Poverty In The Philippines (How Does It Affect Us?)

[Kiwi-Alan]

With a large supply of cheap labour around, why is that the big multi national companies do not start factories in the Phills like they have in Thailand. My thoughts would be the corruption.   More work less poverty. 

[Methersgate]

Reasons why multinational corporations avoid the Philipines:

1. The Constitution bars foreign enterprises from owning more than 40% of most businesses.

2. Labyrinthine bureaucracy, which is erratic and uncertain in its application.

3.The high cost of power.

4. Poor infrastructure in terms of roads railways (what railways!) and ports, and poor Internet access.

5. The rather poor standard of education and the weak work ethic of the labour force, which is compounded by very restrictive labour laws (see 2!) A friend who has run a business in the Philipines for many years says that "Filipinos only work at one speed!"

[Dave Hounddriver]

"Filipinos only work at one speed!"

 

That does seem to be the cultural norm, and yet, every filipino I have seen at work in another country or on a cruise ship works harder than the locals.  So generalizing the entire country for the failings of management to adapt to Philippine ways seems like saying "those were sour grapes anyway".

[manofthecoldland]

Reasons why multinational corporations avoid the Philipines:

1. The Constitution bars foreign enterprises from owning more than 40% of most businesses.

2. Labyrinthine bureaucracy, which is erratic and uncertain in its application.

3.The high cost of power.

4. Poor infrastructure in terms of roads railways (what railways!) and ports, and poor Internet access.

5. The rather poor standard of education and the weak work ethic of the labour force, which is compounded by very restrictive labour laws (see 2!) A friend who has run a business in the Philipines for many years says that "Filipinos only work at one speed!"

Succinct analyisis, Mr. Methersgate.

   When business situations go awry, you have very limited recourse to protect and recapture your investments if you are not a National. Even when you are, your political and judicial options are quite iffy, cumbersome and expensive to pursue.

   This is a 'low-trust' society and culture for many practical and traditionally valid reasons. The PI is a political state, but some might not consider it a nation-state, because it is not unified in language, ethnicity or a common set of unifying principles and ideas... IMO

   The upper strata seem to be fixated on 'extractive economics' for personal group advancement to the detriment of the greater body citizens, seemingly not believing that a rising common lake-level will raise up all boats. When I first came here, I was shocked by the low level of infra-structure development and investment, but now I understand why and how it failed to evolve.

   Recent reads that you can take the shortcut to by going to Amazon.com and scanning the synopsis and best re-views:

1. "Why Nations Fail:The origins of power, prosperity and poverty.", 

2. "Poor Economics: A radical rethinking of the way to fight global poverty."

3. "Farewell to Alms: A brief economic history of the world'.

4. "The Rational Optimist: How prosperity evolves."

   I no longer wonder what and why things went economically the way they did here after the 60's. I just accept and try to enjoy whats here. 

[robert k]

 

Reasons why multinational corporations avoid the Philipines:

1. The Constitution bars foreign enterprises from owning more than 40% of most businesses.

2. Labyrinthine bureaucracy, which is erratic and uncertain in its application.

3.The high cost of power.

4. Poor infrastructure in terms of roads railways (what railways!) and ports, and poor Internet access.

5. The rather poor standard of education and the weak work ethic of the labour force, which is compounded by very restrictive labour laws (see 2!) A friend who has run a business in the Philipines for many years says that "Filipinos only work at one speed!"

Succinct analyisis, Mr. Methersgate.

   When business situations go awry, you have very limited recourse to protect and recapture your investments if you are not a National. Even when you are, your political and judicial options are quite iffy, cumbersome and expensive to pursue.

   This is a 'low-trust' society and culture for many practical and traditionally valid reasons. The PI is a political state, but some might not consider it a nation-state, because it is not unified in language, ethnicity or a common set of unifying principles and ideas... IMO

   The upper strata seem to be fixated on 'extractive economics' for personal group advancement to the detriment of the greater body citizens, seemingly not believing that a rising common lake-level will raise up all boats. When I first came here, I was shocked by the low level of infra-structure development and investment, but now I understand why and how it failed to evolve.

   Recent reads that you can take the shortcut to by going to Amazon.com and scanning the synopsis and best re-views:

1. "Why Nations Fail:The origins of power, prosperity and poverty.", 

2. "Poor Economics: A radical rethinking of the way to fight global poverty."

3. "Farewell to Alms: A brief economic history of the world'.

4. "The Rational Optimist: How prosperity evolves."

   I no longer wonder what and why things went economically the way they did here after the 60's. I just accept and try to enjoy whats here. 

