BY BENJIE OLIVEROS
President Gloria Macapagal-Arroyo told the recent 27th National Conference of Employers that by working with her government, they can take the country to the “Enchanted Kingdom of First World Success.” But the country is nowhere near the road to success. On the contrary, it is well on the road to perdition.
President Gloria Macapagal-Arroyo told the 27th National Conference of Employers at the Manila Hotel May 23 that by working with her government they can take the country to the “Enchanted Kingdom of First World Success.” President Arroyo may be enchanted with the U.S., Japan, and Germany, the three most economically powerful countries in the world, but the Philippines is nowhere near the road to success.
The existing economic and political relations of the country with these countries, especially the U.S., prevent the country from advancing beyond the backward, agricultural and pre-industrial state that it is in.
Philippine trade with the U.S., Japan, and the European Union (EU) illustrates not only the unequal or unbalanced relations but also the vast differences in the state of production between a backward country like the Philippines and the so-called First World countries.
The U.S. is the main trading partner of the Philippines. The country mainly exports electronic products to the U.S. followed by articles of apparel and clothing accessories. Imports from the U.S. consist of electronic products, industrial equipment and machinery, and cereals and cereal preparations.
Japan is the second biggest trading partner of the Philippines. Philippine exports consist mainly of electronic products and ignition wiring and other wiring sets. Electronic products, industrial equipment and machinery, and transportation equipment comprise the country’s main imports from Japan.
Electronic products top the export items to the EU. Other top exports are apparels and clothing accessories, coconut oil, other products manufactured from materials imported on consignment basis, and woodcraft and furniture.
Likewise, electronic products have the biggest share among the major Philippine imports from the EU. Other top imports are industrial machinery and equipment, medicinal and pharmaceutical products, transport equipment, and telecommunication equipment and electrical machinery.
The Philippines exports electronic products in the form of semi-conductors and computer chips. But it imports finished electronic products for consumer and industrial use. It is also worth noting that 80-90 percent of the components of the chips the country exports are imported.
The country exports motor vehicle wiring sets to Japan but imports transportation equipment. It exports garments, coconut oil, woodcraft, and other peripheral and semi-processed products but imports industrial necessities such as machinery, telecommunications equipment, mineral fuel, iron and steel, and chemicals. It also imports plastics, textiles, medicinal and pharmaceutical products, and cereals. Even the mining industry that the Arroyo administration intends to develop as part of the export sector will not alter the existing state of things.
Moreover, transnational corporations (TNCs) dominate the small, stunted, and shrinking manufacturing sector in the country. TNCs account for over three-fourths of the total sales of manufacturing corporations in the country’s Top 1,000 corporations in 2003. These in turn accounted for nearly 80 percent of the country’s total manufacturing output. TNCs characteristically set up shop in export-oriented enclaves importing most of their inputs. The main linkage they have to the local economy is the exploitation of cheap unorganized labor and taking advantage of infrastructure and utilities subsidized by public resources.
TNCs only contribute around five percent to the Gross Domestic Product (GDP) and averaged a measly 3.9 percent in 1991-2000. They also contributed barely one percent to total employment last year: 335,000 jobs out of the 31.6 million employed.