The Philippines can turn Asia’s aging population to its advantage. Chief Economist Bert Hofman of the World Bank, in a video conference, projected that more and more manufacturing concerns will consider relocating to the Philippines because of its young and well-educated population.
The country, however, must prepare itself for that eventuality. Otherwise, these conglomerates will go to other countries that offer a more favorable business climate.
For starters, the Philippines should upgrade its training program, until now a TESDA monopoly. Nothing’s wrong with that except for the fact that the agency puts emphasis on hair care, manicure and pedicure, dressmaking, and other non-essentials. It should instead focus on skills that the manufacturing sector will likely need, and for that it must consult the academe and industry.
The Philippines should stop enticing foreign firms through tax breaks: no taxes for the next ten years or so. For one important reason: DTI may or may not grant the incentive, and giving it the option to grant or withhold the largesse is a source of corruption.
Moreover, it is doubtful whether such tax breaks are even a factor in the decision of the companies to relocate here, although of course they are just too happy to take advantage of it.
Instead of tax breaks, the government should offer foreign investors full ownership of the business they set up. They way things are, foreigners are allowed to own only 40 percent of the corporation. They need to find a Filipino as partners or as dummies for the remaining 60 percent. It is this arrangement that drives foreign investors away.
Another contentious issue is land ownership. Foreign investors should be allowed to own land. Citizens fear that foreigners will gobble up the whole country. To allay that fear, land ownership by foreigners should be limited to a size just enough on which to build the manufacturing plant.
Certainly, the country should not allow foreigners to own hectares of land. For that matter we should not allow the rich among us to appropriate for themselves so much land for speculation purposes.
These two issues—corporate sharing and land ownership—are something that will require Constitutional amendments. It is high time too that we put xenophobia behind us. After all Filipinos are exploited more by their fellow citizens than by foreigners.
Sure, we should be foreign-investor friendly, but we should not grant them too much concession.
The government is too quick to bargain away labor rights. The plight of workers at Hanjin Heavy Industries Corporation is a case in point. The giant shipbuilding company, which operates under the auspices of Subic Bay Metropolitan Authority (SBMA), pays its workers less than the minimum wage and makes them work in dangerous conditions. No wonder we often hear of workers dying in accidents.
In other parts of the country, workers form unions so that they can win concessions in the matter of wages and working conditions. They don’t have that right at SBMA, where foreign companies are assured industrial peace. Never mind that Hanjin is located between the towns of Subic and San Marcelino, not within SBMA. The rule applies to it by the simple expedience of classifying it as a firm within the free port.
But what if it were within the SBMA proper? That does not give this South Korean firm the right to trample on the rights of workers.
The US Navy occupied Subic Bay from 1947 to 1991 under the Military Bases Agreement. Old timers observe that the base, the largest US Facility outside Continental United States, reported fewer cases of Filipino workers dying by accident in its half a century of existence in the country than Hanjin in a year.