is the subject of my Trade Tripper column in this weekend issue of BusinessWorld:
The newspapers gleefully cackled (on a Sunday no less!) at Pope Francis allegedly slamming the clergy’s “obsession” with homosexuality, abortion, contraception. From the way the media painted it, it was as if Pope Francis had called for the renunciation not only of the teachings of Pope Benedict XVI but also centuries and centuries of Catholic teaching. The truth, as usual, however, is that Pope Francis did no such thing.
I think it was Pat Archbold (“Quotes That Prove The Pope Is A Liberal,” National Catholic Register, Aug. 5) that best described how Pope Francis differs with Pope Benedict XVI:
“The press has been telling us that Pope Francis, in word and deed, is no less than the total renunciation of Pope Benedict’s papacy... I think it is time we face facts. The press is right. The Pope is a liberal and I have the quotes to prove it:
“Encourages Homosexuality: ‘It is deplorable that homosexual persons have been and are the object of violent malice in speech or in action. Such treatment deserves condemnation from the church’s pastors wherever it occurs.’
“He is focused on the poor: ‘Many people today lack hope. They are perplexed by the questions that present themselves ever more urgently in a confusing world, and they are often uncertain which way to turn for answers. They see poverty and injustice and they long to find solutions.' 'Yet if we refuse to share what we have with the hungry and the poor, we make of our possessions a false god. How many voices in our materialist society tell us that happiness is to be found by acquiring as many possessions and luxuries as we can! But this is to make possessions into a false god. Instead of bringing life, they bring death.’
“He is overtly humble and does not embrace his office: ‘The authority of the pope is not unlimited.’ ‘The cardinals have elected me, a simple and humble worker in the Lord’s vineyard. The fact that the Lord can work and act even with insufficient means consoles me, and above all I entrust myself to your prayers.’"
“He makes a point of extolling women and the Church: ‘It is theologically and anthropologically important for woman to be at the center of Christianity. Through Mary, and the other holy women, the feminine element stands at the heart of the Christian religion.’”
Which should pretty much close the argument that Pope Francis, who cares for gays, the poor, and women’s rights is the anti-Benedict. Except for one fact that Archbold points out: “Every quote above is from Pope Benedict. Every one.”
There is no break with established Catholic doctrine (the text of the Pope’s interview can be found here www.americamagazine.org/pope-interview). This is a fact that people, perhaps because technology and media have encouraged them to think in the short-term (particularly as far as gratification of desires are considered), have difficulty in comprehending about an institution that thinks in millenia or even eternity. Pope Francis’ point, as Matthew Schmitz, writing for First Things (firstthings.com, “Pope Francis on How to Talk About Abortion, Gay Marriage, and Contraception,” Sept. 20), insightfully declares is “not to compromise on or back away from truth, but rather to reject its caricature. This is good practical guidance. If it’s what he meant in his broader remarks, then those remarks offer wise advice well worth taking.”
I agree. Both sides of the moral debate indeed need to take a step back. Locally, pro-RH (or “pro-choice” or social “progressive”) Catholics need to accept that the faith does come with demands, that one can’t pick and choose only those doctrines they like from those they don’t. That by doing so they are actually placing themselves as their own god. On the other hand, the anti-RH (and “pro-life”) Catholics need to understand the utter subtleties of the doctrines of the faith, not reducing what essentially are beautiful and textured teachings into something merely as stark black and white, debasing a profound conversation about our shared humanity into a simple “us” vs “them” antagonism.
Thus, Catholic Vote’s Stephen White was correct in his assessment that the “challenge for the Church, as the Pope seems to see it, is not that people are unaware [or refuse to accept that] that the Church considers, for example, abortion, contraception, and homosexual acts to be sinful (everyone knows this); the problem is that they don’t understand why the Church teaches what it does.” The clergy’s problem, locally, for example, is not that they talk too much against contraception but that they don’t talk enough (and competently) about it to place it within the context of the power and beauty of the whole of Church teaching.
So, to sum up, Pope Francis never changed anything doctrine wise. Which is perhaps the real heresy that he may be committing, at least in the eyes of “pick and choose” Catholics and progressives.
28.9.13
22.9.13
Readying for ASEAN integration
is the subject of my Trade Tripper column for this Friday-Saturday issue of BusinessWorld:
The big news as far as trade in this region is concerned is the coming ASEAN economic integration, scheduled to occur in 2015. People are understandably excited about this, of course, seeing the ASEAN Economic Community (AEC) as some sort of an Asian European Community, generating visions of cosmopolitanism among the residents of the 10 ASEAN countries, as well as the considerable economic benefits.
