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Analyzing an ampao economy

By Rod Kapunan | Posted on Jul. 27, 2013 at 12:01am | 567 views

Like those croaking frogs in a flooded field, the clappers of this regime
tell President Aquino that to sustain the unprecedented economic
growth that registered a 7.8-percent increase in GDP, even outpacing
China, he should do more to create jobs and encourage investments.
Needless to say, that demand is an admission we have an ampao
economy.
What is economic growth if we have a 7.5-percent unemployment rate?
Are we to build an investment catch-basin just to sustain the so-called
positive economic performance? In fact, they failed to tell us that we
remain the tail-ender among the Asean countries when it comes to
entrusting their money to us.
According to the Asian Development Bank, the Philippines just edged
Cambodia which drew $1.55 billion, but tied with Myanmar in obtaining
a measly $2.24 billion foreign direct investments in 2012. The rest drew
the following: Vietnam, $8.4 billion; Thailand, $8.6 billion; Malaysia,
$10.07 billion; Indonesia, $19.85 billion; and Singapore, $56.65 billion.
If the claim of a shining economy is not translated to more FDI,
according to Norio Usui, then something is awfully wrong with us.
Despite that, Philippine Chamber of Commerce and Industry president
Miguel Varela insists we should go ahead in scrapping those provisions
in our Constitution, which imposes a ceiling of 40 percent ownership on
certain industries, and in passing the Land Use Act to allow investors to
own and develop our lands. That was seconded by Sergio Ortiz-Luis, Jr.
of the Philippine Exporters Confederation, Inc. and Melito Salazar of the
Management Association of the Philippines. However, not a whimper

suggesting industrialization was heard to qualitatively enhance the


volume and value of our exports.
As repeatedly said, it is not ownership of our national patrimony that
will induce them to invest, but on how much they will earn more out of
their investment. They will only take the bait if their money is assured
to generate the maximum profit at the soonest possible time. Never will
they allow their capital to be tied down for a long period to face an
uncertain prospect.
To encourage them to come, we must do something to improve our
comparative advantage not just in the international market, but most
importantly within our own domestic market. If we cannot defend
ourselves within our own turf, then it is a pipedream for us to fight our
competitors in the international arena, or much more invite them to fight
for us.
For instance, how could we seduce them to put in their money when
investment profitability is almost prohibitive? The minimum daily wage
now is P456 for non agricultural workers, and P419 for plantation and
non-plantation workers. If one includes the employers share for the
SSS, the employees compensation, the Pag-Ibig, PhilHealth, and prorating the 13th month pay, that would add up to more than P500 daily
that every employer must earn to pay his worker.
Let us not talk about that high-falutin per capita income, for definitely it
would not tally with our present poverty level which according to the
National Statistical and Coordination Board is at 27.9 percent, nor for us
to believe the National Wage and Productivity Commission that we rank
third in the highest in minimum wage in the whole of Southeast Asia.
Again, that would not match the 10.5 percent unemployed (4.4 million
Filipinos), and the 19.3 percent underemployed (7.5 million), not to
mention the close to 50 percent contractual workers in our labor force
and the rampant violation of the minimum wage law.

How can President Aquino create more jobs when many of our
entrepreneurs are relocating their production plants to China, Vietnam,
Cambodia, Bangladesh and now Myanmar all wanting to reduce their
production cost? Certainly these Filipino entrepreneurs would not be
affected by that ludicrous proposal of those traitors in Congress to
prostitute our countrys economy. The problem is that our legislators
have not been able to logically sort out why our entrepreneurs have
failed to grab those economic privileges before handing them over to
those foreign carpetbaggers. In fact, had it not for the almost 10 million
overseas Filipinos workers who remitted last year a record high of
$21.391 billion, the country would have long gone deep into the
sinkhole.
To be sure, foreign investors know our privatized public utility
corporations are on top when it comes to charging consumers of the rates
and charges they will have to pay. The cost of our electricity is P12.66
per kilowatt hour, second to the highest in Asia; our water is between
P35 to P40 per cubic meter, more expensive than in countries situated on
the fringes of the Sahara Desert; and fuel oil is P43.50 for diesel while
for gasoline P56 per liter, toll is P235 for small vehicles.
The same is to true with realty tax. Many suspect the speedy disposition
of unpaid real estate properties have become a syndicate among local
governments that they practically violate the right of the ownertaxpayers to be heard. Many of those escheated big properties end up
owned by tycoons and taipans serving as ready buyers. Of course, there
will be an initial boom in the price of real estate upon the lifting of the
limitation, but that will be driven by speculation. The bust will come
sooner after the gamblers come to their senses, with more Filipinos
squatting outside the fence.
This explains why investment here is a losing proposition. Foreign
investors know the continued economic retrogression is due to the stickup charges, rates and fees imposed by the greedy elite coupled by highwage urban workers who have to fight for their survival. It was the local

elite and their foreign partners that practically drove us out of the
market.
That formula is no different from the simpleton theory of the neoliberals
who insisted in dismantling our tariff, optimistically predicting it would
result in the elimination of smuggling to invariably increase customs
collection. Nothing of their optimism happened much that it turned out
be cheaper to smuggle goods than to produce them locally to bring about
employment. There is nothing now to develop here, only to exploit.

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