A trade war between the United States and China presents a wealth of opportunity to the Philippines — if, of course, Filipinos are up to the challenge of seizing them. Up for grabs is a bonanza for suppliers of goods and services that the US is set to cut China out of if this “war” escalates. It all depends on whether Philippine business is up to competing for a piece of the pie.
Key to this lies in the Philippines’ ability to gear up and put all hands on desk for the race to seize sizeable chunks of the new demand for non-Chinese supplied products that will be created in the US market. At present, the Philippine economy is doing well, but it is at risk of sputtering unless vital support foundations are laid to ensure it stands on solid footing. Key pillars of this foundation are essential transport and labour productivity infrastructure.
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The Philippines routinely produces a vast bumper crop of natural and human resources. However, mobilising these into economic output is an on-going challenge due to formidable physical and social constraints.
For one thing, the Philippines is an archipelago and, as such, transport and storage of goods is costly along much of the supply chain. Though a lot of investment has been poured into the throughput capacity of sea ports over the last several decades, roads and bridges connecting these to industrial centres remain substandard and often present a limit to both size, weight, and speed of trucks plying them. More importantly, the use of rail for freight movement remains at pre-1950s levels if at all existent. The biggest challenge is to reduce the cost of moving one tonne of Filipino product per kilometre. To do that freight transport in the Philippines badly needs to step up from tingi scales to the modern bulk logistics that make use of high-speed high capacity transport, storage, and handling facilities seen in truly competitive countries.
Second, the competitiveness of the Philippine labour force has been tapering off thanks to productivity gain not keeping apace with rising salaries and wages. Various leftist campaigns to raise the “minimum wage” achieved no more than to further highlight an emerging national delusion that Filipino workers are up to the task of building a truly strong national industrial machine. Higher wages can only be supported in a free market by a proportionate increase in labour productivity. Without the latter, higher wages only contribute to inflation and, down the line, more poverty. Add to that the Philippines’ enormous population which puts even more downward pressure on salaries and wages and it becomes starkly evident that the Filipino worker is in no position to compete unless her inherent capabilities as contributors to real industrial output is lifted.
Looking past the immense feat of upgrading domestic industrial capability and infrastructure, there are easy fixes in the horizon. The influx of experienced and pound-for-pound more economically valuable Chinese workers into the Philippines, while seen by many as a bad thing, itself presents vast opportunities for millions of underemployed Filipinos and struggling local businesses. The substantial purchasing power of these relatively better-paid foreigners represents new demand for local goods and services. The economic activity they will stir up, not to mention the construction work required to develop property needed to house them, will go into creating more jobs and demand that could spell boom times for enterprising Filipinos.
Key here is to find opportunity in what, at first, seems like adversity. It does not help that a community of Opposition “thought leaders” and “influencers” still sore from a catastrophic defeat in this year’s elections know nothing beyond blanketing the national discourse with a negative pessisimistic mood all for the purpose of undermining a government that is working hard in the service of Filipinos who had, for their part, loudly indicated a resounding mandate to continue down the new path it charted for them. It is time Filipinos come together and work towards the future. Together they should ditch the obsolete thinking that certain elements in their politics would like to see persist to keep them anchored in a past that is no longer relevant and beholden to old demons that only serve to haunt rather than inspire.
benign0 is the Webmaster of GetRealPhilippines.com.
I don’t want to be a negative force here; but sorry, I am a Realist. China is an Industrialized country. It has its sophisticated manufacturing and industrial base. The country is advance in Science and Technology.
It is equal to any industrialized country, in terms of research and development.
The problem of the U.S./China trade war is: China export goods to the U.S., with little or no tariffs of goods exported. While China impose tariffs on goods imported from the U.S. There is a huge amount of “Trade Deficit”, in the U.S./China trade balance amounting to hundred of billions of dollars.
Some U.S. manufacturing companies, moved to China, to take advantage of the Low Pay of Chinese labor; then export these U.S. – China made goods to the U.S., with no tariffs or low tariffs.
This made many jobs lost in the U.S… Pres. Trump is not amenable with the trade situation. so, he is imposing the right amount of tariff on all goods, manufactured in China; whether they are from U.S. companies or Chinese companies.
If we can start designing quality assured goods, and put a reliable manufacturing base; we can do what China did to the U.S.
Unfortunately, during the Aquino era; the Aquinos were only interested in promoting the delusion of EDSA revolution. While they enriched themselves and their cahoots, at the peoples’ expense. The program of the late Pres. Marcos Sr., of an Agro Industrial Base of the country, was put aside.
Instead, the Aquinos built, the EDSA shrine, to be worshiped, on every EDSA holiday. Named airports, memorial stadiums, etc…to themselves. Put their nasty faces on our currencies, to fulfill their being egomaniacs.
This is the reality. We are at the bottom of the economic trash. We are a Feudal Oligarchy country, exporting cheap manual , service and slave labor throughout the world.
We have turned into a “Hacienda Luisita” economy , Aquino Cojuangco style !
Science is the religion of the mainland Chinese people. The big US mistake is moving their industries to China to take advantage of the Chinese cheap labour where workers are indoctrinated with a scientific mind and that is why it didn’t take long for the Chinese to copy every form of technology the US have, the Chinese didn’t steal those technologies, the US just gave them away, is it the Chinese fault? I don’t think so.
In the Philippines, the knowledge of science is not meant to spread among the ordinary people and we all know the conclusion.
@sarda:
Thank you, I appreciate your comment. It is good to inform our fellow Filipinos, who are still suffering from that : ” EDSA DELUSION”…who are addicted to Kudetas, like Trillanes , some priest. some professors , the oppossition, the NPA/communists and Lugaw Robredo.
Our situation is the result, of the mismanagement of the economy, and greed of the politicians , during the Aquino era. They all sold out out. Now, we are all sufering !
These evil people sold us out…they are responsible for our present suffering !
They are the ones who can show credentials and therefore gives them authority.
Those who cannot show any credentials (the ordinary people) should shut up and just let the authority handle the business matter.
They say, evil triumph because good men didn’t do anything, perhaps they needed credentials to show.
To make our way, we must have firm resolve, persistence, tenacity. We must gear ourselves to work hard all the way. We can never let up.