The problem is that, although the AEC could bring benefits (though debates on that point has been extensive), the questions that we should be asking are: what benefits the Philippines expects to receive from the AEC and, if there are, are we actually ready to receive them?
It must be remembered that the AEC will be embodied in an international agreement, meaning international obligations that we need to comply with. It’s no accident that, except for the Philippines (which has always been enthusiastic for any new international agreement), the countries most enthusiastic for these things have one thing in common: strong economies that keep getting stronger. The Philippines is not in that league. At least not yet. Note that our utilization of ASEAN-CEPT (Common Effective Preferential Tariff) benefits consistently only amount to around 20% of our trade. This does not provide a pretty picture insofar as our ability to take advantage of international rules considering the fact that we had to concede something in order to qualify for those probable benefits.
Of course, people are also crowing about the fact that Philippine competitiveness levels have improved (slightly). But this improvement cannot really be considered something to boast about, as the Anti-Pinoy Blog (“The Philippines Competitiveness Rankings, Unemployment, and FDI”; Sept. 5, 2013) rightly observed:
“... the Philippines has not reduced unemployment nor attracted substantial foreign direct investments, and still remains greatly less competitive than Singapore, Brunei, Malaysia, Thailand, and Indonesia.
“It is also interesting that the Philippines has a competitiveness footprint similar to Vietnam -- a socialist country although Vietnam still beats the Philippines in terms of attracting FDI and reducing unemployment.
“So yes, it is good that competitiveness has improved -- BUT the improvement is not enough to allow us to catch up with Malaysia, Indonesia, Thailand, and Singapore.”
The Anti-Pinoy Blog does make one suggestion for improving competitiveness: “Opening the economy will allow the Philippines to greatly improve its economy, attract investments, create jobs, and reduce unemployment -- as shown by our ASEAN neighbors and competitors.” It is a suggestion that your Trade Tripper would normally agree with. But now, only with reservations.
The reason has to do with a point made by Asian affairs commentator Sourav Roy (“ASEAN: What’s That and Who Cares? Certainly Not the Common Man in Asia”; Sept. 10, 2013): “...there’s something uber-fake about the pseudo ‘one-ASEAN-one direction’ jingoism that gets my goat. It exists only in the topmost echelons of Southeast Asia’s political, diplomatic, academic and media circles. The common man in almost all its 10-member nations has no clue what ASEAN is about. We’re talking here about millions of illiterate, poor, underprivileged Asians who are in the thick of the situation, happy to progress in life, one day after another.”
And I completely agree with his observation that “most of the educated knew that ASEAN was a regional grouping and nothing more meaningful than that.”
I’ve been in this field long enough to know that, generally, when it comes to trade our (i.e., the government’s and business’) institutional memory, quality, and quantity of knowledge, and capacity for planning has consistently fallen short. That’s why I believe that Philippa Dee’s (“Time to Rethink the Global Rules”, East Asia Forum, Aug. 19, 2013) trenchant observation must be truly pondered upon: “The bigger trade problems are not at the border but behind it.”
Thus my issue with unleashing on our people an agreement that not only has a legal textual intricacy that will make our tax laws seem like grade school work but also a multi-disciplinary (economic, social, political, health) complexity that approaches the metaphysical. Because it must be remembered that, despite the homogeneity of cultures within ASEAN, the Philippines will essentially have to trade and interact heavily with countries whose philosophies on the rule of law, human rights, and democracy are different than ours.
And that has to be related to the fact that the Philippines is essentially a very “nice” country, nice almost to a fault. Which is a problem considering ASEAN’s lack of a credible dispute settlement system that our country could turn to protect its rights. Which is why Joshua Kurlantzick (“ASEAN’s Future and Asian Integration”; November 2012) pointed out: “Most Western leaders and even many of Southeast Asia’s top officials do not consider the organization capable of handling serious economic or security challenges, including disputes in the South China Sea.”
As I said before and I’ll say again: we need to exercise better circumspection regarding ASEAN integration. We might just be leading in the preparation of a feast that only others can enjoy.