 

All (that I know of) wealthy first world countries manufactured durable goods for their own consumption and export. It appears to work every time it happens, even with countries devastated by losing a war such as West Germany, Japan and Taiwan. South Korea wasn't a wealthy country in the 50's. The US which has moved to a largely service based economy and less and less a manufacturing one will return to manufacturing or cease to exist in a few generations. If I were a foreign power that wanted to destroy the US, I would do....nothing.... because not having an external enemy would hasten the collapse. :tiphat:

 

The Philippines imports far too much. Much of what they do produce is from components that were imported and what the Philippines makes from final assembly work is like a body builder eating empty carbs. In and of themselves they will not let you build muscles, you need protein for that.

 

Broken record time, apologies in advance,

 

The Philippines needs to manufacture something like a old Volkswagon Beetle...from scratch. Mine the ore, foundries and mills to process, factories to make the component parts, assembly plants. All reasonably well paying jobs so Filipinos become able to buy what they have produce. Locally made and within the economic reach of Filipinos. If the entire car could not be exported, components probably could be. And the Philippines could reduce and hopefully one day eliminate importation of chop chop cars from Japan.

 

It seems that the country that least benefits from cheap Filipino labor is....the Philippines.

 

Look at what you see in the stores and malls. Most of it is imported. Filipinos are paying Koreans, Chinese, Finns, Germans, Japanese to work for them plus import duty plus the shop owners markup, doing this on their Filipino wages, or on money from remittances. It does virtually nothing to accelerate the economy, provides few jobs and what few jobs it may create are low paying, service variety that we have already established are NOT going to lift the country.

 

I know manufacturing will not spring up without investment. In all the countries that we call first world, wealthy individuals and consortiums started the ball rolling so they could profit more. This does not appear to be happening in the Philippines because the wealthy individuals and consortiums who could do it choose not to. The government chooses to not encourage outside investment.  You will see a lot more malls and very few more factories.

 

End of sermon.

[Tukaram (Tim)]

With a large supply of cheap labour around, why is that the big multi national companies do not start factories in the Phills like they have in Thailand. My thoughts would be the corruption.   More work less poverty. 

 

Some have tried - most don't stay long. Ford had an assembly plant in Laguna but closed in a few years ago - Mitsubishi is talking about reopening it....  Some good jobs here would sure help.  Even the call center jobs are better than nothing (and I think better than OFW). Imagine a generation of parents actually raising their own kids. Almost like a middle class.  :tiphat:

[manofthecoldland]

   The PI adopted the economic policies of Import Substitution Industrialization back in the 60's. Unlike other E. Asian countries, it never phased them out and shifted to more open free trade policies. Instead the Oligarchies resorted to extreme protectionalism, kept import taxes high, prevented competition and its attendant increased efficiencies and technical improvments to come to bear thereby relegating them a failure to be competitive,

   Most third world countries used this economic policy at the time to one degree or another, but the PI never really left it despite its eventual failure. The state sponsored controls and corruption that came about practically insured that things didn't change.

   The PI has an interesting economic history, and 12 years ago I bought the best college series of economic texts at our Jade Book Store (now defunct or bankrupt), but I'm sure that the National Bookstore carries college Economic texts. If you're interested in this subject, the texts are much simpler here than in western Econ 101 courses, and make for quick reads.

   Good things here on the web too. Its a pretty simple story of power, corruption and failure to adapt, adopt and change. 

[AlwaysRt]

Even the call center jobs are better than nothing (and I think better than OFW)

 

What is the pay at the call centers? Minimum wage for a domestic helper in Hong Kong is about p26,000/mo plus room and board. Mine has been at it a while and is closer to p43,000/mo. Then there are often Christmas, annual, and Chinese New Year bonuses.

[Methersgate]

 

Even the call center jobs are better than nothing (and I think better than OFW)

 

What is the pay at the call centers? Minimum wage for a domestic helper in Hong Kong is about p26,000/mo plus room and board. Mine has been at it a while and is closer to p43,000/mo. Then there are often Christmas, annual, and Chinese New Year bonuses.

 

 

Pay at call centres is less than can be earned as an OFW; many call centre workers look to get employment overseas.

[chris49]

What is the pay at the call centers? Minimum wage for a domestic helper in Hong Kong is about p26,000/mo plus room and board. Mine has been at it a while and is closer to p43,000/mo. Then there are often Christmas, annual, and Chinese New Year bonuses.

 

Entry level probationary (International Call Centre, not local)....14k going up to 18k after 90 days. Depending on performance, the salary is 20-24k pesos after about a year. There might be overtime or performance incentives.  A shift supervisor over 30k and a normal employee after 2-3 years..24k escalating up. But it's a tough business, night shift and travel time. And sick leaves or absence not well tolerated.

 

I know several in the 30k and up range, but International Call Centers are located at Ortigas or Makati, so accom and travel time can cut into that.