COMMUNIST Vietnam Has Defeated DEMOCRATIC Philippines Again This 2025

Cổng thông tin Trung ương Đoàn TNCS Hồ Chí Minh

A few days ago, I wrote about warning Filipinos that they shouldn't wait for more unmitigated typhoon disasters, before realizing that the Filipino First Policy isn't working! There's a statement that says, "Just because being tanga (inattentive) is libre (free), doesn't mean you should be tanga!" 

Analyzing the different policies: why policies matter

I found a Business World article on my Facebook news feed discussing the Vietnamese economy. In fact, it would be better to share some hard truths that the article offers about what really went wrong with the democratic Philippines compared to Communist Vietnam:

DIVERGENT ECONOMIC MODELS

Vietnam pursued an export-oriented manufacturing strategy which has proven significantly more successful over the past half century than the Philippines’ service-heavy, remittances-dependent model. Export performance alone tells a compelling story. Vietnam’s exports amount to an astonishing 105-107% of its GDP, making it a true export powerhouse in Asia. The Philippines, by contrast, has exports equivalent to only a paltry 27-32% of GDP.

Vietnam’s industrial transformation has been anchored by major multinational investments, most notably Samsung, which has turned the country into a critical global electronics manufacturing hub. Beyond foreign giants, Vietnam is nurturing its own champions. Its first fully electric vehicle manufacturer, VinFast has begun exporting EVs to the United States and Canada, symbolizing the country’s ambitions to climb the technological ladder.

The Philippines’ path has been dramatically different. Instead of manufacturing, its growth pillar had been Overseas Filipino Workers (OFWs) and the Business Process Outsourcing (BPO) sector. In 2024, the country’s 2.2 million OFWs sent home $38.5 billion in remittances, which is an extraordinary lifeline that supports millions of households. The BPO sector added another $38 billion in service exports in 2024, with forecasts of $40 billion in 2025. These inflows fuel consumption but do not necessarily spark industrial deepening or lay the foundation for economic diversification.

The contrast is sharp: Vietnam built factories while the Philippines built call centers. These choices continue to shape the trajectory of both economies.

FDI AND THE INVESTMENT CLIMATE 

A major platform of Vietnam’s success has been its sustained ability to attract foreign direct investments (FDIs). From 2010 to 2023, Vietnam accumulated $168 billion in FDI inflows which far outpaced the Philippines’ $107 billion. Vietnam’s transformation began with the Doi Moi reforms of 1986, which shifted the country from central planning to a market-oriented economy 11 years after reunification. These reforms created a stable policy environment, encouraged industrial clustering, improved infrastructure, and transparency.

The Philippines, meanwhile, has been stifled by regulatory inefficiencies, bureaucratic red tape, and infrastructure deficits. Although the Philippines has recently introduced reforms to liberalize sectors and improve competitiveness, its overall investment environment still lags. The Philippines ranked 95th out of 190 economies in the former World Bank Ease of Doing Business Index, compared with Vietnam’s 70th. While the Philippines scores higher in some measures of economic freedom, Vietnam outperforms in property rights security which is essential consideration for foreign investors. In the successor 2024 World Bank Business Ready Report, Philippines only scored 48 vs 65 of Vietnam under Business Entry (ease of registering and starting LLCs).

Vietnam’s aggressive pursuit of reforms allowed it to embed itself deeply in global supply chains, while the Philippines has struggled to break free from its structurally narrow economic base.

As I previously wrote, it should be superbly ironic that Communist Vietnam, under a one-party state, where people don't get to elect their leaders, is getting more FDI than the Philippines! It's funny how some Filipinos can blame (insert political family) as the cause. I even ask, "If that's the case when they are FDIs investing in Communist Vietnam?" The answers I hear can be like, "Because there are no Marcoses and Duterte in Vietnam!" Please, Vietnam's human rights record isn't exactly spotless either, given that it's a Communist state.

If we want to get to the root of the problem, we need to realize that while democracy is a strong edge, Communist Vietnam has almost little or no protectionist provisions within its constitution. This is different from the 1987 Constitution where the protectionist provisions are rather hardcoded into the constitution, making it difficult to move in and move out, depending on the situation. 

The Philippines' overreliance on OFWs vs. Vietnam's FDI-friendly policies

The criticism I presented earlier from Business World was that the Philippines is overreliance on OFWs. This reminds me of a few articles I wrote. I wrote an article asking if OFW program is better than FDI because of the dollar remittance. A much earlier article that I wrote addressed that we seriously need to stop thinking of OFWs vs. FDI as an invasion game. The idea that, "Either Filipinos invade other countries through OFWs or FDIs will conquer the Philippines, is an obsolete idea. This should be a reality check that needs to be done between the democratic Philippines and Communist Vietnam:

1. If OFWs are indeed "conquering the world", why is it that they're still required to submit to the host country's laws? Why hasn't a single country where OFWs are sent surrendered to the Philippines?
   
2. If FDIs are indeed invaders, why has Vietnam retained its sovereignty and defended its rights against China?
   
3. To those who insist that Vietnam is an example of succeeding thorugh self-industrialization, I encourage you to read my facts vs. gossip essay on that matter. Because, newsflash, Vietnam actually accepted FDI as part of Doi Moi! 

This creates the contrast. The late Nguyen Duy Cong took the late Lee Kuan Yew's advice. However, Filipinos have been still too stuck on what LKY said about the Marcoses that they forget his economic advice. That's the big tragedy! Vietnam took LKY's economic advice but the Philippines didn't! It's a real tragedy if you consider these words were also spoken by LKY, in his book From Third World to First:

Something had seriously gone wrong. Millions of Filipino men and women had to leave their country for jobs abroad beyond their level of education. Filipino professionals whom we recruited to work for Singapore are as good as our own. Indeed, their architects, artists, and musicians are more artistic and creative than ours. Hundreds of thousands of them have left for Hawaii and for the American mainland. It is a problem the solution to which has not been made easier by the workings of a Philippine version of the American constitution. 

The big difference is that the Communist Party of Vietnam, ironically, despite being totalitarian (such as locking up Noodle Bae for insulting General Secretary To Lam's gold steak dinner), knows what to do with FDI. What happened to Noodle Bae could be considered a violation of free speech. The Philippines may be more democratic than Vietnam, but why is it still upholding the obsolete views of the Filipino First Policy? It should be considered a major irony indeed!