Readers on relaunching Phl Inc. and savings

We give way to our readers once again. This time, we share two views: one comes from Willy Arcilla commenting on the Philippine economy as a whole and the other is from Cesar Ortiz on the efforts of a cooperative to champion savings in the country. Please read on.

Willy Arcilla writes: “Greetings and kudos for your sobering article on this subject. Allow me to chime in. The Philippine economy is a ‘leaky bucket.’

“The Philippines has been registering positive GDP growth for 77 consecutive quarters or nearly 20 years, yet poverty persists and income inequality continues to widen. Why? Because the Philippine economy is a ‘leaky bucket.’

“1. Trade deficit — The Philippines has been running a chronic and worsening trade deficit since gaining independence. As we know, every dollar of import makes our country poorer. We import virtually everything, from fuel and coal to rice and wheat flour, to milk and meat. From clothes and shoes to toys and housewares. From steel and aluminum, floor tiles and glass, to bathroom fixtures and furniture, appliances and electronics, from phones and computers to motorcycles and cars, commercial vans and heavy-duty trucks.

“2. Import-dependent exporters — As you pointed out, our biggest export is electronics, while our biggest import is also electronics, meaning we add little value in cheap labor.

“3. Except for a handful of exceptions in fastfood and pharmaceuticals, multinational companies and foreign brands continue to dominate — from food and beverage, to household and personal care — as our local firms have failed to invest in marketing and branding, notably in market research and innovation, talent recruitment, training and retention.

“4. Local firms import a substantial volume of raw and packaging materials for input to their locally manufactured products due to a lack of quality and quantity of raw materials from primary sectors like agriculture, fishery forestry. (There is) no modern packaging industry.

“5. The biggest leakage is the fact that our government purposely pursued a totally wrong strategy of exporting our best people instead of our best products. The true value of overseas Filipino workers (OFWs) is not in their annual remittances, but is reflected in the GDP of their host countries, the profit and loss (statements) of their foreign employers, and the tax collections of their governments.

“Besides, even if their remittances reach $30 billion, if we do the math and divide that by 15 million OFWs, we end up with only $2,000 per capita per year. (Dividing this) by 365 days and five members of the household is only $1.50 each.

“The Philippine economy’s business model is broken. It’s bad enough that we sell only to ourselves, it’s worse that businessmen and entrepreneurs sell to the poor Filipino masa, thus making the poor even poorer while enriching themselves at the expense of the poor. Worst of all, our businessmen don’t even buy from the poor, but from abroad.

“Furthermore, it’s bad enough that we don’t pay our local employees well, it’s worse because we blame them for not saving enough money. Worst of all, we goad them to borrow money through mobile and cashless banking. And we call that financial inclusion.

“In the US, labor is costly, but goods are affordable. In the Philippines, labor is cheap, but goods are costly. In China, where we lived for 10 years, everything local is cheap, while everything imported and foreign is costly. In the Philippines, local goods are even costlier than imports.

“The result: US is the superpower of the world, China is the super factory of the globe and the Philippines is the supermarket of the planet.

“The prescription: relaunch Philippines, Inc. consisting of a new and improved Philippines that is globally-competitive, not just locally-competitive; export-oriented, not import-dependent; with modernized farming, not traditional; industrial manufacturing not just assembly; and with innovative entrepreneurship not imitations.”

Helping the poor to save

This next one is from Cesar B. Ortiz, NP.

“Having started my advocacy on natural healing and poverty reduction a few years ago, I never cease to look for a good product for healing the sick using natural functional food supplement, as well as a sound program to help the poor in the countryside.

“As regards to alleviating poverty at the grassroots level, your quest for an entity to champion a savings revolution is just at arms length. This organization needs a push or support in terms of media mileage and exposure, including due recognition nationwide, and an official endorsement from the government.

“I am referring to a seven-year-old CDA registered cooperative, the Nutriwealth Multi-Purpose Cooperative Inc., with head office at Cubao, Quezon City.

“It is a unique cooperative doing extraordinary operation since it is focused on promoting financial literacy and long-term savings to its growing shareholders nationwide.

Facebook and Twitter

We are actively using two social networking websites to reach out more often and even interact with and engage our readers, friends and colleagues in the various areas of interest that I tackle in my column. Please like us at www.facebook.com and follow us at www.twitter.com/ReyGamboa.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at  HYPERLINK “mailto:[email protected]” [email protected]. For a compilation of previous articles, visit  HYPERLINK “http://www.BizlinksPhilippines.net” www.BizlinksPhilippines.net