Senator and Philippine presidential contender Mar Roxas, recently engaged in dialog and repartee with young Chinese-Filipino businessmen at the Anvil Exchange Forum.
To get things going, Sen. Roxas talked for a brief nine minutes (sans notes) on the three principles he believes are necessary to attain the nation’s goals.
1. Never give up the long term
Roxas said cutting corners, and the mentality of Puede na yan (That’s passable), Bahala na (I’m not going to worry about it), or Bukas na lang (It will keep for tomorrow) is giving up the long term.
Giving up the long term negatively affects ones customers and business relationships, Roxas explained. And this negative impact will take away any value one has created for a product, a service, or a reputation.
He cited the NAIA Terminal 3 case (that’s pending before an international tribunal, with a verdict to be handed down this month) as having given up the long term.
“They got impatient, they cut corners, mabilisan (haphazard) — and now, a decade later, we still don’t have an airport,” Roxas lamented.
“ZTE is going to be the same thing — cut corners, no bidding, did not follow the normal procurement process — I guarantee you, kung matuloy ito (if it pushes through) it will be like NAIA 3.” (This was before the Senate hearings on the ZTE-NBN deal and President Gloria Arroyo’s subsequent cancellation of the contract.)
Roxas cautioned that if public officials and businessmen give up the long term, the result will always be the same: everyone loses, we have a bad reputation, and no one wants to do business with us.
2. Don’t be incrementalist
“If you had the capital to open 10 outlets. Don’t open 50 and take five years to do it,” Roxas admonished the businessmen. “Finish the 10, and then from the cash flow, you can do the next 10, and so on.”
Roxas pointed out that our national budget (1.1 trillion pesos for this year, 1.3 trillion pesos, next year) was “spread so thinly — a little bit here, a little bit there, and in the end, lahat naka-tiwangwang kasi konti-konti (everything is left unfinished due to incrementalism).”
The Senator pointed out that solving a problem today and then “using that as leverage to solve two problems tomorrow, four the next day, and eight the next day,” made much more sense than stretching available resources too thinly that nothing gets done.
Roxas called incrementalism “a sickness, a way of trying to please everybody, but in the end pleasing nobody.”
He said it was rare for politicians to build a 10-kilometer road. What most tend to do is build a hundred meters of cemented road in each town, with dirt roads at each end. So driving through the countryside means one will have to navigate cemented roads alternating with patches of dirt!
3. Marking to market
Roxas used the banking term to mean: not lying to yourself about the value of your business. “Magpakatotoo tayo (Let’s get real),” Roxas exhorted the group.
No matter what a businessman tells anyone, he must know the real values in his balance sheet, “Because that will be the foundation from which you can do things, or not do things, in the coming year,” Roxas said.
“Oftentimes, we fool ourselves, other people, or the government that things are what they are not,” he said. “So we make decisions based on this. In the end there are huge gaps, we aren’t able to follow through, and we aren’t able to deliver on the promises we make to our international customers, tourists, business partners, and whoever it is we deal with.”
Not holding oneself accountable and not having good governance, Roxas concluded, means “we only hurt ourselves.”
Competing With China
In reply to our question on how the Philippines could compete with a manufacturing giant like China on its own turf to increase RP exports to the mainland, Roxas replied that the Philippines would be uncompetitive if the product were labor-intensive or in any way dependent on economies of scale.
According to the Senator, “The only way we can compete and increase our exports to China is if we have greater value added or more sophistication. We have to be more technically or creatively innovative — and that can only come from a more educated population.”
Roxas pointed out that the Philippines’ biggest exports to China consisted of copper cathodes, wire harnesses, and other sophisticated electronic components.
“But we have to keep reinvesting in our people so they can move up the value chain. Otherwise, China will get to a point where they can already make those products,” and we would lose our edge.
Competing With Ourselves
The Senator, in answer to a question regarding which country posed the biggest threat to the Philippines in terms of competing for product markets, said, “The biggest threat against us is ourselves.”
He quipped, “One thing about us, we never miss an opportunity to miss an opportunity!”
Roxas named three competitors in the region: Vietnam, Indonesia, and Thailand.
“Vietnam is growing at nearly 9%. They’ve been doing this for over a decade now,” he noted. “Their regulations as to what one has to do to start a business are very straightforward, very easy.”
He also showed admiration for the hardworking Vietnamese people. “Any society that could kick out the French, kick out the Americans, and then live in caves, can do anything.”
Indonesia is another competitor, Roxas continued, “if it gets its act together.”
“With 250 million people and a huge natural resource,” Indonesia, he said, is going to be quite a challenge.
Thailand was a threat, Roxas said, because at 63 million people the country is very productive.
“In the mid-1950s Philippines per capita GDP was twice that of Thailand. By the time we crossed over 2000, Thailand’s GDP was two times that of the Philippines,” he explained.
Anecdote on Attitude
“I have a great story about Thaksin (Shinawatra, former Thai Prime Minister) at the time we were discussing ASEAN-China trade,” Roxas said.
According to Roxas, he asked Thaksin, “Why is Thailand so aggressive about this? Aren’t you afraid that your agriculture sector will be overwhelmed by goods crossing over from China?”
“That’s why we in the Philippines are trying to go as slow as possible,” Roxas explained to Thaksin. “We know we won’t be able to compete.”
Thaksin reportedly replied, “Thailand has 60 million people, China, 1.2 billion people. I can sell to them 20 times more than what they can sell to me!”
The Senator bemoaned the dearth of that positive attitude in the Philippines. “In our country our attitude is let’s put up barriers, let’s protect ourselves.
“It’s an attitude that says: I can make products at cost, on spec, deliver on time, and sell to them 20 times more than they can ever sell to me,” he added.
Moreover, Roxas reiterated the need to invest in developing a higher level of technology and innovation, as well as the need to develop more new products.
He reemphasized that improving education was crucial in moving up the value chain.
“There’s a difference between motion and movement,” he said.
Asked if the President Arroyo’s “holiday economics” (moving a weekday holiday next to the weekend) was motion or movement, he replied it was definitely movement.
Roxas explained that he liked the holiday economics scheme for its predictability and its positive effects on domestic tourism. He said he even had the law changed in his province to adopt the scheme because he saw its positive effects.
One of the last questions was for an update on the Senator’s relationship with TV personality and radio commentator Korina Sanchez. When asked if it was as stable as the country’s economy, Roxas replied that it
was “more vibrant.”
(Photos by Alexander M. Young)
print ed: 11/07