The big news as far as trade in this region is concerned is the coming ASEAN economic integration, scheduled to occur in 2015. People are understandably excited about this, of course, seeing the ASEAN Economic Community (AEC) as some sort of an Asian European Community, generating visions of cosmopolitanism among the residents of the 10 ASEAN countries, as well as the considerable economic benefits.
The problem is that, although the AEC could bring benefits (though debates on that point has been extensive), the questions that we should be asking are: what benefits the Philippines expects to receive from the AEC and, if there are, are we actually ready to receive them?
It must be remembered that the AEC will be embodied in an international agreement, meaning international obligations that we need to comply with. It’s no accident that, except for the Philippines (which has always been enthusiastic for any new international agreement), the countries most enthusiastic for these things have one thing in common: strong economies that keep getting stronger. The Philippines is not in that league. At least not yet. Note that our utilization of ASEAN-CEPT (Common Effective Preferential Tariff) benefits consistently only amount to around 20% of our trade. This does not provide a pretty picture insofar as our ability to take advantage of international rules considering the fact that we had to concede something in order to qualify for those probable benefits.
Of course, people are also crowing about the fact that Philippine competitiveness levels have improved (slightly). But this improvement cannot really be considered something to boast about, as the Anti-Pinoy Blog (“The Philippines Competitiveness Rankings, Unemployment, and FDI”; Sept. 5, 2013) rightly observed:
“... the Philippines has not reduced unemployment nor attracted substantial foreign direct investments, and still remains greatly less competitive than Singapore, Brunei, Malaysia, Thailand, and Indonesia.
“It is also interesting that the Philippines has a competitiveness footprint similar to Vietnam -- a socialist country although Vietnam still beats the Philippines in terms of attracting FDI and reducing unemployment.
“So yes, it is good that competitiveness has improved -- BUT the improvement is not enough to allow us to catch up with Malaysia, Indonesia, Thailand, and Singapore.”
The Anti-Pinoy Blog does make one suggestion for improving competitiveness: “Opening the economy will allow the Philippines to greatly improve its economy, attract investments, create jobs, and reduce unemployment -- as shown by our ASEAN neighbors and competitors.” It is a suggestion that your Trade Tripper would normally agree with. But now, only with reservations.
The reason has to do with a point made by Asian affairs commentator Sourav Roy (“ASEAN: What’s That and Who Cares? Certainly Not the Common Man in Asia”; Sept. 10, 2013): “...there’s something uber-fake about the pseudo ‘one-ASEAN-one direction’ jingoism that gets my goat. It exists only in the topmost echelons of Southeast Asia’s political, diplomatic, academic and media circles. The common man in almost all its 10-member nations has no clue what ASEAN is about. We’re talking here about millions of illiterate, poor, underprivileged Asians who are in the thick of the situation, happy to progress in life, one day after another.”
And I completely agree with his observation that “most of the educated knew that ASEAN was a regional grouping and nothing more meaningful than that.”
I’ve been in this field long enough to know that, generally, when it comes to trade our (i.e., the government’s and business’) institutional memory, quality, and quantity of knowledge, and capacity for planning has consistently fallen short. That’s why I believe that Philippa Dee’s (“Time to Rethink the Global Rules”, East Asia Forum, Aug. 19, 2013) trenchant observation must be truly pondered upon: “The bigger trade problems are not at the border but behind it.”
Thus my issue with unleashing on our people an agreement that not only has a legal textual intricacy that will make our tax laws seem like grade school work but also a multi-disciplinary (economic, social, political, health) complexity that approaches the metaphysical. Because it must be remembered that, despite the homogeneity of cultures within ASEAN, the Philippines will essentially have to trade and interact heavily with countries whose philosophies on the rule of law, human rights, and democracy are different than ours.
And that has to be related to the fact that the Philippines is essentially a very “nice” country, nice almost to a fault. Which is a problem considering ASEAN’s lack of a credible dispute settlement system that our country could turn to protect its rights. Which is why Joshua Kurlantzick (“ASEAN’s Future and Asian Integration”; November 2012) pointed out: “Most Western leaders and even many of Southeast Asia’s top officials do not consider the organization capable of handling serious economic or security challenges, including disputes in the South China Sea.”
As I said before and I’ll say again: we need to exercise better circumspection regarding ASEAN integration. We might just be leading in the preparation of a feast that only others can enjoy.
