In the judgment seat of the Lord we will be made accountable for our deeds here on Earth, including our behavior as stewards of this temple of the God. What will the Lord say about how we celebrate Christmas and the New Year?
I bet God wouldn’t be so happy about it—I mean the way we binge, waste fossil fuel through traffic congestion, produce tons of solid waste from gift wrappers, and generate tons of harmful smog and smoke as we shoot fireworks. But is there really a sustainable way to celebrate the holidays? The answer is yes.
1. We can reduce wastes by giving gifts minus the packaging or wrappers. That way we can also save money. The recipients will surely understand if we just explain the principle behind it.
2. Send “virtual” gifts, e-cards, and e-mails. Electronic cards are free. That way, you don’t have to spend money. I received a lot of e-cards since November and I’m happy about it. Some of us really don’t need stuff; only the idea that a friend thinks about us in this season of giving and cheer. During a friend’s birthday, I gave 300 pesos worth of text messaging load or credits by just texting him the call card number and the PIN code.
3. Use the internet to connect with friends. With the advent of broadband, we don’t need to drive to a friend’s or relative’s house. We can always do teleconference or e-chat. Or we can send a text message. The yahoo messenger is an excellent vehicle for this. No driving means less traffic congestion, less burning of fossil fuel, less emission of ozone-depleting substances.
4. Do car pooling. If you really have to go somewhere, do carpooling or use public transport. That way, you lessen gas consumption as well as traffic congestion.
5. Don’t shoot fireworks. Just bang pots and pans to welcome the New Year. Or shout if you will.
Happy New Year to All!
Thursday, December 29, 2005
Wednesday, December 28, 2005
Friendships Without Borders
Recently I got an email from Aor Buaklee, a charming lady from Thailand, telling me that Esther is going to visit her in Chiangmai in April next year. She also extended her invitation to me but I couldn’t yet figure out where to get the funds. But who knows? Hope springs eternal. (Aor Buaklee is second from left in the first picture; the first one is Esther.)Esther, Aor and me got a bit closer during the International Visitors Program in the US. Maybe it has something to do with geography. About two dozen typhoons usually visit the Philippines each year. Esther has noticed that those typhoons would normally proceed to ravage Taiwan after leaving a trail of destruction in the Philippines. “We have something in common,” said Esther, who currently works as reporter of the United Daily News in Taiwan.
I guess my fascination with Thai history, Thai food, Muay Thai, and the mighty Mekong River brought me closer to Aor. We always talk about all these things during the program. Thai history is rich and colorful, just like their cuisine. And boy! Aor turned out to be an excellent cook. Esther and me one night cobbled together some vegetables, spices, eggs, processed meat, and wine and brought them to Aor’s room. In just about an hour or two, we have a fantastic Thai dinner comprising four different kinds of food, including some reprocessed leftovers from the other night’s dinner in a restaurant a few blocks from the One Washington Circle Hotel. Thai food is practically vegetable-based, maybe the reason for Aor’s svelte figure.
Tuesday, December 27, 2005
Journalism: Vocation Sans Vow of Celibacy!
One thing I’m thankful for about 2005 is the International Visitors Program where I had the opportunity to visit the United States. Call it serendipity. I really didn’t expect to be chosen for that program. It came at a time when I was wondering whether or not I should continue doing journalism. I was already doing short-term consulting for some international organizations when I got a call from the US embassy. The question was simple: Was I interested to go to the US? If the answer is yes, then I had to see Marilou at the embassy for initial briefing. I said yes, and the rest is history.The program was fantastic both from educational and cultural point of view. I was able to clarify a lot of my preconceived notions about the Americans. Most of all, I gained a lot of friends from across the borders whom until now I continue to exchange messages with. I also learned a lot from their cultures, their ways, and their perspectives about the world.
Ah, journalism—I thought I knew every thing about how is it to be a “journalist.” Like, we always assume that all journalists smoke because of the daily pressures of work, love, and living. Supposedly, smoking is a tension reliever, besides being a badge of “cool.” And holy smoke! I learned during the first day (September 14) that only one of us from all over the world—Asia, Eastern Europe, Latin America, Middle East, and Africa—was smoking. She is the lady with a very beautiful name—Reem Khalifa (third person from left in picture number 3), a lady journalist from Bahrain. (Reem means "Arabian antelope." Isn’t that beautiful?) A few days after, she told me she decided to quit smoking. She said she needs to maintain good health for the sake of her beloved son. Nice mom, I thought. Are we a representative of the world’s journalism profession? If the answer is yes, then the world is indeed changing for the better.
On the way to the Los Angeles airport after the program (October 6), I shared the van with Rolando Barbano from Argentina. I could sense that Rolando was still sleepy from the night’s partying (somewhere in Malibu?), but we had an animated conversation about the life of journalists. It seems that journalists all over the world—we agreed—are underpaid. “This profession is really a vocation,” Rolando (the first person from left, picture number 3) said.
“Yes, like priesthood,” I replied. “But at least, we don’t have to observe a vow of celibacy!”
We burst with laughter as I disembarked for Gate # 2 (Was it number 2?).
“Keep in touch,” said Rolando.
“Sure,” I answered. “Keep in touch.”
Monday, December 26, 2005
Don’t kill the goose that lays the golden eggs!
Recently, industrialist Raul Concepcion urged the government to reduce or remove the fiscal incentives being enjoyed by the country’s business process outsourcing (BPO) companies, including call centers, to help address the country’s fiscal problem. We share Mr. Concepcion’s concern for solving the fiscal crisis because it’s the only way the country could get good sovereign ratings. It’s the only way the government and the private sector could have access to much-needed international money at favorable rates. Nevertheless, I think doing so by penalizing the BPOs is the wrong way to go.
Taking away the BPO’s perks is like killing the goose that lays the golden eggs. Besides the rising remittances by the country’s overseas workers, outsourcing these days is the only industry that are keeping the economy afloat and providing jobs to thousands of young Filipinos. Because of bad weather, the country’s farm sector has not been doing better in the last three quarters. Our industry sector has been doing relatively well but they are not hiring more workers probably in their efforts to maximize current manpower and computerize to improve efficiency. The country’s export sector, particularly the electronics industry, is suffering from low growth so exporters simply do not have the incentive to expand payroll. But in the last five years, the call centers have been doing the country a great service by hiring 365 days a year. And it has been generating a lot of jobs in other services sectors as well including banking, real estate, wholesale and retail, transportation, food manufacturing, and other urban-oriented services. Why penalize success especially that this industry is the only ones we could be proud of right now?
The Board of Investments (BOI) says the BPO industry, also called “information technology and information technology-enabled services (ITES), now employs about 141,762 people, of which 80,000 are into call centers. The BOI expects the BPO jobs to expand to 640,157 by the year 2010. From P12 billion this year, the BOI said investments into the sector would reach P44.7 billion by 2010 and export revenues to reach US$6.4 billion from this year’s US$2 billion. That this industry emerged during the time when the country’s politics is in its most volatile period speaks highly of the dynamic character, the efficiency, and the resiliency of this industry. Why should we shoot ourselves further in the foot?
Outsourcing has a strong social equity angle. Contrary to popular perceptions, workers in the call centers and other outsourcing business come from lower middle or even poorer classes in society. If you kill outsourcing by taxing it or by lessening its viability, you also kill the hopes and dreams of these young people, more than half of whom are actually breadwinners. Yes, they have this nice Americanized accent but most of them are actually sons and daughters of people from the poorer segments of our society, mostly struggling professionals like underpaid teachers. The kids from rich families sometimes try their hands at call centers but most of them could not take the pressures of a job whose function include getting yelled at by some distant voices from some unknown parts of the earth.
We really don’t know much about this industry. Everybody seems to assume that outsourcing is out there growing fast and it’s transforming the country’s economy. Yet, even until this time the number crunchers at the National Statistical Coordination Board could not seem to figure out the industry’s contribution to the country’s gross domestic product. Any effort to raise taxes on this industry therefore would have unknown, uncertain, and probably counterproductive results.
Maybe Mr. Concepcion was calling for reforms in the country’s fiscal incentive system so that we could generate more revenues to fund economic development. We share his concern. The best way to achieve this end is not taxing outsourcing but rationalizing the granting of incentives. In the last several decades, the country’ policy makers have produced several hundreds of laws and rules from which investors could draw fiscal perks from. I suspect a lot of these investors are actually engaged in “double dipping” or getting perks from several agencies and laws for a single project.
Recent estimates from the Department of Finance indicates that the country is losing about P300 billion each year from foregone revenues because of this big loophole. Right now, there are several agencies—e.g. Board of Investments, Philippine Export Zone Authority, Clark Development Corporation, Subic Bay Metropolitan Authority, and the Phividec Industrial Authority— granting fiscal perks using different criteria. I suspect that these gargantuan powers being welded by unelected bureaucrats manning these agencies are being abused for ends other than that of the national interest. The process of granting of these incentives is not transparent and the agencies giving them do not seem to have any record or report of their monitoring activities whether or not the terms for which the incentives are given are being observed properly. Therefore, if there’s something that the country’s legislators should really do something about as soon as possible, it’s this system that seems to have institutionalized corruption and rent-seeking in the country’s bureaucracy.
Because the granting of fiscal incentives always carries with it opportunities for corruption, i believe that—under ideal condition—the country should rather abolish totally all fiscal incentives and it replace them with a very low corporate tax, say 15 percent instead of the current 35 percent. The assumption for a low corporate tax policy, however, is the presence of adequate economic and social infrastructure. Since we can’t put the required infrastructure overnight, the second best policy could be rationalizing the country’s fiscal incentives laws.
Congress is doing something about this. But because of the country’s pre-occupation with the “Hello, Garci” controversy (election cheating), fertilizer scam, and other political issues, reforming the country’s fiscal incentives system will probably take some time. While Congress is still undergoing the process, the best thing each one can do vis-à-vis the outsourcing industry is observe the Hippocratic Oath: Do no harm!
Taking away the BPO’s perks is like killing the goose that lays the golden eggs. Besides the rising remittances by the country’s overseas workers, outsourcing these days is the only industry that are keeping the economy afloat and providing jobs to thousands of young Filipinos. Because of bad weather, the country’s farm sector has not been doing better in the last three quarters. Our industry sector has been doing relatively well but they are not hiring more workers probably in their efforts to maximize current manpower and computerize to improve efficiency. The country’s export sector, particularly the electronics industry, is suffering from low growth so exporters simply do not have the incentive to expand payroll. But in the last five years, the call centers have been doing the country a great service by hiring 365 days a year. And it has been generating a lot of jobs in other services sectors as well including banking, real estate, wholesale and retail, transportation, food manufacturing, and other urban-oriented services. Why penalize success especially that this industry is the only ones we could be proud of right now?
The Board of Investments (BOI) says the BPO industry, also called “information technology and information technology-enabled services (ITES), now employs about 141,762 people, of which 80,000 are into call centers. The BOI expects the BPO jobs to expand to 640,157 by the year 2010. From P12 billion this year, the BOI said investments into the sector would reach P44.7 billion by 2010 and export revenues to reach US$6.4 billion from this year’s US$2 billion. That this industry emerged during the time when the country’s politics is in its most volatile period speaks highly of the dynamic character, the efficiency, and the resiliency of this industry. Why should we shoot ourselves further in the foot?
Outsourcing has a strong social equity angle. Contrary to popular perceptions, workers in the call centers and other outsourcing business come from lower middle or even poorer classes in society. If you kill outsourcing by taxing it or by lessening its viability, you also kill the hopes and dreams of these young people, more than half of whom are actually breadwinners. Yes, they have this nice Americanized accent but most of them are actually sons and daughters of people from the poorer segments of our society, mostly struggling professionals like underpaid teachers. The kids from rich families sometimes try their hands at call centers but most of them could not take the pressures of a job whose function include getting yelled at by some distant voices from some unknown parts of the earth.
We really don’t know much about this industry. Everybody seems to assume that outsourcing is out there growing fast and it’s transforming the country’s economy. Yet, even until this time the number crunchers at the National Statistical Coordination Board could not seem to figure out the industry’s contribution to the country’s gross domestic product. Any effort to raise taxes on this industry therefore would have unknown, uncertain, and probably counterproductive results.
Maybe Mr. Concepcion was calling for reforms in the country’s fiscal incentive system so that we could generate more revenues to fund economic development. We share his concern. The best way to achieve this end is not taxing outsourcing but rationalizing the granting of incentives. In the last several decades, the country’ policy makers have produced several hundreds of laws and rules from which investors could draw fiscal perks from. I suspect a lot of these investors are actually engaged in “double dipping” or getting perks from several agencies and laws for a single project.
Recent estimates from the Department of Finance indicates that the country is losing about P300 billion each year from foregone revenues because of this big loophole. Right now, there are several agencies—e.g. Board of Investments, Philippine Export Zone Authority, Clark Development Corporation, Subic Bay Metropolitan Authority, and the Phividec Industrial Authority— granting fiscal perks using different criteria. I suspect that these gargantuan powers being welded by unelected bureaucrats manning these agencies are being abused for ends other than that of the national interest. The process of granting of these incentives is not transparent and the agencies giving them do not seem to have any record or report of their monitoring activities whether or not the terms for which the incentives are given are being observed properly. Therefore, if there’s something that the country’s legislators should really do something about as soon as possible, it’s this system that seems to have institutionalized corruption and rent-seeking in the country’s bureaucracy.
Because the granting of fiscal incentives always carries with it opportunities for corruption, i believe that—under ideal condition—the country should rather abolish totally all fiscal incentives and it replace them with a very low corporate tax, say 15 percent instead of the current 35 percent. The assumption for a low corporate tax policy, however, is the presence of adequate economic and social infrastructure. Since we can’t put the required infrastructure overnight, the second best policy could be rationalizing the country’s fiscal incentives laws.
Congress is doing something about this. But because of the country’s pre-occupation with the “Hello, Garci” controversy (election cheating), fertilizer scam, and other political issues, reforming the country’s fiscal incentives system will probably take some time. While Congress is still undergoing the process, the best thing each one can do vis-à-vis the outsourcing industry is observe the Hippocratic Oath: Do no harm!
Sunday, December 25, 2005
Prospects of Business Process Outsourcing in the Philippines
(In the last few weeks, I did a little research on business process outsourcing in the Philippines for my newspaper, The BusinessMirror. Let me share you some of the results. Comments are welcome.)
Nine o’clock night time is probably when most city dwellers are safely home with their families after a day’s toil. For Marky Rondeal (23), Jewel Gumiran (25), and Lariza Cruz (27), however, the day has just begun. They are call center agents of Client Logic based in Emerald Avenue in Ortigas, answering calls from Americans several thousand miles away, helping them with their daily concerns ranging from payable bills and technical problems regarding electronic gadgets, attending to their queries as well as complaints about products and services until six in the morning the following day. For these efforts, they get a net of P16,000 (US$291) each month, an amount that includes night differentials as well as rice and transportation allowances.
“When I applied for this job, it’s all about the big pay. Now I know that by doing this, I actually help people. That makes me feel good,” says Rondeal. He said he used to work as computer technician after finishing a vocational training from AMA Computer College with a monthly take of P6,000 (US$109). After learning that call centers pay better, he quit and went on to join Client Logic. He has no regrets. Besides the “big pay,” he feels he is now a better man, a confident professional who “knows how to talk to people and help solve their problems.”
