Why is the Philippine economy losing out on investments to Vietnam, Thailand, South Korea, Singapore, Malaysia, Indonesia
Is it:
1 – 60/40 Restrictions
2. – Presidential System of Government
3 – Unitary Form of government
4 – Filipino Culture
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I wonder what sort of questions Vilfredo Pareto will ask to come to a conclusion. To those who are not familiar with Pareto, here’s the skinny:
In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth. In the late 1940s, Dr. Joseph M. Juran inaccurately attributed the 80/20 Rule to Pareto, calling it Pareto’s Principle. While it may be misnamed, Pareto’s Principle or Pareto’s Law as it is sometimes called, can be a very effective tool to help you manage effectively.
Anecdotes on the “Vital Few” and the “Useful Many”
In an AP Crowd Discussion thread on Pareto as applied to the Philippines, the following comments were made:
Lea Salonga:
I had dinner with a bunch of people a few years ago, one of whom was a Chinese businessman who swore to never do business again in the Philippines. He didn’t mention the constitution, but he did talk about how difficult it is because of all the red tape he’d have to go through to get things done.
Paul Farol:
In the foreign missions I had documented at the time when APEC thing was at its height, businessmen and economic leaders were more concerned with economic policies. So I guess 60/40 would be the answer here.
Think about it – we can be the most culturally perfect specimen – but if our economic policy sucks – do we seriously think we’ll land a job or there are companies who can meet the needs of the world perfect cultural specimen – macbook, iphone, vacation cruise, pension plan, profit sharing, vision+dental+medical plan? Or will there be greater access to a variety of capital – local or foreign? Should we settle for being “local” just so we can show the cultural purity of the Filipino? Heavens to megatroid
We have been on this road before – South Korea vs North Korea; East Germany vs West Germany; China (before and after Deng Xiaoping); – and still we persist on the trivial solutions which don’t do JACK – Beating a dead horse talaga oo. 
We can have a parliamentary system now – but without econ lib – do we seriously think the economy will improve and the job scene will improve?
We can have a federal system now – but without econ lib – do we really think the economy will improve and we’ll have job-providers rushing to NAIA hellport.
Can we have econlib without federal and parliamentary? Will the economy improve and will there be job providers? Think China one-party state – no change in political framework but change in economic policy – culture being equal.
We can have cultural change now – but without econ lib – do we think the economy will improve and we’ll have a better quality of life? Mao tried the cultural revolution – remember? Perhaps for those who have gatas sa labi – don’t recall that moment of history – and are doomed to following the “great leap forward” of the “cultural revolution” which sent China…. backward. Simpletons have it so easy. 
Of course, culture is still important – but what aspects of culture exactly? One needs to be more specific as there are cultural traits that need to be evaluated for retention or for disposal. After all, having a wimpy attitude that perennially begs for protection can translate into a protectionist national policy that in the long term works against the person being “protected”. The economic “protection” makes the Philippines less attractive to people who can provide jobs. You can be the most spic and span, timely, completely master English, have an Ivy League degree and still no J.O.B. – live off your in-laws or your spouse. Imho, within the framework of national economic policy – cultural reform falls under the category of the “useful many”.
The categories in the “tail” of the Pareto chart used to be called the “trivial many” or the insignificant factors. Dr. Juran later preferred to call them the “useful many”. They deserve at least a quick look. For example, what if one of these “useful many” factors contributed to only 3% of the problems, but it was so simple you could solve it immediately at practically zero cost? That is called a “just do it”.
Cultural reform is one of those things that are within an individual’s control. And that’s the most common of middle class takes. It’s an improvement on the apathy of the masses in the sense that there is an attempt at reform. Is it enough from a public economic policy perspective? 
Isn’t that fiddling while Rome burns?
Reality and Idealism – Scoping out the Constitutional Reform Agenda
My proposition as far as Constitutional Reform is concerned is to stick to a SINGLE SALES OBJECTIVE, to focus on ONE SOLID VALUE PROPOSITION – Economic liberalization.. PERIOD.
I agree that a more comprehensive agenda is good but that tactically – it is full of landmines. Having three propositions in one package is too much to handle for the common tao. Heckling the common tao also gets tired as people can just pick up a dagger and just plunge it in your jugular just because they got pissed with their antics – NPA, Ampatuan, Dacer – the list goes on and on.
