BANGKOK, Thailand — As Filipino motoring journalists converge in Bangkok for the annual Bangkok Motor Show, it is difficult to ignore the sense of loss or resentment that Pinoy gear heads feel about our country’s failure to attract major automotive companies to set up production plants in the Philippines.
As many of us criss-cross around Thailand, most if not all become painfully aware of the fact that Thailand is now officially the “Detroit of Southeast Asia”.
Just saying it, leaves a bad taste in the mouth of those who still remembers a time when cars and engines were “made in the Philippines”. Like Manny Pacquiao’s seven division titles in world boxing, the title of “Detroit of Southeast Asia” should be hanging in some industrial zone in the Philippines.
Instead, it is in Thailand where practically all of the major automotive and utility brands either have a regional headquarters or at the very least a vehicle production center.
It was not very long ago when the Philippines had a chance to compete against Thailand in efforts to woo the major brands and possibly be the regional hub for vehicle production in Southeast Asia. As the oldest car culture in the region, we actually had the upper hand since all the major brands were already based in Manila and had established production facilities even if at a smaller scale.
We imagined ourselves to be at the forefront of Asian motoring and automotive awareness because of our pro-American and US influenced automotive market as well as highways. We were way ahead of the pack in consuming American made cars as well as major Japanese brands.
Unfortunately when our ASEAN neighbors developed, they started to covet the car manufacturers and began to woo them in earnest, the Philippines thought nothing of it. We were so self-assured in our imagined “advantage” of being the only English speaking country in the area.
Government officials wrongly assumed that foreign companies would be “hinayang” or reluctant to waste their structural investments and historical ties in the Philippines. So slowly but surely, Thailand, Indonesia, and Malaysia lured bits and pieces of the Philippine advantage.
Like a cheated wife living in self-denial, we continued to believe that our long time partners from the US and Japan would always come home to their first love and bring home the bacon of profits and investments.
Our government officials in past administrations failed in choosing not to recognize the allure and serious threat that Thailand was making by offering extremely competitive incentives to car manufacturers.
Rather than counter the temptations from Thailand, our government officials acted like a betrayed spouse and gave the car manufacturers a “take it or leave it”.
They chose to ignore the benefits for job generation, technology and skills transfer, export potential for parts, as well as image building as a stable and desirable location for global corporate investors, or did they?
Like typical landlords, they focused on the “rent” which came in the form of various taxes. In the absence of a serious development program of national interest, decisions were based mostly on how to protect certain business interests of private groups and how to continue to collect revenues.
Even today, as President Noynoy seriously attempts to woo ASEAN businessmen and corporate investors, he will discover if he chooses to investigate, that much of government’s policies, trade agreements, etc. were crafted and enacted to protect only a few companies and families and the Republic of the Philippines.
Prior to any formal or official data, I would tend to think that government “earns” more from many businesses, than the business itself.
Consider the fact that businessmen or corporations have to plow in millions or billions of pesos in a business venture. That alone costs money. Then they have to set up the business, hire people, purchase goods or materials, manufacture the end product and then bring the product to the market or to consumers.
Every step of the way, businesses take on both risk and financial responsibility. The government on the other hand collects income at every step and immediately profits before the business even sells their produce.
Whether it is fuel, travel, automotive, electricity, telecommunications, banking and insurance, the government immediately makes the profit, collects the money most of which is either spent well or stolen.
That is where the mistake lies. The government can only spend the money but can’t really invest it in real terms that would create more jobs, stimulate expenditure, thus stimulating the economy and production. The business of government continues but not much else.
P-Noy should get the NEDA to research how much of every peso that government collects, actually goes into “renewable” income, or how much is spent for every job created? What is the “life expectancy” of such jobs compared to those provided for in the private sector?
Perhaps it is time to re-engineer government philosophy and policy away from merely making money via taxation.
Like Thailand and other countries, it might be a more sound policy to incentivize and encourage people to put up shop, create jobs, stimulate buying power, etc.
At this stage, it would be next to impossible to regain the title we lost by default. As an island, the cost of logistics to bring in raw materials and ship out finished automotive products would be irrational.
However, there is another “boat” that we should not miss. Many car manufacturers are now considering the strategy of spreading out their parts supply chain after the earthquake and tsunami that hit Japan and seriously disrupted global production.
This could be OUR ticket if government chooses not to tax the hell out of it once again.