THE Philippines is a country of contrasts and contradictions, especially when it comes to its economy.
Many years ago there
was a television advertisement promoting a popular laundry detergent.
The ad featured an older and presumably wiser woman advising a group of
ladies about her choice of soap and why it was the best.
What made this unusual was that they were all provincial women washing their clothes in a gently flowing river.
Jeepney-riding
commuters get angry about a P1 increase in fares while carrying a
smartphone that costs at least a month’s salary. And now some jeepney
operators have copied bus companies by installing free wireless-fidelity
Internet.
A bakery that is about
a kilometer and one jeepney ride away from the Philippine Stock
Exchange building in Makati City makes the best pan de sal in Metro
Manila. It has been in business for at least two decades. People line up
at 6 a.m. to buy; about half go home empty-handed. Baking stops at
about 8 a.m., but begins again in the afternoon. On the bakery’s wall
are permits issued by the barangay and the Makati City government, but
you know that an official receipt has never been issued.
Foreign observers of
the Philippine economy are like blind men, with each trying to figure
out what an elephant looks like. The Philippines does not fit their
economic models.
If you go to Shopwise,
you will find the prices of pork shoulder and ham or leg (the local
cuts of kasim and pigue) are the same. The most expensive cut is the
tenderloin, which is priced at about 30 percent higher. But if you go to
the local wet market, you will probably find that the prices of all
three cuts are the same.
The economic models
say the loin should always be more expensive, as it is in limited supply
and is of higher value, being more tender with almost no fat. Yet,
customers of the palengke are not too interested in buying the loin,
because it becomes too soft when cooked and they want the flavor of the
fat.
To repeat, economists
are like blind men. One basic economic theory says rational people think
within “the margin,” meaning, they seek to buy the best value. Between
buying a good car or a perfect car for the same price, the rational
choice would be the perfect car. But then again, another economic
principle is that people choose based on trade-offs; more value for the
pork loin or more flavor with the pork shoulder?
My college-age son is
now doing his required National Service Training Program (NSTP), opting
for the Literacy Training Service. He goes each Saturday to a very poor
area in northern Metro Manila, often bringing elementary-level reading
materials for the children. But according to the instructions given to
the families in the program, they should avoid displaying or using the
television, cell phones or other electronic devices during the NSTP
visit.
Maybe if a person
wants to understand the Philippines and its economy, they should watch
the GMA 7 television show Magpakailanman.
The program usually
features people who have endured immense hardships, either through bad
decisions or through no fault of their own. Most foreign economic
experts would be appalled, if not horrified, by the living conditions
depicted on the show. It might even damage their delicate Western
sensibilities.
But the people
featured on Magpakailanman, just like the country, are able to overcome
adversity. Certainly, not everyone in every situation comes out
successful in the end. These might even be the notable exceptions. But
when you consider that the Philippine government is usually available
only to offer limited help in even the most severe and dreadful
situations, the country and its people manage to push forward.
Trying to figure out
how the country and the economy actually function is an almost
impossible task. It has to do with how the Filipino manages his or her
everyday life. And there is no textbook economic model for that.
The sad and, perhaps,
disturbing thing is not thinking how difficult life in the country can
be without an efficient and effective government helping the nation to
attain prosperity, but thinking how much better the life of the average
Filipino could be under a government that functioned better.
The Philippines is a nation of contradictions because of the people being so much stronger than the country’s institutions.
****
E-mail me at
mangun@gmail.com. Visit my web
site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets.
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