As consti reform involves the constitution you will have to engage and collaborate with the whole spectrum of political orientations and ideological views. Indeed when the question of parliamentary reform was raised – this time the monkey wrench is no longer Gloria but on the terms of the current congressmen – that’s a RED FLAG.
The issue with both parliamentary and federal is that there is still a lot of work that needs to be done in refining a more or less working model – and to get the buy-in of the power brokers in Congress who are in competition with their fellow trapos. Same goes for federalism – the boundaries of the states that will make up the federation have not been fully delineated yet. That’s going to be very contentious and divisive.The oligarchy can throw a monkey wrench – and the masa, ignorant as they are will bundle the 60/40 with the fuzzy federal and parliamentary issues – and we are back to the starting line.
Thus I prefer just one agenda – economic liberalization – remove the 60/40 – it can be done faster via people’s initiative – after all a lot of the politicians are already in agreement in letting the 60/40 go. It’s already a huge undertaking with one issue – having three moving parts causes drag. A 3 point agenda is too big a sea change – from a tactical political view -it’s a doomed proposition.
In another discussion, Paul Farol confirmed:
validate ko na sa Bagumbayan ground leaders (the people who actually interface with the local kingpins and politicians), ang tanong nila eh kung sino ba ang magiging MP sa mga lugar nila kung parliamentary ang government?
Sabi ng isa, “Yari tayo sa Ilokos Sur, si Singson magiging MP!” Siguro sa mga probinsya na may magagaling na lider, papatok ang parliamentary.. Ilan iyon vs. ilang probinsya ang bugok ang mga lider?
Kapag trabaho at pera – who doesn’t want extra cash in their wallet? – NOBODY. 
This now boils down to numbers – don’t get mad at oligarchy – get even – remove the restrictions which allow them to gain the upper-hand. The local oligarchy are big fish in a small pond. Let big fishes compete and cut each other to size. Or, we increase the size of the pond – so that not only big fishes survive but all kinds of fish – big and small – fair play baga – - we all win.
We have better chances at pushing the 60/40 because people can relate to economics. The masses are not comfortable in outright discussing issues of political restructuring or geographical realignments – at this point.. therefore strategically, am inclined to do a
Round 1 – 60/40… Quick Fast Sell
Round 2 – Federal Parliamentary will be contingent on economic performance – money changes everything.
People’s quality of lives may have improved that they opt out of Round 2 – but that’s another story
Gotta get the gelato after the Pareto. Later y’all.
this article is anti-constitution and anti-filipino! what part of “tangkilikin ang sariling atin” don’t you understand?
di na kailangan amendahan yan dahil, kahit ano man ang mangyari.. WE ARE STILL THE SUPERIOR RACE AND DA BEST PA RIN TAYO! WOO! PROUD TO BE PINOY!
PACQUIAO FOR PRESIDENT!
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theoloniousfunk Reply:
May 15th, 2011 at 3:52 pm
If Manny Pacquiao thinks Pareto is the next Mexican contender lined up to fight him, then we’re ****ed as a nation should he run for President.
Besides, Pinoys are themselves members of the Malay race, so stop gloating over your “Pinoy Pride”.
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man, the Pareto Principle also applies to the Philippine Government on which areas should they focus first. Heck, they have too many things at hand right now that up until now they haven’t even started on economic reforms, still grandstanding on political issues, and the people are still sucking up on Willie et. al.
If they really follow Pareto Principle, then they should focus on 20% of those issues first, starting with that 60/40 restriction to attract investors.
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I was introduced with the Pareto Analysis; when I was working in the Auto Manufacturing Industry. Its was used to determine the % of non-conforming parts (scraps), from the good parts in the manufacturing process….it was a good analytical tool for quality assurance in manufacturing process…
Few Business people will invest in our country because:
1) It is politically unstable.
2) The Oligarchs and the Hacienda Luisita Mafia have monopolized the business atmosphere. Their grip is tight on the economy.
3) The Brains of our country are almost all working in foreign countries.
4) The country’s technology is a century backward, compared to any advanced country.
5) We are still a Feudal-Oligarchy/Theocracy country…
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Aaaah, kaya pala di na nagtatrabaho si BS Aquino eh, cos he only needs 20% of his time for work, 80% for riding his porsche
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80/20 principle
20% goes to work
80% goes go siestas and fiestas
no wonder we’re behind.
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