Rationalizing the severe corruption of the business sector

October 18, 2013 at 1:11 am (Amerikana, Corruption, Crisis, Debt, Economy, Financial Crisis, Graft, Hoodlums in Barong, Malacañang, Mindanao Peace, Philipppine internal problems, Politics, Social Concern, Thieves in Government) (, , , , , , , , , , , , , , , , , , , , , , , , , , )

Policy regime change is needed in the business and especially in the finance sector. The old paradigm of the Philippines and selected vassal type states with supplier economies, must be revolutionized. This will depend mostly on the act of the young, emerging, up-and-coming captains of industry.

The history of Philippine finance has been that of subservience and excessive docility towards superior super powers or stronger industrial economies. This cannot be the case any longer. Even with the excursion of individuals or groups like Enrique Razon to foreign frontiers, Ayala and other entrepreneurs – Eduardo Cojuangco Jr., Lucio Tan, Henry Sy, John Gokongwei to foreign enterprise destinations or missionary ports such as New Zealand, Australia, China, Latin America, Papua New Guinea, Vietnam, among many others, much has to be repaired in the Philippines.

Benevolent, jump-starting credit from both the public and the private sector is close to non-existent, breeding unsophisticated but widespread corruption within the private sector; the government is most of all helpless to stem this kind of graft and corruption within the world of Philippine business. The doctrine of trust as the most important item for purchase in the Philippines is extremely prostituted to nauseating proportions. At the end of the day, private enterprise becomes the receiving end of chastisement and censure for entering into haphazardly concocted schemes that bleed the public treasury dry or siphon the blood of the average consumer publics.

While banks deprive the vast majority of the country of credit, the financial sector lends indiscriminately to public sector institutions that simply steal the borrowed funds or connive with private business groups or ghost, or shell non-profit service providers to divert the loans and bank the same in private accounts.

Still, notwithstanding this cruel practice of the financial sector, Big Business engage in blatant theft of intellectual property of both local and foreign IP owners, enriching themselves without regard to any kind of regulation or rule designed to rationalize fair use of property rights.

One of the greatest failures of the state stems from the lack of a strong, collective espousal of concern for one’s country. The fundamental blame can be traced to this country’s entire educational system that is wholly inadequate in this regard in comparison with more nationalistic, patriotic states like Japan, Taiwan, South Korea, Malaysia, and others. Both the public sector and the business sector work in proverbial synchronicity towards improving the nation state – all in their own niches. Compounding this problem is that the sons and daughters of the captains of industry and political elite usually grow up under the watch and tutelage of more or less illiterate baby sitters (yaya) and imbibe a culture of Mr. Nonoy Marcelo’s nincompoopism, similar now to that exhibited by the national leadership.

As a classic example, in a few decades following the Second World War, Taiwan subsidized power, communication-telecommunications, among many other amenities so that business will grow. In the Philippines, both business and public sector will bleed the people dry for the use of these utilities but give way to the elite to be free of hassles in freely using and increasing their consumption of both power wattage and telecom air time.

Bangko Sentral ng Pilipinas (Wikipedia photo)
The country plunged into the mendicancy promoting program of handing out cash to the poorest of the poor. This entailed nearly 3 billion pesos (about US70 million dollars) per year during the time former President Gloria Macapagal Arroyo and ballooned into 21 billion pesos or more (approximately US490 million dollars) at the present, in the incumbency of Mr. Benigno Aquino.

If credit regime policy was revolutionized and this so-called cash transfer program, including the billion peso bribes to legislators and bureaucrats were spent instead for pump-priming national credit, if only the leaders of the country were more patriotically inclined instead of exceedingly greedy, a lot of change would have happened over the last three years.

It will certainly take a mere pittance of the 2014 2.26 Trillion pesos Philippine budget to create islands of growth in the financial credit sector. But if things go on as they are, this is mere wishful thinking but without doubt a situation that could breed bigger problems in the near future. The state of want and deprivation everywhere surely will translate into bigger crimes, fuel terrorist group’s recruitment efforts and spur a myriad social issues that will be difficult for any future administration to competently manage.

Then again, the same could have been hoped, if the previous regimes from the post-Marcos era to the present had entered into this kind of paradigm shift. But there appears to be no hope for the country given the kind of nincompoops pretending to run the government or acting like captains of industry in a country they will never consider to be their own love. The best next thing that could happen in the Philippines then, going back to the initial premise that the only redeeming factor are the youth and the conscientious citizens of this land, will be a full-blown, whole system resetting revolution or a self-imposed values reorientation and policy regime shift by the business sector.

Every source of decay dies of its own; however, there is absolutely no crime in removing the root of a disease even before its appointed death. Relatedly, any system can always have bugs. But no system admin would appreciate running the system with the bugs when ridding it of the problem issues will make the thing run smoother, more efficiently and make every affected end user happy.