For P8,000 (US$145) a month, Gumiran used to tell radio listeners about vehicular traffic during rush hours. Now she is getting a higher pay that affords her more money to buy milk and diapers for her two-year old son, new clothes for herself, and occasional dine-outs with friends. She said she lives with her mom because she still can’t go it all alone financially but feels that her life has improved since she started doing call center since 2003.
“We [call center agents] can buy more things than those who do day jobs. We could meet our needs or finance our lives,” she said. She hopes that her application to be become a trainer will get the nod of her bosses soon. “I expect to stay in this business for long.”
For her part, Cruz—a former high school biology teacher—says she is saving a significant part of her pay for graduate studies, probably an MBA. “I have to save up for that.”
Outsourcing mushrooms
Numbering around 106 companies and still counting, call centers are among the fastest growing segment of a new industry in the Philippines called the “business process outsourcing.” According to Mitchell Locsin, president of the Business Processing Association Philippines (BPA/P), this rising industry includes voice outsourcing or call centers call centers and non-voice including software development, animation, medical transcription, engineering design, and back office processing and shared services. Locsin says that BPO is expected to generate about US$ 2 billion this year, owing to a double digit growth in investments in many of these sectors. Investments in call centers alone have been rising at an average of 70 percent each year since the last five years.
Locsin could not exactly trace the historical origins of these business sectors, but he said that the entire industry became prominent in the last five years. His organization BPA/P was organized only two years ago at the urging of then Trade and Industry secretary, now senator, Mar Roxas to ensure the industry’s sustainability.
“It’s hard to say when BPO started but the boom was felt since 2000,” says Locsin. “However, we have companies that have been here since 96. Hanna Barbera [an animation company] is here since the last 20 years. Chevron was here since 96 but 2000 was the year when the industry’s growth really accelerated.”
Jeanette S. Carillo, assistant chief of the information and communications technology division of the Board of Investments (BOI) says the BPO industry, also called “information technology and information technology-enabled services (ITES), now employs about 141,762 people, of which 80,000 are into call centers. Carillo expects the BPO jobs to expand to reach 640,157 by the year 2010. From P12 billion this year, Carillo also expects investments into the sector to reach P44.7 billion by 2010. She expects the industry’s export revenues to reach US$6.4 billion from this year’s US$2 billion.
Great labor pool
People attribute the sudden emergence of the BPO industry to several factors.
Ramon Isberto, head of the public affairs group of the Philippine Long Distance Telephone Company (PLDT) and Smart Communications says the rapid expansion of BPO could be explained by the greater availability of broadband services all over the country. Besides PLDT and Smart, the Ayala Group through Globe Telecom has been rolling out fast broadband as well as Wi-Fi services in major cities in response to growing demand for high-speed Internet connectivity thus making its easier for investors to set-up BPO operations.
By February, Dell Computer—a US$54 billion global technology company—will start its own call center operations in the Mall of Asia in Pasay to serve its American clients. Dagoberto Quintana, vice president of Dell International Services who oversees Dell’s 30 call centers across the United States, Asia, and Europe says his firm will hire 700 call center agents for its Philippine operations.
“Like anyone else we are interested where there is a great labor pool and a competitive market. The Philippines is one of those locations,” says Quintana. “We look forward for excellent English skills, we look for people that are customer-centric in their thinking, and can provide great customer service and we look for folks that can do problem solving. We do analysis all over the world all the time and this is a good location to add to our global network.”
Danilo Sebastian Reyes, country manager of the ClientLogic, another global outsourcing firm, further explains: “Customer service is one of our niches because Filipinos are really customer service-oriented. In the call center, we have a distinct advantage. We are not far behind in technical support because we have capable and able graduates in computer science and engineering. Definitely, we are also strong on the back office processing because we have lots of accounting graduates that are required for types of work that include accounting, auditing, and insurance.”
ClientLogic’s BPO operations spans the globe particularly in the US, Asia, and Africa. Besides Ortigas, ClientLogic also has call center operations in Baguio. Caroline Go, the firm’s employee and corporate relations manager, says ClientLogic will soon go into the fast-growing medical transcription business.
Recently, neoIT, a California-based outsourcing and IT consulting firm which has recently set up shop here in the Philippines at the Pacific Star Building (Gil Puyat, Makati) tried to quantify the attractiveness of various countries for BPO services in paper entitled “Mapping Offshore Markets Update 2005.” The study considered several variables in their ranking namely financial benefit (e.g. cost advantage including labor cost); service maturity (e.g. competency of suppliers, industry size); people (e.g. labor pool and skill, language proficiency, educational system); infrastructure (e.g. ICT and physical infrastructure); and catalyst (e.g. government support, geopolitical environment, culture, time zone). The results: India came at the top and the Philippines came a close second. Other top ten countries include Poland, Ireland, Canada, Mexico, Czech Republic, Malaysia, China, and Hungary.
Transforming the urban landscape
If BPO industry is changing the lives of people like Marky Rondeal and Jewel Gumiran, the BPO business has started to change the urban landscape as well as the Philippine economy.
Several years ago, places like Emerald Avenue in Ortigas, Paseo de Roxas and Ayala Avenue in Makati, the Gil Puyat corner Ayala also in Makati; and the Alabang-Zapote Road are practically dead after the office workers left for home. These days, these places are teeming with people, mostly in their 20s and 30s, who are going to their night shifts. These places are night time oases for taxi drivers who usually get more money ferrying in and out call center workers.
Ortigas area is an interesting case. Besides ClientLogic, this place is also home to famous BPO companies like Ambergris, Contact Point, Convergys, Cylynx, ePacific Global Contact, HelloPNI, Influent, NuComm Intenational, HelloCorp, TelePhilippines, and Vertex. These days, the streets in the said place never sleeps as many restaurants, cafes like Figaro and Starbucks, convenience stores (e.g. Mini Stop and Seven Eleven) and fastfood stores like Jollibee are open 24 hours each day to cater to the needs to call center agents.
The same scene could be observed in Eastwood Cyberpark in Libis, Quezon City. East wood is hosts to outsourcing operations of Citibank, IBM, Trend Micro, Canon, TOEI Animation, eTelecare, Air Relay, Call Asia, and Customer Contact Center. Areas like the Northgate Cyberzone along Alabang-Zapote Road, and the Forth Bonifacio Global City are now teeming with night time economic activities.
“It’s a very exciting industry,” says ClientLogic’s Reyes. “I see a lot of potentials particularly in the job opportunity part of it. We are looking at a factor of ten: for one job that we create we affect ten others like food services, transportation, real estate, among many others. We are actually getting a lot benefits from it.”
Cielito Habito, economics professor and director of the Ateneo Center for Economic Research and Development based in Quezon City says that the economic impact of the BPO industry so far has been reflected in two ways.
First, this is reflected in the impressive performance of the communications and transportation sub-sector. In the last two years, this sub-sector has been growing mostly double digit rates, thus also buttressing the entire services sector. Compared to the erratic performances of the agricultural and the industry sectors, the services sector has been consistently buoyant, growing close to or more than 7 percent. The second effect—he said—is in employment that translates to higher consumption and therefore higher demand for products and services in the local economy.
Spending power
Recently, BusinessMirror had a group interview with about a dozen call center agents of Ambergris Solutions in Ortigas. When asked what they do with their pay every fifteen days, many of answered “spend.”
Indeed, estimates by BusinessMirror shows that—assuming an average pay P15,000 a month—the combined payroll of all the BPOs in the Philippines could translated to at least P2 billion pesos a month or P25 billion a year going into circulation. This money goes to purchases of food stuff, drinks, cigarettes, clothes, cellular phones, shoes, fashion accessories, toiletries and personal care products. When asked what are their aspirations in life, most of them say they want “a better life,” “a stable family,” and continuing climb up the outsourcing or business career ladder. That why many of them say they save some of their monthly take home money for the “rainy days” as well as for “graduate studies,” preferably MBA.
“Saving for a better life” does not sound like an aspiration of sons and daughters of the rich and the middle class who are supposedly the ones who can speak better English. “That’s because most of us do really come from the C or even the D class,” says Ellen (27) a computer science graduate from STI Colleges. “The really rich ones don’t stay for long. They can’t seem to adjust to the pressures of the job. Besides, they don’t need the money. They are here because their parents want them to have a job—any job.”
“In fact, many of us here are breadwinners,” adds Catherine (26) a physical therapy graduate from Arellano University.
Hollow and shallow?
Still, Habito says the outsourcing still fits his theory of the Philippine economy being “narrow, hollow, and shallow,” because the industry has “limited links with the rest of the economy” and are concentrated in metropolitan Manila. Nevertheless, he concedes that many outsourcing firms are fast expanding into the regions like Cebu, Dumaguete, Davao City, and Cagayan de Oro City.
As for industry leaders, that expansion is accelerating geographically and across outsourcing sub-sectors. For instance, Ambergris Solutions—currently employing 3,000 working at its three sites in Ortigas (i.e., Discovery Suites and Raffles Corporate Center) and Market! Market! at the Fort Bonifacio Global City—for instance is set to hire at least 300 more people to man its non-voice outsourcing projects next year to serve clients in the US, Australia, and other parts of the Asia-Pacific Region.
“We’re looking on all kind of work—software development, insurance, technical support, chat, email, all kinds of work,” says Rajiv M. Dhand, Ambergris’ director of operations, stressing that they are likely to work with global companies that are in the Fortune 500 list. “It’s a natural extension of this kind of work because if you realized most of the seats are utilized at night. So if you can use those seats even in the daytime, it’s much more [profitable] for the company.”
Isberto of Smart and PLDT says that because of greater availability of broadband, investors could now enhance their presence in the Philippines by complimenting their call center operations with non-voice outsourcing, specifically medical transcription, back office operations and shared services, engineering and architectural design, litigation support, and animation. This kind of business, Isberto said, does not require workers who know how to speak fluent English. All they need—he said—are some technical backgrounds as well as basic skills in written English.
Indeed, these kinds of services wouldn’t find difficulties getting recruiting technical people as there are many lawyers, accountants, architects, engineers, commerce graduates, medical technologists, nurses, doctors, and computer programmers who are either jobless or underemployed. Each year, the Philippine educational system produces more than 400,000 graduates, 60 percent (244,000) of whom comes from business administration and related courses, engineering and technology, fine and applied arts, law and jurisprudence, mathematics and computer science, medical and allied professions, and natural science. These are the types of skills that needed to man the growing non-voice BPO that is emerging.
Scratching the surface
Many BPO executives say the BPO has barely scratched the surface. Dhand says the outsourcing business in India has become saturated and, hence, he expects more clients to opt for the Philippines.
“It’s [going] to zoom or take off. It’s because we have just 10 percent of the cost of the same work that is being done in the US. India and the Philippines are the only places where this work is financially and resource viable,” claims Dhand. “As of now India is kind of saturating because there is so much of these BPOs and call center work happening over there.”
Dhand adds: “So the next logical choice is definitely the Philippines because (a) India is saturating and (b) from a base company plan perspective any big company who has a site in India definitely wants to have a back up site somewhere else in this region and Philippines is the next logical choice. Similarly those who have a base here, their logical choice for a [back up] site would be India.”
It’s a strategy that is being done by Dell with its network of call centers all over the US, Canada, El Salvador, Panama, India, and now the Philippines. It’s the same approach being done by ClientLogic whose operations include 55 facilities throughout the US, Austria, Canada, France, Germany, India, Ireland, Morocco, Netherlands, Panama, Poland, United Kingdom, and the Philippines.
“I don’t see the Philippines competing with them because for big companies they want to mitigate the risk so rather than putting it in one place they would rather split it up so in the event that something happen in one country then it can be done by another country,” says Client Logic’s Reyes.
Nine o’clock night time is probably when most city dwellers are safely home with their families after a day’s toil. For Marky Rondeal (23), Jewel Gumiran (25), and Lariza Cruz (27), however, the day has just begun. They are call center agents of Client Logic based in Emerald Avenue in Ortigas, answering calls from Americans several thousand miles away, helping them with their daily concerns ranging from payable bills and technical problems regarding electronic gadgets, attending to their queries as well as complaints about products and services until six in the morning the following day. For these efforts, they get a net of P16,000 (US$291) each month, an amount that includes night differentials as well as rice and transportation allowances.
“When I applied for this job, it’s all about the big pay. Now I know that by doing this, I actually help people. That makes me feel good,” says Rondeal. He said he used to work as computer technician after finishing a vocational training from AMA Computer College with a monthly take of P6,000 (US$109). After learning that call centers pay better, he quit and went on to join Client Logic. He has no regrets. Besides the “big pay,” he feels he is now a better man, a confident professional who “knows how to talk to people and help solve their problems.”
For P8,000 (US$145) a month, Gumiran used to tell radio listeners about vehicular traffic during rush hours. Now she is getting a higher pay that affords her more money to buy milk and diapers for her two-year old son, new clothes for herself, and occasional dine-outs with friends. She said she lives with her mom because she still can’t go it all alone financially but feels that her life has improved since she started doing call center since 2003.
“We [call center agents] can buy more things than those who do day jobs. We could meet our needs or finance our lives,” she said. She hopes that her application to be become a trainer will get the nod of her bosses soon. “I expect to stay in this business for long.”
For her part, Cruz—a former high school biology teacher—says she is saving a significant part of her pay for graduate studies, probably an MBA. “I have to save up for that.”
Outsourcing mushrooms
Numbering around 106 companies and still counting, call centers are among the fastest growing segment of a new industry in the Philippines called the “business process outsourcing.” According to Mitchell Locsin, president of the Business Processing Association Philippines (BPA/P), this rising industry includes voice outsourcing or call centers call centers and non-voice including software development, animation, medical transcription, engineering design, and back office processing and shared services. Locsin says that BPO is expected to generate about US$ 2 billion this year, owing to a double digit growth in investments in many of these sectors. Investments in call centers alone have been rising at an average of 70 percent each year since the last five years.
Locsin could not exactly trace the historical origins of these business sectors, but he said that the entire industry became prominent in the last five years. His organization BPA/P was organized only two years ago at the urging of then Trade and Industry secretary, now senator, Mar Roxas to ensure the industry’s sustainability.
“It’s hard to say when BPO started but the boom was felt since 2000,” says Locsin. “However, we have companies that have been here since 96. Hanna Barbera [an animation company] is here since the last 20 years. Chevron was here since 96 but 2000 was the year when the industry’s growth really accelerated.”
Jeanette S. Carillo, assistant chief of the information and communications technology division of the Board of Investments (BOI) says the BPO industry, also called “information technology and information technology-enabled services (ITES), now employs about 141,762 people, of which 80,000 are into call centers. Carillo expects the BPO jobs to expand to reach 640,157 by the year 2010. From P12 billion this year, Carillo also expects investments into the sector to reach P44.7 billion by 2010. She expects the industry’s export revenues to reach US$6.4 billion from this year’s US$2 billion.
Great labor pool
People attribute the sudden emergence of the BPO industry to several factors.
Ramon Isberto, head of the public affairs group of the Philippine Long Distance Telephone Company (PLDT) and Smart Communications says the rapid expansion of BPO could be explained by the greater availability of broadband services all over the country. Besides PLDT and Smart, the Ayala Group through Globe Telecom has been rolling out fast broadband as well as Wi-Fi services in major cities in response to growing demand for high-speed Internet connectivity thus making its easier for investors to set-up BPO operations.
By February, Dell Computer—a US$54 billion global technology company—will start its own call center operations in the Mall of Asia in Pasay to serve its American clients. Dagoberto Quintana, vice president of Dell International Services who oversees Dell’s 30 call centers across the United States, Asia, and Europe says his firm will hire 700 call center agents for its Philippine operations.
