Biyernes, Setyembre 10, 2021
Tomorrow is September 11 the birthday of the late despot, Ferdinand E. Marcos Sr. Now, I decided to write this post on the high cost of utilities - something that's hardly dealt with until now. Public utilities are defined as water, electricity, natural gas, telecommunications, gas, and other ESSENTIALS to operate daily in this modern age. I could remember the struggle for decades is that, EVEN AFTER THE END OF THE MARCOS YEARS, the cost of utilities is still that expensive.
It doesn't take a rocket economist or to get a degree in economics from Ateneo De Manila University (ADMU) or the University of the Philippines (UP) to understand this. What we need to revisit some high school and college economics. I confess that I did fail my first grading in economics in my high school years (but got better), I only have a total of 12 units of economics (both undergraduate and graduate school) but it doesn't mean I can't understand the basic of economics. Economics' first basic principle is SUPPLY AND DEMAND. This basic rule learned in high school (or middle school under K-12) would be that high demand and low supply equals HIGHER prices and high supply and ow demand equals LOWER prices. I don't even need a basic degree in economics to understand all that?
One could question why the cost of utilities is so expensive
Let's think of the GEOGRAPHICAL features of the Philippines which means that there will be a HUGE POPULATION. Now, take a look at those who supply the utilities. The current 1987 Constitution is still having its negative list. True, the negative list has been modified and certain industries were eased during the regimes of Fidel V. Ramos up to that of the late Noynoy Aquino. However, why hasn't the issue of utilities been eased? Even today, DITO Telecommunications is still subjected to 60-40 while other industries aren't. One could question how many locally available utilities are there vs. the whole population of the Philippines.
Let's have some common sense questions. How many Filipinos are there vs. the number of local providers of utilities? There are MILLIONS of Filipinos. Google suggests that the Philippines now has a population of 111,308,897 as of September 9, 2021. How many of these people are adults? Now how many companies can cater to the needs of them? How many households are there? For example, the longtime duopoly of PLDT and Globe can't meet up the high demand for Internet. The result is that we have SLOWER, MORE EXPENSIVE Internet as a result. Another example is also how water and electricity are usually monopolies. Again, how do you expect monopolies to EFFICIENTLY and EFFECTIVELY give to the demands of several people in just one area one? Common sense please!
Let's face it that we've swapped presidents many times. Did the regime of Noynoy lower down the prices of utilities? NONE! Did the current regime of President Rodrigo R. Duterte lower down the prices of utilities? STILL NONE! It's because of the law of supply and demand. If the government decides to ever let companies sell their prices lower when supply is low and demand is high - it's basically ECONOMIC SUICIDE! How can companies recover from the cost of operations IF they are selling at a loss?
How foreign investments will eventually help ease the high cost of utilities
It's always an old-age argument that, "Why do we have to rely on foreigners? Can't we develop on our own?" Again, that argument is growing old rather quick. Many lies have been going on against foreign investments such as "Pero sila lang ang yayaman diyan!" or the silly notion of "Sasakupin tayo ng mga dayuhan!" In reality, a review of the history of China and Singapore will prove how foreign investments did help. Deng Xiaoping, though a communist, went to the USA and told the Americans, "China is open for business." The late Lee Kwan Yew invited foreign investors to Singapore. Did those foreign investors seize control of China and Singapore? Instead, the helped develop the national industry by providing newer stuff, newer employment, and newer ideas. Deng's communism with Chinese characteristics is something not welcome to the CPP-NPA. Lee's Singapore was an open hub to foreign investment.
If the Philippines starts welcoming foreign investment - it would mean more jobs and more taxes. It would also mean filling in the SUPPLY AND DEMAND GAP. Any good businessman would buy what he needs to fulfill the task - even if he has to buy imported materials and equipment. It's pretty much like how Deng said, "It doesn't matter if the cat is black or white - as long as it catches mice!"A good businessman could care less if the materials he uses are local or imported - it's as long as he could produce quality produce. A businessman who seeks to develop his "sariling kakahayan" will do anything legitimate - even if it means IMPORTING new ideas to develop that "sariling kakahayan".
Just think how the demand can be lessened if more foreign investments came in. For example, if Internet won't be just be provided by PLDT, Globe, and DITO then there will be cheaper Internet at a better rate. It's because the foreign Internet companies will fill in that supply gap which will reduce the demand. If there will be more foreign power companies then reviving the Bataan Power Plant wouldn't be necessary. Maybe, the Bataan Power Plant can be rented out to a foreign investor instead who may convert it into another power plant. Regardless, supply and demand gaps are filled in by both exports and imports to help regulate prices and lessen inflation.