In review and in prospect
Inflation is definitely here to stay and it will continue to exert downward pressure on economic growth in the Philippines. How can the Philippine economy grow when its main asset — warm bodies — is increasingly uncompetitive in the industries where it’s been primarily deployed? Damning data on the state of the nation’s collective intellect and comprehension faculties make competing on price alone no longer feasible when one considers that lower labour cost countries are steadily eating Filipinos’ lunch in the overseas and business process outsourcing labour markets.
The Philippine economy, in short, is being double-whammied: (1) demand is depressed due to Filipinos’ purchasing power being eroded by flat productivity and dwindling economic opportunities owing to their intellectual bankruptcy and (2) supply risks made potent by the Philippine economy’s dependence on imports are pushing prices upward. Global supply chains are shifting at their foundations putting further pressure on the Philippines’ fragile access to essential input to its economy — food, fuel, fertilisers, and capital (funds, tech, and equipment). If war erupts in the South China Sea — or even if navigation through shipping lanes there are even the least bit compromised — the effects on shipping costs of these essential goods would add an additional whammy on supply and, as such, another upward push on prices.
No food, fuel, and capital, no economic activity, no employment, no demand. The economy — specially a consumption driven one like the Philippines’ — needs to slosh stuff around to create the extra level of demand required to sustain the surpluses that props up Filipinos’ standard of living — i.e. their ability to consume rather than merely subsist. In terms of accumulating surpluses, the Philippines is progressively falling further behind its southeast Asian peers. Rock bottom for Filipinos is coming back to subsistence — just being able to eat, house, and clothe themselves — and even keeping that rock bottom, well, rock-like in substance is being made difficult by mounting risks on access to those essential input commodities.
The Philippines is not just competing for markets for whatever it has on offer for the world to buy. It is also competing for supplies. As other developing countries demand more, supplies will have to keep up. If supply does not keep up with demand, Filipinos will need to pay more for these finite supplies. To be able pay more, they need to make more. This means becoming more productive at doing stuff. How does one become more productive producers? Technology and smarts are fundamental enablers to achieve that and those happen to be the very things Filipinos don’t have much of at the moment.
Last week’s blog posts
Is it even possible to “boycott” Chinese products?
August 13, 2023 by benign0
"The foundation of national wealth is capital and capital is created from innovation that improves labour productivity. Filipinos lack the essential scientific and technological traditions that creates that capital..."
August 8, 2023 by benign0
"The position taken by 'activists' pretty much boils down to an oversimplified and overused cliché which basically goes like this: soldier bad, all the rest good. This is a doctrine that has peppered the lame rhetoric of Filipino 'activists' for decades..."
August 8, 2023 by benign0
"Stupid people cannot choose leaders wisely and stupid people will remain beholden to cults of personality whether those cults are led by a Marcos, a Duterte, a Robredo, a General Secretary, or one cardinal, bishop, or another."
VP Inday Sara Duterte Carpio Hogs 13 Percent of 2024 National Budget
August 7, 2023 by Oman
"That sizeable chunk I am referring to is VP Inday’s huge Intelligence Funds which is at a staggering P650 million through both the Office of the Vice President (P500 million) and the DepEd (P150 million)."