The plight of the Filipino businessmen

The Philippines was colonized by Spain for about four hundred years, by the United States for about forty years from the early 1900s, and about four years by Japan during World War II. During all these periods of colonization, the Filipinos, by and large, were merely workers as very few entered into the realm of business.

On the other hand, throughout all these times, the ubiquitous Chinese businessmen were always about town engaged in trade and commerce, buying and selling goods.

To be sure, there were already a few Spanish businessmen then who later on acquired and maintained Filipino citizenship as they were born and took their roots here. In this category may be included the Elizaldes, Cabarrus, Ysmaels, Zobels, Ayalas, Tuasons, Jacintos and Madrigals, to name a prominent few.

These Spanish-descended Filipino businessmen were, indeed, quite big during their time when there was practically no competition from other businessmen abroad. It must be emphasized that during that early period of our history most other businessmen elsewhere in the world still had the same level of business skill and technical know-how as our Spanish-descended Filipino businessmen. Still and all, the bulk of the Filipino then, as they are until now, were ordinary workers and employees.

Through time, however, the foreign businessmen grew in size until they eventually became giants in the business-world leaving far behind by then the Filipino businessmen of Spanish descent.

The phenomenal growth of the businessmen from most other countries like the United States, Japan, England, France, Germany, Italy, Portugal and the rest of the advanced world was triggered largely by the all-out support of their respective governments. This government support of their businessmen consisted of financial assistance made available to them through long-term and low-interest credit facilities that fully matched their business and operational requirements.

This goes to show the critical role of government in assuring the growth and success of the business sector. Stated otherwise, businessmen cannot grow in global size and stature without the active support of their own government.

Unfortunately in the Philippine setting, the Filipino businessmen all throughout the years did not get as much support from the Philippine government as the foreign businessmen did from theirs. True it is that there were some government support for the Filipino businessman but these were mere token support, and in trickles at that, that could not as it did not bear upon the success, or more accurately the lack of success, of our local entrepreneurs.

Quite the opposite, in the country, the Filipino businessmen who find themselves at the opposite end of the political spectrum from the current administration, far from receiving support from government, instead gets harassed and are even driven-out of business. In the Philippines, indeed, political considerations has been the nemesis of the Filipino businessmen.

In short, the atmosphere for investment and business in the country is so abject that the Asian Development Bank, as reported in the papers recently, has assessed the Philippines as number 65 in a list of 66 countries, one-notch only above Bangladesh at the bottom.

In a situation as miserable as it is for the Filipino businessman, what can be done to alleviate the plight of our languishing local entrepreneurs? Fortunately, dismaying as the present scenario is for him, there is a doable solution to turn the situation around. The solution is simple and is not new. It has been tried and tested and continues to be used today with success in all the countries where their businessmen have grown in leaps and bounds.

In these advanced countries, their governments made sure that all the big-ticket projects, or all the projects for infrastructure and utilities for that matter, were given to their own local businessmen to pursue. Their businessmen are able to successfully undertake these big local projects because their very own government supports them financially by making available to them long-term, low-interest credit facilities that matches the needs and requirements for their projects. The long period for repayment of the loan as well as the low-interest rate imputed makes for a favorable situation where the businessman is able to complete the project, earn a profit, and be able to re-pay back the loan. This way, their businessmen were able as they did grow to become the business giants that they are today.

On the part of their governments, they are able to extend this favorable financial credit package to their own businessmen because they can raise new local money by floating government bonds which their own central banks purchase by creating the new local money. These bonds are securitized against future taxes, a certain future money, which taxes as they are collected eventually pay and retire the bonds.

This same formula for business success should be adopted and likewise enforced in the case of the Philippines.

As it is, since we have ourselves a big problem on the availability of local money, government itself is forced to borrow foreign funds to finance vital and big-ticket projects for our infrastructure and utilities. And when we do this, it is invariable as in fact it happens that the subject project is given to the foreign businessmen/company of the nationality where the foreign funding comes from. In this situation, the Filipino businessman is always left-out of the big business opportunities and is only relegated to the crumbs of small-time projects.

Thus, today, the bulk of Filipino businessmen remain of the small and medium-scale category as even our former big entrepreneurs of Spanish descent have diminished in business stature in their own country owing to the lack of government support.

It is high time then, that we fully address this sad plight of the Filipino businessman by urgently adopting the solution and measure above-detailed and as continuously emphasized in our previous articles.

(You may write your comments / suggestion at 15/F Equitable Bank Tower Paseo de Roxas, Makati City or through e-mail at HYPERLINK "mailto:[email protected]")

(Editor’s note: Atty. Roxas is writing a limited series of articles dealing with financial matters and other important business topics. He is available for speaking engagements on the subject matters of his articles.)