Friday, February 27, 2015


It is not the fact of spending less foreign exchange when merchandise imports occasionally fall like they did by more than 10 percent in December last year. 

The declines which happen a bit more often than increases indicate the country’s growing ability to produce what it wants. I have not seen the numbers but I find the increasing use of substitutes for fossil fuel as one of the best indicators of the economy’s ability to be closer to economic independence.  

It must be admitted however coal seems to be taking over crude oil as the main fuel.  

Hence the private sector should be encouraged to develop more coal mines.  We have huge coal deposits in Malangas but mineral is said to be of low BTU.  

There is a community in Batangas, small as it is, completely dependent on solar power. 

The truth as a layman like me sees it is that  solar  power can be developed anywhere where the sun shines.

There are other smaller sources of power like biomass.

The trend towards developing renewable energy appears to be unstoppable.  But its contribution to total power generation remains small. Again it is not the fact that foreign exchange disbursements for crude oil will decline if renewable sources are fully developed.

The country has amassed gross international reserves of around $80 billion.

Crude oil is the single biggest important expense.  There is enough supply of dollars for imported crude or coal.

The reduction of reliance on imported materials by developing other alternative sources redeems the ability of the Filipino to stand on his own two feet.  That is the whole point.

Slow development of solar power and other indigenous sources is a manifestation of the possibility- in fact a reality- that when the Filipino is pushed to the corner he will stand up and fight and win.

This is the most important in how we will live  under the environment of the Asean Union.  Tariffs will be erased among the members. That means each of the group will try hard to  produce what it can to export to neighbors that do not have the product encouraged by the fact that a material  can be produced and exported at a lower costs if the country buying it does not collect tariff.

Having a bloated population of 100 million people living in a comparatively small piece of territory or 300,000 square kilometers makes self sufficiency in food difficult to attain.

But look at Taiwan. It is not just self-sufficient in food. It exports eggs, pork and vegetables to Japan and the Philippines. Its territory is probably less than half of the Philippines.

But Taiwan’s  population is only one-fourth that of the Philippines. It feeds its own people and is left with more to export.

Developments that have been happening since   Benigno   Aquino III took power in  2010 seem to indicate that under a trusted leader, the Filipino can help himself survive if he gets assistance from the business sector and the state.

I will not tire repeating that for the first time in history of this country, the banks and other financial institutions are going out of their way to help the small man eke out a living starting with small cheap loans.

Unable to push industrialization to higher planes because the economy failed to establish base material such as iron and steel and wood, the market- driven economy found itself pushing the service industry as a main driver of growth.

Thus we have an ever growing business process outsourcing industry that earns huge foreign exchange. Call centers are nearly everywhere. There is one in my city of Lipa.

We do not have the actual count of warm foreign bodies coming to the Philippines as tourists  but the number is definitely increasing as higher occupancy of rooms in five star and lesser hotels shows.

Try going to the casinos. Chinese, Koreans, Malaysians are in all kinds of gaming tables. The high rollers mostly from China, as repeatedly asserted on this space come with their families to enjoy the numerous tourist destinations while the father is  burning  – or winning -- money at the gaming table.

 The service industry appears to be the best hope for economic growth. Information obtained from the Philippine Stock Exchange shows that companies in the service sector paid the highest cash dividends. 

The economy may have discovered what it is good at – the service industry. The country has failed in manufacturing or industrialization. It failed more miserably in agriculture as proven by the fact that the Philippines is now the biggest rice importer. 

Thailand, on the other hand, is the world’s biggest exporter of the cereal 

The service sector and the recognition of the ability of the small man to get lift himself by his boot straps with financial help form the government and private sector are the brightest  spots in the economy.

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