Some Filipinos Still COULDN'T Tell the Difference Between Foreign Direct INVESTMENT and Foreign INVADERS

Bombo Radyo Cebu 

Today is National Heroes Day 2025. Why do I feel that Buwan ng Wika (National Language Month), alternatively called Buwan ng Kasaysayan (National History Month), has been used to justify the Filipino First Policy, which caused the Philippines to fail? Some time ago, and it wasn't Buwan ng Wika, I actually wrote an entry begging Filipinos to abandon the thought that foreign investors are foreign invaders. 

Whether we want to admit it or not, even the meaning of the words investor and invader are too different. A simple dictionary definition would show that investor and invader are two different words. An investor is "a person or group of people that puts its money into a business or other organization in order to make a profit:", according to the Cambridge Dictionary. Meanwhile, the Cambridge Dictionary defines invader as "an army or country that uses force to enter and take control of another country:". Big difference! Get more dictionaries and thesauruses and realize that investors aren't invaders.

Although the Philippine Anti-Fascist League Facebook original page may be gone, there's still much disinformation about FDI. I would like to write this post before August 2025 ends. 

Would MNCs seeking profits mean they're "invading" other countries?

Malaya Business Insight

The definition that investors are people or a groups of people that put their money into business, to make a profit, would say, "Aha! You are wrong! All they want is profits!" The meme above is ignorance at its finest, by the late Neil Doloricon. I wonder if Neil ever bothered looking at an accounting statement while he lived. To no surprise, Neil was a founding member of the IBON Foundation. Some fatso on Facebook (and other fake accounts, probably some of them belong to him) say that the IBON Foundation makes more sense than me. Their best basis is that I'm using BlogSpot to share my ideas. Please, someone can be on a free domain and speak the truth, and link to important research. On the other hand, somebody can have a paid domain, be part of a huge organization, and be spreading fake news! Even if I do get a paid domain, I don't expect those clowns to listen to me, so why should I listen to them?

Business & Plans

It's sad but true, but people who are screaming for #SahodItaasPresyoIbaba (that is, raise the salaries while lowering the prices) may be mistaking revenues for profits (read here). If we should know the meaning of the word profits, we should know that profit is what's left of income less expenses. Above is a sample income statement which reveals that sales (revenues) are deducted by all expenses, which in return, the net income after taxes, is barely half of what's left after the sales! However, some people are still insisting on the idea that profits are "unpaid wages", which isn't always true. Some people indeed pay measly wages because they only care about making a quick profit. However, such businesses will no longer be profitable in the long run, as much as people who refuse to raise costs when needed.

Investopedia gives this basic difference between revenues and profits:

Revenue vs. Profit: An Overview

Revenue is the total amount of income generated by the sale of goods or services related to a company's primary operations. Profit is the amount of income that remains after accounting for all expenses, debts, additional income streams, and operating costs. Profit is typically referred to as net profit or the bottom line.

Key Takeaways

• Revenue is the total amount of income generated by the sale of goods or services related to a company's primary operations.
• Also known simply as sales, revenue doesn't deduct any costs or expenses associated with operating the business.
• Profit is the amount of income that remains after accounting for all expenses, debts, additional income streams, and operating costs.
• Revenue and profit both refer to money a company earns but a company can generate revenue and still have a net loss.
• Companies report revenue and profit on their income statement but record them in different areas of the report.

Why shouldn't the FDI keep all the profits? After all, think about the expenses that they've been paying for stuff like:

1. FDIs will be bound by labor laws, and must therefore pay according to the country's wage laws. Plus, the more the demand for labor, the higher a company will be obligated to pay according to the laws of supply and demand (read here). In short, the more people they are, the more they're obligated to pay wages. 
2. Filipino lessors would be asking for their rent. There's a contract and violation of terms of contract (such as two consecutive months of non-payment) would result in lawful eviction.
3. Every business has to pay for utilities such as electricity, water, and telecommunications. 
4. There would also be other operational costs, such as maintenance, renovation, reconstruction, etc.
5. All income is taxable when it hits a certain bracket. Given that FDIs are huge companies, they're bound to have huge taxable income. These companies will need to pay for taxes such as the monthly 12% VAT tax, quarterly taxes, withholding taxes (for some) and the annual income tax.

The fact that profits are barely even half of what's left after revenues, it should be the reward of those who have worked hard to keep the company afloat! Why should the lessor get a share of the profit when all he or she did was offer a place to do business? The lessor has already been paid with the monthly rental. The lessor should be responsible for managing the money, since he/she will be obligated to pay for repairs and the like!

Remembering that the Philippines traded with foreigners, before it was named the Philippines, by the Spaniards!

Art by Hugo Yunzon

After defining investors and invaders, I'd like to review some Economics 101 and History 101. It's already been stated that before the Philippines was even named the Philippines (after King Philip of Spain), the pre-colonial natives of the Philippines did business with foreigners (read here). In doing some history lessons, long ago, before China fell to Communism, the Chinese traders already did business in the Philippines. This was long before China started trying to claim areas that aren't theirs. 

From Purdue Filpino--here's some basic information about Filipinos trading with the Spanish. Unlike the Arabs who once occupied Mindanao (therefore explaining why Islam is practiced strongly there), China never occupied the Philippines, nor did the Chinese traders seek to take over it: 

Between the 10th and 16th centuries and before the Spanish colonization, Chinese traders sailed to the Philippines. They brought porcelain and silk, in exchange for beeswax, deer horn and trepang (sea slug). The trade with China was the beginning of a major influence and contribution within the FIlipino culture. One major influence that the Chinese contributed within the culture was culinary arts. Some culinary techniques that the Filipinos were taught include sauteed dishes, rice cakes and noodle dishes(like Pancit!). In addition, the Chinese way of family structure also heavily influenced the traditional Filipino family structure. The traditional Filipino structure is very rigid, authoritarian, and uses Chinese-based nomenclature. The eldest son is called Kuya, and the eldest daughter is referred to as Ate. Both kuya and ate have authority and responsibility over their siblings.

