Philippine Stocks News
Philippine Stocks News
William F. Sai’s Road to Recovery Part 2
Road to Recovery Part 2 – William F. Sai, Economist
We can have both local and foreign investments whose goods and services can be domestic or export oriented.
Attracting investments is not just advertising or to go abroad to make an appeal. We have to review our investment policy both local and foreign; the results are more jobs resulting to more people paying taxes.
We take the China model and adapt it to our culture. The good news is we have abundance of ‘talents’ in the Philippines which we can harness our own. The only question is what would an investor need to put up factories and business here and employ more of our talents? What restrictions do they feel negative to the investment climates? Why do they prefer other countries than our country?
Government should also review what happen to our agricultural sector. Why can’t we feed ourselves and import rice when we have the best rice engineers and educational institution in Asia, the IRRI (International Rice Research Institute). The bottom line is to revive our agricultural sector, if we have vast lands of resources for our agriculture. What are the systemic issues here?
One country should feed itself or self reliant in the agricultural needs of its own people. We should not spend our Dollar reserve to import things. Whatever bickering or rights is secondary to the right to feed its own people. Importing rice through NFA is only a temporary measure or stop gap solution to the problem. Government should monitor progress and spend money not to invest on the agricultural industry but rather support business who will make investment on agriculture. It should provide the best investment climate to ensure success on agriculture like review and make attractive the ‘COOPERATIVE’ system or corporations so that small farmers can be united to make one company that is competitive in the global market.
We should stop on big Infrastructural projects. Jobs created here are not sustainable or temporary but huge amount of public funds are spent, Theoretically, we need the infrastructures for the business velocity we need, but we still don’t have the business we need to ride on these infrastructures.
Yes, it might be a chicken and egg thing, like our education producing talents, but if we can’t make it tailor fit to what we need, they will just go down the drain. We call it the brain drain, meaning we train and produce our talents for other countries to use as their own. Of course, we don’t discount the remittances in dollars that we receive from our OFW and they are really our modern day heroes. However, these are not the goals of our education sector to train and produce talents for other countries. We want them to be here and let our country the sole beneficiary of what they can do to our industries. As for the investments, everyone can argue that the business will follow if you put these in places, this is another theory. The situation now is there is no business or our business investment velocity is not enough? Therefore, so much will be thrown to depreciation. It is like buying a bus but with a handful of passengers.
So you want long answer for your homework. Ok, here we go. Despite the constitutional limits for foreigners to invest in this country, the economy is still growing, not at high rate but its growth is still okay. You don’t see foreigners taking charge of our economy like in other Asian countries. Ours is controlled by Filipinos. Corporations must be 60% controlled by Filipino capitalists. That’s what the constitution mandated. But if you look at some economic indicators, figures will tell you that stock exchange is nearing its all time record high at 3,400 points. It shows that there is money in Philippine stock market. How much taxes or fees does the Philippine government get, that I do not know yet? But it should be in the hundreds of millions. The peso value is gaining more what it lost years ago. While it may affect our Filipino workers abroad, and our exporters, it gives us relief to high cost of electricity and oil. This will also lessen our debt burden measured in foreign currency. The gross domestic product is high at 5.6% though this is below the fighting rate of 6% to counter the ill-effects of population growth of this country at 2.3% mostly contributed by the poor among us.
The political will to balance our national budget with marching orders to collect taxes from where it is due will save us from foreign borrowings. These efforts will give dividends in the near future. I will tell you. I don’t want to discuss negative thoughts here. I am optimistic. What about tourism? I also don’t care if people come here or not. I see them as invaders so they must behave.
Is LC Still a Buy?
