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Rant: Despair and Hopelessness

This weekend I had the chance to do a Google+ hangout with my father in the Philippines. He and I don't talk often but we do have a very good relationship. My dad is cool like that. In this hangout we talked about a few things happening in the Philippines and I've gotten the feeling that my homeland is getting ever deeper into economic disrepair, and that the politics to which I've come to be hopeless on is beyond repair. I've wanted to get something off my chest that's been bothering me for a while now, so if you would indulge me please read on.


I grew up in a part of the Philippines where the land is fertile, there are thriving industries, and there's a certain sense of abundance and stability. This part of the Philippines has good schools, good employment opportunities (mostly industrial and service industries), good investment opportunities (real-estate and agricultural), and good potential for growth. This was true when I was young and this is true even now. My family is pretty well off and could afford to get me quality education -- for which I was thankful for.

My father is a businessman who runs a retail rice dealership even before I was born (more than 30 years). It's one of the few businesses our family runs. That business has provided for my education and eventual emancipation as I pursued a career in computer science. I forever will be indebted to rice retail as it holds a significant part of my heart.

Past Experience

While I was still in the Philippines and just starting in my career -- around 2005 -- there was a sense of economic fluency in the IT industry. People were setting up outsourcing companies to service offshore clientele and I was very fortunate to meet and be friends with awesome tech startup founders (Orange and Bronze Software Labs and more recently Codeflux, Inc.). It was boomtown if you were in the IT or outsource industry and getting in on the ground floor (so to speak). It wasn't the same with other industries around the Philippines.

It was around this time that inflation started coming up and when 2007 came around the global financial crisis hit. At this time I was fortunate to be working at Friendster building a team in the Philippines. The fast dropping value of the peso and the slow dropping value of the US dollar meant that Friendster and other companies can afford to ride the turndown and still ramp up their teams in the Philippines. Call centers were booming as US-based operations started closing down and capacity from India wasn't able to fill the demand. It wasn't all rosy though, commodities markets were being cornered by China's manufacturing, their surplus exports were flooding the market with cheap goods both perishable and non-perishable. Local production in the Philippines was being devastated by lack of actual growth in the local economy and the rising cost of living.

Current State

Fast forward 5 years or so and every major south east asian economy is on the upswing following the exit from the global financial crisis. What's changed in the five years is that the local IT industry in the Philippines has somewhat grown up and entrepreneurs have realised that they can start competing with every other startup in the world. Globalisation has arrived to the local economy in the Philippines in terms of media (the entertainment industry is now reaching more places than ever before) and ICT (telecom giants are now part of multi-national conglomerates, startups punching above their weight being set up in the Philippines).

The biggest missing piece is original innovation. Every other country in south east Asia is a major force to be reckoned with -- Malaysia has a booming oil industry, unstoppable growth, seemingly never-ending infrastructure development, and a strong local economy; Indonesia's retail industry is amazing; Singapore has become another major international trade hub; Australia (if you count it as part of South East Asia) is just beginning to become a major player in global trade in terms of ICT among other things (the mining industry and close ties with China are helping a lot for international and local trade). The Philippines? Let me think.

We don't have a local vehicle manufacturer -- all vehicles on the road in the Philippines was produced somewhere else (jeepneys have engines imported from japanese manufacturers, metals are not locally sourced). We don't have our own locally developed and competitive industrial-scale agricultural produce that's not owned by a multinational company. Virtually no technology is practically invented in the Philippines. Our biggest local industry is retail (malls are very lucrative) and even if it expands to other countries only the 1% of Filipinos get to benefit.

Virtually 90% of the population do not invest in the local economy. The underground economy eludes taxation and typically generates majority of internal trade. Any investment you make is at risk of being defaulted on (if you buy private bonds) or failing (if you buy equity) and the risks are most of the time not worth the returns. Political instability and protectionist policies scare foreign investment. Even I, a citizen living in another country, feel like any investment I make now is no worse than me gambling on the results of a footy game or a horse race here in Australia (sometimes I even feel more secure in doing that compared to investing in the Philippines).

The Future

Given all this, I have a very grim outlook at the chances of the Philippines of turning it around. I know this is hard to say as a proud Filipino but I feel I have to say it.

I've been thinking about this a lot because in the next 10 years I want to be able to assess really how I can help the Philippines in my own way. I've always held the belief that the Philippines is well positioned to be able to compete in the global arena and that the way to do it is by levelling up the industries in the Philippines. A 100 million strong population (and something like 110 million in 10 years) should be an asset to be developed. There are industries that can be built in the Philippines that can leverage these massive numbers and they don't all have to be in Manila. There are local problems that need local solutions that also translate to global settings and I'm positive it's just a matter of the right investments and building the right structures to support them.

It's hard to see how the current political climate will be conducive to actual serious nation building though. I don't even want to say anything about the people in government because I don't have a horse in that race. I believe that it doesn't matter who you put in government but that if you have the right systems in place then you have a better chance of making a real difference. I don't believe in the "hope" strategy where you educate children and hope they grow up to become better people. Putting hope in the government and its policies though is also the wrong way to go about it.

The solutions will be multi-party and should be synergistic. I understand that government intervention and regulation is necessary to some degree but that cooperation between the government and the private sector should yield benefits for all. There's a lot of things to be said about politics when it doesn't work but when it does work quarrels over the details would be for mere entertainment.

My Hope

There's very little I can do now but hope that in 10 years time helping out in the development of the Philippines should be possible. I'm aware that my investments today will be helpful to some degree but I'd rather do my homework in these coming years. I'm learning a lot now and I intend to keep learning and observing so that maybe someday I can help in a meaningful way.

At my current state, whatever investment and risks I can take will be mere nickel-and-dime endeavours. Maybe that will help but I'm not sure pennies can be grown to bills enough to make a significant impact. There's 100 million people in the Philippines today and building up industries for the benefit of even just 10% (that's 10 million people) would be a huge benefit.

My other hope is that the entrepreneurs who are starting the businesses in the Philippines think about what opportunities there are that will leverage the population, solve local problems, and in day 1 compete in the global arena. Sure it will require investments and it will take on a lot of risk. If you set your sights high enough and commit enough to making your endeavour a success, then taking on investment should not be harder than it normally is. Think about growing the whole market instead of just growing your own business. If your intentions are pure, your vision is clear, your commitment is evident, and you are worthy of trust -- good people will help you achieve your goals.

I look forward to that day 10 years from now when I can say "yes, I will invest in you because your vision will affect potentially 10 million Filipino lives". Until that day, I lay in wait ever so helpless and desperate.


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