“Like anyone else we are interested where there is a great labor pool and a competitive market. The Philippines is one of those locations,” says Quintana. “We look forward for excellent English skills, we look for people that are customer-centric in their thinking, and can provide great customer service and we look for folks that can do problem solving. We do analysis all over the world all the time and this is a good location to add to our global network.”
Danilo Sebastian Reyes, country manager of the ClientLogic, another global outsourcing firm, further explains: “Customer service is one of our niches because Filipinos are really customer service-oriented. In the call center, we have a distinct advantage. We are not far behind in technical support because we have capable and able graduates in computer science and engineering. Definitely, we are also strong on the back office processing because we have lots of accounting graduates that are required for types of work that include accounting, auditing, and insurance.”
ClientLogic’s BPO operations spans the globe particularly in the US, Asia, and Africa. Besides Ortigas, ClientLogic also has call center operations in Baguio. Caroline Go, the firm’s employee and corporate relations manager, says ClientLogic will soon go into the fast-growing medical transcription business.
Recently, neoIT, a California-based outsourcing and IT consulting firm which has recently set up shop here in the Philippines at the Pacific Star Building (Gil Puyat, Makati) tried to quantify the attractiveness of various countries for BPO services in paper entitled “Mapping Offshore Markets Update 2005.” The study considered several variables in their ranking namely financial benefit (e.g. cost advantage including labor cost); service maturity (e.g. competency of suppliers, industry size); people (e.g. labor pool and skill, language proficiency, educational system); infrastructure (e.g. ICT and physical infrastructure); and catalyst (e.g. government support, geopolitical environment, culture, time zone). The results: India came at the top and the Philippines came a close second. Other top ten countries include Poland, Ireland, Canada, Mexico, Czech Republic, Malaysia, China, and Hungary.
Transforming the urban landscape
If BPO industry is changing the lives of people like Marky Rondeal and Jewel Gumiran, the BPO business has started to change the urban landscape as well as the Philippine economy.
Several years ago, places like Emerald Avenue in Ortigas, Paseo de Roxas and Ayala Avenue in Makati, the Gil Puyat corner Ayala also in Makati; and the Alabang-Zapote Road are practically dead after the office workers left for home. These days, these places are teeming with people, mostly in their 20s and 30s, who are going to their night shifts. These places are night time oases for taxi drivers who usually get more money ferrying in and out call center workers.
Ortigas area is an interesting case. Besides ClientLogic, this place is also home to famous BPO companies like Ambergris, Contact Point, Convergys, Cylynx, ePacific Global Contact, HelloPNI, Influent, NuComm Intenational, HelloCorp, TelePhilippines, and Vertex. These days, the streets in the said place never sleeps as many restaurants, cafes like Figaro and Starbucks, convenience stores (e.g. Mini Stop and Seven Eleven) and fastfood stores like Jollibee are open 24 hours each day to cater to the needs to call center agents.
The same scene could be observed in Eastwood Cyberpark in Libis, Quezon City. East wood is hosts to outsourcing operations of Citibank, IBM, Trend Micro, Canon, TOEI Animation, eTelecare, Air Relay, Call Asia, and Customer Contact Center. Areas like the Northgate Cyberzone along Alabang-Zapote Road, and the Forth Bonifacio Global City are now teeming with night time economic activities.
“It’s a very exciting industry,” says ClientLogic’s Reyes. “I see a lot of potentials particularly in the job opportunity part of it. We are looking at a factor of ten: for one job that we create we affect ten others like food services, transportation, real estate, among many others. We are actually getting a lot benefits from it.”
Cielito Habito, economics professor and director of the Ateneo Center for Economic Research and Development based in Quezon City says that the economic impact of the BPO industry so far has been reflected in two ways.
First, this is reflected in the impressive performance of the communications and transportation sub-sector. In the last two years, this sub-sector has been growing mostly double digit rates, thus also buttressing the entire services sector. Compared to the erratic performances of the agricultural and the industry sectors, the services sector has been consistently buoyant, growing close to or more than 7 percent. The second effect—he said—is in employment that translates to higher consumption and therefore higher demand for products and services in the local economy.
Spending power
Recently, BusinessMirror had a group interview with about a dozen call center agents of Ambergris Solutions in Ortigas. When asked what they do with their pay every fifteen days, many of answered “spend.”
Indeed, estimates by BusinessMirror shows that—assuming an average pay P15,000 a month—the combined payroll of all the BPOs in the Philippines could translated to at least P2 billion pesos a month or P25 billion a year going into circulation. This money goes to purchases of food stuff, drinks, cigarettes, clothes, cellular phones, shoes, fashion accessories, toiletries and personal care products. When asked what are their aspirations in life, most of them say they want “a better life,” “a stable family,” and continuing climb up the outsourcing or business career ladder. That why many of them say they save some of their monthly take home money for the “rainy days” as well as for “graduate studies,” preferably MBA.
“Saving for a better life” does not sound like an aspiration of sons and daughters of the rich and the middle class who are supposedly the ones who can speak better English. “That’s because most of us do really come from the C or even the D class,” says Ellen (27) a computer science graduate from STI Colleges. “The really rich ones don’t stay for long. They can’t seem to adjust to the pressures of the job. Besides, they don’t need the money. They are here because their parents want them to have a job—any job.”
“In fact, many of us here are breadwinners,” adds Catherine (26) a physical therapy graduate from Arellano University.
Hollow and shallow?
Still, Habito says the outsourcing still fits his theory of the Philippine economy being “narrow, hollow, and shallow,” because the industry has “limited links with the rest of the economy” and are concentrated in metropolitan Manila. Nevertheless, he concedes that many outsourcing firms are fast expanding into the regions like Cebu, Dumaguete, Davao City, and Cagayan de Oro City.
As for industry leaders, that expansion is accelerating geographically and across outsourcing sub-sectors. For instance, Ambergris Solutions—currently employing 3,000 working at its three sites in Ortigas (i.e., Discovery Suites and Raffles Corporate Center) and Market! Market! at the Fort Bonifacio Global City—for instance is set to hire at least 300 more people to man its non-voice outsourcing projects next year to serve clients in the US, Australia, and other parts of the Asia-Pacific Region.
“We’re looking on all kind of work—software development, insurance, technical support, chat, email, all kinds of work,” says Rajiv M. Dhand, Ambergris’ director of operations, stressing that they are likely to work with global companies that are in the Fortune 500 list. “It’s a natural extension of this kind of work because if you realized most of the seats are utilized at night. So if you can use those seats even in the daytime, it’s much more [profitable] for the company.”
Isberto of Smart and PLDT says that because of greater availability of broadband, investors could now enhance their presence in the Philippines by complimenting their call center operations with non-voice outsourcing, specifically medical transcription, back office operations and shared services, engineering and architectural design, litigation support, and animation. This kind of business, Isberto said, does not require workers who know how to speak fluent English. All they need—he said—are some technical backgrounds as well as basic skills in written English.
Indeed, these kinds of services wouldn’t find difficulties getting recruiting technical people as there are many lawyers, accountants, architects, engineers, commerce graduates, medical technologists, nurses, doctors, and computer programmers who are either jobless or underemployed. Each year, the Philippine educational system produces more than 400,000 graduates, 60 percent (244,000) of whom comes from business administration and related courses, engineering and technology, fine and applied arts, law and jurisprudence, mathematics and computer science, medical and allied professions, and natural science. These are the types of skills that needed to man the growing non-voice BPO that is emerging.
Scratching the surface
Many BPO executives say the BPO has barely scratched the surface. Dhand says the outsourcing business in India has become saturated and, hence, he expects more clients to opt for the Philippines.
“It’s [going] to zoom or take off. It’s because we have just 10 percent of the cost of the same work that is being done in the US. India and the Philippines are the only places where this work is financially and resource viable,” claims Dhand. “As of now India is kind of saturating because there is so much of these BPOs and call center work happening over there.”
Dhand adds: “So the next logical choice is definitely the Philippines because (a) India is saturating and (b) from a base company plan perspective any big company who has a site in India definitely wants to have a back up site somewhere else in this region and Philippines is the next logical choice. Similarly those who have a base here, their logical choice for a [back up] site would be India.”
It’s a strategy that is being done by Dell with its network of call centers all over the US, Canada, El Salvador, Panama, India, and now the Philippines. It’s the same approach being done by ClientLogic whose operations include 55 facilities throughout the US, Austria, Canada, France, Germany, India, Ireland, Morocco, Netherlands, Panama, Poland, United Kingdom, and the Philippines.
“I don’t see the Philippines competing with them because for big companies they want to mitigate the risk so rather than putting it in one place they would rather split it up so in the event that something happen in one country then it can be done by another country,” says Client Logic’s Reyes.
A Sustainable Christmas
Call me Scrooge but I did not celebrate Christmas the way everybody else did. No Christmas tree, no Christmas lights. We did not binge, or drink and eat to death. I did not even attend the Editorial Section’s Christmas party. (I had to take care of the Kid who had slight fever). On Christmas Eve, we simply had a quite lunch at the Alabang Town Center. No fancy food really—just noodles, boneless milk fish with papaya pickles, kangkong (a vegetable), softdrinks, and halo-halo (crushed ice mixed with ice cream, fruits, milk, and sweetener). After lunch we spent several hours at the Powerbooks to browse some interesting titles. I got the latest issue of the Economist while the Kid got The Archeology of Warfare. Before going home late in the afternoon, the family shopped for fruits (apples, oranges, bananas).
Most Filipinos usually have Noche Buena or midnight meal with the entire family to celebrate Christmas (December 25). We decided to forego that practice as well. It’s the best way to keep our weight and blood pressures down while saving money. At twelve midnight when the rest of the community were eating, drinking like crazy or shooting fireworks, I was safely in bed reading Thomas Barnett’s new book entitled Blueprint for Action: A Future Worth Creating. I noticed Tinette was reading about the history of wheat, a feature story in the Economist. My son was already asleep by that time. Earlier in the night the Kid and I had a lively discussion about Arturius, the famous Sarmatian warrior who became King Arthur in legend. By two in the morning, we are asleep with clear conscience knowing that we used less electricity thus less fossil fuel (by not having Christmas lights), we did not burn money by not having fireworks (besides the fact that we simply don’t have much money), we did not binge at a time when millions somewhere else were hungry. Yes, we had a quiet, simple and “sustainable” Christmas.
Most Filipinos usually have Noche Buena or midnight meal with the entire family to celebrate Christmas (December 25). We decided to forego that practice as well. It’s the best way to keep our weight and blood pressures down while saving money. At twelve midnight when the rest of the community were eating, drinking like crazy or shooting fireworks, I was safely in bed reading Thomas Barnett’s new book entitled Blueprint for Action: A Future Worth Creating. I noticed Tinette was reading about the history of wheat, a feature story in the Economist. My son was already asleep by that time. Earlier in the night the Kid and I had a lively discussion about Arturius, the famous Sarmatian warrior who became King Arthur in legend. By two in the morning, we are asleep with clear conscience knowing that we used less electricity thus less fossil fuel (by not having Christmas lights), we did not burn money by not having fireworks (besides the fact that we simply don’t have much money), we did not binge at a time when millions somewhere else were hungry. Yes, we had a quiet, simple and “sustainable” Christmas.
Thursday, December 22, 2005
Ortigas Center a Cruel City? There is hope
DAVE---You hit the nail on the head. But there is hope. Precisely, Cathy and I had been leading the move in Ortigas Center to make it more pedestrian-friendly. We have approval of the OCAI Board for the redevelopment of Ortigas Center, initially costing about P220 million. If you have time after the holidays, say 29th, drop by my office and I will show you a presentation of the Ortigas Center master redevelopment plan that was approved in principle by BF and the 3 mayors of QC, Pasig and Mandaluyong. While we have full control of Greenhills Shopping Center and Frontera Verde, we don’t control Ortigas Center which is now managed by the Ortigas Center Association Inc. (OCAI). We only have one seat in a 15-person Board. Thanks for bringing it up.--- Rex Drilon, Chief Operating Officer, Ortigas & Company
Celebrating Christmas: Views from USA
HI DAVID-- Christmas in the Philippines sounds strangely like the US in that itseems to start earlier every year. But few here celebrate it through to Epiphany on January 6. It has become pretty much a commercial holiday in the US, with Christmas decorations and shopping specials starting early in November. By the time December 25 comes around, most people are getting tired of the incessant Christmas music, enforced good cheer, etc. When I was out doing errands yesterday, I was struck with how harried and impolite people were. When a holiday season becomes this stressful, what is the point? In spite of all that, I wish you and your family a wonderful Christmas. ---Judith
DAVID-- I must say it's a bit rum for New York City BILLIONAIRE (that's a B) Michael Blumenthal to call the $60,000 a year transit workers overpaid and thuggish. I would say it's a lot more thuggish to allow someone—because of our insane campaign finance laws—to essentially buy the mayoralty of our greatest city.
Once again, the corporate-controlled mass media has missed the essential point here. The transit workers are mostly on strike to prevent the city from trashing the pension rights of future workers not themselves. The media should be asking why the rest of organized labor has not gone on strike in sympathy in the first general strike of the twenty-first century.
The stakes are high not only in New York City but across the nation. From the days of the robber barons, organized labor has struggled -- through blood, sweat and tears -- to provide American workers with very basic rights and benefits. The logic of globalism, however, is that they will soon have the same rights and benefits as workers in China. This is the real significance of the NYC transit strike. Workers of the world unite. –David
DAVID-- I must say it's a bit rum for New York City BILLIONAIRE (that's a B) Michael Blumenthal to call the $60,000 a year transit workers overpaid and thuggish. I would say it's a lot more thuggish to allow someone—because of our insane campaign finance laws—to essentially buy the mayoralty of our greatest city.
Once again, the corporate-controlled mass media has missed the essential point here. The transit workers are mostly on strike to prevent the city from trashing the pension rights of future workers not themselves. The media should be asking why the rest of organized labor has not gone on strike in sympathy in the first general strike of the twenty-first century.
The stakes are high not only in New York City but across the nation. From the days of the robber barons, organized labor has struggled -- through blood, sweat and tears -- to provide American workers with very basic rights and benefits. The logic of globalism, however, is that they will soon have the same rights and benefits as workers in China. This is the real significance of the NYC transit strike. Workers of the world unite. –David
I love Christmas, I hate the "holidays"
I love Christmas. People are usually nice during the season (they give gifts left and right). What I hate is the ‘holidays’ part of it. Every where you go there is traffic congestion. It seems like people are possessed by some kind of unseen powers that are driving them to shop, give gifts, receive gifts, eat, and meet with friends and relatives as if there is no tomorrow. The shopping malls are taking advantage of this madness by offering sales discounts, thus attracting even more shoppers and causing even more traffic gridlock. Bazaars are everywhere selling all kinds of stuff. That’s why over the years, Christmas appears to be less and less about the Lord’s birthday party than a pagan’s orgy of shopping, binging, and partying. (Of course, others say Christ’s birth was somewhere in April but that’s another story).
It seems that in other countries, they only celebrate Christmas on the 25th of December. In the Philippines, “Christmas” practically starts in November and ends in January 5 during the “three kings.” Why are we doing this is a puzzle to non-Filipinos. I guess it has something to do with the Filipinos’ penchant for fiesta or festival, which is nothing but an extended, massive drawn out party. Do you wonder why we can’t seem to mount an honest to goodness “revolution” to change this country despite all the corruption in the government from top to bottom? It’s because people would rather go to a fiesta than to a revolution. Are we doomed to be less serious about ourselves? When James Fallows criticized Filipinos for having “damaged culture,” was he referring to this aspect of our character?
