Friday, May 25, 2007

Selected Quotes

From the comment threads in Mr. Quezon's blog.

This one from UP n student, in response to the usual rant about why, if GMA is innocent, does she keep doing her darnedest to avoid impeachment:

"... Foolish that person who, being taunted with '… if you’re innocent, what are you to be scared of?', volunteers to take a lie detector test or a DNA test. Foolish that person who, being taunted with '… if you’re innocent, what are you to be scared of?', volunteers to be arraigned before a court, whether or not TV cameras are whirring.

"Do you not know how many innocent people have been convicted and tossed into jail?"

Makes quite a point. In any case, as even mlq3 knows, impeachment is an inherently political exercise, one which values numbers above all. It was designed to be so, for what reason you'll have to ask the designers themselves. And who might they be? Why, the framers of the 1986 constitution, those paragons of 'nationalist' and socialist thought culled from the ranks of academia, 'national democrats', and (gasp) civil society, a lot of whom are now at the forefront of the mob clamoring for the midget's head. Yes, these people are the ones who designed impeachment to be a political process, a numbers game to see how many congresspersons a president can retain. These same people who were endorsed by and wrote the constitution under the aegis of the widow in yellow. So to all the commenters whining about the requirements for impeachment and the "tyranny of numbers" I can only say, blame Cory!

Of course now they'll say that the impeachment process itself is inherently flawed, and that it would be impossible to impeach a sitting president because patronage forever ensures the loyalty of a large majority of congresspeople. They conveniently forget that Erap had the same power of patronage before being unceremoniouly freighted off to Tanay. What they now say is that a special prosecutor is needed, and perhaps a 'neutral venue' for trying the case. I'm not a constitutional lawyer but wouldn't this require (hehe) Charter Change? Well, in that case I'm all for it.

The incorrigible cvj, on answering a post by Bencard disproving any 'havoc' inflicted on the economy by GMA, writes:

"... since you seem to think in purely economic terms, you might be interested to know that manufacturing output for March fell by 7.6 percent as measured by the National Statistics Office ..."

I won't dispute that fact, but keep in mind that the Philippines has among the highest manufacturing costs in the region, while China continues to have the lowest. It is much, much cheaper now to import goods from China than to manufacture them locally. It's not just our high labor costs, though that is definitely a significant part of it. The local market simply does not have the economies of scale that might allow our manufacturers to remain competitive. A Chinese company for example has an immediate market of 1 billion people on which to distribute its overhead and development costs, while a Philippine company has only 80 million. That's more than 12x the overhead on a per unit basis. Of course we can export, but even if it takes care of the overhead disadvantage, competition would still (eventually) force us to compete on cost. Sooner or later, even our companies would be forced to move their manufacturing operations to China.

Even if we move up the value chain, it's no refuge since China is already making giant strides in that direction (helped in no small way by American companies that had already been pressured to move operations to the Chinese mainland by retailers like WalMart). In any case, the capital requirements are too large, and the rewards are uncertain. What then is left? Niche markets and handicrafts, hardly industries that can sustain a nation of 80 million.

My point here is that the entire manufacturing sector of the national economy is a sunset sector, given that manufacturing costs in China won't be going up anytime soon (and by soon I mean the next decade or two). It is also extremely unlikely that our own labor costs would be going down in the near future, since even current wages are hardly enough to keep body and soul together. It is useless then to beat our breasts about the declining state of the manufacturing sector. Pouring money on the problem won't do much good either, as the fundamental facts remain. Regulatory solutions, or even a return to protectionism, would be futile since our 7000+ islands and very long coastline make smuggling easy as pie -- we'd just lose revenue.

The 7.6 percent decline in March manufacturing output should hardly be surprising.

I'm surprised it hasn't declined more sharply.

The most that any administration can do is slow down the decline of manufacturing. Whatever we do, manufacturing will eventually dwindle down until only a few niche players and handicrafts workshops remain. Sad, but inevitable. It would be best to just concentrate our limited resources on the sectors where we still have a competitive advantage, and which are safe from China's low-cost clutches for at least a couple more decades. I'm talking here of human resource export (yes, I think it should be an economic sector on its own) and BPO. So what if call-centers aren't as sexy (to the socialist mind) as factories? At least it will pay the rent until a knowledge economy matures and comes into its own.

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