The Bangko Sentral ng Pilipinas also gives this interesting trivia on Filipino trade history:

Long before the Spaniards came to the Philippines, trade among the early Filipinos and with traders from the neighboring lands like China, Java, Borneo, and Thailand was conducted through barter. The inconvenience of the barter system led to the adoption of a specific medium of exchange – the cowry shells. Cowries produced in gold, jade, quartz and wood became the most common and acceptable form of money through many centuries.

Since the Philippines is naturally rich in gold, it was used in ancient times for barter rings, personal adornment, jewelry, and the first local form of coinage called Piloncitos. These had a flat base that bore an embossed inscription of the letters “MA” or “M” similar to the Javanese script of the 11th century. It is believed that this inscription was the name by which the Philippines was known to Chinese traders during the pre-Spanish time.​

The FilipiKnow website shares this, which proves that doing business with foreigners is different from imperialism: 

We’ve all been taught that before the Spanish galleon trade, the pre-colonial Filipinos had already established trading and diplomatic relations with countries as far away as the Middle East.

Instead of cash, our ancestors exchanged precious minerals, manufactured goods, etc., with Arabs, Indians, Chinese, and other nationalities. Many foreigners permanently settled here during this period after marveling at the country’s beauty and people.

Out of the foreigners, the Chinese were most amazed at the pre-colonial Filipinos, especially regarding their extraordinary honesty. Chinese traders often wrote about the Filipinos’ sincerity and said they were one of their most trusted clientele since they did not steal their goods and always paid their debts.

Out of confidence, some Chinese were known to leave their items on the beaches to be picked up by the Filipinos and traded inland. When they returned, the Filipinos would give them back their bartered items without anything missing.

If we look at this, did the pre-colonial Filipinos (which makes me wonder, what were they called before the archipelago was named the Philippines) get conquered by China, India, Arabs, or any traders that traded with the natives? It was one thing for the Chinese merchants to do business in the Philippines. It would be another thing if China sought to turn the Philippines (and every neighboring Asian country) into a province of China. The Chinese traders from Imperial China only did business with the pre-colonial Filipino natives. The Spaniards arrived and conquered the Philippines, to be part of the Spanish Empire!  

That means that whenever the Chinese (or any foreigner) traded in the Philippines, they were subjected to Filipino rules. For example, a trader from China would need to bow down to the local chieftain of that area. If a Chinese did business in Muslim Mindanao, the Chinese merchant would need to bow down to the chieftain of that place! A Chinese merchant should avoid trading anything forbidden by the Islamic faith. A Chinese merchant who might attempt to cook pork in that certain area in Muslim Mindanao can expect to be blacklisted, or even executed.

Foreign investors are required to follow local laws, but foreign invaders don't care about local laws 

There's ignorance in saying that FDIs can "do what they want" when they're not subjected to the ridiculous 60-40 policy is plain ignorant. Right now, I want to raise Vietnam (again) because one of the worst critics against 100% FDI shares ownership is Kabataan Partylist. I wrote a post where Kabataan Partylist should learn basic economics from the Ho Chi Minh Communist Youth Union (read here). Vietnam still has guidelines for all FDI to follow, even those that are allowed to own 100% FDI shares. 

There are still balanced restrictions that need to be implemented, such as:

1. Basic rights for employers are universal for all registered businesses. Anybody caught violating these can be criminally charged. 
2. Registering a foreign business as a foreign business.
3. The need for a transparent identity for FDIs, such as their real identity. That would be like no Alice Leal Guos, aka fake citizens, would be allowed to do business. A foreign investor must register as a foreign investor. Their documents to prove that they are indeed non-citizens must be present upon application.
4. Basic laws such as annual inspection by the Office of the Building Official, environmental laws, sanitation laws, etc., should still be followed by all businesses, regardless if they're local or foreign. 
5. These businesses must pay taxes accordingly. Common sense can tell you that you still receive a receipt if you eat at a foreign-owned establishment, as much as you receive a receipt from eating in a Filipino-owned establishment. The Bureau of Internal Revenue would get the revenues, and tax them accordingly. So why whine about FDIs invading the Philippines all the while one may be hypocritically using an iPhone one just recently bought? 

There's the quote, "In Rome, do as the Romans do." FDIs are still required to bow down to local laws, wherever they go. If one does business in Singapore, follow Singaporean laws. If one does business in Malaysia, follow Malaysian laws. The Philippines is no different. FDIs, even those allowed 100% share ownership, are required to follow Filipino laws. It was the law that allowed FDIs to invest. It's also the law that would regulate FDI from exploiting the locals. 

Meanwhile, invaders don't even bother to follow the rules. Did the Spaniards follow the local customs when they occupied the Philippines? Did the Japanese invaders care about local Filipino laws when they invaded the Philippines? It's different that a Japanese company invests in the Philippines. The Empire of Japan is long dead, the Chrysanthemum Throne is only symbolic now, in contrast to the Second World War! Back during the Second World War, Imperial Japan had an illegal occupation of the Philippines, that they had to be kicked out. When Japanese companies like Toshiba, Sony, etc. invest in the Philippines--these companies must follow Filipino laws. When Jollibee invests in other countries, the company must also comply with local laws! That's why it's stupid to think the Philippines is "invading" other countries whenever a Jollibee branch opens there!

Pretty much, this National Heroes Day, I hope I've brought some new insights!