It seems that in other countries, they only celebrate Christmas on the 25th of December. In the Philippines, “Christmas” practically starts in November and ends in January 5 during the “three kings.” Why are we doing this is a puzzle to non-Filipinos. I guess it has something to do with the Filipinos’ penchant for fiesta or festival, which is nothing but an extended, massive drawn out party. Do you wonder why we can’t seem to mount an honest to goodness “revolution” to change this country despite all the corruption in the government from top to bottom? It’s because people would rather go to a fiesta than to a revolution. Are we doomed to be less serious about ourselves? When James Fallows criticized Filipinos for having “damaged culture,” was he referring to this aspect of our character?
Wednesday, December 21, 2005
Ortigas Center: Cruel City
It seems that the planners who designed the Ortigas Center did not think of pedestrians, of ordinary people without cars, when they conceptualized the project. The entire business district is always congested so pedestrians are forced to walk from one office to another when delivering something very urgent. Walking is fine except that the sidewalks are narrow. At the peak of summer, one could easily sweat and stink like a stevedore after just covering 50 meters. When the rains fall, people will just have to run like hell and seek shelter somewhere because the narrow pathways are not covered. I understand the Ortigas family is allocating billions of pesos for further improvements but I haven’t heard something about providing facilities for pedestrians. Haven’t Ortigas’ planners heard about the trend toward “pedestrianisation”? Haven’t they heard something about the “new urbanism”? Haven’t they seen the “sky walk” of the Makati Central Business District that connects offices, parking spaces, and business enterprises thus lessening traffic and protecting pedestrians from the elements?
Tuesday, December 20, 2005
Demystifying the World Trade Organization
The way the discussions on the outcome of the recent WTO Ministerial Conference are shaping up, it’s as if the future of this country is anchored on the outcomes of those gabfests. The truth is that the Philippines’ prospects, lies solely on what we are doing internally to shape up the economy as the forces of globalization, good or bad, rages on.
Is the government really doing something to make agriculture competitive? Are there funds for vital economic infrastructure? Are the schools producing a well-trained workforce that can handle the requirements of the emerging knowledge economy? Those are the more relevant questions that we need to do something about rather than the staid provisions of WTO ministerial declarations.
It’s funny that government negotiators were “so happy” with the talks that produced only vague provisions about the removal of European subsidies by 2013 and the promises about giving better treatment to African cotton in the US market. If one reads the ministerial statement more carefully, the entire document is ampao [popped rice], devoid of any tangible provision on anything. It’s as if it was drafted so the ministers would have another round of junkets in Geneva. And it’s also amusing that critics seem to think the Philippine economy would crumble even before the ink used to sign that document has dried.
Analysts tend to think the WTO shapes globalization. Reality is that the WTO is nothing but a global bureaucratic talking shop that is just reacting to global events. That institution is actually just playing catch up to make sense of the accelerating chaos brought about by rapid technological change and greater mobility of capital, people, and ideas. As such, policy changes that it proffers will always be piecemeal and incremental. Don’t be surprised if the next round of talks will produce another meaningless document.
For two reasons. First, the decisions in WTO are made through consensus. A single no vote could torpedo the entire ministerial talk. Since there are 149 members at varying stages of economic development, they could only agree on a ministerial declaration by adopting the least common denominator. That’s the reason why the Hongkong gabfest produced only one time-bound provision, the elimination of export subsidies by 2013. (By the time, a lot of farmers in Africa would have died for failure to access important markets.) Second, and the more important, is the paradox that while member countries believe that liberal trade is beneficial (and yes, with Communist governments in Vietnam, China, and recently Cuba are the most eager supporters), they negotiate like dyed-in-the-wool mercantilist of the 1800s whose idea of development is beggaring thy neighbors. This is because negotiators are always under pressure at home to pander to vested interests.
It’s true that the country’s tariff structure has been on the downtrend since we signed up with the Marrakesh Treaty in 1994 that gave birth to the WTO. It’s true that we aligned many of our trade policies as a result of the Marrakesh Agreement. But we did so primarily because our policy makers believed, rightly or wrongly, that we need to do away with the dirigiste policies of the past, of monopolies and cartels, and of high tariff walls that werte sheltering inefficient crony industries. These reforms were actually of our tariff reform program that started in 1981 and continued until 2004.
But mind you, the Philippines actually complied superficially with the WTO requirements, just like most other countries including the United States and Europe, and retained actually a lot of protective covers on many agricultural commodities including rice, corn, sugar, and poultry, and other “sensitive products.” The Philippines has retained a host of many restrictions including the constitutional limitations on ownership in telecommunications, insurance, banking, securities, financial services, advertising, public utilities, shipping, media and so many others. Since everybody else is doing the same, we could expect that future negotiations would be more acrimonious and prone to deadlock. And while the WTO is sorting endlessly some of these tangles, the world is changing fast.
Now we have call centers, medical transcriptions, and other information technology enabled services generating billions of dollars worth of exports and creating thousands of jobs. Now, we are getting more than $10 billion worth of remittances each year that are boosting domestic demand, thus giving life to factories. Banks and related industries are more and more getting money from outsourced financial services. All these are happening without any clear cut international agreements on trade in services and people mobility.
It used to be that agricultural experts would jump like chimpanzees every time agriculture grows at 2 percent. Now, given good weather, the farm sector could actually grow at 6 percent. And that’s because under a liberal trading environment, farmer-entrepreneurs and agribusiness companies could have greater access to inputs, packaging materials, and biomedics. It’s not paradise, but it’s not hell either as conjured career activists when they cracked their heads against cop’s truncheons in December 1994 in protest against the Senate’s ratification of the Marrakesh treaty.
The point here is globalization is that will always be there with or out the WTO ministers producing the best written declaration. The services sector is doing well so far, but how about the farm sector? And what are our policy makers doing about it? Congress crafted the Agricultural Modernization Act a few years after WTO’s entry into force in January 1995, but it seems this law has been totally forgotten. Where now is the program on the so-called “strategic agricultural and fisheries development zones”? How was the money for “agricultural modernization” used? These are the more important questions that we need to ponder upon.
Is the government really doing something to make agriculture competitive? Are there funds for vital economic infrastructure? Are the schools producing a well-trained workforce that can handle the requirements of the emerging knowledge economy? Those are the more relevant questions that we need to do something about rather than the staid provisions of WTO ministerial declarations.
It’s funny that government negotiators were “so happy” with the talks that produced only vague provisions about the removal of European subsidies by 2013 and the promises about giving better treatment to African cotton in the US market. If one reads the ministerial statement more carefully, the entire document is ampao [popped rice], devoid of any tangible provision on anything. It’s as if it was drafted so the ministers would have another round of junkets in Geneva. And it’s also amusing that critics seem to think the Philippine economy would crumble even before the ink used to sign that document has dried.
Analysts tend to think the WTO shapes globalization. Reality is that the WTO is nothing but a global bureaucratic talking shop that is just reacting to global events. That institution is actually just playing catch up to make sense of the accelerating chaos brought about by rapid technological change and greater mobility of capital, people, and ideas. As such, policy changes that it proffers will always be piecemeal and incremental. Don’t be surprised if the next round of talks will produce another meaningless document.
For two reasons. First, the decisions in WTO are made through consensus. A single no vote could torpedo the entire ministerial talk. Since there are 149 members at varying stages of economic development, they could only agree on a ministerial declaration by adopting the least common denominator. That’s the reason why the Hongkong gabfest produced only one time-bound provision, the elimination of export subsidies by 2013. (By the time, a lot of farmers in Africa would have died for failure to access important markets.) Second, and the more important, is the paradox that while member countries believe that liberal trade is beneficial (and yes, with Communist governments in Vietnam, China, and recently Cuba are the most eager supporters), they negotiate like dyed-in-the-wool mercantilist of the 1800s whose idea of development is beggaring thy neighbors. This is because negotiators are always under pressure at home to pander to vested interests.
It’s true that the country’s tariff structure has been on the downtrend since we signed up with the Marrakesh Treaty in 1994 that gave birth to the WTO. It’s true that we aligned many of our trade policies as a result of the Marrakesh Agreement. But we did so primarily because our policy makers believed, rightly or wrongly, that we need to do away with the dirigiste policies of the past, of monopolies and cartels, and of high tariff walls that werte sheltering inefficient crony industries. These reforms were actually of our tariff reform program that started in 1981 and continued until 2004.
But mind you, the Philippines actually complied superficially with the WTO requirements, just like most other countries including the United States and Europe, and retained actually a lot of protective covers on many agricultural commodities including rice, corn, sugar, and poultry, and other “sensitive products.” The Philippines has retained a host of many restrictions including the constitutional limitations on ownership in telecommunications, insurance, banking, securities, financial services, advertising, public utilities, shipping, media and so many others. Since everybody else is doing the same, we could expect that future negotiations would be more acrimonious and prone to deadlock. And while the WTO is sorting endlessly some of these tangles, the world is changing fast.
Now we have call centers, medical transcriptions, and other information technology enabled services generating billions of dollars worth of exports and creating thousands of jobs. Now, we are getting more than $10 billion worth of remittances each year that are boosting domestic demand, thus giving life to factories. Banks and related industries are more and more getting money from outsourced financial services. All these are happening without any clear cut international agreements on trade in services and people mobility.
It used to be that agricultural experts would jump like chimpanzees every time agriculture grows at 2 percent. Now, given good weather, the farm sector could actually grow at 6 percent. And that’s because under a liberal trading environment, farmer-entrepreneurs and agribusiness companies could have greater access to inputs, packaging materials, and biomedics. It’s not paradise, but it’s not hell either as conjured career activists when they cracked their heads against cop’s truncheons in December 1994 in protest against the Senate’s ratification of the Marrakesh treaty.
The point here is globalization is that will always be there with or out the WTO ministers producing the best written declaration. The services sector is doing well so far, but how about the farm sector? And what are our policy makers doing about it? Congress crafted the Agricultural Modernization Act a few years after WTO’s entry into force in January 1995, but it seems this law has been totally forgotten. Where now is the program on the so-called “strategic agricultural and fisheries development zones”? How was the money for “agricultural modernization” used? These are the more important questions that we need to ponder upon.
Rude and Poor? A Reaction from Pluto
A friend from Mindanao reacted to my blog post on being poor and rude. “So far, I have yet to archeologically dig the rude manners you pictorially essayed, especially in hospitals,” she protested. Let me share her email to you all.
DEAR DAVE—What coffee shop talks can't expand, blogging can. I read with interest the goings-on in your part of my country. Hermitian is a word that can best describe my present state of existence, already weirdly remote from the topics I just read. If I were from Pluto, I'd view your musings as a great pamphlet to explore these islands from an intellectual perspective.
Amusingly, I have met so much of the rude poor you took an issue against, especially on good manners and right conduct. During my hybernation, I actually saw different lines on their faces: crinkly but never short of passages to the creation of smiles. I simply pored into those craggy skins and saw humanity at its best. How simple, untheoretical, their lives are. So far, I have yet to archaelogically dig the rude manners you pictorially essayed, especially in hospitals. Mathew Arnold has the same reservation against these "masses" in his own England. That culture or "the best of what has been thought and said" is not for them. That is why "pop culture" is often disparaged--viewed as a disentanglement of the poor from the dictates of the dominant-intellectual-noble types.
So, I guess, this issue has so many gaps to fill when viewed in our own setting. I have a mind that is fractured by so many information that I need to sew in with the past. In short, we need to sit down so I can amply explain my dissent to that particular piece. Keep on writing!—IRIS
DEAR IRIS—The context here is that I’m not against the poor. I’m poor myself. I belong to them, with them. I commute each day through jeepneys and buses. I eat their kind of food. I dream their kind of dreams. I was just reacting to the experience related to me by a friend whose sister works in a provincial hospital. The difference is that I don't romanticize the poor or being poor. I see them in their graciousness as well as in their rudeness. If you have noticed I also stressed that there are more nice people among the poor than there rude ones. My reflections on the matter could never be interpreted to mean I’m against them or pretending I’m not one of them. I am.
DEAR DAVE—What coffee shop talks can't expand, blogging can. I read with interest the goings-on in your part of my country. Hermitian is a word that can best describe my present state of existence, already weirdly remote from the topics I just read. If I were from Pluto, I'd view your musings as a great pamphlet to explore these islands from an intellectual perspective.
Amusingly, I have met so much of the rude poor you took an issue against, especially on good manners and right conduct. During my hybernation, I actually saw different lines on their faces: crinkly but never short of passages to the creation of smiles. I simply pored into those craggy skins and saw humanity at its best. How simple, untheoretical, their lives are. So far, I have yet to archaelogically dig the rude manners you pictorially essayed, especially in hospitals. Mathew Arnold has the same reservation against these "masses" in his own England. That culture or "the best of what has been thought and said" is not for them. That is why "pop culture" is often disparaged--viewed as a disentanglement of the poor from the dictates of the dominant-intellectual-noble types.
So, I guess, this issue has so many gaps to fill when viewed in our own setting. I have a mind that is fractured by so many information that I need to sew in with the past. In short, we need to sit down so I can amply explain my dissent to that particular piece. Keep on writing!—IRIS
DEAR IRIS—The context here is that I’m not against the poor. I’m poor myself. I belong to them, with them. I commute each day through jeepneys and buses. I eat their kind of food. I dream their kind of dreams. I was just reacting to the experience related to me by a friend whose sister works in a provincial hospital. The difference is that I don't romanticize the poor or being poor. I see them in their graciousness as well as in their rudeness. If you have noticed I also stressed that there are more nice people among the poor than there rude ones. My reflections on the matter could never be interpreted to mean I’m against them or pretending I’m not one of them. I am.
A Million Jobs in 2005?
Surprise, surprise but it seems that the economy indeed had produced a significant number of jobs in October (32.867 million) when compared with the figures in the same figure last year (31.741) million. That’s a difference of 1.135 million, an indication that more Filipinos got jobs during the time when people from the National Statistics Office knocked on the doors of people and asked them about what they did for a living. If these figures are true then we have one more reason to rejoice this Christmas.
But wait a minute. A third of the 1.135 million “incremental jobs” in October were contributed by the agricultural sector. That’s 390,000 more employment in the farms! Now, that’s really surprising because in the first three quarters this year, the agricultural sector grew only by 1.1 percent. That figure meant that agricultural activities were practically stagnant in the said period. So why is there an impressive growth in agriculture’s job creation?
A check with the Department of Agriculture says indicates that many rice farmers in the country were harvesting in October and that some who had harvested earlier are doing land preparation activities. Farmers are apparently taking advantage of the higher amount of rainfall in October. That means that the “jobs” that were recorded by NSO were probably seasonal ones. That explains why these jobs are mainly unpaid family labor (305,000 “jobs”)—the farmer, his wife, and some kids who have to work their butts off after a lousy production in the first two harvests due to bad weather.
Another surprise: the industry sector actually grew decently at 4.6 percent in the first three quarters this year yet it barely contributed (only 6,000 jobs) to the employment numbers. This must be another case of jobless growth. Let’s hazard a guess: the country’s export sector barely grew in the first three quarters this year. Also, personal consumption expenditure has been flat this year because families of overseas workers decided to save their money rather than splurge. Seeing this trend, the country’s factory managers saw that there’s no need to hire workers. Some even fired thousands of them. That is reflected in the “wage and salary” component the industry that actually lost 36,000 jobs. What made up for this decline in industrial jobs are “own account” workers, probably small entrepreneurs doing some “industrial” activities, including small scale mining and construction. Definitely, the figures say the industry sector has not fully recovered.
