Filipino expatriates and migrants worldwide remit over $25 billion yearly to relatives back home, a sum that forms a minor percentage of their total dollar incomes. Filipino BPO (business process outsourcing) employees' salaries are expected to top the sum in the near future. Combined with incomes of corporate employees and small entrepreneurs, middle class Filipino incomes come up to trillions of pesos yearly. The major percentage of the country's P10 trillion or so bank deposits comprise savings and time deposits (loans to banks) mostly owned by employee masses and expatriate dependents. Yet only a tiny percentage of said earning masses hold certificates of stock in large corporations, compared to some 60% of US employee masses. Additionally, there are only 250 or so companies in the local stock market that are open for public investments. Furthermore, only a handful of investment houses actively promote corporate investments that target employee masses despite such masses' billions of dollars in remittances and trillions of pesos in bank savings.
Why the near-total absence of a local mass-based corporate investment culture? For one, local elite companies are family businesses that refuse part-ownership by masses of 'unknowns'. Another reason: elites own banks that pay near-zero to just 5% yearly interest to depositors while charging up to 40% yearly interest on loans. Elites' corporate groups simply borrow from each other's banks so they don't need public investments which require high dividend costs and create control issues. A third reason: opening investments to the public may invite takeover artists powered by borrowed funds from State agencies or corporate groups to buy out a sufficient number of non-controlling investors and thereby attain control.
Historical culture is also to blame. Historically, Filipino 'natives' from pre-Spanish times to present stuck to micro-scale farming and crafts production, hardly to large-scale trading, manufacturing and exports. History's few thousand Chinese entrepreneurs however 'thought big'. During pre-Spanish times, fleets of Chinese ships (junks) already sold ceramics and other Chinese manufactures largely on wholesale basis islands-wide, with ambulant natives acting as retailers and barter salesmen. Money came in the form of gold dust measured thru tiny weighing scales. Native copper and bronze items as well as forest and marine products (waxes, shells for buttons, pearls, etc.) formed barter items for Chinese porcelain, cloth, iron, kitchenware and other items.
During the Spanish colonial period (1560s-1898), Chinese and Filipino-Chinese dominated local consumer goods imports, buying, processing and ship-scale export of brown sugar, and export of goods from China to Mexico to obtain silver coins. Chinese labor contractors brought thousands of coolies, shoemakers, wood and stone carvers, shipyard workers, furniture and wagon makers, etc. Concurrently, the largest sugar planters of the time (mostly Filipino-Chinese) bought steam-powered sugar mills from British companies on installment basis. The mills' operations (which created large sugar plantations) built the first few colonial elite families. Their sugarcane feedstock suppliers (mainly Filipino-Chinese) formed the period's small middle class. The richest businessman in late 1800s was a Chinese (Tua Son) who dominated the supply of brown sugar to US and British importing companies.
During the US colonial period, the elites managed to borrow the Philippine National Bank's millions of dollars in State deposits to import large sugar centrals and plantation railways from US companies. The borrowers' resultant greatly expanded wealth enabled them to control State largely thru surrogate politicians. In 1950s (post independence), attempts by 'native' politicians to 'Filipinize' industries failed because of lack of dollars for importing and maintaining factories.
In 1970s-90s, the Marcos regime (advised by the IMF-World Bank) managed to create a native political elite and greatly expand the middle classes thru local-foreign joint ventures supported by massive State loans, low-cost industrial zones, tax breaks and control of labor unions. Marcos used US apprehension of all Asia going Communist to wangle some $2 billion in yearly loans over forty years from US Aid and the World Bank. Japanese Aid constructed infrastructures and supplied equipment to factories, all on credit at low interest. All throughout and presently however, Chinese and Filipino-Chinese dominated Philippine business thru their corporate groups, contrary to leftist claims of 'US economic domination'. These days such groups (controlled by less than a hundred elite families) comprise from 50-100 top companies per elite family. On the other hand, 99% of natives are still micro-farmers, crafts people, micro retailers, small franchisers, and employees with a single source of income. Hardly any of such masses (including the middle classes) possess shares in large corporations to obtain additional income from dividends and stock sales. No wonder the Philippine masses are so poor and the elite few are waxing rich. Simply put, the masses never developed a large-scale corporate culture.
How may the Filipino masses redeem themselves? Aside from setting up mega co-op corporate groups thru international synergies as herein described, said masses should use their voting power to set up a government that promulgates anti-poverty laws which re-channel public money towards mega co-op formation. Examples: a) an Employee Income Tax to Co-op Shares law; b) an Employees' Bank law; c) 50% Corporate Income Tax to Co-op Shares law; d) a Loans for Mass Entrepreneurship law; e) other laws that channel capital to employee masses whose ultra-low salaries preclude their saving for investment. Said laws are described in later sections of this work. Once such laws enable employee masses to each own stacks of capital shares in mega co-ops that yield high dividends and that rise in market value, they should develop a lifetime habit of setting aside 20% or more of their total incomes towards purchase of more mega co-op capital stock. Such conditions should signal the beginning of the end of mass poverty in the Philippines.
