Rejoicing Over Filipino Businesses Getting 100% Ownership Abroad While Crying Over FDIs Getting Allowed to Own 100% Ownership

The Philippine senatorial elections are on, right? One of the many things candidates (regardless of party) need to hold is the need for economic reform. As I continue discussing economic charter change, several objections are held. One of the objections is allowing 100% FDI--a subject often subjected to mockery. These mockeries can range from promoting colonial mentality, selling the Filipino to foreigners, borrowing money from abroad (which is definitely not investment, read here), or even the ridiculous notion that FDI includes Filipino women dating foreigners (read here). This time, I would like to address another hypocrisy. This time, it's all about Filipinos who rejoice that Filipino businesses are investing with 100% FDI ownership. All the while, this is crying foul when there's a law passed that will allow foreigners to own 100% FDI ownership, in the Philippines.

This is a meme to expose the hypocrisy. Jollibee has 158 branches in Vietnam, which I assume happened because of franchising. The silly girl above is rejoicing because there are 150 (actually 158 now and may go to 160+ soon) branches of Jollibee in Vietnam. She's saying, "The Philippines has captured Vietnam." However, the silly girl hears the news that Cong Caphe is opening just one branch in Quezon City and she cries, "Waaaaaah Vietnam captured the Philippines." It shows a lack of understanding of what FDI really means.

Last 2022, I wrote an article about the myth of invading other countries through FDIs and OFWs. Do these idiots think that working for other countries mean conquering other countries? Please, working for other countries doesn't mean stealing jobs from their locals. Instead, it's having to work with their locals. If you get the job, by default, you must obey your boss. If you work at Apple in Vietnam, you need to follow what your boss in Apple Vietnam tells you to do. The same goes for Apple investing in Vietnam. Apple must follow the rules and regulations set by the Communist Party of Vietnam (CPV) if it expects to continue doing business in Vietnam.

When a country allows FDIs to own 100% ownership--it's not selling the country. It's all about allowing FDIs to own up to 100% of their shares ownership. It's all about not requiring foreigners to find a Filipino partner before they can do business. Jollibee most likely used franchising to expand worldwide. Chances are Vietnamese businesses or the CPV franchised Jollibee. Franchising means allowing a business to make money under the the franchisor's business name. That's different from looking for a local partner to split 60% shares of stock.

Crying foul over foreigners owning 100% of their profits and rejoicing over Filipino MNCs keeping 100% of theirs, sis poor understanding. What's their definition of profits anyway? Do they think that when Jollibee gets profits for its 158 branches, that Jollibee leaves nothing to Vietnam. Meanwhile, in this hypothetical scenario, are they assuming that Cong Caphe getting its profits, means it leaves nothing for the Philippines?

Business & Plans

It may be because people are confusing profits for revenues (read here). If you think about it, such people may think that profits are the sales for the day. Profits don't belong to the workers, the salary belongs to the workers. It's because profits are basically what's left after the sales have been deducted from all expenses (which includes salaries) and taxes. We have the net profits after taxes. THe sample income statement above shows that sales are deducted from the Cost of Goods Sold (COGS) and then we have all expenses. SG&A would mean Selling, General, and Administrative expenses, which includes all salaries. We have to spend for interest expenses (borrowing money is inevitable), and then when everything is deducted, we have pre-tax income. The taxable income means taxing what's left of income minus all expenses. The result is the net income after taxes, is barely half of the revenues made! That's why the profit doesn't go to the workers but to those paying the workers!

Those on top were the ones managing the money, so they are the ones who keep the profit. Why would employees be entitled to the profit when they receive money from the SG&A expenses? Of course, when employers refuse to pay the employees properly, work quality suffers in return. The agreement is to pay the workers accordingly. Healthy work environment creates healthy workers. Healthy workers are entitled to their salaries, which is part of expense. They don't get any profit-sharing. However, employee shareholders are entitled to dividends during good times. If those on top mismanage the money, they're the ones who get the biggest blame when the company goes south.