Expectedly, the services sector contributed 739,000 incremental jobs, half of which (426,000) came from wholesale and retail trade. Other contributors to the job growth in the services sector include hotels and restaurants; transport, storage, and communications; and real estate, renting and related services. About 47 percent of the incremental jobs generated by the wholesale and retail trade were accounted for by “own account” jobs. These are probably small entrepreneurs who started to set up bazaars in preparation for the Christmas season.
Looking at the report, one can sense that the labor force survey does not really capture a lot of things in the economy. For instance, leaders of the business process outsourcing (BPO) that includes call centers has been saying that the industry is growing 70 percent each year in the last five years. Yet the job growth in the transportation, storage and communications sector hardly reflects this. In fact, the “wage and salary” component even declined. One can sense the survey does not capture the dynamics of this industry.
With this survey, some politicians or government functionaries may yet crow that the economy has just created more than a million jobs. This interpretation is not warranted. The survey simply say there are 1.13 million more employed persons in October this year than when compared to the same month last year. It doesn’t capture how many jobs were created or lost. What the Department of Labor and Employment does is compute the average of the incremental jobs per quarterly survey to come up with an estimate of “new jobs created” statistics. This is wrong. To get the figure on new jobs, the NSO may have to do a payroll survey among employers, complemented by establishment and household surveys. We don’t do it for lack of money.
But wait a minute. A third of the 1.135 million “incremental jobs” in October were contributed by the agricultural sector. That’s 390,000 more employment in the farms! Now, that’s really surprising because in the first three quarters this year, the agricultural sector grew only by 1.1 percent. That figure meant that agricultural activities were practically stagnant in the said period. So why is there an impressive growth in agriculture’s job creation?
A check with the Department of Agriculture says indicates that many rice farmers in the country were harvesting in October and that some who had harvested earlier are doing land preparation activities. Farmers are apparently taking advantage of the higher amount of rainfall in October. That means that the “jobs” that were recorded by NSO were probably seasonal ones. That explains why these jobs are mainly unpaid family labor (305,000 “jobs”)—the farmer, his wife, and some kids who have to work their butts off after a lousy production in the first two harvests due to bad weather.
Another surprise: the industry sector actually grew decently at 4.6 percent in the first three quarters this year yet it barely contributed (only 6,000 jobs) to the employment numbers. This must be another case of jobless growth. Let’s hazard a guess: the country’s export sector barely grew in the first three quarters this year. Also, personal consumption expenditure has been flat this year because families of overseas workers decided to save their money rather than splurge. Seeing this trend, the country’s factory managers saw that there’s no need to hire workers. Some even fired thousands of them. That is reflected in the “wage and salary” component the industry that actually lost 36,000 jobs. What made up for this decline in industrial jobs are “own account” workers, probably small entrepreneurs doing some “industrial” activities, including small scale mining and construction. Definitely, the figures say the industry sector has not fully recovered.
Expectedly, the services sector contributed 739,000 incremental jobs, half of which (426,000) came from wholesale and retail trade. Other contributors to the job growth in the services sector include hotels and restaurants; transport, storage, and communications; and real estate, renting and related services. About 47 percent of the incremental jobs generated by the wholesale and retail trade were accounted for by “own account” jobs. These are probably small entrepreneurs who started to set up bazaars in preparation for the Christmas season.
Looking at the report, one can sense that the labor force survey does not really capture a lot of things in the economy. For instance, leaders of the business process outsourcing (BPO) that includes call centers has been saying that the industry is growing 70 percent each year in the last five years. Yet the job growth in the transportation, storage and communications sector hardly reflects this. In fact, the “wage and salary” component even declined. One can sense the survey does not capture the dynamics of this industry.
With this survey, some politicians or government functionaries may yet crow that the economy has just created more than a million jobs. This interpretation is not warranted. The survey simply say there are 1.13 million more employed persons in October this year than when compared to the same month last year. It doesn’t capture how many jobs were created or lost. What the Department of Labor and Employment does is compute the average of the incremental jobs per quarterly survey to come up with an estimate of “new jobs created” statistics. This is wrong. To get the figure on new jobs, the NSO may have to do a payroll survey among employers, complemented by establishment and household surveys. We don’t do it for lack of money.
Sunday, December 18, 2005
"Equal rights means sharing equally the good and bad aspects of life."
A friend from the United States reacted to my blog post yesterday regarding the Oblation Run. Let me share the email with you.DEAR DAVID: I interpreted the nude women in the Oblation run differently. Although they carried signs calling for equal rights for women, I saw their run as exercising their equal rights as women to join the men in running naked. I say hooray! Equal rights mean sharing equally the good and bad aspects of life. In the campaign for equality, women not only have (in theory anyway) equal rights in the workplace and in the legal sense, but also the obligations. While we don't have universal conscription in this country, should such time come, I expect women to be subject to the draft the same as men. And we have all had to forego the courtesies that men once showed to women when we were seen as "the weaker sex". While I am old enough to remember all those courtesies, I also think that having to forego them is a small price to pay for equal rights. You can't have it both ways. The Philippines, and several other developing countries, are far ahead of the US however with respect to women in political power. Women do well here in state and local office, but lag behind significantly in national elections. When it comes to raising the kind of money you need to run for national office, the good old boy network here still supports their own—with all due respect to Lonnie and David who I'm sure would support an able woman candidate. Merry Christmas to you, David L., and your family.—Judith
DEAR JUDITH: Points well taken, especially that, based on latest information, the ladies actually just gate-crashed the boy’s Oblation run. They were not part of original script. So it’s was actually a case of an old-boys’ network’s activity being hijacked by girls to ensure that they deliver home their own message. So I guess the “equal rights” aspects there is really important. If the boys can do it, why can’t they? And a historical precedent at that! My own old “conservative” instinct told me there were other ways of delivering the message but I guess doing that run at that moment was simply the most creative and probably the most effective way of doing so given the fact that most people are just too preoccupied with the Christmas season. It’s no wonder why most daily papers actually printed all those pictures with positive commentaries in the front pages to highlight the point. Thanks, for that, Judith. I stand corrected. Merry Christmas.—Very truly yours, David
Nudity and academic freedom
It’s only in the Philippines, I mean the University of the Philippines (UP), the country’s premier institution of higher learning where you can have this kind of event. Every December, a fraternity holds what they call “Oblation run” where fresh recruits run along the busiest part of the campus without clothes. It’s a spectacle that attracts all sorts of people—students, faculty, media, tourists, street vendors, voyeurs, and the plain curious. It used to be that only male recruits do the run because the statue Oblation—signifying academic freedom, sited in front of the University administration building is naked or at least its front is covered only with a leaf—appears to be an artistic rendition of the male form. This time, however, two girls joined the run as part of their campaign for “equal rights” in the Philippines.
The male runners usually don’t cover their fronts with leaves but their faces with paper bags with two holes for their eyes to see, like the Makapili in history sans the clothes. (During World War II, the Makapili were the traitors who were paid by the Japanese to identify Filipino resistance fighters in a line of arrested suspects). Last week, however, most of the boys wore balaclava and golden masks while the girls appeared in great style with their dyed wigs and covered faces. I guess that event, which took place on December 16, is a historical landmark, the reason why I posted it in here to celebrate the occasion. I expect more girls to join next year. Who says academic freedom is boring?
I really wonder though whether or not they really needed to streak to stress equal rights. The Philippines is the only country in the world where husbands call their wives “Commander” and where the people get a lady president everytime the country is in dire political trouble. In 1986, Filipinos toppled the dictator Ferdinand Marcos and installed Corazon Aquino through the Edsa People Power Revolution. In 2001, another “revolution” toppled movie-actor-turned president Joseph Estrada due to charges of corruption, incompetence, and involvement in an illegal numbers game and installed another woman president Gloria Macapagal Arroyo. These days Arroyo is herself in trouble due to charges of cheating in the 2004 election and it’s seems another woman, Susan Roces, the widow of another movie actor, is waiting in the wings. Corazon Aquino herself is trying to revive her old political network, visiting urban poor communities, and speaking in forums denouncing Arroyo in greater frequency in an effort to raise her political profile. Is this an indication that she might yet join the political fray come next election, if ever there would be one? Your guess is as good as mine, but that’s a long digression, isn’t it?
Going back to the oblation run—yes, I really think running naked to stress equal rights was plain stupid. But then again, this is a democratic country and we need to respect other people’s rights or academic freedom or whatever you call it.
Running wild and nude outside the UP campus would have been criminal—“indecent exposure” or “public scandal”—but inside UP, my beloved University, it is perfectly legal. And fun. In the name of “academic freedom” you can do anything inside the campus—yes, anything short of burning the whole University down or murdering the University president! (Photo credits: Nonoy Lacza, Oblation Statue from the UP Website)
Friday, December 16, 2005
Wireless Broadband is Transforming the Philippines
Politics in the Philippines is always on the boil. That’s why most people think this country is drifting to obscurity. But there are actually a lot of changes going on, such as the broadband revolution. Most of us may not notice it yet but it’s certain that the Philippines is undergoing deep-seated transformation. Read on if you want to know the details. And please leave some comments.For Rolando Ceballos Jr, a 24 year old software engineer doing programming projects for Accenture, a management consulting firm based in Makati, the Coffee Bean and Tea Leaf is almost like his second office. After five, he usually walks up to Greenbelt III to enjoy coffee while surfing the net using the shop’s Wi-fi hotspot.
“Here I could relax, enjoy the ambience while surfing the net or finishing my projects,” he said.
His regular presence there, however, is not actually about coffee, tea or salads. It’s really more about the broadband Internet access that Coffee Bean and Tea Leaf provides through its Wi-fi hotspot provided by the GlobeQuest, a subsidiary of the Globe Telecom. “It’s fast, about 11 megabytes per second, as against 56 kbps that the dial-up internet provides. It’s probably about a hundred times faster,” he said. “And of course, I enjoy the ambience, the creative atmosphere that the place provides. Most of the time, I do some of my [software programming] projects here after office hours.”
He admits that his kind of lifestyle is not cheap. To access the net, he regularly buys Wi-fi cards for passwords that enable him to use the hotspot. Each card costs a hundred pesos for a 50-minute access, but he said he doesn’t mind spending that much money because he achieves “higher productivity” compared with the old clunky dial-up Internet. And besides, his software engineering skills, he said, gets him more money than what the average white collar worker receives each month. “I like going out with friends; with greater availability of Wi-fi hotspots everywhere, I won’t miss a thing,” he said.
Wi-fi is short for “wireless fidelity,” a radio-frequency technology that allows gadgets like computers, laptops, and personal digital assistants to have high speed wireless access to the internet. One could access it through a hotspot or an access point where signals are beamed from a router to a-Wi-Fi enabled terminal such as a laptop or personal digital assistants.
“If really helps that our building has Wi-fi,” said Agnes, Coffee Bean Greenbelt 3’s manager. “It attracts clients like entrepreneurs, sales people, office workers, and yuppies [young urban professionals] who oftentimes transact business within our premises. Those clients usually come over here after lunch for coffee. They would sometimes stay for hours because of our Wi-fi.”
The cool factor
Mike Antigua, vice president for marketing of Airborne Access, the leading provider of Wi-fi technologies, in the country said that Wi-fi brings “cool factor” to cafes, restaurants, resorts, malls, hotels, airports, and hospitals, besides meeting people’s needs for instant communications.
That’s the reason, he explained, a lot of wi-fi equipped cafés like Starbucks and Seattle’s Best are sprouting near universities like the Ateneo de Manila University in Quezon City and the University of Asia and the Pacific in Ortigas. He said that even summer or semestral breaks, students with laptops continue to flock to these Wi-fi equipped coffee shops, drinking coffee, studying their lessons, chatting with friends, or surfing the Internet. Recognizing the demand for broadband access, some campuses like the Ateneo Professional Schools in Rockwell as well as the Mapua Institute of Technology along Gil Puyat Avenue in Makati have installed their own Wi-fi hotspots.
“I could have wished we had Wi-Fi during our college days,” said Ceballos who finished his computer science course in Bacolod City just about three years ago. “Because all you need is a Wi-fi enabled laptop and you can do research anywhere in the campus.”
Corporate strategy
For yuppies like Ceballos, Wi-fi and coffee shops are all about the “digital lifestyle.” For business establishments, however, it’s all about corporate strategy.
“The people come here and make use of our Wi-fi hotspot. On our part, we are able to sell a few more cups of coffee and dessert,” said Go. “It’s a good proposition, a good synergy.”
In an interview, he said that the outlook for the economy is not very optimistic so he felt he needed technologies and tools that could “maximize” the market. “Wi-fi is one of those indispensable tools.”
Go said he had been reading about wireless technology three years ago. “So when the people of Airborneaccess came calling, they did not find a hard time convincing us to install Wi-fi.”
Said Rosario T. Juan, area manager of Figaro’s Shanghai operations: “We identified it [Wi-fi] as one of our customers needs. Since we cater to a lot of career men and women and business travelers, we would see them meeting in our stores with their laptops or always checking their e-mail on other wireless devices. We then decided to offer it as a value-added service.”
“Since we also have Wi-fi here in our Shanghai stores, I do my job for Figaro Manila and China via satellite,” she added. “I do a lot of my communications work through e-mail and so my job relies a lot on a good and convenient internet connection.”
Antigua said they were having a tough time getting clients when they started the business in 2002. The big break came when Seattle’s Best tapped Airborneaccess for the installation of its Wi-fi hotspot. He explained that Seattle’s Best was apparently trying to catch up with Starbucks and it needed an extra drawing power to capture a bigger market share. After that, awareness of Airborneaccess’ services spread like wildfire and the firm now has installed 206 Wi-fi hotspots all over the country, about 87 percent of which are in Metro Manila. The rest of are in Baguio, Boracay, Calamba, Cebu, Cainta (Rizal), Dagupan City, Lapu-lapu City (Cebu), and San Fernando (Pampanga).
“We now receive three serious calls everyday from entrepreneurs who are exploring the possibility of having their own Wi-fi hotspot,” Antigua said. “Once we hit 200, it’s a lot easier to sell the service. We used to receive calls largely from cafes, restaurants, and hotels. This year, we have lots of calls from retirees, and housewives.”
Antigua says that these days many cafes are now equipped with Wi-fi. Among them are Seattle’s Best, Figaro, Starbucks, Cibo Nuovo, Off-Road Coffee, UCC Coffee, Coffee Beanery, Bon Appetit, Haagen Dazs Café, Café Provencal, Le Coer de France, and Gloria Jeans. Among the more popular restaurants that are starting to ride the Wi-fi bandwagon include Tequila Joe’s, Max’s, California Pizza Chicken, Sugarhouse, Green Tomato, Via Mare, Cravings, Pancake House, among others.
“There are now lots of demand for Wi-fi services even in areas outside Metro Manila, particularly in Bicol, Dagupan, Baguio, Cebu, Davao, and Tagaytay,” said Antigua.
The spread of the Wi-Fi further accelerated with the entry of Globe Telecom in the business through its GlobeQuest Wireless Internet Zone (WIZ). Initially launched in Greenbelt 3, the WIZ now provides hotspots to big business establishments nationwide including the Ayala Center Mall Cebu, Greenhills Theater Mall, Cebu Waterfront Hotel, Holiday Inn Clark, and Mactan International Airport.
