Not with a bang but with an embarrassing whimper

THE incessant drumbeating by the state’s propaganda machine, complemented by over-the-top pronouncements from our political overlords, has been focused on a single message: Bagong Pilipinas has finally found the key to ending our country’s economic stasis and moving to an exalted position as the region’s rising economic star. The Panglossian descriptions may vary, from “fastest-growing economy” and “rising economic tiger” to words that are sometimes overwrought and outlandish. But as sure as the sun rising every morning, no day passes in the realm of Bagong Pilipinas without a tribute being paid to a supposedly rising economy and being transformed by the excellent work of its economic stewards into Asia’s darling.

A few days ago, and sticking to the disciplined messaging, there was this huge media play about foreign direct investment (FDI)-funded projects worth some $14 billion that have been coming in since July 2022 and are supposedly being implemented now. Specifics were not given, of course.

Meanwhile, the work of lifting up economies in other regions — already notches above us and safely ensconced in the upper middle-income classification — was taking place without bombast or fanfare, more focused on the real and hard grind rather than the propaganda.

As 2023 closed and citizens were demanding for the “resibo,” or receipts, to prove that the rhetoric on economic greatness was backed by actual performance, the propaganda machine and the political overlords doubled down on the rhetoric.

Why? Because, there was nothing there. On the contrary, the most elementary of windfalls that come with being a regional economic star — massive net FDI inflows — never materialized. A few days back, the Bangko Sentral ng Pilipinas (BSP) released the hard data on FDI inflows for 2023. It essentially said that, amid all the hoopla, such inflows dropped for the second time in as many years and amounted to an embarrassing $8.86 billion last year, lower than 2022’s $9.49 billion, which in itself was lower than 2021’s.

This data showed 2023 closed not with a bang but with an embarrassing whimper.

With the latest figure and two successive years of lower FDI inflows, it was hard to look at Vietnam’s FDI for last year, which increased 32 percent from 2022.

The BSP cited all sort of anodyne reasons for the latest FDI data, which did not even reach a low double-digit figure. It’s a dismal result that can’t be squared with all the state’s incessant boasting of economic greatness. “Notwithstanding the country’s sound macroeconomic fundamentals, concerns over subdued economic growth and geopolitical risks continued to weigh on investors’ investment plans,” the central bank said of the drop.

Critical information was, of course, excluded from the BSP’s statement on “subdued growth and geopolitical risks.” The context was not provided, and for good reason.

First fact not mentioned: Global trade data showed that global FDI increased by 3 percent in 2023 despite uncertainties and the so-called geofragmentation that unsettled the world economy. Second fact: Vietnam, part of the core group of Association of Southeast Asian Nations members, saw its FDI jump 32 percent last year. I need not mention that up to 1975, television documentaries still proclaimed Vietnam as “the graveyard of lost hopes,” and whose whole institutional experience was built around fighting foreign forces — first, the French, then the Americans.

So, why are foreign investors afraid to pour huge funds into the country, mightily snubbing the supposedly “ready-forbusiness” Bagong Pilipinas, and going to Vietnam or Indonesia instead? (OK, the really amazing story here is that of Malaysia, and a future column will be devoted to that.) Or maybe that is not the right question. Who would invest, and massively so, in a country where the World Bank says the learning poverty rate is a globally high 91 percent? Indeed, who would?

I now backtrack a bit to find the reasons behind the Philippines’ economic greatness in the 1960s, when it was the second fastestgrowing economy in Asia, after

Japan. That greatness was mostly driven by a great educational system and structure that undergirded the economic might of that period. Yes, a great educational system.

The whole educational infrastructure was built on the foundation of a great elementary education, which grounded the young on everything from reading and science to good manners and civics to mathematics. On top of that was an equally impressive tertiary system.

This system was anchored on the system of a premier state university, the University of the Philippines, which trained both the country’s leaders and the nomenklatura. It was also the top public research university. Complementing the UP system were three colleges that served three specific needs, and excellently so.

First is the former Philippine College of Commerce, which produced accountants, finance people and support staff for business, trade and commerce. Second is the former Philippine Normal College, which made sure that every A and B sections in public elementary schools had excellent teachers. And third is the former Philippine College of Arts and Trade, which trained the skilled workers — from mechanics to welders to machinists — needed by a booming economy.

The four tertiary public institutions created from US models never and did not compete with the schools ran — and still being run — by religious orders, primarily the Dominicans, Jesuits and La Salle Brothers, as well as the other nonsectarian, privately run (i.e., family-run) universities.

That great educational system was the foundation upon which that great, second-only-to-Japan economy was built.

UP has long lost its place as one of the top 50 universities in Asia. It is not even among the top 25 in Southeast Asia. Mirroring the gradual loss of UP’s academic luster was the public educational system’s slide to mediocrity. The recent Program for International Student Assessment and Trends in International Mathematics and Science Study reports have validated this slide, especially in the all-too-critical areas of reading, math and science.

Investors go to places where skilled young workers can be tapped in abundance to support the engineering and scientific requirements — plus the technical skills needed for sensitive assembly work — of their businesses. That is why they go to Vietnam, which only has a learning poverty level of 18 percent.

What the polity claims as the root of investors’ reluctance to invest in the Philippines, the so-called restrictive provisions in the Philippine Constitution, is false. The problem primarily lies not in our Constitution, but in our globally embarrassing educational mediocrity.