Filipino First could mean Filipino Last

When Colgate shifted its toothpaste manufacturing to Thailand, I shifted to a local brand. When I travel abroad, I choose to fly on Philippine Airlines whenever possible, even if it is slightly more expensive. Two weeks ago, I decided to vacation in a beach resort in Bohol instead of going to Phuket in Thailand, even if it was more expensive to go to Bohol, if only to put my money where my mouth is.

All things being close to equal, every Filipino should make it a point to Buy Filipino. In many instances, buying Filipino does not hurt. I have been buying Condura, Ronnie Concepcion’s local brand and found it good and reliable. Buying Jollibee over McDonald’s saves on foreign exchange that would otherwise go towards paying franchise costs. Buying Arce ice cream instead of Häägen Daz does not entail a sacrifice on the Pinoy’s taste buds.

Filipinos can be world-class competitive if we put our minds, hearts and efforts into it. The mighty McDonald’s is eating Jollibee’s dust over here. Ronnie Concepcion is exporting his air conditioners abroad and is able to compete in terms of price and quality. High tech electronic parts and products from Texas Instruments and other local manufacturers are proudly Philippine made.

Yet, we have been hearing cries of anguish from many local manufacturers demanding tariff and other artificial protection from imported competition. While this may seem effective in the short term, specially for non-thinking politicians, artificial protection is not a sustainable solution. In the end, our manufacturers just get more complacent and even more uncompetitive in a marketplace that has become global.

The example of the Marikina shoe industry is often cited. Once the pride of Pinoys, Marikina’s shoe industry is dying, if not already dead. They blame cheap imports from China. But that’s not what really killed our shoemaking industry. Lack of competitiveness did the industry in. Our shoemakers cannot compete with imports because they have not upgraded manufacturing technology/practices, have not adopted current design trends and failed to look beyond the small local market.

Look how hopeless they are, someone commented. They made a giant pair of shoes that would land in the Guinness Book of Records, but didn’t even bother to make the style contemporary. Who wears shoes with that kind of style these days? If only Ang Tibay and Gregg shoes, the shoes known for quality and style when I was growing up, managed to keep up with the times, I’d still be wearing Philippine-made shoes today.

Trade and Industry Secretary Mar Roxas is right. He can slow down trade liberalization for a while to help our industries buy a little time. It should be enough that President Macapagal-Arroyo issued Executive Order No. 241 last Oct. 2 which will raise the import duties of around 500 product lines to a range of five percent to 15 percent from the current range of three percent to seven percent. The new rates take effect Nov. 16.

But trade protectionism is not a viable long-term strategy. Globalization of markets is a reality, whether we like it or not. No one, not even the United States, can really fight it. Soon enough, smuggling will intensify because there is no really effective way of stopping globalization of markets at national borders.

Besides, Mar is also obligated to protect consumers as much as producers. Consumers pay a price penalty under a protectionist regime. This is why even the United States is of two minds about forcing China to revalue its currency because doing so would also increase prices of products bought by American consumers. Low-cost goods made in China contributed significantly to America’s low inflation regime… helping consumers hold up the American economy under adverse macroeconomic conditions.

I am sympathetic to the ideals of the so-called fair trade group of former Sen. Bobby Tañada. But at the same time, I would like to caution them that unless we work double time to be globally competitive, Filipino First could result in Filipino Last. Isolating ourselves from the global economy would punish the Filipino people with high-cost products of low quality.

Even the most sympathetic consumer would think twice if local brands fail to keep up with world standards. This is why Philippine Airlines must make sure it flies on time and has the best cabin service or risk losing the patronage of its core Pinoy market. After my sad experience at Bohol Beach Club, I would think twice about doing my share for domestic tourism.

Now is the time to sharpen our competitiveness. Soon enough, China will emerge even more competitive and woe upon countries who are not ready to compete with China. We have to establish our competitive edge now or forget we even have a future. It is as simple as that.

Post Cancun

Still on the subject of trade, now is the time to assess what that euphoria over the "victory" of the Group 22 alliance of developing countries in Cancun is all about. Mar Roxas and Cito Lorenzo must explain to the Filipino people why we rejoiced over the failure of the developed countries to open new areas for liberalization without resolving our demand for the elimination of farm subsidies by developed countries.

The elimination of farm subsidies, to our understanding, will even out the playing field. That’s probably true, but on second thought, I was wondering if this victory matters that much to us. Last August, we covered this issue of agricultural competitiveness in this column and have come to the conclusion that we are not even in the game.

We cited e-mail responses of Dr. Rolly Dy, agri-business expert of the University of Asia and the Pacific (UAP) to our questions on the matter. Dr. Dy pointed out that the Filipino farmer "is not in the loop." This is because the Filipino farmer’s cost of production is high due to low productivity and high cost of logistics compared to the American and Argentinian farmers. Without the US subsidies, Dr. Dy explained, it would be the Argentinians who will benefit. With short supply, the world price can probably increase and the Argentinian farmer will produce more.

If that is the case, why should we complain about Western subsidies that lower export prices that actually affect us? If America wants to sell its corn at lower than production cost, shouldn’t that be good for us, as buyers? After all, the Philippines is a net importer of food – from rice, corn, wheat, vegetables and even sugar.

At least theoretically, America’s subsidy to its corn and wheat producers will allow Filipino consumers to benefit from lower prices of chicken, beef, pan de sal and other food products. Food costs claim the largest chunk of the typical consumer’s budget and we should keep these costs as low as possible for the consumer.

Why are we advocating higher tariffs for food products that our people buy, specially the poor people who now subsist on instant noodles made from imported American flour? That works against the poor in Tondo and Payatas. As in manufacturing, protectionism, specially if it is to be imposed indefinitely, is counter productive for the country’s long term interest.

Trade Off

Here’s something from Dr. Ernie E.

The old gentleman was aging more rapidly than he wanted.

"Your gout is getting worse," said the doctor. "I recommend that you give up smoking, drinking and sex for a while."

"WHAT!" said the man. "Just so I can walk a little better?"

Boo Chanco’s e-mail address is [email protected]