But besides the “cool factor, among the major drivers for the proliferation of Wi-fi in urban centers are travelers and sales people who would like to get instant connection to the net. That’s why a lot of places within or near the premises international airports such as the Mactan International Airport and the Ninoy Aquino Airport have Wi-fi.
Antigua says the trend toward cheaper laptops is also boosting demand. “You can now buy Wi-fi enabled laptops at the cost of about P40,000. These laptops, he said, are a lot lighter, cheaper, and more powerful. There is also the growing popularity of personal digital assistants that can be used to access Wi-fi hotspots.”
Scratching the surface
Both Antigua and Ceballos, however, think the Philippines’s usage of Wi-fi has barely scratched the surface. Most Wi-fi users—they observe—are mostly into email; downloading of data, pictures and graphics from websites; and internet chats. Ceballos said once you have Wi-fi, activities like cheap or free computer-to-computer calls as well as video conferencing that would enable people and organizations to overcome the constraints of time and distance are now possible. Yet, these activities, he said, are not yet common. Wi-fi, itself—Ceballos said—has not extensively gone beyond the “lifestyle” aspect of the technology into homes, offices, and factories that could totally revolutionize society in terms of extensive economic opportunities to larger segment of society. The Wi-fi services themselves are limited to Metro Manila and a few urban centers, thus highlighting social critics fears about the growing digital divide.
A decisive factor to explain the limited impact of Wi-fi could be limited penetration of broadband facilities. Wi-fi is currently associated with products that follow the so-called 802.11 set of standards developed by the Institute of Electrical and Electronic Engineers. The one in current use is the 802.11b standards operating within the 2.4 gigahertz band and transfers data at 11 megabits per second. Entrepreneurs who want to install Wi-fi hotspot in their premises have to obtain a digital subscriber line (DSL) provided by telecommunications companies like PLDT and Globe Telecom. With a DSL, one can now connect a router from which signals are beamed into Wi-fi enabled terminals like laptops or PDAs. How fast Wi-fi could spread to the countryside and to other segments of society, therefore, would depend on the diffusion of DSL or a similar technology.
Ramon Isberto, the chief of the public affairs group of both PLDT and Smart Communications, confirms this view saying that the “revolution” will come not with the spread of hotspots per se but the extensive availability of several broadband technologies in general. Wi-fi, he said has two applications: the common one, the hotspots, or the portable application and the other one which he calls the “Smart WiFi” that uses the transmission application to reach unwired areas of the country. This transmission application, he claims, will hasten that “revolution” in the country. “This one will break down the digital divide.”
Using line of sight platforms or those huge antennas that Smart uses for their cellular sites, signals are beamed into homes and building equipped with small antennas to receive the signals. Once that small antenna is cabled to computers, one could immediately have the Web access that is two times faster than the dial up Internet. “You can also create a hotspot with this set up,” said Isberto.
Isberto claims that this kind of service is now available in 17 cities and towns in Metro Manila; 18 provinces in Northern Luzon (about 100 towns); 15 provinces in Southern Luzon (about 82 towns); 11 provinces in the Visayas (about 42 towns); 22 provinces in Mindananao (about 60 towns). “Smart WiFi reaches as far as Basco, Batanes up North, and as far as Bongao, Tawi-tawi in the South,” he said. “It’s not yet taking the country by storm because we started rolling out outside Metro Manila.”
“This tech is not an end in itself; it’s an enabling technology,” he explained. “What makes it exciting is that it enables individuals and institutions to do things that would otherwise not have been possible for either technical or financial reasons. And that’s really the exciting part of going broadband.”
He said that the extensive spread of hotspots, Smart WiFi, and other emerging broadband technologies would soon have far reaching impact on the Philippine economy. He said that having extensive Wi-fi or broadband penetration would enable to call centers to expand to the provinces to solve the problems of English-speaking call center agents as well as create more opportunities for business process outsourcing particularly on medical transcription, legal contracts, and computer aided design.
“In the next five to seven years, most of the country will be blanketed with broadband,” predicted Isberto.
Isberto said that despite their promotion of Smart WiFi, PLDT and Smart Communications are also looking at emerging technologies like the Wi-Max or the “Worldwide Interoperability for Microwave Access” based on the new IEEE 802.16 standard.
This new technology, like Smart’s line-of-sight platform, uses fixed network infrastructure to connect one fixed node to several other fixed nodes like a radio tower communicating with antennas installed on top of buildings and homes over a radius of 30 miles. This implies that Wi-Max could integrate DSL, wide area networks, local area networks, or deliver Ethernet access to Wi-fi hotspots.
“It’s hard to predict the future, [especially] on what kind the kind of technology will be the real winner in terms technical and business features,” said Isberto. “The stand of PLDT and Smart is that we are examining all these technologies and we have projects in many of the main fields. So we are examining all of them and placing bets in all the major players. Wherever the market will go, we can do it.”
Wednesday, December 14, 2005
The case for the legalization of wiretapping
Why just don’t we legalize wiretapping?
The calls for the resignation of President Gloria Macapagal Arroyo (GMA) came out of that wiretapping incident that seems to show she might have cheated in the 2004 election. The problem is her opponents could not use that tape as evidence because wiretapping is illegal, unless granted by the court. So GMA is still there in Malacañang despite the popular belief that she probably did not win. Had wiretapping been legal all along, that cheating issue could have been solved on the same day that the tapes came out.
I believe legalizing wiretapping will be good for the Philippines. Politicians will neither lie nor speak about anything knowing that someone else might be taping him/her. Imagine a country where politicians rarely open their mouths! And if they do they will only speak the truth. That would be wonderful. If everyone knows that someone is listening, politicians will be deterred from cheating, would be afraid to steal from the country’s coffers, or would not make deals at the expense the public.
In just a few years, the country’s GDP will grow very fast and people will have more jobs. Business people will no longer be pestered by politicians seeking bribes. Nor would they seek out politicians to bribe since they know bureaucrats and pols are avoiding situations where they could be photographed or recorded making sleazy quid pro quos.
Corporate governance will improve because parties negotiating a business deal know that each one has complete information about each other, thus lowering the transactions cost. The economy will be competitive and efficient since all economic players have access to important information. Consumers will benefit since goods and services will be prized at points allowed only by the efficient and objective interaction of supply and demand.
Advocates of civil liberties fear that wiretapping would yield the Orwellian future where Big Brother is capable of suppressing and censoring even our inner thoughts. In reality, a ban on wiretapping is a form of social control, an instrument of the ruling class to oppress those below the food chain. Where wiretapping is illegal, the supply of such services is scarce, meaning that only the rich could afford access to vital societal information. Do you wonder why only the really rich ones like Martha Stewart do insider trading? It’s because only the rich have access to “privileged information” that are usually obtained through irregular methods like wiretaps, playing golf with polite society, and having sex with a business tycoon’s secretary or driver.
In this of information, only the rich get richer because they always have competitive advantage. The poor may have the grapevine but the quality of information going through these media are inferior and secondary, something that could never be parlayed as sure-fire investments in the stock markets and some offshore financial instruments. Knowledge is power and the poor don’t have access to that.
Karl Marx, Alexis de Tocqueville, Martin Luther King, Amartya Sen—we all seek guidance from their wisdom in our quest to achieve political and economic equality. Forget it. All we need to do is legalize wiretapping and equality in spirit and in truth will reign in the land.
When you legalize wiretapping, the supply of that kind of that service will rise, since a huge industry offering such services will bloom like flowers in May, resulting in reduced prices.
Besides legalizing wiretapping, we also need to provide zero tariffs for wiretapping equipment and accessories thus pushing the price for wiretapping services further down. The country has thousands of graduates in communications engineering and information technology such that consulting companies engaging in the wiretapping and similar business will not run out of human resources to employ.
We will be attracting foreign direct investments in said sector since former Israeli commandoes, secret service agents, and jobless former Stasi and KGB spies, ronins or masterless hired guns, and mercenaries from all over could be attracted to set up shop and do things that are perfectly legal. Right now, they do it in the sly, making them dangerous to society. If they are legal, society could monitor their activities since they are going to register with the Securities and Exchange Commission. They will have their own chambers of commerce ("Wiretappers Association of the Philippines") as well as their own code of ethics.
They say wiretapping will cause widespread intrusion into people’s privacy. True, but it’s so easy to deal with that. Just avoid any kind connectivity. Or go back to the Stone Age. But privacy, my foot! Society has given up on that long time long time ago since we started having credit cards, internet accounts, web logs, close circuit television cameras, electronic chat, and reality TVs. Actually, privacy hasn’t been there since homo sapiens discovered that life is better in cramped urban setting, in a context we call now “civilization.”
Try setting up a TV program where people’s houses will be wired and their intimate activities aired on TV and you will be swamped with thousands of volunteers. Oh my, people just love to have “exposure” and instant fame.
It’s not uncommon these days for decent citizens of this Republic to dwell in electronic chat rooms where they bare their souls as well as their private parts. Try surfing the blogosphere and one would see people of all ages, gender, persuasion, color, and creed hopelessly begging the world to see and read their innermost feelings and darkest thoughts. This is one big exhibitionist world craving—nay lusting—for attention.
Instead of an Orwellian future, we will have people empowerment. Imagine a collective bargaining agreement between labor and capital. Unionists will say: “We really appreciate if you upgrade our pay and benefits. We don’t want a situation where we have to send all those transcripts and Boracay photos to your wives as well as our headquarters…” The boss will say: “C’mon guys, there is no sense being confrontational about this. The company cares for its employees.”
Wiretapping will be a great leveler.
The calls for the resignation of President Gloria Macapagal Arroyo (GMA) came out of that wiretapping incident that seems to show she might have cheated in the 2004 election. The problem is her opponents could not use that tape as evidence because wiretapping is illegal, unless granted by the court. So GMA is still there in Malacañang despite the popular belief that she probably did not win. Had wiretapping been legal all along, that cheating issue could have been solved on the same day that the tapes came out.
I believe legalizing wiretapping will be good for the Philippines. Politicians will neither lie nor speak about anything knowing that someone else might be taping him/her. Imagine a country where politicians rarely open their mouths! And if they do they will only speak the truth. That would be wonderful. If everyone knows that someone is listening, politicians will be deterred from cheating, would be afraid to steal from the country’s coffers, or would not make deals at the expense the public.
In just a few years, the country’s GDP will grow very fast and people will have more jobs. Business people will no longer be pestered by politicians seeking bribes. Nor would they seek out politicians to bribe since they know bureaucrats and pols are avoiding situations where they could be photographed or recorded making sleazy quid pro quos.
Corporate governance will improve because parties negotiating a business deal know that each one has complete information about each other, thus lowering the transactions cost. The economy will be competitive and efficient since all economic players have access to important information. Consumers will benefit since goods and services will be prized at points allowed only by the efficient and objective interaction of supply and demand.
Advocates of civil liberties fear that wiretapping would yield the Orwellian future where Big Brother is capable of suppressing and censoring even our inner thoughts. In reality, a ban on wiretapping is a form of social control, an instrument of the ruling class to oppress those below the food chain. Where wiretapping is illegal, the supply of such services is scarce, meaning that only the rich could afford access to vital societal information. Do you wonder why only the really rich ones like Martha Stewart do insider trading? It’s because only the rich have access to “privileged information” that are usually obtained through irregular methods like wiretaps, playing golf with polite society, and having sex with a business tycoon’s secretary or driver.
In this of information, only the rich get richer because they always have competitive advantage. The poor may have the grapevine but the quality of information going through these media are inferior and secondary, something that could never be parlayed as sure-fire investments in the stock markets and some offshore financial instruments. Knowledge is power and the poor don’t have access to that.
Karl Marx, Alexis de Tocqueville, Martin Luther King, Amartya Sen—we all seek guidance from their wisdom in our quest to achieve political and economic equality. Forget it. All we need to do is legalize wiretapping and equality in spirit and in truth will reign in the land.
When you legalize wiretapping, the supply of that kind of that service will rise, since a huge industry offering such services will bloom like flowers in May, resulting in reduced prices.
Besides legalizing wiretapping, we also need to provide zero tariffs for wiretapping equipment and accessories thus pushing the price for wiretapping services further down. The country has thousands of graduates in communications engineering and information technology such that consulting companies engaging in the wiretapping and similar business will not run out of human resources to employ.
We will be attracting foreign direct investments in said sector since former Israeli commandoes, secret service agents, and jobless former Stasi and KGB spies, ronins or masterless hired guns, and mercenaries from all over could be attracted to set up shop and do things that are perfectly legal. Right now, they do it in the sly, making them dangerous to society. If they are legal, society could monitor their activities since they are going to register with the Securities and Exchange Commission. They will have their own chambers of commerce ("Wiretappers Association of the Philippines") as well as their own code of ethics.
They say wiretapping will cause widespread intrusion into people’s privacy. True, but it’s so easy to deal with that. Just avoid any kind connectivity. Or go back to the Stone Age. But privacy, my foot! Society has given up on that long time long time ago since we started having credit cards, internet accounts, web logs, close circuit television cameras, electronic chat, and reality TVs. Actually, privacy hasn’t been there since homo sapiens discovered that life is better in cramped urban setting, in a context we call now “civilization.”
Try setting up a TV program where people’s houses will be wired and their intimate activities aired on TV and you will be swamped with thousands of volunteers. Oh my, people just love to have “exposure” and instant fame.
It’s not uncommon these days for decent citizens of this Republic to dwell in electronic chat rooms where they bare their souls as well as their private parts. Try surfing the blogosphere and one would see people of all ages, gender, persuasion, color, and creed hopelessly begging the world to see and read their innermost feelings and darkest thoughts. This is one big exhibitionist world craving—nay lusting—for attention.
Instead of an Orwellian future, we will have people empowerment. Imagine a collective bargaining agreement between labor and capital. Unionists will say: “We really appreciate if you upgrade our pay and benefits. We don’t want a situation where we have to send all those transcripts and Boracay photos to your wives as well as our headquarters…” The boss will say: “C’mon guys, there is no sense being confrontational about this. The company cares for its employees.”
Wiretapping will be a great leveler.
Tuesday, December 13, 2005
Wanted: Statesmen and masochists (Or why should we consider monarchy)
In the last few months, experts and pundits have been debating whether or not the Philippine should shift from the presidential to parliamentary form of government. It is clear however both parties are missing the real issue as to why Philippine politics has been prone to gridlock.
Advocates of parliamentary form of government say the Philippines has been stuck with the presidential system for so long and Filipinos have nothing to show for it economically. The country has been debt-ridden, thus preventing it from paying for vital economic and social services. It has been suffering from fiscal crisis, from graft and corruption, ineffective governance, corrupt bureaucrats. All these problems emerged under a presidential system.
Those who love the presidential form say there’s nothing wrong with the system per se. The problem is with the crooks capturing state power. If we could get the right people into office, we could make the presidential system work. It is more democratic because the president is directly elected by the people.
My view is that both perspectives miss the real issue. Yes, the country’s politics is prone to gridlock. But that has something more to do with how pervasive the impact of politics is in the country’s economic life. It’s prone to paralysis because of one single fact—that wealth creation in this country is not done through economic means or entrepreneurial skill but through extra-economic means: bribery, connections, government subsidy, high tariff walls for favored industries, tax holidays for favored companies, pork barrel, and plain graft and corruption.
Do you ever wonder why it takes three dozens of signatures for an entrepreneur to set up a simple photocopying business? That’s because bureaucrats and politicians in power from top to bottom layers of government want to maximize return for their “investments” (i.e. campaign expenses). Call it rent-seeking, ersatz capitalism, bureaucrat capitalism, predatory state, or semifeudal or plain graft and corruption, whatever—they are all one and the same and it has been a profitable enterprise for many crooks in government since the dawn of Philippine history.
