Global capitalism has altered the economic, political, and cultural terrains of the Philippine society. As a society integrated in the international political economy, the Philippines is subjected to the logic of global capitalism in which capital profits and thrives from uneven development, the differentiation of social conditions among national economies, the preservation of low-cost labor regimes, and the reproduction of relative poverty. Poverty remains. Tremendous unemployment, inequality, and social immobilization appear to be a permanent fixture in the Philippine capitalist society. The base, in the triangular, hierarchical structure of the Philippine society, is widening while the rich is getting stronger and more affluent. The Philippines remains a Third World (developing) economy following the prescriptions of macroeconomic policies of the World Bank, structural adjustment programs of the International Monetary Fund, and free trade policy of the World Trade Organization. Apparently, where there is an appreciable gap between the rich and the poor, it simply means there is patent inequity in the distribution of wealth.
There is inequality in the distribution of wealth when only a handful of “vested and privileged few” holds the purse of the nation and enjoys the gains of economic activity. As the gap widens, the poor suffers deeper and longer deprivation because the range of goods and services available to them contracts. This is exactly the reason why more than one billion people lack the opportunity to consume in the quality and value that would allow them to satisfy their compelling basic needs. Growing inequality is one of the biggest social, economic and political challenges of our time. But it is not inevitable. For some reasons, it ushers the dawn of a vicious socio-economic climate that causes deterioration in national competitiveness, high crime rate, social unrest, and political instability. The highpoint of these problems is the onset of revolution or terrorism that threatens the viability and existence of a country.
This historical moment is marked by the universalization of capitalism, as depicted in the process of neo-liberal globalization. Every aspect of human life and nature itself has been penetrated by the capitalism’s logic of accumulation, commodification, profit-maximization, and competition. It is revolving around the orbit of globalizing capitalism that structural changes, as well as structural phases, in the world in general and in the Philippine society in particular has to be contextualized. The drive for capital accumulation is, of course, not the only process at work but it is hard to make any sense of the changes in the Philippine society without closely examining it. As socialists struggling for human emancipation, we are tasked to take seriously capitalism’s fundamentally oppressive reality in this moment when market forces control the world. As globalization unfolds its real process of the completion of the world market, a thorough critique of capitalism is most urgently needed. The economic system in the Philippines is classified as a newly industrialized economy. It does have an emerging market. Over the last few years it has the fastest growth recorded in the last 34 years.
On the other hand, doing business in the Philippines is a highly personal endeavor whereas planning to close a deal or just getting ready for an investment, one should bring enough time, patience and perseverance. A personal introduction through a friend or business associate is essential to establish a relationship with your business partners. Always keep in mind that, in the Philippines, a successful business relationship is based on personal contacts, human interactions, and trust to the people you’ve been associating with or getting attached with the business. Well, as mentioned
before, Filipinos are incredibly status-conscious and the use of formal titles is considered an important way of showing respect to your business partners and colleagues. Unlike in other Asian countries, the exchange of business cards is not overly formalized, albeit still being important. You should, of course, try to present and receive business cards with both hands. Include your title and your position on your business cards to emphasize the influence and status you may have. Talking about businesses, many people, company or the entire industry competes with one another in order to standout among the crowd and to be well known in some reasons. Firms would be forced to produce goods which consumers want most and there will 3
Be more options for the consumers to choose upon. In addition, price changes by firms would be reasonable to both producers and consumers. A good example is the issue about Pinoy Branded Phones competes with a well-known Foreign Branded phones. As we all know, people love to have new gadgets with new features and other stuff and that makes foreign brands like Samsung, LG, Apple and so on standout compare to our own pinoy branded phones like Starmobile, Cherry Mobile, Torque and My Phone. Why? Because the foreign brands offer outstanding features which Filipinos and other nationalities love. Also, if we just heard the word “International” or “Branded” or “American Brand”, the tendency is we automatically approved of it, praise and even save up money just to buy that certain gadget unlike buying Pinoy Phones , first of all it is affordable compare to foreign brands but almost the same quality and features. Actually Pinoy Phones are leveling up their standards to Foreign branded phones, they make phones which are affordable in price and offers the best value for your money but with almost the same features as the foreign branded ones. The Filipinos are very competitive when it comes to business issues and as well as other stuff. They tend to make good ones to compete with the better ones ahead and also to prove to them that Filipinos are multinational competitor and can match up with foreign brands nowadays. Another aspect in business is how efficient people are to lower their cost just to maximize their profit; well it’s a good thing indeed. A good example wherein food businesses mostly make the standout here by preferring to lower their cost in order to attract many
customers/consumers like providing promos and big discounts. As we all know, people nowadays prefer affordable price or what we call in tagalog “sulit yung gastos!” than the expensive ones who is almost the same as the affordable one, most likely they will choose the one which is more cheaper but can exceed their likes and expectations.
Looking to the bright side, “2013 has been a banner year for the Philippines, with Asia’s best economic growth marks and improved public finances. The country’s better fortunes are captured in most of the personal valuations of its 50 richest.” (According to Forbes.com) In relation to this, the Philippines is pursuing massive “infrastructure spending program” to attract foreign investment and create more jobs. (Government spending for roads, bridges and other public works in 2013 is seen to result in more than 400,000 jobs, according to the Department of Public Works and Highways (DPWH). In the first quarter of the year, disbursements already reached P34.8 billion, which was P16.1 billion or 86 percent higher than the P18.7 billion released by the DPWH during the same period last year. Public Works Secretary Rogelio Singson told reporters during a news briefing at the department’s Operation Center in Manila on Tuesday that the increase in government spending for various public infrastructure projects translated into more employment opportunities, thus contributing, he said, to continuing economic growth under the Aquino administration.) (Story courtesy of Jonathan L. Mayuga, Business Mirror)
Another aspect in relation which is First to mention is about the Domestic Demand in the Philippines which is very strong, driven by private investment and consumer growth. Strong indeed it may seem for a broad range of goods and services is galvanizing economic growth in the Philippines, helping the country to buck a regional slowdown. Consumer confidence remains high, buoyed by news that the government plans to roll out several big-ticket infrastructure projects, in part aimed at creating jobs. However, the Philippines remain vulnerable to many of the external factors that are weighing on its peers.