15.9.13
Economy and morality
is the subject of my Trade Tripper column in the weekend issue of BusinessWorld:
The reason for the title is because whenever the word “morality” crops up, a substantial number of readers immediately become dismissive, anticipating it leading to boring “moralizing” (pun intended) or just plain garden-variety naíve idealism. Hence my tying up the issue of morals with economics. Because if people can’t be made concerned with the degradation of society, the youth’s sense of entitlement, our adult’s lack of responsibility, the vulgarity of popular culture, then surely (at least) we might show concern for what’s happening to our own wallets.
Nowadays, of course, it’s quite fashionable to complain about corruption and pork barrels. But your friendly Trade Tripper was never much into fashion anyway. And so it was with some gratitude that he heard some much needed sanity into this public debate, this time coming from Cardinal Chito Tagle: “... political solutions only provide a temporary answer to the problem of corruption. This is a cultural problem. It will only be eradicated through moral transformation and behavioral change to be led by parents in their households.”
Spot on. This is what I’ve been pointing out as well through various media. This doesn’t mean that people should be passive politically but rather be more discerning regarding their actions and to focus on what the real problem is that needs to be solved. If people want to make a nuisance of themselves in the streets and dress up in silly costumes, fine. But the ills of our society arise from serious fundamental problems that demand utterly serious thinking from a politically mature and serious people.
Is it then so hard to accept the idea that the problem of corruption, bad governance, absence of national vision, fundamentally lies with our people’s character and morals? That the problems are so deeply ingrained that no amount of angry rallying can solve, as EDSA 1 (which deposed a Marcos for an Aquino) or EDSA 2 (which removed an Estrada for an Arroyo) have shown? And if people are now shrieking about the “crooks in Congress” (or the Executive), shouldn’t the blame fall on those who voted them into office a mere four months ago?
Indeed. All this just goes to prove what we’ve been saying all along: if we want a better economy, leaders, and country, we simply must have better voters. Or to paraphrase from US President Barack Obama: change will not come from Malacañang, change has to come to Malacañang.
Of course, the default excuse is to blame the lack of education for our people’s propensity to vote criminals, plunderers, or traitors into public office. But how can this be when public spending on education constitutes between 15-17% of overall expenditure and when our country’s literacy rate, particularly in the last two decades or so, hovers around the 95% mark?
Inevitably, it’s because public debate on education ignores the fact that education is not limited to the classroom. What the student learns outside it is equally as important, if not actually more so. From there one can now grasp the true significance of the family, media, and the Internet.
So if the family is being rendered unstable (what with promiscuity, same-sex marriage, and divorce all touted as the new normal), and media and the Internet carelessly flouting pornography and the if-it-feels-good-then-do-it mindset, what effect would that have on our people’s overall education, which means the development of our people’s skills, productivity, and integrity, and consequently the economy? Devastating, as Charles Murray (Coming Apart, Crown Forum, 2013) and Mary Eberstadt (How the West Really Lost God, Templeton Press, 2013) amply demonstrated.
As I wrote in a previous article, both convincingly show that the breakdown in people’s religiosity, traditional marriage, and the family lead to “enormous” economic costs. 2012 research reveals that the high US divorce rates “perpetually inhibits growth of the U.S. economy.” This is backed up by Nick Schulze (Home Economics, Aei Press, 2013), he declaring the link between “divorces and out-of-wedlock births in America” and economic wellbeing as indeed substantial.
Which is why the local academe’s, the media’s, and policy makers’ unquestioning over-infatuation with John Rawls, as well as secular progressivism, is utterly baffling.
As JL Liedl wrote for Ethika Politika (“Want a Good Economy? Try Virtue”; 4 September 2013): “The dehumanizing theorems and charts of the economist have done us enough harm already. Their consistent failures and the general increase in global misery under their watchful guidance should be enough to convince us that modern economics has been tried and found wanting. Man does not live by bread alone, a truth that must be acknowledged, perhaps especially acknowledged, when considering how man produces and obtains bread. There is something metaphysical in play here, and it must be observed even when dealing with the nitty-gritty, physical practicalities of capital and labor. Virtue, more than anything else, more than economic theories or fiscal policy, is what a society needs to have a good and just economy.”
The reason for the title is because whenever the word “morality” crops up, a substantial number of readers immediately become dismissive, anticipating it leading to boring “moralizing” (pun intended) or just plain garden-variety naíve idealism. Hence my tying up the issue of morals with economics. Because if people can’t be made concerned with the degradation of society, the youth’s sense of entitlement, our adult’s lack of responsibility, the vulgarity of popular culture, then surely (at least) we might show concern for what’s happening to our own wallets.