Fertilizer scam? Hello Garci? Jueteng? They are just tips of icebergs. That’s why politicians of all shades of virtues—or lack of it—are perpetually fighting tooth and nail to capture, recapture, and maintain political power.
Let’s accept it: politics is necessarily Darwinian, survival of the fittest. Checks and balances. That is good for society; just look at those perpetual struggles in the animal kingdom for the status of an alpha male. But when you put in economic and financial element—nay unadulterated greed—in the political equation, that’s where trouble comes in because the political system starts attracting all sorts of sleazy elements. The crooks in power will cheat, cajole, threaten, and bribe to maintain power. Crooks outside the corridors of power will also cajole, lambaste, block, and revolt to capture power. Former Singapore Prime Minister Lee Kuan Yew called it “exuberance of democracy” but it’s really nothing but plain and simple shoot-in-the-foot.
All those who want to reform the Philippine politics and economy should therefore strive to remove the nexus between politics and the economy. This policy reform objective could be achieved through measures including low and neutral tariff rates (to discourage smuggling as well as the incentive to make deals with Customs officials), the removal of the pork barrel system, opening up entry and exit of all businesses including utilities and telecommunications without having to acquire franchise from Congress, and lowering of corporate taxes coupled with the removal of fiscal incentives, among many others. The central idea is to prevent political motivations to encroach in people’s economic decisions, subject to certain limited criteria such as environmental regulations and national security.
We should adopt the concept that doing business or engaging in entrepreneurship is an inalienable right on par with our freedom of assembly and speech as well as of pursuit of happiness. That way mayors, governors, and bureaucrats will not have any power to put barriers against people’s entrepreneurial energies. You remove political intervention in economic decisions and you can see that “public service” will only attract two types of persons, either statesmen or masochists, and that will be for the good of the country.
Do we hear these reform issues from advocates of either presidential or parliamentary form of government? No. Failure to address these issues would render the debates on the form of government meaningless.
As a last resort, maybe we should just think seriously about the proposal of Fr. Joaquin Bernas, the country’s leading constitutional expert from the Ateneo de Manila University, and probably the wisest Jesuit in the land. When asked about the best form of government for the Philippines, Father Bernas answered with great confidence: “I believe the best form of government is monarchy—for as long as I am the king.”
Advocates of parliamentary form of government say the Philippines has been stuck with the presidential system for so long and Filipinos have nothing to show for it economically. The country has been debt-ridden, thus preventing it from paying for vital economic and social services. It has been suffering from fiscal crisis, from graft and corruption, ineffective governance, corrupt bureaucrats. All these problems emerged under a presidential system.
Those who love the presidential form say there’s nothing wrong with the system per se. The problem is with the crooks capturing state power. If we could get the right people into office, we could make the presidential system work. It is more democratic because the president is directly elected by the people.
My view is that both perspectives miss the real issue. Yes, the country’s politics is prone to gridlock. But that has something more to do with how pervasive the impact of politics is in the country’s economic life. It’s prone to paralysis because of one single fact—that wealth creation in this country is not done through economic means or entrepreneurial skill but through extra-economic means: bribery, connections, government subsidy, high tariff walls for favored industries, tax holidays for favored companies, pork barrel, and plain graft and corruption.
Do you ever wonder why it takes three dozens of signatures for an entrepreneur to set up a simple photocopying business? That’s because bureaucrats and politicians in power from top to bottom layers of government want to maximize return for their “investments” (i.e. campaign expenses). Call it rent-seeking, ersatz capitalism, bureaucrat capitalism, predatory state, or semifeudal or plain graft and corruption, whatever—they are all one and the same and it has been a profitable enterprise for many crooks in government since the dawn of Philippine history.
Fertilizer scam? Hello Garci? Jueteng? They are just tips of icebergs. That’s why politicians of all shades of virtues—or lack of it—are perpetually fighting tooth and nail to capture, recapture, and maintain political power.
Let’s accept it: politics is necessarily Darwinian, survival of the fittest. Checks and balances. That is good for society; just look at those perpetual struggles in the animal kingdom for the status of an alpha male. But when you put in economic and financial element—nay unadulterated greed—in the political equation, that’s where trouble comes in because the political system starts attracting all sorts of sleazy elements. The crooks in power will cheat, cajole, threaten, and bribe to maintain power. Crooks outside the corridors of power will also cajole, lambaste, block, and revolt to capture power. Former Singapore Prime Minister Lee Kuan Yew called it “exuberance of democracy” but it’s really nothing but plain and simple shoot-in-the-foot.
All those who want to reform the Philippine politics and economy should therefore strive to remove the nexus between politics and the economy. This policy reform objective could be achieved through measures including low and neutral tariff rates (to discourage smuggling as well as the incentive to make deals with Customs officials), the removal of the pork barrel system, opening up entry and exit of all businesses including utilities and telecommunications without having to acquire franchise from Congress, and lowering of corporate taxes coupled with the removal of fiscal incentives, among many others. The central idea is to prevent political motivations to encroach in people’s economic decisions, subject to certain limited criteria such as environmental regulations and national security.
We should adopt the concept that doing business or engaging in entrepreneurship is an inalienable right on par with our freedom of assembly and speech as well as of pursuit of happiness. That way mayors, governors, and bureaucrats will not have any power to put barriers against people’s entrepreneurial energies. You remove political intervention in economic decisions and you can see that “public service” will only attract two types of persons, either statesmen or masochists, and that will be for the good of the country.
Do we hear these reform issues from advocates of either presidential or parliamentary form of government? No. Failure to address these issues would render the debates on the form of government meaningless.
As a last resort, maybe we should just think seriously about the proposal of Fr. Joaquin Bernas, the country’s leading constitutional expert from the Ateneo de Manila University, and probably the wisest Jesuit in the land. When asked about the best form of government for the Philippines, Father Bernas answered with great confidence: “I believe the best form of government is monarchy—for as long as I am the king.”
Monday, December 12, 2005
Wanted: All Seasons, All Weather Capitalists
Last week, young industrialist Joey Concepcion, the last speaker for the night, strode into the podium of the La Salle’s Graduate School of Business “fearless forecast” symposium sans the flashy Powerpoint presentation. All he had is a firm conviction that he needed to speak to the participants because in that room, he felt, are the future of the country that is currently hobbled by shoot-in-the-foot politics.
His message: entrepreneurs of this country should move on, tough it out, adapt to the changing economic and political circumstances and expand their business operations so they can help their country by creating more economic opportunities and jobs. And they should pay the right amount of taxes. That way they could help build this country without getting their hands muddied in partisan politics.
He had the simplest message, yet he got the group’s attention. And rightly so. If there’s one aspect that may characterize the Concepcion group of companies, it’s their capability to grow during the best and worst of times from the Marcos dictatorship to the present administration. My impression is that the family doesn’t wait for the fair weather to expand operations. Since the country joined the WTO, some “nationalists” thought local “industrialists” will wither away as tariffs of most products were expected to go down. The country’s tariff rates indeed have been going down, but the Concepcions’ businesses seem to keep on growing thus creating more jobs for Filipinos.
The speakers before him rattled off numbers that simply confirmed the posture where they were coming from. Representative Joey Salceda of Albay’s third district and one of President Arroyo’s economic advisers, say the Philippines economy is bound to grow by 5.7 percent next year. No, it will only be 4.6 percent, said University of the Philippines economist Benjamin Diokno, former budget secretary under the Estrada Administration. Or it might be just be 4.0 percent, said Peter Wallace, head of a local business forum, especially if politics will get out of control and the government would fail to collect more taxes. Listening to them, it’s as if the world will end tomorrow.
For Concepcion, those were “just numbers.” What will matter, he said, are entrepreneur’s decisions to move on despite the unsettling political situation. There is always hope, he said. Those who are hopeless, they should pack up and leave. But those who stay or are stuck, they should move on and do their share in nation-building.
And he is right. In fact, if one looks at the combined first three quarters performance of the Philippine economy, it would show that the industry grew by 4.6 percent and services by 6.1 percent, despite the fact that the government, owing to its obsession of balancing the books, has not been spending much on important economic infrastructure. That growth rate therefore reflects the “people’s economy” and is something that the current government could never grab credit for. It’s a product of each entrepreneurial decision to “move on” and do business despite the odds, of each overseas worker’s decision to get that distant job so the dollars are sent home, and of millions more of other decisions to move on and get on with their lives. It’s all about the people, minus its government.
Of course, it could have been better had the Philippines got a friendlier environment in the realm of both policy and governance such that entrepreneurs will even more flourish. Or that, according to Peter Wallace, Gloria Arroyo—in her commitment to family unity—simply joined her husband when he had that lonely self-exile and never bothered to come back. Since she is still there in Malacañang—and that she really has real baggage to deal with (e.g. fertilizer scam, “Hello Garci” controversy, among others— let the politics continue to its logical conclusion. But while the politicians are doing that, let the entrepreneurs, the industrialists, do their business. Someday we may yet wake up to a better world knowing that change came not because of politicians but because entrepreneurs and ordinary people like you and me moved on with our lives despite all the odds.
Welcome to the real world!
His message: entrepreneurs of this country should move on, tough it out, adapt to the changing economic and political circumstances and expand their business operations so they can help their country by creating more economic opportunities and jobs. And they should pay the right amount of taxes. That way they could help build this country without getting their hands muddied in partisan politics.
He had the simplest message, yet he got the group’s attention. And rightly so. If there’s one aspect that may characterize the Concepcion group of companies, it’s their capability to grow during the best and worst of times from the Marcos dictatorship to the present administration. My impression is that the family doesn’t wait for the fair weather to expand operations. Since the country joined the WTO, some “nationalists” thought local “industrialists” will wither away as tariffs of most products were expected to go down. The country’s tariff rates indeed have been going down, but the Concepcions’ businesses seem to keep on growing thus creating more jobs for Filipinos.
The speakers before him rattled off numbers that simply confirmed the posture where they were coming from. Representative Joey Salceda of Albay’s third district and one of President Arroyo’s economic advisers, say the Philippines economy is bound to grow by 5.7 percent next year. No, it will only be 4.6 percent, said University of the Philippines economist Benjamin Diokno, former budget secretary under the Estrada Administration. Or it might be just be 4.0 percent, said Peter Wallace, head of a local business forum, especially if politics will get out of control and the government would fail to collect more taxes. Listening to them, it’s as if the world will end tomorrow.
For Concepcion, those were “just numbers.” What will matter, he said, are entrepreneur’s decisions to move on despite the unsettling political situation. There is always hope, he said. Those who are hopeless, they should pack up and leave. But those who stay or are stuck, they should move on and do their share in nation-building.
And he is right. In fact, if one looks at the combined first three quarters performance of the Philippine economy, it would show that the industry grew by 4.6 percent and services by 6.1 percent, despite the fact that the government, owing to its obsession of balancing the books, has not been spending much on important economic infrastructure. That growth rate therefore reflects the “people’s economy” and is something that the current government could never grab credit for. It’s a product of each entrepreneurial decision to “move on” and do business despite the odds, of each overseas worker’s decision to get that distant job so the dollars are sent home, and of millions more of other decisions to move on and get on with their lives. It’s all about the people, minus its government.
Of course, it could have been better had the Philippines got a friendlier environment in the realm of both policy and governance such that entrepreneurs will even more flourish. Or that, according to Peter Wallace, Gloria Arroyo—in her commitment to family unity—simply joined her husband when he had that lonely self-exile and never bothered to come back. Since she is still there in Malacañang—and that she really has real baggage to deal with (e.g. fertilizer scam, “Hello Garci” controversy, among others— let the politics continue to its logical conclusion. But while the politicians are doing that, let the entrepreneurs, the industrialists, do their business. Someday we may yet wake up to a better world knowing that change came not because of politicians but because entrepreneurs and ordinary people like you and me moved on with our lives despite all the odds.
Welcome to the real world!
Sunday, December 11, 2005
Rude and poor
In reaction to my blog on medical professionals, Louise—a practicing architect and urban planner—wrote me about her sister’s frustrations about working in government-owned hospitals.
DAVE—Kathleen [a doctor] is frustrated the way things are going at Government Hospitals. She relates to me how RUDE the sick poor are, particularly the relatives. I told her, why don't she make a journal of her encounters because there are really some cases that deserve a deeper study since these affect statistics? Facts:
1. A SOB father brought his wife in labor at the middle of the night. The baby delivered turned out to be premature. He has to be put in an incubator. After 24 hours under Kathleen's patient care, the baby was already doing fine. Then this SOB insisted that he brings his child home already kasi okay na daw [the child is ok]. He threatened everybody at the hospital if he will not be allowed to do it. So he was made to sign a waiver. Within the day, he has to rush his kid back to the hospital. Too late because the child died. This happened at Trece Martires.
2. A number of times, some near-death patients are rushed at dawn at Trece or JP Rizal with relatives demanding that they be attended immediately. Two weeks na daw na nilalagnat, kung di pa tumirik ang mata, tsaka nila naisipang dalhin sa hospital. [The child had fever for two weeks. Yet they only bring the kid to the hospital when the child had convulsion] Then they blame everybody at the hospital if the emergency case turns out fatal. There was a case when one resident doctor from La Salle was stabbed by a frustrated poor patient because of that.
My question is, are the mindset of poor people mostly like that? If this is so, what is the deeper reason behind this? Who is to be blamed? Their genes, their breeding, or external factors such as the government?
My sis once had an altercation with a poor patient at Trece. A drunk man threatened her for suggesting and making an endorsement that his wife be brought to PGH because all oxygen tanks were in use and there was no available one for the patient. The man yelled daw, "Anong klaseng Hospital ng Gobyerno 'to, ni oxygen tank, wala? Anong klase kang Doctor?" [What kind of government hospital is this? You don’t even have an oxygen tank!] "Hoy", my sister yelled back," taxpayer ka ba, para mag-demand ng ganyan sa gobyerno natin?" [Hey, do you pay your taxes honestly to demand so much from the government?] If the guard haven't intervened daw, muntikan na [If the guard did not intervene, violence could have erupted].
LOUISE—I would like to think that good manners and right conduct has nothing to do with one’s economic class. There are also many rude people in the middle class and the rich. I guess it’s the failure of the country’s educational system. But in absolute terms, there are more rude people among the poor simply because there are just too many poor people in this country. That should also mean there are a lot more nice people among them than among the rich who are numerically few. [By the way, I got the Pulse Asia indicators and found out I belong to the “poor” segment of the population.]
The real danger there is that some people tend to romanticize the poor. Blame Karl Marx for that. When Marx started telling the world the masses are the heroes of history, some intellectuals started interpreting this view in moral terms. So the poor can do no wrong even if they are rude. I don’t think so. I guess the best way to deal with the problem is to post security guards at strategic areas of the hospital all the time. Yes, many of them may yet inherit the kingdom of heaven but they have to behave well while on earth.
For a long time, I’ve been wondering why, our national Jose Rizal, did not support Andres Bonifacio’s “working class” revolution in 1896. His explanation: he feared that the slaves of his time will simply be the tyrants of tomorrow. That’s why he wanted change to come gradually. He stressed that the masses should attain education so they would know the science and fine art of governance. We are still figuring out that science and fine art of governance even until today. [It was not a “working class revolution” by the way, but that’s another story. I’ll write another piece on that].
