One very real observation about the Philippine economy is that it is characterized by rent-seeking.
Most everyone is into the business of renting out something. The concept of business, even by the lowly, is one of rent-seeking.
Let us begin with the most common. We put our money into real estate, be it raw land with the intention of leasing it, or a condominium unit also for rent. In the previous generations, people save to be able to build apartments, which they rent out, providing them with some form of stable and “sure” income. It is not as entrepreneurial as putting up a factory or shop where labor is employed and management skills are put to test.
The apartments graduated into town-houses, more fashionable especially since Marcos froze rentals during martial law through PD 10. With land becoming more expensive, the in-thing among lessors now are condominium units, supposedly for “investment.”
But rent goes beyond houses or apartments. There are the jeepney operators who rent their rickety contraptions to poor drivers by exacting a fixed daily payment called “boundary.” The same goes for buses. And taxis.
One reason why we have such a crazy transportation system in the country, particularly in heavily congested NCR, is the boundary system which defines our public transport system. Bus, taxi and jeepney drivers have to earn enough at the very least, to pay their daily boundary to the operator-rentier, instead of getting paid wages for honest toil.
Nowadays, Uber and Grab have come to the scene. The “enterprising” man or woman buys a car, and then enlists it with either transport innovator. The idea sounds good, where the driver is the owner of the car. But trust the “enterprising” Filipino to exact rent once again. He buys a fleet of cars, hires drivers, and then “rents” the Uber or Grab-enlisted vehicle again.
Before agrarian reform, our landowners exacted rent by way of the “kasama” paying a portion of the harvest to the landlord. It was called crop-sharing, which bound the tenants to poverty.
But now that the land is theirs by virtue of land reform laws, they are proscribed from selling or mortgaging their small landholdings, and they become prey to the new “landlord”, the “mamamakyaw” who lends them money to buy seeds, fertilizers and pesticides, but ensure that they buy the harvest, often at prices below market and below fairness. Advanced money is thus rented too.
It seems our concept of business entrepreneurship is confined to exacting rent for property owned or borrowed. It is not one of harnessing the factors of production, such as land, hiring labor, and producing a product through good management and risking capital.
But that is not all.
We also rent “ourselves,” and I do not mean those plying the sex trade, though that too is rent.
We get into politics and “rent” our connections, our influence, our power.
The barangay chairman or kagawad who allows street urchins or even adults to “guard” parking spaces in public thoroughfares, in exchange for a share (often bigger) in the tip, exacts rent of his “power”.
The customs collector and examiners, or for that matter, as some aver, everybody in the BOC, from top to bottom, collects “rent” out of influence and position. Ditto the BIR examiner.
The legislator who gets a share of the public works projects in his district collects rent for his power. So does the mayor, and most every other government official. So does the judge or the “fix-cal” rent his power and influence.
And so do those “oligarchs” who bankroll political campaigns and extend monetary favors to influential politicians. Once their “protégés” are ensconced in power, they then ask for favors, for monopoly privileges, for tax breaks, for sweetheart deals, for fat contracts.
That too is rent. A nation of rentiers.
Making money not by the sweat of one’s brow, or the skill of one’s hands, or the creativity of one’s mind, but by sitting pretty and collecting tolls.
Wonder no more why our neighbors who swear and live by the Confucian ethic of hard work and risk-taking, are well advanced compared to our laggard state.