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Lufthansa vs. PAL

October 14, 2011 at 1:11 am (Crisis, Debt, Economy, Euro Crisis, Europe, European Crisis, Financial Crisis, Greece, Greece Crisis, Greece Debt Crisis, Malacañang, Philipppine internal problems) (, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , )

In October of 2009, the German flag carrier Lufthansa told investors during a meeting that it was confronted with considerable risks in regard to its income targets even as it was bringing in revenue somewhat higher than the same period in the previous year, 2008.

A number of factors led to the airline’s current plight. Management cannot be blamed for its predicament but the executives of Lufthansa point to external factors as the cause of its blight.

The roots of the problem were traced to fresh oil price increases and weak passenger demand. Lufthansa shares of stocks went down by 5.5 %, closing at Euro 10.37 from its original price. The flag carrier of Germany was certain they can clarify the problem with their report of an almost hostile environment.
The German airline predicted the problem to subsist in that year. Other airlines like United Kingdom’s BMI British Midland and Austrian Airlines that Lufthansa availed were only going to bring in break even or negative earnings in the coming months.

In the United States, the prospects did not look rosier. Several U.S. airlines, the American Airlines (AAL) and US Airways (USAW) tried drastic measures to plug costs in the face of the shortfalls in travel and tourism demands. AAL was scheduled close down its maintenance facility in Kansas and downgrade its stations around the country leading to the lay-offs of no less than 700 workers.

USAW forms part of Lufthansa’s Star Alliance of international carriers – supposedly to suspend or totally discontinue regular routes between Philadelphia and five landing destinations in Europe, causing the retrenchment of more or less 1,000 personnel.

To compound its problems further, in July 2011, Lufthansa was rebuked having a hostile policy in terms of granting Accessibility to special passengers like disabled persons.  Even the United Nations itself, was antagonized by the airline when it refused to allow on board UN’s Special Rapporteur on Disability, Shuaib Chalklen April 4, 2011  who has flown unaccompanied for the last 15 years. Chalklen tried in vain to board SWISS flight LX 353 on a routine one hour and 40 minute journey from London UK to Geneva, Switzerland. SWISS is owned by Lufthansa.

European Commission reports that the airline limited the number of special passengers or Persons of Reduced Mobility (PRMs) allowed to travel on any given flight.

There are other pressing problems besetting the airline. On the other hand, a similar case is that of the Philippine flag carrier Philippine Air Lines (PAL).

The airline’s ledgers had been in the red for quite some time now – at one time it suffered a loss of 90 billion.  PAL’s high operating costs against its downsliding income due to world economic recession, international travel and exports slump are at a record low.  According to allevii’s blog, PAL’s own predicament began as early as 1998 and fairly recently during the events of 2008.

PAL downsized its organization and resolved to out-task its operations, reduce its fleet and lay off workers.

Given its detractors, like Lufthansa what options will PAL have? PAL inevitably has to survive and do all these, but at what cost?  Right now, it faces several cases from the Regional Courts, right up to the Supreme Court.

Unlike Lufthansa however, PAL does not seem to have the full support of the government.  The political party of the Presidential Political Adviser, has come out openly in support of the retrenched employees of the airline in a Privilege Speech at Congress.  The adviser’s party also accused PAL of economic sabotage. On the other hand, the adviser’s boss, the chief executive is trying to do a balancing act by dishing out statements in support of PAL.

In comparison, while Lufthansa is wavering in its economic posture and is threatened with harsher realities during the coming European Union’s economic crisis, it has everything it needs to be able to weather the storm. It can even face the United Nations squarely in the face and give it hell.  Whereas, PAL, appears to be the whipping boy of nearly everyone, the political adviser of the incumbent president among them. Can it wage a confrontation with even a lowly trade organization of ASEAN?  I wonder. Are we hoping for better things to come for the Philippine’s national flag carrier?

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Implications for Philippine economy

June 27, 2011 at 9:34 am (Economy, Europe, Greece, Greece Crisis, Greece Debt Crisis, Philipppine internal problems) (, , , , , , , , , , , , , , , )

If Europe suffers economic shortfalls, Philippine business and the entire economy will terribly be affected, despite the fact that the economy is boosted by OFW remittances and exports at the present. If a European crisis starts kicking, even our exports will suffer a painful slowdown. GDP markers will shoot down as a result.

Remittances will already be affected by the trend in the Middle East of hiring locals instead of foreign workers. To the uninitiated, a lot of poor Saudis live below the marginal subsistence line in their land. A compassionate Saudi government for instance, cannot afford to let its own people live in inhuman conditions. Thus the new emergent policy of easing out foreign workers and placing locals in their stead. Such move could affect the myriad of Filipino workers now in the Middle East, most especially if the other MidEast countries follow suit.

This inevitably does not augur well for the administration of Pres. Benigno Aquino. With a slew of internal problems now troubling and soon to hit the Philippines like multiple whammies, with its business feeling the pain of an unresponsive and penny pinching regime, there is nowhere for the country to go but down.

Any cosmeticizing by the Malacanang Palace cannot save the day.

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