Beyond the Pearly Gates, where Saint Peter stands watch, is a department devoted to complaints from and about the Philippines. Rumor has it that the staff has been increased in the past few months.
Unlike at a local department store, these complaints are passed to higher authorities for potential future action and those that submit their grievances may not be responded to directly. However, if the protests are anything similar to what we hear and read on social media and in the press, there may be a good reason for that.
A recent complaint—which is justified—is that the Philippine trade deficit increased to the third-worst historical performance, the other two being in December 2017 and May 2018. The problem, though, is that too many think they understand the situation well enough to be rationally upset.
“Trade” is easy to understand and the word “deficit” is usually something negative. Then there is the spin as noted in this headline: “Trade deficit worsens as exports fall flat.” Or this one: “Philippine trade gap widens in July amid lackluster export growth.” People are smart enough to know that a weaker peso could increase exports and that did not happen. Further, a trade deficit can actually weaken the currency further. Finally, the trade deficit means that $3.97 billion went out of the country in July.
Therefore, the complaint and plea is, “Save the Philippines from our horrible trade deficit!”
While the July deficit is a fact, the “complaint” may not be “proper.”
As enumerated many times, the increase in the deficit came in large measure because of a 135-percent increase in the imports of iron and steel and a 61.1-percent increase in transport equipment.
The better complaint should be: “Why does the Philippines have to import virtually all of its steel needs?” The country’s largest steel producer, Steel Asia Manufacturing Corp. is investing $500 million for three integrated steel facilities in Luzon and the Visayas. Currently, the company is the largest producer in Southeast Asia of one of the least value-added steel products—reinforcement steel or rebar. The new plants will produce products that are now 100 percent imported. Why are we faced with this situation? That is the genuine complaint.
The 61-percent increase in transport equipment also warrants a complaint of, “Why does the Philippines import virtually all of the buses that ply our roads?” The closest we come to manufacturing a bus is building the body to slap on the finished and complete imported chassis. And even then, that accounts for only about 20 percent of all the buses on the roads.
Let the foreign investors complain about a potential decrease in their government incentives and it makes front-page news. But there is no headline saying that every bus—in addition to countless other products—carries a plaque that says “Proudly Made in China.”
If we are going to complain, let’s complain about decades-long government policies that have in effect encouraged imports. We cannot properly regulate and control our mining industry so that we cannot tap our substantial iron ore deposits. We cannot produce steel products competitively—cheaper to import—because we cannot use domestic iron ore for our steel mills.
No wonder there is no direct response from the celestial complaint office. They probably got tired of writing, “Figure it out for yourselves.”