The Philippines is growing up

Given our independence by the Americans and released from the Japanese after the war, this nation is around 50 years old. In country years, this is a toddler. As we grow up, this toddler learns the good (freedom of speech, rule of law, etc.) and the bad (litigation and TROs, as we have the most lawyers per capita in the region).

Freedom of speech. During the martial law days, even a few words against the Marcos administration would have put anyone to jail. (In fact, my uncle was detained for having long hair). Without a writ of habeas corpus or the need to produce your body, you can disappear or as they used to say "swallowed." Today, you can ask for the President to resign or ask for constitutional change; you can even call a Comelec official while the votes are being counted and ask about the "dagdag." (Not sure if this is legal, though.) You can even protest in the streets as long as you have a mayor’s permit.

The Catholic Church is now doing the right thing. Despite wielding tremendous power in deciding who continues to sit on the President’s chair, it has stayed on the sidelines and focused its constituency on moral and doctrinal issues. There is finally a semblance of a separation of Church and State. However, don’t expect it to be pro-population control anytime soon.

Decision-making. Finally, this administration is making decisions not based on the polls (her poll numbers are way down anyway), rather on what she thinks is the right thing to do. Whether the right thing is for her benefit alone or for the country is for history to prove out. In my opinion, this is the best time to institute reforms, as her poll numbers can’t go any lower. One brilliant decision was to appoint Gary Teves, a man whom I have respect for, as the new Finance Secretary.

Reforms are work in progress. I remember one of my teachers teaching me that to improve quality you should never blame the worker but blame the system. (For some of you quality buffs, my teacher was the late Dr. Edward Deming... sorry bragging moment there). I agree with him 120 percent. I have seen so many otherwise incorruptible and competent technocrats go into government only to be corrupted or manipulated into a new animal. We need to change the system to something where power is fair and transparent.

Where Would I Start?

Our laws. Laws need to be as unambiguous as possible and easy to understand by the lay person. The more ambiguity gives more chances for smart lawyers (and there are too many of them in this country) to find loopholes so as not to comply. They trained for this job. "Legislating from the Bench" is a new term I learned. Our Supreme Court has been alleged to be under the influence of the President by one of the "Hyatt 10." Whether the allegation is true or not, I just wish that we could strengthen our court system to remove the ability of the rich to buy decisions but rather win based on the merits of the case. A court system where the business owner is not always disadvantaged but given a level-playing field when sued by labor.

Our form of government. Maybe a parliamentary form is more appropriate; I leave that to the wisdom of our political fathers. My only thought is that it should be small, simple, fair and transparent. Maybe a federal system of three states – Luzon, Visayas and Mindanao – will reduce the number of governors. A smaller government means less chances for corruption. Maybe a form of government where the President or Prime Minister can hire and fire his ministers with clear delegation of authority but cannot overrule his minister’s decision without a valid reason. If his minister’s decision is overruled, this override is immediately submitted to a governance audit team as to why the override is needed.

Election process. Indonesia has more than twice as many people as the Philippines. In its recent presidential election, it took them less than a week to count the votes. In contrast, the Philippines took more than two months. Clearly, we need to reengineer the counting process to increase transparency and improve efficiency. In the case of impeachment, maybe the petition of 10 percent of the voting public is enough to call a special election to remove the incumbent. Leaving the impeachment process to a hundred people leaves too much room for horse-trading.

My Two Cents: Although I am more cynical than most people, I do not call for her resignation because I believe everyone has the right to due process. People power is not due process. As a layman, I perceive that most if not all of the senators and congressmen and mayors and governors may themselves have called the Comelec, and may or may not have cheated in past elections themselves.

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Watch Out For HP

In the last four months, HP stock has risen 20 percent from around $20 a share to a recent close of $24 per share. What changed?

They changed their leader. They hired Mark Hurd from NCR as their new CEO. He is known in the marketplace for execution and less fluff than Carly, his predecessor. He does face a few challenges.

Dell continues to dominate the PC market where HP continues to be losing share. Dell is now moving up the food chain with its servers and services.

HP’s strength in the printer sector is now under fire from disruptive technologies. In the inkjet arena, the printer is practically given to you because they make their money on replacement as they charge about P1,500 per replacement cartridge, while to refill unofficially the same cartridge costs about P200. Until now, HP has felt secure in that the print quality of the cartridge declines significantly as both the quality of the ink injected and the air balance in the cartridge produces a draft (low) level quality of print.

In fact, as early as 2003, HP has already patented a new refilling station that answers both, but one wonders why they have not released the refilling station. Could it be that they want to maintain their margins longer? Well, they better launch it soon. I heard Inke, a Singaporean group, has developed a refilling station that can refill the cartridge without fear of loss of quality as the ink is of good quality and the air balance in the cartridge is maintained (check out www.inke.com.sg). Same quality, lower cost seems like a good business proposition to me. (Disclosure: The local Inke distributor took me out to lunch.)

My Two Cents: CEOs and presidents are faced with constant challenges from disruptive technologies. They just need to take control of the process and launch their own disruptive products or risk having someone else destroy their cash cow. (Hmm... can this humble opinion be more applicable to the earlier story?)

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Dickson Co is CFO (C is for Cheap) for Dfnn, Intelligent Wave Philippines and HatchAsia.com. For comments or suggestions, e-mail [email protected].