Nowadays, of course, it’s quite fashionable to complain about corruption and pork barrels. But your friendly Trade Tripper was never much into fashion anyway. And so it was with some gratitude that he heard some much needed sanity into this public debate, this time coming from Cardinal Chito Tagle: “... political solutions only provide a temporary answer to the problem of corruption. This is a cultural problem. It will only be eradicated through moral transformation and behavioral change to be led by parents in their households.”
Spot on. This is what I’ve been pointing out as well through various media. This doesn’t mean that people should be passive politically but rather be more discerning regarding their actions and to focus on what the real problem is that needs to be solved. If people want to make a nuisance of themselves in the streets and dress up in silly costumes, fine. But the ills of our society arise from serious fundamental problems that demand utterly serious thinking from a politically mature and serious people.
Is it then so hard to accept the idea that the problem of corruption, bad governance, absence of national vision, fundamentally lies with our people’s character and morals? That the problems are so deeply ingrained that no amount of angry rallying can solve, as EDSA 1 (which deposed a Marcos for an Aquino) or EDSA 2 (which removed an Estrada for an Arroyo) have shown? And if people are now shrieking about the “crooks in Congress” (or the Executive), shouldn’t the blame fall on those who voted them into office a mere four months ago?
Indeed. All this just goes to prove what we’ve been saying all along: if we want a better economy, leaders, and country, we simply must have better voters. Or to paraphrase from US President Barack Obama: change will not come from Malacañang, change has to come to Malacañang.
Of course, the default excuse is to blame the lack of education for our people’s propensity to vote criminals, plunderers, or traitors into public office. But how can this be when public spending on education constitutes between 15-17% of overall expenditure and when our country’s literacy rate, particularly in the last two decades or so, hovers around the 95% mark?
Inevitably, it’s because public debate on education ignores the fact that education is not limited to the classroom. What the student learns outside it is equally as important, if not actually more so. From there one can now grasp the true significance of the family, media, and the Internet.
So if the family is being rendered unstable (what with promiscuity, same-sex marriage, and divorce all touted as the new normal), and media and the Internet carelessly flouting pornography and the if-it-feels-good-then-do-it mindset, what effect would that have on our people’s overall education, which means the development of our people’s skills, productivity, and integrity, and consequently the economy? Devastating, as Charles Murray (Coming Apart, Crown Forum, 2013) and Mary Eberstadt (How the West Really Lost God, Templeton Press, 2013) amply demonstrated.
As I wrote in a previous article, both convincingly show that the breakdown in people’s religiosity, traditional marriage, and the family lead to “enormous” economic costs. 2012 research reveals that the high US divorce rates “perpetually inhibits growth of the U.S. economy.” This is backed up by Nick Schulze (Home Economics, Aei Press, 2013), he declaring the link between “divorces and out-of-wedlock births in America” and economic wellbeing as indeed substantial.
Which is why the local academe’s, the media’s, and policy makers’ unquestioning over-infatuation with John Rawls, as well as secular progressivism, is utterly baffling.
As JL Liedl wrote for Ethika Politika (“Want a Good Economy? Try Virtue”; 4 September 2013): “The dehumanizing theorems and charts of the economist have done us enough harm already. Their consistent failures and the general increase in global misery under their watchful guidance should be enough to convince us that modern economics has been tried and found wanting. Man does not live by bread alone, a truth that must be acknowledged, perhaps especially acknowledged, when considering how man produces and obtains bread. There is something metaphysical in play here, and it must be observed even when dealing with the nitty-gritty, physical practicalities of capital and labor. Virtue, more than anything else, more than economic theories or fiscal policy, is what a society needs to have a good and just economy.”
7.9.13
For a Philippine competition law
is the subject of my Trade Tripper column in this weekend issue of BusinessWorld:
The country has seen loud calls from the general public to institute reforms, from the PDAF to the FOI. Among these fashionable areas of reform is on competition policy. However, through the years, your Trade Tripper has learned that if there’s a thing that the public (particularly foreign businesses) wants immediately accomplished, with zero fuss, then generally it’s best indeed to make a fuss about it. It’s when people are emotionally (even hysterically) demanding to rush matters that time to study it becomes a necessity.
