“To solve massive unemployment, the government must generate three million jobs a year or 8,000 jobs a day”
With President Marcos Jr. at the helm, promising to do things differently for the welfare of the Filipino, the question has arisen:
Amid the gravest food, energy, education and geopolitical crises ever to pummel the Philippines, can the country be prosperous on a path of more robust growth?
Yes, says Ramon S. Ang (RSA), the president and CEO of San Miguel Corp., the country’s largest diversified industrial conglomerate. With P316 billion sales in the first quarter, SMC is on track to chalk up a record P1.2 trillion revenues in 2022.
How can the Philippines grow higher and faster? Thru rapid industrialization and expanded exports earnings, says Ang. He thinks that the country can easily generate $200 billion in exports a year, up from the disappointing $60 billion to $76 billion of recent years.
In 2020, Ang convinced Congress (the House of Representatives) to pass House Bill 7575, the Bulacan Airport City Special Economic Zone and Freeport Act. In May 2022, the Senate amended the House version. The final copy was then sent to then President Duterte. Even without PRRD signing it, the bill would have become law on July 4, 2022.
But then Marcos Jr. became president at noon of June 30, 2022. The next day, July 1, he vetoed the bill. Ramon Ang must again go thru the wringer of a congressional procedure to re-pass the bill after curing its alleged “defects.”
In Marcos’s view, HB 7575 will grant tax incentives or foregone tax revenues—money the government can ill afford to give away given the current multiple crises, especially the food shortage which the President said is very severe and could last for at least three years.
Former Finance Secretary Carlos Dominguez estimated the “leakages” up to P60 billion in 50 years or P1.2 billion per year. P1.2 billion can buy you 40 million kilos of rice at P30 per kilo.
Those 40 million kilos can feed 300,000 Filipinos in one year. So why give that money away to some largest industrial or technology company that is probably richer than 90 percent of mankind? See the logic?
But then you get into what is called a chicken-and-egg situation. Which comes first?
Before the government can give away money, it must first attract investors who naturally won’t come—unless you give them incentives, like the tax perks. Without the investors, the government cannot generate jobs.
The Philippines easily has 30 million jobless today, officially and unofficially. Officially jobless are in the 5.8 percent who are unemployed as of March 2022 based on the labor force participation rate of 65.4 percent.
The Philippines has 77 million adults, those above 15. But only 65.4 percent or 50.35 million are reckoned by government as part of the labor force. Of the 50.38 million, only 5.8 percent or 2.92 million are supposed to be jobless.
That is a big lie. Subtract 50.38 million from 77 million, you get 26.62 million. Add the 2.92 million officially jobless, you get 29.54 million jobless..
To solve massive unemployment, the government must generate three million jobs a year or 8,000 jobs a day.
If the President simply does nothing but partying, the economy by itself can generate one million jobs a year—if there is no crisis.
If the economy grows by 8 percent per year, it creates another one million jobs. That’s two million jobs. The third million thus is the President’s responsibility.
Generating jobs takes two to tango—government with its enlightened policy (incentives, little or no corruption, easier ways of doing business); and the private sector, with guys like Ramon Ang visioning of a prosperous country.
Having a job is the best way to feed oneself and one’s loved ones, to send one’s children to school so they become useful to society themselves, and of course, to stay away from crime and nefarious activities that yield unforgiven money to the unscrupulous.
In RSA’s vision, the jobs can come from high-tech industries—like semiconductors, batteries, electric vehicles, and medical care. You can entice these industries if you have a place like a freeport, a quality educational system, and no-hassle, no-red tape management that only a privately managed economic zone and freeport can provide.
The global semiconductor market will reach $601 billion in 2022, according to the World Semiconductor Trade Statistics (WSTS).
The global lithium-ion battery market size is projected to grow from $36.90 billion in 2020 to $193.73 billion in 2028, an average growth rate of 23.3 percent per year.
A major growth industry is the manufacture of electric vehicles.
Automakers worldwide will spend more than $500 million to develop new electric cars and passenger trucks, and also on battery manufacturing, through 2030.
Global automakers are projected to spend more than $515 billion by 2030 to develop and build electric vehicles.
In the US alone, 13 carmakers have announced plans to spend more than $75 billion to open electric vehicle manufacturing plants in six states.
By 2025, more than 100 EV models are expected to be on the market and available to US customers. That includes cars, trucks, and SUVs.
EV sales remained strong in 2021 – up 40 percent for global EVs and 4 percent year-over-year, for US — despite supply chain disruptions and material shortages.
So $600 billion from semiconductors, $200 billion from lithium batteries, and $515 billion from electric vehicles, that’s $1.3 trillion in business from these three industries. Ramon Ang’s vision of $200 billion looks very achievable indeed.
For semiconductors, the best name is Taiwan Semiconductor Manufacturing Corp..
China is interested in TSMC’s technology, one reason why Beijing wants to seize the island because it is its province. TSMC has to relocate some of its factories to Bulacan as a backup manufacturing base.
Another potential investor is CATL, the world’s largest EV (electric vehicle) battery producer. Ten percent of its batteries are sold to Tesla.
To these companies, Ramon Ang has a clarion call: Come to the Philippines, invest, the water’s fine.
I am sure President BBM will drink to that.