Two years ago, I wrote about the socio-economic cost of Pinoy Pride Economics. It might be better to call it Pinoy Fried Economics because such mentalities have caused the Philippines to fail. Pinoy Pride Economics has fried up any potential for the Philippines to improve. As it's August, the month is commonly called Buwan Ng Wika (month of the language), the celebrations tend to focus more on the celebration of Filipino Culture instead of Tagalog. I remember Buwan Ng Wika programs tend to showcase how cultural exchange evolved the Filipino Culture--such as showing the Chinese traders and Americans in their interaction with Filipinos. On this very first day of August, I'll discuss the problem of the Filipino vs. Foreigner dichotomy. Last I re-studied Filipino History, I never saw it as once free from foreign influence. The Chinese traded with the Philippines--way before the Chinese Communist of China (CCP) caused trouble because of their country's terrible leadership. Chinese and Filipinos can be friends despite all that, as the Chinese people themselves are usually victims of their terrible government.
The ongoing problem right now is with Filipinos who are still very anti-FDI. Anyone can discuss with them what FDI really means but they'll just close their ears, say la-la-la I can't hear you, and it can get funny and irritating at the same time. This reminds me that I wrote about how Filipino First Policy is taught in values education. I remember a time in my elementary days when somebody chose something only because it was Filipino-made and rejected the imported product because it was imported. What was downright funny is that the schools aren't equipped with everything Filipino-made, the construction equipment used to make the schools aren't made in the Philippines, and whether we want to admit it or not, many lessons taught in school are foreign concepts. I'd like to highlight especially to my idiotic math teacher back then (won't mention her name) that mathematics is a subject contributed by worldwide thinkers, not just Filipinos!
A sample Filipino vs. foreigner dichotomy
I read some Facebook posts based on ignorance about what FDI truly is. FDI means Foreign Direct Investment. A statement made out of ignorance could be a statement like this:
If we develop every sector of society, we don't need foreigners to give us a proper economy. Of the total population, the working force is the lowest percentage. The working class needs to be increased, especially the farmers and fishermen.
If the government develops every local economy in every province and supports small entrepreneurs and scholars, it will contribute a lot to the national economy.
FDI is never a solution to the country's development. You are just fooling monopolistic capitalists. Losing local economic competitiveness. The people are losing their livelihood.
That FDI m*therf*cker, that's just a trap. It's like a Chinese debt trap. Local businessmen will give investment to foreign investors and unbeknownst to the businessmen, the shares of foreign investors are growing more than them. The effect of this is to cripple the economy because the country's money goes out and goes to foreign investors.
If we get rid of political dynasties, greedy politicians and capitalist greed and we seat smart people in every sector of society and smart businessmen, this country will progress. We don't need the validation of White people or any other race. We have our own country. We have our own culture and identity.
I took the statement above from somebody's Facebook post. I will not directly mention the person's name or link him here to avoid direct shaming unless the person is a public figure. I will just call him Porky Madugo (Madugo means bloody) because he's fat and has bloody ideals (and I believe talking to him about economics is just useless, read why here). The statement is purely made out of ignorance, and the person. The statement above is what the late Lee Kuan Yew (and many people in his wall tend to despise Singapore presumably because of the late Flor Contemplacion) would call a third-world mentality.
First and foremost, Porky needs to answer the following and I guess he has no guts to answer or will use the IBON Foundation, dismiss studies from other countries all in the name of Pinoy Pride, etc.:
- How can Filipinos develop every sector of society without foreign investment when not everything Filipinos need (such as equipment) is available locally?
- How can he propose that Filipinos create their own businesses when not every Filipino is business-oriented? Plus, the dilemma is if Filipinos aren't allowed to use imported equipment, where will they get their locally-made equipment?
- How can the government develop every local economy if the government doesn't have any funding from taxes, because of a lack of businesses? Does he propose to print more money, which, by the way, is inflationary?
- Does he know the difference between foreign investment and foreign debt (read here)? Does letting a foreign restaurant open in the Philippines mean the Philippines owes the country money or does the foreign restaurant owe the Philippines, income tax?
- How does the foreign investor having more shares than the local businessmen prove more detrimental? Would he invest in another country where he can only keep 60% of his shares in stock? Did the Philippines conquer other nations through Jollibee and OFWs? Does he even realize that even if foreigners own more shares of stock, they are still bound to the rules of the local country? Again, has he forgotten that even if an MNC owns more than 40% of the shares, they are still required by the law, to pay their taxes?
- How does he propose to remove political dynasties, greedy politicians, and capitalist greed under the current 1987 Constitution of the Philippines' provisions? Also, how does he say that Filipinos are "unique on their own" and don't need validation from white people or any other race?