As BusinessWorld reported (Competition Law Urged, 28 August 2013) on the East Asia Forum on competition law last week, the consensus seemed to be that “a competition policy is considered important for a country to grow and consider itself an advanced economy.” Furthermore, “competition law should also be separated from politically motivated industrial policy as the latter allows the government to choose which industries to champion instead of letting natural competition occur in the market.”
However, there’s an obvious need to examine the assumptions on which such assertions are made. One assumption can be seen from President Noynoy Aquino’s speech during the forum: “As a student of economics, I know that monopolies are incredibly inefficient. It kills innovation. There is zero impetus, in a monopoly, to continually improve your product or your service, simply because you have your market cornered.”
This was disputed by the Anti-Pinoy Blog <http://antipinoy.com/; see Anti-Trust Bill to Improve Competition in Philippine Economy -- Or Otherwise>: “When you remove the rhetoric -- it boils down to the government wanting to increase regulation of the market under the guise of ‘promoting competition.’ Such a policy does not present any benefit to consumers and imposes more harm. More regulations and more agencies will not improve competition in the protected Philippine economy. It has not worked for decades -- it’s not about to work now.”
“The myth peddled to the common tao is that unregulated markets lead to the creation of monopolies. Therefore government has to step in to ensure that companies will not have a coercive market monopoly. The reality is that coercive monopolies cannot exist without government protection, special regulations, exemptions, and subsidies.”
Nonoy Oplas, president of Minimal Government Thinkers, Inc., agrees: “When government intervenes hard to force or pretend to attain social equality, such intervention will naturally result in subsidizing the lazy and irresponsible, while penalizing and over-taxing the efficient and industrious.” For him, “fierce competition is fair competition. Government-managed or protected competition is not fair competition.” And I concur with his assessment that, at least for the present, the “best anti-monopolization regulation that government can do is to have rule of law strictly enforced.”
Indeed, as your Trade Tripper pointed out, no ban (constitutionally) on monopolies definitively exists. Article XII, Section 19 (along with Section 10) of the Constitution merely provide that the “State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.” (italics supplied) This could serve as justification for a company succeeding through merit in an industry that encourages a “natural monopoly,” defined by Wiki (yes, I know) as occurring “when, due to the economies of scale of a particular industry, the maximum efficiency of production and distribution is realized through a single supplier.”
And the idea that “natural monopolies” can be apt for our country, considering the small size of our domestic market, has substantial merit. As such, Filipinos should therefore be supportive of even larger Filipino conglomerates. Take San Miguel Corp., for example, which, despite its size and reach, could not really be considered possessing monopoly power due to the nature and threat presented by global (or regional) competition.
Claims related to predatory pricing also need to be examined. As Anti-Pinoy explains (rightly, in my view): “This assumption can only take place if and only 1) the predator has deep financial resources; and 2) -- if there are very high barriers to entry -- such as special regulations, exemptions, subsidies, and protections by the State.”
Even declarations like “all advanced economies have a competition policy” should be rendered suspect. Simply because we’re not an “advanced economy.” Which should tell you a lot about the wisdom of importing and imposing a regulatory framework tailored for countries whose circumstances are not similar to the Philippines.
What Filipinos should be therefore discerning about are foreign corporations acquiring Filipino companies or influence to the point that monopoly powers are exercised beyond the reach of Philippine jurisdiction. Another is the relationship that competition law has with corruption. Finally, there’s the dire need to constrain the ill-effects of having both political and economic power held by a select number of families in the country.
As your Trade Tripper wrote repeatedly in the past: The issue is not whether we should have a competition law (we should) but rather the kind of competition law that will work effectively for the interests of Filipinos.
The country has seen loud calls from the general public to institute reforms, from the PDAF to the FOI. Among these fashionable areas of reform is on competition policy. However, through the years, your Trade Tripper has learned that if there’s a thing that the public (particularly foreign businesses) wants immediately accomplished, with zero fuss, then generally it’s best indeed to make a fuss about it. It’s when people are emotionally (even hysterically) demanding to rush matters that time to study it becomes a necessity.
As BusinessWorld reported (Competition Law Urged, 28 August 2013) on the East Asia Forum on competition law last week, the consensus seemed to be that “a competition policy is considered important for a country to grow and consider itself an advanced economy.” Furthermore, “competition law should also be separated from politically motivated industrial policy as the latter allows the government to choose which industries to champion instead of letting natural competition occur in the market.”
