It’s less than two days before the Philippines mid-term general elections.
The SNAFUs which the COMELEC is about to face has not even begun. Meanwhile, each of the candidates whether of Team Patay or UNA will try to distract the core issues.
So what if Loren did not declare her posh apartment, will you be truly any better off had Loren declared her pad in the Big Apple? I highly doubt that.
For all the government spending, the credit upgrades, the PSE index historic highs – mainstream Pinoy media are still left scratching their nut sac claiming that the Philippines jobless growth is a paradox. Nothing can be farther from the truth, the Philippine phenomenon of jobless growth is not a paradox – it’s the outcome of a flawed restrictive economic policy embedded in the Philippine constitution.
Rather than drown you with words– allow me to attempt to explain the phenomenon of Aquinomics with a set of six illustrations. Each of the succeeding illustrations build on the concepts presented in the prior diagram. Let’s start with the basics the economy – the market(s).
Under a free and open market suppliers and buyers exchange value for goods and services. Prices are a result of market equilibrium – a situation in which the supply of an item is exactly equal to its demand. Since there is neither surplus nor shortage in the market, price tends to remain stable in this situation. Companies are able to sustain staffing levels while meeting customer service levels and revenue targets. People have jobs and are able to afford the goods sold by the different companies.
When markets are regulated – buyers end up paying for the additional cost of regulation. Buyers choices become limited, the number of suppliers decrease – and buyers and suppliers alike have to pay more taxes to pay for the expenses of the government bureaucracy which will enforce the regulations. As companies decrease, jobs decrease – and the incidence of poverty and joblessness increase.
Markets in the Philippines are not only regulated – but they are also protected. Meaning – only Filipino businesses or majority-Filipino firms are allowed to do business in the Philippines. By eliminating foreign participation in the market – only few Filipino businesses are left to serve the large number of buyers – using a limited workforce – leading to optimal profit margins. Since there are only few businesses and lots of people looking for jobs – joblessness is high, ergo – poverty is widespread.
From that model of a protected Philippine market, replicate and apply the model to the different segments and industries – which in its totality, make up the Philippine economy. The model is applicable to agriculture, telecom, education, health, tourism, trade, banking, and real estate. To keep the jobless and poor from becoming restive – government raises taxes to subsidize those who became poor (no thanks to government regulations and government protection of local businesses which reduced the job creating capacity of the Philippine economy).
All the protected Filipino companies who monopolize the Philippine economy operate the Philippine Stock Exchange. Foreign investors are not allowed by law to compete against the Filipino companies – foreigners can only invest into or withdraw money from the coffers of the protected Filipino companies. The cluey, of course know that there is a big difference between portfolio investments aka hot money (in one day, out another) and money used as operating capital for payroll, office supplies, construction and marketing.
With the capital infusion from the financial capital markets the Filipino companies then meet if not exceed their revenue goals – but are not in any way under pressure from competition to upgrade their capacity to deliver superior customer service. Facilities are not replaced or expanded – but are maintained to the end of product life.
Staffing levels therefore, remained stagnant while capital infusions from global financial markets drove growth upwards.
Continuing this state of affairs means persistent poverty for the citizenry, corruption in government, and revenue for cronies – the faces and numbers may change but the song will remain the same.
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