‘Just do it . . . ’

Voice From A Brit

Mike Wootton

It has been said many times, that if you have money and power here in the Philippines, you can do just about anything, and in all probability get away with it. In development, there is no point bothering with applications for permits and gaining the approvals that the law says you need, that is for wimps; “Just Do It” and then there will be progress.

What an economy eh! In which to defy or ignore the law brings progress, to follow it delivers paralysis and financial loss. If you happen to be among the local elite, then a combination of power and connections, “support” disbursed into the right places and have the “name,” then the legions of petty and even not so petty bureaucrats are not going to bother you. In fact, you can make the most outrageous statements to them, such as “you’re not approving our project as the law demands, will inhibit our contract with the buyer in which case we will file an action against you.” Such apparently baseless threats by somebody who obviously has the money to pursue such a course of action, and in all likelihood succeed in a legal system which is also subject to influence, will make the bureaucrats at the very least pause for thought.

Problem is that foreign investors cannot do this. They usually expect to have to comply with laws and regulations, and even those who are not too fussy about that and have the money to “influence” lack the power and connections to allow them to just steam-roller their way through the rules, they would probably get caught out by the elite on whose territory they were “trespassing” or even by the bureaucrats, as well as losing their “influencing” money. Certainly, if it came to court they would have an excellent chance of losing any case and/or it would just drag on for years like the Fraport business.

So if you are the local elite, you don’t have to follow any rules, you just do it and development happens. There are not too many [of their] buildings which have been demolished after completion, because of lack of permits and approvals . . . 

That the Philippines is “Open for business” is an interesting statement. It is certainly open for people to spend money. Foreign investors can enter into exploration or pre-development contracts with abandon and commit to spending their risk money. The size of the risk is enormous, anything explored and proven which is worthwhile will be captured by the locals before any commercial activity takes place -another source of foreign capital has been well utilized by the Philippines. Whether or not the locals can or will do anything about it is of course quite another matter; there is a good chance they won’t actually take whatever it is forward, often they will just sit on it, waiting for somebody else to come along to whom they can “flip” the opportunity.

I get the feeling that the foreign investment community has now “wised up” to what being open for business actually means so far as the Philippines is concerned, and that there will not be too many shoppers coming along through the open door. Perhaps this is what the government and the elite want? Foreigners will take the investment risk thus stimulating development, and in doing so will allow government to claim foreign direct investment (FDI) inflows, professional pre-development work will be done at the expense of the foreign “experts,” and then whatever the opportunity may be can be picked up by local business and “developed by Filipinos” [or just left lying fallow until a flipping opportunity comes along as the case may be!].

Well, I suppose it is a strategy of sorts which can be sustained as long as there remain not too many pesos to the US dollar/euro, and the Philippine Stock Exchange continues to bounce around all over the place in a way that appeals to the “portfolio” foreign investment funds and supports the elite’s valuations of their businesses.

The Philippines business environment is a nightmare of highly questionable practice supported or at least facilitated by a red tape obsessed government, and a legal system which people simply don’t trust [and not without good reason!] . . .

Mike can be contacted at mawootton@gmail.com