However, there’s an obvious need to examine the assumptions on which such assertions are made. One assumption can be seen from President Noynoy Aquino’s speech during the forum: “As a student of economics, I know that monopolies are incredibly inefficient. It kills innovation. There is zero impetus, in a monopoly, to continually improve your product or your service, simply because you have your market cornered.”
This was disputed by the Anti-Pinoy Blog <http://antipinoy.com/; see Anti-Trust Bill to Improve Competition in Philippine Economy -- Or Otherwise>: “When you remove the rhetoric -- it boils down to the government wanting to increase regulation of the market under the guise of ‘promoting competition.’ Such a policy does not present any benefit to consumers and imposes more harm. More regulations and more agencies will not improve competition in the protected Philippine economy. It has not worked for decades -- it’s not about to work now.”
“The myth peddled to the common tao is that unregulated markets lead to the creation of monopolies. Therefore government has to step in to ensure that companies will not have a coercive market monopoly. The reality is that coercive monopolies cannot exist without government protection, special regulations, exemptions, and subsidies.”
Nonoy Oplas, president of Minimal Government Thinkers, Inc., agrees: “When government intervenes hard to force or pretend to attain social equality, such intervention will naturally result in subsidizing the lazy and irresponsible, while penalizing and over-taxing the efficient and industrious.” For him, “fierce competition is fair competition. Government-managed or protected competition is not fair competition.” And I concur with his assessment that, at least for the present, the “best anti-monopolization regulation that government can do is to have rule of law strictly enforced.”
Indeed, as your Trade Tripper pointed out, no ban (constitutionally) on monopolies definitively exists. Article XII, Section 19 (along with Section 10) of the Constitution merely provide that the “State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.” (italics supplied) This could serve as justification for a company succeeding through merit in an industry that encourages a “natural monopoly,” defined by Wiki (yes, I know) as occurring “when, due to the economies of scale of a particular industry, the maximum efficiency of production and distribution is realized through a single supplier.”
And the idea that “natural monopolies” can be apt for our country, considering the small size of our domestic market, has substantial merit. As such, Filipinos should therefore be supportive of even larger Filipino conglomerates. Take San Miguel Corp., for example, which, despite its size and reach, could not really be considered possessing monopoly power due to the nature and threat presented by global (or regional) competition.
Claims related to predatory pricing also need to be examined. As Anti-Pinoy explains (rightly, in my view): “This assumption can only take place if and only 1) the predator has deep financial resources; and 2) -- if there are very high barriers to entry -- such as special regulations, exemptions, subsidies, and protections by the State.”
Even declarations like “all advanced economies have a competition policy” should be rendered suspect. Simply because we’re not an “advanced economy.” Which should tell you a lot about the wisdom of importing and imposing a regulatory framework tailored for countries whose circumstances are not similar to the Philippines.
What Filipinos should be therefore discerning about are foreign corporations acquiring Filipino companies or influence to the point that monopoly powers are exercised beyond the reach of Philippine jurisdiction. Another is the relationship that competition law has with corruption. Finally, there’s the dire need to constrain the ill-effects of having both political and economic power held by a select number of families in the country.
As your Trade Tripper wrote repeatedly in the past: The issue is not whether we should have a competition law (we should) but rather the kind of competition law that will work effectively for the interests of Filipinos.
3.9.13
On the August 26 rally (updated 3/9/13)
When the US Founding Fathers gathered for the Declaration of Independence against Britain, they made sure they signed their names clearly in the document. The reason? As Benjamin Franklin puts it: 'we must all hang together, or assuredly we shall all hang separately.'
The point was: the British didn't need to find out who were responsible, the US rebels were happy to publicly name themselves and challenge the government. That's courage.
Compare that to the unknown organizers of the August 26 rally, who actually needs PR and political campaign professionals to work up the people. And, more suspiciously for me, insult those who may have just mere questions about it. Since when has a movement about right become a matter of psychological coercion?
What I'm trying to say is this: if the cause is just, then don't hesitate to stand up openly for it. Otherwise, it just raises doubts about the sincerity of its movers.
To those who feel strongly about joining, please do. But be sure to join of your own mind. And with open eyes.
Anyway, here also is a good article from Get Real Philippines! on the matter. Several other good articles, particularly decrying the mob mentality based on utter lack of real evidence can be found here; another article asking what exactly did Napoles commit (see here); and the bigger systemic issue (see here). The Manila Standard Today's editorial on the Philippine government's unravelling, due to it's 'vindictiveness', 'ineptitude', and arrogance is here. Roberto Tiglao here analyses the COA audit on the matter and expresses suspicion of it.