This country of course is a country of whiners. People, rich and poor, always think the government should provide everything. When those liberation theologians in the 80s think there should be “preferential option for the poor,” many of those poor people think the government owes them every thing. Never mind that in this country each one is trying to avoid paying taxes. Pathetic but true.
DAVE—Kathleen [a doctor] is frustrated the way things are going at Government Hospitals. She relates to me how RUDE the sick poor are, particularly the relatives. I told her, why don't she make a journal of her encounters because there are really some cases that deserve a deeper study since these affect statistics? Facts:
1. A SOB father brought his wife in labor at the middle of the night. The baby delivered turned out to be premature. He has to be put in an incubator. After 24 hours under Kathleen's patient care, the baby was already doing fine. Then this SOB insisted that he brings his child home already kasi okay na daw [the child is ok]. He threatened everybody at the hospital if he will not be allowed to do it. So he was made to sign a waiver. Within the day, he has to rush his kid back to the hospital. Too late because the child died. This happened at Trece Martires.
2. A number of times, some near-death patients are rushed at dawn at Trece or JP Rizal with relatives demanding that they be attended immediately. Two weeks na daw na nilalagnat, kung di pa tumirik ang mata, tsaka nila naisipang dalhin sa hospital. [The child had fever for two weeks. Yet they only bring the kid to the hospital when the child had convulsion] Then they blame everybody at the hospital if the emergency case turns out fatal. There was a case when one resident doctor from La Salle was stabbed by a frustrated poor patient because of that.
My question is, are the mindset of poor people mostly like that? If this is so, what is the deeper reason behind this? Who is to be blamed? Their genes, their breeding, or external factors such as the government?
My sis once had an altercation with a poor patient at Trece. A drunk man threatened her for suggesting and making an endorsement that his wife be brought to PGH because all oxygen tanks were in use and there was no available one for the patient. The man yelled daw, "Anong klaseng Hospital ng Gobyerno 'to, ni oxygen tank, wala? Anong klase kang Doctor?" [What kind of government hospital is this? You don’t even have an oxygen tank!] "Hoy", my sister yelled back," taxpayer ka ba, para mag-demand ng ganyan sa gobyerno natin?" [Hey, do you pay your taxes honestly to demand so much from the government?] If the guard haven't intervened daw, muntikan na [If the guard did not intervene, violence could have erupted].
LOUISE—I would like to think that good manners and right conduct has nothing to do with one’s economic class. There are also many rude people in the middle class and the rich. I guess it’s the failure of the country’s educational system. But in absolute terms, there are more rude people among the poor simply because there are just too many poor people in this country. That should also mean there are a lot more nice people among them than among the rich who are numerically few. [By the way, I got the Pulse Asia indicators and found out I belong to the “poor” segment of the population.]
The real danger there is that some people tend to romanticize the poor. Blame Karl Marx for that. When Marx started telling the world the masses are the heroes of history, some intellectuals started interpreting this view in moral terms. So the poor can do no wrong even if they are rude. I don’t think so. I guess the best way to deal with the problem is to post security guards at strategic areas of the hospital all the time. Yes, many of them may yet inherit the kingdom of heaven but they have to behave well while on earth.
For a long time, I’ve been wondering why, our national Jose Rizal, did not support Andres Bonifacio’s “working class” revolution in 1896. His explanation: he feared that the slaves of his time will simply be the tyrants of tomorrow. That’s why he wanted change to come gradually. He stressed that the masses should attain education so they would know the science and fine art of governance. We are still figuring out that science and fine art of governance even until today. [It was not a “working class revolution” by the way, but that’s another story. I’ll write another piece on that].
This country of course is a country of whiners. People, rich and poor, always think the government should provide everything. When those liberation theologians in the 80s think there should be “preferential option for the poor,” many of those poor people think the government owes them every thing. Never mind that in this country each one is trying to avoid paying taxes. Pathetic but true.
Thursday, December 08, 2005
San Diego-Tijuana Border: "Welcome to Paradise!"
IVP Batch 2005 at the Port of San Ysidro, San Diego, California. Each day at least 132,000 people and 50,000 vehicles (trucks, buses, cars, rail, private aircraft) cross the California-Mexico border through the Port of San Ysidro in San Diego.A small poster saying “WELCOME TO PARADISE!” greeted us as we hurtle down the labyrinthine office of the US Customs and Border Protection (USCBP) at the Port of San Ysidro guarding the Tijuana-San Diego border. We were going towards where the intercepted contrabands (e.g. drugs) and illegal immigrants are brought prior to “processing” inside the building. That poster had a sense of irony because, as one border cop had been stressing, one of USCBP's businesses is about stopping people from illegally coming in.
Each year, there are about 92 million-person border crossings between the Mexico and California. Border crossing through conveyances like trucks, buses, cars, rail containers, trains, passenger vehicles, and private aircraft reach 36 million each year. These statistics reflect how the economy of the US and Mexico has become intertwined. Part of that economic tangle is the grim reality of trafficking of drugs and people. Each year almost 70,000 immigration violators are caught at the Southern California ports of entry. Hundreds died trying to enter the US through the Arizona desert.
My heart pounded hard after the border patrol cop accompanying us got a message that an attempt at illegal human smuggling has just been foiled. Mexicans, he said. The dogs caught them coming in hidden in a car’s trunk. It was stupid for them to do because even people coming in through the most clever means—like hiding a child in a truck’s gas tank—are easily detected.
“The child was unconscious; the smugglers may have drugged her so she can bear the heat, fumes, and—hopefully—survive the long, tortuous journey,” he said. “She was barely breathing when we found her. We have to tear the gasoline tank apart and rush her to the hospital to save her life.”
How many people could a car trunk contain? I imagined that my old Mazda’s trunk could hardly accommodate three persons. When the cops opened the trunk, I saw people piled on top of each other like sardines. They were startled to see American cops hovering over them. I started counting as they were herded out towards the holding area. One, two, three…. holy cow! There were seven of them--four males and three females. I reached for my camera but failed to take pictures. I was too shock to do anything.
The cops say those who have criminal records will be detained and charged in court. Those who don’t have any bad record will be deported after some paper works. “We are really after the smugglers, illegal syndicates, and not these people who are victims.”
“We are good at what we do,” the border cop boasted, stressing they have all sorts of training and technologies to deal with “the problem”: sniffing dogs, electronic sensors, software, profiling, and psychological techniques that easily yields offenders. “These people [smugglers] hate us very much. So when we see them being too friendly, like asking me how's my day, I know they are hiding something, maybe drugs—marijuana, cocaine, heroine, methamphetamines—or humans.”
Why do people keep on trying to enter the US illegally knowing that the risks of capture, embarrassment, detention, and legal problems are very high?
Economic factors easily come to mind. After all, cases of human smuggling—the cops say—usually rise following some natural disasters in Latin American countries. The theory of the “rational man” says that a person would do something if the rewards for such an effort are greater than the risks involved. That could only mean that a significant percentage of those people trying to cross illegally are able to get through and blend with the local population despite all the gadgets, the sniffing dogs, and other technologies.
I remember the story of General Antonio Lopez de Santa Anna, that Mexican strongman who massacred the Gringo rebels at the Alamo, Texas about 170 years ago. Encouraged by his victory, Santa Anna went after the remaining part of the Texan troops led by Sam Houston who were giving the Mexicans guerilla warfare. Santa Anna had cornered Houston’s group in a maze of swamps along the San Jacinto River. Instead of going in for the kill, Santa Anna and his men took a nap, a siesta!
“Victory can wait, boys. Let’s have a little sleep first,” he must have told his men. It was a costly error. He woke up to the thundering sound of cannon fire from Houston’s group who were slaughtering his more numerous but sleep-dazed fighters. Santa Anna escaped to the forest but was captured two days later. Under duress, he signed away Texas’ independence. In the American-Mexican war that followed, Santa Anna had to part with California, New Mexico, Oklahoma, and other states as well, making the US among the biggest country in the world in terms of land mass. It’s a case of one stupid nap changing the course of history. Historians say it was the first step for America to become a world power.
Aren’t the Mexicans just recovering economically what they had lost militarily and politically many years ago?
Maybe. Maybe not. It’s probably just all about sharing in the “American dream.” Either way, the Mexicans are succeeding. Mexican or the Latino population in general is now among the biggest and most politically influential ethnic groups in California, Texas, and other parts of the US. It’s a reality that apparently benefits their host communities as well. Latinos provide cheap brawn for the California’s farms, shops, and factories.
“Sure, thanks!” Those seven Mexicans may have said as they passed through that small poster welcoming them to “paradise” on the way to detention. They will be sent back home after some questions, but they knew they could always try crossing the border again.
Wednesday, December 07, 2005
Call centers are great but let's not forget the farms
It used to be that whenever events like a “national summit” to solve some pressing problems is held in the Metropolis, politicians and media organizations come in droves to participate in the gabfest. Last week, the Department of Agriculture held a national agriculture and fisheries extension policy summit in Makati supposedly to solicit inputs from experts for the proposed National Agriculture and Fisheries Extension Act of 2006. The event however came and went like mists in the morning. Media and politicians largely ignored it. Senator Ramon Magsaysay, the chair of the Senate Committee on Agriculture, was supposed to give pep talk to inspire the participants, but did not show up. He had more important things to do.
If there’s one thing that the supposed national summit proved, it’s the truth that agriculture and fisheries issues are no longer in the radar screens of most policy makers. It’s bad because about half the number of people in this country is still dependent directly or indirectly on the farm sector. The country is paying dearly for this neglect.
It appears that the “political market” for initiatives in the farm sector is no longer there. The reason for this is that the mass movement for rural development as well as agrarian reform seems to have dissipated. Do we still hear about the “peasant movement” and their supporters from the middle class? Nobody seems to care when peasant organizers were slaughtered at the Hacienda Luisita a few months back.
During the time of President Fidel V. Ramos, some economists and management experts from the academe thought that the Philippines could leap-frog the development process by focusing the energies on the services sector. Never mind the agricultural sector, they say. It’s too unpredictable. It’s subject to the tender mercies of weather. Bankers think its “un-bankable.” Focus on services: Filipinos are gracious, always smiling, speak good English, could do efficient pencil-pushing at very low rates, sing and dance well, flip hamburgers better, and do not mind working long hours down the hot and humid bowels of oil tankers and cargo ships. It’s our “competitive advantage,” they say.
Indeed, the country’s services sector has been growing exceptionally (6-7 percent growth rate in gross value added) in the last five years, driven particularly by the transport, communications, and storage; trade; and financial services. Never mind that the government, preoccupied with improving the country’s balance sheets and paying off foreign debts, has not been investing in health, social services and infrastructure. Lately, industry leaders from the Business Processing Association Philippines claimed the country is expected to generate at least US$2 billion, half of which came from call centers. They also say the industry now employs more than 140,000 workers and still counting. These trends, they say, tend to support the view for a services-oriented development strategy, especially so that dollar remittances from overseas Filipino workers tend also to buttress urban-oriented service enterprises.
Or so they thought until the National Economic and Development Authority (Neda) told us last week that the local economy grew only but 4.1 percent despite the double-digit growth of dollar remittances in the last ten months, the lowest since 2002. The reason for that, according to Neda, is that families of OFWs are saving their money. Personal expenditures are flat thus the overall level of economic activity has not improved. That’s probably true except that if one looks at the numbers, the real reason lies with the fact the farms were doing badly in the last four quarters.
Neda has been blaming bad weather but its not admitting another truth: that owing to the continuing fiscal problems, government has not been putting much money for the farm sector. And if they indeed spent huge sums for fertilizer, these expenditures may not have benefited the farmers but some bureaucrat’s bank accounts.
What we are saying is that call centers are great, that the vibrancy of the services is important to the economy. After all, the service sector accounts for 44 percent of the GDP. But let’s not forget the farms. That’s where many of the poor people are. They can’t work in call centers and medical transcription firms. Their “competitive advantage” is in the countryside. The truth is that the Philippine economy usually grows stronger in times when the farm sector was doing as well.
Where should we start? Policymakers should look at the results of that national extension summit. That gathering was intended to sharpen the country’s strategy to bring practical knowledge on how best to grow crops, raise animals, and do aquaculture. Next year, besides doing the usual politics, legislators would the nation a great service if they could pass the proposed national extension law. And provide funds for it. They should put money where the food is.
(Note: I wrote this editorial piece for the BusinessMirror, 7 December 2005).
If there’s one thing that the supposed national summit proved, it’s the truth that agriculture and fisheries issues are no longer in the radar screens of most policy makers. It’s bad because about half the number of people in this country is still dependent directly or indirectly on the farm sector. The country is paying dearly for this neglect.
It appears that the “political market” for initiatives in the farm sector is no longer there. The reason for this is that the mass movement for rural development as well as agrarian reform seems to have dissipated. Do we still hear about the “peasant movement” and their supporters from the middle class? Nobody seems to care when peasant organizers were slaughtered at the Hacienda Luisita a few months back.
During the time of President Fidel V. Ramos, some economists and management experts from the academe thought that the Philippines could leap-frog the development process by focusing the energies on the services sector. Never mind the agricultural sector, they say. It’s too unpredictable. It’s subject to the tender mercies of weather. Bankers think its “un-bankable.” Focus on services: Filipinos are gracious, always smiling, speak good English, could do efficient pencil-pushing at very low rates, sing and dance well, flip hamburgers better, and do not mind working long hours down the hot and humid bowels of oil tankers and cargo ships. It’s our “competitive advantage,” they say.
Indeed, the country’s services sector has been growing exceptionally (6-7 percent growth rate in gross value added) in the last five years, driven particularly by the transport, communications, and storage; trade; and financial services. Never mind that the government, preoccupied with improving the country’s balance sheets and paying off foreign debts, has not been investing in health, social services and infrastructure. Lately, industry leaders from the Business Processing Association Philippines claimed the country is expected to generate at least US$2 billion, half of which came from call centers. They also say the industry now employs more than 140,000 workers and still counting. These trends, they say, tend to support the view for a services-oriented development strategy, especially so that dollar remittances from overseas Filipino workers tend also to buttress urban-oriented service enterprises.
Or so they thought until the National Economic and Development Authority (Neda) told us last week that the local economy grew only but 4.1 percent despite the double-digit growth of dollar remittances in the last ten months, the lowest since 2002. The reason for that, according to Neda, is that families of OFWs are saving their money. Personal expenditures are flat thus the overall level of economic activity has not improved. That’s probably true except that if one looks at the numbers, the real reason lies with the fact the farms were doing badly in the last four quarters.
Neda has been blaming bad weather but its not admitting another truth: that owing to the continuing fiscal problems, government has not been putting much money for the farm sector. And if they indeed spent huge sums for fertilizer, these expenditures may not have benefited the farmers but some bureaucrat’s bank accounts.
What we are saying is that call centers are great, that the vibrancy of the services is important to the economy. After all, the service sector accounts for 44 percent of the GDP. But let’s not forget the farms. That’s where many of the poor people are. They can’t work in call centers and medical transcription firms. Their “competitive advantage” is in the countryside. The truth is that the Philippine economy usually grows stronger in times when the farm sector was doing as well.
Where should we start? Policymakers should look at the results of that national extension summit. That gathering was intended to sharpen the country’s strategy to bring practical knowledge on how best to grow crops, raise animals, and do aquaculture. Next year, besides doing the usual politics, legislators would the nation a great service if they could pass the proposed national extension law. And provide funds for it. They should put money where the food is.
(Note: I wrote this editorial piece for the BusinessMirror, 7 December 2005).
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