It must be understood that allowing Filipino MNCs to invest 100% abroad and 100% FDIs in the Philippines, is a win-win situation. Filipino MNCs are still subjected to foreign laws, even if they aren't required to find a local partner abroad. The same goes for MNCs who invest in the Philippines--they still follow laws even without a Filipino partner. Filipino MNCs will keep 100% of the net profits after taxes when they invest abroad. Letting FDIs do the same in the Philippines is the same thing. Not having too many restrictions will encourage more FDIs, which will in turn mean more taxable income, more employment generated, and filling in the supply/demand gap.

Filipino First Policy Linked with Crab Mentality

Having sea crab yesterday or just eating crab, I always think of that old commercial in the 1990s. It was called, "Iwasan ang crab mentality." or "Avoid crab mentality." This makes me recall a scene when I was a child. I saw a pail full of mud crabs (called alimango in Filipino) and if one crab got out, the others pulled it down. The TV commercial showed how if the crabs got together, they could all escape their grizzly fate of becoming eaten for human consumption. Chefs are just lucky crabs pull each other down. However, it also shows that the crabs would rather all be cooked together than let that crab escape. Unfortunately, crab mentality is one of the biggest problems in the Philippines. It's not all that unique among Filipinos. However, it doesn't Filipinos should ever take comfort in engaging in a crab mentality, just because other people do it . Here's an interesting excerpt from Inquirer by Jerry Peres de Tagle PhD: Studies in human behavior ...

It's a Common, Broken New Year's Resolution Among Filipinos to Do Better with Their Finances and Economic Knowledge

Happy New Year, right? There's this statement in Cebuano that says, "Sa Disyembre nag lipay-lipay. Sa Enero, naglikay-likay." For non-Cebuano speakers, it means, "Enjoying all December. Fleeing in January." It's because of the bad habits that are common during the Christmas season. I wrote an entry talking about when a Merry Christmas leads to an Unhappy New Year . After Christmas vacation, it can be common to talk about New Year's Resolutions. Sadly, there are resolutions meant to be broken or resolutions on paper only. Several people finish high school, go to college, get a job, but never gain the necessary knowledge of economics and finances. Instead, they continue to live the same habits year after year. Even worse, the same foolish behavioral patterns get passed down f rom parent to child to grandchild. Still stuck with financial habits that put one in a financial dodo The New Year starts and it can get funny. I tend to hate December because of the ...

The Recent Microsoft Global Outage Should be a Wake-Up Call to the Philippines' Need to Fix the 1987 Constitution's Economic Flaws

The Express Tribune The recent Microsoft Global Outage was caused by Crowdstrike. Since I'm no IT or CS expert--it's better if I let them talk in the news. From BBC News , here's a detail from Crowdstrike that reveals the root cause of the problem has been systemic with an update: This is still a little unclear. CrowdStrike is known for producing antivirus software, intended to prevent hackers from causing this very type of disruption. According to CrowdStrike boss George Kurtz, the issues are only impacting Windows PCs and no other operating systems, and were caused by a defect in a recent update . "The issue has been identified, isolated and a fix has been deployed," he said. "This is not a security incident or cyber-attack." What exactly was wrong with the update is yet to be revealed, but as a potential fix involves deleting a single file, it is possible that just one rogue file could be at the root of all the mayhem. Thankfully, those who created th...

Is Vietnam Getting More FDI Inflows than the Philippines, Because of Its Supposedly Better Fight Against Corruption?

Discussing international marketing or world economics with boomer Filipinos can be painful. Some people still believe in the Filipino First Policy. I cite Vietnam as an example of why economic charter change (called econ cha cha) should be done. Some people cite that Vietnam's increase in FDI is because of the fight against corruption. I don't deny Vietnam has a crackdown on corruption. I don't deny that fighting against corruption helps the economy. However, fighting corruption without the proper tools and not having economic development, is useless. Fighting corruption isn't a panacea or cure-all either. Spanking is part of child discipline, not the whole of child discipline. People who only spank but never teach right and wrong, render spanking ineffective . Instead, look at Vietnam's economic policy vs. the Philippines' economic policy. Some people blame the following for the Philippines' lack of foreign investments, some things Vietnam also suffers fr...