Secondly, the Remittance in which over 2.2 million Filipinos are working abroad with over 5 billion dollars remittance in the first quarter of 2013. The cash transfer helped Philippines 5
pay off foreign debt and boost economic consumption. Many people in a poor situation are leaving their homes and families behind to migrate and seek employment abroad. They capitalize on the opportunity to move more freely in a globalized world, but large amounts of their higher incomes flow back to their struggling families in the form of remittances. The effects of remittances are complex. In the Philippines, most remittance money is immediately spent on food, housing, and medical needs. Few invest in the economy, and only seven percent of recipients put money into savings accounts. Thus, most of the GDP growth in the Philippines is not really growth, because the economy develops little despite the increased cash flow. On the other hand, remittances play a significant role in the alleviation of poverty in countries like the Philippines, where the OFWs are considered national heroes. While remittances have both positive and negative effects on poverty and the global economy, one thing is certain: with over 300 billion dollars in annual remittances (topping foreign aid and foreign direct investment in 2006), an economic trend of this magnitude is something that cannot be ignored
Disparity between Social Classes in the Philippines is also one of the main reasons in which the Gap between the poor and the rich is increasingly widening. Why? Because in some aspects like some politicians are not being caught by traffic enforcers when they commit a driving violation; this is because of their position in the society. The support of the government is biased on the social status of a citizen. There is no equality, unlucky children in poor families’ gets free education and free education has a lower quality of education than private schools which children with middle class families are enrolled into. Social biasness can be seen more often in our country. We can perceive that the government is in favor of people that have good social status rather than people in the lower class. In addition, this is also one of the main reasons which is the Income
inequality that has been a long lasting development challenge for the Philippines. “In a statement released by the National Statistical Coordination Board in 2005, it was recognized that the income gap between the rich and the poor was wider in the Philippines than in Indonesia and Thailand, indicating serious inequality in the distribution of the country’s economic gains. It is noted that the income of the Philippines’ richest ten percent of the population was in fact twenty times the 6
income of the poorest ten percent. Data spanning across 1985-2006 in the Philippines have shown that income inequality has been prevalent throughout her history, despite signs of economic growth. It has been observed that since 1985, the richest quintile of the population has consistently commanded more than 50% of total family income in the country, with the poorest quintile at less than 5%. Despite major fluctuations in economic performance during the period 1985-2003, income inequality while very high has remained relatively stable.” (Excerpt from National Statistical Coordination Board) Also, Income Inequality varies in four specifications namely Hereditary Wealth in which People with higher income may have the chance to have a better education than the others while the Poor people tend to mend in their own understanding or maybe just learn some of the basics or levels in education. Next is the Education in which the life of a person with a higher level of education can obtain a higher income based of work while the lower levels may just end up in a low income based of work. Follow by Discrimination in the workplace for example, it is most likely that the better looking people may land a good and proper job while the physically not attracted may get the hard time to land a job. Lastly is the Monopoly of power in which people who have the connections may easily get higher paying job than other people with the same profession. It is indeed unjust to those people really working hard and yet it didn’t paid off because of some people who uses their power and connections for their own satisfaction and own pleasure.
Many people didn’t realize that they must have been using their money unwisely and because of that gap between the rich and the poor is
increasingly widening specifically with the Social Classes. There are rich people who want to be richer and continuously be richer. The way upper class spent their money is by buying assets like bonds, stocks and so on that continue to generate more income. They spend their money efficiently and effectively better than the other two. This is the reason why they keep getting richer. In addition almost all of them have high level of education so there are many opportunities available for them. High paying job is a norm for them that they are easily being accepted to these types of jobs because they have good connections. Middle class prioritize buying liabilities like cars, condominium etc. so their income continue to decrease. Liabilities are things that lessen your monthly or annual income because it 7
requires regular payment. This class has almost the same level of education to upper class but they tend to become a little lower position than the upper class. The possible reason is their lack of connections. Lastly, lower class buys expenses despite their low income so they live “paycheck to paycheck”. Expenses are stuffs like clothes, appliances and so on. Instead of saving up money because of their low income they spend their money very inefficiently and ineffectively in contrast with the upper class. “Poor getting poorer” or “poor getting children” are famous quotes. They seem true to how the things work now. Lack of education is a factor for this unwise spending. Therefore rich people rules and the lower class people are tend to be at the ruled. It is like the way it used to be since the world began and as to the observations and researches in the status of it, most likely it will continue and the rich will be more aggressive and out of reach in this modern capitalist society.
Asian Development Bank (Fighting Poverty in Asia and the Pacific) http://www.adb.org Bukluran sa Ikakuunalad ng Sosyalistang Isip at Gawa (BISIG- Union of Filipino Socialists) http://filipinosocialism.wordpress.com Investopedia http://www.investopedia.com
Inquirer Business http://business.inquirer.net
ABS-CBN News (Story courtesy of Jonathan L. Mayuga of Business Mirror) http://www.abs-cbnnews.com/business The Economist http://www.economist.com
Good News Pilipinas http://goodnewspilipinas.com
SPY Ghana http://www.spyghana.com
The Origin of Capitalism – Published in Year 1999 – by Ellen Meiksins Wood A Theory of Socialism and Capitalism –Published in Year 1989 – by Hans-Hermann Hoppe