Instead, the Philippines is part of the interdependence of nations even when it retains its independence as a nation
Even though Lee was criticised by many for leading the country in an authoritarian style that stifled political dissent and press freedoms, his firm grip on power and maintenance of stability gave little scope for corrupt financial practices. The orderliness that Singapore became known for was attractive to foreign investment – billions of dollar poured in, ensuring the country’s success.Lee maintained a tight grip on domestic finance by preventing the internationalisation of the Singapore dollar and limiting the operations of foreign banks. This meant international firms saw an opportunity to establish themselves in the tiny island nation. Sound financial and economic policy coupled with a corruption free environment and technological advancement meant many multinational firms chose Singapore as a regional hub. Lee championed free trade, which helped Singapore attract a free flow of foreign investment and multinational giants such as General Electric.
Reading this, I dared Porky to take his statement to the National University of Singapore (NUS). Maybe, I should've specifically told him to look for the Lee Kuan Yew School of Public Policy (LKYSPP). There's a difference between a restrictive economy in terms of handling financial issues and equity issues. Singapore doesn't hold excessive restrictions on MNC ownership of their shares. MNCs can do business in Singapore as long as they follow the rules. A lessor can rent a place to do business there if that person follows the rules of the lessor. Limiting the operation of foreign banks doesn't mean not letting them operate.
Maybe, we can also think of how LKY's Singapore even inspired Communist Vietnam. Vietnam needed reforms badly. The late Nguyen Duy Cong aka Do Muoi even consulted with LKY, a daring more for someone who would be considered a leftist. Reading through From Third World to First--LKY even gave Do Muoi assurance that Vietnam could even do better than Singapore. Vietnam is a country rich in natural resources. Some say that Singapore only opened because of its lack of natural resources. However, that has been proven wrong. Instead, when Do Muoi followed LKY's example of letting foreigners do business in Vietnam, Vietnam saw significant progress. Why do you think a Communist nation is now doing better economically than the Philippines? Besides, one can say President To Lam's gold steak scandal didn't stop investors from investing in a nation where the Communist symbol is a part of daily life.
To say that FoodPanda and Grab didn't help Filipino businesses is plain ignorance (read why here). Who gave the drivers their jobs? If it wasn't for FoodPanda and Grab, I doubt there would be more Filipino drivers granted their working-class status, therefore granting them their protection as working-class people. During the pandemic, some local food establishments closed because of a lack of customers. However, those who did delivery services managed to survive. Grab and FoodPanda could care less which business will avail of their services, whether local or foreign. Do you think FoodPanda and Grab will just open in the Philippines but not serve Filipino businesses or hire Filipinos? That would be a very disastrous approach. If FoodPanda or Grab did that--they would've been shut down from bankruptcy if they didn't hire Filipinos or cater to Filipino businesses' delivery needs, which in turn caters to Filipino customers?
This is also the difference between Mao Zedong's approach vs Deng Xiaoping's approach in developing Communist China. When Mao launched the Great Leap Forward, Mao used impractical solutions. China made a great leap forward only to disaster. For some, they prefer to call it the great leap backwards However, Deng's solutions were pragmatic when he opened China for business. It didn't mean China had forgotten its own businesses. Instead, Deng focused on following LKY's advice. Sure, Deng was notorious for the Tiananmen Square Incident. However, nobody can forget Deng was the great reformer, whom LKY called a great man. Deng's pragmatic approach might be an improved version of Vladimir Lenin's New Economic Policy. Lenin allowed some tolerance for businesses and private ownership, as long as they adhered to the state's rules. Do Moi might have Communism written over it, but it's certainly more helpful than the Filipino First Policy.
If Lee hadn't asked Albert Winsemius (who died a year before Deng did) to help him, I couldn't imagine Singapore more. If Do Muoi didn't ask help from LKY even if the two had different ideologies--Vietnam wouldn't have achieved its status now. The Philippines can learn from other nations. Filipino businesses can benefit from FDIs such as the new transfer of technology, new skills, new suppliers, new service providers, and even new customers. A foreign customer buying from a Filipino business is still as much income as a Filipino customer. As Deng mentioned in his cat theory, it doesn't matter if the cat is black or white, as long as it catches mice. Filipinos should care less if the help is from a Filipino or a foreigner, as long as it helps develop the Philippines.
Decades of Pinoy Pride Economics and for what? Really, has Pinoy Pride mentality helped the country? The Filipino First Policy, which sought that the majority of business holders should be Filipinos, only destroyed employment opportunities, chances for better services, and chances for the country to have more tax revenues. All the repeated lies for decades have only kept the Philippines backward. Some of them even lie that first-world countries don't rely on FDI, a huge lie indeed. Yes, first-world countries don't solely rely on FDI but they still rely on FDI as part of their economic plan. If there's one truth about Pinoy Pride Economics--it's that Pinoy Pride never accepts facts even when it's on their faces.
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