Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.
— Winston Churchill
This writer has bold suggestions to help the government plug its record-high budget deficit without need to anger Chief Justice Renato Corona by cutting the judiciary’s budget and without enraging students by reducing budgets of state schools like University of the Philippines.
Here are my recommendations to the reformist President Noynoy Aquino (who, by the way, is paid a shockingly small salary of P75,000 per month as Chief Executive of a nation of 93 million people, with even us in the media pestering him about his dates when he’s supposed to be occasionally off-duty!):
• Privatize the Post Office. As a kid, I would read about Taiwan’s postal service being run as a state corporation and I once wrote then Postmaster General Roilo Golez to complain about our slow mail service and suggested that the Post Office be converted into a state firm. It’s now a state firm, but Commission on Information and Communications Technology (CICT) Chairman Atty. Ivan Uy recently mentioned to an audience of young ethnic Chinese entrepreneurs at an Anvil Business Club dinner that the Postal Service loses P300 million a year.
By the way, Chairman Uy is the second Anvil member who has served in a cabinet rank position; the first was former Agriculture Secretary and now Bohol Congressman Atty. Arthur Yap whose dad Domingo Yap is now Executive Vice-President of the Federation of Filipino-Chinese Chambers of Commerce & Industry, Inc. (FFCCCII). Atty. Ivan Uy is actually a co-founder and former director of Anvil.
My advice is for government to boldly privatize the Philippine Postal Service, so that the government can raise more funds for its social projects, plug the yearly financial losses and also allow this crucial institution to be run more efficiently by the private sector.
Instead of our traditional over-fixation on the US economic model, let us look at the most successful and efficient economic power in Europe — which is Germany — for lessons to be learned. In 1995, the German government privatized the German mail authority then called Deutsche Bundespost; now this renamed and revitalized Deutsche Post AG has become the world’s largest logistics business group with over 470,000 employees in 220 countries and with amazing annual revenues. It is also listed in the German stock exchange, with the government indirectly still owning only about a third of shareholdings through the state-owned KfW bank.
The privatization of Deutsche Post AG has been so successful, it even acquired control of the world-famous logistics and parcel conglomerate DHL in 2002. Deutsche Post AG also wholly owns the Deutsche Postbank AG.
• Privatize PAGCOR. This writer believes government should not be in businesses that the private sector can do better, and that its main role should just be to tax and regulate. Look at the communist government of China: they are the most intense in centralized management of many aspects of national life, yet they have never attempted to operate casinos in Macau. In fact, ironically, unlike the Portuguese colonizers, the communist rulers of China broke up the casino monopoly in Macau and even invited American capitalist roaders to operate casinos there for a phenomenal win-win situation for all.
Due to the capitalist policy of China’s communist rulers, overall casino and tourism revenues of Macau have skyrocketed through the roof, even surpassing those of Las Vegas, further enriching even the former monopoly casino operator Stanley Ho in terms of more income and higher realty values, and of course yielding the Chinese government more tax revenues than ever.
San Miguel Corporation CEO Ramon Ang is right: it is best for the government to privatize PAGCOR through public competitive bidding by all interested investors. The present officials of PAGCOR can then head an all-powerful commission regulating casinos, and the taxes from casinos can still be apportioned for the President’s social welfare fund, etc.
• Privatize our airports. The first and last impressions of the Philippines that tourists and foreign investors take away are our international airports, which for years have been grossly mismanaged.
It is my frustration to see unclean or unrepaired toilet facilities and other shoddy features in our international airports, when the tourism industry should be the No. 1 income-generating source for our economy due to the Philippines’ hospitable culture and numerous world-class tourist attractions.
Thailand’s Phuket or Indonesia’s Bali are not as naturally stunning as Boracay, Bohol or Palawan, but the Thais, Indonesians, Singaporeans and Malaysians have much better international airports and other basic infrastructure. Why not privatize our international airports through public bidding?
• Privatize Metro Manila’s traffic management. Congratulations to President Noynoy Aquino for lessening our frustrating daily woes with Metro Manila’s horrendous traffic jams, by announcing that he and other government officials will no longer use “wang-wang” or blinkers in their motorcades or vehicles; this is a good step in the right direction.
I suggest that President Aquino go further in his matuwid na daan or right path advocacy by rectifying our jungle-like roads. Please consult your advisers and other politicians to pass a law, executive order or whatever to allow the privatization of Metro Manila traffic management for better efficiency.
The traffic jams in our metropolis is a national crisis. This intolerable and insufferable daily chaos in our Metro Manila streets costs the whole Philippine economy many billions of dollars in lost productivity and billions in wasted imported oil every year.
Lessons from Mang Inasal & Jollibee: Why build if you can buy?
While the rest of Philippine society prepared for the recent super typhoon called Juan, a super business deal last week has surprised and impressed most business people — the recent sale of Mang Inasal fast-food resto chain’s 70 percent shareholdings by young Iloilo-born founder Edgar Injap Sia to Jollibee for P3 billion.
Edgar Injap Sia is one of the fast-rising business achievers this writer has recently cited in this column; I also invited him to be guest speaker at the monthly dinner meeting of the Anvil Business Club.
Fluent in English, Tagalog, Hokkien, Mandarin and Ilongo, Edgar Sia shared that when a Pangasinan businessman approached him to apply for the franchise for that entire province, he only agreed on condition that the new franchisee shall commit to open more outlets than the existing number of Jollibee stores in Pangasinan within a few years. That guy has amazing guts, vision and entrepreneurial energy.
Congratulations to him and his buyer, the Tan family of Jollibee led by founder Tony Tancaktiong and president Ernesto “Ato” Tanmantiong, for their remarkable win-win deal. Why win-win? Edgar told me the sale to Jollibee “will be good for the long-term future of Mang Inasal,” which I agree with, due to the operational excellence and complementary nature of their business models. Instead of going through the arduous process of an initial public offering (IPO) at the Philippine Stock Exchange to cash in on his phenomenal success, Sia got P3 billion and still gets to retain 30 percent of the business which could become even more valuable as part of the Jollibee fast-food conglomerate which is No. 1 in the Philippines.
For the Tan family and other stockholders of Jollibee, instead of directly competing and trying to outflank an aggressive and fast-rising competitor (their own former attempt at Mary’s Chicken had flopped several years ago), it’s strategically brilliant and logical for Jollibee to just buy out Edgar Sia. The P3 billion they spent for Mang Inasal could easily be regained with increased sales, more profits and the overall enhancement of the Jollibee brand as the Philippines’ undisputed fast-food industry leader. Why build if you can buy? If you can’t beat your competitor, buy him! (Psssst, this is an open secret: the strategy of buying foes you can’t beat has been a strategy of our many shamelessly corrupt politicos for ages!)
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