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After the event, Marlen Ronquillo of the Manila Times wrote this brilliant article. It about all sums up the real problem of the Philippines. The article is A sad nation of transient rage and short memories. Excerpts:
"Can Janet Lim—Napoles eat lunch in this town again after the fury shall have passed? And after the now-screaming newspaper headlines shall have reduced their font sizes? And the commentators, currently all-worked up in the preaching of right and wrong, shall have moved on to other perceived wrongs in society?
The answer is yes and those who say otherwise will have to look back at our short memories to see how short the shelf lives of the nation’s past outrages have been."
"If you think that this is not a tragic country of transitory rage and fickle moral arbitration, think again.
Janet Napoles , before her fall, was one of the favorite ninangs of the young elite doing their vows of marriage . She was a patron saint to retired priests and funded charitable projects set up by priests identified with the Archdiocese of Manila. Oh, we even have the unbelievable footage of priests and the bishops praying over Napoles. She gifted lawmakers with engraved Mont Blanc pens, to be later used in signing those ghastly documents that ceded their pork to her bogus NGOs.
She was everybody’s friend, if not a benefactor. That power status was a long way from remote Basilan and she probably enjoyed rubbing elbows with the “ dahlings” of Philippine society immensely.
Like Mrs. Marcos, Janet Napoles , will not be driven out of town for life . Her disgrace will be at best transitory and fleeting . Her current pariah status, based on the Filipinos incapacity to hold deep and lasting grudges , will just have an abbreviated life of a few years.
Soon, she will be eating lunch in this town again , totally comfortable in a society of superficial grudges and short memories."
The point was: the British didn't need to find out who were responsible, the US rebels were happy to publicly name themselves and challenge the government. That's courage.
Compare that to the unknown organizers of the August 26 rally, who actually needs PR and political campaign professionals to work up the people. And, more suspiciously for me, insult those who may have just mere questions about it. Since when has a movement about right become a matter of psychological coercion?
What I'm trying to say is this: if the cause is just, then don't hesitate to stand up openly for it. Otherwise, it just raises doubts about the sincerity of its movers.
To those who feel strongly about joining, please do. But be sure to join of your own mind. And with open eyes.
Anyway, here also is a good article from Get Real Philippines! on the matter. Several other good articles, particularly decrying the mob mentality based on utter lack of real evidence can be found here; another article asking what exactly did Napoles commit (see here); and the bigger systemic issue (see here). The Manila Standard Today's editorial on the Philippine government's unravelling, due to it's 'vindictiveness', 'ineptitude', and arrogance is here. Roberto Tiglao here analyses the COA audit on the matter and expresses suspicion of it.
*************************
After the event, Marlen Ronquillo of the Manila Times wrote this brilliant article. It about all sums up the real problem of the Philippines. The article is A sad nation of transient rage and short memories. Excerpts:
"Can Janet Lim—Napoles eat lunch in this town again after the fury shall have passed? And after the now-screaming newspaper headlines shall have reduced their font sizes? And the commentators, currently all-worked up in the preaching of right and wrong, shall have moved on to other perceived wrongs in society?
The answer is yes and those who say otherwise will have to look back at our short memories to see how short the shelf lives of the nation’s past outrages have been."
"If you think that this is not a tragic country of transitory rage and fickle moral arbitration, think again.
Janet Napoles , before her fall, was one of the favorite ninangs of the young elite doing their vows of marriage . She was a patron saint to retired priests and funded charitable projects set up by priests identified with the Archdiocese of Manila. Oh, we even have the unbelievable footage of priests and the bishops praying over Napoles. She gifted lawmakers with engraved Mont Blanc pens, to be later used in signing those ghastly documents that ceded their pork to her bogus NGOs.
She was everybody’s friend, if not a benefactor. That power status was a long way from remote Basilan and she probably enjoyed rubbing elbows with the “ dahlings” of Philippine society immensely.
Like Mrs. Marcos, Janet Napoles , will not be driven out of town for life . Her disgrace will be at best transitory and fleeting . Her current pariah status, based on the Filipinos incapacity to hold deep and lasting grudges , will just have an abbreviated life of a few years.
Soon, she will be eating lunch in this town again , totally comfortable in a society of superficial grudges and short memories."
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