How may the dream begin to pan out towards reality? First World CSR companies' need for climate change action should serve as major catalyst. By proposing profitable clean and green joint ventures to such companies, Philippine mega co-ops should begin to develop the local masses' badly needed large-scale corporate culture which will enable them to redeem themselves out of the daily miseries inflicted by grinding poverty. As described in this blog, the Filipino masses may redeem themselves largely thru their own efforts, with aid provided by multi-racial allies.
Why the near-total absence of a local mass-based corporate investment culture? For one, local elite companies are family businesses that refuse part-ownership by masses of 'unknowns'. Another reason: elites own banks that pay near-zero to just 5% yearly interest to depositors while charging up to 40% yearly interest on loans. Elites' corporate groups simply borrow from each other's banks so they don't need public investments which require high dividend costs and create control issues. A third reason: opening investments to the public may invite takeover artists powered by borrowed funds from State agencies or corporate groups to buy out a sufficient number of non-controlling investors and thereby attain control.
Historical culture is also to blame. Historically, Filipino 'natives' from pre-Spanish times to present stuck to micro-scale farming and crafts production, hardly to large-scale trading, manufacturing and exports. History's few thousand Chinese entrepreneurs however 'thought big'. During pre-Spanish times, fleets of Chinese ships (junks) already sold ceramics and other Chinese manufactures largely on wholesale basis islands-wide, with ambulant natives acting as retailers and barter salesmen. Money came in the form of gold dust measured thru tiny weighing scales. Native copper and bronze items as well as forest and marine products (waxes, shells for buttons, pearls, etc.) formed barter items for Chinese porcelain, cloth, iron, kitchenware and other items.
During the Spanish colonial period (1560s-1898), Chinese and Filipino-Chinese dominated local consumer goods imports, buying, processing and ship-scale export of brown sugar, and export of goods from China to Mexico to obtain silver coins. Chinese labor contractors brought thousands of coolies, shoemakers, wood and stone carvers, shipyard workers, furniture and wagon makers, etc. Concurrently, the largest sugar planters of the time (mostly Filipino-Chinese) bought steam-powered sugar mills from British companies on installment basis. The mills' operations (which created large sugar plantations) built the first few colonial elite families. Their sugarcane feedstock suppliers (mainly Filipino-Chinese) formed the period's small middle class. The richest businessman in late 1800s was a Chinese (Tua Son) who dominated the supply of brown sugar to US and British importing companies.
During the US colonial period, the elites managed to borrow the Philippine National Bank's millions of dollars in State deposits to import large sugar centrals and plantation railways from US companies. The borrowers' resultant greatly expanded wealth enabled them to control State largely thru surrogate politicians. In 1950s (post independence), attempts by 'native' politicians to 'Filipinize' industries failed because of lack of dollars for importing and maintaining factories.
In 1970s-90s, the Marcos regime (advised by the IMF-World Bank) managed to create a native political elite and greatly expand the middle classes thru local-foreign joint ventures supported by massive State loans, low-cost industrial zones, tax breaks and control of labor unions. Marcos used US apprehension of all Asia going Communist to wangle some $2 billion in yearly loans over forty years from US Aid and the World Bank. Japanese Aid constructed infrastructures and supplied equipment to factories, all on credit at low interest. All throughout and presently however, Chinese and Filipino-Chinese dominated Philippine business thru their corporate groups, contrary to leftist claims of 'US economic domination'. These days such groups (controlled by less than a hundred elite families) comprise from 50-100 top companies per elite family. On the other hand, 99% of natives are still micro-farmers, crafts people, micro retailers, small franchisers, and employees with a single source of income. Hardly any of such masses (including the middle classes) possess shares in large corporations to obtain additional income from dividends and stock sales. No wonder the Philippine masses are so poor and the elite few are waxing rich. Simply put, the masses never developed a large-scale corporate culture.
How may the Filipino masses redeem themselves? Aside from setting up mega co-op corporate groups thru international synergies as herein described, said masses should use their voting power to set up a government that promulgates anti-poverty laws which re-channel public money towards mega co-op formation. Examples: a) an Employee Income Tax to Co-op Shares law; b) an Employees' Bank law; c) 50% Corporate Income Tax to Co-op Shares law; d) a Loans for Mass Entrepreneurship law; e) other laws that channel capital to employee masses whose ultra-low salaries preclude their saving for investment. Said laws are described in later sections of this work. Once such laws enable employee masses to each own stacks of capital shares in mega co-ops that yield high dividends and that rise in market value, they should develop a lifetime habit of setting aside 20% or more of their total incomes towards purchase of more mega co-op capital stock. Such conditions should signal the beginning of the end of mass poverty in the Philippines.
How may the dream begin to pan out towards reality? First World CSR companies' need for climate change action should serve as major catalyst. By proposing profitable clean and green joint ventures to such companies, Philippine mega co-ops should begin to develop the local masses' badly needed large-scale corporate culture which will enable them to redeem themselves out of the daily miseries inflicted by grinding poverty. As described in this blog, the Filipino masses may redeem themselves largely thru their own efforts, with aid provided by multi-racial allies.
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