, rent "Kayang pababain ang presyo" means "Prices can be lowered". It says that capitalists (industrialists, landlords, bankers) and elitist governments are part in the gross profit. Get rid of excise taxes (either permanently or temporarily) for the prices of goods and services. In the times of crisis, in the burden of sacrifices, we need to be watchful for capacity. Whatever savings for times of difficulty by the workers and countrymen, the...

Past Chinese School Education in the Philippines was Based on "Sǐ Jì Yìng Bèi"

Chinoys of my age (and older) may remember these textbooks. I called them as the "symbol of trauma". It was memorizing something without understanding it . One would just memorize (without understanding it) because it was typical. Not being able to memorize what was assigned? Get a bad grade? One can expect physical punishment like hitting the hand with a ruler or chili in the mouth. Chinese language teachers are stereotypically strict . The language textbooks (above) are what were used during the 1990s to the early 2000s. As I wrote it, the Sinjiang textbooks aren't effective in teaching Mandarin , in a world where Mandarin has over a billion speakers! There's a Chinese proverb that says, "死記硬背 sǐ jì yìng bèi" or "Memorize to the point of death". That's exactly what those textbooks are. Memorize to the point of death! Okay, it may sound exaggerated. However, that's how Chinese language teachers in the Philippines were made to teach the ...

Migrante International's Really Bad Economic Literacy

March 17 (which is tomorrow) seems to be an unofficial holiday for some people, right? I'm sickened that the late Flor Contemplacion has been treated like she's some national heroine (and thankfully, tomorrow isn't a holiday) even after Singapore had proven her guilt. A movie was made by Joel Lamangan called The Flor Contemplacion Story . The call for Migrante (Migrant) International has been to remember Flor even after several years. What's not too surprising was to learn that Flor's sons were all arrested for drug-related charges. Even her eldest son died while in prison. You have Migrante International wanting to end the labor export policy. However, a post by Migrante really shows how this group fails basic economics. I will not post the whole press statement but one part that made my eyes roll. >> Further opening the country’s economy to foreign ownership and control will worsen the exploitation of our people and the environment without creating a susta...

"Filipino First Policy" Has NO PLACE in the Rising Asian 21st Century

I guess nobody saw the Asian 21st Century coming, right? China was once a poor nation but look at it now. Vietnam was once a poor nation but look at it now. Singapore was once a poor nation but look at it now. The late great Lee Kuan Yew wrote his book From Third World to First . I'm afraid some people have been using it to go against the presidency of Ferdinand R. Marcos Jr. while ignoring what else Lee Kuan Yew had to say. Lee Kuan Yew described the Filipino press to be rambunctious on pages 304-305 which I agree. I'm afraid that the Filipino press may have had a hand in getting rid of any economic or political reforms that could help the Philippines. Yet, one policy has been holding back the Philippines for decades and yes, it's the Filipino First Policy . Reviewing the Filipino First Policy and why it has no place in the rising Asian 21st century I remembered how the values education subject taught Carlos P. Garcia's stupid Filipino First Policy as a Filipino value...

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...

My First Taste of Sichuan at Yang Hero IT Park

I was doing some random historical study. One of the many things I recalled from Asian history class was the Chinese Communist Party in Sichuan. It's an interesting piece of historical detail that Mao Zedong (and other Chinese communists) were avid lovers of spicy food . Yang Hero had its first branch in Gaisano Tabunok. It opened a branch in IT Park last May 25, 2023 . The menus had Chinese translations. The establishment has made me realize the importance of learning Mandarin . True, I could order their food without speaking Mandarin. However, I still feel that the increasing number of Chinese businesses left and right would mean, "You may need to learn some Mandarin now to connect with more people in the world." For a bit of background, here's what I gathered from Sun Star Cebu: Evanmarie Mendoza, social media specialist at Yang Hero, said: “The Chinese barbecue is also a must-try for foodies as it differs from the regular ones that we typically have here in the P...

Tealive's Aren Caramel (Kaong Sugar Caramel) Series

I usually tend to associate sugar with cane sugar. In this case, Tealive (read my review here ) uses a sugar known as gula aren. I did some research and found out that Gula Aren is made from the sap of the sugar palm tree. The fruit is also known as kaong in the Filipino language. Granted, the Filipino language also derives from the Malaysian and Indonesian languages--it may be derived from the Indonesian word kolang kaling . The Philippines may also be producing its own gula aren or palm sugar. Sugar palm or kaong is pretty much grown as a staple in Filipino cooking too. Here's a video from an Indonesian woman. Watching this, it's safe to assume that kaong farmers in the Philippines follow more or less the same routine. Maybe, some people may call it latik though latik is made from coconut milk and not coconut sap. Though, some Filipinos may still call palm sugar as latik. The video above also shows an Indonesian binignit with some kaong. I was shocked to learn kaong is also u...

Getting Stingy at the Cost of Fire Safety?

March is fire prevention month, right? If there are people who are too extravagant then I'd like to talk again about stingy people (read the article here ). I've tried growing up with the stingy vs. extravagant extremes. Some people become stingy even with the necessities. It's one thing to deny a child a children's party since it's a want . It's another thing to deny a child stuff they need all in the name of saving money . Even worse, some people may be more than stingy enough to ignore fire safety. A stingy person just wants to save. It's almost like the story of the Miser and His Gold or The Rich Miser . I really find these stories entertaining at the same time, irritating. The first story has the miser who hid his gold under the ground. Some people today are too distrustful of banks and investments. The second story has a rich man who even dresses in rags, denies his son's shoes, had his wife cook some cake only for him, and was so greedy he had it ...

Started to Invest in the ATRAM Global Equity Opportunity Feeder Fund

It's time to begin a new road into investing. I went from a moderate risk taker to a moderately aggressive risk taker. Of course, I need to be careful with how much money I invest or I don't invest the money that I need. I believe that one could start by investing 15% to 20% of one's income. Basically, it's money that's not needed now. Fortune Recommends gives this ideal sweet spot: Many of the experts we spoke with suggested, as a general rule, to invest a set percentage of your after-tax income. Although that percentage can vary depending on your income, savings, and debts. “ Ideally, you’ll invest somewhere around 15%–25% of your post-tax income, ” says Mark Henry, founder and CEO at Alloy Wealth Management. “If you need to start smaller and work your way up to that goal, that’s fine. The important part is that you actually start.” Some budgeting strategies account for this, such as the 50/30/20 budgeting strategy, which breaks your monthly budget into three ca...

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