Trying to Plan Out What to Do as a Bull Market Starts

I was laughing just thinking about ignorance about the bear and bull markets. Yes, we know about social media gossipers (seldom called a marites in Filipino) tend to spread gossip. I ran into several people panicking when the Philippine Stock Exchange Index (PSEi) was mostly red. Others would panic but Warren Edward Buffett recommends, "Be fearful when others are greedy. Be greedy when others are fearful." That's the best market timing. Some people do cost averaging because it's practically less risky in contrast to lump sum investing. Buffett recommends that non-technical people should periodically invest in a low-cost index fund over a period of ten years. Now, the Philippine Star has an article by Wilson Sy, where the first paragraph talks about the Philippines' entry towards the bull market : Most stock markets have undergone a dramatic shift to start the year, transitioning from a bear market to a bull market. Peak inflation, a slower pace of interest rate h...

When the Education Cares TOO MUCH About Grades, Schools Produce Idiots Instead of Intellectuals

During the pandemic, I was left in limbo thinking about my poor performance under K+10. It was something to think about that a classmate of mine who was both a summa cum laude and an honor student, ended up posting on his wall, "Students cheat because the education system cares more about grades instead of learning." The class salutatorian of our batch even commented about the good old days. I always had that feeling of insecurity and envy towards people better than me. But as Warren Edward Buffet would say, "Don't hate successful people. Learn from them instead." One of them is currently a teacher and the other is in Canada. I thought about my insecurities especially when I used to believe I was descended from a fine scholar and my family was a family of scholars. I remembered the time I was taking MBA and got conned. I was asked, "Is that what MBA taught you?" I got touchy and ended up admitting, eventually, that I was only taking MBA for the presti...

My Personal Opinion on the Recent Universal Robina Incident

I was doing some news readings and I found out about the death of a certain Stephen Corilla. The incident happened in the Universal Robina Corporation's factory in Mandaue a few days ago. It really chilled my bones to read these details which I'll share from Sunstar : POLICE are set to investigate a food and beverage plant in Barangay Tabok, Mandaue City after one of its workers was killed on duty while cleaning a pulverizer machine Thursday afternoon, June 2, 2022. Cpl. Glenn Bordalba of the Mandaue City Police Office Station 3 in Barangay Basak who is leading the investigation told SunStar Cebu Monday, June 6, that they will visit the Universal Robina Corp. (URC) Mandaue City plant in Tabok on Tuesday, June 7, to investigate the matter. Bordalba added that they have not started the investigation yet as they were not allowed entry to the site by the URC management after the incident was reported to them. An approval from the corporation’s consultant is needed for the police to...

My Experience with Tealive Cebu at the Ayala Central Bloc

I have tasted several foreign-owned tea shops. My first experience with tea shops was with Chatime (read here ). Now, I heard of this new coffee shop (or tea shop, take your pick) called Tealive. At first, I thought it was Taiwanese but when I Googled it--it was Malaysian. It made sense that the company uses only Halal-approved ingredients since Malaysia has a huge Muslim population. The founder is Malaysian-Chinese businessman Bryan Loo of Loob Holdings. Loob here also means inside as the Tagalog language also derives from the Malay language. Tealive would later head to the Philippines. It would be like getting Filipinos closer to their Malaysian heritage after all. The branches in Cebu include SM City, SM Seaside, and Ayala Central Bloc. The one I ate was at Ayala Central Bloc. Someone gave me a taste of their sandwich and their signature coffee. I was pretty much impressed that I decided to dine in there. I went to try their lychee tea and chees burger. For a note, their ...

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 ...

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