Stop Investing To Get Foreign Intervention And Start Investing To Get Foreign Investments

Here's a bit of a comic strip to humor this post. This would be a fictitious confrontation between Feeling Vice President Leni Loud Robredo and President Rodrigo R. Duterte (which never happened and it's just for ILLUSTRATIVE purposes). Feeling VP Leni Loud tells President Duterte, "It should just be foreign intervention only... we will lose our sovereignty if we have foreign investors." President Duterte says, "Idiota! Foreign intervention is just an outflow. Also, foreign investments give inflows and it's not a foreign invasion!"

Let's consider two areas of foreign intervention (which I also wrote a similar article on foreign aid) vs. foreign investment and which would be better for the Philippines or any country.

What's the big deal with foreign intervention and why is it bad for the country? 

What's with foreign intervention? I remembered writing an article on foreign aid on how it only gives fish but it never teaches people how to fish. Give a man a fish and he will only have a meal for a day. Teach a man how to fish and he will have a meal for a lifetime. This is the principle that foreign aid is a one day millionaire event. Accepting foreign aid is equivalent to the beggar culture.

The problem is that some Filipinos have the superiority complex all the while adhering to the palamunin or beggar culture at the same time. That kind of mindset is contradictory. If they want to prove the "galing ng Pinoy" or show to the world that they're great then why adhere to the palamunin culture? Oh wait, isn't it prevalent to have the mindset that the rich always poor everything all the time? Oh boy, where do we start with how wrong the mentality is? If the poor don't want to work, if you don't want to accept foreign investors then consider yourself always suck with the same mediocre job all the time with very low pay.

In said illustration, Feeling VP Leni Loud is raising nonsense by saying that foreign investors are foreign invaders. This would be the whole question that I always raised at economic neanderthals who don't know basic economics. If she does study the history of first world countries they progressed through accepting foreign investments and not by protecting and pampering their local businesses. If foreign investors are foreign invaders then you can consider this fact. Are first world countries now invaded by foreigners and have they lost their sovereignty? They haven't lost their sovereignty for this reason. When it comes to foreign investors even if they are granted a huge slice of the investment pie but they are still required to follow rules. They earn money then they must pay it. They employ Filipinos then they must follow the by-laws concerning salaries and employee benefits. In the Philippines, do business and act as the Filipinos do.

The problem with foreign intervention is not only how short-term, one day millionaire the income is but also with how much it'll cost to get foreigners to intervene. Do you think asking for certain foreigners to intervene in the Philippines comes cheap? I doubt it that the interview that Jover Laurio had on BBC was done for free. Whoever put her there had to pay BBC for her platform. According to the Manila Times, when Agnes Callamard came to the Philippines, it was revealed that Chito Gascon from the Commission on Human Rights paid for her stay in a five star hotel. Those events are all outflow of cash but where's the inflow? Where's the Return on Investment (ROI)? None. There's no ROI from all that foreign intervention except as one day millionaires should they accept foreign aid.

How is foreign investment helpful in the long run?

As I mentioned earlier, foreign investors are bound to Filipino by-laws and regulations. In short, they want to do business in the Philippines then they must follow the laws of Filipinos. It's the same principle as Filipinos working abroad. If you work or do business in any country then you must follow their laws. For example, Jollibee in other countries is bound by the laws of those countries. Jollibee China must pay their income there to the Chinese government. Jollibee Singapore must pay their income there to the Singaporean government.

I admit, there is an outflow involved in inviting foreign investors. It takes money for any authority figure in the land to get investment pledges and returns. It would mean going to other countries, spend money on plane tickets and having allegiances with countries. For example, I'd like to talk about my favorite countries namely Japan, Taiwan and South Korea. Let's say that I'm the Supreme Chancellor of the Philippines. I would go there or send an authorized representative to get some shares. For example, I'd like to invite Toei Ltd., Tsubaraya or Bandai Japan to form a Filipino branch. What do I do? I should spend some government money, fly there and invite them to invest. 

Here's the question that I'd to raise all over again as many times as possible. How can we invite foreign investors to do business in the Philippines if the only share they will get is 40% by default unless they get special permission? It's time to ease the 60/40 rule to nonexistence to grant that foreigners may have 50% or above which can be negotiated with a Filipino partner. This law will also allow 100% ownership in terms where they can operate without a Filipino partner while they're leasing land in the Philippines thus profiting the landlords. It would be necessary to ease the restrictions and put only reasonable restrictions such as the need to pay taxes, treating Filipinos who work for them right and following the Filipino by-laws.

How can foreign investment be more helpful? I remembered writing on the Small-Medium Enterprises can grow through foreign investors. It doesn't only provide competition (threats) but also opportunities. I love to rant how foreign investors would want to get locally sourced products and how Filipino businessmen can grow through them. Filipinos shouldn't be missed out by evolution if and if they are faced with competition and opportunities at the same time. You can think of how foreign investment also means innovative thinking is highly encouraged one way or another. A good example of innovative thinking in action would be thinking of how to get more customers by catering through the competitors of one's customers. Take note innovation doesn't limit itself to making various products to keep a line going but also creating new ways or methods to run a business.

Speaking of taxes, foreign investment would mean more revenues for the country because they are required to pay taxes if they want to continue doing business. The foreign companies would need to pay according to their net income. That would mean a lot of money from the company itself. If they had to pay all their required taxes then wouldn't that be a continuous flow of income? That would be better than the one day millionaire through foreign intervention.